Happy New Year 2012!

We wanted to wish all our readers all the BEST in 2012!

Merry Christmas!

merry christmas pics on Sodahead

We wanted to wish all our readers Merry Christmas 2011!

ECJ in Centre hospitalier universitaire de Besançon: Product Liability

Earlier I discussed on this blog the AG’s Opinion in case Centre hospitalier universitaire de Besançon (C-495/10). The case deals with a thirteen-year-old boy suffering burns from a defective electric blanket in a hospital in France. French law has a strict liability rule for public health providers for damages caused by defective devices and products. According to the hospital this rule breaches the full harmonisation character of the Product Liability Directive.

The Product Liability Directive, although it is not stated explicitly in the Directive itself, is an instrument of full harmonization (ECJ Case C-52/00 Commission v France). However, the Directive does not exhaustively harmonise the entire sphere of liability for liability for defective products. This means that matters not covered specifically by the Directive can still be covered by national law.

The ECJ therefore rules that the Product Liability Directive does not prevent national laws holding service providers strictly liable. The liability of service providers is not covered by the Directive, so that it does not fall under the harmonised scope of the Directive. As long as the liability of the service provider does not change the liability of those covered by the Directive. By deciding so, the ECJ follows Advocate General Mengozzi’s Opinion.

For the judgment, click here.

ADR and ODR explained

Recently, we posted about the intended changes in the European regulations on alternative dispute resolution as well as out-of-court dispute resolution (A step away from out-of-court dispute resolution for European consumers). As you may imagine this change has been widely debated in various news. If you are interested in reading more about it, I recommend you the following:

Darin Thompson's blog entry "Online Dispute Resolution Expansion in the EU" within SCL - The IT Law Community

Rafal Morek's blog entry "ADR and ODR for EU consumers: Proposals for new Directive and Regulation" on Kluwer Mediation Blog

Some stats on the use of the Internet in 2011

For some of our readers it might be interesting to read new statistical data that was published on the Internet use in households and by individuals in 2011 within Eurostat. The main finding is that in 2011:

• 71% of European citizens used the Internet on average at least once a week
• 91% of younger persons (aged 16-24)
• 40% of older population (aged 55-74)
• 56% used the Internet everyday or almost every day
• 24% of European citizens (aged 16-74) have never used the Internet
• Romania (54%)
• Bulgaria (46%)
• Greece (45%)
• Cyprus (41%)
• Portugal (41%)
• 73% households had access to the Internet (68% via broadband connection)

How Europeans use the Internet? They:

• search for information about goods and services (80%)
• read news (56%) 
• search travel related information (54%)
• search educational information (40%)
• participate in social networks (53%)
• consult wikis (54%)
• buy products or services online (58%)
• submit completed web forms to public authorities (28%)

For no man is an island

Last Friday, the conference 'Towards a European Legal Culture' took place at Trinity College in Oxford. The organisers, Kai Purnhagen (Ludwig-Maximilians-University Munich) and Geneviève Helleringer (University of Oxford), presented a diverse yet well-coordinated programme based on seven sub-themes that highlighted different aspects of European Legal Culture:
- background
- method
- science and education
- the State
- regulation
- law
- the individual

Since it would be almost impossible to summarise the many views and insights on European legal culture that came to the fore in the presentations and discussions, let me just mention some of the most significant, striking, innovative or inspiring thoughts that are of relevance for European (consumer) contract law...
...on systematisation - it may doubted whether this should be considered as an element of European legal culture, in particular given the unsystematic nature of EU (private) law itself, and it would be more helpful to aim at understanding the development of the EU in light of a study of the coming into being of (representative) nation-States in Europe;
...on dogmatism - cultural pluralism itself might be considered to form part of European legal culture and citizens should have the possibility to choose among different (legal) communities, within the boundaries set by the national or European legislature;
...on economics - insights into, for instance, the correlation between what the judge had for breakfast and the judge's rulings can teach us more about the actual effects of legal rules and, therefore, law & economics should be part of the legal curriculum;
...on forms of State - the idea of the 'Market State', based on opportunity, efficiency and consumer choice, can explain developments in several substantive areas of EU law;
...on community-building - considering that historically the nationalisation of laws and legal cultures has served mainly constructivist purposes (e.g. the codification of private law in continental European countries) today's renewed interest in the subject of European legal culture gives the impression of a novel attempt of community-building in a post-national constellation;
...on principles - it might be argued that legal principles form an expression of European legal culture, which may be found in the first place in the national legal orders (diversity), while then having to be evaluated on the level of the EU (unity?);
...on fundamental rights (my topic for the day) - the values reflected in fundamental rights in the EU may form building blocks for a European private law culture, if they are adequately integrated into legislation and adjudication on matters of private law.

Finally, of course, the current economic crisis did not go unmentioned during the various discussions and from that perspective it may be asked whether the debate on European culture is not of a Utopian nature. Then again, maybe we could strive for a more realistic Utopia, as suggested by Habermas? But that is something for further discussion in the next conference, I guess.

Disobedient Member States

One of the problems that European Commission has to constantly deal with is the late transposition of directives by the Member States. Since the directives do not have direct effect, that means that until the moment they are implemented by the Member States into their own national laws, citizens of the Member States may not benefit from the protection that the European law might have given them in these directives. Therefore, if the directive isn't timely implemented the intended protection of consumers, or harmonizing effect on the internal market that the directive aimed to achieve isn't reached. In order to 'encourage' the Member States to properly and timely implement the directives, the European Commission monitors the transposition process and sanctions those Member States that are too late.

One of the rules that the EU consumers were supposed to benefit as of the end of May 2011 were the new telecommunication rules, according to which e.g. consumers could change telecom operators within one day without changing their phone number as well as get more protection of their privacy and their data online (see: Consumer-friendly mobile phone contracts or Delete cookies?). However, as many as 16 Member States failed to fully implement these provisions up to this day (over 6 months beyond the implementation deadline). The European Commission addressed these Member States and asked for explanation as well as action. The next step would be putting financial penalties on those Member States who do not properly implement the Directive in the coming months. (see: Digital Agenda: Commission presses 16 Member States to implement new EU telecoms rules)

Another consequence of improper transposition may encumber consumers who choose to travel within EU by air. Part of the airline ticket price that passengers pay is the cost of airport charges (i.e. what airlines have to pay to the airports for using airport runaways as well as cost of using airport terminal infrastructure by passengers). Even if most of these airport charges has to be paid directly by the airlines, it ultimately is being borne by the passengers since airlines include these costs in the price of the airline tickets. According to the airport charges directive, which was supposed to be transposed by March 2011, Member States have to make sure that these charges are being set in accordance with principles of transparency, non-discrimination, etc. However, until this day this Directive has not been properly transposed by some Member States (incl. Germany, Austria and Italy with quite important for EU air traffic airports). The lack of transposition of this directive may mean for the consumers that they are paying currently more than what they should for air travel when they are using EU airports. Again, the European Commission addressed these Member States and asked for explanation and action. (see: Air transport: Commission requests Austria, Germany, Italy and Luxembourg to comply with rules on airport charges)

Consumers, Privacy and Data Protection - 5th International Conference

On 25-27 January 2012 in Brussels there will be a 5th International Conference on Computers, Privacy and Data Protection organized, with the theme: "European Data Protection: Coming of Age". Since we talked quite a bit about the new data protection and privacy rules in Europe I thought it might be interesting for our readers to know about this conference.

A step away from out-of-court dispute resolution for European consumers

Also on the 29th November (that was one busy day), the European Commission proposed two new legislative products on alternative dispute resolution, according to the schedule for 2011 that was announced at the beginning of this year (see previous post "Who needs courts?..."). These two proposals are to enable European consumers to solve their problems with traders without going to court, regardless of the kind of product or service that the contractual dispute is about and regardless whether they bought it in their home country or in another Member State (cross-border transactions). It has been estimated that if a universal, of good quality alternative dispute resolution (ADR) system (which means that dispute is solved by a neutral party, e.g. arbitrator, mediator or ombudsman) is introduced across the EU it could save consumers ca 22,5 billion EUR a year. European Commission focuses also on protection of consumers shopping online, planning to create an EU-wide single online platform, which will allow to solve contractual disputes online within 30 days.

Among the newly adopted proposals there is the Directive on consumer Alternative Dispute Resolution (ADR) and the Regulation on consumer Online Dispute Resolution (ODR). The Directive aims at creating out-of-court entities that would solve any contractual disputes in B2C relations. These ADR entities would have to be well-qualified, transparent, impartial, effective and fair. It would be an obligation of the trader to inform the consumer about the ADR entity which could deal with a potential contractual dispute. ADR entities are to resolve the disputes within 90 days. The Regulation, on the other hand, would focus on enabling resolving online disputes between consumers and traders located in different Member States and would create an online platform (ODR). The system is to send consumers' complaints automatically to the competent national ADR entity and it's supposed to resolve the dispute within 30 days.

Q&A on the proposals may be found here.

Unfair commercial practice ≠ unfair contract term ≠ void contract - AG's opinion in case C-453/10 Pereničová and Perenič

29 November 2011: AG's opinion in case C-453/10 Pereničová and Perenič

As you might have heard this was a busy week for me, therefore I'm a bit behind with news regarding European consumer law. I'll try to catch up with most of it this weekend, though. Firstly, on the day of my PhD defense the Advocate General Trstenjak gave an opinion in the case C-453/10 concerning interpretation of provisions of two consumer directives: Directive 93/13 on unfair contract terms and Directive 2005/29 on unfair commercial practices.

The opinion is not available in English yet, but let me translate for you the most important findings thereof. It concerned a following factual situation. A Slovakian company SOS (which is not a bank) grants consumer credits on the basis of standard contract terms. A married couple Perenič took out a credit of 4979 EUR which was to be paid back in 32 monthly rates of ca 199 EUR. The 33rd monthly rate, the last one, was supposed to be equal to the loaned amount, i.e. 4979 EUR. As a result the married couple was to return 11.352 EUR. The company indicated a yearly interest rate of 48,63%, however, due to court's calculations the yearly interest rate in practice was equal to 58,76%. When they were calculating the interest rate the company didn't take into account an additional payment for granting the credit which was 83 EUR. The concluded credit agreement has a few provisions that may be deemed to be unfair towards the consumers. The married couple was in delay with payments of one of the instalments, and the company demanded payment of penalty (209 EUR) from them. The consumers then started proceedings to avoid the consumer credit contract.

The national court was questioning whether the consumer credit agreement contained unfair contract terms and what influence that would have on the binding force of the contract. The questions raised were as follows:

1. Does the aim of consumer protection of unfair contract terms directive require that the contract is declared void upon stating that it contains unfair contract terms in case such a solution would be more beneficial to a consumer?

2. Is the fact that the service provider indicates a lower than factual yearly interest rate to the consumer an unfair commercial practice based on the provisions of the unfair commercial practices directive? If it is an unfair commercial practice does it influence the binding force of the consumer contract (taking into account interests of the consumer) and the unfairness test conducted on the basis of unfair contract terms directive?

The Advocat General Trstenjak considering the first question, reminded that art. 6 of the Directive on unfair contract terms states that an unfair contract term is 'not binding' on the consumer. She reminds that this means that the provision doesn't lose its binding force for the service provider (it's voidable, and not void) (Par. 49). Furthermore, the Directive states that 

"the contract shall continue to bind the parties upon those terms if it is capable of continuing in existence without the unfair terms"

This seems to suggest that an unfairness of a contract term results only in its voidability, and the rest of the contract remains in force as long as the disproportion encumbering the consumer was removed. It has been previously argued by AG Tizzano in case Ynos (C-302/04) that this interpretation is in favour of consumers since it prevents the consumer to be bound by an unfavourable contractual term, but it doesn't protect the service provider, for whom removal of one or more contractual provisions might be disadvantageous and might raise his interest in avoidance of the whole contract. Other interpretation (automatic voidness of the whole contract) would weaken consumer protection. (Par. 50) Therefore, the Member States are not bound to proclaim the whole contract void in case of recognizing an unfair contract term within it. (Par. 51) The whole contract should be, however, declared void if it cannot exist without the avoided contract term. (Par. 52) The test whether the contract could exist without the unfair contract term could be conducted based on subjective (taking into account consumer's interests in avoiding the whole contract) or objective criteria (whether the contract is objectively still able to be performed). (Par. 54) The AG Trstenjak states that it's the objective criteria that should be applied by court. (Par. 56, 68) She bases her conclusion on the linguistic interpretation of the contract (Par. 58), since the formulation of Art. 6 suggests that avoidance of the whole contract should be exceptional. This conclusion is also supported by Art. 22 of the Directive which again seems to refer to the objective crtieria (Par. 59). Additionally, the aim of the Directive is to restore the balance between the contractual parties by removing from the contract unfair contract terms and not to avoid contracts that contain unfair contract terms. (Par. 63) According to AG Trstenjak taking into account only consumer's interests in deciding whether the whole contract should be avoided would lead to granting the consumer with a more beneficial position than the one that equal parties usually have on the market. That was not the aim of the Directive. There is no reason to release the consumer from all his contractual obligations, that he took upon himself voluntarily and while being well-informed thereabout. (Par. 65) However, pursuant to Art. 8 of the Directive, Member States may provide for more consumer protection in their national laws (minimum harmonisation). This means that Member States may also decide to proclaim the whole contract void in case it contains an unfair contract term and avoidance of the whole contract is more beneficial for consumers. (Par. 71-72) 

Summing up, Member States don't have to declare the whole contract void in case it contains an unfair contract term and avoidance of the whole contract would be more beneficial to consumers, but they are free to do so.

Answering the second question, AG Trstenjak first mentions that professionally offering consumer credits is a 'commercial practice' regulated by the Directive on unfair commercial practices, since it relates to a sale of goods and services, i.e. financial services (art. 2 (d) Directive). (Par. 80) However, as AG states further Directive 2005/29 does not have any consequences as far as the binding of a contract term (and the contract itself) that might be seen as an unfair commercial practice is concerned. This might be evaluated only on the basis of Directive 93/13. (Par. 83-84) Therefore, the AG concludes that, in general, provisions of the Directive 2005/29 might not be used in the national proceedings at hand. (Par. 86) However, the AG then mentions that even if the provisions of the Directive 2005/29 may not have specific legal consequences in a given situation, they should be taken into account in interpretation of other legal acts protecting consumers, since they are interrelated, and Directive 2005/29 is in a certain way a general regulation in comparison with Directive 93/13. (Par. 88-89) Taken this into account AG Trstenjak assesses whether the fact that the service provider gave a lower estimate of a yearly interest rate than the real one to the consumer should be seen as an unfair commercial practice. The AG considers it to be a misleading commercial practice, since it influences consumer's decision to conclude a contract by giving him false information regarding an essential contractual element. (Par. 96) The average consumer is perceived as collecting offers of many potential credit providers and as making a decision on with whom to conclude a credit agreement based on comparison of their offers, including costs involved therewith. (Par. 99) The yearly interest rate should be seen as part of the contract's price. (Par. 97) As a result, the real amount of the yearly interest rate should be seen as an essential information when concluding a credit contract without which a consumer would usually not be able to take a reasonable transactional decision. Misleading him as to this information has to act as to his detriment. (Par. 101) Therefore, it should be considered to be an unfair commercial practice. (Par. 103) It doesn't matter either whether the service provider acted with due professional diligence when calculating the yearly interest rate. (Par. 106) The fact that misleading information given in the contract constitutes an unfair commercial practice doesn't automatically lead to a conclusion that such a contractual provision is an unfair contract term. To the contrary, the general unfairness test still needs to be conducted. (Par. 121, 125-126) However, the fact that there has been an unfair commercial practice recognized may be taken into account when assessing unfairness, based on art. 4 of the Directive 93/13 according to which all circumstances attending the conclusion of the contract are to be taken into account. (Par. 123-125)

Summing up, indicating in a consumer credit contract a yearly interest rate that is lower than the factual one constitutes an unfair commercial practice. It doesn't automatically mean that such a provision in the contract should be considered unfair, but this assessment should be taken into account by the national court when it conducts the unfairness test (as a circumstance attending the conclusion of the contract).

Congratulations to Dr. Luzak!

This morning, Joasia Luzak, founder of this blog and my colleague at the Centre for the Study of European Contract Law (CSECL), convincingly, successfully and with élan defended her PhD thesis on 'The implied duty of a service provider to warn about a risk of construction defects resulting from a contract with a third party, with emphasis on defects resulting from design failures'. In her analysis, she made a comparison of the rules that have been developed in English, German and Dutch case law on precontractual and contractual duties to warn. She then compared the relevant rules in the Draft Common Frame of Reference to these. A short summary of the research (in Dutch) can be found here. We will of course keep you posted on the publication of the book.

Congratulations, Joasia!

Cross border prescriptions

Time of winter holidays is coming soon. Have you ever wondered what happens if you want to buy your medicines when you have flu skiing... Commission decided: it is time to know what you think. Thus consultation on "Measures for Improving the recognition of prescriptions issued in another Member State" is in full swing.

Consultation period started on 28 October 2011 and Commission would like to end it by 8 January 2012. As all patients and health professionals prescribing medicinal products or medical devices belong to target groups, everybody may take part (online questionnaire).

It all started with the Directive 2011/24 which requires that the Commission adopts the measures enabling a health professional to verify the authenticity of the prescription and whether the prescription was issued in another Member State by a member of a regulated health profession who is legally entitled to do so (in other words something like “standard format”). What is worth mentioning, prescriptions would include e.g. elements to enable contact between the prescribing party and the dispensing party in order to understand the treatment.

Stakeholder input will feed into the impact assessment as announced on the European Commission's impact assessment webpage

The unanswered question(s) of ius commune

Yesterday and today, four of the authors of this blog attended the annual conference of the Ius Commune Research School (a cooperation of the law schools of Maastricht, Leuven, Utrecht and Amsterdam, with branches in Edinburgh and Stellenbosch, and some individual members in other universities and legal practice). This year, the event took place in Utrecht and addressed a broad range of questions regarding both private and public law aspects of the possibility of a European ius commune. Here are some impressions...

The key note speeches were given by Katharina Boele-Woelki (Utrecht), Jan Wouters (Leuven) and Martijn Hesselink (Amsterdam):

Boele-Woelki spoke about the different existing and possible future legal regimes concerning property relations between spouses in Europe. She addressed the European Commission's proposals in this field (on these proposals, see also an earlier post on this blog) and commented on the possible ways forward: bilateral agreements, harmonisation (for instance according to the suggestions of the Commission on European Family Law, which reduce the number of regimes to 2 as opposed to the currently existing 5), unification, or the introduction of an optional regime.

Wouters looked into the relations between private law, the EU and global governance. Taking the examples of food safety standards, forest certification (e.g. taking action against the illegal harvesting of timber) and credit default swaps, he argued that the EU legislature can sometimes use standards developed by private bodies to pursue a certain public policy or 'common good' (e.g. the protection of public health or forests in the first two examples), while at other times it will replace these kinds of rules with mandatory legislation in order to serve certain public policy goals (e.g. market integrity in the third example).

Hesselink reflected on the question of how many systems of private law there are in Europe. He focused on the normative dimension of this dilemma, starting from the value of a 'sense of belonging' to a system. At this point, he distinguished between five views: nationalism, Europeanism, cosmopolitanism, dualism (meaning 'normative agnosticism'), and pluralism. He then went on to consider which of these (not mutually exclusive) loyalties could be the right one, and whether it would be possible to determine a hierarchy of values on the basis of them. In his view, the most plausible model for the current state of European contract law would be one of 'Europeanism as post-nationalism and proto-cosmopolitanism' (the latter term being based on the work of Habermas, in particular his new book on Europe's Constitution). Still, other values (especially justice) in Hesselink's view may trump Europeanism and system thinking, which means for instance that (on a less abstract level) an optional Common European Sales Law (CESL) may be a welcome instrument, but should not be pursued at any price.

In the smaller workshops, a wide range of more specific questions related to the idea of a 'ius commune' were discussed. I attended the workshops on 'contract law' and 'constitutional processes'. The first one focused on the merits of the proposed CESL (including the historical background to some rules, the expected usefulness of the remedies in case of non-performance, rules on digital content, and the pros and cons of optional regimes in private law) and considered the likely (economic) effects of the recently adopted Consumer Rights Directive. The workshop on 'constitutional processes' presented some of the research done within the scope of the 'European national and constitutional law' research project (Eunacon) led by Monica Claes, e.g. regarding the foundation of the EU on an 'uncommon principle' of federalism, and the impact of judicial networks (such as international associations of courts) on the development of law and its consequences for the conceptualisation of the constitutional order. Furthermore, attention was paid to the need for and possibility of establishing a constitutional ius commune, taking into account both institutional and substantive aspects of the theme. As Leonard Besselink, who chaired the second part of the workshop, remarked, the fact that this difficult query could not be easily solved did not diminish the beauty one could find in the unanswered question (a proposito, the beauty of the system was one of the values that Martijn Hesselink would refer to in his speech as well). Therefore, what could be a more appropriate ending to this post than a link to the piece Besselink based his observation on? Here it is.

Towards a European legal culture

The European Law Institute that was inaugurated in June (with a conference on which we posted earlier) has now officially opened its office in Vienna. Commissioner Reding was present at the first working meeting, dedicated to the proposal for a Common European Sales Law, and observed that:

'The European Law Institute will help build a European legal culture. More consistency between Europe's different legal systems will help strengthen mutual trust and our citizens' confidence in the EU's legal system, strengthening confidence in the European rule of law, which is the cement binding the European Union together. It will make the European area of justice concrete and real so that people can exercise their rights and take advantage of the Single Market's opportunities. The Institute will also bring added value to research on how EU law is implemented across the Union. It will engage in projects that will have concrete results for the daily lives of European citizens and legal practitioners.'

As regards European legal culture, the Oxford conference that I referred to in last Friday's post is now being advertised on the website of the Institute of European and Comparative Law.

Lindner - Brussels I and the consumer that went AWOL

Today, the Court of Justice of the EU (CJEU) gave its judgment in Lindner. The facts of the case can be found in an earlier post on this blog. Basically, the questions put to the Court all come back to one point: does the consumer protection provision laid down in Article 16 of Regulation 44/2001 on jurisdiction (the Brussels I Regulation) also apply to consumers who left their last domicile without giving notice of a change of address? Or, in other words, does Article 16 of the Regulation apply to consumers who have gone AWOL?

The Court answers with an unequivocal 'yes'. It states at para. 55 of the judgment:

'in a situation such as that in the main proceedings, in which a consumer who is a party to a long-term mortgage loan contract, which includes the obligation to inform the other party to the contract of any change of address, renounces his domicile before proceedings against him for breach of his contractual obligations are brought, the courts of the Member State in which the consumer had his last known domicile have jurisdiction, pursuant to Article 16(2) of that regulation, to deal with proceedings in the case where they have been unable to determine, pursuant to Article 59 of that regulation, the defendant’s current domicile and also have no firm evidence allowing them to conclude that the defendant is in fact domiciled outside the European Union'.

Therefore, the allocation of jurisdiction to the courts of the Member State in which the consumer has his domicile - guaranteed by Article 16 in order to protect consumers from costly, far-away proceedings in the professional party's court of choice - is also valid in situations where we only know the consumer's last domicile. It is noteworthy, however, that in this case the persuasive arguments are not based on consumer protection. Rather, the CJEU refers to wider objectives of the Regulation which apply to the consumer and his counterparty alike:

• 'strengthening the legal protection of persons established in the European Union, by enabling the applicant to identify easily the court in which he may sue and the defendant reasonably to foresee before which court he may be sued' (at para. 44);
• avoiding a situation 'in which the fact that it is not possible to identify the current domicile of the defendant precludes determination of the court having jurisdiction, thereby depriving the applicant of his right to bring proceedings' (para. 45);
• and: 'the criterion of the consumer’s last known domicile ensures a fair balance between the rights of the applicant and those of the defendant precisely in a case such as that in the main proceedings, in which the defendant was under an obligation to inform the other party to the contract of any change of address occurring after the long-term mortgage loan contract had been signed' (para. 46).

So far, the Court stays within the logic and system of the Regulation (to which it refers in para. 43). The cherry on the pie, however, is in the final paragraphs of the judgment, where the Court considers the requirements to be complied with in the subsequent proceedings, referring to the Charter of Fundamental Rights of the EU. It had been pointed to the Charter by several Member States (see the Opinion of the AG). Referring explicitly to Article 47 of the Charter, the Court emphasizes that 'proceedings leading to the delivery of judicial decisions take place in such a way that the rights of the defence are observed (see Case 125/79 Denilauler [1980] ECR 1553, paragraph 13, and Case C‑394/07 Gambazzi [2009] ECR I‑2563, paragraph 23)' (para. 48-49). Fundamental rights, such as respect for the rights of the defence, however, do not constitute unfettered prerogatives and may be subject to restrictions (Gambazzi, para. 29). Applied to the case at hand, the Court states:

'52. As regards the requirement relating to the need to avoid a disproportionate interference with the rights of the defence, it must be pointed out that this applies in particular for the interpretation of Article 26(2) of Regulation No 44/2001. That provision must be understood as meaning that a court having jurisdiction pursuant to that regulation may reasonably continue proceedings, in the case where it has not been established that the defendant has been enabled to receive the document instituting the proceedings, only if all necessary steps have been taken to ensure that the defendant can defend his interests. To that end, the court seised of the matter must be satisfied that all investigations required by the principles of diligence and good faith have been undertaken to trace the defendant.

53. It is true that, even if those conditions are satisfied, the possibility of taking further steps in the proceedings without the defendant’s knowledge by means, as in the case in the main proceedings, of notification of the action served on a guardian ad litem appointed by the court seised constitutes a restriction of the defendant’s rights of defence. That restriction is, however, justified in the light of an applicant’s right to effective protection, given that, in the absence of such proceedings, that right would be meaningless.'

The application and interpretation of the Charter in this context gives some insight into the role that fundamental rights play in the EU legal order. It is however not immediately obvious what the 'rights of defence' include, even after the Court's decision. One may for instance still argue about the outcome - the AG, after all, considered that the appointment of a guardian without the consumer's knowledge and consent is not enough to assume submission to the jurisdiction of the court under Article 24 of the Regulation. The Court seems to attach greater emphasis to the need for someone to be there and represent the consumer, even in the consumer's absence.

Reporting on digital content contracts

Yesterday, together with three colleagues, I attended a conference on 'Consumer legislation for digital products' that was organised by DG Justice in Brussels. At this conference we presented the results of a study on the topic that we carried out on request of the European Commission. This study was a joint project of the Centre for the Study of European Contract Law (CSECL) and the Institute for Information Law (IViR) and concerned the legal framework for digital products, such as films, music, e-mail, social networking and e-books. Empirical data on problems that consumers encounter when buying and using these types of digital content were provided by Europe Economics, whose report is also available on the Commission's website.

As indicated by the Commission, 'the studies will feed into the Commission’s ongoing work aimed to ensure a stepped up enforcement of the existing legislation also to purchases of digital content and to assess the need for further possible adaptation of EU consumer legislation to changing markets'. In this field, the recently adopted Consumer Rights Directive and the proposal for an optional Common European Sales Law are of importance.

Only constructive criticism expected... on Common European Sales Law conference

Last week, together with two of my colleagues, I attended a "Conference on European Contract Law - unlocking the internal market for growth" in Warsaw, Poland. The theme of the conference was focused on the new proposal for a Regulation of the Common European Sales Law. You could read previously on this blog about Commissioner Reding's speech given during this conference (Reding on Common European Sales Law), but I wanted shortly to share my observations and most important remarks that were made during these two days.

I have to admit that I have mixed feelings as to this conference, since it tried to be for everyone (academics, practitioners, consumer organizations' representatives, business organizations' representatives, politicians) and therefore at times was for no one (or just a few chosen ones). Due to the large amount of invited speakers their time to talk was limited to ca 10min, which meant that often the questions posed during the discussion were longer than the presentations (!). However, despite the time issues, full schedule and very general remarks made by some, there were many important issues raised by the speakers and by their audience. It's good to have a venue to talk about these issues, even if barely ever a satisfactory solution was mentioned.

I think for readers of this blog mostly the presentations given by the members of the European institutions would be relevant, since they talked about reasons behind the current proposal for the CESL, as well as its future development. And so, Dirk Staudenmayer, representative of the European Commission, assured that the goal during drafting of the CESL was to create a very comprehensible, easily accessible instrument. That need to make the CESL easily accessible influenced the scope thereof (i.e. basically limitation to regulation of sales contracts). He called the structure of the CESL an added value to already existing European regulations, since the CESL's provisions follow the life cycle of the contract (from formation to prescription). That pragmatic approach is visible also in the structure: there is no general and specific part division which allows the readers to avoid having to shuffle back and forth through the regulation. The terminology of the CESL was also made more concrete; general terms (e.g. reasonableness) were deleted as much as possible. The CESL was drafted in a way to assure high level of consumer protection (apparently no one of the national consumer lawyers consulted accused the CESL of providing lower level of consumer protection than in their current national legislations) as well as to protect interests of the businesses. The scope of the CESL protects SMEs, since the European Commission found problems with actions undertaken by SMEs in the common market and wanted to eliminate these problems. Large businesses are excluded from the scope of the CESL, since there were no such problems found with relation to them. Of course, Member States are welcomed to broaden the scope of the application of the CESL to cover large businesses, as well. Additionally, large businesses may choose to use the CESL regulation by adopting their standard contract terms in accordance therewith. The scope of the CESL was extended to cover digital problems, since it's a fast-growing, important for consumers market and these transactions have also been regulated by the Consumer Rights Directive. 

The main problems that had been mentioned as far as the regulation of the CESL is concerned is the lack of any provisions e.g. on legal capacity, agency, national prohibitions. What if the parties to a cross-border contract choose to regulate it by the provisions of the CESL, and one of these parties is 15 years old. The CESL does not determine whether a 15 year old would have a legal capacity to conclude a contract. Laws of which country would then be applicable to determine that?

Another problem that had been mentioned many times was the problem with the legal basis for adopting the CESL in its current scope as a regulation. The legal basis currently given by the European institutions is Article 114 of the Treaty while the academics claim that it should have been Article 352 of the Treaty. The latter one has not been chosen by the European Parliament, as Diana Wallis explained, since it would have excluded it from active participation on the scope and adoption of the CESL. This explanation, while sufficient on a political level, leaves a lot to be required from the legal/ academic perspective.

Diana Wallis reminded everyone about the vote that had already taken place in the European Parliament on the Optional Instrument, in which the European Parliament with clear majority expressed its support for the adoption of the OI. She mentioned that the works on the CESL are especially important in the current financial crisis, as the CESL is perceived as one key to solving financial crisis (by helping to unlock internal market's potential for growth).

Another member of the European Parliament, Klaus-Heiner Lehne, sees the Optional Instrument as a new method to try and develop new ways of harmonisation of the European law. According to him, minimum harmonisation doesn't work and the idea of introducing full harmonisation in the Consumer Rights Directive had failed, as well, due to many exceptions thereof and a limited scope of that directive. In his opinion if we adopt the CESL we will acknowledge that the full harmonisation in Europe will never be achieved. After all, the CESL allows the Member States to shape their national laws as they see fit (with exceptions introduced by e.g. European consumer legislation). However, cross-border transactions are a different matter and that is what the European rules should and would regulate fully. This also means that the CESL is a clear example of how subsidiarity rule works in Europe. 

As far as the idea of using the CESL as a toolbox was discussed, Mr Lehne mentioned that we already have that in the DCFR, so there is no need to treat the CESL as a toolbox. Toolbox, after all, does not need to have a binding force, parties may decide whether to choose to use it and how to use it.

Additionally, it was mentioned that there would be a database created of national case law that will be issued on the interpretation of the CESL, after its adoption. This, hopefully, will allow the judges to interpret the general terms used in the CESL in a similar way. However, the past experience with the CLAB database (that was supposed to lead to a uniform interpretation of the 'unfairness' concept in consumer contracts) showed us that such expectations can be way premature.

I think these are the most important remarks that had been made that might be important to you, readers. At the end of the conference, Mr Lehne warned that as of now people who oppose the idea of the Optional Instrument on principle are excluded from further consultations on the CESL. They expect only constructive criticism at this stage. Too much money and time have been put into this project not to achieve some result now...

Improper implementation of the Services Directive

While the European institutions are busy preparing new sales' regulations (Consumer Rights Directive and Common European Sales Law), services seemed to be a bit forgotten. This is surprising taking into account that consumers conclude many contracts for provisions of services in various areas of their lives. The Services Directive, which harmonizes these contracts to a certain extent, was adopted on 12 December 2006 and binds in all Member States at the latest as of the beginning of 2010. Or at least, it was supposed to...

Two weeks ago the European Commission referred three Member States (Austria, Germany and Greece) to the CJEU for only partial transposition of the Directive (Services Directive: the Commission refers Germany, Austria and Greece to the Court over incomplete transposition of the Directive). The Directive required EU countries to remove unjustified or disproportionate legal and administrative barriers to the setting up of businesses and the provision of cross-border services in the EU. Another goal thereof is to get rid of unwarranted barriers affecting service recipients (both consumers and businesses) wanting to make use of services from other Member States. All in all, it's supposed to facilitate cross-border provision of services to consumers and businesses, alike. What have the three Member States missed to implement?

"Austria has yet to pass any horizontal transposition laws while in Germany three measures have still to be adopted (one at federal level and two at regional level). In Greece a whole series of measures has yet to be adopted, especially in economically important sectors such as tourism and personal and business services. A law on private employment agencies and a law on estate agents and sales representatives, for example, have still to be adopted."

It's good to know that the poor uncle (that's how European regulation of the provision of services could be perceived in comparison to the regulation of sales contracts) gets any attention from the European institutions, at all.

ICT Tourism Business Platform

Since the Internet became more popular, travel information search and booking has been one of the top five most popular consumers' tasks online. Consumers book flights, hotels and whole package trips online. And even if they decide to make a travel reservation via phone or in person, they often first double check all information on their trip destination as well as hotels, travel companies online. This means that the tourism sector becomes more and more tailor-made to the particular consumer, rather than remaining mass service. It seems that these tailor-made services are often delivered by SMEs instead of big companies, but big companies have an advantage over SMEs of having developed more e-commerce applications and platforms. In order to help SMEs to compete on this market, the European Commission plans to create an ICT and tourism platform (functional by the end of 2012). Such a platform would help SMEs to interconnect via big distribution networks with all important market players and therefore, it would enable their participation in the digital value chain. More on this may be found here.

European (legal) culture & consumers

The best part of my working day today consisted of reading a part of a thesis manuscript dedicated to the cultural dimension of national resistance against the 'Europeanisation of private law'. Having come to the end of the chapter, it seemed interesting to look at possible references to 'legal culture' in the recent proposal for a Common European Sales Law. So here is what I found..

Recital (1) of the proposed Regulation states:
'(...) From the range of obstacles to cross-border trade including tax regulations, administrative requirements, difficulties in delivery, language and culture, traders consider the difficulty in finding out the provisions of a foreign contract law among the top barriers in business-to-consumer transactions and in business-to-business transactions. (...)' (emphasis added)

And the conclusions of the Communication accompanying the proposal say:
'It is also an innovative approach because, in line with the principle of proportionality, it preserves Member States’ legal traditions and cultures whilst giving the choice to businesses to use it.'

It shows that the current initiatives in the field of European contract law steer clear, as far as possible, from interference with the legal traditions and cultures of the Member States. This is confirmed by the fact that the proposed CESL does not include any provisions on topics that generally engage (culturally determined) values, in particular the morality of contracts. It differs in this respect from previous academic proposals for comprehensive sets of contract law rules, such as the PECL and DCFR.

Does this mean that the CESL should be considered not to touch upon any questions of legal culture? Interestingly, in a speech that Commissioner Viviane Reding gave in Leuven in June of this year (on which we posted earlier) she remarked that:
'In the long run, the optional instrument on European Contract Law needs to become embedded in a European legal culture where lawyers, judges and academics progressively develop a joint understanding of the principles of private law as they are common to the legal systems of our Member States and of the evolving acquis communautaire.'

But what then is meant by a 'European legal culture'? In this context, more food for thought can be found in a recent article by Jürgen Habermas on 'Europe's post-democratic era', in which he submits that:
'A Europe-wide civic solidarity cannot emerge if social inequalities between the member states become permanent structural features along the fault lines separating poor from rich nations. The union must guarantee what the constitution of the German Federal Republic calls the "uniformity of living standards". This "uniformity" refers only to a range of variation in social living conditions that is still acceptable from the perspective of distributive justice, not to the levelling of cultural differences.' (emphasis added)

To be continued...

And as a final note here: European legal culture will be the theme of a conference that is being organised in Oxford mid December (more information will follow on this blog), which promises an interesting discussion and - talking about culture & consumers - presents an excellent opportunity to go and see Leonardo in London.

Clive on (Warsaw conference on) Common European Sales Law

Eric Clive's summary and first impressions on the Warsaw conference on European contract law can now be found on the European Private Law News blog. The first reactions from stakeholders (consumer and businesses organisation) and academics seem to be generally favourable and constructive towards the proposal on a Common European Sales Law.

Reding on Common European Sales Law

The text of Commissioner Reding's speech at the currently ongoing conference on the future of European Contract Law, organised by the Polish presidency, is now available on the website of the European Commission. Reding emphasises the potential role of the recently proposed Regulation on a Common European Sales Law:

'The optional Common European Sales Law will provide companies with an easy and cheap way to expand their business to new markets. It will bring more choice, security and a better deal to consumers. In the Commission's analysis, it's a win-win situation: for businesses and consumers who want to take advantage of our Single Market. Europe needs to develop and exploit such win-win situations. Because we have no time to lose in our fight for stability, growth and competitiveness of this marvellous continent. Some say in these days that Europe is in danger. I do not share this negative view. I believe Europe is full of opportunities and of potential that we just need to unlock with determination. And the optional Common Sales Law is one of these opportunities.'

Some first-hand news on the conference proceedings will probably follow next week when Joasia, who is attending the conference, will be back from Warsaw. Furthermore, Eric Clive promised to post on the conference on the Edinburgh European Private Law blog.

2020 vision on health and consumers

Today, the European Commission presented its proposals for its new Health and Consumer Programmes for the period 2014-2020. Commissioner Dalli observed that '[t]hese two programmes are about people; about fostering the conditions for people to live to their full potential and play a key role in society and in the economy. Keeping people healthy and active for longer is good for people and is good for jobs and growth. Confident, empowered consumers create thriving markets. I am confident the two programmes will make a significant contribution to achieving Europe 2020 goals – to create smart, sustainable and inclusive growth by the end of this decade'.

The proposed Consumer Programme aims at improving possibilities for consumers to actively take part in the internal market, in particular by:

- enhancing product safety through effective market surveillance;
- improving consumers' information, education and awareness of their rights;
- consolidating consumer rights and strengthening effective redress, especially through alternative dispute resolution;
- strengthening enforcement of rights cross-border.

In relation to these points, the Commission indicates that it intends to enhance consumer awareness of available rights under EU law, for instance through giving more publicity to the work of the ECC-net (network of European Consumer Centres).

Online music in Europe

This short video outlines problems that European regulators face with regard to creating a single market for transactions concerning online music. Illegal downloading, problems with online licensing, databases and copyrights are all mentioned.

Write as if you were writing it for your Grandma - tips on simplifying legal language.

In a recent talk "The right to understand" for TED Sandra Fisher-Martins, translator and language-activist, made some interesting remarks about the complexity of language used in documents (legal, medical etc.) and how we could simplify it (btw, she also gives astounding statistics on literacy rates in Portugal). She argues for a civic movement, consumers becoming more demanding as to what is not only their daily need, but also a civic right: the right to understand.

"Next time you're handed a document you don't get, demand to understand. Put pride to one side for a bit and ask until it's all clear."

She also argues for drafters of these documents to write them in a way that general public would understand and not only the drafters themselves. After all, as Einstein once mentioned:

"If you can't explain it simply, you don't understand it well enough".

So how do you simplify the language? She advises to write the documents as if you were writing it for your grandmother, without patronizing her and with respect. You use three techniques to do it:

"First of all, you start with what's most important. Grandma is busy. She's not going to read three full pages just to get to the main idea. (...) Second, use short sentences. Because Grandma. like any of us, if the sentences are too long, by the time she gets to the end, she won't remember the beginning. Finally, the third: use simple words - those that Grandma already knows."

Opt-out tools from targeted online advertising: it's just an illusion putting me back in all this confusion...

A recent study on online behavioral advertising (Why Johnny Can't Opt Out) conducted by researchers at Carnegie-Mellon University showed that consumers are having serious troubles to use opt-out tools that advertising companies provide to them in order to enable consumers to opt out of receiving ads targeted based on their Web-surfing behavior. Some consumers that were tested couldn't find the opt-out page without additional instruction received from the test moderator. Some consumers got confused and thought that they would need to pay for using the opt-out tools. Consumers who managed to find opt-out tools, often managed to opt-out only from one type of ads instead of from all of them. Additionally, there were complaints made that the opting-out process took a long time (ca. 45 minute for some). The test results show that the self-regulatory measures that advertising companies implemented at the moment in the US to enable consumers to stop targeted advertising are less than satisfactorily efficient. This data should be interesting to European legislators who struggle at the moment with the implementation of the ePrivacy Directive. (see e.g. Cookies going stale)

(see: Consumers Don't Understand Opt-Out Tools)

European Competition and Consumer Day

On 24-25 November in Poznan (Poland) there will be an event organized to celebrate the European Competition and Consumer Day. Every year the European Competition Day is organized by the country that holds the Presidency. This year Poland decided to devote this day to the interaction between competition and consumer protection (partially, due to both these areas being covered by the Polish Office of Competition and Consumer Protection). The title is: "Competition - what's in it for consumers?". If you are interested in taking part in it, you may find more information about participation and programme on the event's website.

AG Mengozzi: Scope of Product Liability Directive does not extend to service providers using defective products

The Opinion by Advocate General Mengozzi in Centre hospitalier universitaire de Besançon (case C-495/10) concerns the scope of the Product Liability Directive and the possibility for Member States to set rules on the liability of service providers for defective products used. It concerns a French case dealing with the damages of a thirteen year-old boy, who suffered burns during surgery in a French hospital as a result of a defective heated mattress.

According to the highest administrative court of France, the Conseil d’État, public health providers are strictly liable for damages caused to patients as a consequence of defective devices and products. According to the Conseil d’État, this liability rule follows from French administrative law rather than the legislation implementing the Product Liability Directive. In this case before the ECJ, this strict liability rule for public health providers is questioned, as it is argued that it is in breach of the Product Liability Directive.

Advocate General Mengozzi points out that in order for the rule to be in breach of the Directive, it must fall under its scope. He points out that this can only be the case if :

(a) the public health provider could be seen as supplier in the sense of Article 3(3) of the Directive, or

(b) if the liability rules for producers and other parties covered by the Directive preclude liability of others.

According to the Advocate General, neither is the case.

As to (a), the Mengozzi argues that a public health provider can not be seen as a supplier under the Directive. As a main rule, the Directive holds liable the producer of the product, i.e. the actual manufacturer. If the producer can not be identified, other parties may be liable instead. One of these parties is what the Directive refers to as the “supplier” of the product. But this term does not include the service provider, i.e. a party who uses a (defective) product while providing a service to a consumer. Rather, it refers to the other parties in the chain of distribution of the product, with the last seller being the last party in the chain. This is not surprising, as the Directive deals with manufacturer’s liability rather than user’s liability, even though the manufacturer’s liability is extended to other parties in the distribution chain if the actual manufacturer can not be identified.

The answer to (b) is somewhat more complex. As the Directive determines the liability of some parties but not of others, it could be argued that the Directive precludes liability of those other parties. So the reasoning would be that because the manufacturer and, under circumstances, later suppliers can be held liable, Member States can not make other parties liable. Mengozzi argues differently. The most important argument given on this point is that issues that are not explicitly dealt with under the Directive, do not fall under its scope. As a consequence, Member States have the freedom to design and apply their own rules, including e.g. the French rule holding public health care providers liable for damages as a result of the use of defective equipment. This makes sense: the Product Liability Directive does not govern all aspects of liability of defective products, leaving the topics left untouched open for regulation by Member States.

The Advocate General adds that if the Court decides differently on the question of scope, i.e. if it would decide that a service provider’s liability would fall under the scope of the Directive, this would breach Article 13 of the Directive. However, it seems likely that the Court follows the Advocate General on the question of scope, thus leaving the French liability rule untouched.

Click here for the opinion.

A moment for our readers

Originally, I created this blog in order to keep in touch with developments in European consumer law. It gave me a motivation to look up the news every day (and read it immediately, without sending it to my email for later reference). This blog was also planned to be an archive for all the news, easy to fall back on months later. It's not an anniversary of this blog today, but it has been some time since I checked Google Analytics (a brilliant statistics tool, btw!) to see how we were doing. And wow, was I surprised. I mean I hear from time to time that someone, aside my colleagues, is reading the blog. My students, other academics I run into mention this blog occasionally. But when I compared today the number of visits that this blog had in the past month to the visits within the same period of time but last year, I was astonished. The number increased over 200%. I guess we are doing something right. I'll try to keep it up this way. :)

Should medical tourism be reimbursed by national social security system? - CJEU case in Commission v. Portugal C-255/09

27 October 2010: CJEU case C-255/09 Commission v. Portugal

Unfortunately, the fall while often beautiful in its various colours also leaves us susceptible to various infections. Our bodies have to adjust to lower temperatures, lack of sun, etc. and often cannot fight against a flu, throat infection, UTI... It seems appropriate that the CJEU ruled today in a case concerning consumers health issues and protection of their right to have the medical costs reimbursed by social security and insurance.

Article 22 of the Regulation 1408/71 on the application of social security schemes to employed persons and their families moving within the Community provides that within Europe consumers who travel to another country for non-hospital medical care are supposed to be reimbursed for the cost thereof in their own country. In a recent case of 5 October 2010 Commission v. France (C-512/08) the CJEU decided that a Member State could make reimbursement for non-hospital care planned in another Member State subject to prior authorisation if that care required the use of major and costly equipment.

In the current case, against Portugal, the CJEU considered whether Member States were allowed to introduce such a limitation of the need to obtain prior authorisation for medical treatment abroad in order to obtain reimbursement, when no costly or major equipment would be used. Portugal, namely, allows consumers to claim such reimbursement only after they fulfilled a threefold prior authorisation requirement. Additionally, consumers may claim such reimbursement only for 'highly specialised' foreign medical care, which cannot be provided in Portugal due to technical difficulties or a lack of qualified personnel.

The CJEU stated, first, that medical services are covered by the provisions on the freedom to provide services. (Par. 46) This means that Article 49 EC (of the Treaty) applies to cross-border healthcare. (Par. 52) On the basis of Article 49 EC Member States may not adopt national rules which make provision of services between Member States more difficult than provision of same services within a single Member State. In previous case law (e.g. Kohll; Smits and Peerbooms, Commission v. France) the CJEU confirmed that:

"the mere requirement, for treatment planned in another Member State, of prior authorisation to which responsibility for payment by the competent institution is made subject, in accordance with the rules governing cover in force in the Member State to which that institution belongs, constitutes, both for patients and service providers, an obstacle to the freedom to provide services, since such a system deters, or even prevents, those patients from approaching providers of medical services established in a Member State to obtain the treatment in question" (Par. 60)

In the current case it is foreseeable that Portuguese consumers would be deterred from seeking medical care abroad due to a prospect of financial loss in the event of refusal by the national health system to meet the medical costs. An additional deterrent factor is the complexity of the three-stage administrative authorisation procedure. (Par. 62) Moreover, the fact that reimbursement might be granted only when such a medical procedure is not available in Portugal further limits the possibility of consumers seeking medical care abroad. (Par. 63) This all indicates that prior authorisation is a restriction on the freedom to provide services. (Par. 71)

This restriction may not, in this case, be justified by an aim of maintaining the financial balance of the social security system (this argument for limitation was, e.g., accepted in Commission v. France). No evidence has been provided that in case the medical care is not 'major', the Portuguese social security system would be overburdened, taking into account that it's usually only consumers in border areas or where specific conditions are to be treated who travel for medical reasons. (Par. 77-79) As far as the claim was made by Portugal that such restrictions are necessary in order to protect the social security system, the CJEU observed that Member States are still free to set various conditions on which benefits (also, reimbursement) are granted:

"in so far as they are neither discriminatory nor an obstacle to freedom of movement of persons (...) That is particularly so in the case of the requirement that a general practitioner should be consulted prior to consulting a specialist" (Par. 86)

Additionally, Member States may fix the amounts of reimbursement which patients who have received care in another Member State can claim (objectively, without discrimination and using transparent criteria). (Par. 87)

Finally, the CJEU decided that the fact that Portugal does not provide for any possibility of reimbursement of non-hospital medical expenses incurred in another Member State in respect of a consultation with, e.g., a general practitioner or a dentist (not a highly specialised care) is contrary to the freedom of provision of services, as well. (Par. 95)

I agree with the CJEU that cross-border medical care is not likely to become a threat to social security systems, since consumers would most likely prefer to be treated close to their home, family and friends, as well as by doctors who speak their language. Therefore, it seems that when a consumer is looking for medical care abroad he has to have solid reasons to do so and should be enabled financial compensation just as he would have been compensated for undergoing the same treatment in his own Member State.

Where to sue for harmful online content? CJEU case in eDate Advertising and Martinez/Martinez (C-509/09, C-161/10)

25 October 2011: CJEU joined cases C-509/09 and C-161/10 eDate Advertising and Martinez/Martinez

Today CJEU gave judgment in eDate Advertising case setting rules as to which court should have jurisdiction in cases concerning infringement (alleged one) of personality rights that happened by means of content placed online on an internet website. It gave interpretation to Article 5(3) of Regulation 44/2001 on jurisdiction and recognition and enforcement of judgments in civil and commercial matters as well as Article 3 of Directive 2000/31/EC on electronic commerce, of which the first one is of particular interest for consumers and will be discussed here.

The problem that had been addressed was as follows. Imagine that on some website personal information of a consumer is published. If that consumer thinks that this information is either incorrect or improper and should be taken down from the internet, he might know what his first step should be, i.e. contacting the website, but what he should do after the website doesn't react to his notification is a bit more tricky to figure out. The consumer may go to his own national court to demand removal of such information, but if the website is set on a server of another Member State, operated and owned by parties from another Member State, then the chances are that it will be difficult to establish which court should have jurisdiction over such procedures.

This is what happened in the two cases presented to the CJEU. In eDate Advertising X, domiciled in Germany, demanded removal of an archived internet news report on a Rainbow website in which his full name was given as a person who murdered a well-known actor and was appealing from his conviction. After being released on parole X wanted the website to stop reporting that matter and refrain from future publication. eDate Advertising operated this website and was established in Austria. In Martinez/Martinez the French actor Olivier Martinez and his father, Robert, complained of interference with their private lives, etc. by an English website of Sunday Mirror which published a text entitled "Kylie Minogue is back with Olivier Martinez" detailing their meeting in 2008.

In both these cases national courts of the place of domicile of persons claiming alleged infringement of their personality rights were not sure as to whether they had jurisdiction. Article 5(3) of the above-mentioned Regulation determines that in matters relating to tort, delict or quasi-delict a person domiciled in a Member State may be sued in courts of another Member State, where the harmful event occurred or may occur. This 'place where the harmful event occurred or may occur' is difficult to establish when infringement may happen by means of content placed online. In an earlier case Shevill and Others the CJEU had held that:

"in the case of defamation by means of a newspaper article distributed in several Contracting States, the victim may bring an action for damages against the publisher either before the courts of the Contracting State of the place where the publisher of the defamatory publication is established, which have jurisdiction to award damages for all of the harm caused by the defamation, or before the courts of each Contracting State in which the publication was distributed and where the victim claims to have suffered injury to his reputation, which have jurisdiction to rule solely in respect of the harm caused in the State of the court seised"  (Par. 42)

The same considerations may be applied to other media and means of communication, e.g. online content. (Par. 44) However, the CJEU takes into account that distribution online happens instantly after publication of the content and is, in principle, unlimited. Moreover, it might be difficult to quantify that distribution with certainty and accuracy in a particular Member State due to technological difficulties. This leads to difficulties in determining damage that had been caused within a particular Member State. (Par. 45-46) At the same time, one cannot help but notice the serious nature of the harm which may be suffered by a person whose rights have been infringed on a world-wide basis. (Par. 47) Taking this into account, the CJEU decided that in cases of online infringement of personality rights the above-mentioned rule should be adjusted in favour of the victim:

"a person who has suffered an infringement of a personality right by means of the internet may bring an action in one forum in respect of all of the damage caused, depending on the place in which the damage caused in the European Union by that infringement occurred. Given that the impact which material placed online is liable to have on an individual’s personality rights might best be assessed by the court of the place where the alleged victim has his centre of interests, the attribution of jurisdiction to that court corresponds to the objective of the sound administration of justice" (Par. 48)

The centre of interest means usually habitual residence, but can be determined otherwise if e.g. professional activity is pursued in another Member State. (Par. 49)

This all means that if information is posted about consumer's private life online that he would like to object to, he might do so in his own national court, regardless where the website that posted that information is established. Moreover, he may claim damages in one court for infringement of his personal rights all over Europe and claim all of his damages in one procedure.