Case C‑34/13, Kušionová

Right to accommodation fundamental right which must be taken into consideration  when implementing UTCC Directive

>> The Unfair Terms in Consumer Contracts Directive (UTCC- Directive 93/13) has harmonised the laws, regulations and administrative provisions of the Member States relating to unfair terms in contracts concluded between a seller or supplier and a consumer. 

Mrs Kušionová had concluded a consumer credit agreement with SMART Capital for an amount of €10 000. The loan was secured by a charge on the family home. Subsequently, Mrs Kušionová brought an action for annulment of the credit agreement and the charge agreement against SMART Capital, claiming that the contractual terms binding her to that undertaking were unfair.

The referring court sought to establish whether, in the light of Articles 38 and 47 of the Charter, Directive 93/13 must be interpreted as precluding national legislation which allowed the recovery of a debt that was based on potentially unfair contract terms by the extrajudicial enforcement of a charge on immovable property provided as security by the consumer. 

The Court first of all stressed that Article 38 of the Charter provides that European Union policies must ensure a high level of consumer protection. Moreover, Article 47 of the Charter concerned
 the right to an effective judicial remedy. The Court held that hose mandatory requirements were applicable to the implementation of Directive 93/13. The  Court reiterated the system of protection introduced by Directive 93/13 was based on the idea that the consumer was in a weak position vis-à-vis the seller or supplier, as regards both his bargaining power and his level of knowledge  (see judgments in  Pohotovosť, C‑470/12, EU:C:2014:101 and Sánchez Morcillo and Abril García, C‑169/14, EU:C:2014:2099, para 22).).

 The Court noted that Directive 93/13 was silent as to enforcement of charges. However, it is settled case-law that, in the absence of harmonisation of national mechanisms for enforcement under EU law, it was for the national legal order of each Member State to establish such rules, in accordance with the principles of procedural autonomy, provided, however, that those rules were not less favourable than those governing similar domestic situations (principle of equivalence) and that they did not make it excessively difficult or impossible in practice to exercise the rights conferred by EU law (principle of effectiveness) (see, inter alia, Joined Cases C-222/05 to C-225/05, van de Weerd, on which I wrote this post).

The Court held that as regards the principle of equivalence, it did not have before it any evidence which might raise doubts as to the compliance of the legislation at issue in the main proceedings with that principle.

In previous cases, the Court has already held that every case in which the question arises as to whether a national procedural provision makes the application of EU law impossible or excessively difficult must be analysed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national bodies (see inter alia, Asociación de Consumidores Independientes de Castilla y León, C‑413/12, EU:C:2013:800, para. 34). Moreover, it has held that the specific characteristics of court proceedings which take place under national law between sellers or suppliers and consumers cannot constitute a factor which is liable to affect the legal protection from which consumers must benefit under the provisions of Directive 93/13 (see, to that effect, judgments in Banco Español de Crédito, C‑618/10, EU:C:2012:349, para. 55).

In the present case, the Court thus held that is was necessary to determine, in a situation such as that in the main proceedings, to what extent it was impossible in practice or excessively difficult to apply the protection conferred by that directive.  The Court held that the loss of a family home was not only such as to seriously undermine consumer rights, but it also placed the family of the consumer concerned in a particularly vulnerable position (see, to that effect, the Order of the President of the Court in Sánchez Morcillo and Abril García, EU:C:2014:1388, para. 11).

The Court pointed out that the right to accommodation was a fundamental right guaranteed under Article 7 of the Charter that the referring court must take into consideration when implementing Directive 93/13. The Court held that  the fact that it was possible for the competent national court to adopt any interim measure would suggest that adequate and effective means existed to prevent the continued use of unfair terms, which was a matter for the referring court to determine.
The Court thus found that Directive 93/13 must be interpreted as not precluding national legislation which allowed the recovery of a debt that was based on potentially unfair contractual terms by the extrajudicial enforcement of a charge on immovable property provided as security by the consumer, in so far as that legislation did not make it excessively difficult or impossible in practice to protect the rights conferred on consumers by that directive, which was a matter for the national court to determine.