Case C‑377/14

Ernst Georg Radlinger

and

Helena Radlingerová

v

Finway a.s.

(Request for a preliminary ruling from the Krajský soud v Praze)

‛Reference for a preliminary ruling — Directive 93/13/EEC — Article 7 — National rules governing insolvency proceedings — Debts arising from a consumer credit agreement — Effective judicial remedy — Point 1(e) of the annex — Disproportionate amount of compensation — Directive 2008/48/EC — Article 3(l) — Total amount of credit — Point I of Annex I — Amount of drawdown — Calculation of the annual percentage rate — Article 10(2) — Obligation to provide information — Ex officio examination — Penalty’

Summary — Judgment of the Court (Third Chamber), 21 April 2016

Acts of the institutions — Directives — Direct effect — Limits — Not possible to rely upon a directive against an individual — Not included — Implementation by Member States — Obligations of national courts — Obligation of national courts to examine, of their own motion, whether certain obligations laid down in Directives 93/13 and 2008/48 regarding consumer protection have been complied with

Consumer protection — Credit agreements for consumers — Directive 2008/48 — Requirements as to information to be provided in the agreement — Subject matter — Obligation for the national court to examine, of its own motion, whether those requirements have been met and to determine the necessary consequences — Limits

Consumer protection — Unfair terms in consumer contracts — Directive 93/13 — Means to prevent the use of unfair terms — National legislation preventing the national court, of its own motion, from examining the unfair nature of a term at the origin of a debt which is the subject matter of insolvency proceedings and which limits review by the courts of terms concerning unsecured claims — Unlawful

Article 7(1) of Directive 93/13 on unfair terms in consumer contracts must be interpreted as precluding national legislation which, in insolvency proceedings, does not permit, firstly, the court hearing the action to examine of its own motion any unfairness of contractual terms on which the claims declared in those proceedings are based, even when that court has available to it the matters of law and fact necessary to that end, and which, secondly, permits that court to examine only unsecured claims, solely in respect of a restricted number of complaints related to whether they are time-barred or have been paid. A national court is required to assess, of its own motion, whether a contractual term falling within the scope of Directive 93/13 is unfair, compensating in that way for the imbalance which exists between the consumer and the seller or supplier, where it has available to it the legal and factual elements necessary for that task. Since the right to an effective judicial remedy means that the consumer is permitted to contest, before the national court, the merits of the claims arising from a credit agreement which contains terms likely to be unfair, whether or not those claims are secured, national legislation which permits a debtor seeking to contest an unsecured claim to rely only on the fact that the claim is either time-barred or has been paid is liable to affect the effectiveness of the protection intended by Articles 6 and 7 of Directive 93/13. (see paras 52, 56, 57, 59, operative part 1)

Article 10(2) of Directive 2008/48 on credit agreements for consumers must be interpreted as meaning that it requires a national court hearing a dispute concerning claims based on a credit agreement within the meaning of that directive to examine of its own motion whether the obligation to provide information laid down in that provision has been complied with and to establish the consequences under national law of an infringement of that obligation, provided that the penalties satisfy the requirements of Article 23 of that directive. Information, before and at the time of concluding a contract, on the terms of the contract and the consequences of concluding it is of fundamental importance for a consumer. It is, in particular, on the basis of that information that the consumer decides whether he wishes to be bound by the conditions drafted in advance by the seller or supplier. Furthermore, there is a real risk that the consumer, particularly because of a lack of awareness, will not rely on the legal rule that is intended to protect him. It follows therefrom that effective consumer protection could be achieved only if the national court were required, of its own motion, to examine compliance with the requirements which flow from EU law on consumer law. Since the national courts are required to ensure the effectiveness of consumer protection intended to be given by the provisions of Directive 2008/48, the role attributed to the national courts by EU law in this area is not limited to a mere power to rule on the compliance with those requirements, but also consists of the obligation to examine that issue of its own motion, where it has available to it the legal and factual elements necessary for that task. (see paras 64-66, 70, 74, operative part 2)

The obligation on a Member State to take all the measures necessary to achieve the result prescribed by a directive is a binding obligation imposed by the third paragraph of Article 288 TFEU and by the directive itself. That duty to take all appropriate measures, whether general or particular, is binding on all the authorities of Member States including, for matters within their jurisdiction, the courts. In that regard, so far as concerns Directive 93/13 on unfair terms in consumer contracts and Directive 2008/48 on credit agreements for consumers, the obligation to examine ex officio the unfairness of certain terms and the presence of mandatory information in a credit agreement constitutes a procedural rule placed not on an individual but on the courts. Moreover, when national courts apply domestic law, they are bound to interpret it, so far as possible, in the light of the wording and the purpose of Directive 2008/48 in order to achieve the result sought by the directive and consequently comply with the third paragraph of Article 288 TFEU. This obligation to interpret national law in conformity with EU law is inherent in the system of the FEU Treaty, since it permits national courts, for the matters within their jurisdiction, to ensure the full effectiveness of EU law when they determine the disputes before them. (see paras 76, 77, 79)

Articles 3(1) and 10(2) of Directive 2008/48 on credit agreements for consumers and point I of Annex I to that directive must be interpreted as meaning that the total amount of the credit and the amount of the drawdown together designate the sums made available to the consumer, which excludes those used by the lender to pay the costs connected with the credit concerned and which are not actually paid to that consumer. Since the concept of the ‘total amount payable by the consumer’ is defined in Article 3(h) of Directive 2008/48 as being the sum of the total amount of the credit and the total cost of the credit to the consumer, it follows that the concepts of ‘total amount of the credit’ and of ‘total cost of the credit to the consumer’ are mutually exclusive and that, accordingly, the total amount of the credit cannot include any of the sums included in the total cost of the credit to the consumer. Thus, within the meaning of Articles 3(1) and 10(2) of Directive 2008/48, none of the sums intended to meet the commitments agreed under the credit concerned, such as the administrative costs, interest, commissions and any other type of cost which the consumer is required to pay, can be included in the total amount of the credit. In that case, it is for the national court to ascertain whether a sum has improperly been included in the total amount of the credit, within the meaning of Article 3(1) of Directive 2008/48, since that fact is likely to affect the calculation of the annual percentage rates of charge and, in consequence, affect the accuracy of the information which the lender must set out, by virtue of Article 10(2) of that directive, in the credit agreement at issue. (see paras 85, 86, 89, 91, operative part 3)