Effective judicial protection as a fundamental right in the context of EU consumer law

1. Effective judicial protection as a fundamental right in the context of EU consumer law Rajko Knez

2. Setting the scene • Role of the ECJ and national courts • Study of Max Planck Institute … about national procedural laws / practices and their influences to the effectiveness of the procedural protection of consumers and free circulation of judgements

3. Consumers… at the outset • Consumers are (also) important for the Internal Market • ECJ made quite clear what is the image of the EU consumer • Models: • Caveat emptor • Caveat venditor • Information model

4. Case C-168/00 Simone Leitner … non-material damage caused by loss of enjoyment of the holidays (entgangeneUrlaubsfreude)… a protection not even known in the national legal system(s) • And latter C-65/09 Ingrid Putz a shift to „vendor be aware“

5. ECJ deals with consumers protection • Interpreting directives on consumer protection • substantial / procedural directives • minimum harmonization directives • targeted max. harmonization • Internal market rules, i.e. freedoms and competition rules • Cases of „ancillary“ legislation… like Brussels and Rome regulations (cross-border issues)

6. But, one shall not forget even wider framework • Treaty on the Functioning of the EU EU consumer policy (Article 169) seeks to promote consumers' health, safety and economic interests, as well as their right to information, to education and to organise themselves in order to protect their interests. Article 12 of the TFEU also requires consumer protection to be taken into account when defining other EU policies. Consumer policy is a shared responsibility between the EU and MS. • Charter of Fundamental Rights – Article 38… to integrate a high level of consumer protection into the Union policies • and – important – consumer protection from the directives shall be viewed under CFR rights, like a right to Art. 7 – right to respect private life or Art. 47 – a right to access to justice (A2J) etc

7. Private life includes a right to a HOME • a HOME is close connection to a MORTGAGE as a part of a LOAN AGREEMENT • Case Monika Kušionová, C-34/13

8. At a national level… • Legislator – implementation tasks EX ANTE • Administrative authorities - implementation tasks EX POST • COURTS – also EX POST, but…

9. …consumers are rather special A consumer: • is a one-shot player • lacks legal knowledge • might be vulnerable • makes fast and momentum-based-decisions • lacks information • might be faced with the EU-world-wide infringements (Dieselgate, Xerox) • is addressed with aggressive marketing • might „pay“ for the services with the personal data • having low trust in cross-border services and trade (but statistics reveal improvements) • usually not the one being responsible for the cause of the legal problem

10. Courts are in rather special position when faced with consumers • Max Planck studies reveal: • the volume of CPR is huge and complex also for judges (civil courts are predominantly competent) • fragmentation of the level of protection is a huge problem, also the manner and the scope of implementation (including a change of the type of harmonisation on the EU level) • the notion of consumer is not the same in all MS (positive, negative, passive, active cons). • rather different (lacking coherence) and not-unproblematic application of procedural rules, especially „ex officio“ application of EU CPR (consumer protection rules) • ex officio is not always known to judges – although ex officio principle constitutes a kind of residual EU standard to be invoked by the national judge in order to overcome evident shortcomings generated by the application of national procedural rules • certain level of judicial activism is needed, but it differs among MS a lot (also whether new facts can be stated on a judge own motion) • but in some MS the court’s inquisitorial role is rare (Art. 6 ECHR) and their procedural rules are rather strict not to apply it • however, 8 MS adopted ex officio obligation in case of consumer‘s protection regarding that national judges are empowered to use their (modern) procedural function in order to be vigilant and helpful regarding the application of EU consumer protection law. • ex officio is especially important in cases against the consumers, like in payment order procedures • usually there is no ex officio in the enforcement proceedings

11. Different reasons for ex officio application in some MS: • unfairness • consumer protection in general • mandatory protection – in favorem • pubic morality • illegality • Max Planck study urges to change national legislation to apply EU CPR on own motion • in order to have equal approach across the EU • to enable legal remedies in case of lack of own motion application • to mandate ex officio also in enforcement proceedings • the (i.e. this) ECJ case law shall be implemented by the legislator • national proc. autonomy is limited by principles of effectiveness and equivalence • Recom. to the EC is to include ex officio obligation in the directives

12. Decisive factors for not to commence the procedure: • lack of knowledge by the consumer • costs (and fear to bear the costs of opposite party if loosing a case); usually a simple CBA gives clear reasons not to commence the proceeding • burden of proof • complexity of the procedure • duration of the procedure • legal representation (also if only at higher instances; this might prevent consumers to use appeals)… pro se litigation is proposed (in some MS consumer -pro se – gets „help“ from judges) • legal help is usually not available • costs of expert witnesses when needed • In cross-border cases also costs of service of the doc., translation costs, usually dual legal representation

13. Some further findings of the study: • a judge shall use the managerial powers helping the consumer but in a way not to endanger the perception of its impartiality... (SIC) • to make possible individual and collectives redresses, but for the courts to be empowered to stay the ind. proceedings until the collective ends • to invoke notion of vulnerable consumers especially in more specific areas of services (public services, complex services…) • ADR or consumer ombudsman shall be available (ADR is not widely known) • Inspectors or other adminis. authorities can be of help (like in the field of competition policy) • Procedures without representation of attorneys can be an option • Better knowledge of the national CPR than the EU CPR • lower courts do not consider themselves as decentralised courts (EU courts) • a special consumer redress for mass violations shall be available • cross-border cases are more difficult for the judges, but due to the increasing trade on-line the shift is expected to this type of cases

14. Actions for Collective Redress are high on the agenda, but the implementation varies: • In most MS it is not mandatory to stay indiv. proceedings once the collective redress is commenced • most MS follow the Invitel (C-427/10) doctrine regarding the res judicata effect • it is proposed to change the approach (on the EU level) for the consumer not to be in position to rely himself on the decision from the collective redress before he can make use of it • Some special instruments are not well known: EEO, EO for Payment Procedure, European Small Claim Procedure, etc And finally • Max Planck study urges that procedural aspects of consumer protection are important and need synergy between EU and national level to be in conformity with Art. 47 CFR