26 April 2012: CJEU judgment in case C-472/10 (Invitel)
I'm participating right now in the conference on the law and economics perspective of the CESL in Chicago, which means that this blog post will be short by necessity. Still, it is worth mentioning that the CJEU issued a new judgment yesterday clarifying certain issues as to the applicability of the Unfair Contract Terms Directive.
The case concerned contracts concluded with consumers by Invitel, which is a fixed-line telephone network operator in Hungary. Invitel included in its standard contract terms a condition pursuant to which consumers had to pay additional fees, which had not initially been agreed between the parties, when they decided to pay invoiced by money orders. (Par. 17) The method of calculation of these additional fees was not explained. (Par. 18) Upon complaints of many consumers to the consumer protection authority, it decided to take an action against Invitel claiming they had been using an unfair contract term and demanding automatic and retroactive reimbursement to consumers who were charged by Invitel these fees. (Par. 19)
The Hungarian court asked the CJEU whether a standard contract term that gives a possibility to a service provider to unilaterally change contract terms without explaining the method of adjusting the price nor reasons behind it should be seen as always and automatically void (blacklisted). Moreover, the Hungarian court enquired as to the details of an action that a consumer protection organisation may make against companies using unfair contract terms: if the contract term is considered to be unfair, does it not bind any consumer, also if they are not party to the proceedings (also as regards the future)?
The CJEU answered, as it was to be expected, that the national court has to assess the unfair character of a contract term on its own. The Unfair Contract Terms Directive does not provide for a black list of unfair contract terms. (Par. 25-26) Certain factors are being indicated to the national court as having to be taken into account in its assessment of unfairness: the fact whether the reasons for, or the method of, the amendment of the fees were set out in plain, intelligible language; the fact whether consumers have a right to terminate the contract.
" (...) the possibility for the consumer to foresee, on the basis of clear, intelligible criteria, the amendments, by a seller or supplier, of the GBC with regard to the fees connected to the service to be provided is of fundamental importance." (Par. 28)
The answer to the other question was that if a consumer organisation begins an injunction procedure against a company on behalf of hurt consumers, the recognition of unfairness' effects by the national court shall bring about effects not only for the consumers who were represented in the procedure by the consumer organisation but also to those who concluded a contract with the server provider under the same standard contract terms, and who were not party to the injunction proceedings. (Par. 38) Moreover, the court should apply, of its own motion, and also with regard to the future, all consequences of unfairness which are provided by national law. (Par. 43)