Alicja Slowik , 11 décembre 2023

In the recent judgment Provident Polska (C‑321/22), the Court of Justice of the European Union held that a requirement that a consumer pay excessive non-interest credit costs can constitute an unfair term under the Directive 93/13/EEC on unfair terms in consumer contracts (Unfair Contract Terms Directive).

In the case at hand, three Polish citizens, ZL, KU and KM concluded consumer credit agreements with a credit undertaking Provident Polska. Under those agreements, consumers were obliged to pay, in addition to the sums borrowed and interest, supplementary non-interest credit costs such as ‘disbursement commission’ or ‘administrative charges’. In all three contracts, the non-interest costs were very high and represented a very important percentage of the sums loaned. In addition, two of the agreements in question required that the loan repayments had to be made in cash to an agent of the lender at the borrower’s home. Considering the non-interest credit costs foreseen in the agreements were unreasonable and excessively high, the three consumers concerned decided to bring an action before the District Court of Warsaw seeking to obtain a declaration that the terms of the agreement relating to non-interest costs were not enforceable against them on account of their unfairness. Provident Polska argued that the actions brought by the borrowers should be dismissed and made a counterclaim against them, seeking an order requiring them to pay it sums corresponding to a part of the fees and commissions due under the loan agreements.

Having several doubts on the conformity of different provisions of Polish law with the Unfair Contract Terms Directive, the District Court decided to stay the proceedings and refer to the Court of Justice three preliminary questions. Firstly, the national court wanted to know whether a contractual term may be regarded as ‘unfair’ within the meaning of Article 3(1) of the Unfair Contract Terms Directive on the ground that it ‘grants a seller or supplier a fee or commission that is disproportionately high in relation to the service offered’. Secondly, the national jurisdiction was uncertain whether the requirement foreseen in Polish law according to which a consumer must have a legal interest in bringing proceedings for the purpose of obtaining a declaration that some contract terms are unfair is compatible with the Unfair Contract Terms Directive. Under the relevant domestic rules, an action for such a declaration may be upheld only if an applicant shows that he or she has an interest in bringing proceedings which persists until the hearing is closed. Such an interest would be excluded, inter alia, where more complete protection of an alleged right may be obtained by a different legal action. Moreover, a consumer loses his or her interest in having a declaration on unfair contract terms when the creditor decides to bring to initiate action for performance. In such a case, the consumer’s rights may be upheld as part of his or her defence in the enforcement proceedings. Thirdly, the national court was asking whether ‘a loan agreement whose sole term providing for the manner of loan repayment has been found to be unfair must not continue in force after that term has been excluded therefrom and is therefore void’.

The Court of Justice recalled at the outset that pursuant to Article 3(1) of the Unfair Contract Terms Directive ‘[a] contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.’ The determination as to the presence of ‘a significant imbalance’ shall not be limited to an economic evaluation. Nonetheless, according to the well-established case law, where such an evaluation shows that there is a significant imbalance, that finding may be made without it being necessary to examine other factors.  In the case at hand, the national jurisdiction was justified in considering that such an imbalance may arise from excessively high non-interest credit costs which are clearly disproportionate in relation to the amount loaned. The Court, observed however, that in its assessment, the national jurisdiction shall ascertain whether the contractual terms in question may be effectively subject to the ‘unfairness control’. By virtue of Article 4(2) of the Unfair Contract Terms Directive, an assessment of the unfairness of contractual terms is not to relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration.

Regarding the second preliminary question, the Court of Justice underlined that the question of a consumer’s interest in bringing proceedings in the context of an action seeking a declaration that unfair terms are unenforceable fall within the scope of the procedural autonomy of the Member States. It then recognised that ‘an interest in bringing proceedings is an essential and fundamental prerequisite for any legal proceedings’. Such a requirement clearly pursues a general interest of the sound administration of justice. Yet, the Court considered that Polish procedural rules according to which the legal interest is regarded as being absent where the consumer concerned may obtain protection of his or her right in the context of a different legal action constitute an unlawful limitation of the consumer’s right to apply to a court to have a term in a contract declared unfair and disapplied.

Finally, assessing the third preliminary question, the Court of Justice ruled that a loan agreement may be declared null and void where it is found that only the term of that agreement setting out the specific arrangements for payment of the sums due is unfair and that that agreement cannot continue in existence without that term.  Nevertheless, if the unfair term providing for the manner of loan repayment is separable from the rest of the contract, the agreement may continue in existence and the consumer may choose any method of payment from among those which are permissible under national law.

Provident Polska adds to the set of recent rulings concerning the interpretation of the Unfair Contract Terms Directive (see e.g. Všeobecná úverová banka a.s., C-598/21; Banco Santander, C‑265/22). Guidelines on the determination of unfair clauses in consumer credit agreements and on the limits of Member States’ autonomy regarding the establishment of procedural conditions for bringing an action against unfair terms are a positive development for the clarification of consumer protection rules in the EU legal order.

Reproduction autorisée avec la référence suivante : Alicja Słowik, Determination of unfair terms in consumer credit agreements under Directive 93/13, actualité n° 42/2023, publiée le 11 décembre 2023, par le Centre d’études juridiques européennes, disponible sur www.ceje.ch