The principle of consumer protection can be implemented not only within the framework of traditional substantive law, but also through the conflict of laws rules which can protect a specific category of consumers. The areas of application of conflict-of-law rules are precisely those cross-border relationships that the European legislator would like to encourage. Consequently, the Rome I Regulation on the applicable law to contractual obligations lays down specific rules applicable to consumer contracts[1], under which the consumer may not be deprived of the law of the country in which he has his habitual residence by choice of the applicable law. These favourable rules can be applied, if the business carries out his business activity in that country where the consumer has his or her habitual residence or the business activity is directed into this country. In determining the jurisdiction, the consumer is also in a fair position and, pursuant to Articles 17 to 19 of the revised Brussels Regulation, the consumer may bring legal proceedings and be sued in the courts of the place where the consumer is domiciled.[2]
The complex and sophisticated toolbox of consumer law is supposed to aim to protect not only the individual interests of consumers, but the collective interests of the consumer society as well, against the domestic and cross-border economic activities that violate them. All of the aforementioned acts of legislation, in the context of consumer contracts, is a direct and individual dispute between a consumer and a business, and in the absence of specific collusive or separate European legislation on a separate collective bargaining instrument, it is questionable in the proceedings initiated to enforce collective rights of consumers, the jurisdiction of the court of law and the law applicable to the proceedings.
The aim of the study is to examine, whether the for collective actions empowered enteties could refer to the favourable rules of the consumer or is there any other option to ensure a high level of consumer protection trough collective actions against cross border breach of consumer interest.
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In order to clarify the circumstances in the case of the application of the law on conflict of laws, it is indispensable to investigate domestic collective dispute resolution procedures (public interest, public and collective lawsuit, affiliated lawsuit and so on) focusing primarily on the recording and selection of private legal relationships that potentially resolve international conflicts. Collective dispute resolution systems can serve a number of objectives of legal policy, such as the promotion of access to justice[3], the reduction of costs[4], the efficiency of justice[5] and the improvement of the behaviors of economic operators.[6]
In the Hungarian law, more legal acts provide protection for the collective consumer interests, to a number of legitimate organizations. In general, such claims are enforced only by public bodies designated by the legislator or by other organizations for the protection of these interests and for the protection of specific rights[7]. Publiclitigation can be categorized by the authorized bodies, on the basis of an infringement, on the basis of legality, on the basis of the legal position to be brought in the case or on other grounds, but it can not be definitively determined exactly which legal authorization conferring a right to initiate is of public interest.[8]
There is some uncertainty as not all sectoral legislation categorically states that the power to initiate matters is in the public interest.[9] Nevertheless, the range of public interest claims that must be taken into account in the regulation of cross-border dispute resolution can be defined. Since the legal legitimacy in case of public interest is not based on substantive law but on a separate statutory mandate, it is therefore possible to determine, by virtue of the content of the law granting the right of initiation, which objects of public interest may constitute a private law case of conflict. The focus of our investigation is on forms of public interest claims aimed at protecting consumers' interests directly or indirectly. Legislative mandate can be found in several places in the Hungarian legal system.
The authorizations that justify the application of a public interest in disputes relating to a contract are, as a matter of principle, can be found in the Hungarian Civil Code (Ptk). As far as the types are concerned, it must be noted that there are six types of public interest actions: litigation concerning personal status (second and fourth books], violation of personality rights in the public interest [Art. 2:54. § (4)-(5)], a contract in the public interest [Art. 6:88. (4)], unfair terms and conditions of contract that become part of a consumer contract [6:105 (1) (a)], in a contract between undertakings and in an unfair term in a contract concluded by a contracting authority with a non-contracting authority [Art. 6:106 § (1)] designation of a body fulfilling a public interest commitment [Art. 6:590 § (1)].
According to Section 6:105 of the Civil Code, the public prosecutor, the minister, the autonomous state administration body, the head of the govern-
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ment, the head of the central office, the head of the capital and county government office, an association for the representation of consumers 'interests in the economic and professional chamber or an interest representation organization and its consumer interests protected by law and any Member State of the European Economic Area may bring an action in the public interest for the protection of consumers' interests.
Issues such as the above mentioned ones in connection with public interest claims that may be filed against unlawful activities against consumers may also arise in the Consumer Protection Act[10], the Competition Act[11] and Law on the Central Bank[12] (MNB Act). According to the CLV Act of 1997 on Consumer Protection, (hereinafter referred to as Act on Consumer Protection) may be initiated by the public prosecutor's office and by the associations representing the interests of consumers if the lawful conduct of the undertaking affects a wide range of consumers which are not known but which can be determined on the basis of the circumstances of the infringement or a significant disadvantage and the proceedings fall within the jurisdiction of the court.
In view of the widespread availability of services available to non-frontier Internet users, this margin of interest is to be considered with particular weight. A right of action exists where the offending conduct of an undertaking affects a wide range of consumers which can be determined by the circumstances of the infringement. The scope of illegal activities can also be very diverse, which is basically a violation of consumer rights on the part of the business and is the subject of litigation. This may be product distribution, service delivery, finance or utility service, commercial communication, advertising, etc. Activity may be behavioral behavior (eg selling unsafe goods, publishing unlawful advertising, etc.), or omission (eg failure to indicate information elements relevant to consumer choice). The activity is always determined by the content of the legal protection provision, depending on the prohibition or the prescriptive type.
For example, an online company operating an online store has a registered office outside of Hungary and is pursuing a lawful activity (continuous misleading practices, illegal[13] / unfair contract terms) to Hungary, where consumer interests are violated. An organization authorized to bring an action of public interest may, in the case of an offense by the Act on Consumer Protection or the unfairness of contractual terms by the Civil Code, invoke an offense against a lawsuit of the public interest, it is in its primary interest to come before a domestic forum and to base its claim on domestic law. In the event that, under the general rules of jurisdiction, an action of public interest should be brought before a court having jurisdiction in the defendant's resident country, the institution of collective bargaining, in particular cross-border legal relationships, would be completely insignificant. Solving this problem is possible by weighing possible options, excluding them.
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From a purely theoretical point of view, it is interesting to examine whether it is possible to refer to Article 6 of the Rome I Regulation and to Article 18 of the revised Brussels I Regulation in order to establish a more applicable law and jurisdiction in the case of public interest. Answering the question requires a twotier rating.
On the one hand, can we consider the mass consumer demands and claims of the collective bargaining forms to be a contractual obligation in civil and commercial matters, in which we must look for the applicable conflict-of-law norm in Rome I. On the other hand, the collective nature of the claims and the numerous abstract and more individual consumer demand that they have shown make it possible, nevertheless, to apply the more favorable rules applicable to consumer contracts in those cases. As regards the scope of Rome I Regulation and the law applicable to non-contractual obligations (hereinafter Rome II)[14], it must be emphasized that the notion of "contractual obligation" and "noncontractual obligations" should be interpreted separately, in particular in the light of the system and objectives of those Regulations.
In accordance with preamble Nr 7 of both Reguations, it is necessary to take into account not only the objectives of this Regulation but also the coherent application of the former Brussels I Regulation, Article 5 of which, inter alia, distinguishes between the contract or the contractual claim and the unlawful tort, an act of a specific nature or a case relating to a claim arising out of such an act. The extension of the special rules of consumer contracts (Article 6 of Rome I) to organizations acting on behalf of a wide range of consumers was rejected by the European Court of Justice on a case-by-case basis.
According to the case-law of the Vorarlberger Gebietskrankenkasse and WGV-Schwabische Allgemeine Versicherungs AG, on 10 March 2006. C-347/08[15] road accident occurred on a German motorway, covered by a motor vehicle insured by Mr Gaukel, a German motor vehicle insurance company, WGV-SAV on the other hand, D. Kerti, the leader of the other vehicle. As a result of the collision, D. Kerti had a spinal cord tendon in the neck and therefore had to undergo various medical treatments. As a social insurance agency, KGD of VGKK, who had a permanent residence in Bludenz (Austria), had been living in Ubstadt-Weiher (Germany) since then. D. on the basis of Kerti's statutory assignment, VGKK requested WGV-SAV to pay the costs of the insured person. According to VGKK, the sole liability of the accident was the insurer of WGV-SAV. Since no payment was made, VGKK filed a claim for reimbursement against WGV-SAV against the Bezirksgericht Dornbirn (Austria). WGV-SAV contested the action and raised the referral of a court of law. On the one hand, it argued that those rights were in their origin D. Kerti's rights, who resided in Germany at the time of the application. Secondly,
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the dispute arises between two equal partners, so that the applicant can not be subject to the protection afforded by Regulation No 44/2001. as ECJ explains its reasoning in this case. The Brussels I Regulation interpreted the scope of the rules of jurisdiction conferred on insured persons by the insured person so that a social insurance body acting as an assignee on behalf of the insured can no longer be regarded as a weaker party than the defendant and can not therefore rely on Article 9 (1) (b) and 11 (2) in order to bring an action before the courts of the Member State in which he is established, against an insurance undertaking established in another Member State who is allegedly responsible for the accident.[16]
On the other hand, a legal assignee of a directly injured party who is itself a weaker party can benefit from the special rules of jurisdiction of the abovementioned provisions[17]
This position has consistently been consistently represented by ECJ, in a way, in the name of a large number of consumers, but not in the public interest, thus, a party who does not have a position in the position of protecting consumers of a similar nature could hardly rely on this basis on the favorable rules of conflict of laws and jurisdictional rules. This would be counter-productive for pertinence or an affiliate, which also wants to combine multiple claims, but individual consumer demands appear individually, so there would be no obstacle to referring to those legislation.
The possible solutions must be sought in the regulation Rome II on non-contractual obligations. If collective protection of consumer interest claims can not be conceived by the international private law rules applicable to contractual obligations under the law of the consumer's habitual residence, we must look at extra solutions. The ECJ. has repeatedly narrowed down the search for the appropriate reference rule to the field of non-contractual obligations.
According to Article 7 (2) of the Brussels Regulation[18], a person resident in a Member State may be sued in another Member State in matters relating to tort, delict or quasidelict, in the courts for the place where the harmful event occurred or may occur.
The prerequisite for applying the above section to the above-mentioned problem is the interpretation of the place of occurrence of the harmful event and the corresponding qualification. ECJ is concerned with the interpretation of the content of the concept of "the occurrence of a loss event in cases C133 / 11. Folien Fischer AG, paragraph 39, and C-523/10. s. Wintersteiger, paragraph 19, stated that the term 'place where the damage occurred or occurs' in paragraph 5 of Article 3 of the Regulation (former Brussels I Regulation) includes both the place where the damage occurred and the place where the event giving rise to the dam-
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age occurred and therefore, depending on the applicant's choice, in one of the courts of each other. "
In the Judgement of the case C-167/00 Verein für Konsumenten information v Karl Heinz Henkel[19], the EuB. has interpreted for the purposes of the applicability of the otherwise identical provisions of the Brussels Convention preceding the Brussels I Regulation, the concept of unlawful tort. In the case of the main proceedings, an Austrian consumer protection organization brought an action of public interest (Verbandsklage) against a company established in Munich. According to the applicant, the contractual terms and conditions of the defendant undertaking contained unfair clauses by the Austrian law, which had been brought into an Austrian court for an injunction. In defining the jurisdiction of the court (also in the assessment of the defendant's appeal), Article 5 (1) and (3) of the Brussels Convention (which corresponds to the rules currently in force) must be interpreted as meaning that the matter in question contractual or contractual claim, or a delict or quasi delict. In the case before the ECJ, the court has also exhaustively assessed the provisions of Article 7 of Directive 93/13 /EEC on unfair terms in consumer contracts, which provides that Member States are to ensure that adequate and effective means exist to ensure that, to put an end to unfair terms in the contracts of sellers or service providers with consumers.
It was considered as well that an organization entitled to bring an action of public interest, albeit subject to the unfairness of the terms used in individual contracts, is not the subject of the contract. It was also argued that the Brussels Convention and not the then Brussels I Regulation, which was adopted at that time, were applicable, but in view of the slight modification of the said sections (more precisely the clarification), there is no reason to diverge from the two laws.
Finally, ECJ argued that a proceeding initiated by a consumer protection organization against the unfairness of unfair terms in the general terms and conditions of consumer contracts could be relied on in the context of Article 5 (3) of the Convention, in order to establish the jurisdiction of the Court of Justice and thus the defendant's allegedly infringing activity as under the Brussels Convention, an act of unlawful act or a related act can be considered.
Therefore, there is no proper reference to the law applicable to contractual relations, given that the body authorized to initiate the contract is not a contractor or a weaker partner. In the light of the foregoing, the procedures for injunction laid down in the Directive 22/2009[20] shall be considered refers to the non contractual relations arising from unlawfull delict within the scope of the Rome II Chapter II. The general rule of the Rome II. Regulation shall apply the lex loci damni principle of
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Article 4 (1). Article 4 (3) may be exempted from the application of the basic rule as an 'escape clause' in relation to Article 4 (1) and (2), where it is clear from the circumstances of the case that the unlawful act is manifestly more closely connected to another country. The Article 6 contains specific rules that specify the basic rule and define the non-contractual obligation arising from an unfair competition act as the law applicable to the law of the country in which the competitive conditions or the collective interests of consumers are or may be harmed.
Based on the opinion of the Advocate General in the procedure C-191/15 between Verein für Konsumenten information (VKI) and Amazon EU Sarl. we have to consider that the scope of Article 6 (1) of the Rome II Regulation extends to any act which is likely to alter relations between the participants on a market, whether between competitors or in respect of consumers collectively. According to that autonomous definition of 'unfair competition' within the meaning of that provision, that concept covers the use of unfair terms inserted into general terms and conditions, in so far as this is likely to affect the collective interests of consumers as a category and, therefore, to influence the conditions of competition on the market.[21]
Consequently in case of procedures for injunctions, the country - where the consumers' collective interest are harmed in the light of Article 6 (1) of the Rome II Regulation, - is that one, where those consumer are domiciled, whose are targeted by the undertakings commercial activity and whose interest are represented by a consumer protection organisation in the procedure.
In the case, the ECJ interpreted the lawsuit concerning the unfairness of the terms used in the general contract terms of Amazon, responding to the questions raised by the inquiry, it dispersed the doubts of the judicatur. In its decision the ECJ stresses, however, the law applicable to the examination of the unfairness of terms in consumer contracts which are the subject of an action for an injunction must be determined independently in accordance with the nature of those terms. Thus, where the action for an injunction aims to prevent such terms from being included in consumer contracts in order to create contractual obligations, the law applicable to the assessment of the terms must be determined in accordance with the Rome I Regulation.[22]
On behalf of the Ministry of Social Affairs, the Austrian consumer association VKI has been conducting collective proceedings (Verbandsklage) against a various clauses (including the choice of law clause in favor of German law) in the trust agreements of TVP Treuhand-und Verwaltungsgesellschaft für Publikumsfonds mbH & Co. KG, based in Hamburg. TVP is a 100% subsidiary of the German MPC Group, which structures and sells closed funds. As a trustee, it manages the holdings of Austrian
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investors in several real estate and ship funds of the MPC.
In the collective action procedure, it was disputed whether the choice of law clause in favor of German law is acceptable and whether this should be checked under German or Austrian law.[23] The Supreme Court (Oberster Gerichtshof) asked the ECJ for a preliminary ruling on these questions.
The judgement also contains essential clarifications on the scope and scope of consumer protection under international private law. One of the main results of the judgement is to laid down the frames of clarification between contractual statute and company statute. The issues relating to company law are excluded from the scope of the Rome I Regulation (Art. 1 Par. 2.). The TVP had argued that the company and trust agreements are so closely interlinked that the exclusion also includes the trust agreements, so that the applicable law is determined according to the company statute according to §§ 10, 12 IPRG (Act on intarnational private law) and the Rome I Regulation is not applicable.
The ECJ made it clear that the exclusion from the scope of the Rome I Regulation only affects the organizational aspects of companies. It is not enough for a contract to be linked to corporate law issues. The trust agreements and the admissibility of the clauses contained therein, which regulate the contractual relationships between the trustor and the trustee (e.g. scope of TVP's liability, place of performance, choice of law) are rather subject to the Rome I Regulation as contractual legal relationships.
The consumer protection provisions according to Art 6. Rome I Regulation are not applicable to service contracts that are provided exclusively in a country other than the state of the consumer's habitual residence. According to the ECJ's interpretation, the trust agreement is an activity in the administration of the property entrusted in trust for a fee, and therefore a service agreement as defined in the provision.
The exception is due to the fact, that the consumer cannot reasonably expect the law of his home country to apply to service contracts which are provided exclusively out of his country of habitual residence. According to consumer protection purposes, the place of performance is not to be determined on the basis of the contractual agreement; Rather, it is necessary to examine whether the nature of the agreed services already means that they can only be provided in their entirety outside the country of habitual residence.
If the service is physically provided in a country other than the one in which the consumer can benefit from it, the exclusion is only applicable if the consumer does not have the opportunity to use it in his country of habitual residence and to go abroad for this purpose. If the service is merely provided remotely, the exclusion according to Art 6 (4) lit b Rome I Regulation is not applicable.
In the present case, where the amounts were paid into TVP trust
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accounts in Austria, the dividend payments were transferred to Austrian accounts, reports about the trust administration were sent to consumers in Austria and consumers could access information via a website and exercise their voting rights, the services were provided remotely in the consumer's country of habitual residence according to the ECJ decision; so the exclusion would not apply in this case.
According to Art. 6 para. 1 Rome I Regulation (Art. 5 para. 3), Austrian law is generally applicable to the trust agreements with Austrian consumers. A choice of law clause is admissible; According to Art. 3 Paragraph 1 unfair contract terms Directive (93/13 /EEC), however, this only applies if the clause informs the consumer that the mandatory provisions of his domestic law remain applicable according to Art. 6 Paragraph 2 Rome I Regulation.
In the present decision, the ECJ extends this case, already developed in the case VKI / Amazon (C-191/15), to all contracts, regardless of whether they are made electronically, as in the case in Amazon.
As we can consider, without proper and certain nominated international private law rules for crossborder collective lawsuits, without unified European collective redress instrument for consumers, the ECJ has developed a well applicable set of tools for those problem. The judgment in case C-191/15 against Amazon was certainly welcome as it gives more clarity on several important issues relating to three different areas of law, which have a direct impact on many fields of consumer protection linked fields, and has done a step forward on clarifying the application of Rome I and Rome II regulations to activities undertaken by the participants of the cross border market.
On the basis of all this, if we consider the damage to consumer interests as damage, which is protected by the collective instruments of dispute resolution, then Hungarian law can be found to be applicable to a public interest claim in the interests of domestic consumers. It should be noted, however, that if a lawsuit of an undertaking is carried out not only in Hungary but also in other countries, the decision in Hungary to terminate the infringement would merely be restricted to Hungary. ■
JEGYZETEK
* The study was prepared as part of the program between the Ministry of Justice and the University of Debrecen Faculty of Law to improve the quality of legal education.
[1] Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations OJ L 177, 4.7.2008, p. 6-16
[2] Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters OJ L 351, 20.12.2012, p. 1-32
[3] Gibbons, S.M.C.: Group Litigation, Class actions and Collective Redress: An Anniversary Reappraisal of Lord Woolf's Three Objectives. In: (Dwyer, D. ed.): The Civil Procedure Rules Ten Years On. Oxford-New York, 2009., 129.
[4] Andrews, Neil: English Civil Procedure. Fundamentals of the New Civil Justice System Oxford-New York, 2003., 974.
[5] Udvary Sándor: The Advantages and Disadvantages of Class Action. Iustum Aequum Salutare IX. 2013.1., 68.
[6] Regarding to the Hungarian collective redress mechanisms see more: Harsági Viktória: A kollektív igényérvényesítés fejlesztési lehetőségei. Acta Univ. Sapientiae, Legal Studies 4, 2 2015., 218., Harsági Viktória: A modellválasztás dilemmái a kollektív igényérvényesítés hazai szabályozásánál. Eljárásjogi Szemle 2016/1. 24.
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[7] Kecskés László - Wallacher Lajos: A csoportos jogérvényesítés lehetséges formái választottbíráskodás keretében a magyar jogban In: (Kecskés László - Lukács Józsefné ed.): Választottbírók Könyve. HVG-ORAC Budapest, 2012, 283.
[8] Szikora Veronika - Jagusztin Tamás: Helyzetkép a társult perlésről - Európában és azon túl. Európai jog. 17. évf. 5. sz. 2017. 19-25.
[9] Jójárt Eszter: A közérdekből indított per In: (Petrik Ferenc ed.): Polgári eljárásjog Kommentár a gyakorlat számára, Harmadik kiadás. HVG-ORAC, Budapest 2017. 1209.; Harsági Viktória: A közérdekből indított per In: (Varga István ed.): A Polgári Perrendtartás és a kapcsolódó jogszabályok kommentárja II/III. HVG-ORAC, Budapest 2018. 2005.
[10] Act CLV of 1997 on consumer protection (Fgytv) 39 Art.
[12] Act LVIII of 2001 on the Hungarian National Bank (Jegybanktv)
[13] Act XLVII of 2008 on the Prohibition of Unfair Business-to-Consumer Commercial Practices (Fttv)
[14] Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) OJ L 199, 31.7.2007, p. 40-49
[15] Judgment of the Court (Third Chamber) of 17 September 2009. Vorarlberger Gebietskrankenkasse v WGV-Schwäbische Allgemeine Versicherungs AG. Case C-347/08. Reports of Cases 2009 I-08661
[16] C-167/00 43.Section
[17] C-167/00 44.section
[18] Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters OJ L 351, 20.12.2012, p. 1-32
[19] Judgment of the Court (Sixth Chamber) of 1 October 2002. Verein für Konsumenteninformation v Karl Heinz Henkel. Reference for a preliminary ruling: Oberster Gerichtshof - Austria. Case C-167/00. Reports of Cases 2002 I-08111
[20] Directive 2009/22/EC of the European Parliament and of the Council of 23 April 2009 on injunctions for the protection of consumers' interests (Codified version) Text with EEA relevance OJ L 110, 1.5.2009, p. 30-36
[21] Opinion of Advocate General Saugmands-gaard delivered on 2 June 2016. Case C191/15 Verein für Konsumenteninformation v Amazon EU Särl ECLI:EU:C:2016:388, 73.
[22] Judgment of the Court (Third Chamber) of 28 July 2016. Verein für Konsumenteninformation v Amazon EU Särl Request for a preliminary ruling from the Oberster Gerichtshof Case C-191/15, ECLI:EU:C:2016:612, 49.
[23] Judgement of the Court (First Chamber) of 3 October 2019. Verein für Konsumenteninformation v TVP Treuhand- und Verwaltungsgesellschaft für Publikumsfonds mbH & Co KG, Case C272/18, ECLI:EU:C:2019:827
Lábjegyzetek:
[1] The Author is senior lecturer, University of Debrecen Faculty of Law.
Visszaugrás
