Radlinger and Radlingerova (Judgment) [2016] EUECJ C-377/14 (21 April 2016)

Radlinger and Radlingerova (Judgment) [2016] EUECJ C-377/14 (21 April 2016)

Article 7(1) of Directive 93/13/EEC precludes national legislation that prevents courts in insolvency proceedings from examining ex officio the unfairness of contractual terms underlying creditor claims, and that restricts review to only certain claims or grounds. Article 10(2) of Directive 2008/48/EC requires...

Source-derived case information.

Citation
[2016] EUECJ C-377/14
Parties
Applicant: Mr Radlinger; Applicant: Ms Radlingerová; Respondent: Finway a.s.
Jurisdiction
European Union
Judgment Date
21 April 2016
Procedural Posture
Preliminary Ruling (reference for Interpretation) / Judgment on Reference From National Court
Outcome
Preliminary ruling issued; national law precluding ex officio review of unfair terms and restricting consumer remedies is incompatible with EU law.
Legal Topics
Unfair Terms in Consumer Contracts, Consumer Credit Agreements, Procedural Autonomy, Judicial Review of Contract Terms, Calculation of APR, Penalty Clauses
EU Law Consumer Protection Insolvency Law Unfair Terms in Consumer Contracts Consumer Credit Agreements Procedural Autonomy Judicial Review of Contract Terms Calculation of APR +1 more

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Parties

Mr Radlinger

Applicant

Ms Radlingerová

Applicant

Finway a.s.

Respondent

Procedural Posture

Preliminary Ruling (reference for Interpretation) / Judgment on Reference From National Court

Legal Issues

  1. 1 Whether national insolvency rules precluding ex officio review of unfair contract terms are compatible with Directive 93/13/EEC Article 7(1)
  2. 2 Whether courts must ex officio review compliance with information requirements under Directive 2008/48/EC Article 10(2)
  3. 3 Interpretation of 'total amount of credit' and 'amount of drawdown' under Directive 2008/48/EC

Ratio Decidendi

Article 7(1) of Directive 93/13/EEC precludes national legislation that prevents courts in insolvency proceedings from examining ex officio the unfairness of contractual terms underlying creditor claims, and that restricts review to only certain claims or grounds. Article 10(2) of Directive 2008/48/EC requires courts to examine ex officio compliance with information obligations and to apply all national law consequences for non-compliance. The 'total amount of credit' and 'amount of drawdown' must exclude sums not actually made available to the consumer. The cumulative effect of all penalty clauses must be assessed for unfairness, and all unfair terms must be excluded from the contract.

Court Disposition

Preliminary ruling issued; national law precluding ex officio review of unfair terms and restricting consumer remedies is incompatible with EU law.

Orders

  • National courts must be able to examine ex officio the unfairness of contractual terms in insolvency proceedings.
  • Courts must ex officio review compliance with information requirements under Directive 2008/48/EC and apply national law consequences for non-compliance.