CfP: Collective Redress and Digital Fairness, deadline 1 June 2025

Dear readers, 

a quick note to highlight a great conference opportunity at the University of Amsterdam. 

The organisers of the conference "Collective Redress and Digital Fairness", which will be held at the University of Amsterdam on 10 and 11 December 2025,  have issued a call for papers open to scholars and practitioners who are interested in engaging with the conference's broad theme, namely "the intersection of collective redress and digital fairness, understood as the equitable treatment of individuals and society in the digital space" and who will bring an own insight with emphasis on (but not limited to) a number of central questions:

• 

  CfP flyer

  What are the theoretical and normative foundations of collective redress?
• How effective is collective redress in the digital legal sphere at international, European, and national levels?
• How do digital rights intersect with other branches of law (e.g., consumer and competition law), and what does this mean for collective actions?
• What impact does litigation have on the compliance and governance of digital corporations?
• How do private and public enforcement interact, and what role do collective actions play within this regulatory framework?
• What is the role of private law and private law remedies in shaping digital fairness, and how does it constrain or contribute to collective redress mechanisms?

Contributions may focus on procedural and substantive law aspects, as well as theoretical, doctrinal, and empirical studies from national, European, and transnational perspectives. 

Thanks to sponsoring by the Dutch foundation for Collective Actions research, selected speakers will be provided one night of accommodation in Amsterdam and a reasonable travel budget. How to apply? You find the submission requirements on ACT's website and in the flyer! Deadline for application is 1 June 20225.

‘Paying’ with personal data – what rights do consumers have?

The recently approved Directive on the modernization of consumer protection rules (available here) explicitly extended the scope of the Consumer Rights Directive to contracts where the consumer ‘pays’ with data, or contracts where the consumer provides personal data in exchange for a digital content product or a digital service. This extension means that consumers who ‘pay’ with their personal data have specific information rights stemming from Article 6 and the new Article 6a of the Consumer Rights Directive, such as the right to get information on the possibility of recourse to a complaint mechanism. Furthermore, these consumers are now entitled to the right to withdraw from the contract, even if they do not pay a monetary price. The advantage of this right when it comes to contracts where consumers ‘pay’ with data is evidently more limited than when consumers pays with money. Nevertheless, this is the latest move by the EU to better protect consumers’ personal data.

In fact, the Digital Content Directive (also recently approved and available here) was the first to 'innovate' in this area, by acknowledging the need for consumer protection in contracts where the consumer ‘pays’ with data. The Digital Content Directive extended the remedies already provided by the Consumer Sales Directive (applicable to the sale of goods and now replaced by the Sale of Goods Directive) to digital content contracts, both where the consumer pays a monetary price and where the consumer ‘pays’ with personal data. According to Article 14, in case of lack of conformity, consumers who provide their personal data in exchange for a digital content product or a digital service are entitled to have the product or service brought into conformity (for example, through an update). Furthermore, consumers are entitled to terminate the contract in case of any lack of conformity (regardless of how minor). In case of termination, the rights in the GDPR must be respected, particularly when it comes to the right to be forgotten (Article 17 GDPR) and the right to data portability (Article 20 GDPR).  

The increasing efforts by the EU to protect the consumer who ‘pays’ with data are an acknowledgement of the importance that similar data-based business models will play in the contracts of the future. However, the treatment of personal data as a contractual counter-performance is not uncontroversial. For example, although the (previous) European Data Protection Supervisor welcomed the protection of data subjects through consumer law, the EDPS also vocally opposed the treatment of data as a counter-performance. Nevertheless, given the increase in the number of contracts concluded in exchange of (personal) data (think of Spotify, Facebook and other similar platforms that provide digital services), it seems important to develop (and adjust) a general contract law framework applicable to these contracts. This must be done alongside – and not in opposition to – the data protection framework.

Return to sender - CJEU in Fülla (C-52/18) on bulky non-conforming goods

We have not yet had a chance to address the CJEU's judgment of 23 May in the case Fülla (C-52/18). As we have mentioned in the comment on the AG Wahl's opinion, Mr Fülla was convinced that a party tent he has ordered on the phone was not in conformity with this order. The trader was disputing this claim, but the main issue of the case was the lack of a proper communication between the parties as to where and on what conditions the goods could be brought into conformity to begin with. Mr Fülla demanded that the tent was brought into conformity at his place of residence and did not offer to return it. The trader expected the goods to be returned, but did not inform of this requirement the consumer nor offered to advance the postage costs for the return of the goods.

As it was mentioned in our previous comment, and following the opinion of AG Wahl, the CJEU also leaves the determination of the place, in which the goods should be brought into conformity, to the discretion of national laws (para. 46). After all, the place has not been specified in the Consumer Sales Directive, except for its provisions requiring that the determination of such a place enabled repair or replacement: free of charge, within a reasonable time and without significant inconvenience to the consumer (para. 32). Therefore, national courts have to take into account these three requirements, as well, in their interpretation of national laws in accordance with EU law (para. 47). The CJEU emphasises that consumers could experience some inconvenience when having to package and deliver goods to a place where they will be brought back into conformity. It just cannot be a significant inconvenience (para. 40). However, due to the character of certain goods (e.g. that are heavy or bulky) a need to send/transport them to a place other than their location with the consumer may automatically constitute a significant inconvenience (para. 43). It is worth to note that the CJEU is not overly concerned with the lack of harmonisation that such a solution would lead to, as the CSD is in any case a minimum harmonisation directive.

When a consumer sends the goods back to a trader, claiming that they are non-conforming, the question arises whether the trader needs to advance the costs of posting the goods back to him. The CJEU considers such an obligation too far-reaching and able to distort the balance of rights and obligations of both parties. The main argument here is that the goods may turn out not to be non-conforming and that advancing such postage costs could also slow down the process of bringing the goods back into conformity (para. 53). Therefore, in general, consumers may only expect that the postage costs will be reimbursed to them after the non-conformity is confirmed by the trader. However, the situation is different if the advance of postage costs would be necessary in order not to prevent the consumer from making use of their rights (para. 55). Therefore, in specific cases where the transport is costly, e.g., traders could be required to advance such costs. We may expect some disputes arising to determine when exactly such a significant inconvenience would arise.

Finally, the CJEU addresses the issue of the hierarchy of remedies. As a consumer may only then terminate the contract due to non-conformity if a trader was first given an opportunity to remedy that non-conformity, the question was whether in a given case this condition was fulfilled. After all, Mr Fülla did not deliver the tent to the trader's place of business. The CJEU answers this in the affirmative. As the consumer notified the trader of the non-conformity and of the fact that the repair/replacement could occur at his home, when the transport of goods was likely to cause a significant inconvenience to consumers, and the trader did not inform the consumer about his requirement for the place at which repair/replacement could occur - the consumer could terminate the contract on the basis of the non-conformity (para. 65).

Crossing Paths: AG Bobek on jurisdiction in consumer cases under Regulation 1215/2012 and Directive 93/13

Yesterday, Advocate-General Bobek published his Opinion in a case where the Brussels I Regulation (Recast) and the Unfair Contract Terms Directive cross paths (C-347/18 Salvoni v Fiermonte). The case concerns the question what happens if a national court fails to check - ex officio - whether the rules on jurisdiction over consumer contracts have been observed in a cross-border dispute and the court issues an order for payment, even if there are indications that the consumer involved lives abroad? Once the order becomes final, can judicial review still take place in the country of origin before the order is enforced in another Member State?

When the defendant is a consumer, only the courts in the Member State where the consumer is domiciled have jurisdiction under the Brussels I Regulation (Article 18). In the case at hand, the consumer involved - Ms Fiermonte - appeared to live in Hamburg, Germany, which would mean that the Italian court where the order-for-payment procedure was brought did not have jurisdiction. In so far as Ms Fiermonte did not enter an appearance, the court should have declared of its own motion that it had no jurisdiction (Article 28). And if she did appear in court, she should have been informed of her right to contest jurisdiction (Article 26(2) of the Regulation).

Source: e-justice.europa.eu

The court in Milan nevertheless issued an order for payment against Ms Fiermonte, who did not oppose it. The court was subsequently requested to issue a so-called 'Article 53 Certificate'. Under the Regulation such a Certificate is necessary for cross-border enforcement (i.e. in Germany) to demonstrate that the order is enforceable in the country of origin (i.e. in Italy). The court then concluded that it should have verified its jurisdiction.
It found - ex officio - that the order in question was based on a legal relationship between a consumer and a professional. Thus, the order was issued in breach of the jurisdiction rules in the Regulation. The court asked the CJEU whether it should rectify this in the course of the Certificate-procedure. In this respect, it referred to the CJEU's case law on effective consumer protection under the UCTD and pointed out that the automatic issue of the Certificate might deprive Ms Fiermonte of an effective remedy as guaranteed by Article 47 of the EU Charter of Fundamental Rights.

Before we discuss AG Bobek's Opinion, let us briefly recall that in the context of the UCTD, the CJEU has repeatedly held - e.g. in Océano, Pénzügyi Lízing, and most recently Aqua Med - that costs or distance may deter consumers from taking legal action or exercising their rights of the defence. This would be the case where proceedings are brought before a court which is very far away from the consumer's place of residence (see Aqua Med, para 54). If this is already the case in domestic disputes, it applies all the more strongly in cross-border disputes. Moreover, the CJEU has held that rules conferring final and binding effect (res judicata force) on a decision must still meet the requirements of equivalence and effectiveness; see e.g. Finanmadrid. For instance, short time-periods to oppose an order for payment or to challenge its enforcement are problematic, also from the perspective of Article 47 Charter; see e.g. Profi Credit Polska.

Against this background, the referring court's question whether it should review the order and/or inform the consumer of the possibility to challenge its enforcement in Germany is not so strange. In addition, it was unclear whether the documents were properly served and thus, whether Ms Fiermonte had had an actual opportunity to oppose the order for payment. In a domestic situation, it would therefore be questionable whether the requirements of effectiveness and Article 47 Charter are complied with. The court responsible for the enforcement may operate as a last resort.

However, AG Bobek makes a strict separation between the CJEU's case law on the UCTD and the system of the Regulation. In his view, judicial review (ex officio) in the course of the Certificate-procedure is neither permitted nor required by EU law. It would run against the logic and spirit of the Regulation, which is aimed at the rapid and efficient enforcement of judgements abroad. The court must issue the Certificate automatically when the formal conditions are satisfied. It cannot re-evaluate the underlying judgment on points of substance and jurisdiction. This would compromise the Regulation's effectiveness.

Whereas AG Bobek's view is understandable in light of the Regulation's framework, his explanation of the distinction between the Regulation and the UCTD seems a bit artificial. On the one hand, he states that the Regulation lays down rules of a procedural nature, which are not as result-oriented and far-reaching as the (substantive) provisions of the UCTD. Yet, the rationale of the CJEU's case law on the UCTD is that consumers must be enabled to exercise their rights and that, because of their weaker (procedural) position in terms of knowledge and financial means, courts fulfil a compensatory role.
On the other hand, Bobek submits that the Regulation recognises that consumers are worthy of specific protection as defendants and that it contains additional procedural guarantees for that reason. Doesn't this mean that courts should play a role in enabling consumers to exercise their rights under the Regulation as well? It might be true that Ms Fiermonte can make an application for refusal of enforcement of the order in Germany on the grounds of lack of jurisdiction or the absence of due service of documents, but this depends on her initiative (Articles 45 and 46 of the Regulation). To what extent will it be taken into account that Ms Fiermonte is a consumer who might not be aware of her rights or not be able to pay lawyer's fees? (Ironically, the case was about unpaid lawyer's fees.) Shouldn't she at least be informed of her defence possibilities?
Bobek observes that it would be strange for the court to issue a Certificate for enforcement of the order while simultaneously pointing out its allegedly erroneous nature. This would be contrary to the principle of legal certainty. It would also undermine the principle of fair trial if the court would take on the role of the defendant's legal counsel.

Still, one cannot help but wonder why "an extra layer of protection for consumers" as proposed by the referring court could not "be ‘read into’ the provisions of Regulation No 1215/2012". That would be a true crossing of paths.

2019 forecast: Sun shines on consumer sales contracts

Over a week ago, on December 7, the Council has announced reaching an agreement on the revision of the sales of goods directive (Consumer Sales Directive 1999/44/EC) (More unified rules on contracts for the sales of goods: Council agrees its position). This means that there is a chance for the European Parliament to adopt the new Directive before the elections. The first reading has now been scheduled for March 2019.

 

The original proposal of the Commission intended to provide separate remedies for non-conformity of products purchased at a distance and of digital content. Due to the opposition to this further fragmentation of consumer protection rules, the proposal has, however, been adopted and the amended new rules would regulate non-conformity in all sales contracts. The Council welcomed this change. If we (and the EP) follow the Council's general approach, which may be read here in more details, this is what we may expect:

Harmonisation level

The new rules would apply targeted maximum harmonisation, with Member States being able to maintain further reaching consumer protection in respect of: time limits for guarantee periods (with the minimum set at 2 years); the reversal of the burden of proof for non-conformity (if it manifests within one year from the moment of the delivery there will be a presumption of non-conformity, but the Member States may extend this time period to two years); allowing consumers to choose a specific remedy if the lack of conformity became apparent within a short period after delivery, no longer than 30 days; maintaining flexibility on adoption of the obligation to notify about non-conformity within two months from detecting it. 

 

Goods with digital elements

IoT or connected goods (goods with digital elements) will be regulated by this new directive rather than the directive on digital content. Sellers will be obliged to provide updates for goods with digital elements but only for a period of two years (whilst digital content not integrated in goods will need to be updated during a time that consumers may 'reasonably expect').

 

Remedies

Consumer remedies for lack of non-conformity will remain the same (repair, replacement, price reduction and termination) but the strict two tier system has been mellowed down by the introduction of a more detailed exceptions allowing sellers to opt for price reduction or termination instead of specific performance. New provisions account for CJEU's case law stating that consumers should not be liable to pay for the normal use of goods during the period prior to their replacement, as well as that they are not to bear the costs of removal of installed non-conforming goods and the re-installation of the conforming goods.

Ex officio control of unfair terms presupposes an effective remedy: CJEU order in PKO Bank Polski

On 28 November 2018, the EU Court of Justice issued an order in PKO Bank Polski (C-632/17), which concerns the same issue as Profi Credit Polska (C-176/17), a case we have reported on earlier. In short, the question raised by the referring Polish court was whether the order-for-payment procedure at issue is incompatible with Article 7(1) of the Unfair Contract Terms Directive (93/13/EEC), because:

(i) the procedural rules restrict the consumer's right to lodge an objection against such an order for payment in such a way that there is a significant risk that she will not exercise that right, and

(ii) in the absence of the consumer, the court does not have the power to examine (a) the unfairness of the terms of the underlying credit agreement and (b) compliance with the requirements deriving from the Consumer Credit Directive (2008/48/EC).

Thus, there were two problems:

• The court's role is, in principle, limited to a review of formalities; it does not have available to it all the elements of fact and law arising from the credit agreement and thus, is not in the position to examine unfair terms. 
• The legal relationship resulting from the credit agreement is reviewed only if the consumer lodges an objection; the objection must meet various procedural requirements in an extremely short period (two weeks); and the consumer-defendant must pay a court fee that is three times greater than the claimant; see also our blog on Profi Credit Polska. 

In Profi Credit Polska, the CJEU already held that the Member States' obligation "to lay down procedural rules that ensure observance of the rights which individuals [i.e. consumers] derive from Directive 93/13", which "implies a requirement that there be a right to an effective remedy", also enshrined in Article 47 of the EU Charter of Fundamental Rights. The two above-mentioned problems combined prevented the court from carrying out the required assessment under the EU consumer protection legislation at issue. This is reiterated in PKO Bank Polski. The CJEU concludes that the Polish order-for-payment procedure is precluded by Article 7(1) of Directive 93/13 and Article 10 of Directive 2008/48/EC.

We can tentatively draw two conclusions from the CJEU's decisions:

1. While the CJEU (still) does not make a clear distinction between Article 7(1) of Directive 93/13 (which requires "adequate and effective means" against unfair terms) and Article 47 of the Charter, it appears that the first presupposes the latter. If a case is not brought before the court, it cannot perform unfair terms control (either ex officio or at the consumer's request). In case of an "inversion of the dispute", i.e. it is the defendant – here: the consumer-debtor – who must initiate adversarial proceedings by lodging an objection, the court must determine whether the procedural rules infringe the consumer's right to an effective remedy (or rights of the defence, for that matter) as guaranteed by Article 47 of the Charter. If the obstacles are too high, there is a significant risk that consumers will not lodge and objection. 
2. The CJEU seems to suggest that the national court must be able to perform ex officio control, whether the consumer involved invokes the existence of unfair terms or not. This is in line with its earlier case law, see e.g. Banesto and Radlinger. But how does the referring Polish court obtain the necessary information? One possible answer is that the creditor must submit the underlying credit agreement in evidence. This calls into question the entire order-for-payment procedure, which is based on only a banking ledger excerpt. Is such an excerpt sufficient? And what should happen in the absence of the consumer? Should she be required to lodge an objection at all? The CJEU does not answer these questions. 

In its case law on other types of debt collection proceedings, the CJEU did not consider an "inversion of the dispute" to be contrary to EU (consumer) law in itself, as long as there were judicial remedies available to consumer. We have brought this up in previous blog posts.

However, PKO Bank Polski shows why a reliance on the consumer's initiative might be problematic, exactly because of the procedural obstacles discussed in light of Article 47 Charter. Removing those obstacles is a first step. Preventing creditors from circumventing judicial control – by allowing them to resort to extrajudicial enforcement procedures or to withhold information from the court – would be the next.

Cláusulas suelo: the aftermath (Real Decreto-ley 1/2017)

In the aftermath of the judgment of the EU Court of Justice on Spanish 'floor clauses' (cláusulas suelo) of 21 December 2016, reported by us here, the Spanish government has issued a 'Royal Decree' which establishes an extrajudicial mechanism for the swift resolution of disputes concerning these clauses: Real Decreto-ley 1/2017 (full text available here, in Spanish). According to the Decree, it is foreseeable that the CJEU's judgment will lead to an increase in claims of affected consumers, who demand repayment of the amounts overpaid by them on the basis of 'floor clauses' in their mortgage contracts. The Decree's aim is to facilitate consumers and credit institutions to settle any claims by reaching an agreement about the amount to be paid back. The Decree also seeks to prevent high costs for the administration of justice.

Article 3 of the Decree obliges credit institutions to implement a (free) system for alternative dispute resolution, which is voluntary for consumers and allows them to file a request for repayment. The credit institution then must calculate the amount to be repaid and make an offer to the consumer within three months after the request has been filed. If this does not result in an agreement, the consumer may still go to court. This is not only the case if the consumer rejects the offer, but also if the credit institution rejects the consumer's request, or if the three-month period expires without an offer having been made or without the offered amount having been paid to the consumer. During the three-month period, however, neither party may bring a judicial action. Credit institutions must ensure that consumers are aware of the availability of this ADR system.

In addition, Article 4 of the Decree stipulates that, in case court proceedings are initiated after the conclusion of the out-of-court procedure, the credit institution can only be ordered to pay costs if the consumer has rejected the offer and obtains a more favourable judgment in court. A similar rule applies if the credit institution commits itself to pay a certain amount before submitting a defence: it can only be ordered to pay costs if the judgment is more favourable.

The Decree has already been criticised for not being specific enough as to the substantive right to repayment. It only defines the general scope (Article 2), but leaves the question what constitutes an unfair term for lack of transparency open to interpretation. The methods of calculation of amounts and interests are left entirely for the credit institutions to decide. Therefore, the Decree may induce litigation when parties ask the courts for further guidance. Moreover, it is unclear to what extent consumers' right to effective judicial protection - safeguarded by Article 47 of the EU Charter of Fundamental Rights - is limited and whether such a limitation is justified (cf. Alassini, C-317/08). The regulation of costs in Article 4, in particular, could be problematic from the perspective of access to court. It might deter consumers to go to court and compel them to accept the credit institution's offer.

In the next few months, we will see how effective the Degree will be in practice.

Effective consumer protection in light of Article 47 EUCFR: Opinion of AG Kokott (C-503/15 Margarit Panicello)

Yesterday, Advocate General Kokott presented her opinion in yet another case on Spanish procedural law and the effective protection of consumers against unfair contract terms (Case C-503/15, Margarit Panicello). We have reported on this blog on earlier cases, most notably Banco Español de Crédito, Sánchez Morcillo and Finanmadrid. 

The present case stands out, because of the explicit reference to Article 47 of the EU Charter of Fundamental Rights in the request for a preliminary ruling. The 'referring court' (one of the questions at issue is whether the Secretario Judicial - court registrar - can actually be regarded as a court or tribunal for the purposes of Article 267 TFEU) has asked the EU Court of Justice whether certain procedural rules are incompatible with Article 47, in that they preclude the possibility of judicial review. In Spain, there is a special procedure (jura de cuentas) available to lawyers for the recovery of unpaid fees that are owed to them by their clients. Unpaid fees could be a sign of a soured relationship, and lawyers would rather not litigate against their clients; for them, jura de cuentas is a preferably 'evitable' (avoidable) evil. AG Kokott's opinion makes clear why it might be an 'evitable' evil in light of EU law as well.

To relieve the judiciary, the exclusive competence to deal with the jura de cuentas procedure has been transferred to the Secretarios Judiciales. The procedure is optional; lawyers can still choose to initiate court proceedings. The applicable procedural rules preclude the Secretario Judicial to examine ex officio whether the contracts between lawyers and their clients (natural persons), on the basis of which recovery of unpaid fees is claimed, contained possible unfair terms or unfair commercial practices. AG Kokott's conclusion that those rules are incompatible with Directive 93/13/EEC (on unfair terms in consumer contracts) is perhaps not very surprising, against the background of the CJEU's case law. The opinion is more interesting from the perspective of Article 47 of the Charter, which safeguards the right to effective judicial protection against violations of the rights and freedoms guaranteed by EU law. 

In the case of Finanmadrid, the referring court had made a similar reference to the Charter, but the CJEU avoided answering the question related to Article 47 (click here for some reflections on this case). In yesterday's opinion, AG Kokott explicitly adopts the reference to Article 47 of the Charter. And rightly so, because the procedural rules at issue do not only impede the (full) effectiveness of Directive 93/13/EEC, they may also constitute an intolerable interference with "the right to an effective remedy before a tribunal" enshrined in Article 47. As AG Kokott observes (para. 114), when provisions of national law fall within the scope of EU law, it must be assessed whether they are compatible with EU fundamental rights (click here for a further analysis of Case 617/10, Åkerberg Fransson). Moreover, the CJEU has held in Sánchez Morcillo (para. 35) that: 

"the obligation for the Member States to ensure the effectiveness of the rights that the parties derive from Directive 93/13 against the use of unfair clauses implies a requirement of judicial protection, also guaranteed by Article 47 of the Charter, that is binding on the national court (see, to that effect, judgment in Banif Plus Bank, C‑472/11, EU:C:2013:88, paragraph 29). That protection must be assured both as regards the designation of courts having jurisdiction to hear and determine actions based on EU law and as regards the definition of detailed procedural rules relating to such actions (see, to that effect, the judgment in Alassini and Others, C‑317/08 to C‑320/08, EU:C:2010:146, paragraph 49)."

According to AG Kokott, several elements of the jura de cuentas procedure are problematic in light of the required level of consumer protection. These elements are partly considered with respect to the question whether the request for a preliminary ruling is admissible. They are nevertheless relevant for a substantive assessment of the Spanish procedural rules (cf. paras. 104-105 and 115-117). 

• The first element is the 'reversal of the dispute' or 'shift of initiative' to the client/consumer, who needs to oppose the claim before the proceedings become contradictory (para. 41). Only then, the case will be more closely examined on the merits (paras. 44-47). 
• Secondly, the decision of the Secretario Judicial is non-appealable and immediately enforceable, even though it does not obtain res judiciata force (paras. 48-50 and 91). In AG Kokott's view, enforcement of the decision is equated - by the Spanish legislator! - with the enforcement of judicial decisions, just like judgments given in preliminary relief proceedings (paras. 51-60). This means that there is neither an obligation for the Secretario Judicial to ex officio examine possible unfair terms, nor an opportunity for the client/consumer to raise a defence that would suspend the enforcement proceedings. 
• Thirdly, the jura de cuentas procedure concerns a legal dispute (paras. 83-86) and has a mandatory, binding character, even though it is optional for lawyers (paras. 87-88). 
• Fourthly, even if an ex officio examination of unfair terms would be possible at the enforcement stage, that would not be sufficient, for reasons of both process efficiency and the effectiveness of EU law (paras. 133-136). A decision would still be given and the client/consumer would receive a demand to pay, exercising pressure. Therefore, there is a risk that payment would take place without enforcement proceedings being necessary. 
• Fifthly, filing opposition against enforcement cannot be compared to having the opportunity to oppose the claim before a decision is given (para. 136). Such an opposition would not suspend the proceedings, and would thus pave the way to the payment of potentially unfair claims (para. 137). 

Although these elements are not listed as such by AG Kokott, they directly support her conclusion that the procedural rules at issue are contrary to Article 47 of the Charter as well as Directive 93/13/EEC (read in conjunction with Directive 2005/29/EC concerning unfair business-to-consumer commercial practices). All these elements resonate with the right to effective judicial protection, which includes - inter alia - the right to an effective, proportionate and dissuasive remedy, respect for the rights of the defence, the right to be heard and the principle of equality of arms. The opinion demonstrates that Article 47 of the Charter can provide a framework for the assessment of procedural rules that govern legal disputes falling within the scope of EU law, in this case: a dispute about a contract possibly containing unfair terms (and unfair commercial practices). If and to what extent Article 47 and the principle of effectiveness or the 'full effect' of EU law overlap, remains to be seen. In this respect, the 'referring court' makes a distinction between judicial review in general (question 1) and ex officio examination under Directive 93/13/EEC (question 2). AG Kokott does not separate the notion of judicial review and Article 47 of the Charter from the context of Directive 93/13/EEC, probably because Article 47 has an accessory character: it always requires a connecting link with a substantive provision of EU law. That does not mean that Article 47 does not have anything to contribute. AG Kokott seems to recognise this in her opinion. 

The question of admissibility has not been addressed in this blog. However, AG Kokott's views as regards the independence of the Secretario Judicial (paras. 71-81) are worth reading. It is interesting to note that the Spanish government has argued that the Secretario Judicial cannot be considered as an 'externally' independent authority, which has sparked a discussion about the transfer of quasi-judicial competences away from the judiciary and the Rule of Law (cf. para. 86). If the CJEU follows AG Kokott's conclusion that the request should be declared admissible, it will be difficult to avoid a reference to Article 47, which is an expression of "the fact that the Union is a community based on the rule of law" (see the Explanations relating to the Charter of Fundamental Rights). 

Dutch Supreme Court on effective remedies for consumers

A recent development in the area of European consumer law we have not yet reported on this blog is a recent judgment of the Supreme Court of the Netherlands (available here in Dutch; Lindorff/X or telefoonabonnement-arrest II) in a case about a contract for a mobile phone subscription including a 'free' phone. The Supreme Court held that the national court must examine of its own motion if the price of the phone has been stipulated separately and if not, annul the contract. This may have far-reaching consequences for providers of mobile services offering subscriptions and phones for an 'all-in' price, to be paid (monthly) by the consumer.

According to the Supreme Court, the national court has to apply of its own motion national provisions implementing the Consumer Credit Directive (87/102/EEC). At issue was a contract between a consumer and a large Dutch telecommunications company for a mobile phone subscription and a 'free' phone, for a monthly 'all-in' price. In the Supreme Court's view, this is a purchase-in-instalments ("koop op afbetaling") and a credit contract in the sense of the Consumer Credit Directive. The Dutch provisions on purchase-in-instalments are not of European origin, but the Supreme Court puts them on an equal footing for the sake of 'manageability'. The national court must take, if necessary of its own motion, adequate measures to ensure the effective legal protection of consumers. Sanctions for the infringement of consumer rights under the Directive must be effective, proportionate and dissuasive. This means, among other things, that if the price of the mobile phone is not stipulated separately, the contract can be annulled. The Supreme Court considers that such a stipulation will generally indicate the essence of the performance, so that it is excluded from the scope of the Unfair Contract Terms Directive (93/13/EEC). 

In this case, the Supreme Court seems to go beyond the consistent interpretation of national law by 'gap-filling': the remedy was not specified in the Dutch Civil Code, but follows from the general principle of effectiveness and the right to effective judicial protection in EU law. Although the Supreme Court does not explicitly refer to Article 38 or Article 47 of the EU Charter of Fundamental Rights, it does mention relevant case law of the CJEU (inter alia, Pohotovost' and Duarte Hueros, reported by us here and here).

The Supreme Court addresses the consequences of an annulment of the contract at length: the consumer may return the phone, without having to pay any costs for using the phone or decrease in value. Damages would only be due if the consumer does not behave as a 'careful debtor' or fails to return the phone. The mobile service provider has to pay back the part of the price (and costs) the consumer has already paid for the phone. The mobile service provider cannot institute a counterclaim on the basis of unjust enrichment, says the Supreme Court, as this would be contrary to the effective protection of consumers. One could wonder whether effective protection really means that no compensation is due, since consumer protection is about eliminating disadvantages between consumers and traders rather than putting consumers in the best position.

The case has not only drawn the attention of legal academics, but also of claims organisations. A class action is being prepared against at least 8 Dutch mobile service providers (see here and here). For our Dutch readers, a more extensive description of the Supreme Court's findings can be found here.

The ball remains in the Member State's court - CJEU judgment in Case C-470/12 Pohotovost'

More news from the CJEU today, as the Court handed down its judgment in the Pohotovost' case. The question at issue here concerned the (im)possibility for a consumer organisation to join in a case regarding the enforcement of an arbitration award against an individual consumer. Please refer to our earlier post on Advocate-General Wahl's opinion in this case for a more detailed summary of the facts ('Who decides who decides').

The CJEU follows the AG in ruling that the Slovak procedural law applicable to the case does not infringe upon EU law:

'Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, in particular Articles 6(1), 7(1) and 8 of that directive, read in conjunction with Articles 38 and 47 of the Charter of Fundamental Rights of the European Union, must be interpreted as not precluding national legislation which does not allow a consumer protection association to intervene in support of a consumer in proceedings for enforcement, against the latter, of a final arbitration award.'

The Court bases its decision on the fact that the Unfair Terms Directive does not cover the issue of consumer organisations' participation in enforcement proceedings and that, therefore, it is up to national legal systems to provide rules on this, taking into account the principles of equivalence and effectiveness. The principle of equivalence is not infringed upon, as Slovak law does neither allow a consumer organisation to join in enforcement proceedings that are governed by national law nor those involving EU law. The principle of effectiveness, moreover, is not breached, since the Slovak law does not make the application of EU law impossible or excessively difficult by excluding consumer organisations from enforcement proceedings. The Court finds no points of reference in Articles 38 (consumer protection) and 47 (right to an effective remedy) of the EU Charter of Fundamental Rights to alter that conclusion.

Who decides who decides - Opinion of AG Wahl in Case C-470/12 Pohotovost'

What position do consumer organisations hold under EU law when it comes to assisting consumers in pursuing their claims in court? While the Court of Justice of the EU (CJEU) recently clarified the conditions under which a consumer organisation may bring an independent claim regarding unfair contract terms (ACICL v. ASE), a case that is currently pending concerns the possibilities for an organisation to join in a procedure regarding the enforcement of an arbitration award. Today, Advocate-General Wahl handed down his Opinion in this case, C-470/12 Pohotovost'.

The case concerns a Slovak credit supplier, Pohotovost', who had concluded a consumer credit contract with a certain client. Subsequently, as a result of arbitration proceedings concerning this contract, an arbitration tribunal ordered the consumer/client to pay the credit company a certain amount of money. The arbitration award became final and execution proceedings followed. At this stage, consumer organisation HOOS asked to be added to the proceedings, in particular in order to challenge the impartiality of the bailiff involved in the case, who earlier had been employed by Pohotovost'. 

Slovak procedural law prevents the consumer organisation from joining the proceedings. The referring court is in doubt as to the validity of this national rule of procedure in light of the consumer protection offered by EU Directive 93/13 jo. Articles 38 and 47 of the EU Charter of Fundamental Rights (consumer protection and the right to an effective remedy).

According to AG Wahl, EU law does not preclude a provision of national law that prevents a consumer organisation from joining in enforcement proceedings. At the same time, the relevant provisions of EU law do not stand in the way of a judge allowing a consumer organisation to join such proceedings. In other words, in the AG's opinion the question referred to the CJEU is neither directly nor indirectly governed by EU law: Directive 93/13 does not address the role of consumer organisations joining in individual proceedings, nor does it prohibit Member States from adopting a higher level of consumer protection by allowing judges to accept consumer organisations being added to such proceedings. Articles 38 and 47 of the Charter do not lead to a different conclusion, since they do not support an interpretation of the Directive in the sense that it would lay down a right for consumer organisations to join in individual enforcement proceedings.

In sum, whereas this opinion does not promote a further extension of EU legislative competences (and thus respects the procedural autonomy of the Member States), it does offer a clear illustration of the process of constitutionalisation of EU consumer law (visible in the growing number of references to the Charter in preliminary reference procedures).

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.

Rights and remedies - AG Mengozzi's opinion in Case C-413/12 ACICL v. Anuntis

While EU law on the one hand requires Member States to provide effective remedies for the protection of Union law (Article 19 TEU), on the other hand it shows respect for national rules of procedure that fall outside of the scope of EU competences. This raises the question how a balance should be struck between effective protection of European rights and national procedural autonomy. In the field of European consumer law, accordingly, the Court of Justice of the EU is regularly asked to assess whether national laws offer adequate means to enforce consumer protective rules. Advocate-General Mengozzi today delivered his opinion in a case of this type, namely that of the Asociación de Consumidores Independientes de Castilla y Léon (ACICL) v. Anuntis Segunda Mano SL (not yet available in English).

The case concerns a claim of the regional consumer organisation ACICL against the Anuntis company to have some of the latter's general terms and conditions (as used on its website) declared void because of their unfair nature, and to impose an injunction against Anuntis to prevent further use of these terms. In first instance, the judge in Salamanca who was presented with the dispute held he was not competent to hear the case, since the relevant rules of procedure stipulated that the claim should be brought before the competent court in the place of residence of the defendant. The judge added that this decision was open to appeal, even if the national law did not provide any rules to that effect. The court hearing the appeal considers this interpretation of Spanish law to raise the following preliminary questions:

'Does the protection afforded to the consumer under Council Directive 93/13/EEC on unfair terms in consumer contracts allow the Audiencia Provincial, as a national court of appeal, to hear and determine, in spite of the absence of any relevant domestic legal rule, the appeal brought against the decision of the court of first instance assigning to a court of the place where the defendant has its address territorial jurisdiction to hear and determine the action for an injunction brought by a consumer association of restricted territorial scope, which is not associated or federated with other associations and which has a small budget and a small number of members?

Must Articles 4, 12, 114 and 169 of the Treaty and Article 38 of the Charter of Fundamental Rights of the European Union, read in conjunction with Directive 93/13 and the case-law of the Court of Justice relating to the high level of protection of the interests of consumers, as well as to the practical effect of directives and the principles of equivalence and effectiveness, be interpreted as meaning that the court of the place where that association has its address, and not the court of the place where the defendant has its address, is to have territorial jurisdiction to hear and determine an action for an injunction against the use of unfair terms, to protect the collective or general interests of consumers and users, brought by a consumer association with restricted territorial scope, which is not associated or federated with other associations and which has a small budget and a small number of members?'

AG Mengozzi is of the opinion that the relevant procedural rules in this case survive the Court's normal 'effectiveness and equivalence' test. In casu, the test boils down to one on effectiveness only, since the equivalence of the handling of cases under EU law and under national law is not contested. As regards the effectiveness of the Spanish rules of procedure that are at stake here, the AG observes that these rules do not completely prevent ACICL's access to justice and can, therefore, not be considered to make the enforcement of EU rights 'impossible or excessively difficult'. ACICL's financial difficulties to pursue a claim in a different region are of no relevance here, according to the AG, since national rules of procedure are based on objective considerations regarding the costs of litigation rather than on subjective financial problems of litigating parties.

As regards the second question, AG Mengozzi expresses doubts concerning the CJEU's competence to rule on this point, since it will lose its practical relevance after a negative answer is given to the first question. Still, he adds that also on this matter no fundamental problems of effective protection of EU rights are to be foreseen, taking into account that EU law does not prescribe that consumer protection (including rules on jurisdiction) should be extended to consumer organisations.

Relatively little attention is paid to the national court's reference to the EU Charter of Fundamental Rights. Concerning effective remedies in EU law, legal scholarship has suggested that Article 47 of the Charter might provide a framework for improving the (individual and collective) enforcement of consumer rights. For more on this topic, I refer to one of my working papers, which contains further references to the work of, among others, Norbert Reich and Hans Micklitz.