CJEU Rules that Service Regulation Postpones National Time Limits

This is the most important take of the judgment delivered on 7 July 2022 in LKW WALTER Internationale Transportorganisation AG (Case C-7/21) (see already the report of K. Pacula here).

Under Article 12 of the Service Regulation Recast (formerly Article 8 of Regulation 1393/2007), the addressee of a document has a right to refuse to accept the document on the ground that it was not translated in a language that he understands or an official language of the place of service. The time limit for so doing is now 2 weeks. The CJEU rules that national time limits may not run during this time limit (which was only one week under former Art. 8), and must therefore begin to run after the expiry of the time limit in the Service Regulation.

The case was concerned with proceedings in Slovenia involving an Austrian company. A judgment rendered by the Slovenian court was served on the Austrian party (for more details, see the reports of K. Pacula). Under Slovenian law, a time limit to object to the judgment starts running from the date of service (as under the law of many Member States).

As a result, two time limits started to run at the same time: one to exercise the right of refusal under the Service Regulation, and another to object to the judgment. In addition, the time limits, which were the same, and thus overlapped, were short: 8 days. But it does not seem that the shortness of the time limit mattered for the CJEU. It ruled:

41 The effectiveness of the right to refuse to accept a document to be served requires (…) that [the addressee] has the full one-week period to assess whether it is appropriate to accept or refuse to accept service of the document and, in the event of refusal, to return it.

So, addressees should be able to enjoy fully the period afforded by the Service Regulation (which is now 2 weeks) to determine whether to refuse the document. As a result:

46 (…) the starting point of the period within which a right of appeal is to be exercised in accordance with the legislation of the Member State of the authority which issued the document (…) in principle must begin to run after the expiry of the one-week period referred to in Article 8(1) of the Charter (sic) [Regulation].

Do You Need More Than 10 Minutes to Realise You Do Not Understand a Document?

The proposition that you need the full time period to assess whether the document is written in a language that you understand is a bit surprising. As everybody knows, it takes anybody a few minutes to realise that.

What might take much longer is to seek legal advice to know about your rights with respect to the document. The right of refusal, however, is explained on a form which must be served to the addressee with the relevant document(s).

Interestingly, this case was actually an action against the Austrian lawyers of the applicant. They had received the documents from the client indicating when they had been received. It does not seem that they advised the client to refuse to accept service. They filed an objection on behalf of the client, but missed the Slovenian deadline by a few days. As a result, the client sued them for professional negligence. It could have been that the client would have trusted his lawyers to understand the document, and that the full time period would indeed have been useful, but this was not the case here. Neither the client, nor the lawyers seem to have an issue with Slovenian. In any case, the issue is not whether the lawyers of the addressee understand the relevant language, but the addressee itself.

Behavioural Analysis

Another issue with the effect given by the CJEU to the time period in the Service Regulation is that it will benefit to addressees who perfectly understand the relevant language, or to addressees served with documents written in an official language of the place where they live, and who thus may not refuse to accept service. It seems that it is exactly what happened in this case.

The CJEU explains, however, that it did not want to introduce a discrimination between addressees who do not need the time period, and who could thus immediately dedicate their time to the assessment of their rights under national law (i.e. whether to appeal) and others, who need first to assess their rights under the Service Regulation. As a consequence, the CJEU explains that it fears that it would give an incentive to addressees based in other Member States to refuse to accept service, and decides to eliminate the problem by putting all addressees in the same situation.

One can only applaud the court for taking into consideration the potential effect of its judgment on the behaviour of parties, and assess whether such behaviour would be desirable.

This being said, it is unclear whether the Service Regulation really offers avenues for strategic behaviour and thus incentives for parties to use their right of refusal strategically. If a foreign based addressee assesses that it understands the relevant language, that addressee may not refuse to accept the document. If it does so, it will generate useless legal debates on the issue, but will ultimately lose. It will be found that service was proper since the start, and the refusal will have no impact.

It might be that, under certain circumstances, the demonstration of whether the addressee understands the relevant language will be difficult, and that it could not be assessed with certainty whether s/he is entitled to refuse. Maybe then the addressee could decide, after carefully weighing his options (and thus using fully the time period under the Regulation), not to refuse and to focus directly on the merits of the case.