For those who have missed updates on impossibly complicated fact-rule patterns in UCTD adjudication, this month has offered a nice pick-me-up in the form of a new AG opinion on procedural rules and principle of effectiveness. Brace, brace for C-385/20: EL and TP v Caixabank!
The dispute in EL and TP v Caixabank concerns not so much unfair terms (the contract between the parties was found in national proceedings to be based on unfair currency terms and hence converted) but the consumer's ability to recover their legal expenses (lawyer fees) after having won an unfair terms case.
In the case at stake, the claimants had sued Caixabank indicating that the entirety of the dispute was uncertain at start. For such cases, Spanish law has no specific provisions concerning the reimbursable fees; however, courts have concluded by analogy that the disputed amount can be put down to a fictitious lumpsum for the purpose of calculating lawyers fees - which can be, in turn, maximum 1/3rd of the overall value of the dispute. In the dispute underlying this case, the disputed amount had been automatically set at 30000 euros by the court and the reimbursable fees to 10000 euros - less than half of the fee due by the consumers to their lawyers. The entity of the dispute thus set could not later be challenged or altered at the consumer's request.
In essence, the referring court wants to know whether the working of the two rules, which ultimately mean that the consumers must bear a large part of their legal costs on their own despite having won the dispute is against Articles 6 and 7 of the Unfair Contract Terms Directive, requiring the consumer to be put in the same position where they would have been if unfair terms had never become part of the contract.
The opinion answers two separate questions: whether it is against the effectiveness of Articles 6-7 UCTD that the value of a dispute is set at a certain lumpsum level and cannot be modified by the consumer; whether a rule that caps lawyer fees at a certain proportion of the value of the dispute may again be in breach of the same provisions. The Advocate General considers the arguments proposed by, in particular, the claimants and the European Commission - on one side - and the Polish and Spanish governments on the other side. Saugmandsgaard Øe is not particularly impressed by the Commission's submission that asking consumers to pay out-of-pocket lawyer fees would go against the principle of full compensation established in Gutierrez Naranjo: this principle, according to the AG (para 46) does not regulate the question of legal expenses; in this respect, the AG agrees with the Polish government's submission that some out-of-pocket expenses are allowed as long as they do not make it practically impossible for the consumer to pursue their rights. This may be controversial as such and may not hold well, I think, if the Court decides to answer the questions in a different order. Quite understandably, the AG further brushes off some purely national interpretive issues (see eg para 79) in respect of one of the questions, considering them essentially irrelevant to the purpose of answering the questions posed to the court.
To both those questions, the AG gives a negative answer in principle: none of these rules are against the Directive insofar as, on the one hand, the lumpsum or otherwise established entity of the dispute ultimately approximates the value of the dispute to the consumer (the wording of the opinion is slightly different, but it seems to me that this is a more logical way of phrasing the condition), while on the other hand any existing cap must allow the consumer to obtain a reimbursement commensurate to the expenses that they had to face.
In practice, both caveats suggest that the Spanish rules may have to be interpreted in a more consumer-friendly manner than some Spanish courts seem to do - however, the way in which the AG has formulated his opinion may lead some readers to interpret his guidance very differently. Whichever side the Court decided to take on this issue (it seems well possible that they may eg decide to rephrase the questions and answer them at once, looking at the cumulative impact of the rules rather than assessing them separately), it is to be hoped that the outcome will be formulated in slightly clearer terms.
