Injunction and Skimming Off- Divided or United?

Thirdly, the action for injunction belongs to the acquis communautaire of European consumer law. The action for injunction may be regarded as a kind of minimum standard all Member States have to guarantee. In the author's understanding this comprises also the duty to grant consumer organizations standing. The Hungarian national consumer protection authority, acting as a plaintiff, did not merely want to obtain a declaration that the contested term was void as being unfair with regard to all consumers that had concluded a contract with the defendant telecommunications services provider, in effect linking the collective and the individual legal effects together. The Hungarian national consumer protection authority also claimed reimbursement of the sum which the defendant business had received as a consequence 'of the illegal invoicing of money order fees'. It therefore referred the following questions to the ECJ:

(1) May Article 6(1) of [the Directive] [...] be interpreted as meaning that an unfair contract term is not binding on any consumer where a body appointed by law and competent for that purpose seeks a declaration of the invalidity of that unfair term which has become part of a consumer contract on behalf of consumers in an action in the public interest (actio popularis)?

May Article 6(1) of that directive be interpreted, where an order which benefits consumers who are not party to the proceedings is made, or the application of an unfair standard contract term is prohibited, in an action in the public interest, as meaning that an unfair term which has become part of a consumer contract is not binding on all consumers also as regards the future, so that the court has to apply the consequences in law thereof of its own motion?

(2) May Article 3(1) of [the Directive], in conjunction with points and 2(d) of the annex applicable by virtue of Article 3(3) of that directive, be interpreted as meaning that, where a seller or supplier provides for a unilateral amendment of a contract term without explicitly describing the method by which prices vary or giving valid reasons in the contract, that contract term is unfair ipso jure?

Germany which was at the forefront of fighting for the Europeanization of the action for injunction needed more than 25 years of discussion before a political agreement could be reached to introduce a collective remedy for confiscating or 'skimming off' unlawful profits (Gewinnabschopfungsanspruch) in the law on unfair commercial practices. However, the outcome was a mere 'paper tiger', which did not even make it into the law on unfair contract terms and which has not to date produced any noteworthy results. Thus, the profit which resulted from the use of an unfair term remains with the businessman. Consumer organizations if they want to skim off illegal profits resulting from unfair terms end up in a deadlock.[1]

Hungary is not the only country with a collective redress scheme that provides for remedies beyond the stop-order mechanism enshrined in the action for injunction. Whereas the action for injunction can be found in Article 209/B of the Hungarian Civil Code, the claim for damages and of confiscating or 'skimming off' unlawful profits is regulated in Article 39(1) of the Hungarian law on consumer protection:

(1) The consumer protection authority, the non-governmental organisation for the protection of consumers' interests or the public prosecutor may bring proceedings against any party whose illegal activities affect a wide range of consumers or cause substantial disadvantage, in order to defend a wide range of consumers or eliminate substantial disadvantage. Such an action may also be brought even if the identity of the consumers adversely affected cannot be established.

The openness of this rule corresponds to its purpose. Article 39(1) does not state that the claimant organization is allowed to take the unlawfully acquired proceeds. One could also imagine a system whereby the proceeds do not accrue to the organization but according to which it can merely order the trader to pay back to the consumer directly. To a traditional Western European private lawyer it might induce beads of sweat, since it seems to be an exercise in political goal setting rather than a right to sue based on legal criteria. This rule paradigmatically reflects the openness of many legal rules, in the new Member States, but also in the older new Member States like Greece and Portugal.[2] The ECJ did not have to deal with the precise requirements of Article 39, however. The demand submitted by the defendant obviously aims at questioning the legality of a claim of confiscating unlawful profits, which goes beyond the explicitly cited requirements of Directive 93/13/EEC. The ECJ confirmed the leeway granted to the Member States in Article 8 of Directive 93/13/EEC, which codifies minimum harmonization (see recitals 39—10 of the Invitel case). More interesting is what AG Trstenjak says on the skimming-off procedure. I will come back to this issue later on.

  • [1] Cf. for example, the attempt of the Hamburg consumer organization,
  • [2] Cf. H-W Micklitz and A Stadler, Verbandsklage in der Informations- und Dienstleistungsgesellschaft (Griechenland, 2005) 169. The reason might be that private law has a lesser influence in these countries on the shaping of remedies.
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