Thursday, 31 October 2013

Landmark cases

Studying case law is a great way to learn about European consumer law matters. A book that has recently been published in honour of Professor Jules Stuyck collects essays on a number of leading EU judgments in the field. The editors summarise the book's contents as follows:

'This unique book tells the story of the coming of age of EU consumer law, a legal domain that hasn’t ceased to expand in depth and scope during the last 20 years.
However, this book has not been conceived by the editors as an exercise in nostalgia. The contributions offer ample food for thought about the challenges awaiting consumer law in the years to come. The selected cases in this book are therefore without exception landmark decisions. What this volume doesn’t offer however, is an exhaustive overview of EU consumer law jurisprudence. It doesn’t aspire to be a textbook covering all aspects of consumer law. Rather, the authors have approached the cases – some of which have been commented upon quite extensively in legal doctrine already – from a novel and personal perspective, sometimes coloured by the contributor’s particular background, concerns and interest. Very often, the cases have been used as a point of departure to point out a development in EU and / or national consumer law.
The result of the contributors’ efforts does not only read as splendid anthology but it will be read and continued to be read by anyone interested in EU consumer law.'

Readers interested in Jules Stuyck's work might also wish to look up his editorial in the latest issue of consumer law journal euvr.

Work on European cloud computing contract terms got off the ground

This week the European Commission formalised an expert group that is supposed to elaborate on potential European rules for cloud computing contracts, which could be implemented through an optional instrument. At the moment, consumers and SMEs are somewhat reluctant to use cloud computing services due to uncertainties as to their rights, obligations, and in general the functioning of cloud computing and its security. Current proposal for the Common European Sales Law regulation does not address many issues of cloud computing, therefore, the task of the new Expert Group would be to isolate these problems and to draft contract terms for consumers and SMEs that would provide more security to cloud computing contracts. The report is expected back in spring 2014. (European Commission takes another leap to boost cloud computing)

Building a house? Online disclosure on construction products' performance

I have written my PhD about various fall-traps that consumers may stumble into while having someone construct their house. Notwithstanding that it is often a long, costly and technologically complicated process, consumers usually have to deal with various service providers who may not all be quite as reliable as necessary. Additionally, it is hard for consumers to overview the project and materials used, since their usability and effectiveness may not be immediately clear, upon a glance. It was then interesting to see that the European Commission decided to take certain legal measures to protect European consumers with regard to potentially defective, inferior construction products. The Commission proposes namely that manufacturers of construction products upload digital 'declarations of performance' on their websites, disclosing essential characteristics (e.g., fire resistance, mechanical strength, energy efficiency) of every product they sell. At the moment instead of having these documents publicly available, clients need to individually request them, which makes making comparisons between products more difficult. (Online information about construction products to save time and money) These changes should supplement the recently implemented Construction Products Regulation (in force as of 1 July 2013), which aims at providing accurate information on the performance of construction products by harmonising the language used by construction manufacturers.

Wednesday, 30 October 2013

Healthcare tourism

On October 25th the new Directive on cross-border healthcare of 2011 had to be implemented in all Member States. This means that currently consumers should be able to at their convenience go abroad in search of medical treatments and medical care. The new rules will make reimbursement claims less formalistic, provide better information to consumers on their patients rights and complaint procedures abroad. Additionally, consumers should be able to easier determine whether a given healthcare specialist is fit for practice and if they are issued prescriptions in another Member State they should be honored by the pharmacists in their country of residence, too. For more information, see Q&A of the European Commission.

The rules mentioned above harmonize situation of consumers who want to seek medical care abroad and of those who receive prescriptions from another Member State. However, it cannot be said that these rules guarantee patients' safety in Europe. If there are no strict, harmonized rules on authorization of medical devices, consumers could be severely harmed in the process. Imagine buying a pregnancy test during your holidays in another Member State, it being faulty due to more relaxed supervision measures and you ending up believing you are not pregnant and partying weeks long to your health's detriment. To prevent such black scenarios on 22 October the European Parliament looked into another subject related to improving healthcare in Europe - the safety of medical devices. The review of currently binding rules is to bring about more disclosure towards consumers on medical devices and involve them in the monitoring of such devices. A great idea is the facilitation of reporting defects. BEUC still argues for more changes in the newly drafted law, however, asking the European institutions to put a stop to producers using consumers as guinea pigs of their products and instead putting stricter rules on when products may enter the European market. (Parliament opens the door to safer medical devices)

Friday, 25 October 2013

How soon is "by 2015"?

On Tuesday, we had reported on the European Parliament's vote to officially initiate the last round of negotiation on the new EU data protection rules. The proposal seemed to gain a certain momentum due to the current agitation with regard to US surveillance programs; the hope was expressed that the negotiations might bring results by next spring.
This hope was not unanimously shared by members of the European Council, it seems. Looking at the conclusions drafted yesterday, it seems that the new rules are likely to be slightly delayed , being linked to the completion of the Internal Digital Market "by 2015".
With the new elections coming in May, it is quite possible that the delay might be non-negligible.


Several terms of Ryanairs general conditions found unfair by Spanish court

This week, a Spanish court has declared no less than eight terms in Ryanair's terms of service unfair, and thus invalid.

Among them, the infamous fee imposed on passengers failing to show their printed boarding card at the airport, but also the diversion of all complaints from the "local" (for the consumer) authorities to those of Ireland.

It is hardly imaginable that Ryanair will want to spontaneously complain with the decision. On the other hand, it might also be not so eager to see the case brought further in the judicial system and, possibly, to end up at the Court of Justice of the European Union.

This case might be the beginning of an interesting saga....

Wednesday, 23 October 2013

Parliament calls for suspension of SWIFT agreement

As we had anticipated, the European Parliament's plenary session has voted in favour of a resolution asking the suspension of the EU-USA SWIFT agreement, after allegations that the American NSA abused of the system to "spy" on European citizens.
The vote was quite tight, with 280 MPs in favour of the suspension, 254 against it and 30 abstentions.
Now of course the question is- what will be the consequences of this (non-binding) vote?

(to be continued)

Tuesday, 22 October 2013

MEPs raising stakes on EU data protection

Yesterday, the EP civil liberties committee voted to endorse the data protection package proposed by the Commission (one directive and one regulation) , giving the Parliament a full mandate to engage in negotiations with MS representatives and get the new rules passed as soon as possible. 

The new measures should, in particular, introduce clearer safeguards for European citizens when interacting- especially on the Internet- with counterparts settled in non-EU countries.The MPs stressed how the urgency to adopt such measures has been made clear by the mass surveillance cases which started to be uncovered at the beginning of last summer and are, as it seems, still unravelling.

Three are the main features of the proposed legislation:
1) need for authorisation: no provider should be entitled to transfer data concerning European citizens or Europe-originated information without an authorization from European data protection authorities (and without informing the person concerned);
2) important sanctions would be imposed on companies breaching those requirements;
3) citizens should be entitled to manage their data: which means that no data should be collected without the explicit assent of the person affected and that one should always be entitled to obtain erasure of the information which concerns her.

The Parliament hopes to see the negotiations through before the coming European elections, to be held in May 2014.

P.S. 23/10/2013: As I write the Parliament is voting on the possible suspension of the SWIFT agreement between the EU and the US, due to suspects that the latter were abusing of it in order to process EU citizens' financial data outside the scope of the protocol. We will keep you posted on the results of this (non-binding) vote.

Monday, 21 October 2013

Downloaded any goods recently? - consumer protection standards

The European Commission conducts regular sweeps - checking the enforcement's level of EU consumer protection measures by European websites. Last December a sweep was conducted to see whether websites selling digital consumer products (games, books, videos and music) are in compliance with EU legislation. The sweep that took place in the summer of 2012 showed that over half of the investigated websites (172 out of 330 checked websites) was not compliant with EU rules. (Q&A - Sweep on on-line games, books, videos and music) After that sweep, the authorities issued advice and warnings to websites that were potentially in breach of EU rules. As a result, the repeated sweep revealed that out of 172 previously non-compliant websites, 116 have been corrected. Altogether, 80% of the examined 330 websites is now compliant with EU consumer law. (Better protection for EU Consumers downloading games, e-books, videos and music) This means that consumers should be getting better information nowadays on products' attributes, should be informed fully and comprehensively on their rights (e.g., the fact that when the download starts consumers lose their right of withdrawal), on how to contact the sellers with their complaints, have been provided with fair contract terms. The conducted studies revealed also that consumers are still insufficiently informed about the following facts:
  • that they are giving up their right of withdrawal with the start of a download (42% websites don't provide this information);
  • that they have a right to take a legal action or claim compensation when the product doesn't work;
  • how to contact the trader;
  • that the product may have geographical restrictions that would make it impossible to use it abroad if consumers travel;
  • that digital games that are advertised as 'free' could upon downloading and use still requirement certain payments being made.
The enforcement actions will continue to be conducted. It is especially relevant to increase children protection when purchasing digital goods, since they are often users of digital goods and are more vulnerable consumers, more prone to succumb to misleading commercial practices.
The European Commission advises consumers to think whether they have an answer to the following questions prior to making a purchase decision:
  • Can you contact the trader in case there is a problem? Make sure that the trader provides his name, geographical and e-mail address.
  • Do you have all the information you need about how to run the download? Check that you are given sufficient information and minimum operating system requirements of the product such as size, quality and whether a device or particular software is needed in order to operate the digital content product.
  • How much is it really going to cost? Look out for the final price; including taxes and all charges that may be hidden in the last stages of the payment process.
  • Do you have a right of return? Be aware that once you have started downloading the product, you have usually no right to return it.
  • Are your rights being restricted? Beware of terms that exclude the trader from various liabilities and redress mechanisms including legal action; they are probably unfair.
  • Where can you use the digital content? Look for information whether you can use the digital content in another country than the one you live in. You may get a nasty surprise if you are travelling or on holiday. Contact the sales office for advice, if you do not find the information.
  • What is the real cost of the "free" kids game? There might be add-ons requiring payment without you being warned about it beforehand.

Friday, 18 October 2013

Parliament endorsing proposed EU e-signature

On Tuesday, the European Parliament's Industry committee has voted to endorse a proposal by the commission aiming at imposing mutual recognition if e-signature mechanisms in the Internal Market.
The official Dutch way
to e-signature
The proposal would require member states to mutually recognise each other's national electronic identification systems, but also require that such systems be reported to the European Commission. Existing national systems would accordingly not have to change, but would be classified according to their level of security.

This should make it easier for parties negotiating cross-border contracts to identify themselves. Even more importantly, EU citizens moving from one country to another should be able to "carry along" their e-signature and use it to interact also with public administrations different than the one which has issued it. 

The negotiations on the future instrument, which interestingly enough seems like a piece of secondary legislation aiming at negative integration without any previous harmonization effort, will probably begin next month.

Total recall?

Product safety is an emotional subject that is being brought up more often nowadays. Since technology and communication keeps on improving, it is no wonder that in the legal world we tend to focus our attention nowadays more on preventing product defaults (therefore, regulating product safety and promoting unsafe product recall) rather than on product liability (regulating consequences of product defaults). Anyone who has heard stories about laptops overheating on their users' thighs (How the heat from a laptop can 'toast' the skin on your thighs) or children choking on toy parts (Two Children's Toys Recalled Due to Choking Hazards) would be happy to hear that yesterday the European Parliament's Consumer Protection Committee adopted two reports on: product safety and market surveillance. These reports aim to contribute to the review of current European product safety rules, by strengthening consumers' information rights and further regulating product safety requirements. (see our previous post: Product Safety in 2013

Some of the introduced by the MEPs changes in the current Product Safety Directive promote a new, voluntary, third-party issued safety label (EU Safety Tested mark) as well as make a label on product's country of origin mandatory, in order to increase transparency.

"Where a good was produced in more than one country, the country of origin will be where it underwent its "last, substantial, economically justified processing or working in an undertaking equipped for that purpose and resulting in the manufacture of a new product or representing an important stage of manufacture"." (Internal Market MEPs tighten up product safety and market surveillance rules)
The MEPs also brought back to the draft the 'precautionary principle' that Commission's Members wanted to remove from the currently binding rules. Pursuant to this principle, some products may need to be removed from the market faster, since consumers are given the benefit of the doubt as to their safety. Another interesting addition is a provision pursuant to which a pan-European database on product-related injuries suffered by consumers would be created. This could make it easier to monitor a product that enters a few different European markets at the same time. It was also suggested to introduce a public EU-wide blacklist that would name all firms that have been 'repeatedly found to have intentionally breached' EU product safety rules.

The vote in the plenary on these two new regulations is planned for December this year. (Interview: how new product rules will improve safety for consumers)

Thursday, 17 October 2013

The existence of a causal link is not a condition for consumer protection - CJEU judgment in Case C-218/12 Emrek

Today, the Court of Justice of the EU handed down its judgment in Case C-218/12 Emrek. For a description of the facts of the case and AG Cruz Villalón's opinion, I refer to an earlier post on this blog ('The missing link').

The Court follows the AG and observes that:

'it must be held that the requirement of prior consultation of the Internet site by the consumer could give rise to problems of proof, in particular in cases where the contract was not concluded at a distance through that site, as in the main proceedings. In such a situation, difficulties related to proof of the existence of a causal link between the means used to direct the activity, that is an Internet site, and the conclusion of a contract, would tend to dissuade consumers from bringing actions before the national courts under Articles 15 and 16 of Regulation No 44/2001 and would weaken the protection of consumers which those provisions seek to achieve.' (para. 25)

Accordingly, the Court holds that:

'Article 15(1)(c) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as meaning that that it does not require the existence of a causal link between the means employed to direct the commercial or professional activity to the Member State of the consumer’s domicile. However, the existence of such a causal link constitutes evidence of the connection between the contract and such activity.'

See also the CJEU's press release on the case.

Sponsored publications NOT to be seen as commercial practices - CJEU in RLvS (C-391/12)

17 October 2013: CJEU judgment in case RLvS (C-391/12)

Today the CJEU decided not to follow the AG's opinion in the RLvS case which examines the character of sponsored publications in a newspaper with regards to their potential misleading effect on consumers (for facts of this case see our earlier post: Sponsored publications as unfair commercial practices...)

The CJEU agrees with the AG Wathelet that German law may not prohibit or more severely restrict commercial practices than what the Unfair Commercial Practices Directive requires, even if such restrictions could be justified as an attempt to protect pluralism of the press. (Par. 33) At the same time, however, the judges do not share the AG's conviction that a publication of editorial content by a newspaper publisher could be perceived as a commercial practice. This would mean that it would not fall under the scope of the Directive and could be separately regulated by national laws. (Par. 34-35) 

It is the Court's opinion that a commercial practice must originate from a trader and be directly connected with the promotion, sale or supply of his products, and the 'trader' is defined broadly, which means that the Directive applies also when a trader's practice is put to use by another undertaking and benefits that undertaking. (Par. 37-38) The editorial content that was the subject of the judicial proceedings was not promoting the publisher's product (free newspaper) but rather it promoted products and services of other undertakings, and as such could fall under the definition of a commercial practice due to the broad definition of a 'trader' in the Directive, satisfying the first requirement. (Par. 39-40) However, the Court believes that any promotion through the editorial content of a newspaper was 'indirect' and was not liable to significantly influence the consumers' economic behaviour with regards to acquiring the newspaper. Therefore, this practice could not fall under the scope of the Directive as a commercial one. (Par. 41)

Interestingly, both the AG and the CJEU support their argumentation by referring to the same provision in the Directive - point 11 on the black list that determines as unfair such use of advertorials that does not clearly inform consumers that the editorial content was paid for by a trader. According to the AG that provision signifies that national laws may not demand more strict requirements to be met with respect to editorial content's publication. The Court stated, in turn, that this provision:

"(...) is not intended as such to require newspaper publishers to prevent possible unfair commercial practices by advertisers for which a direct connection could thereby be potentially established with the promotion, sale or supply to consumers of the products or services of those advertisers." (Par. 44)

I have to admit, though, that it's hard to see for me what this provision was intended for if not for that? The Court seems to point out that this prohibition would apply only to advertisers and that they should be the ones who make sure that the editorial content is clearly labelled as sponsored. This seems to get the newspaper publishers off the hook rather easily.

More convincing are arguments referring to a potential conflict of this provision with requirements set out by Directive 2010/13 and Directive 89/552. (Par. 45-46) Lastly, the CJEU underlines that the European Commission has not yet directly legislated the area of publishers' obligations with regard to third-party sponsored content of their publications, as far as written press is concerned, which means that Member States are free to regulate it. (Par. 49)

Wednesday, 16 October 2013

World Food Day 2013

Today, we are celebrating World Food Day and, as usual, the focus then is on issues such as food safety (e.g., yesterday a seminar took place on efficiency of meat official controls - How to make meat official controls work for all?) and food waste. It has been calculated that around a third of food is wasted globally (1.3 billion tons, with 90 million tones in Europe), either due to lack of awareness, lack of shopping planning, lack of knowledge how to use leftovers, or inadequate storage, packaging, overproduction, stock management inefficiencies, etc. (Commission underlines commitment to reducing food waste in Europe) At the moment, the European Commission is debating introduction of specific action plans that would reduce food waste (e.g., date labelling, donation of surplus food to food banks, short food supply chains).

The last year's horse meat scandal and the increasing rates on obesity turned some heads towards the subject of food quality, as well (Calling for quality, not just quantity). While many people in the world still struggle to find enough food, others may have sufficient food but still suffer from malnutrition due to improper diet.

Since Europeans are not the only ones wasting food and it is the World Food Day, it is worth it to listen to this TEDx talk of how to cut food waste in the US, by Peter Lehner.

Friday, 11 October 2013

Your views on cross-border protection of consumers

Today, the European Commission's DG Health and Consumers opened a public consultation on the review of the EU Consumer Protection Cooperation Regulation. Anyone interested in the possibilities to improve the cross-border protection of consumers can express their views on this topic by filling out a questionnaire.

Questions include the following topics:

What means of investigation and intervention do national enforcement authorities need to cooperate better in tackling infringements to consumer laws concerning several countries?

What sanctions are necessary to better deter infringing practices?

How can the enforcers act more efficiently and provide a more robust enforcement response to combat malpractices which occur widely in the EU or which are perpetrated by the same trader operating in a number of Member States?

The consultation will be open till 31 January 2014. See also the Commission's press release and the website of DG Health and Consumers.

Thursday, 10 October 2013

One last menthol cigarette?

This Tuesday, as re-scheduled (see our earlier post On lobbying in Brussels), a vote took place in the European Parliament on the proposal for a new tobacco products restrictions. The draft law suggests, for example, that the health warning on packaging should cover 65% of its surface (instead of current 30/40%). Additionally, flavoured cigarettes are to be banned and e-cigarettes are to be regulated (in the same way as tobacco products with regards to advertising and they could be sold only to consumers over 18 years old). (Tobacco: larger warnings, flavours banned, e-cigarettes regulated) Small cigarette packs (less than 20 cigarettes) would be banned. The idea behind these new revisions is that they would help prevent young people from taking up smoking by making it less attractive and less accessible. As we mentioned in our previous posts it remains to be seen whether these new rules will manage to be agreed on by all the European institutions prior to their term's ending.

Friday, 4 October 2013

BKK Mobil Oil: public law body can be seen as ‘trader’ in the context of the Unfair Commercial Practices Directive

Can public law bodies fall under the personal scope of the Unfair Commercial Practices Directive? Since yesterday’s judgment in BKK Mobil Oil we know the answer is yes. Also the practices of public law bodies can thus qualify as unfair commercial practices. But what the criteria to determine public from commercial practices are in the end remains unclear.

BKK Mobil Oil is a German health insurance fund established as a public law body. BKK published on its website a message targeted at its own customers, trying to convince them not to switch to another health insurance. Without going into the details, the message contained false information and thus was found to mislead BKK’s customers. According to BKK, however, the German Gesetz gegen den unlauteren Wettbewerb (Act against unfair competition, UWG) nor the Unfair Commercial Practices Directive applied to this case, because BKK could not be seen as trader.

The Bundesgerichtshof filed a preliminary question at the CJEU, asking how the Unfair Commercial Practices Directive should be interpreted on this point: should BKK be seen as a proper business, or is it a body that pursues a social objective and the behaviour of which is thus not covered by the Directive?

In its answer, the CJEU emphasizes that this matter should be seen from a European perspective and that the question on whether an organization such as BKK should be seen as a ‘trader’ does not depend on its legal status in national law (par. 25-26).

In the Directive, ‘trader’ is defined as ‘any natural or legal person who, in commercial practices covered by [that] Directive, is acting for purposes relating to his trade, business, craft or profession and anyone acting in the name of or on behalf of a trader’ (Article 2(b)).

The CJEU emphasizes that the term ‘trader’ should be seen as the diametrically opposed concept of ‘consumer’ (par. 33) and that BKK’s members can in fact be seen as consumers, taking into consideration that BKK’s misleading information prevent them from making an informed choice (par. 37). In line with this, the CJEU argues, BKK should be seen as a trader (par. 38).

This does not stand out as an example of clear legal reasoning. The definition of consumer tells us equally little as the term trader in this context. The Court (perhaps deliberately) does not give actual criteria to determine the border between ‘public’ and ‘commercial’ practices, which in the end seems to be the essential – and admittedly, difficult – question.

Thursday, 3 October 2013

Taking rally cars around, anyone? - CJEU in Lundberg (C-317/12)

No need for you to install a tachograph, as long as it is your car that you're carrying and you're not doing that for a living. 

For those who, like me until this morning, have little idea
of what a tachograph looks like
That's in short what the Court of Justice decided today in the Lundberg case. Mr Lundberg, a Swedish national and amateur rally driver, was taking his rally car to a fair- by using an extra lorry attached to his normal car- when the police stopped him and issued a fine for violating article 3 of Regulation 3821/85 (now and hence Regulation 561/2006).
The provision at hand requires certain equipment to be installed on vehicles unless they belong to one of the categories listed by the same article. 

After a few passages, the question got to the CJEU by means of a preliminary ruling request. In particular, it was in doubt whether Mr Lundberg's situation could fall under letter h) of article 3, exempting "vehicles or combinations of vehicles with a maximum permissible mass not exceeding 7.5 tonnes used for the non-commercial carriage of goods". The main reason of doubt was that some companies and private persons contribute habitually and substantially to Mr Lundberg's activities by means of various sponsorships. Did this change the nature of the carrying activity into a "commercial" one?

According to the Court,  it does not. Interpreting the regulation both according to it literal meaning and to its aims, having regard to both the regulation's and the exception's functions, the Court affirms that carriage of goods has to be understood "non-commercial" every time that it is done solely for the purpose of a hobby, regardless of the extent to which the carriage is financially supported by sponsors. 

The purpose of Regulation 561/2006 is mainly "to improve social conditions for employees who are covered by it" (par. 25) and, by doing so, to make road transport safer. The derogation, on the other side, aims to exclude activities conducted "outside any professional and commercial activity" from the regulated domain. The latter's aim would be frustrated if cases like that of Mr Lundberg's were to be affected by the regulation; at the same time, the regulation's aims are not offended by applying the exemption (cases of this king being "infrequent"- par. 37-, applying the derogation seems unlikely to have serious consequences on road safety.).

Thus, just in case you were thinking of moving your rally car around Europe, rest assured- the Court is protecting you against sour (regulatory) surprises.

Changing consumer's claims in case of non-conformity should be facilitated - CJEU in Duarte Hueros (C-32/12)

3 October 2013: CJEU judgment in case Duarte Hueros (C-32/12)

Two years ago we have discussed an interesting case of Weber & Putz (Replacement of non-conform goods?...) that brought to light interesting issues related with the hierarchy of remedies in the Consumer Sales Directive in case of non-conforming goods (first tier - bringing the goods back into conformity through: replacement or repair; second tier: price reduction or contract's termination). The Court then insisted that consumers should in principle be awarded a remedy from the first tier in case of goods' non-conformity, which meant that if only one of these remedies was possible and it was an expensive one, the costs of making use of that remedy should be placed on the sellers. In order to not encumber sellers unduly, courts could oblige consumers to pay a certain, proportional amount of that cost. Consumer protection would be ensured by allowing consumers for whom this cost would be burdensome to demand one of the second tier remedies instead. Today the CJEU issued another judgment on what the proper use of the remedies for non-conforming goods should be, this time focusing on the second tier remedies and the guarantees that the Member States should keep in force in their procedural laws for consumers´ benefit.

Ms Duarte Hueros had some bad luck when purchasing her new car in 2004. She opted for a fancy model with a sliding roof, allowing her to enjoy an open-topped car when the weather was nice (it's Spain, so probably most of the time). Unfortunately, the car she received was not quite waterproof. When it rained, the water leaked in through the roof (and while it may not rain much in Spain, once could be one time too many). After numerous repairs in the workshop it appeared that the defect could not be repaired. Since repair was impossible, Ms Duarte asked for replacement of her car, which request was denied her. In the end in 2011 Ms Duarte brought an action for contract's termination and repayment of the purchase price. It was not the matter of the dispute that she has exhausted her claims for first tier remedies and was entitled to claim a remedy from a second tier. Out of possible two remedies, price reduction or contract's rescission, she opted for the latter one.

Here is where it gets interesting. Article 3(6) Directive states that contract's rescission can be denied to consumers if non-conformity of the purchased goods is minor. Spanish law (and many other Member States) adopted this provision. The curious matter is that apparently Spanish courts consider a leaking roof of a car a minor defect! As the AG Kokott points out in Par. 57 of her opinion there is no uniform interpretation of what should be understood as a 'minor' defect in European consumer law. He mentions, however, that other European courts have ruled in comparable cases that a lack of waterproofing could not be perceived as a minor defect. Apparently while the Spanish courts focus on the fact that the car can still be driven when it's leaking water inside (maybe that's due to that little amount of rain falling in Spain and it not being seen as something undesirable), other national courts take a broader picture into account. The AG mentions that the Spanish court should have referred also the question of what should be understood as a minor nature of a defect for a preliminary ruling.

Instead, the Spanish courts took their prerogative to determine based on the facts of the case that the defect was not minor and to refuse contract's rescission to Ms Duarte. The question referred to the CJEU inquired whether if the consumer´s claim for one second tier remedy was rejected, the national court was obliged to grant her the other second tier remedy - price reduction, even if the consumer did not apply for it.

Spanish procedural law has very strict rules on res judicata and the claims submitted in the proceedings. On the one hand, a consumer may make alternative claims aside the main one but the Spanish court will consider only the claim specifically submitted. On the other hand, Spanish law has  a broad interpretation of extension of res judicata - all claims that consumer could have brought are covered and excluded from a new action. (Par. 34 AG Opinion) Since Ms Duarte made only a claim for contract's rescission and recovery of contract's price, the Spanish court did not see itself being able to grant her price reduction of its own motion in these proceedings, and at the same time she would have been prohibited from making a new claim for price reduction in new proceedings.

Both the AG (Par. 41) and the CJEU (Par. 29) state that there is no ex officio duty for the national courts to grant appropriate price reduction to consumers of their own motion when the consumer did not ask for price reduction. As the AG points out the Directive enables consumers to raise certain claims, under specific conditions but contrary to Directive on Unfair Contract Terms it does not require intervention of a third party, that is:

 "Firstly, action as a deterrent taken by a national court of its own motion is irrelevant to the implementation of a contract. In most cases, unsatisfactory performance is not, in fact, dependent on the will of the parties, in particular where the contracting partner is not the manufacturer of the product and normally has no influence over its quality or, in the case of non-obvious defects, knows nothing about it. Moreover, the consumer is not in a comparably weak position with regard to the implementation of the contract. Unlike the position with regard to the unfairness of a term, the consumer can easily detect whether the product is of the agreed quality. This is also demonstrated by the present case, where it is precisely the consumer who is asserting her claims before the national court. In the judgments which have been delivered on the Unfair Terms Directive, on the other hand, it was generally the undertakings which relied on their claim on the basis of an unfair term. Therefore, action by a national court of its own motion would not strengthen consumer protection, but would rather provide the consumer with an additional means of attack. " (Par. 47-48 AG's opinion)

What the Directive requires of the Member States, however, is to ensure that consumers may effectively claim appropriate remedies in practice and that these procedural rules comply with the principles of effectiveness and equivalence. (Par. 30-31) Spanish law, as mentioned above, obliges the Spanish courts to only examine claims specifically raised by consumers, does not allow consumers to change the claim in the course of the proceedings and also prevents them from starting new actions due to broad interpretation of res judicata. (Par. 35-36) This effectively takes away consumer's possibility to claim price reduction when he first demanded only contract's rescission which in the proceedings was denied due to the minor nature of the defect. (Par. 37) Theoretically, the consumer could raise an alternative claim of price reduction from the beginning, but the CJEU assesses the likelihood of such a scenario as extremely low. (Par. 38) These elements combined suggest that the Spanish procedural rules make consumer protection provided for in the Directive if not impossible than at least excessively difficult - on the one hand consumers are prevented from making a claim for a new remedy themselves, on the other hand courts are not authorised to find it themselves. (Par. 39)

"The Spanish system essentially obliges the consumer to anticipate the outcome of the competent court’s analysis of the legal characterisation regarding the lack of conformity in the goods, which is final, making the protection provided for the consumer under Article 3(5) of Directive 1999/44 completely uncertain in nature, and thereby rendering that protection inadequate." (Par. 40)

The CJEU makes it clear that the national court has to solve this issue to the consumer's favour, guaranteeing his protection provided for in the Directive that is a possibility to ask for another remedy if one is denied by court. How this will be achieved in practice is for the Spanish courts to determine.

Wednesday, 2 October 2013

Universal mobile phone charger

Last week the European Parliament's Members were busy with an interesting project: a universal mobile phone charger for all makes. Imagine the wonderful world where you don't have to worry that your battery is running low and you may end up stranded somewhere, since you know that anyone around you could provide you with a fitting charger. In my experience, when you are looking for that charger in crucial moments the Murphy's law will contribute to people around you having invested in all sorts of mobile phones but the one compatible with yours. A universal mobile phone charger is perceived by MEPs as a tool to cut costs and waste for consumers. (Bring in a universal mobile phone charger for all makes, say MEPs)

Tuesday, 1 October 2013

Your Ideas for Europe

This month our readers have a chance to show their inventiveness and impress not only us but the whole of Europe. Until 23 October anyone can submit their idea as to how to improve the European single market on a website created for this purpose: Your Ideas for Europe. There are four themes and this is a second week of this action with a theme 'Social Rights' (to be followed by 'banks' and 'e-commerce'). Five of the most promising ideas will be chosen by an expert jury and further discussed during the Euronews TV debate at the European Parliament in Strasbourg on 23 October.