Abstract
Over the past decade, that is to say, post-financial crisis, national courts have identified rules of national civil procedure that they understand operate to impede the application of EU consumer law rules, as transposed into domestic law. The potential incompatibility of these national rules with EU law has come to the fore in the adjudication of disputes concerning consumer regulatory needs in consumer contracting for sales, services and credit. In responding to these references, the ECJ has rendered a line of judgments in an effort to establish procedural safeguards for the enforcement and protection of EU consumer rights. This contribution critically analyses one procedural mechanism, namely the establishment of the power and subsequent obligation on national judges to examine compliance with EU consumer protection rules ex officio. The contribution begins by providing a brief outline of the framework of EU and national consumer law, and the character of consumer rights enforcement. It then examines the tool (namely the preliminary reference procedure) by which the courts have engaged in the development of the ex officio regulation of EU consumer law, and outlines the key ECJ case law resulting therefrom. The contribution then evaluates the key shifts in national judicial cultures to which this mechanism of procedural protection gives rise and assesses the reach, limits and problematic dimensions of ex officio control in ensuring the effective and equivalent protection of consumer rights.
This paper was first presented at PPJ 2017 in Dubrovnik. I would like to thank Professors Alan Uzelac and Remco van Rhee as well as Marko Bratković, and the other participants at the conference, for an interesting discussion. The paper has also benefited from discussion with Professor Burkhard Hess and from the comments of Vincent Richard.
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Notes
- 1.
ECJ is used here to refer to the European Court of Justice before the Lisbon Treaty; the term CJEU is used to refer to the Court of Justice of the European Union (encompassing the General Court and the Court of Justice).
- 2.
As well, potentially other dispute resolution bodies, although this will not be discussed here. Throughout, this paper endeavours to clarify the context in which the regulation of unfair contract terms is made, both by national courts and by other dispute resolution bodies.
- 3.
The Consumer Rights Directive 2011/83/EU is an example of a directive with a targeted maximum harmonisation reach. Moreover, at the end of 2015, the European Commission proposed two directives of a maximum harmonisation scope: Proposal for a Directive on certain aspects concerning contracts for the supply of digital content COM(2015) 634 and the Proposal for a Directive on certain aspects concerning contracts for the online sale of (tangible) goods COM(2015) 635. These proposals aim to remove obstacles to cross-border e-commerce, by establishing single sets of rules for contracts for the sale and renting of digital content and contracts for digital services.
- 4.
As anticipated perhaps by Art. 169(2) TFEU.
- 5.
This requirement is also established in the Treaty structure; Art. 19 TFEU provides that the “Member States shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law.”
- 6.
With a few key exceptions including European civil procedural norms legislated for on the basis of the EU’s competence for judicial cooperation in civil matters in Art. 81 TFEU. For an overview, see Hess (2010).
- 7.
For further discussion on the underpinning debate, see Storskrubb (2008, 19–25).
- 8.
In the cases Rewe (Case C-33/76 Rewe EU:C:1976:188) and Comet (Case C-45/76 Comet EU:C:1976:191), in which the Court held that in the absence of rules which harmonise procedure, rights derived from EU law should be enforced in line with national procedural rules.
- 9.
Joined Cases C-430/93 to C-431/93 Van Schijndel EU:C:1995:441.
- 10.
See Ebers (2008, 197–261).
- 11.
The notion of consumer being limited to a core definition, which certain Member States go beyond, that is, to natural persons acting outside their trade, business or profession.
- 12.
Per Art. 3(3) and the annex of the UCTD.
- 13.
Art. 4(2) UCTD.
- 14.
Art. 5 UCTD.
- 15.
In light of space constraints, it is not possible to identify and characterise all instances in which the UCTD—as implemented in the national systems—has constituted a matter of adjudication across the Member States. A brief overview of two points is instead considered: The social, economic and legal factors that have brought these issues before the national courts and which have incentivised those courts to make references to the ECJ for preliminary rulings necessarily diverge across the Member States.
- 16.
The ECJ may also hear appeals on points of law from the General Court, and infringement proceedings initiated by the European Commission.
- 17.
Amongst others, these determinations have been described as a reflection of legal culture, whether monist or dualist, whether judicial review is engaged (Mattli and Slaughter 1998), as a reflection of the national courts seeking empowerment (Alter 1998), as a reflection of the significance of EU trade for that Member States (Stone Sweet and Brunell 1998), as well as a determination to engage in a type of judicial dialogue (see the contributions in Cafaggi and Law 2017) or political dialogue (Burgorgue-Larsen 2015).
- 18.
In particular, in Spain, over 55% of referrals concerning the UCTD and relating to its ex officio control—9 of 16 in total—were made from first instance courts. Data collected by the author from the website of the CJEU.
- 19.
On the substantive test of unfairness, see Case C-237/02 Freiburger Kommunalbauten EU:C:2004:209, Case C-240/98-244/98 Océano Grupo EU:C:2000:346, Case C-472/10 Invitel EU:C:2012:242.
- 20.
Case C-470/12 Pohotovost EU:C:2014:101.
- 21.
Case C-473/00 Cofidis EU:C:2002:705 and Case C-49/14 Finanmadrid EU:C:2016:98.
- 22.
Case C-618/10 Banco Español, Banesto EU:C:2012:349.
- 23.
Case C-415/11 Aziz EU:C:2013:164.
- 24.
While the questions referred are typically framed in terms of whether national procedural rules are compatible with the UCTD, the key questions underpinning the development of the ex officio regulation of consumer law have been the following: What is the character of the civil procedural systems in the Member States? What is the role of the judge/adjudicator? Is it typically adversarial or inquisitorial? Is it based on party disposition or does the judge/adjudicator have more of an investigative role? These issues are discussed in Sect. 5 of this paper.
- 25.
It is worth noting that data on housing, repossessions and evictions are largely irregular and not collected on the basis of harmonised approaches across the Member States. However, a considerable rise in the number of evictions and repossessions has been identified in a number of EU countries, including Spain (European Commission 2012, 43).
- 26.
It is worth noting that in relation to EU competition law the ECJ has held that the national court should apply EU Treaty law ex officio where the party that would benefit had never advanced their application; the ECJ has held that this obligation does not arise where such an examination would oblige the national court to abandon the rather passive role assigned to it under national civil procedural law (Joined Cases C-430/93 and 431/93 Van Schijndel/Stichting Pensioenfonds voor Fysiotherapeuten EU:C:1995:441 paras. 17, 19–22).
- 27.
Case C-240/98-244/98 Océano Grupo EU:C:2000:346.
- 28.
Case C-473/00 Cofidis EU:C:2002:705.
- 29.
Case C-168/05 Mostaza Claro EU:C:2006:675.
- 30.
Case C-168/05 Mostaza Claro EU:C:2006:675, Judgment, para. 38.
- 31.
The ECJ has held that the national courts must be empowered to examine possible violations of rights derived from other consumer protection directives. These include: Directive 87/102, amended by Directive 98/7 on consumer credit (Case C-429/05 Rampion EU:C:2007:575); Directive 85/577 on doorstep selling (Case C-227/08 Martin Martin EU:C:2009:792); Directive 1999/44 on consumer sales (Case C-32/12 Duarte Hueros EU:C:2013:637 and Case C-497/13 Faber EU:C:2015:357). Here, the focus is on the UCTD and so these cases will not be examined further. Only Faber is examined briefly.
- 32.
To the extent that national rules “cannot be less favourable than those relating to similar actions of a domestic nature nor render virtually impossible or excessively difficult the exercise of rights conferred by Community law”: Case C-33/76 Rewe-Zentral [1976] ECR 1989, Judgment, para. 13, the limitation–essentially based on the principle of equivalence and effectiveness to be applied, “by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national instances. In the light of that analysis the basic principles of the domestic judicial system, such as protection of the rights of the defence, the principle of legal certainty and the proper conduct of procedure, must, where appropriate, be taken into consideration”; Case C-312/93 Peterbroeck [1995] ECR I-4599, Judgment, para. 14.
- 33.
Case C-40/08 Asturcom EU:C:2009:615.
- 34.
Case C-484/08 Caja de Ahorros EU:C:2010:209.
- 35.
Case C-243/08 Pannon EU:C:2009:35, Judgment, para. 35.
- 36.
Case C-137/08 Pénzügyi Lízing EU:C:2010:659.
- 37.
Case C-137/08 Pénzügyi Lízing EU:C:2010:659, Judgment, para. 49.
- 38.
Effectiveness must be measured with reference to the procedural provision in the procedure as a whole.
- 39.
Case C-415/11 Aziz EU:C:2013:164. This criterion for the national court is clear from AG Kokott’s Opinion, to the extent that she examined particularly the significance of rules on unilateral determination of the amount owed by the debtor in default, in light of national procedural rules, while the Court predominantly made reference to unfairness deriving from the limitation on the consumer’s right to a remedy, per point 1(q) Annex, UCTD. See Micklitz and Reich (2014, 800).
- 40.
“Hidden constitutionalisation” per Micklitz and Reich (2014, 800), in light of the fact that while neither the AG nor the Court explicitly engaged the respect for housing, as found in Art. 7 CFR, their reasoning did engage constitutional considerations, in the relationship between domestic proceedings and contract law regulation, Opinion, para. 52, and the highlighting of the purpose for which the loan had been made, that is, the purchase of the home; Judgment, para. 61.
- 41.
Case C-613/15 Ibercaja Banco EU:C:2016:195; see also C-421/14 Banco Primus EU:C:2017:60.
- 42.
Case C-618/10 Banco Español EU:C:2012:349, Judgment, para. 65.
- 43.
Case C-26/13 Kasler EU:C:2014:282.
- 44.
Case C-34/13 Kušionová EU:C:2014:2189.
- 45.
In line with the notion that the national court must have the “legal or factual elements” available, explored in more detail below; Case C-488/11 Asbeek Brusse EU:C:2013:341, Judgment, paras. 41, 42. Similarly, in this case, like Aziz, noted above, the Court (there being no AG Opinion) raised the “social” issue of the “essential needs” of access to the home; Judgment, para. 32.
- 46.
Case C-488/11 Asbeek Brusse EU:C:2013:341, Judgment, para. 58.
- 47.
Case C-497/13 Faber EU:C:2015:357.
- 48.
Case C-497/13 Faber EU:C:2015:357, Judgment, para. 44.
- 49.
For example, Lenaerts et al. (2014, para. 4.40) refer to the principle of sincere cooperation (Art. 4(3) TEU).
- 50.
Case C-472/11 Banif Plus Bank EU:C:2013:88, Judgment, paras. 28–30 and para. 41.
- 51.
Case C-413/12 ACICL v. Anuntis EU:C:2013:800, rejecting the scope for a consumer organisation to bring an action for an injunction in the courts of its place of business.
- 52.
Case C-49/14 Finanmadrid EU:C:2016:98; recent Spanish legislative reform aimed to ensure this ex officio control would be exercised at the earlier stage (i.e. obliges the secretario judicial) per the law on civil procedure of 2000, amended by Ley 1/2013 (LEC).
- 53.
Case C-122/14 Aktiv Kapital EU:C:2016:486.
- 54.
Especially one which provides that mortgage enforcement proceedings cannot be stayed by the court of first instance, which in its final decision can at most award compensation in respect of the consumer-debtor’s damage, where that debtor cannot appeal against a decision dismissing his objection to enforcement, while the seller/supplier-creditor may bring an appeal against a decision terminating proceedings or ordering the disapplication of an unfair term.
- 55.
For further detail, see Hess and Taelman (2017, para. 288 et seq.).
- 56.
See further, Hess and Taelman (2017, para. 298 et seq.).
- 57.
For an overview of the Spanish system in relation to consumers, see Gascón Inchausti (2005).
- 58.
Case C-169/14 Sanchez Morcillo I EU:C:2014:2099 and Case C-539/14 Sanchez Morcillo II EU:C:2015:508.
- 59.
AATC 70/2014 and 71/2014, of 10 March 2014 and AATC 111/2014, 112/2014, and 113/2014, of 8 April 2014.
- 60.
Which provides that terms which have the effect of “excluding or hindering the consumer’s right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to the contract” may be regarded as unfair.
- 61.
It also found that the system did not violate the fundamental right to effective judicial protection, as it allowed for the opportunity for evaluation of the terms before the enforcement proceedings were finalised. With regard to the equality of arms, the ECJ held that for the purposes of the UCTD, it is enough that the consumer can appeal to an objection based on unfairness; all others fall outside the scope of the directive and were not for the Court to evaluate.
- 62.
Case 618/10 Banco Español EU:C:2012:349.
- 63.
Case C-312/14 Banif Plus EU:C:2015:794, Judgment, paras. 29, 30.
- 64.
Case C-34/13 Kušionová EU:C:2014:2189.
- 65.
Moreover, in the cases of Case C-381/14 Sales Sinués EU:C:2016:909 and Case C-119/15 Biuro EU:C:2016:987, the ECJ held that the proportionality of national measures must be taken into account, particularly in the latter case where the issue concerned the balance between effective abstract control and the need to respect the right to be heard.
- 66.
On the understanding of notaries for the purposes of cross-border dispute resolution, see Mantovani (2017).
- 67.
Case C-32/14 ERSTE EU:C:2015:637.
- 68.
Case C-32/14 ERSTE EU:C:2015:637, Judgment, para. 49.
- 69.
Case C-503/15 Panicello EU:C:2016:696, Opinion of AG Kokott, paras. 104 and 138.
- 70.
Case C-503/15 Panicello EU:C:2017:126.
- 71.
Case C-168/15 Tomášová EU:C:2016:602.
- 72.
Case C-224/01 Köbler EU:C:2003:513.
- 73.
Challenging the notion that procedural autonomy has ever concretely existed, see Bobek (2011, 305–324).
- 74.
In Case C-137/08 Pénzügyi Lizing EU:C:2010:659, AG Trstenjak highlighted the significance of the dialogue between the courts and indicated the significance of the extent to which national civil procedure might be affected by the ECJ’s case law.
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Law, S. (2018). The Transformation of Consumer Law in Times of Crisis: The Ex Officio Control of Unfair Contract Terms. In: Uzelac, A., van Rhee, C. (eds) Transformation of Civil Justice. Ius Gentium: Comparative Perspectives on Law and Justice, vol 70. Springer, Cham. https://doi.org/10.1007/978-3-319-97358-6_16
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