Consumer Protection under the Brussels I bis Regulation: Room for Improvement

The author of this post is Willem Visser. He is one of the editors of the Dutch Journal for Consumer Law and Unfair Commercial Practices (Tijdschrift voor Consumentenrecht & handelspraktijken).

In April 2023, the EAPIL Working Group on the Reform of the Brussels I bis Regulation issued a preliminary position paper formulating proposals for reforming the Regulation. On 29 March 2023, the European Commission published a study to support the preparation of a report on the application of the Brussels Ibis Regulation.

In my opinion, consumer protection seems to be only marginally on the radar in these documents. Therefore, I wrote this article, which was published in the Dutch Journal for Consumer Law, where I propose to extend the material scope of the provisions dealing with consumer contracts (Articles 17-19 Brussels I bis Regulation) and to significantly simplify the entire chapter on jurisdiction. A summary of my article and proposals is set out below.

Consumers are protected through EU regulations not only when it comes to their substantive rights (against unfair commercial practices, unfair terms, etc.), but also when it comes to procedural law, in particular the assesment of international jurisdiction in disputes over consumer contracts.

This procedural protection is enshrined in the Brussels I bis Regulation and its predecessors (Regulation No. 44/2001 and the 1968 Brussels Convention). These instruments will be referred to below as ‘the Brussels regime’.

The Brussels regime protects consumers by giving jurisdiction to the courts of their country of residence (Articles 17-19 Brussels I bisRegulation). That seems like a great deal, but in practice there are several limitations to that protection.

First, the consumer protection only applies to consumer contracts and not to any non-contractual obligations invoked by consumers (for example, tort, unjust enrichment and negotiorum gestio). In these types of cases the consumer cannot litigate before the court of his or her domicile, but will probably have to seek the courts of its professional counterparty: the defendant’s domicile. It is not desirable for consumers to be forced to litigate outside their country of residence, because that means extra travel time, litigating in an unfamiliar country and in a different language, with the help of a foreign lawyer, in a procedure that may well be more expensive than in his or her home country. Moreover, it is not always clear – on the basis of the various rulings by the EU Court of Justice – whether an obligation should be qualified as a ‘contractual obligation’ or a ‘non-contractual obligation’. There have been several cases where the natural person was the weaker party and needed protection, but did not get it because of the non-contractual nature of the obligation in question (see the ECJ decisions in Wikingerhof, Kolassa and Deepwater Horizon). I therefore believe that consumer protection in the Brussels Ibis Regulation should not be limited to consumer contracts but should be extended to non-contractual consumer obligations.

Second, the ECJ interpretes the concept of ‘consumer’ restrictively: it “must necessarily be interpreted strictly, in the sense that it cannot be extended beyond the cases expressly mentioned in that Regulation” (amongst others: Poker Player, C-774/19, para. 24). This restrictive approach resulted in a natural person not being able to claim consumer protection under the Brussels regime in the following situations: if he/she was a consumer but transferred his/her rights; in that case, the person to whom the rights have been transferred cannot be considered a ‘consumer’ (C-89/91); if the contract was entered into with a view to an as yet unexercised but future professional activity (C-269/95); if it concerns a class action initiated by a group of consumers (C-167/00); if both parties are consumers (C-508/12); if the consumer does not have a contract with the issuer of the certificates (C-375/13); if the agreement subsequently acquired a professional character (C-498/16); if the contract was concluded for a dual purpose, unless the contract, in view of the context of the transaction – considered as a whole – for which it was concluded, is so distinct from that professional activity that it is evident that it was concluded primarily for private purposes (C-630/17); if there is a claim by a consumer against an airline that is not a party to the transport contract (C-215/18).

So, there are quite a few situations where a natural person is not considered a ‘consumer’, and therefore cannot litigate before the courts of his or her own domicile. This is remarkable, because the European Union ensures “a high level of consumer protection” (Article 38 of the EU Charter of Fundamental Rights). I believe that in several of the situations mentioned above, there is an unjustified lack of protection. In my opinion, the regime of Article 17-19 Brussels I bis Regulation should therefore be applied less restrictively by entering an assumption into the Regulation that a natural person acts in his capacity as a consumer. It is up to the counterparty to prove that the natural person has unmistakably acted in the context of his or her profession or business.

In addition, I believe that consumer protection should also apply to consumer collective actions. There is no valid reason why the collective nature of a claim should result in a group of consumers no longer being considered a weaker party. At the time the contracts were concluded, the consumers represented had less room to negotiate with their professional counterparty, and thus to that extent still had a weaker position. Moreover, it leads to a divergence between the competent court and the applicable law. Still, collective actions based on a breach of consumer contracts remain governed by the law of the consumers’ country. The freedom to conduct a business, guaranteed in Article 16 of the EU Charter, does not necessitate the exclusion of collective actions from consumer protection. The professional counterparty of the consumer has already had to take into account that individual consumers could bring proceedings against it in their own place of residence. That this is different in the case of a consumer collective action is therefore, in that sense, an unexpected advantage for the counterparty.

Third, in my opinion the ‘targeting requirement’ in Article 17 (1)(c) Brussels I bis Reguliation is not workable in practice. This requirement has given rise to much ECJ case-law and leads to legal uncertainty (see the legal commentary on the Alpenhof judgment). In my opinion, in this digital day and age a consumer contract should only be excluded from consumer protection where the professional would not have to expect litigating in the courts of the consumer’s domicile. This is the case only, when the contract is concluded in a physical sales area or when the consumer cannot get the goods or services delivered in his place of residence under the trader’s terms and conditions.

In light of the above, I conclude that consumer protection under the Brussels regime has not kept pace with substantive consumer law in which consumer protection has become more extensive.

But that’s not the only comment I would like to make on the current Brussels I bis Regulation. The complexity of the chapter on jurisdiction (Chapter II of the Regulation) results even today – more than 50 years after its predecessor, the Brussels Convention, was signed by the the EEC members States – in large numbers of preliminary rulings. The Brussels/Lugano regime accounts for the majority of the 245 preliminary rulings on private international law sources from 2015 to 2022. That means more than 120 questions (128 to be precise) over a 7-year period. In my opinion, that is too much for an instrument that is in place more than 50 years.

Reducing the Court of Justice’s workload is not necessarily a compelling reason to simplify a regime, but it should be borne in mind that behind every case submitted to a court, there are two or more parties who – until the preliminary question is answered – cannot proceed with their legal proceedings. The delay is considerable, since preliminary reference proceedings before the Court of Justice take 16.6 months on average.

I therefore propose to replace the articles which give rise to the largest amount of preliminary questions (Article 7(1) and (2) of the Brussels I bis Regulation) by an article which aligns jurisdiction and applicable law. My proposal is that Article 7(1) and (2) (and perhaps other parts of Article 7) should be replaced by the following rule:

A person domiciled in one Member State may also be sued in another Member State whose laws governs the relevant contractual or non-contractual obligation underlying the claim. Where there are several claims governed by different laws, the courts of the Member State which laws governs the most far-reaching claim shall have jurisdiction.

The advantage of aligning jurisdiction and applicable law is that it improves coherence between the Brussels I bis Regulation and the Rome I and Rome II Regulations (which designate the law that is applicable to a contractual or non-contractual obligation). These Regulations all aim to promote predictability of the outcome of litigation, legal certainty and mutual recognition of judgments.

Simplifying the Brussels regime would give rise to fewer preliminary questions and fewer delays. Preventing delays is one of the objectives of procedural law. As the saying goes: ‘Justice delayed is justice denied’.

I admit that I have not yet thought through all consequences of my proposals, and it is going too far to elaborate all of them in the context of my article. But it seems right to discuss these proposals further and, if possible, to include it as an option in the ongoing review of the Brussels I bis Regulation.