Luigi Lonardo, PhD candidate, King’s College London

Background

A recent Court of Justice ruling in the Faber case (C-497/13) determined that purchasers are considered “consumers” even if they don’t explicitly claim this status, as long as the purchase wasn’t for business or professional purposes. The Court decided that national courts must independently determine if a purchaser qualifies as a consumer, guaranteeing the application of EU consumer protection laws regardless of the purchaser’s awareness of their rights. Additionally, any product non-conformity identified within six months of delivery is presumed to have existed at the time of delivery. This judgment aligns with the EU’s dedication to consumer protection, potentially benefiting countless European buyers. However, a more nuanced approach from the Court could have resulted in a more balanced outcome.

This ruling clarifies the interpretation of Directive 1999/44 concerning consumer goods and related guarantees. The Court addressed two key points: whether consumers must inform the seller of any non-conformity within two months to exercise their rights (Article 5(2)) and whether non-conformity evident within six months of delivery is presumed to have existed at delivery, allowing for rebuttal (Article 5(3)).

The facts of the case

In May 2008, Ms. Faber purchased a used car from Hazet garage. The car caught fire and was destroyed in September of the same year. In January 2009, Ms. Faber informed Hazet garage of the incident and held them liable. Whether she had previously notified Hazet garage of the accident is disputed. Hazet garage denied liability.

Ms. Faber initiated legal proceedings against Hazet garage, without invoking her consumer status. Due to the car being scrapped, a technical investigation into the fire’s cause was impossible. The Dutch court dismissed Ms. Faber’s claims because she notified Hazet garage more than three months after the incident, exceeding the time limit stipulated by Dutch law.

The case was appealed to the Gerechtshof (Regional Court of Appeal) Arnhem-Leeuwarden, which subsequently referred questions to the Court of Justice for a preliminary ruling.

The questions referred and the judgment

Following Advocate General Sharpston’s opinion, the Court addressed the referring court’s seven questions, dividing them into two categories:

1. Can a national court, on its own initiative, examine whether a purchaser is a consumer?
2. When and how should a consumer inform the seller of a product’s non-conformity?

The Court clarified its interpretation of the Directive, despite the case involving private parties. This was necessary because national courts must interpret domestic law in alignment with the “applicable directive” (para 33). In this case, the relevant Dutch law directly implemented Directive 1999/44.

1. A court can inquire the consumer status ex officio

Uncertainty arose in the Dutch courts regarding the applicable provisions in the contract because Ms. Faber’s consumer status was unclear. The Court ruled that a national court can independently investigate consumer status, even if the involved party hasn’t claimed it (para 48). The Court emphasized that a court can declare consumer status even during an appeal when the purchaser hasn’t disputed the lower court’s judgment.

The Court highlighted that without uniform procedural rules, Member States determine the specific procedures for safeguarding individual rights under EU law. These procedures, however, cannot be less favorable than those governing similar domestic actions (principle of equivalence) and cannot unreasonably hinder the exercise of rights granted to consumers by EU law (principle of effectiveness).

The Court reasoned that judges routinely classify legal situations presented before them, which isn’t discretionary but a fundamental aspect of legal reasoning. Since Dutch courts routinely categorize legal and factual matters according to procedural rules, this should also apply to EU law definitions (para 39).

While the principle of effectiveness would only be relevant if the principle of equivalence wasn’t applicable, the Court chose to express its view. It referred to the established principle that national law must ensure that EU citizens can easily exercise their EU consumer rights. The Court justified this principle based on the “idea that the consumer is in a weak position vis à vis the seller or supplier”.

2. Provisions on communications and burden of proof of the consumer

The Court examined Article 5(3) of the Directive, stating that a product’s non-conformity is presumed if identified within six months of delivery. It emphasized the necessity of the Directive’s liability system, as proving a product’s non-conformity existed at delivery would be challenging for the consumer (para 54). Therefore, due to the importance of protecting consumers under Article 5(3) of Directive 1999/44, it’s considered a public policy rule. Consequently, national courts with discretion in applying such rules must apply domestic laws transposing Article 5(3) on their own initiative (para 56).

Regarding the purchaser’s responsibilities, the Court clarified that informing the seller of non-conformity doesn’t require a “detailed inspection of the good.” Importantly, the consumer only needs to prove the existence of non-conformity, not its cause or the seller’s responsibility (par 70).

Comments

• Is the consumer so weak?

The Directive doesn’t explicitly state that judges can independently determine its applicability in pending cases. The Court’s decision to allow national judges to establish consumer status was based on the principle of effectiveness. This principle recognizes consumers’ vulnerability (see para 59 of the AG opinion), as affirmed in case law on various consumer directives ( Mostaza Claro , Rampion and Gordard ). However, AG Kokott, in Duarte Hueros, distinguished between consumer vulnerability during bargaining, where protection is warranted, and after contract conclusion, where such an assumption may not be necessary. This perspective is noteworthy for its balanced approach. A more nuanced view, like AG Kokott’s, might be preferable to the Court’s reasoning, as it avoids simplifying the consumer’s position and could lead to different conclusions.

AG Sharpston, while agreeing that consumers aren’t always in the same position (para 60), argued that information asymmetry makes them weaker even after contract conclusion. The seller is better positioned to prove the cause of non-conformity, justifying a public policy rule requiring investigation. AG Sharpston extends this rationale to cases protecting weaker parties, such as workers. Although the Court acknowledged this distinction, it merely recognized that in Member States allowing individuals to represent themselves in consumer law matters, consumers, particularly due to lack of awareness, might struggle to meet the requirements for claiming consumer status. This argument, while valid, is a broad policy choice: not all Member States allow self-representation in consumer law cases, and the logic weakens when a lawyer assists the individual, as in the Dutch court’s question.

• A high standard of consumer protection is ensured because the consumer only has to prove the existence of the lack of conformity

The consumer’s burden of proof is minimal: they only need to demonstrate the existence of non-conformity, not its cause or the seller’s fault. While the presumption is rebuttable, the burden shifts to the seller/supplier. While the Court assumes the EU legislator had valid reasons for this burden allocation, continuous broad interpretations by the CJEU might not preserve the balance intended by consumer directives. In the recent Boston Scientific judgment concerning defective implantable medical devices, a similar presumption of defect was applied. This consistent approach demonstrates a high standard of consumer protection, potentially at the expense of sellers/producers, by easing the consumer’s burden of proof and placing the risk on the seller/supplier [[1] ](file:///C:/Users/kiran/Downloads/blog%20-%20Faber%20-3.7.%20draft.docx#_ftn1).

Another noteworthy aspect is that some EU legal systems allow for technical reports to determine the cause of product defects or non-conformity. Since consumers aren’t required to prove these causes, they wouldn’t bear the cost of expert opinions, making legal action simpler and more accessible.

Conclusion

This decision reinforces the high level of consumer protection within EU law, reflected in recent CJEU case law. The Court determined that courts must proactively investigate consumer status, regardless of whether the individual claims it, ensuring the automatic application of EU consumer law to private purchases. This is based on the premise that the purchaser, as a potentially “weak” party, deserves protection. Faber clarifies that consumers simply need to inform the seller of non-conformity within two months of discovery, without burdensome requirements. Regarding the burden of proof, consumers only need to prove the non-conformity’s existence within six months of delivery.

Photo credit: Daily Telegraph

Barnard & Peers: chapter 23

[1]               See Maria Castellaneta, “The company shall pay for the damages occurred within 6 months”, Il Sole 24 Ore, Friday 5th June, 46.