ECJ in BBVA v Gabarro: personal notification of new rights, please!

In today's decision concerning the case of BBVA SA v Gabarro et al (case C-8/14)- another episode in the post-Aziz saga, the Court of Justice sets fairly high requirements for transitional rules including time limitations for the exercise of new rights. In doing so, it follows and specifies the opinion of AG Szpunar, which we had reported on earlier this year. 

The case concerns a provision in the 2013 Spanish law reinforcing the protection of mortgage debtors. With reference to cases in which enforcement proceedings were pending and no unfair terms control had been exerted under the pre-existing (consumer-unfriendly) procedural rules, the law granted consumers a one-month period to bring an action based on the claimed unfairness of a given contractual term. The period started to run with the publication of Law 1/2013.

Already the AG had concluded that, while the one-month limitation seemed proportionate to the needs to legal certainty and all in all did not appear excessively short, the moment at which the period started to run was problematic. The Court follows the same approach. It observed that under Spanish law consumers were informed of the fact that enforcement proceedings against them had been instituted and of their right to oppose enforcement within 10 days of the notification. The new law, however, did not provide for such a notification. As a consequence, consumers "could not reasonablt take advantage of a further opportunity to make an application objecting to enforcement", since "they were notified about it through the same procedural means used to convey the initial information"[para 38]. On light of that, the transitional provision was not such as to guarantee full enjoyment of that period and, therefore, the effective exercise of the new right" [para 39]. 

In other words, the court seems to suggest that such a time limit should only start running after the consumers are individually notified of the fact that an adopted law grants them a new right. While consumer-friendly and also respectful of legal certainty, following it might entail imposing a non-negligible burden on court offices. It is hard, however, to imagine a different solution. What do you think?

Save the date: 24 November - symposium on the new Package Travel Directive

New Package Travel Directive symposium: 24 November 2015 in Amsterdam

THE REGISTRATION IS NOW OPEN

With the European Parliament and the European Council finally reaching an agreement on the revision of the Package Travel Directive earlier this year, this symposium intends to evaluate the new rules, anticipate problems with their implementation into national laws, as well as discuss missed chances in the harmonisation of the travel sector contracts. Experts in this field will discuss, among other things, such issues as: the exclusion of individually arranged combined services by the consumer from the scope of the PTD, the difficulties of protecting travelling consumers in the P2P economy and in the digital age, continued lack of harmonisation of passenger law.

The symposium is organised by prof. Marco Loos (CSECL, University of Amsterdam) and dr Joasia Luzak (CSECL, University of Amsterdam). It will be divided into three sessions. The first session will be devoted to the scope of the new Directive, with as speakers: prof. Klaus Tonner (University of Rostock) and dr Stephan Keiler (University of Salzburg). In the second sessions, the missed opportunities regarding the application of the provisions of the Directive to modern, digital package travel contracts will be discussed by prof. Sophia Zheng Tang (Newcastle University) and dr Joasia Luzak (CSECL, University of Amsterdam). The last session will be devoted to the relationship between the new Directive and the European Contract Law, as well as the passenger acquis, with as speakers: prof. Marco Loos (CSECL, University of Amsterdam), dr Josep Maria Bech Serrat (University of Girona), Jens Karsten (bxl-law).

The attendance in the symposium will be free of charge. Registration is necessary. The details about registration will follow shortly.

ECJ "Facebook" case: EU -US safe harbour agreement invalid

Just today, the European Court of Justice declared (Schrems v Data Protection Commissioner, C-362/14) that the 2000 Commission decision which allowed the transmission of EU citizen's data to the United States is invalid. The decision, according to the Court, failed to show that the Commision had actually considered whether the United States guaranteed a level of protection of fundamental rights "essentially equivalent" to the one afforded in the European legal order.

See more extensively the excellent coverage by the Guardian here and, here (with some speculations on what the decision entails.

PS the case was initiated by the same guy whose other actions we had talked about some time ago.

Enforcement by notary with no unfair terms control is ok, says ECJ

Yesterday, the Court of Justice delivered its judgment in another Hungarian unfair terms case, Erste Bank Hungary v Attila Sugár (C-32/14). 

In this case, the problem raised before the referring national court concerned an enforcement clause connected to a recognition of debt to be actioned by a notary. This allowed the creditor, a bank, to potentially obtain extra-judicial enforcement. The debtor, a consumer, claimed that the original loan agreement contained unfair terms and the notary should therefore refuse enforcement. When the notary declined to comply with the consumer's requests, the case was brought before a local court. 

The question before the Court of justice was, in essence, whether the Hungarian law establishing the possibility of "notarial enforcement" of a credit was in compliance with article 7 of the Unfair Terms Directive. The problematic feature of this procedure is that the notary has no competence to ascertain whether the agreement on which the credit is based contains unfair terms.   

The result, which will bring little satisfaction to consumer advocates, is that the Court found the Hungarian legislation, at least at face value, to be compatible with the Directive's requirement. This is not particularly surprising, considered that already in Kusionova the Court had argued that extra-judicial procedures are not necessarily problematic. Much rather, it must be reasonably possible for the consumer to find effective relief somewhere in the system. 

In the case at stake, it seemed that it would be possible for the consumer to oppose the enforcement before a court and that the latter court would be able to grant appropriate protection- including unfair terms scrutiny and interim relief. The court repeats, to this respect, its previous statement that the "effective protection" requirement cannot be stretched to make up fully for the consumer's "total inertia".  

The ECJ did acknowledge (para 54) that the involvement of a notary might present additional hurdles for the consumer: 

taking account of the particular confidence that, as a general rule, consumers place in notaries, in their capacity as impartial advisors, and the fact that documents drafted by them are not vitiated by illegality, there is a substantial risk that consumers will be less vigilant when those documents are drafted regarding the existence of unfair terms and the consequences of a simplified notarial enforcement procedure, such as that at issue in the main proceedings. Furthermore, where such a procedure has been initiated by the seller or supplier, the consumer may not have, without the intervention of a notary, all the relevant information enabling him to defend himself before the national courts in the context of that procedure.

According to the Court, however, the fact that the Hungaria law on notaries requires them to perform a preventive control on the acts they draft, and to assist both parties impartially, appear to be in principle "such as to contribute to compliance" with the Directive (para 58). 

Although the Court states that it is for national courts to verify that the position of notaries actually is such to contribute to preventing the use of unfair terms, there is no such nuance in the conclusions. To the contrary, the ruling expressly mentions that notaries can affix the enforcement clause "when no review... has been performed at any stage". Although the substance of the decision might be reasonable- after all, it is not the Court's task to cast doubts on the whole idea of extra-judicial enforcement- the ECJ reasoning, and the way it is not mirrored in the conclusions, seem wanting. Better luck next time?