Transparency Claims, Intellectual Services and Consumer Contracts: A Case of Consumer Over-Protection and Under-Protection?

Abstract

Abstract The paper examines the development of the case law of the Court of Justice of the European Union (CJEU) on the consequences of (non-)transparency claims in consumer contracts in the case of the supply of intellectual (legal) services. In its recent decision (Case C-395/21, D V), the CJEU was confronted with the consequences of the unfairness of the remuneration term contained in a legal services contract. The Court’s analysis of the non-transparency (and unfairness) of core terms under Articles 4 para 2 and 5 UCTD and its consequences under Article 6 UCDT raises a variety of questions. Specifically, the D V case illustrates the difficulties of the CJEU in striking an adequate and effective balance between consumer protection on the one hand and the right of the business party (lawyer) to her/his counter-performance (the remuneration) for the legal services on the other hand. This, in a nutshell, is because the unfairness of the term led—like most mortgage loan agreements denominated in foreign currency—to the invalidity of the whole price-setting mechanism, depriving the supplier of his/her remuneration in its entirety. Against this backdrop, the paper will address the troublesome relationship among the unfairness of core terms encompassed in consumer contracts providing intellectual services, restitutionary remedies and judicial revision of the unfair terms, alternatively leading to situations of consumer over-protection and under-protection. First, the paper will highlight why this case law poses new challenges for both consumer and national law and why it should be treated differently from – or, at least, in confrontation with – the recent CJEU’s case law concerning the mortgage loan agreements saga. Secondly, the paper395 will argue that the denial of remuneration of the supplier—even though complying with the aim to restore the legal and factual situation in which the consumer would have been in the absence of the unfair term—could entail consumer over-protection issues, since the performance could not be returned; this situation could potentially lead to clashes with overarching general principles (such as the principle of proportionality). Lastly, the exclusion of a judicial revision in the sense of a judicial estimate could be detrimental for the consumer if the quantification of the supplier’s remuneration would be impossible without such a judicial estimate. In that case, the invalidity of the unfair term and of the contract in its entirety could expose consumers to unjust enrichment claims, thus frustrating the CJEU’s aim of preventing judicial estimates of a fair charge and undermining the principle of legal certainty, as interpreted by the European Court. In this sense, such an orientation will trigger a situation of consumer under-protection. In the final analysis, the paper will address some of the possible systemic implications of the CJEU’s case examined. The paper will further suggest that, in order to prevent both situations of over-protection and under-protection of consumers, we should rethink the mechanisms of the transparency assessment under the UCTD – in particular, when essential terms are concerned and neither the restitution nor the remuneration of the services provided is possible or consistent with EU Consumer Law.