Private Enforcement as a Deterrence Tool: A Blind Spot in the New Deal for Consumers

Abstract

The New Deal for Consumers does not acknowledge the deterrence function of private enforcement of EU consumer law. The Omnibus-directive provides guidance to administrative entities and courts on how to balance the principles of effectiveness, proportionality and dissuasiveness when imposing a penalty but leaves civil courts rudderless. The paper demonstrates that the triad requires more attention within the specific context of private enforcement. Indeed, the CJEU has in recent years put a clear emphasis on the deterrence function of the non-binding effect of unfair contract terms, a civil sanction imposed by civil courts. These courts, however, are struggling with the implications of this function. They are actively searching for direction by referring new preliminary questions to CJEU. Empirical research conducted in the Netherlands shows Dutch district courts largely recognize their role as enforcer of EU consumer law. It also reveals that these courts consider the proportionality and the dissuasiveness of the sanction to be at odds when the gap left after the removal of an unfair contract term is not filled with national law.