Directive 2009/22/EC on injunctions for the protection of consumers' interests. Katri Kummoinen Ministry of Justice, Finland

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1 Directive 2009/22/EC on injunctions for the protection of consumers' interests

2 MAIN OBJECTIVES to ensure union wide compliance with EUlegislation protecting consumers collective interests the directives mentioned in the Annex of the Directive to create a system which makes it possible to terminate unlawful practices in cross-border marketing and sales (i.e. where the activity has its origin in one MS and its effects in another)

3 Means EU-country unlawful marketing unlawful contract terms Consumers e.g. in Finland Action for Injunction - the qualified entities in the country where consumers collective interests are infringed.

4 EU-country unlawful advertising etc. business in Finland Action for Injunction The competitive court or administrative authority in the country where the unlawful activity originates from

5 TRANSPOSING DIRECTIVE What has to be done: 2009/22/EC to specify the national entities qualified to bring action and to communicate them, at their request, to the Commission - public bodies and/or private organisations whose purpose is the protection of consumers collective interests to designate the national courts/administrative authorities competent to rule on proceedings commenced by foreign entities

6 Act on Cross-border Injunction Procedures EU-country unlawful marketing unlawful contract terms Consumers e.g. in Finland Action for Injunction Consumer Ombudsman Consumer Agency Finnish Medicines Agency Financial Supervision Authority National Supervisory Authority for Welfare and Health Finnish Communications Regulatory Authority

7 Prior consultation before seeking an injunction Prior consultation is not mandatory acc. to the directive, but very important in practice - The primary goal is that a business will voluntarily end the use of unfair contract terms. In trying to achieve this goal, the supervisory authority may in Finland use following means: sending information to a business about how it should proceed requesting a business for an explanation of how it will address a violation that has been found asking a business to participate in negotiations to end the violation asking a business for a commitment in writing that it will end the violation In general, supervisory authorities use following means to ensure compliance with consumer protection legislation 1. Guidance and information for businesses websites of the supervisory authorities meetings, announcements and reports on current problems for particular business sectors training events and seminars joint campaigns and information dissemination with associations representing various fields

8 Other means of the supervisory authority to ensure compliance 2. Policy guidelines on the content of consumer protection legislation. These guidelines may be generated in co-operation and negotiation with entrepreneurial and other partners as supervisory letters and memos written from a business sector s or a subject-specific point of view as summaries of court practice and decisions of supervisory authorities 3. Negotiations with various business organisations to develop contract forms used in their line of business. As a result of these negotiations the Consumer Ombudsman has accepted standard contract terms for over 30 business sectors. in individual cases, the fairness of these terms can, however, be challenged

9 EU-country unlawful advertising etc. business in Finland Action for Injunction Consumer Agency Marketing Court Finnish Medicines Agency

10 Competences of the court or the authority The national court/authority may issue an injunction prohibiting the unlawful activity, and enforce this injunction, in accordance with national law, by payments into the public purse or to some other beneficiary in case of a failure to comply with a decision within the specified time limit, and order, where appropriate, a publication of a decision or a corrective statement

11 Scope of application Directives mentioned in the Annex concerning the following questions: door-to-door selling consumer credits television broadcasting activities package travel unfair contract terms distance contracts sale of consumer goods and guarantees electronic commerce advertising of medicinal products distance selling of financial services unfair commercial practices services in the internal market timeshare and long-term holiday product contracts

12 Provisions in the Directives where consumers collective interests are involved Practices and activities affecting consumers in general (i.e. advertising, information, standard contract terms) the Directive does NOT cover individual consumer disputes class actions

13 Directives as transposed Background: directives are not usually directly applicable Consequently: courts/authorities need to apply laws transposing the directives Note: several directives in the Annex are minimal directives Consequently: choice of law has significance

14 APPLICABLE SUBSTANTIVE LAW No choice of law rules in the directive The court/authority is to decide on the law applicable on the basis of the P.I.L rules normally either the law of the MS where the infringement originated or the law of the MS where the infringement has its effects Note: Rome I -regulation the country-of-origin principle in certain directives

15 OTHER MEANS OF COLLECTIVE REDRESS In Finland, a group action for compensation has been possible since 2007 in consumer disputes. As such, EU-legislation does not require the existence of such action. It is only the Consumer Ombudsman who may act as a plaintiff in group actions. The Finnish group action is based on an opt-in model. Consumers need to deliver, within a time limit, a written letter of accession in order to belong to the group. Only the parties to the dispute have a right of appeal. However, if the Consumer Ombudsman does not appeal a decision, a class member has such a right regarding his or her claim. Ordinary rules on remedies and liability to pay other parties legal expenses are applied. No punitive damages The losing party is obliged to pay all necessary and fair legal expenses of the other party.

16 ADR mechanisms Consumer Disputes Board is a statutory out-ofcourt dispute resolution body The Board resolves disputes between a consumer and a business concerning consumer goods and services, housing transactions, rented housing, the assignment of occupancy rights, and guarantees and pledges. disputes also between private persons concerning housing transactions, rented housing and the assignment of occupancy rights group complaints presented to the Board by the Consumer Ombudsman

17 ADR mechanisms (2) The complaint is made in written form to the Board. No lawyer is needed. The parties are responsible for their own costs, such as mailing costs. exception: the costs for an expert statement The handling of a matter by the Consumer Disputes Board is free of charge for both parties. A decision reached by the Board is a recommendation concerning the resolution of a dispute. - however, about 80% of businesses comply with the Board's decision.