Thursday, 4 February 2016

Conference and publication on consumer ADR and ODR

The Centre for Socio-Legal Studies of the University of Oxford will hold the Fourth Annual Civil Justice Conference on ADR and ODR on 18-20 April 2016. The conference programme is organized around three themes: implementation (of the ADR Directive); trust (in ombudsman); justice (the potential of consumer ADR to deliver justice). The full provisional programme is available here, and the link to registration here.

Our readers interested in this area of EU consumer law may wish to know that a special issue of the European Review of Private Law (vol. 24 issue 1) on Access to Justice and Consumer ADR is soon to be published.

AG Szpunar's opinion in case C-421/14 (Banco Primus)

Enforcement proceedings and unfairness continued: AG Szpunar in Case C-421/14 (Banco Primus)

In yet another case following a preliminary reference from a Spanish court, Advocate-General Szpunar has delivered an opinion about the implications of Directive 93/13 for the ex officio assessment of unfair contract terms. The most important feature of this case is the fact that an ex officio assessment had already taken place at an earlier stage. The referring court has asked whether this limits its obligation to assess other potentially unfair terms which have not been part of the initial assessment. This case is of interest both from a procedural and a substantive perspective.

The consumer, Mr. Jesús Gutiérrez García, had started extraordinary opposition proceedings (incidente extraordinario de oposición) against Banco Primus SA in a final attempt to stop the mortgage enforcement proceedings initiated against him. These proceedings were “extraordinary” in that the normal opposition period of 10 days had lapsed, and even the expiry period of 1 month (on the basis of transitional law after the introduction of Ley 1/2013 in Spain, on which the Aziz judgment had a determining effect). In previous proceedings, the contractual default interest had already been assessed and diminished to zero, and the stay of the enforcement proceedings (predating Ley 1/2013) had been terminated. In the subsequent extraordinary opposition proceedings, the referring court noted that several other clauses in the mortgage agreement could be considered as unfair, but it was prevented from assessing these clauses because the proceedings were brought too late under the applicable transitional law.

The referring court asked various questions concerning the scope of the obligation to assess the unfairness of contract terms of its own motion, touching on the interpretation of Articles 3, 4, 6 and 7 of Directive 93/13 and the principles of equivalence and effectiveness (interestingly, there is no reference to Article 47 of the EU Charter of Fundamental Rights). In his opinion (paras. 28 ff.), AG Szpunar first comments that the Spanish government’s and Banco Primus’ arguments that Mr. Gutiérrez García’s claim is inadmissible do not preclude the admissibility of the request for a preliminary reference. Spzunar then refers to the BBVA case to conclude that the expiry period of 1 month is unlawful. He moves on to explain his view that the mere fact that an ex officio assessment has been carried out previously does not limit the referring court’s obligation to assess the unfairness of contract terms that have not been assessed yet. Szpunar does not address the (hypothetical) question what should happen if the terms at issue have already been assessed and the previous decision has acquired res judicata force.  


In the second part of his opinion (paras. 52 ff.), AG Szpunar gives an overview of the EU case law on the assessment of the unfairness of contract terms. Spanish law allows for early termination / acceleration of the mortgage agreement insofar as a serious breach on the part of the consumer is foreseeable. According to Szpunar, this is not contrary to Directive 93/13 as such, as long as the national court’s assessment of the unfairness of a contractual clause providing for early termination is not anticipated, and as long as the national court can still declare the clause at issue to be not binding on the consumer. However, in the present case, the mortgage agreement offered Banco Primus the option of early termination in the event of a minor default on the part of Mr. Gutiérrez García. Although the bank did observe the national procedural requirements in practice, Szpunar puts forward that the court's assessment should not depend on whether an unfair term is actually applied or not. The clause may be unfair even if the bank acts within the limits indicated by the law, but the clause would open the possibility for going beyond that.

Tuesday, 2 February 2016

New safe harbour agreement reached

A quick update for our readers on the legal guarantees surrounding data flow between EU and US: today, the Commission and the American government have reached an agreement that will replace the "safe harbour" agreement struck down by the CJEU last October (see our post here). The new agreement has been labelled "EU-US privacy shield". 

The deal is supposed to represent a major improvement compared to its predecessor, which, according to the Court of Justice, did not offer sufficient guarantees that the private data of European citizens would be processed in an acceptable ways once transferred to US-based companies and agencies.

According to the Commission's releases, the "privacy shield" should provide both clear rules for companies handling data and limitations on the US government's access to such data. Further, European citizens fearing that their data is being mishandled should have several remedies available.

Also this time, take a look at the Guardian's nice article on the topic for some more context. 

Tuesday, 26 January 2016

Vacancy for a PhD candidate (European consumer law)

Any (recent) graduate or a student who is about to graduate, with an interest in research and in European consumer law, should consider applying for a PhD position at the University of Amsterdam, within a bigger project "The ABC of Online Disclosure Duties: Towards Better Informed Consumers". See here for more details.

The deadline for application is 26 February 2016.

Friday, 22 January 2016

Refugees among the most vulnerable consumers in Europe

German consumer associations have started reacting to the special demands of refugees that act as arguably particularly unexperienced consumers with extensive cultural and language barriers: for helpful information regarding German law see: link.

Updated European Legislation on small claims to come

At the end of last year a regulation updating both the European Small Claims Procedure and the European Order for Payment Procedure was enacted: see link.

As the key amendment the threshold for small claims will be lifted from 2.000 EUR to 5.000 EUR. This remains below the initially suggested 10.000 EUR, however might still benefit SMEs and obviously an increased number of cross-boarder consumer complaints. In addition, possibilities of oral hearing and taking of evidence were enhanced. 

The changes are to be rendered effective by July 2017.

Quick update: VW

The Foundation "Volkswagen Car Claim" that was established in the Netherlands on the initiative of the Austrian consumer association VKI (Verein für Konsumenteninformation) has collected a total of 60.000 European consumers as of now. This sum is claimed to be far less than the total amount of people who were potentially harmed. Given that there are no legal options to claim collective damage in Germany and Austria, also many German and Austrian consumers have joined this claim. As an important element of the Dutch Collective Settlement Act the respondent - VW - needs to deliberately join the negotiations though.

This international case renders the differences between European and American means of collective redress once more very obvious. The different threat values of the respective legal means (or the lack thereof) may result in very different treatments of consumers (see for one assessment: here).

Wednesday, 20 January 2016

A look into the future: What does 2016 hold for consumer law?

There is no doubt that 2015 was quite a busy year for the European institutions. In the light of considerable social, economical and political challenges faced by the EU these days, the European Commission under the presidency of Jean-Claude Juncker proclaimed that it would carefully choose its priorities and focus on feasible initiatives. While it is still too early to predict whether this approach will go beyond mere declarations, an overall policy stance can already be inferred from first two work programmes published under rather high-sounding titles: A New Start and No time for business as usual. Key objectives within ten priority areas have been defined and measures to be taken in order to reach them were announced. But what does this actually mean for consumers?

From the consumer law perspective three areas deserve particular attention:
  • Measures designed to create a connected Digital Single Market
  • Initiatives aimed to further deepen the internal market
  • EU international trade policy, especially the Transatlantic Trade and Investment Partnership (TTIP), which is currently being negotiated by the EU and the USA
As we have already reported, first three legislative proposals implementing the Digital Single Market were presented on 9 December 2015. The first one deals with a fully novel issue of digital content (e.g. streaming music, purchasing e-books), while the second one builds upon the existing regulatory framework for online sales of goods. Both measures are seeking to fully harmonise several core aspects of online business-to-consumer sales of tangible goods and supply of digital content, including rules on pre-contractual information duties, consumer’s right to withdraw from the contract, conformity of goods and digital content as well as relevant remedies. Furthermore, a proposal for a regulation on ensuring the cross-border portability of online content services in the internal market was adopted.

In 2016 the Commission will surely try to further proceed with these measures. Its new approach to the European law-making shall ensure that the Digital Single Market strategy does not share the fate of the Common European Sales Law. Efforts are made to secure a common understanding with the European Parliament and the Council on key initiatives already at an early stage. Despite public concerns about the impact of such arrangements on the democratic process, an inter-institutional Agreement on Better Law-making has recently been finalised. Time will tell whether this approach will produce the desired results. In any case, it seems unlikely that the flagship measures implementing the Digital Single Market, which are by no means uncontroversial, will come into force in the nearest months. Also the Dutch Presidency in the Council seems to be taking a ‘wait and see’ attitude to this issue.

2016 will therefore rather be a time of intense discussions, public consultations and further legislative proposals. We may, among other things, expect a proposal aimed to bring an end to unjustified geo-blocking as well as other forms of discrimination on the basis of residence or nationality. Detailed information on the envisaged copyright reform should be presented shortly. Of particular interest are also measures, which have already been adopted in the previous years – such as Regulation 524/2013 on online dispute resolution for consumer disputes – or those at an advanced stage of adoption. It is worth noting that the European ODR platform has lately become operational and will be made available to consumers and traders on 15 February. While a faster and easier, Internet-based mechanism of resolving disputes between consumers and traders sounds like a good idea, much still needs to be done to ensure its reliability and promote its use among both parties to the contract. Furthermore, in the following months we will almost certainly witness a long-awaited reform of EU data protection law. Following the agreement reached in trilogue last month, it appears very likely that the final texts of General Data Protection Regulation and Data Protection Directive will be formally adopted in the first quarter of 2016.

From the consumer law perspective, particular attention should also be paid to the Commission’s Regulatory Fitness and Performance programme (REFIT), i.e. a systematic analysis whether the existing regulatory framework is fit for its purpose. According to the recently published roadmap, a substantial part of EU consumer law will be subject to evaluation within next 18 months, namely:
  • Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market (Unfair Commercial Practices Directive);
  • Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees (Sales and Guarantees Directive);
  • Directive 93/13/EEC on unfair terms in consumer contracts (Unfair Contract Terms Directive).
  • Directive 98/6/EC on consumer protection in the indication of the prices of products offered to consumers (Price Indication Directive);
  • Directive 2006/114/EC concerning misleading and comparative advertising (Misleading and Comparative Advertising Directive);
  • Directive 2009/22/EC on injunctions for the protection of consumers' interests (Injunctions Directive).
Additionally, Consumer Rights Directive 2011/83/EU and Regulation 2006/2004 on consumer protection cooperation are also expected to undergo separate evaluations in the coming months. During the first semester of 2016 public consultations on application of consumer legislation in Member States will be launched, which might well be a spark for another heated debate, reminiscent of the time when the Common European Sales Law was still on the agenda.

Without doubt 2016 will be a very exciting year in consumer law. Like every year, we will keep you posted about the most significant developments, so stay tuned!

Saturday, 16 January 2016

Consumer financial services: share your experience and have your voice heard by the Commission!



In December 2015 the European Commission launched a three month consultation on how to create a stronger European market for retain financial services (bank accounts, payments, loans, credit cards, mortgages, insurance products). The Commission aims to identify the barriers consumers face when they wish to access financial services across borders and find way to remove these barriers in order to improve product choice and pricing for every European consumer.

As part of this consultation the Commission seeks to hear your voice!

You can share and discuss your ideas on the measures that could be taken to improve consumer access to financial services with director Mario Nava and his team in charge for EU legislation on consumer financial services during a live online discussion. The live chat will take place on Tuesday 26 January 2016, from 15:00 to 16:30 CET. Submit your questions and/or register for the chat here.

The other option is to share your personal experience of being unable to access financial services in another EU country by recording and sharing a short video. See the instructions here.

Thursday, 14 January 2016

Collective actions may not replace individual ones - opinion AG Szpunar C-381/14, C-385/14 (Sales Sinués)

14 January 2015: AG Szpunar's opinion in joined cases C-381/14 and C-385/14 (Sales Sinués)

AG Szpunar published today his opinion in a new Spanish set of cases concerning unfair contract terms in consumer credit contracts. While Spanish consumers are trying to invalidate some terms in their credit contracts, based on their unfairness, Spanish banks asked for the stay of these individual proceedings, since there are also collective proceedings ongoing in Spain on the same issue (Par 17-18). Spanish Code of Civil Procedure seems to demand that individual proceedings were stayed in such cases and that the outcome of collective proceedings will be decisive for an individual case, without the consumer being able to dissociate herself from the collective action. Spanish courts are unsure whether these provisions of national law are compliant with consumer protection standards set in the Unfair Contract Terms Directive 93/13 since, among other things, at the moment of the referral the collective proceedings have been ongoing for four years and no date has yet been fixed for the hearing (Par. 21)

AG Szpunar in its opinion stresses that the literal interpretation of the Spanish Code of Civil Procedure provides a possibility for national courts to stay proceedings, and not an obligation to do so (Par. 29, 60), which opinion is shared by the Spanish Government and the Commission (Par. 34). However, Spanish courts appear to differently interpret this provision, including, as giving precedence to collective proceedings, which mandates the stay of individual proceedings (Par. 31-33). AG Szpunar concurs with the Commission's point of view that individual and collective actions against unfairness serve different purposes and collective actions are just "a complementary means of guaranteeing" consumer protection (Par. 53-54). This follows also from the abstract test used in collective proceedings, not allowing to include careful examination of all circumstances of an individual case (Par. 55). As such, Member States need, first, to guarantee a possibility to raise an individual claim of unfairness (Par. 56). Following on these arguments, AG Szpunar concludes that "it is therefore clear ... that, under Directive 93/13, the relationship between collective actions for an injunction and the specific terms by which consumers are bound must be one that is favourable to the consumer, not one which poses an obstacle to individual actions or replaces individual actions by collective actions for an injunction" (Par. 59). He evaluates thus the Spanish procedural rules, unsurprisingly, as potentially breaching the principle of effectiveness if they oblige national courts to stay individual proceedings when parallel collective proceedings are being conducted, with consumer not being able to dissociate herself from the collective action (Par. 67 and further).  "... if ... it is to be presumed that Directive 93/13 confers individual in personam rights on which it must be possible to rely in the context of individual legal actions and that collective actions for an injunction are complementary to, and different and distinct from individual actions, then there is no justification for the mandatory or automatic staying of individual actions until such time as a final judgement is delivered in collective proceedings" (Par. 68). Another important point raised is that the outcome of both procedures may differ, due to the need to take consumer's contractual individual circumstances into account in individual actions: "Accordingly, a consumer who decides to act in his individual capacity should not be directly affected by a judgement delivered in collective proceedings, even though the court hearing his individual action will obviously take that judgement into account." (Par. 72). Concluding, if the consumer would choose to follow collective way of enforcing her rights - its her choice, but the choice needs to be left open to the consumer to dissociate herself from the actions of a consumer organisation and to raise her individual claims separately (Par. 74).