Thursday, 18 March 2010

To settle or not to settle? - ECJ says: Settle! C-317/08 Alassini

18 March 2010: ECJ case C-317/08, C-318/08, C-319/08 and C-320/08 Alassini
The ECJ gave a judgment today in the Alassini case (ECJ C-317/08, C-318/08, C-319/08 and C-320/08) concerning interpretation of Article 34 of the Universal Service Directive. The Universal Service Directive concerns the provision of electronic communications networks and services to end-users.
Article 34 of the Universal Service Directive states:

‘1. Member States shall ensure that transparent, simple and inexpensive out-of-court procedures are available for dealing with unresolved disputes, involving consumers, relating to issues covered by this Directive. Member States shall adopt measures to ensure that such procedures enable disputes to be settled fairly and promptly and may, where warranted, adopt a system of reimbursement and/or compensation. Member States may extend these obligations to cover disputes involving other end-users.
2. Member States shall ensure that their legislation does not hamper the establishment of complaints offices and the provision of on-line services at the appropriate territorial level to facilitate access to dispute resolution by consumers and end-users.
3. Where such disputes involve parties in different Member States, Member States shall coordinate their efforts with a view to bringing about a resolution of the dispute.
4. This Article is without prejudice to national court procedures.’

The Italian government while implementing this Directive adopted mandatory settlement procedure that had to be followed by the parties in the dispute prior to instigating court procedures. In the given case the defendants have argued that the actions against them were inadmissible because the applicants (consumers) had not first initiated the mandatory attempt to settle the dispute before the settlement bodies, as required under the Italian law. The question referred by the Italian court to the ECJ was (Par. 37):

'whether Article 34 of the Universal Service Directive and the principle of effective judicial protection must be interpreted as precluding legislation of a Member State under which the admissibility before the courts of actions relating to electronic communications services between end-users and providers of those services, concerning the rights conferred by that directive, is conditional upon an attempt to settle the dispute out of court.'

The ECJ considered that matter and adjudicated that the provision of the Universal Service Directive have not been infringed by the Italian law.

The Universal Service Directive requires Member States to ensure that (Par. 38):

'transparent, simple and inexpensive out-of-court procedures are available, enabling disputes involving consumers and relating to issues covered by that directive to be settled fairly and promptly. Those procedures are always to be without prejudice to national court procedures.'

Since the Universal Service Directive does not prescribe specific nature of the out-of-court procedures which have to be introduced, it has to be concluded that Member States are not limited in making out-of-court procedures for the settlement of disputes mandatory (Par. 42). To the contrary (Par. 45):

the fact that national legislation such as that at issue in the main proceedings has not only put in place an out-of-court settlement procedure, but has also made it mandatory to have recourse to that procedure before bringing an action before a judicial body, is not such as to jeopardise the attainment of that objective. On the contrary, such legislation, in so far as it ensures that out-of-court procedures are systematically used for settling disputes, is designed to strengthen the effectiveness of the Universal Service Directive.

Further, the ECJ considered whether the Italian legislation did not infringe the principles of equivalence, effectiveness and the principle of effective judicial protection. It has been concluded that these principles aren't breached provided that (Par. 53-58):

that procedure does not result in a decision which is binding on the parties, that it does not cause a substantial delay for the purposes of bringing legal proceedings, that it suspends the period for the time-barring of claims and that it does not give rise to costs – or gives rise to very low costs – for the parties, and only if electronic means is not the only means by which the settlement procedure may be accessed and interim measures are possible in exceptional cases where the urgency of the situation so requires.

It is for the national court to determine whether in the given cases these conditions had been fulfilled.

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