Extension of Res Judicata to Third Parties and/or to the Term?

It does not take much imagination to picture that the aforementioned section played a crucial role in the deliberations of the court. The AG focuses on the effect utile of the directive which requires an extension of res judicata (Rechtskrafterstreckung). Whereas the AG explicitly excludes third parties not involved in the proceedings, since their right to be heard has not been respected, the ECJ does not comment on this question despite referring directly to the AG (recital 39), although it limits the effects 'on those who have concluded with that seller or supplier a contract'.

The submission of the Hungarian court does not require that a distinction be drawn between the two forms of extension of res judicata, as the relevant Hungarian law does not include third parties. The addressee of the extension of res judicata is the same user of the term, not the term itself declared as illegal, even if the incriminated contract is applied literally identical by another businessman.

However, the ECJ's formulation in recital 40 leaves more leeway (open wording) and would make it theoretically possible to extend the effet utile to the term, regardless of the original user, e.g., if a Member State wants to use some sort of system of ex parte court order by which each and every trader has to abstain from using the banned terms on penalty of fines or other sanctions, that seems to be up to that Member State. It is hardly comprehensible why a user, who applies the same incriminated term, should be allowed to refer to a 'legitimate interest'. The reading of the AG might be in line with the Member States' laws where every extension of res judicata is met with suspicion. It has to be made equally clear that the distinction which the AG so forcefully underlines stands in the way of the overall development of a common approach to the two fields of law. It still reflects elements of traditional private law thinking, where not the practice but the contract is regarded as the key element in deciding on the potential effects of an unfair term.

The argument could be made that context matters and that a term may be valid under certain circumstances and invalid under others. This argument goes to the heart of the distinction between blacklisted terms and those whose validity has to be assessed under the general fairness test. I would argue that blacklisted terms serve to clean the market and that there is no room for taking particular circumstances into account, similar to the interpretation of the black list in the Unfair Commercial Practices directive.

The Extension of Res Judicata as a Minimum Requirement for Member States

Are Member States now obliged to introduce erga omnes effect to actions for injunctions declaring a contract term to be unfair or are they only entitled to do so as the Directive lays down minimum requirements only? Let us recall what AG Trstenjak said:

They [these unfair terms] can therefore be combated effectively only if the decision of the national court finding a particular term to be unfair is accorded fairly wide applicability (51).

Consequently, the national provision in question meets the requirement of 'effectiveness' set out in Article 7(2) of Directive 93/13(58).

The ECJ argues in a similar direction (recitals 37, 39, 38 reprinted above):

In this respect, it should be added that the deterrent nature and dissuasive purpose of the measures to be adopted, together with their independence of any particular dispute, mean that such actions may be brought even though the terms which it is sought to have prohibited have not been used in specific contracts (see Commission v Italy, paragraph 15) (37).

[...] It should be noted that, as the Advocate General pointed out in points 57 to 61 of her Opinion, national legislation such as that referred to in the present paragraph satisfies the requirements of Article 6(1), read in conjunction with Article 7(1) and (2), of the Directive (39).

The opinion of the AG and the ECJ judgment read together suggest that the Member States are under an obligation to extend res judicata beyond the contracting parties. Both seem to start from the premise that adequate and effective protection under Article 7 cannot be limited to the parties to the dispute but must include all those who have concluded a consumer contract with the same supplier. A certain uncertainty results from the operative provisions of the judgment. Both the AG and the ECJ formulate: 'Article 6(1) of Directive 93/13, read in conjunction with Article 7(1) and (2) thereof, must be interpreted as meaning that: - it does not preclude the declaration of invalidity of an unfair term included in the standard terms of consumer contracts in an action for an injunction.' This formula does not find any equivalent in the judgment, where the minimum character of the Directive and the potential link to the extension of res judicata is not discussed. One might therefore wonder whether further clarification is needed in order to decide the mandatory character of the extension to third parties. Even if the Member States are obliged to introduce an extension of res judicata, they have substantial leeway in how to shape the extension. This goes together with the principle of procedural autonomy as stressed by the AG (recital 38).

< Prev   CONTENTS   Next >