COMMUNICATION FROM THE COMMISSION "ACTION PLAN on consumer access to justice and the settlement of consumer disputes in the internal market"
Date: 1996-02-14
Institutions: European Commission
Subjects: access to the courts, action programme, civil proceedings, consumer protection, single market

C0MIV5!SS!0N OF THE  EUROPEAN  COMMUNITIES 

Brussels,  14.2.1996 
COM(96)  13 final 

COMMUNICATION  FROM THE COMMISSION 

"ACTION  PLAN  on consumer  access to justice  and the  settlement  of 
consumer  disputes in the internal  market" 

TABLE  OF  CONTENTS 

Foreword 

PART  I:  THE PROBLEM  STATED 

CONSUMER  DISPUTES 

II. 

III. 

OUT-OF-COURT  PROCEDURES  IN THE MEMBER  STATES 

NATIONAL 
PROCEDURES 

INITIATIVES  CONCERNING  ACCESS  TO  COURT 

PART II: THE COMMUNITY  DIMENSION  OF THE  PROBLEM 

I. 

II. 

THE  COST  OF .JUDICIAL  FRONTIERS 

THE  RESULTS  OF THE  CONSULTATION  ON THE  GREEN  PAPER 

PART  HI: THE  INITIATIVES  PROPOSED 

I. 

II. 

THE  PROMOTION  OF  OUT-OF-COURT  PROCEDURES 

ACCESS  TO COURT  PROCEDURES 

III. 

PERSPECTIVES 

Annex I: 
Annex II: 

Annex III: 

Schedule  of  envisaged  initiatives 
Working  outline  for  a Recommendation  laying  down  criteria  for  the 
establishment  of  out-of-court  procedures  applicable  to  consumer 
disputes 
Draft  form for the settlement  of intra-Community  consumer disputes 
(provisional  version) 

FOREWORD 

This  Communication  is  a  follow-up  to the  Green  Paper  on  the  access  of  consumers  to 
justice  and  the  settlement  of  consumer  disputes in  the  single  market  (COM(93)  576 of 
16 November  1993). 

The  problems  of  access  to justice  demand  a  concerted  response  on  the  part  of  several 
institutions  at  local,  national  and  European  level.  In  consonance  notably  with  the 
provisions of Article  129a and the principle of subsidiarity, Community measures will of 
necessity  be  restricted. 

However,  in view of  the  cross-border  dimension  of  the problem,  certain  objectives  can 
only  be  realised  at  Community  level:  in  particular,  the  objective  of  creating  an 
environment  favourable  to  the  settlement  of  intra-Community  consumer  disputes 
necessarily  involves  -  bearing  in  mind  the  dimensions  of  the  envisaged  measure  -
initiatives designed  to coordinate  certain aspects of national  and  local policies. 

The  following  measures have been proposed  or have already  been  initiated: 

- 

- 

- 

à  proposal  for  a  Directive  on  the  coordination  of  the  laws,  regulations  and 
administrative  provisions  of  the  Member  States  relating  to  actions  for  an 
injunction,  which the  Commission  adopted  on 24 January  1996; 

the  initiatives  envisaged  in this action plan; 

other  actions and pilot  projects  already  in operation  or about to be  launched. 

In  consonance  with  the  third  paragraph  of  Article  3b  of  the  Treaty  establishing  the 
European Community, the initiatives presented in this action plan do not go beyond what 
is necessary  to achieve the objectives  set out in Article  129a of the Treaty, but they  are 
not of  an exhaustive  nature: 

- 

- 

on the  one hand,  they  are supplementary  to the proposal  for  a Directive  adopted 
by the  Commission  on 24/1/1996 concerning  actions for  an  injunction; 
on the  other  hand,  they must  be underpinned  by  additional  support  for  the  pilot 
projects designed to ensure consumer access to law and to justice1 as well as better 
distribution of information  needed to access existing national procedures in other 
Member  States2. 

As regards this latter requirement, priority  action was required  in order to ensure  greater 
familiarity  with  national  legal  aid  systems.  The  consultations  on  the  Green  Paper  did 
indeed confirm  that  legal aid  is of crucial importance to the most disadvantaged  citizens 

As described  in the Green  Paper, and notably chapters I.B.I  and IV.E, with subsequent  follow-up 
on the  same  lines. 
Council Resolution of 13 July 1992 on future priorities for the development of consumer protection 
policy  (OJ No  C 294, 22.11.1989,  p.  1): paragraph  4,  last  indent  of the Annex. 

-  and all the more so when they are involved in an intra-Community  dispute. With a view 
to  making  good  the  absence  of  information  at  European  level,  the  Commission  intends 
to  publish  a  "Guide  to  Legal  Aid  in the  European  Union".  This  Guide,  whose  text  has 
already  been  drafted  in cooperation  with  the Council  of the  Bars and  Law  Societies  of 
the European Community, will be sent free  of charge to the multipliers who can pass this 
information  on  to  interested  citizens  (solicitors,  courts,  local  or  regional  information 
agencies, consumer  associations). 

Other  similar  publications  could  be  prepared  in  cooperation  with  the  bodies  concerned, 
hence  developing  a  policy  of  partnership  between  the  Community  institutions  and  the 
legal  professions,  at the  service  of the  citizen. 

PART I: THE PROBLEM  STATED 

I. 

CONSUMER  DISPUTES 

The  hallmark  of  a typical  consumer  dispute  is the  disproportion  between  the  economic 
sum at  stake  and the cost of  its legal  resolution. 

For  any  rule-of-law  State this disproportion  raises the question  of how to reconcile  the 
requirement  that justice  be  rendered  without  discrimination3  with the  constraints  of  the 
budget  for  the  administration  of justice  -  a  budget  that  in  many  cases  cannot  meet  the 
demand. 

The way this question is answered also determines the magnitude of the gap between the 
theoretical construct designed by the legislator and voters' day-to-day lives: it is the small 
disputes  of  everyday  life  that  give  ordinary  citizens  an  opportunity  to  gauge  the 
effectiveness  of the law - and not the headline-making court cases, which rarely concern 
them. 

In  most  developed  countries,  consumer  disputes  have  received  particular  attention  in 
recent  decades4,  also  in the  context  of  with  the  principle of  "equality  of  arms"5  and  in 
consequence  certain  specific  schemes  have  been  introduced  -  examples  include  Article 
5 of the Rome  Convention  on the law applicable to contractual  obligations6 and  Section 
4 of Title II of the Brussels Convention on jurisdiction and the enforcement  of judgments 
in  civil  and  commercial  matters7.  In  particular,  Articles  13  to  15  of  the  Brussels 
Convention  introduce  a  special  scheme  governing  contracts  concluded  with  consumers 
stipulating that, under certain conditions, actions brought against consumers may only be 
brought before the courts of the country in which the consumer is domiciled.8 In Shearson 
Lehman Hutton9, the Court of Justice of the European Communities held that this scheme 

Article 6 of the European  Convention  on Human  Rights: "In the determination  of his civil  rights 
and obligations ... everyone  is entitled to a fair and public hearing within  a reasonable time by an 
independent  and  impartial  tribunal  established  by  law". 
This principle knows no exceptions as regards the value of the issue at stake, and applies also to 
what  are  considered  as  small  disputes  (by  the  administration  of justice,  but  not  by  the  citizens 
concerned). 
For the purposes of this Communication,  "consumer dispute" means any dispute involving a natural 
person, acting outside his trade or profession  and a natural  or legal person acting  in the course of 
business.  As  regards  the  notion  of  "consumer",  see Articles  153 and  155  of  the  Report  on  the 
accession agreement of Denmark,  Ireland and the United Kingdom to the Brussels Convention on 
jurisdiction  and  the  enforcement  of judgments  in  civil  and  commercial  matters  (the  Report  is 
published  in OJ No  C  59,  5 March  1979, pp 71  ff). 
As  regards  the  principle  of  "equality  of  arms"  before  the  courts,  see  also  the  case  law  of  the 
European Court of Human Rights, notably cases Neumeister v. Austria (1968), Bônisch v. Austria 
(1985),  Feldbrugge  v. the Netherlands  (1986). 
OJ No  L 266, 9.10.1980,  p.  1  . 
Codified  version:  OJ No C  189, 28.7.1990,  p. 2 

6 
7 
g 
When  the  conditions  mentioned  in Article  13 are  satisfied,  Article  14 provides  in addition  that  actions 
brought  by  consumers  against  the other party to the contract  may be heard either before  the courts of the 
country  in which  the defendant 
9 

is domiciled  or those  of the consumer's  country  of  domicile. 

Judgment  of  19 January  1993, case C-89/91 (ECR 1-139). 

"... derived  from  a concern to protect the consumer  as the party to the contract who was 
considered  to  be  economically  weaker  and  less  experienced  in  the  law  than  his  co-
contractor". 

A  summary  description  of  the  replies  given  by  the  Member  States  to  the  problem 
regarding  consumer  disputes allows us to categorize  these replies  into two  strands10: 
- 

the  establishment  of  out-of-court  procedures  specifically  devoted  to  consumer 
disputes; 
the  establishment  of  simplified  procedures  and/or  simplified  modalities  for 
instituting  proceedings,  for  claims up to a specified  ceiling. 

- 

II. 

OUT-OF-COURT  PROCEDURES  IN THE MEMBER  STATES 

In  Denmark,  Sweden  and  Finland,  most  consumer  disputes  are  handled  by  "consumer 
complaints  commissions"  created  during  the  70s;  these  commissions11,  are  a  kind  of 
administrative  authority  and  make  their  decisions  on  the  basis  of  a  written  procedure 
whose  details  are regulated  by  statute. 

In the Netherlands the "Geschillencommissies" (dispute commissions)12 play a similar role 
in  what  is  basically  a  written  procedure.  They  deliver  a  binding  opinion  ("bindend 
advies")  which  must  be  complied  with  by  the  parties.  The  Geschillencommissies  are 
subject  to  an approval  procedure  designed  to ensure that  certain  conditions are met  and 
are members  of  a Foundation  set up in  1970. 
More recently, Geschillencommissies/  Commissions des litiges were created  in Belgium 
as well. 

In  Portugal  a  free  conciliation  and  arbitration  procedure  for  consumer  disputes  was 
established  in Lisbon in the context of a pilot project backed by the Commission and the 
Portuguese  authorities,  whose  very  positive  results13  have  lead  to  the  opening  of  other 
similar  centres. 

In Spain  a  "sistema  arbitral  del consumo" was established  by Royal  Decree  of  30 April 
1993; in the framework  of this system, each arbitration commission consists of a chairman 
(representing  the  administration),  a consumer  representative  and  a representative  of  the 
professionals14. 

In several countries a mediator (known  as "private ombudsman"  in the United  Kingdom 
and Ireland) has been created  in certain economic sectors (most commonly  banking and 
insurance)15.  The  British  and  Irish  Ombudsman  Association  has  recently  drawn  up 

10 

The  two  approaches  are  complementary,  in  most  Member  States  -  for  example,  the  United 
Kingdom  has developed  both  simultaneously. 
Chaired  by  a  lawyer  and  made  up  of  representatives  of  consumers  and  professional  circles.  For 
example,  in the  1993-94  financial  year the Swedish  commissions  received  6 327  complaints. 
Consisting  of a consumer  representative,  a representative  of the professional  organisation  of the 
sector concerned, and an independent chairman. In 1994 the Geschillencommissies registered 7  167 
cases (as opposed  to  6  594  in  1993 and 6 027 in  1992 -  the annual  growth  rate  is  over  8%). 
Almost  2 000 cases settled  within  40 days. 
Since their  creation, the  "Juntas  arbitrales" have registered  over  14 992  complaints. 
The task of these mediators  is to deal with consumer disputes through mediation, conciliation  and 
(in certain  cases) they may  deliver a decision which  is binding on the professional.  For example, 

minimum  criteria  binding  on  its  members;  in  the  case  of  mediators  created  for  certain 
public  services  these  criteria  are normally  established  by  statute. 

In other Member States a similar role is played by the Chambers of Commerce (Germany 
and,  more  recently,  Italy). 

III.  NATIONAL 

INITIATIVES  CONCERNING  ACCESS  TO  COURT 

PROCEDURES 

In France a simplified  procedure was established  by Decree No 88-209 which  facilitates 
the  introduction  of  claims  of  up  to  FF  13 000  before  the  courts:  the  "declaration  au 
greffe"  (indicating  the  identity  of  the  parties  and  the  nature  of  the  claim,  as  well  as  a 
summary  of  the  grounds)  is  standardised  in  a  simplified  form  which  is binding  on  the 
defendant  when  submitted  to  him  by  the  registrar;  likewise,  the  defendant  is  provided 
with  a simplified  form  for  setting  out his comments. 

In England  a  "simplified  summons" may  be used  for  all claims of up to UKL  3 000 in 
the County  Courts. This is a simplified  form  (of exemplary clarity)  which is filled in by 
the complainant  and a copy of which is sent by the court to the defendant,  together  with 
a reply  form  (which  is just  as clear  as the first one). 
If the defendant  does not respond within  14 days, the complainant may request the court 
to  issue a payment  order;  if  the defendant  contests the  grounds the case is referred  to  a 
hearing. The "County Court Rules" (1981) specify  that the hearing shall be informal  and 
strict  rules of  evidence  shall  not be applicable. 

In  Ireland  a  similar  mechanism  was  introduced  three  years  ago  for  small  claims  by 
consumers. This procedure, initially introduced for claims of up to 500 punts, now applies 
to  claims  of  up  to  600 punts  and  it  is planned  to  raise  the  ceiling  to  1000 punts.  The 
court registrar helps the consumer fill in the form  which  - after  entry in the register  - is 
sent  to  the  defendant;  all  he  has  to  do  is  to  fill  in  the  special  form  created  for  this 
purpose. If the defendant  contests the application,  the registrar  attempts to reconcile the 
parties; to this end  he may  allow  them to  put their  case  and/or  invite  them to  negotiate 
a  solution. 

In other  Member  States, such as Germany,  equivalent  forms  exist  for  certain  categories 
of  disputes.  In  Belgium,  forms  have  been  drafted  to  make  it  easier  for  to  institute 
proceedings  before justices  of the peace. 

In Sweden  and Finland,  simplified  forms have been prepared  for bringing  complaints to 
the attention  of the  "Consumers  Complaints  Committees". 

The  forms  mentioned  above  exist  only  in  the  national  language  of  the  legal  orders 
concerned. 

in  1993 in the United  Kingdom  8  133 complaints  were registered  by the Insurance  Ombudsman 
and 9  578 by the  Banking  Ombudsman. 

PART  II:  THE  COMMUNITY  DIMENSION  OF  THE  PROBLEM 

I. 

THE  COST  OF  "JUDICIAL*'  FRONTIERS 

In the  context  of a single  market  created  against  a background  of different  legal  traditions 
and  commercial  practices  it  is  only  natural  that  a  certain  number  of  transactions  should 
give  rise  to  certain  difficulties 
in  interpretation  or  indeed  in  the  performance  of 
obligations  linked  to  the  transaction,  creating  disputes  between  the  parties. 

The  possibility  of  rapidly  and  fairly  settling  these  disputes  at  a  reasonable  cost  was 
highlighted  by  all  the  parties  concerned  during  the  consultations  on  the  Green  Paper  as 
a  sine  qua  non  for  the  development  of  intra-Community  transactions  and,  hence,  for  the 
success  of  the  internal  market. 

The  implementation  of  appropriate  procedures  is  indispensable,  given  that  not  all  the 
operators  concerned  have  a  "legal  service"  specialised  in  the  very  complex  issues  of 
dispute  resolution  when  the parties  are  domiciled  in different  countries:  few  firms  (below 
a  certain  size)  and  even  fewer  consumers  are  able  to  navigate  the  maze  of  private 
international  law  (whose  application  in  a  Union  of  15  Member  States  give  rise  to  210 
different  potential  combinations),  the  existing  conventions  (none  of  which  is  yet 
applicable throughout the European Union in its entirety) and the national procedural  rules 
(which  have  in  no  way  been  approximated). 

The  fear  of  "complications"  as  well  as  the  cost  of  finding  one's  way  through  the  "maze" 
exercise  a strong  dissuasive  effect  on  transactions  involving  consumers:  since  consumers 
(taken  singly)  do  not  normally  possess  large  sums  of money,  the  costs  of hiring  a  lawyer 
will  often  be  quite  out  of  proportion  with  the  value  of  a  potential  claim.  In  certain 
countries this dissuasive effect  is compounded  by the  sluggishness of the legal  procedures 
and  in others  by  rules  governing  the  payment  of  lawyer's  fees:  in  several  Member  States 
the  party  who  "wins"  the  case  can  only  recover  a  small  part  of  the  costs  incurred  -  and 
in  consumer  disputes  this  means  that  the  plaintiff  is  certain  to  bear  costs  over  and  above 
the  damage  suffered,  in  the  uncertain  perspective  of  obtaining  a  "favourable"  ruling 
awarding  a  sum  which  may  be  less  than  the  cost  of  "winning"  the  case. 

The  specific  and  supplementary  barriers  which  complicate  the  settlement  of  intra-
Community  consumer  disputes  may  thus  hinder  the  smooth  functioning  of  the  internal 
market,  on  the  same  lines  as  technical  and  tax  barriers. 

In  order  to  verify  the  truth  of  this  hypothesis,  the  Community  employed  an  independent 
research  institute  to conduct  an  in-depth  study  on the  "Cost of legal  barriers to  consumers 
in the  single  market".  The  results  of  this  study  -  which  covers the  15 Member  States  and 
was  conducted  in  1995  -  may  be  summarised  as  follows: 

The  average  cost16 of  in-court  settlement  of  an  intra-Community  dispute17 over  an 
amount  equivalent 
the  best  conceivable 
to  ECU  2  000  corresponds 
circumstances  (see  below)  to  approximately  ECU  2  500  for  the  plaintiff. 

in 

This  cost  (which  hence  represents  the  "minimal"  average  cost)  does  not  include: 
VAT  on  lawyer's  fees  (which  private  individuals,  as  opposed  to  firms, 
cannot  recuperate); 
experts'  fees; 
costs of  travelling  abroad  (when  the parties  have to attend  court  in  person); 
reimbursement  of  witnesses'  fees; 
the  cost  of  notifying  and  serving judicial  documents. 

The  average duration  of a case before  a lower  court  for the same  intra-Community 
dispute  is between  23.518  and  29.219  months  for  the  European  Union  as  a  whole, 
and  in  certain  combinations  of  countries  it  exceeds  40  months,  while  at  national 
level  it  is  normally  under  20  months. 

In  other  words  the  backlog  of  pending  court  cases  in  certain  Member  States  has 
a  "cumulative"  effect  and  this  affects  the  nationals  of  other  Member  States  even 
if  they  seem  to  be  protected  at  national  level  20. 

It  should  be  noted  that  the  above-mentioned  periods  relate  to  the  courts  of  first 
instance  and  assume  a  dispute  which  is  free  of  technical  "complications"  (no 
expert  reports,  no  letters  rogatory)  and  procedural  difficulties  (no  counterclaims) 
and  assume  that  the  court  decision  is  not  appealed  to  a higher  court  and  that  the 
case  is not referred  to the European  Court  of Justice  for  a preliminary  ruling.  Like 
the  estimate  concerning  costs,  this  is  in  some  way  the  "best"  hypothesis. 

Summarising  in  cost/benefit  terms  the perspectives  of a "standard"  court  case,  the 
study  shows  that  for  a  "simple"  inter-Community  dispute  the  situation  is  as 
follows: 

a  party  who  has  suffered  damage  in  the  amount  of  ECU  2  000  must,  in 
order  to  have  "access to justice",  first  pay  an  "entrance  fee"  of ECU  2  500 
(court  cost  +  lawyer's  fees,  exclusive  of  VAT),  in  the  (uncertain) 
perspective  of  recovering  his  loss  within  12  to  64  months  (depending  on 

court  costs  + lawyer's  fees 
For the purposes of this study we use the notion already employed  in the Green Paper of a "dispute 
between  two parties  domiciled  in two  different  Member  States". 
For  an  action  brought  in the  country  in which  the defendant  is domiciled. 
For an action brought in the parties in which the plaintiff  is domiciled, followed  by the recognition 
and  exequatur  procedures  in  the  defendant's  country.  However,  it  should  be  noted  that  in  two 
Member  States  the  duration  of  this  second  stage  alone  exceeds  20  months  and  in  four  other 
Member  States  it  is equal  to or  greater  than  10 months. 
The  average  duration  of  a  procedure  brought  in  one  Member  State  and  followed 
by  enforcement  of  the  decision  in  another  Member  State  in  conformity  with  the 
Brussels  Convention  may  be  as  long  as  72  months  in  certain  countries,  according 
to  the  results  of  the  study. 

20 

the  country)  -  all  this  on  the  assumption  that  the  defendant  will  (still)  be 
solvent  when  the  court  makes  its  decision. 

If  the  second  condition  is  not  (or  no  longer)  met  at  the  time  of  judgment, 
the  plaintiff  (while  "winning"  the  case)  will  have  lost  ECU  4  500  (his 
initial  loss  +  expenses). 

If  the  condition  is  met,  and  if  the  court  finds  for  the  plaintiff,  he  will  be 
awarded  damages;  in  most  of  the  Member  States  (11  out  of  15  according 
to  the  study)  he  will  however  recover  only  a  part  of  his  outgoings  (in 
addition,  certain  legal  orders  simply  rule  out  compensation  for  the  fees 
charged  by  "foreign"  lawyers). 

Since  these  costs  amount  to  ECU  2  500  on  average,  the  plaintiffs 
"balance"  (damages  minus  non-reimbursed  outgoings)  will  often  be  close 
to  zero  if  not  indeed  negative. 

4 

Bearing  the  above  points  in  mind,  the  study's  fourth  conclusion  is  hardly 
surprising: very few intra-Community  disputes involving consumers come to court. 

Quite  apart  from  the  fundamental  problems  posed  by  such a situation  in a  rule-of-
law state or community21  it remained  to be  seen whether  (in regard  to  out-of-court 
mechanisms)  the  problem's  dimensions  could  be  quantified  in  some  manner.  To 
this end,  the  Commission  launched  two  initiatives  whose  results provide  an  initial 
answer  to  the  question: 

I)  One  of  the  conclusions  of  the  Green  Paper  concerned  the  "creation  of  a mechanism  to 
follow  up  cross-border  disputes  with  a  view  to  inventorising  the  problems  encountered 
in  practice".  Here  the  reactions  to  the  Green  Paper  were  unanimous. 

On  an  experimental  basis,  and  drawing  on  a  limited  sample  of  border  sides,  the 
Commission  thus began to collect  useful  information  and particulars  (quantity, origin  and 
classification  of  complaints)  so  as  to  get  a better  idea  of  the  magnitude  of  the  problem: 
in eight border regions, organisations and/or bodies whose mission  is to inform  consumers 
collected  complaints  against  professionals  established  in  a  Member  State  other  than  that 
of  the  consumer  ("intra-Community"  complaints).  From  December  1994  to  September 
1995  2 615 complaints  of this kind  were  registered  for  a total  value of ECU  39 492  315. 

II)  Eurobarometer  survey  43.0,  conducted  in  spring  1995,  also  offers  two  significant 
indexes: 

- 

24%  of  the  interviewees  (3  799  out  of  15  800)  conducted  at  least  one  intra-
Community  transaction  in  the  past  12 months,  but  only  3.2%  purchased  durable 
goods  (this  last  percentage  is  indeed  lower  than  the  figure  for  1992); 

8,7%  of  persons  who  conducted  an  intra-Community  transaction  (332  out  of 
3  799)  encountered  problems. 

21 Issues  of  principle  irrespective  of  the  number  of  concrete  cases 

10 

In the  second  part  of  the  studied  mentioned  above,  the authors estimate  that  the  above-
mentioned  legal barriers create an atmosphere of uncertainty whose macroeconomic costs 
partly explain  the "foregone  profits" of the internal  market (in other words the  difference 
between  the  forecasts  and  the  real  benefits  of  the  internal  market). 

According  to the  study's  conclusions: 
"That  legal  uncertainty  (or judicial  barriers)  impede economic growth and  stability  in an 
economy  is  a  central  hypothesis  in  development  economics  as  well  as  in  the  political 
economy  of  transformation  in  Eastern  European  reform  countries.  On  the contrary,  this 
aspect has hardly  been recognised  in the research on European  integration.  It has not been 
considered  in the  planning  of  the  European  Union  that economic  integration  induces an 
increase in legal  uncertainty  (...)  that can destroy  or at least reduce the expected  positive 
effects  of an internal  market  programme and also of a European  economic and  monetary 
Union". 

Among  the effects  of  legal  uncertainty,  the  study  notably  indicates  that: 
"Even expected transaction costs let consumers shy away from  buying abroad. The reason 
is that, when  regarding  the  higher  transaction  costs, foreign  goods have  lower  utility  for 
the potential buyers even at the same or at a lower market price for those goods compared 
with  home  goods.  The  same  is  valid  for  producers.  The  risk  of  having  to  use  higher 
transaction  costs  to  get  payment  for  delivered  goods  reduces  the  profit  or  incentive  for 
selling  abroad"  (...)  "Another  static  effect  refers  to  a  concentration  process  that  is 
produced  by  transborder  legal  uncertainty.  As transborder  legal  uncertainty  is relatively 
more  important  for  small  enterprises  than  for  big  ones,  small  enterprises  tend  to  be 
outcompeted". 

The study's  authors  emphasise  that  a quantitative  estimate of the macro-economic  costs 
is very  difficult;  however,  in  their  conclusions  they  estimate  that: 
"By  far  the  highest  costs  are  caused  by  consumers  not making use of  price  differentials 
within the European  Union due to legal uncertainty  (...)  Adding up the direct static costs 
leads to costs in the range of  7 230 to 73 790 million ECU. The sum of the hypothetical 
average  scenarios  we  regarded  as plausible  is 27  530 million  ECU". 

II, 

THE  RESULTS  OF  THE  CONSULTATION  ON  THE  GREEN  PAPER 

The Green Paper was the subject  of very extensive consultations whose results  confirmed 
the necessity  for  as well  as the  urgency  of  a Community  initiative. 

The European  Parliament  (Resolution  of 22 April  1994)22, the Committee of the Regions 
(opinion  of  17 May  1994)23,  the  Economic  and  Social  Committee  (opinion  of  1 June 
1994)24 as well  as a large  majority  of  organisations  representing  the  interests  concerned 
(consumers, business  and  the  legal  professions)  have come out clearly  in favour  of  such 
an  initiative. 

In  all  the  Commission  received  110  written  reactions  representing  all  the  interests 
concerned  from  all  over  the  European  Union;  all  parties  who responded  by  a  specified 

OJEC  NoC  128, 9.5.94,  p. 459 
OJEC  NoC  217,  6.8.94.  p. 29 
OJEC  No C 295  of  22.10.94,  p. 1 

23 
24 

deadline  (3Î  May  1994) were  invited  to a hearing  which  took  place on 22 July  1994. A 
certain  number of options derived  from  the replies received  by the Commission were also 
discussed  at the  first  European  Consumer  Forum (4 October  1994), which  hosted  almost 
350 participants  from  19 countries  and  representing  all  circles  concerned. 

In the summary report on the internal market presented on 9 December  1994 to the Essen 
European  Council,  the  Commission  confirmed  it  would  "base  its  measures  on  the 
consultations  in the context  of  the  Green  Paper". 

the  French  government  presented 

On  22 December  1994 
the  Council  with  a 
"Memorandum for an Active Consumer Policy" in which it emphasised that "the problems 
of  access  to  justice  have  not  been  resolved  and  jeopardise  the  creation  of  a  genuine 
European  area.  In other  words  the  Green  Paper  on  access to justice  is a response  to an 
essential  and  priority  need".  Other  Member  States, as well  as the EFTA  countries,  have 
invited  the  Commission  to take  concrete  initiatives  in the field of consumer  disputes. 

As  regards  the  objectives  of  the  Community  initiative,  a  significant  consensus  arose 
during  the  consultation  process  around  certain  strands  in the Green  Paper,  notably: 

I) 

II) 

HI) 

the coordination of national provisions concerning actions for an injunction  which 
may  be  brought  in respect  of  certain  infringements  of Community  law25: 

the  promotion  of  an  environment  favourable  to  the  out-of-court  settlement  of 
consumer  disputes26; 

the  creation  of  a  mechanism  for  monitoring  intra-Community  disputes  and  the 
establishment  -  in  the  shape  of  a  pilot  project  - of  coordinated  mechanisms  for 
instituting  cross-border  proceedings.27 

As  regards  the  first  point  (actions  for  an  injunction)  a  proposal  for  a  Directive  was 
presented  by  the Commission  on 24 January  1996. This is a problem  which can  only  be 
resolved  by  the  adoption  of  a legal  instrument  at  Community  level. 

As regards  the other  points (settlement  of disputes)  the Commission  favours  a voluntary 
approach  and  wants  to create  better  conditions  for  cross-border  cooperation. 

To this end the third part of this plan proposes specific  measures which, because  of their 
European dimension, may contribute to realising the objectives pursued. These  objectives 
concern  both  the smooth  functioning  of the  internal  market  (Article  100a of the  Treaty) 
and  the protection  of consumer  interests  (Article  129a). 

The  existence  of  appropriate  procedures  for  settling  consumer  disputes  favours  the 
"spontaneous" respect of obligations arising  from  the contract and/or the applicable  legal 

26 

Conclusion  No  1  of  the  Green  Paper,  paras  13  and  14  of  the  Resolution  of  the  European 
Parliament 
Conclusions No 4 and 5 of the Green  Paper, para. 22 of the Resolution of the European  Parliament 
Conclusions  No  3  and  6  of  the  Green  Paper,  paras  7  to  9  of  the  Resolution  of  the  European 
Parliament  which  however  are  a  lot  mor  far-reaching  than  the  perspectives  described  in  this 
Communication 

12 

provisions;  on  the  other  hand,  the  absence  of  procedures  designed  to  settle  intra-
Community  disputes  rapidly  constitutes  an  uncertainty  factor  for  the  economic  players. 
From  the micro-economic  perspective  this factor  favours  the party  who defaults,  allowing 
him  to  profit  from  his  negligence,  while  the  other  party  bears  the  loss. 

At  macro-economic  level,  the  same  factor  exercises  a  dissuasive  effect  which  (by 
gradually  "eroding"  the  economic  operators'  confidence  in  the  reliability  of  intra-
Community  transactions)  may  diminish  the  expected  benefits  of  the  internal  market  for 
the  economy  as  a  whole. 

in 
As  indicated  in  the  foreword,  the  initiatives  envisaged  in  Part  III  are  not  exhaustive: 
consonance  with  the  European  Parliament's  suggestion,  the  idea  is rather  to  draw  up  an 
"interim  report  with  a  timetable  for  implementing  the  necessary  measures"28.  This 
timetable  is  reproduced  in  Annex  I  to  this  Communication. 

28 

Resolution  of  22  April  1994, mentioned  above. 

13 

PART  III:  THE  INITIATIVES  PROPOSED 

I. 

THE  PROMOTION  OF  OUT-OF-COURT  PROCEDURES 

At  Community  level  the  Commission  considers  that  the  initial  focus  must  be  on  out-of-
court  procedures,  for  the  following  reasons: 

- 

- 

- 

markets  are evolving  far  more  swiftly  than  legal  codes, and  infinitely  more  swiftly 
than  the  negotiations  between  1 5  Member  States; 
the  spectacular  growth  of  out-of-court  procedures  relating  to  consumer  disputes 
may  be  interpreted  either  as  a  response  to  sluggishness  (and  difficulties)  in  the 
adaptation  of  certain  legal  codes  (adopted  at  a  time  when  disputes  were  far  less 
numerous  and  did  not  cover  the  typical  problems  of  contemporary  society),  or  as 
a  "filter"  to  be  encouraged  so  as  to  overcome  the  court  backlog,  or  as  a  challenge 
to  the  principle  of  the  unicity  of  the  courts;  but  however  one  may judge  its  merits 
and  demerits,  this  trend  applies  to  most  Member  States; 
the  experience  gained  by  several  Member  States  proves  that  the  "selective" 
encouragement  of  out-of-court  procedures  for  settling  disputes  - providing  certain 
essential  criteria  are  respected  - has  been  welcomed  both  by  consumers  and  firms 
(by  reducing  the  cost  and  duration  of  consumer  disputes)  and  is  currently 
supported  by  all  sides  concerned. 

In  the  framework  of  the  internal  market,  the  lessons  we  can  draw  from  these  experiences 
the  proliferation  of  "out-of-court"  bodies  of  all  kinds 
may  be  invaluable.  Given 
(mediators,  conciliators,  arbitrators)  and  at all  levels (sectoral,  national, regional  and  even 
local)  there  are  two  options:  Either  we  ignore  the  phenomenon,  fully  aware  that  for  most 
intra-Community  consumer  disputes  the  cost  of  a  lawsuit  would  be  disproportionate;  or 
we  try  to  establish  "benchmarks"  to  accommodate  the  "foreign"  consumer,  on  the  same 
lines  practised  by  the  countries  who  lead  the  field  in  this  area  (See  Chapter  II  of  Part  I). 

The  experience  oi'  these  countries  is  that  certain  out-of-court  procedures  may  play  an 
important role  in settling consumer  disputes whenever  certain  minimum  criteria have  been 
established  to  ensure the  transparency  of  the  procedure  and  the  independence  of the  body 
responsible  for  dealing  with  the  disputes. 

By  contrast,  the  absence  of  such  criteria  goes  a  long  way  to explaining  consumer  distrust 
in  certain  countries  in  regard  to  all  forms  oi' out-of-court  dispute  resolution.  The  results 
of  the  consultation  on  the  (îreen  Paper  were  revealing  in  this  respect:  most  of  the  parties 
involved  would  welcome  minimum  criteria  at  European  level,  including  the  professionals 
concerned,  as well  as  the  European  Parliament  and  the  Economic  and  Social  Committee. 

On  the  basis  of  the  comments  and  suggestions  received,  the  Commission  is  urged  to 
define  and/or  propose  a  list  of  minimum  criteria,  applicable  to  the  treatment  of  intra-
Community  consumer  disputes  in  order  to  facilitate  the  creation  and/or  "networking"  of 
out-of-court  procedures  at  internal  market  level. 
The  establishment  of  such  criteria  at  European  level  would  make  it  possible  to  support 
and  supplement  the  policies  of  the  Member  States  that  have  chosen  to  promote  a 
"conciliation  culture"  in  the  domain  of  consumer  disputes,  and  should  obviously  draw 
inspiration  from  criteria  established  at  national  level. 

14 

A  draft  working  outline  comprising  six  minimum  criteria 
this 
Communication  (Annex  II); three stages are envisaged,  in line with the timetable  featured 
in  Annex  I. 

is  annexed 

to 

STAGE  1: 

The working  outline  is sent  to the  interested  parties  for  consultation,  with 
an  eye  to  finalising  the  definition  of  the  proposed  criteria. 

STAGE  2: 

The  criteria  adopted,  in  their  definitive  version,  are  the  subject  of  a 
Commission  Recommendation. 

This text  should  stipulate  an observation  period  (three  years)  during  which  the  existence 
of  common  criteria  could  facilitate  the  creation  of  "approved"  bodies  in  each  Member 
State,  on  a voluntary  basis. 

Moreover, the existence of national  bodies employing similar criteria might make it easier 
to manage mechanisms for handling intra-Community complaints on a voluntary basis (for 
example,  by  creating  a  single  "post  office  box"  to  which  consumers  could  direct  their 
complaints,  hence  obviating  potentially  arduous  research  when  the  professional  belongs 
to  a  "foreign"  system). 

STAGE  3:  At  the  end  of  the  observation  period,  the  follow-up  given  to  the 
report 
Recommendation  would  be 
accompanied, where relevant, by a proposal designed to ensure compliance 
with  the criteria,  in accordance  with procedures yet  to be determined,  and 
after  further  consultations. 

the  subject  of  an  assessment 

By  way  of  example,  compliance  with  the  criteria  could  be  guaranteed  using  a  scheme 
similar to the one in force  in certain  Member  States (examples: United  Kingdom,  Ireland, 
Sweden,  Finland,  Denmark,  the  Netherlands). 

The purpose  of  such  a scheme  would  not  be to  "regulate"  intra-Community  disputes  but 
to help the interested  parties establish  procedures applicable to such disputes, on the same 
lines as the  Office  of  Fair  Trading,  for  example,  in  the  United  Kingdom.29 

II. 

SIMPLIFIED  ACCESS  TO  COURT  PROCEDURES 

The  establishment  of  out-of-court  procedures  as recommended  in  Chapter  I can  only  be 
envisaged  on  a  strictly  voluntary  basis;  neither  professionals  nor  consumers  can  be 
"obliged"  to  rely  on  them. 
The  situation  was  aptly  summarised  by  the  European  Parliament  in  its  Resolution  of 
22  April  19°4  on  the  Green  Paper  (paragraph  5)  : "when  all  amicable  procedures  have 
failed,  parties  must  be  able  to  seek  legal  redress  at  a cost  commensurate  with  the  small 
sums  involved". 

29  Under  (he  Fair  Trading  Act,  (he OFT's  (ask  is  "«> encourage  (he  relevant  associai ions  lo  prepare  and 
to disseminate  to their members codes of practice  for guidance  in safeguarding  and promoting the interests 
of consumers  in the United  Kingdom";  in this Context,  a standard  procedure  has been  adopted  for handling 
complaints. 

15 

To  this  end,  Parliament  considers  "that  it  would  be  appropriate  to  harmonise  to  a  certain 
extent  the  rules  governing  legal  proceedings  in  the  Member  States,  in  order  to  establish 
a  Community  procedure,  for  claims  up  to  a  certain  amount,  for  the  rapid  settlement  of 
individual  transfrontier  consumer  disputes"  (paragraph  9  of  the  Resolution). 
I his  view  is  shared  by  a  large  number  of  bodies  and  organisations  that  represent  users 
and  call  for  harmonisation  of  the  "ceiling"  of jurisdiction  for  courts  ol  this  kind  {justices 
de  paix,  County  Courts,  Amtsgehcht)  as  well  as  the  global  introduction  of  simplified 
proceedings  (simplified  summons,  declaration  au  greffe)  in  order  to  ensure  a  certain 
"parity  of  treatment"  of  small  disputes  in  all  the  Member  States30. 

Given  the  present  state  of  Community  law,  the  suggestions  summarised  in  the  preceding 
paragraph  must  be  approached  with  a  fair  measure  of  caution.  However,  a  "Community" 
contribution  to  solving  the  problem  is  conceivable,  provided  the  legal  traditions  and 
idiosyncrasies  of each  Member  State are  fully  respected.  Such a contribution  could  in  fact 
be  based  on  the  existing  corpus  of  national  rules  (see  below),  while  making  it  possible 
to  improve  access  to  existing  national  procedures  (which  for  at  least  one  of  the  parties, 
in  the  case  of  an  intra-Community  dispute,  remains  a  "foreign  one").  In  this  context  the 
sample  forms  mentioned  in  Part  I,  Chapter  III  pay  help  illustrate  the  objective  in  mind. 

Drawing  inspiration  from  these  examples  the  Member  States  could  adopt  a  simplified 
European  form  for  intra-Community  disputes31  with  a  view  to  facilitating  access  to  the 
national  courts. 
Far  from  involving  harmonisation  of  procedures,  such  an  initiative  would  bring  them 
closer  to users, namely  those justiciable,  and  provide  greater  transparency  at the very  first 
stage  of  gaining  access  to  an  essential  "public  service". 
Forms  have  been  created  (or  harmonised)  at  F>uropean  level  in  the  context  of  other 
problems  of  everyday  life  -  for  example  the  "E  111"  form  (to  enable  citizens  to  draw 
sickness  insurance  benefits  in  a  country  other  than  their  country  of  residence)  and  other 
forms  adopted  in the  social  security  field.  Experience  shows that  these documents,  which 
exist  in all Community  languages, facilitate  access for  users and also lighten the  workload 
of  the  bodies  responsible  for  handling  the  dossier  in  question. 

From  this perspective  the idea would  not be to harmonise procedures but to provide  better 
access  to  the  procedures  that  exist  in  each  country,  as  they  stand  at  present  -  hence 
encouraging  an  approximation  of  the  circumstances  facing  the  parties  to  an  intra-
Community  dispute,  currently  separated  by  certain  specific  barriers.32 

The form  would  be prepared  in the  11 Community  languages and the  "usage  instructions" 
could  be  defined  as  follows: 

30 

In  most  Member  States  a  "simplified"  procedure  applies  to  disputes  whose  value  is  less  than  a 
certain  sum;  however  this  sum  can  vary  greatly.  For  example,  a claim  for  up  to  1 500  Ecus  is 
considered  as a  "small  dispute" (with  a view  to  applying  simplified  procedures)  in  France  or  in 
Germany, but not in Spain or the United Kingdom. The cost and duration of the "treatment" varies 
as a result,  for  claims  relating  to the same  amount,  depending  on the country  whose courts  have 
jurisdiction. 
By European  "form"  we mean a form whose basic structure should be "harmonised"  (with an eye 
to  facilitating  the  translation  as  well  as  the  handling  of  the  complaint),  but  there  is nothing  to 
prevent  Member  States  from  adapting  the  form  to  their  national  traditions  and  legal  orders. 
Green  Paper,  Chapter  III  A.2  (page  72) 

I. 

II. 

Ill 

The  claimant  would  fill  in the  form  in  one  of  the  Community  languages  having 
the  status  of  an  official  language  in  the  claimant's  country  of  residence33;  the 
claim,  formulated  in  this way,  would  then  be  transcribed  to  the  equivalent  form 
in  an  official  Community  language  of  the  addressee's  country  and  sent  to  the 
latter,  via the  relays  indicated  by the  Member  States; 
In the  section  of the  form  reserved  for  him, the  addressee could  either  propose a 
solution  as  to  the  substance,  or  inform  the  complainant  of  the  existence  of  an 
the  dispute  amicably  (mediator,  conciliation 
instance  which  could  settle 
commission,  etc.); 
If the addressee  did  not  respond  within  a  given  period,  or  rejected  the  proposed 
solution,  the  form  would  be  forwarded  to the  competent  authority  (which  would 
find there  the  background  to  the dispute  as  well  as the  subject  of  the  complaint 
and  the  identity  of the parties,  in the  two  languages). 

A provisional  version  of such a form  is annexed  to this Communication  (Annex III); the 
final  version  will  be  established  on  the  basis  of  wide-ranging  consultation  with  the 
Member  States,  the  legal  professions,  associations  representing  potential  users,  on  the 
understanding that recourse to the form by users (consumers and firms) should be optional 
and  not  rule  out  other  forms  of  dispute  settlement.  In  introducing  the  form,  two  stages 
may  be  envisaged. 

Stage  I: the  form  is tested  in  a limited  number  of  border  regions 

In order to respect cultural and legal, national  and regional  particularities, the multipliers 
are selected  on the basis of consultations  with the  Member  States and interested  parties. 
A  group  of  experts  representing  the  Member  States  supporting  the  initiative  is  in 
responsible  for  follow-up  and  drafts  recommendations  on expiry  of an  appropriate  trial 
period. 
The  timetable  for  prior  consultations  in  the  context  of  implementing  the  initiative  is 
reproduced  in Annex  I to this  Communication. 

Stage  II: the final version  of the form  is presented  by the  Commission  in the context  of 
a proposal  for  a regulation  which will also define  its "usage instructions" on the basis of 
the  results of the trial  period. 
In this case  the  "scope"  of the  form  could  be  the  subject  of  prior  consultations  with  an 
eye to determining the ceiling for what the Member  States consider to be "small claims". 

III. 

PERSPECTIVES 

In the absence of Community  initiatives designed to improve individual access to justice, 
consumer  associations  and  certain  Member  States  suggest  that  persons  who  have  been 
harmed  by  the  behaviour  of  a  given  professional  be  afforded  the  opportunity  to  sue 
collectively.  This objective  may be achieved  in the form  of a "class action" as is already 
the case in most of the Common Law countries, or via a series of authorisations  granted 
to a representative organisation, on the lines of the "joint representation" action introduced 
in  France  by the  Law  of  18 January  1992. 

33 Where relevant, in agreement with the competent  authorities of the Member States, the 
form  could  also  be  filled  in  the  Community  language  of  the  country  of  origin  of  the 
consumer. 

17 

However,  at  present  Member  States  seem  far  from  agreement  on  this  particular  option. 

Hence  other  avenues  should  be  explored  and  a  debate  should  be  launched  on  the 
possibilities  of  consolidating  related  actions,  as  -  for  example  - when  the  behaviour  of  a 
given  professional  harms  several  consumers. 

To  this  end,  it  should  be  remembered  that  provisions  already  exist  in  the  national 
legislations,  applying  to  "actions...  so  closely  connected  that  it  is  expedient  to  hear  and 
determine  them  together  to  avoid  the  risk  of  irreconcilable  judgments  resulting  from 
separate  proceedings"  (Article  22,  third  paragraph,  of  the  Brussels  Convention  on 
jurisdiction  and  the  enforcement  of judgments  in  civil  and  commercial  matters). 

Application  of these provisions  is currently  stymied  by the fact that consolidation  operates 
"ex  post"  in  regard  to  a  multiplicity  of  claims  submitted  successively  (rather  than 
simultaneously)  to  a  number  of  different  courts;  this  poses  substantial  if  not  to  say 
unsurmountable  technical  problems  in the case of intra-Community  disputes34: in the  case 
of  related  actions,  the  solution  adopted  by  the  Brussels  Convention  refers  to  the  notion 
of  "court  first  seised"  but  this  is  not  defined  by  the  Convention  and  gives  rise  to 
incompatible  interpretations  in  the  national  legal  orders35. 

To  get  round  these  problems  the  Commission  might  propose  that  consumers  harmed  by 
the  actions  of  a given  professional  could  instruct  their  organisations  to  group  complaints 
"ex  ante",  hence  facilitating  the  consolidation  of  related  actions:  while  remaining 
individual  cases  (in  no  circumstances  would  they  be  equivalent  to  a  "class  action")  they 
could  be  lodged  at  the  same  time  before  the  same  court  (normally,  the  court  having 
jurisdiction  over  the  defendant's  domicile). 
Writs  and  notifications  concerning  persons  issuing  such  an  instruction  could  thus  be 
addressed to the authorised  association (leading to substantial  savings in the  administration 
of  justice)  and  lawyers'  fees  would  be  considerably  reduced  (both  for  consumers  who 
"consolidate"  their  actions  and  for  the  professional  concerned),  by  comparison  with  the 
cost  of  the  same  cases  if  they  were  treated  in  isolation36. 

Eventually,  the  consolidation  of  related  actions"  could  be  proposed  as  an  add-on  to  the 
policy  of promoting  out-of-court  procedures,  in that  it would  apply  only  to  circumstances 
where  an  out-of-court  mechanism  is  not  available  (because  it  does  not  exist  or  because 
the  defendant  rejects  it).  In  this  case  the  following  approach  could  be  adopted: 

Green  Paper,  pages  76  ff. 
See the report drawn up by the Working Party for the approximation  of the law on civil procedure: 
in  certain  Member  States, a dispute  is considered  to  be  "pending"  from  the date the defendant  is 
notified  of the  writ;  in  other  countries the case may  have  to  be entered  by  the court  registrar;  in 
yet  other  countries  "lis  pendens"  is  born  when  the  claim  is  admitted,  or  when  it  is  sent  to  the 
defendant. 
Instead  of  having  to  face  a  host  of  procedures  being  dealt  with  by  different  courts  (with  the 
attendant  risk  of  inconsistent  decisions  and  hence  legal  uncertainty)  the  professional  concerned 
would also benefit  from  a single procedure allowing him to plan his costs more reliably and hence, 
if  he  wished,  to  negotiate  an  amicable  settlement  with  an  interlocutor  acting  on  behalf  of  the 
consumers  concerned. 

36 

a  transitional  period  could  be  accorded  during  which  out-of-court  procedures  for 
settling  intra-Community  disputes  could  be  established  (by  the  professionals 
concerned)  provided  they  respect  the  minimum  criteria  laid  down  at  European 
level  (see  Chapter  I); 

on  expiry  of  the  transitional  period  concrete  proposals  on  the  consolidation  of 
related  actions  could  be  presented  and  would  apply  to  the  disputes  which  cannot 
be  resolved  by  any  of  the  abovementioned  procedures. 

19 

ANNEX I 

Indicative 
initiatives 

timetable  concerning  measures to be taken  to implement  the  envisaged 

THE  PROMOTION  OF OUT  OF  COURT  PROCEDURES 
(Chapter  I of  Part  III  of this  Communication) 

- 

- 

- 

- 

Consultation  of  interested  parties  concerning  the  working  outline  featured  in 
Annex  II: March -  September  1996 

Adoption  of  the  Recommendation:  end  1996 

Observation  period:  December  1996 -  November  1999 

Preparation  and  presentation  of  an  assessment  report  on  the  operation  of  the 
system:  December  1999 -  May 2000. 

ACCESS  TO  COURT  PROCEDURES  (Chapter  II  of Part  III) 

- 

- 

- 

- 

Consultation  of the  interested  parties  on the draft  form  featuring  in Annex  III: 
March  -  September  1996  (Member  States,  Association  europoéenne  des 
magistrats,  Council  of the Bars and  Law  Societies  of the  European  Community, 
representative  associations  of users: consumers  and firms) 

Definition  of  the  working  outline  concerning  the  procedures  for  using  the  form 
and  selection  of the  frontier  regions  in which the  form  will be tested:  October  -
December  1996 (new  round  of consultation  with the Member  States) 

Nomination  of the members of the group of experts responsible  for  following  up 
the  initiative:  March -  April  1997 

Trial  period:  June  1997 - May  2000 

Recommendations  of  the  group  of  experts  on  the  follow-up  to  the  trial  period: 
June -  September  2000 

20 

ANNEX  II 

WORKING  OUTLINE  FOR  A RECOMMENDATION  ESTABLISHING 
CRITERIA  FOR THE  CREATION  OF OUT-OF-COURT  PROCEDURES 
APPLICABLE  TO CONSUMER  DISPUTES 

FIRST  CRITERION 

The  impartiality  of  the body  responsible  for  handling  the  disputes must  be  guaranteed 
by  all  appropriate  means  and  notably: 

- 

- 

in the case of mediators, by according them adequate guarantees of independence 
in the  performance  of their tasks; 

in the case of collegiate bodies, by ensuring joint representation of consumers and 
professionals  in the  bodies that  handle the disputes, as well  as the  independence 
of  the  third  party  that  chairs  the  body,  whenever  provision  is  made  for  such  a 
party. 

SECOND  CRITERION 

The  effectiveness  of the procedure  must be ensured  by measures  guaranteeing: 

- 

- 

- 

the  existence  of  clear  and  simple  forms  for  submitting  claims,  available  in  the 
eleven  Community  languages; 

establishment  of  and  compliance  with  time  limits,  including  preliminary  steps 
which  may  be  imposed  on  the  consumer  (example:  all  remedies  internal  to  the 
firm have been  exhausted); 

attribution  of appropriate  investigatory  powers to the body responsible  for  taking 
the  decision; 

THIRD  CRITERION 

Adequate  publicity  must  be  guaranteed  using  appropriate  means  to  ensure  the 
transparency  of the  following  elements: 

the existence  and  scope  of the procedure; 

the maximum  time  limit  and possible  cost  of the procedure  for  the  consumer; 

- 

the  criteria  governing  the  "decision"  of  the  body  responsible  for  handling  the 
dispute; 

21 

the  legal  import  of  this  "decision",  spelling  out  whether  it  is  binding  on  the 
professional  or whether it is a mere recommendation; in the first case the sanctions 
for  non-compliance  must  be set out. 

These particulars must always be provided in writing to any consumer who has expressed 
an  interest  in  availing  of  the procedure. 

The  decisions,  or  at  least  a summary  thereof,  must  be the  subject  of  an  annual  report 
accessible  to the public. 

All  decisions must be reasoned  and  in writing and  must  be communicated  to the parties 
concerned  as soon  as possible. 

FOURTH  CRITERION 

When  the  parties  are  domiciled  in  different  countries,  each  party  must  be  informed  in 
writing,  and  in  a  language  having  the  status  of  official  Community  language  in his/her 
country  of  residence,  of the decision  on the dispute,  setting  out the  grounds. 

FIFTH  CRITERION 

Application  of  the  codes  of  conduct  must  never  result  in  depriving  the  consumer  of 
protection afforded  to him/her by the mandatory rules of the law of the country in which 
he/she habitually resides, in conformity  with the Rome Convention on the law applicable 
to contractual  obligations. 

SIXTH  CRITERION 

Terms  in  a  contract  which  have  not  been  individually  negotiated  may  under  no 
circumstances be invoked to prevent consumers from  bringing an action before the courts 
having jurisdiction  for  the judicial  resolution  of the dispute. 

22 

CLAIM 
(In certain  circumstances  this document may replace  the letter  of formal notice) 

ANNEX III 

ADDRESSEE 
Name: 
First  name:  . . 
Address:  . . .. 

THE BACKGROUND i <» 

SUBJECT OF THE APPLICATION^ 

ANNEXES(3) 

Done at .. 
Signature 

(1)  Specify  as precisely  as 
possible: 
(a) the dates, places and 
conditions of purchase, sale 
or signature  of the contract 
(b) problems  encountered 
with the product  or service 

(2)  Specify  the precise 
nature of your  request 
(examples: amount of 
reimbursement,  repair or 
replacement  of a product, 
etc.). 

(3) Indicate  here all details 
you consider  necessary  and 
annex all documents 
supporting your request 

IMPORTANT: 

The Addressee has  15 days to reply  from  receipt of 
this document. If no reply  is received within this 
period, the Sender  may lodge a copy of the letter 
of formal  notice with the clerk  of the court having 
jurisdiction. This submission will be equivalent to 
a declaration  before  the clerk of the court. 

Note for  the sender: 
If the addressee is domiciled abroad, always consult a lawyer or a consumer organisation: they will be able to 
inform  you on the law applicable to the dispute, indicate to you the court  having jurisdiction  and help you at 
all stages of the procedure,  in accordance with the rules applicable  in each country. 
If the addressee is domiciled  in a Member  State of the European Union, your claim may be transcribed 
to a form  equivalent to this one, which exists in all official  languages of the Union. 

23 

-  REPLY  -
(Failure to reply within the ordained time limit may lead to an action being brought 
before the court having jurisdiction) 

I  accept  your  claim  and  agree to 

within  a period  of 

I  do not  accept your  claim  because 

and,  moreover,  request  as  follows 

I  certify  that  I have  received  your  claim  and propose the  following: 

A) record  our agreement  on the following  solution (1): 

B) submit the dispute to the body mentioned below (2): 

(l) Example: partial  or  full 
reimbursement  of the price, 
repair  or replacement  of the 
product. 
(2) Example: conciliator, 
arbitration,  mediation centre. 
Specify  clearly: 
- the cost and duration  of the 
procedure, 
- the legal status of the decision 
issued by this body (is it 
binding on the two parties or 
only on the professional  or  is it 
merely  a recommendation?) 

Done  at.. 
Signature 

Sender's  reply to the proposals: 

concerning proposal A) 

concerning proposal B) 

Signature 

^ 

ISSN 0254-1475 

COM(96) 13 final 

DOCUMENTS 

EN 

10 

Catalogue number  :  CB-CO-96-070-EN-C 

ISBN 92-78-00588-6 

Office for Official Publications of the European Communities 

L-2985 Luxembourg 

51