Luigi
Lonardo, PhD candidate, King's College London
Background
Are buyers of retail goods
"consumers" even when they do not claim this status? According to the
findings of the First Chamber of the Court of Justice in case
C-497/13 Faber
the answer is yes.- Purchasers are consumers, whether they know it or not,provided
they conclude the contract not for business or professional reasons.
The Court has ruled that a national
judge is required to investigate on its own motion whether, in relation to a
contract, the purchaser is a 'consumer'. Therefore, the protection of EU consumer
law applies independently from the party's reliance on this status. Moreover, if
a lack of conformity in a product becomes apparent within six months from the delivery,
this is presumed to have existed at the time of delivery. The conclusions
reached by the Court are in line with the high standard of consumer protection
in EU law and confirm the case law which tends to lighten the burden of proof
of the consumer. This should come as good news for millions of European
purchasers. However, the Court could have adopted a more nuanced approach that
would have led to a more balanced outcome.
The Court was asked to interpret Directive
1999/44 on consumer goods and related guarantees
("the Directive"). In particular, it was asked to interpret Article
5(2), which grants Member States freedom to provide that, in order to benefit
from his rights, the consumer must inform the seller of a lack of conformity of
the goods within two months from discovering it, and Article 5(3), which
provides that any such lack of conformity which becomes apparent within six
months of delivery of the goods shall be presumed to have existed at the time
of delivery - and the presumption can be rebutted.
The
facts of the case
In May 2008 Faber bought from Hazet
garage a second-hand car which, in September of the same year, caught fire and
was completely destroyed. In January 2009, Ms Faber informed by telephone the
seller’s garage that she was holding it liable. It is disputed if Faber had
informed Hazet garage of the accident before this date. The seller denied
liability.
Ms Faber therefore started proceedings
against Hazet garage. Two facts are noteworthy: Faber did not rely on her
consumer status, and at this stage a technical investigation to ascertain the
cause of the fire could not take place as the car had been scrapped in the
meantime. The Dutch court
rejected Faber's claims on the grounds that she only informed Hazet more than
three months after the accident – too late, under Dutch law (Article 7:23
Netherlands civil code).
The Gerechtshof (Regional Court of
Appeal) Arnhem-Leeuwarden, before which the dispute was brought on appeal,
decided to refer questions to the Court of Justice for a preliminary ruling.
The
questions referred and the judgment
Following the opinion
of Advocate General Sharpston, the Court dealt with the seven questions asked
by the referring court by dividing them into two sets:
1.
Can a national court examine by its own
motion whether a purchaser is a consumer?
2.
When and how should the consumer's duty
to inform the seller of a lack of conformity of the goods be exercised?
As a preliminary remark, it is noticed
that the Court expressed its views on the Directive even though the dispute in
the main proceeding was between private parties. It did so because national
Courts are required to interpret domestic law in the light and purpose of the "applicable
directive" (para 33). In the present case, the Dutch law was a direct
implementation of Directive 1999/44.
1.
A
court can inquire the consumer status ex
officio
In the contract at issue, the Dutch
judges were in doubt on the provisions applicable, because it was not known
whether it was concluded with a consumer. The Court ruled that the status of
consumer can be examined by the national court on its own motion even though
the party has not relied on that status (para 48). What's more, this status can
be declared by a court even in appeal proceedings where the purchaser had not
raised any complaint against the judgment of the court of first instance.
The Court considered that "in the absence of harmonisation of
procedural rules, the detailed procedural rules governing actions for
safeguarding an individual’s rights under EU law are a matter for the domestic
legal order of the Member States, provided, however, that they are no less
favourable than those governing similar domestic actions (principle of
equivalence) and do not make it in practice impossible or excessively difficult
to exercise the rights conferred on consumers by EU law (principle of
effectiveness)". It reasoned as follows.
On the principle of
equivalence (para 38): the ordinary task of judges is to assign a legal
classification to the situation brought before them. This, the Court argues, is
not in itself the exercise of a discretion, but simply the legal reasoning of a
judge. Since Dutch courts are required to classify matters of law and facts eg
according to procedural rules, the same should happen for the definitions of EU
law (para 39). The principle of
effectiveness would only need to be considered if there was no principle of
equivalence. However, the Court expresses its view on it (para 41). It refers
to the established principle that national law must ensure that it is not too
difficult for EU citizens to exercise the rights conferred on consumers by EU
law. This principle is justified, in the Court's view, "on the idea that
the consumer is in a weak position vis à
vis the seller or supplier".
2. Provisions on communications and
burden of proof of the consumer
The Court then analysed Article 5(3) of
the Directive: lack of conformity of a product is presumed when it becomes
apparent within six months of the delivery. The Court considered
that the system of liability established by the Directive is necessary because
it would be impossible for the consumer to prove that a lack of conformity
existed at the time of delivery (para 54). Hence, "[i]n view of the nature and importance of the public interest
underlying the protection which Article 5(3) of Directive 1999/44 confers on
consumers, that provision must be regarded (…) as a rule of public policy. It
follows that where, under its domestic legal system, it has a discretion as to
whether to apply such a rule of its own motion, the national court must of its
own motion apply any provision of its domestic law which transposes Article
5(3)" (para 56).
Furthermore, it is
asked what the purchaser has to prove when the lack of conformity is
communicated within two months. In light of the travaux préparatoires of the Directive, the provision that the
consumer must inform the seller of the lack of conformity ‘does not establish a
strict obligation to carry out a detailed inspection of the good’. Furthermore,
crucially, "[t]he consumer is
required to prove only that the lack of conformity exists. He is not required
to prove the cause of that lack of conformity or to establish that its origin
is attributable to the seller" (par 70).
Comments
·
Is
the consumer so weak?
Nowhere does the
Directive say that judges can establish on their own motion whether the
directive applies a case pending before them. The Court based its
decision to allow national judges to establish on their own motion the status
of consumer also on the principle of effectiveness. That is, the assumed
weakness of consumers (see para 59 of the AG opinion), as affirmed in the case
law on various consumer directives (Mostaza
Claro, Rampion and Gordard).
However, in Duarte Hueros AG Kokott
introduced a sensible distinction. One issue is the consumer at the stage
of bargaining: at this time he or she deserves protection. After the conclusion
of the contract, it is a different issue: here there is no particular reason to
consider the consumer as the weaker party anymore. This view is of particular
interest because it is extremely equilibrated. Possibly, since it is more
nuanced, it is even to be preferred to the reasoning of the court. It would
avoid oversimplifying the position of the consumer and would lead to different
conclusions.
AG Sharpston, who
shares Kokott's view that "the two sets of consumers are not in the same
position" (para 60), argues
nonetheless that the consumer is weaker even after the contract is concluded
because there is asymmetry of information. In other words, it is easier for the
seller to prove the cause of a lack of conformity. Therefore a rule of public
policy that creates the obligation to investigate is justified. Moreover, she
adds, the rationale also applies any time there is the need to protect a weaker
party (eg in case of workers). The Court did address this possible distinction,
but limited itself to acknowledging that "In a field in which, in a number
of Member States, the rules of procedure allow individuals to represent
themselves before the courts, there would be a real risk that the consumer,
particularly because of a lack of awareness, would not be able to satisfy"
the requirements of claiming consumer status. While this argument may be appealing,
it is a policy choice that is rather sweeping: first, not in all Member States
it is possible for individuals to represent themselves in matter of consumer
law. Second, if this is the ratio, why is there no difference when the
individual is actually assisted by a lawyer, as the referring Dutch court had
expressly asked?
·
A
high standard of consumer protection is ensured because the consumer only has
to prove the existence of the lack of conformity
The consumer has very little to prove
indeed: only the existence of a lack of conformity, not the causes, nor that
such a lack is imputable to the seller. Of course, the presumption can be
rebutted but this means that the onus is on the seller/supplier. While the
Court assumed that the European Union legislator decided to apportion the
burden of proof in these terms for solid reasons, it is questionable whether
the continuous extensive interpretation given by the CJEU will preserve the
fair apportionment provided for by the consumer Directives. Indeed in a recent
judgment,
Boston Scientific, the Court had already reached a
similar conclusion of presumption of defect.
Even though that case was about defective products (not any general lack of
conformity) and more specifically about medical devices implantable in the
human body, the outcome is the same. The high standard of protection is
therefore ensured – possibly at the expense of the sellers/producers- by
lightening the burden of proof for the consumer. The risk of the conveyance,
then, is on the producer or seller/supplier[1].
A further element is worth noting: some
European Union legal systems foresee the opportunity of a technical report to
ascertain, for example, the causes of defects or lack of conformity in products.
If the consumer does not need to prove these, however there is no need to
summon an expert- ie to pay for its work. Legal action will therefore be
smoother and easier to start.
Conclusion
The Decision reaffirms the high level of
consumer protection in EU Law which the Court has expressed in its recent case
law. In particular, the
Court has found that a court is required to investigate on its own motion
whether a purchases is a consumer, independently from him or her relying on
this status. Therefore EU consumer law automatically applies to the buyer who
purchases goods for private use – on the ground that the purchaser is a
"weak" party, worthy of protection.. As explained in Faber, for
example, these rights imply that a consumer should simply inform the seller of
the lack of conformity of a product within two months of its discovery- the
communication needs not to be burdensome for the consumer. Moreover, as far as
the burden of proof, the consumer is only required to prove the existence of
the lack of conformity of a good that is has purchased, if this lack appears
within six months from delivery.
Photo credit: Daily Telegraph
Barnard & Peers: chapter 23
[1] See Maria Castellaneta, "The
company shall pay for the damages occurred within 6 months", Il Sole 24 Ore,
Friday 5th June, 46.
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