Gösta Petri Consumer and Marketing Law Unit DG Justice and Consumers Consumer protection and enforcement in EU law

Two aspects: 1. Enforcement of consumers' rights - against traders, e.g. remedies for faulty goods - public enforcement, by national consumer protection authorities (CPC network) - individual/collective redress 2. Enforcement of traders' claims against consumers - consumer protection safeguards against unfair enforcement - main instrument: the Unfair Contract Terms Directive (93/13/EEC)

The Unfair Terms Directive 93/13/EEC Adopted over 20 years ago but continues to be the main tool to ensure fairness in consumer contracts A term which has not been individually negotiated is unfair if it causes a significant imbalance in the parties' rights and obligations, to the detriment of the consumer Unfair terms shall not be binding on the consumer Contracts must be drafted in plain, intelligible language Indicative and non-exhaustive list of unfair terms in the Annex

Procedural aspects of EU consumer law EU consumer protection directives focus on the substantive law and do not harmonise the rules of procedure The directives contain only very general requirements regarding the rules of procedure The national rules of procedure and the practice of national courts have a decisive impact on whether consumer law effectively protects consumers

Ex officio assessment of unfair terms Obligation to examine fairness of contractual terms and apply necessary consequences of their own motion Ex officio apply both when the consumer is defendant and when the consumer initiates proceedings The court is required to examine the term where it has available to it the legal and factual elements necessary for this task Where the court considers that the term is unfair, it must not apply it, except if the consumer opposes that

The principle of equivalence Rules applying to EU rights must not be less favourable than those applying to similar rights under national law Non-binding character of unfair terms is equivalent to public policy considerations The Unfair Terms Directive must be regarded as having an equal standing to national rules of public policy The obligation to assess terms extends to situations where under national law the court has a discretion to apply rules of public policy

The principle of effectiveness National rules may not make it impossible or excessively difficult to exercise EU rights The national court must assess legal and factual circumstances which may act as an obstacle Example: use of other types of procedures instead of an ordinary civil procedure to deprive consumers of the protection Example: where national procedures prevent a consumer from raising the unfairness of the contract term

C-618/10 Banco Español de Crédito The principle of effectiveness in practice When does the national procedure make it excessively difficult for consumers to protect their rights? The case concerns application of the principle of effectiveness in payment order procedures under Spanish law Short time-limit for objections and the need to be represented by a lawyer dissuade consumers from defending themselves

Case C-415/11 Aziz Violation of principle of effectiveness by not giving consumers the possibility to raise unfairness of terms in mortgage enforcement proceedings and not allowing judges assessing unfairness of terms in ordinary proceedings to suspend mortgage enforcement proceedings

C-168/05 Mostaza Claro Unfair clauses in arbitration agreements To what extent should arbitration awards be reviewed by the national court? The CJEU concedes that the review of arbitration awards should be limited in scope and exceptional This includes situations where an arbitration ward is founded on failure to observe EU rules of public policy Article 6 of the Unfair Terms Directive is a rule of public policy

C-40/08 Asturcom Telecomunicaciones Limits concerning res judicata Is any involvement required from the consumer? The case concerns an arbitration award which has acquired the force of res judicata EU law does not require a national court to disapply rules on finality of a decision, if they comply with equivalence and effectiveness Principle of effectiveness does not require a national court to make up fully for the total inertia of the consumer