Tag Archives: EU Court of Justice

The UCP Directive – nearly ten years on…

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In 2005, the European Directive on Unfair Commercial Practices (UCP Directive 2005/29/EC) was adopted. Looking back after almost ten years, one may ask how the UCP Directive has worked out. Surely, the UCP Directive has left its mark on national consumer protection frameworks in the EU. The European Unfair Commercial Practices Directive

Briefly described, the UCP Directive has the ambitious aim of preventing distortion of consumer contracting choice-making, in particular with regard to contract decisions prior to conclusion of a contract and decisions to exercise existing contractual rights. The UCP Directive is a horizontal framework Directive with a maximum harmonisation nature. Because of its broad scope of application, it covers all B2C commercial practices in all sectors (although it gives priority in some areas where more specific (EU) rules apply). The UCP Directive holds provisions on unfair commercial practices, a black list of practices deemed unfair, and dedicated rules on various topics such as Codes of Conduct and the relationship with various information duties in other EU legislation.

The core of the Directive lies in the prohibition of practices contrary to the requirements of professional diligence which materially distort or are likely to materially distort the economic behaviour of the average (targeted) consumer with regard to a product or service. Thus, unfair commercial practices consist of two elements: the (potential for) material distortion of consumers’ transactional decision-making and the normative yardstick of professional diligence. The concept of ‘unfair practices’ is further subcategorised into misleading and aggressive practices.

Since 2005, one of the issues that has caused (and to this day continues to cause…..) headache in various member states is the maximum harmonisation principle, combined with the broad scope of application. As the ECJ has ruled, the maximum harmonisation principle of the UCP Directive overrides national regimes that prohibit combined sales offers in certain B2C markets, regimes that generally prohibit participation in lottery conditional on the purchase of goods and regimes that restrict the advertising of upcoming sales.

A further problematic issue is the ambit of exceptions to the maximum harmonisation principle. For instance, article 3 (2) provides that the Directive is without prejudice to contract law and, in particular, to the rules on the validity, formation or effect of a contract (e.g., rules on fraud, mistake and misrepresentation). This is usually understood to be an exception in favour of national private law. However, in those countries where the UCP Directive was implemented in the Civil Code as a species of tort law, divergence between the ‘UCP tort’ and contract rules may easily occur. Furthermore, article 3 (9) allows more restrictive national rules in the area of financial services. As far as financial services are concerned, the Directive is a minimum harmonisation framework. Also, in case of conflict between the provisions of this Directive and other EU rules regulating specific aspects of unfair commercial practices, the latter shall prevail and apply to those specific aspects (article 3 (4)). Particularly difficult areas are TV-advertising and health claims in advertising.

Other problematic issues include the ‘average consumer’ yardstick, also in light of the maximum harmonisation character of the Directive. National courts applying this standard may find themselves offering less protection to consumers than they were used to under pre-existing national protective frameworks. The UCP Directive, like so many rules of EU consumer law, is modelled around the ‘average consumer’. According to standing case law, the ‘reasonably well informed and reasonably observant and circumspect’ consumer can be expected to make a serious effort at collecting and understanding all available information on essential aspects of a contract. The ‘average consumer’ is neither easily impressed nor quickly deceived. . The framework assumes consumers to be ‘reasonably well informed and reasonably observant and circumspect’ rational choice actors who  make serious efforts at collecting and understanding all available information on essential aspects of a transaction.This average consumer is a non-existent model of man, not a statistical average but a normative yardstick.

On the other hand, however, the UCP Directive seems to acknowledge that some consumers such as the elderly and children are ‘below average’ and that such vulnerable consumers are in need of further protection against repeat-players with superior knowledge on how they can be encouraged, persuaded, seduced and discouraged. Herein lies a delicate tension between protection and individual responsibility.

These and other experiences with the 2005 UCP Directive are the subject of a book I co-edited with Amandine Garde and Orkun Akseli. The book, titled “The European Unfair Commercial Practices Directive – Impact, Enforcement Strategies and National Legal Systems”, was recently published by Ashgate. On the publisher’s website, the introductory chapter is freely downloadable.

The book is roughly divided into four parts. Part I deals with issues of implementation, approximation and harmonisation. As noted earlier, the maximum harmonisation nature and its exceptions of the UCP Directive raise particular challenges to national legal systems. For instance, in what areas does the Directive leave room for manoeuvring? In what ways does it cause frictions with domestic law? Does it conflict with other areas of EU and domestic consumer law?

Part II deals with vulnerability issues. The UCP Directive is slightly ambiguous as concerns vulnerability due to age, mental or physical condition. On the one hand, the Directive assumes consumers to be “reasonably well informed and reasonably observant and circumspect”. Therefore, the ‘model consumer’ is considered to be confident and proactive in gathering and processing information before making transactional decisions. On the other hand, however, the Directive seems to offer specific protection to old, young, disabled and challenged consumers. Obviously, the question is what makes these groups vulnerable in connection with commercial practices. And are they the only ones prone to succumb to certain unfair practices?

In Part III, the interaction between the UCP regime with other forms of regulation of traders’ behaviour is discussed. How does the UCP Directive relate to other generic and specific EU rules of consumer protection? Does it complement or interfere with other regimes – be they legislative, regulatory or self-regulatory?

Finally, in Part IV of the book various issues of enforcement come to the fore. In principle, the UCP Directive leaves it to Member States to decide on the enforcement architecture. The result is a plethora of instruments across the EU, each with their advantages and drawbacks. What lessons can be learned from the various choices at Member State level? Recently, the European Commission communicated its first report on the application of the Directive. The gist of the report is that the UCP Directive itself is adequate as it stands but that enforcement efforts need to be intensified. All the more reason to delve deeper into the enforcement issues…

In short, the book offers a survey of some nine years of combating unfair commercial practices within the European Union and as such sheds further light on how the UCP Directive has actually worked out.

 

Rechtsbijstandverzekering: hoe verder na zaak C‑442/12 ?

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Recent gaf het HvJ EU op verzoek van de Hoge Raad het definitieve antwoord op een uitlegvraag rondom Richtlijn 87/344 (rechtsbijstandverzekering). Het HvJ besliste in HvJ EU 7 november 2013, C-442/12 (Sneller/Das):

  • dat de richtlijn zich ertegen verzet ‘dat een rechtsbijstandverzekeraar die in zijn verzekeringsovereenkomsten regelt dat rechtsbijstand in beginsel wordt verleend door zijn werknemers, tevens bedingt dat de kosten van rechtsbijstand van een door de verzekerde vrij gekozen advocaat of rechtsbijstandverlener slechts vergoed kunnen worden indien de verzekeraar van mening is dat de behandeling van de zaak aan een externe rechtshulpverlener moet worden uitbesteed’;
  • dat het daarbij ‘geen verschil (maakt) of rechtsbijstand voor de desbetreffende gerechtelijke of administratieve procedure naar nationaal recht verplicht is’.

Met name het tweede punt lijkt mij een belangrijke verduidelijking: bij procedures waar geen verplichte procesvertegenwoordiging voor vereist is, geldt ook de vrije advocatenkeuze. Rechtsbijstandverzekeraars moeten die vrijheid respecteren.

Eerder publiceerde ik over deze materie een artikel (TvC 2011) waarin ik een andere uitleg van de Richtlijn bepleitte. Daar waren naar mijn mening goede uitlegargumenten voor. Anderen bepleitten de uitleg die nu door het HvJ is aanvaard. De beslissing van het HvJ betekent dat de verzekerde ook vrije advocaatkeuze heeft als voor procederen geen advocaat verplicht is.

Voor wat betreft geldend recht heb ik dus duidelijk ongelijk gekregen. Voor wat betreft wenselijk recht blijf ik van mening dat er veel argumenten zijn die pleiten voor het toestaan van differentiatie tussen ‘naturapolissen’ en ‘restitutiepolissen’ bij rechtsbijstandverzekeringen. Als de klant maar weet wat hij koopt, en er robuuste kwaliteitswaarborgen en klachtmogelijkheden zijn voor de dienstverlening bij zowel advocatuur als rechtsbijstandverzekeraars, is concurrentie op dit punt m.i. beter dan monopolisering. De uitspraak van het HvJ maakt die differentiatie erg moeilijk.

Intussen kunnen we ons afvragen of de Richtlijn niet eens onder de loep genomen moet worden. Deze dateert namelijk van 1987 en ik vermoed dat de verschillende nationale markten voor rechtsbijstand inmiddels geheel veranderd zijn. Tijd om nog eens echt goed te kijken naar de ratio van de vrije advocaatkeuze bij rechtsbijstandverzekering?

Tot die tijd is de vraag hoe de uitspraak doorwerkt in de praktijk van rechtsbijstandverzekeraars. Ongetwijfeld zullen rechtsbijstandverzekeraars hun productvoorwaarden herijken. Maar wat merkt de klant daar van? De richtlijn bepaalt niets over een actieve informatieplicht. Niets zo makkelijk als rechten van verzekerden in algemene voorwaarden opbergen. Moet de rechtsbijstandverzekeraar voortaan niet actief informeren over het keuzerecht?

Overigens is de spanning tussen vrije advocaatkeuze en sturing door rechtsbijstandverzekeraars geen typisch Nederlands probleem. Ook in andere landen hebben verzekeraars alle belang bij efficiëntie en kwaliteitscontrole. Zo bereikte de strijd tussen advocaten en rechtsbijstandverzekeraars onlangs ook in Duitsland de hoogste rechter. Verzekeringsvoorwaarden die de klant een bepaalde advocaat aanbevelen en een financiële prikkel geven om te kiezen voor die advocaat zijn niet per definitie ontoelaatbaar. Zo besliste onlangs het Bundesgerichtshof (BGH 4 december 2013. IV ZR 215/12). Zou dat wel mogen van het HvJ… ?