Also
yesterday the Court of Justice delivered its ruling in case C-119/15 Biuro
podróży Partner. The judgment may come as a surprise to some commentators as it
markedly deviates from the opinion of Advocate General Saugmandsgaard Øe
presented earlier this year (see our previous post here). The Court adopted a
more consumer-friendly approach and accepted a national solution, according to
which the use of terms equivalent to those included in the register of unfair
clauses may lead to an imposition of administrative sanctions, even the term
included in the register was declared unlawful in a different factual context.
The Court made it clear, however, that effective judicial remedies must be
available to traders, on whom the sanctions are imposed.
Underlying
dispute and questions referred for a preliminary ruling
Reference
for preliminary ruling came from the Court of Appeal in Warsaw, which examined
an appeal from the decision of the Polish consumer protection authority
(President of UOKiK) imposing a fine of PLN 27 127 (approx. EUR 4 940) on the
travel agency Partner. Imposition of sanctions was based on the finding that
supplier, in its contracts with consumers, made use of standard provisions
equivalent to terms previously declared unlawful by a court and introduced into
the public register of unfair terms. The referring court expressed doubts as to
the interpretation of Directives 93/13/EEC (Unfair Contract Terms Directive)
and 2009/22/EC (Injunctions Directive). It explicitly referred to the Invitel
case (C‑472/10), in which the
Court held, that its case-law that the effects of a judicial decision declaring
unfair terms unlawful may be extended to all consumers having concluded a
contract containing the same terms with the same seller or supplier, even if
they did not participate in the proceedings brought against that trader. The
referring court asked for clarification whether an analogous interpretation can
apply to consumers who concluded a contract containing the same terms with a
different seller or supplier.
The
judgment
According
to the Court, in light of Article 6(1) and Article 7 of Directive 93/13/EEC,
read in conjunction with Articles 1 and 2 of Directive 2009/22/EC and in the
light of Article 47 of the Charter of Fundamental Rights of the EU, the use of
standard contract terms with content identical to that of terms which have been
declared unlawful by a judicial decision having the force of law and which have
been entered in a national register of unlawful standard contract terms can be
regarded as an unlawful act also in relation to a seller or supplier which was
not a party to the proceedings culminating in the entry in that register.
However,
it is essential that the seller or supplier is provided with an effective
judicial remedy against the decision which finds that contested terms are
equivalent. In particular, the following two elements should be subject to a review:
a) the
question whether, in the light of all relevant circumstances particular to each
case, those terms are materially identical, having regard in particular to
their harmful effects for consumers,
b) the
amount of the fine imposed.
Comment
The
judgement is noteworthy for several reasons. First of all, it elaborates on the
role of the Charter of Fundamental Rights in the context of unfair contract
terms. This time the Court explicitly referred to the Charter (paras. 23-27),
although it had refrained from doing so in other important cases like Aziz
(C-415/11). The Court also made it clear that not only consumers, but also the
sellers and suppliers enjoy the fundamental right to effective judicial remedy
which must be respected.
Secondly,
the judgment sheds some light on the role of unfair contract terms registers,
which can be adopted by Member States. The Court did not delve into the debate
about the erga omnes effect of judgments, but appeared to have taken it for
granted that lists of unfair terms may also be based on court rulings (para.
36), thus differing quite fundamentally from the Advocate-General's opinion
(paras. 54-56 of the opinion). Instead of questioning the legitmacy of such
registers, the Court focused on the way in which they work in practice and
emphasised that not only the formation, but also management of such registers
must comply with EU law. In particular, registers should remain transparent and
up-to-date. Possible consequences of noncompliance with these requirements have
not been specified, though. In case of a serious mishandling of unfair terms
registers, initiation of infringement proceedings could perhaps be envisaged.
It is worth mentioning that with respect to the abovementioned parameters, the
Polish register – with more than 6500 often overlapping entries – left much to
be desired. However, as we have already reported, legal framework in Poland has
meanwhile undergone a substantial reform and no longer provides for an erga
omnes effect of judgements entered into the register. Interestingly, the lack
of transparency was mentioned as one of the reasons for the reform.
In
the analysed case particular importance was attached to the trader’s
possibility to challenge the decision. Emphasis was placed on two elements:
assessment of the conduct itself (material equivalence) and the amount of the
fine. In this respect the Court aligns, to a certain extent, with the Advocate
General, who also stressed the need to analyse contractual terms in a broader
context and to allow traders to present factual arguments. Nevertheless, the
Court's understanding of the Polish system of judicial review differs rather
significantly from the Advocate-General's view (see paras. 42-43 of the
judgment and para. 65 of the opinion).
Notwithstanding
these discrepancies, it seems justified to say that a system in which
administrative sanctions are imposed based on the register of unfair clauses is
only acceptable if the reviewing court is competent (obliged?) to analyse the
case on the merits. In the Polish judicial practice several reviewing courts
have expressed the view that conducting such an assessment should not be their
task, as there is a separate procedure adopted specifically for this purpose.
In the light of CJEU judgment, such an argument may be contested. According to
the Court, assessment of material equivalence undertaken by the reviewing court
is sufficient from the point of view of effective judicial protection. At the
same time, the Court does not preclude the existence of stronger procedural
guarantees for traders. In particular, it does not address the issue whether an
alternative solution, in which every contractual term needs to be first
assessed by the court in a dedicated procedure and only afterwards the trader can
be subject to administrative sanctions, would undermine the effectiveness of EU
consumer law.
The
assessment of the second element – the amount of fines – has similarly been
left to national courts. In this respect, however, the judgment is less controversial
as it clearly refers to the well-established principle of proportionality
(paras. 44-46).
Concluding
remarks
The
judgment in Biuro podróży Partner may be regarded as a development of Invitel
jurisprudence. The Court seems to have accepted that a judicial ruling
recognising particular contract terms as unfair may also produce, at least
indirectly, legal effects vis-à-vis other sellers and suppliers. Nevertheless,
this was not the main angle of the Court's analysis. While the CJEU
acknowledged that administrative proceedings against different traders may be
based on registers on unfair clauses, it did not attach much importance to the
fact that the register in the case at hand was composed of clauses which had
previously been declared unfair by courts in different individual cases.
Emphasis was rather placed on the need to provide both consumers and traders
with effective judicial remedies in light of Article 47 of the Charter. The
Court provided some guidance as to the interpretation of this principle,
although this can hardly be regarded as clear and comprehensive. The judgment
also sheds some light on requirements concerning the management of unfair term
registers, which should remain transparent and up-to-date. Furthermore, it
clarifies that even if the administrative sanction is based on equivalence of
contract terms, judicial review should seek to establish whether the terms are
indeed materially – and not only formally – identical and sanctions are
proportional. The question of what should be done if the earlier court had simply erred in its finding was not explored.
Due
to a recent reform of the Polish law on unfair terms, the judgment of the Court
will be particularly relevant to a number of pending proceedings, initiated
before the reform came into force, which were often stayed in anticipation of
the CJEU ruling. In this context, it is crucial that the Court did not reject
the consumer-friendly interpretation of the previous Polish scheme in its
entirety. As regards the availability of effective judicial protection, the
assessment has largely been left to national courts. Limited evaluation performed
by the CJEU did not disclose any significant shortcomings of the analysed legal
framework, contrary not only to the opinion of the AG, but also the part of
Polish jurisprudence and academia. It will thus be very interesting to see the impact of the judgment on the ongoing proceedings.
