Source: https://recent-ecl.blogspot.com/2018/05/
Timestamp: 2019-10-17 02:36:56
Document Index: 339802612

Matched Legal Cases: ['CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ', 'art.22', 'art.22', 'Art17']

Recent developments in European Consumer Law: May 2018
Are 'effectiveness' and 'effective judicial protection' synonyms? Judgment of the CJEU in Case C-483/16
Today the EU Court of Justice issued its judgment in Case C-483/16 Sziber v ERSTE Bank Hungary. We have reported earlier on the Opinion of Advocate General Wahl in this case, which touches on the relation between the principles of equivalence and effectiveness on the one hand and the right to effective judicial protection, as guaranteed by Article 47 of the EU Charter of Fundamental Rights, on the other.
According to the referring court, the problem in this case was that the consumer - Mr. Sziber - had not amended his application as requested; under the new Hungarian legislation (also discussed on this blog here) he should have specified which legal consequences he wished to obtain if the contract were to be found invalid and, in particular, to which repayments he would be entitled to exactly. Because he did not do so, the referring court could not examine the case on the merits. Therefore, it asked the CJEU whether it was compatible with the Charter as well as with Article 7 of Directive 93/13/EEC to require the consumer to provide additional information in civil proceedings.
The CJEU refers to its judgments in Unicaja, Pereničová and Gutiérrez Naranjo to reiterate that consumers have, in principle, the right to restitution of amounts that have been unduly paid on the basis of unfair terms. As regards the procedural rules governing claims falling within the scope of Directive 93/13/EEC, the EU Member States have procedural autonomy, subject to the principle of equivalence and - here it gets interesting - Article 47 of the Charter (Sziber, para 35). The CJEU does not (separately) mention the principle of effectiveness, even though it still did so in Sales Sinués, the judgment it refers to in this respect. Has the 'effectiveness' of the Directive been replaced with 'effective judicial protection', or are they synonyms?
The answer seems to be: not necessarily. In paras 49-53, the CJEU focuses on the question whether there is an infringement of the (individual) right to effective judicial protection and if so, if this can be justified because it is legitimate and proportionate (paras 51-52). This is very similar to the test of Article 52(1) Charter. In principle, the existence of special procedural requirements for consumers does not mean that they do not enjoy effective judicial protection; they can be requested to provide the court with additional information. The purpose of those requirements is to relief the burden on the judicial system due to the great number of cases, which serves the general interest of a proper administration of justice. This may prevail over individual interests. It appears that the procedural rules at issue are not so complicated or severe that they disproportionally affect the consumer's right to effective judicial protection, but it is up to the referring court to determine this.
Moreover, ERSTE Bank and the Hungarian government have emphasised that consumers have the possibility to claim repayment and compensation under the new legislation. The CJEU holds that, if this indeed turns out to be the case, or if consumers have other effective procedural means at their disposal, the effectiveness of the protection intended by the Directive does not preclude the procedural rules at issue (para 54). Here, the focus is on the availability of "adequate and effective means" (Article 7 of the Directive) rather than on justification(s) for a possible infringement of Article 47 of the Charter.
Today's judgment suggests that that 'effectiveness' and 'effective judicial protection' call for different tests, in the context of Directive 93/13/EEC. This could be seen as a confirmation that they entail different perspectives. In the case of Sziber this may not lead to a different outcome, but there are cases where it would arguably have made a difference [*].
Lastly, it should be noted that the CJEU leaves it up to the referring court to decide whether the principle of equivalence has been met (paras 37-48). It also concludes - unsurprisingly - that Directive 93/13/EEC applies in domestic consumer disputes as well, where there is no cross-border element.
[*] See e.g. Anna van Duin, 'Article 47 EUCFR and Civil Courts: The Case of Arbitration Clauses in Consumer Contracts (the Netherlands vs Spain)', Working Paper 5/2018, Jean Monnet Chair of European Private Law, available at https://ssrn.com/abstract=3186531.
Posted by Anna van Duin at 16:38 No comments: Links to this post
Labels: access to justice, charter, consumer protection, effective judicial protection, effectiveness, unfair contract terms, unfair terms
Posted by Andrea Fejős at 01:25 No comments: Links to this post
Today the EU Court of Justice gave judgment in a Belgian case we have reported earlier on this blog: Karel de Grote-Hogeschool v. Suzan Kuijpers (C-147/16). The case concerned a repayment scheme between a student and an educational institution in Belgium regarding tuition. When the student failed to meet her payment obligations, the institution brought a claim against her before the peace court in Antwerp. The student did not appear in the proceedings and did not have legal representation.
The referring court wanted to know if it could examine ex officio whether the contract fell within the scope of the Unfair Terms Directive (and, consequently, whether it contained unfair terms). The CJEU's answer to this question is - unsurprisingly - positive. Moreover, the concept of 'seller' has a wide meaning and includes the educational institution insofar as it provides a service that is complementary and ancillary to its educational activities. The CJEU reiterates that
"(...) it must be borne in mind, as the Court has consistently held, that 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 93/13 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, by analogy, judgment of 21 April 2016, Radlinger and Radlingerová, C‑377/14, EU:C:2016:283, paragraph 79 and the case-law cited)."
It is noteworthy that the CJEU has answered the question as to the ex officio examination to be carried out by the national court on the basis of the principle of equivalence (rather than effectiveness or the right to effective judicial protection):
"It follows that, where the national court has the power, under internal procedural rules, to examine of its own motion whether a claim is contrary to national rules of public policy, which, according to the information provided in the order for reference, is the case in the Belgian judicial system for a court giving judgment in default, it must also exercise that power for the purposes of assessing of its own motion, in the light of the criteria laid down in Directive 93/13, whether the disputed term on which the claim is based and the contract containing that term come within the scope of that directive and, if so, whether that term is unfair (see, by analogy, the judgment of 30 May 2013, Asbeek Brusse andde Man Garabito, C‑488/11, EU:C:2013:341, paragraph 45)."
Posted by Anna van Duin at 13:05 2 comments: Links to this post
Labels: cjeu, consumer credit, consumer protection, ex officio, unfair contract terms, unfair terms
AG Opinion on Profi Credit Polska: barriers to appeal against payment order contravene UCTD
On the 26th April 2018, the AG Kokott's opinion on case C‑176/17 Profi Credit Polska S.A. w Bielsku Białej v Mariusz Wawrzosek was issued. The AG Kokott is of the opinion that the Polish procedure does contravene the Consumer credit directive as there are significant obstacles in place for the consumer to be able to exercise his rights, leaving him in a disadvantageous position.
It has been well established in the case law that national courts should examine whether terms are unfair ex officio. This case asks whether the same is true when the court examines a bill of exchange arising out of a consumer credit contract.
In Poland it is a widespread practice to issue bills of exchange by the creditor against the consumer, for securing the debt out of a consumer credit agreement. The polish civil procedure code, Kodeks postępowania cywilnego (hereafter: KPC) has a fast track procedure in place for the issue of such bills of exchange where the court is limited to examining solely the formal requirements applicable to the bill of exchange, without examining the relationship underlying it. The question referred was whether this procedure is compatible with the consumer credit directive.
There are two stages in the procedure, in the first stage the consumer credit agreement is not examined by the court, yet it can be examined in the second stage following an objection of the defendant/debtor. The facts of the case were that Mariusz Wawrzosek signed a credit agreement with the bank Profi Credit Polska S.A.. That agreement contained a standard term that the debtor would issue a blank bill of exchange to secure the claim of the bank from the credit agreement. As the debtor failed to repay his debt the bank filled out the bill of exchange with the amount of 3.268,38 PLN and used the bill of exchange as a basis for issuing a payment order against the debtor.
AG Kokott argues that the relationship should be viewed as a whole, meaning both stages (para 28).The previous directive on consumer credit included a provision on bills of exchange. The current directive does not include such an article, meaning that it is up to the member states to decide whether to regulate bills of exchange in relation to consumer credit agreements. Still the referring court asked whether the polish law contravenes art.22(1) of Directive 2008/48/EC (Consumer Credit Directive, hereafter: CCD)
According to the opinion, as the CCD does not harmonise law on bills of exchange, there is no violation of art.22(1) CCD. Art17(1) is not relevant to the case, as it refers to the instance when the claim has been transferred to a third party; while in this case the relationship remained between the bank and the debtor. Therefore, the CCD does not preclude the provisions of Polish law in question.
Is the same true in the case of Directive 93/13/EC (Unfair Contract Terms Directive, hereafter: UCTD)? AG Kokott differentiated the facts of this case from that of Finanmadrid EFC and Aziz. The bill of exchange forms the basis for the issue of a payment order. Unlike Finanmadrid EFC, the payment order covers only the bill of exchange, meaning that the debtor is able to turn against the creditor at a later stage requesting that a contract term is found unfair (para 66). Also the AG clarified that unlike Aziz, in this case there is not the chance of eviction from the family home, meaning that having only one chance to appeal against the payment order is compliant with the UCTD, especially if the consumer can further raise compensation claims or claims based on unjust enrichment and raise issues of unfairness in such proceedings (para 70-71).
Finally, AG Kokott pointed out the issues that to her opinion render the procedure of the appeal of the consumer against the payment order contrary to the UCTD. The AG argues that the fact that the appeal is possible only at the second stage of the procedure is not problematic as the law does not protect the consumer from complete inertia (para 73). The two week deadline for exercising the appeal is also not problematic in itself. (para 79) What is problematic is that in this appeal the debtor is required to put forward all the reasons for the appeal, submit all the relevant evidence as well as pay all the court expenses.
The procedure should not be such as to discourage the consumer from appealing to the court (para 77). AG Kokott finds that the requirement for the consumer to prepay ¾ of the court expenses when filing an appeal, as opposed to ¼ of the expenses for the applicant, is particularly grave and able to discourage the consumer from appealing to justice (para 80).
This is a carefully measured opinion where AG Kokott is conscious of the principle of subsidiarity yet willing to defend the rights of European consumers where that is necessary.
Posted by Eleni Kaprou at 11:27 No comments: Links to this post
Labels: civil procedure, cjeu, consumer credit, expenses, unfair contract terms