Earlier today the Court of Justice delivered its judgment in joined cases C-419/18 and C-483/18 Profi Credit Polska. The case follows the earlier judgment involving the same party, in C-176/17, as well as the order in C-632/17 PKO Bank Polski. Both of these earlier rulings dealt with the Polish fast-track order for payment proceedings (postępowanie nakazowe) for the enforcement of promissory notes and bank ledger excerpts, respectively (see: Effectiveness of the UCTD revisited... and Ex officio control of unfair terms...). In both cases the Court found that the procedure was not compatible with Directive 93/13/EEC on unfair terms (UCTD) as it required the consumer to lodge a complaint (zarzuty) under comparably strict conditions (as regards time, content and costs) before the national court could analyse the fairness of the underlying credit agreement of its own merits. The order in PKO also included the analysis of Directive 2008/48/EC on consumer credit and in that context established that the national court should also be able to perform ex officio control of the trader's compliance with information duties regardless of consumer's complaint. In the second Profi Credit judgment delivered today, the Court had a chance to clarify what exactly national courts should be examining ex officio, at what stage of the order for payment proceedings and based on what evidence. The judgment brings a bit more clarity to the reading of EU law than its predecessors, but does not dispel the interpretative doubts entirely.
Facts of the case
The case involved several Polish consumers who entered into credit agreements secured by blank promissory notes. Following the debtors' failure to fulfill their contractual obligations, Profi Credit completed the notes with relevant amounts and moved to their enforcement in the order for payment procedure. Under the applicable Polish law, the court hearing the dispute in which an initially blank promissory note is relied upon, is authorised to verify whether the promissory note had been completed in accordance
with the promissory note agreement concluded with the consumer. However, such an assessment can only be made in the event of a complaint raised by
the debtor, which the latter had failed to do. The creditor, in turn, refused to provide the court with additional documents arguing that he was only obliged to present the duly completed and signed promissory note. In these circumstances the courts in Warsaw and Opole decided to stay the proceedings and ask the Court of Justice for its interpretation of Directives 93/13 on unfair terms and 2008/48 on consumer credit.
Judgment of the Court
First question
In the first part of the judgment, the Court of Justice analysed whether
the possibility under national law to secure the payment of a debt arising under a consumer
credit agreement by means of a blank promissory note is at all compatible with Articles 3(1), 6(1) and 7(1) of Directive 93/13 and Article 10 of
Directive 2008/48. The Court responded in the affirmative, but qualified its answer in several important respects.
According to the Court, both the provision in the consumer credit agreement, requiring the issuance of a
blank promissory note, and the more specific promissory note agreement, detailing the rules in accordance with which
that note may be lawfully completed by the lender, may fall within the scope of Directive 93/13. The inclusion of such clauses in the standard terms (and its subsequent enforcement in the order of payment proceedings) can, therefore, comply with that directive provided that national courts undertake the assessment of these two types of terms in light of the UCTD. The judgment further synthesizes the criteria of such an assessment, that is good
faith, balance and transparency (see para. 54 et seqq). A particularly strong emphasis is placed on that last criterion. Specifically, the national court must determine whether the
consumer has received all the information that may have an impact on the
scope of his or her obligations and that enables him or her to assess,
in particular, the procedural consequences of securing debts arising
under a consumer credit contract by means of a blank promissory note and
the possibility of subsequent recovery of the debt solely on the basis
of that note. The
contractual term in question must also be drafted in plain, intelligible language
and the consumer must be given the opportunity to
examine its content. Finally, in line with Article 10(2) of Directive 2008/48, the national court is required to examine of its own motion whether the obligation
to provide information laid down in that directive has been complied
with and if not, establish the relevant consequences.
Second question
The second part of the judgment centred around the question whether a national court, which has serious doubts as to the merits
of an application based on the initially blank promissory note, must examine of its own motion whether the provisions
agreed between the parties are unfair and if so, based on what evidence. The Court, unfortunately, does not clearly specify which provisions agreed between the parties are covered by this reasoning. It seems reasonable to align this part of the judgment with the scope of the previous question and relate it to: a) fairness control of the provision in the consumer credit agreement requiring the issuance of a
blank promissory note and provisions of the promissory note agreement; b) compliance with disclosure duties from Directive 2008/48. However, the wording of the judgment is not particularly accurate and the Court appears to switch between the analysis of Directive 2008/48 and the UCTD in a somewhat confusing way (cf. paras. 69 and 70).
Overall, the key takeaway from this part of the judgment is that the national court should be able to demand the production of the
documents on which the creditor's application is based, including the provision in the promissory
note agreement. This confirms that the requirement for the national court to undertake ex officio control in the presence of legal and factual evidence required for that task, should not be interpreted restrictively. Rather the national court must investigate of its own motion whether a term in the B2C
contract falls within the scope of the UCTD and, if so, to assess whether such a term is unfair. In doing so, the court should interpret national procedural rules, so far as possible, in the light of the Union law and disapply any national legislation or
case-law which precludes the ex officio control of the relevant contract term, for example by requiring that such a control can only take place following a consumer's complaint.
Concluding thought
The judgment of the Court in joined cases C-419/18 and C-483/18 Profi Credit Polska seeks to establish a high level of consumer protection also in the fast-track order for payment proceedings. Polish procedural law provides for such proceedings if the facts supporting the claim are evidenced by an exhaustive list of documents, such as invoices accepted by the debtor; request for payment along with a written recognition of the debt; or a duly completed promissory note, the truthfulness and content of which do not give rise to any doubt (Art. 485 of the Polish Code of Civil Procedure). The order of payment is issued ex parte: the debtor is notified of the order and is able to raise a complaint under the conditions described by the Court in the first Profit Credit judgment. It is worthy of note that Polish Code of Civil Procedure was reformed as recently as June 2019 and the order of payment procedure was significantly affected by the reform. Nonetheless, the amendments do not seem to be linked to the CJEU case law or even more generally with consumer protection. The only pro-consumer change is the removal of the order of payment procedure based on bank excerpts - a move, which appears to be linked to the 2015 judgment of the Polish Constitutional Court on bank enforcement titles (a similar legal concept). For the time being, the Polish legislator seems to be unaware of the Court's case law on the UCTD. Time will tell, therefore, if national courts will indeed be inclined to put a brake on fast-track proceedings in consumer credit cases.
