Doing Away with the Strict Separation
Both directives operate with large blanket clauses, which represent the heart of each directive. On the one hand, there are the non-binding terms, which contradict the principle of unfairness as laid down in Article 3 of Directive 93/13/EEC.
On the other hand we have the unfair commercial practices. The scope of Directive 2005/29/EC is quite wide. The interpretation of unfair commercial practices developed by the ECJ in the framework of the VTB case law includes contract clauses, if the unfairness of a commercial practice is caused in particular by the use of unfair terms (AG Trstenjak in Perenicova, recital 91).The ECJ followed this argumentation without taking over the arguments. Thus Directive 2005/29/ EC mutates into a catch-all element of any unfair commercial practice, be it advertising, sales promotion or standard contract terms. Nordic countries might perceive this finding as a late confirmation of their consumer protection policy applied ever since. However, this wide conception does not automatically improve the situation of the consumer, since initially the AG and the ECJ soften the strict separation of law on unfair terms and the law on unfair commercial practices.
According to Art. 3(2) of Directive 2005/29/EC is 'without prejudice to contract law and, in particular, to the rules on the validity, formation or effect of a contract' (ECJ recital 44 of Perenicova). But the ECJ has also emphasized that 'a finding that a commercial practice is unfair is one element among others on which the competent court may base its assessment of the unfairness of contractual terms under Article 4(1) of Directive 93/13' (recital 43).
Provided There Is an Unfair Commercial Practice and the Scope of Application of the Unfair Terms Directive Is Opened Up
The consequence is that the individual consumer can be helped only if the unfair commercial practice itself can be referred to, to evaluate the unfairness of a contract clause. In Perenicova the AG and then the ECJ worked out precisely how the interaction should appear. First of all, it has to be determined that the incorrect information on the annual percentage rate represents an unfair or misleading commercial practice in terms of Directive 2005/29/EC. The crucial question for the consumer is whether or not and if so, how the incorrect information affects the review of the contract term (Inhaltskontrolle; substantive fairness test) required according to Directive 93/13/EEC. This depends on whether the scope of Directive 93/13/EEC is opened up for the evaluation of unfair or misleading commercial practices. A coherent interpretation of both blanket clauses would come close to an approximation of the assessment criteria. The AG and the ECJ find themselves on new legal ground.
The AG and the ECJ overcome the dividing line between the two fields of law with a simple trick. The control of unfair terms also applies where the author drafted the clause with a view to its possible use (AG's conclusions Invitel of 6.12.2011 recital 65, ECJ Invitel recital 37). 'It is therefore not necessary for general use to be actually or certainly planned' (AG recital 65, ECJ recital 37 with reference to Commission v Italy). By this manoeuvre the control of unfair terms is shifted to an earlier stage of the examination, thus paving the way for the inclusion of commercial acts, as far as the latter meet the formal requirements of being treated as 'contract terms'.
Unfair Commercial Practices as an Indication of Unfair Contract Terms
Clauses for calculating interest rates are to be measured against the principle of transparency, laid down in Article 5 of Directive 93/13/EC.Whereas the AG finds herself constrained to a strict analysis in her conclusions concerning the Perenicova case (recital 117), the ECJ does not even dedicate a single line to this question. It focuses exclusively on Article 4(1) of Directive 93/13/EEC, according to which it is possible to include a commercial practice deemed to be unfair in the assessment of the unfairness of the contract terms as 'one element among others' (ECJ, Perenicova, recital 43). The AG emphasizes (recital 124) that 'Article 4(1) of Directive 93/13/EEC can be regarded as something of a gateway for assessments under the legislation on fair trading practices.' In contrast to the ECJ, she wants to pay particular attention to legislative assessments by the legislature (recital 123).
What are the consequences? Is it possible to transfer the decision's evaluation to other cases of a similar nature? Can contract clauses be effective, even if they have to be classified as unfair or misleading commercial practices? An important distinction has to be drawn between the potential impact of unfair commercial practices on individual contracts, in which the validity of one term might depend on a coherent interpretation of the two areas of the law and the potential impact of unfair commercial practices on collective actions. Article 4(1) of Directive 93/13/ EEC seems to be the dominant understanding, concerning the control of unfair terms in individual litigation only. The ECJ had not yet to decide on the applicability
However, it insisted on restricting the scope of the contra proferentem rule to individual litigation, without, however, seeing and discussing the problem of a consistent interpretation in individual and collective litigation. In light of the recognized tendency of the ECJ to develop a common approach on the two different fields of law, it might not be farfetched to assume that the ECJ might be ready to strive for consistency also in the rules governing the control of contract terms by individual or via collective actions, meaning in particular the reach and application of Article 4 of Directive 93/13/EEC. I have proposed to overcome the antinomies between individual concrete and collective abstract terms in merging the two into a concept of a general-concrete fairness test.
-  'A number of situations will serve to illustrate the close link between the two directives: as regards the circumstances in the main proceedings, for example, it is conceivable that the unfairness of a commercial practice consists in the very use in consumer contracts of unfair terms within the meaning of Directive 93/13. (43) The trader's use of such terms is likely to be seen as a misleading act, since false information is provided or the consumer is unclear as to the actual scale of the contractual rights and obligations, especially with regard to rights and obligations arising from the clauses which are unfair and so invalid for the consumer. A similar assessment is likely to be made of a situation in which the trader words vital terms in language which is not plain or intelligible in order to withhold essential information from the consumer. Conversely, it is also conceivable, however, that false and thus misleading information in a contractual term within the meaning of Directive 2005/29 is the very reason for its unfair nature. This is also the situation which the referring court clearly suspects in the main action and which will need to be examined in the following.'
-  B Dahl, Consumer Legislation in Denmark (Surrey: Van Nostrand Reinhold, 1981).
-  ECJ, Judgment of 24.1.2002, Case C-372/99, ECR 2002, I-819 recital 14.
-  I will refrain from discussing whether and to what extent interest rates form an integral part of the price and are therefore exempted from any form of control, at least in countries like Germany and the United Kingdom where courts have not been given the power to exercise control over so-called core terms of Article 4(1) to collective actions.
-  ECJ, 9 September 2004, C-70/03, Commission/Spain  ECR I-7999.
-  H-W Micklitz, N Reich and P Rott, Understanding EU Consumer Law, recital 3.20.