Commissioner prompts Member States to pursue VW

The EU's Justice Commissioner, Vera Jourova, is pressing national authorities to investigate whether VW breached consumer protection laws - specifically, those based on the  Directive on Unfair Commercial Practices which prohibits misleading advertising, and the  Directive on certain aspects of the sale of consumer goods and associated guarantees - by stressing the green credentials of cars involved in the Dieselgate scandal.

As well as gathering information on action that Member States are taking themselves, the Commissioner wishes to make individual consumers and consumer groups aware of their rights over the claims. A 2013 Report by the Commission (see the Commission's web page on the Directive here) revealed that the Directive was not being enforced as rigorously as it might be by Member States, and the Commission announced its intention of pushing enforcement - the VW affair provides a superb opportunity to advance that agenda.

Italy has already fined VW €5 million over false advertising claims. Action under the Directive could result in more litigation in all 28 Member States of the EU. So far, VW has not compensated European consumers while it has compensated consumers in the USA. It argues (see this report from Automotive News) that by fixing the problem it will have done all it needs to do and there would be nothing left for which to compensate owners. The company also argues that it has not breached the directives (or, more accurately, national laws based on them). The sales directive requires that goods conform to contract - that they are fit for their purpose, which doesn't look like an easy claim to make in this case, that they comply with description (probably a better bet for a claimant) and perform as they should (again, a better bet than unfitness). VW's statement that they are not in breach sounds, well, bullish. As for the unfair commercial practices directive, it prohibits such practices and goes on:

2. A commercial practice shall be unfair if:

(a) it is contrary to the requirements of professional diligence, and

(b) it materially distorts or is likely to materially distort the economic behaviour with regard to the product of the average consumer whom it reaches or to whom it is addressed, or of the average member of the group when a commercial practice is directed to a particular group of consumers.

I wouldn't like to have to argue that claims about VW diesel emissions were not unfair within that definition. But stranger things have happened, and it is unrealistic to think that any manufacturer would admit breaches at this stage. It will only be when cases in Member States' courts start to come up that we will find out whether a breach has really taken place.

See the EU Observer website, this from Automotive News and this article in the Financial Times for more details.

Court of Justice clarifies the rules on consumer guarantees

A press release yesterday from the Court of Justice informs me of the Judgment in Case C-497/13, Froukje Faber v Autobedrijf Hazet Ochten BV. Because I have too many other demands on my time right now, I am resorting to cutting and pasting the text of the press release - lazy, but effective, and I assume that this is what the press department had in mind. I'll come back to it to add some value later.

The headline is: 'Any lack of conformity which becomes apparent within six months of the delivery of goods is to be presumed to have existed at the time of delivery.' That might tell you all you need to know!

On 27 May 2008, Ms Froukje Faber purchased a secondhand vehicle at a garage. On 26 September 2008, the vehicle caught fire during a journey and was completely destroyed. It was towed to the seller’s garage by a breakdown lorry and then, at the request of that garage, to a scrapyard to be kept there. Ms Faber maintains, in contrast to the garage, that, on that occasion, the parties spoke about the accident and about the possible liability of the garage. By letter of 11 May 2009, Ms Faber gave the seller’s garage notice that she was holding it liable. A technical investigation into the cause of the vehicle fire could not take place as the vehicle had been scrapped in the meantime.
As the seller disputed that it was liable, Ms Faber brought legal proceedings. The Gerechtshof (Regional Court of Appeal) Arnhem-Leeuwarden, Netherlands, before which the dispute was brought on appeal, decided to refer questions to the Court of Justice for a preliminary ruling.
As regards whether the national court is required to examine of its own motion whether, in the present case, Ms Faber is to be regarded as a consumer within the meaning of Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees  (OJ 1999 L 171, p. 12), even though she has not relied on that status, the Court replies, in its judgment delivered today, in the affirmative. Whether the consumer is assisted by a lawyer or not cannot alter that conclusion.
In the same vein, the Court confirms that the national court may of its own motion raise Article 5(3) of the directive in the context of an appeal. That provision provides that, unless proved otherwise, any lack of conformity which becomes apparent within six months of delivery of the goods is, in principle, to be presumed to have existed at the time of delivery. In view of the nature and importance of the public interest underlying the protection which that provision confers on consumers, it must be regarded as a provision of equal standing to a rule of public policy within the domestic legal system.
The referring court also asks whether the principle of effectiveness precludes a national rule which requires the consumer to prove that he informed the seller of the lack of conformity in good time. According to Netherlands law, it is in principle for the consumer, if there is a challenge by the seller, to furnish evidence that he informed the seller of the lack of conformity of the goods delivered within a period of two months after the discovery of the lack of conformity.
The Court points out in that regard that Art. 5(2) of Directive 1999/442 on certain aspects of the sale of consumer goods and associated guarantees permits Member States to provide that the consumer must, in order to benefit from his rights, inform the seller of the lack of conformity within a period of two months from the date on which he detected such lack of conformity.
According to the travaux préparatoires in respect of that directive, that option reflects the aim of reinforcing legal certainty, by encouraging ‘diligence’ on the part of the purchaser, ‘taking the seller’s interests into account’, ‘but does not establish a strict obligation to carry out a detailed inspection of the good’.
The Court explains that the obligation imposed on the consumer is limited to that of informing the seller that a lack of conformity exists. The consumer is not required, at that stage, to furnish evidence that a lack of conformity actually adversely affects the goods that he has purchased or to state the precise cause of that lack of conformity. By contrast, in order for the notification to be of use to the seller, it must include a certain number of particulars, the degree of precision of which will necessarily vary depending on the specific circumstances of each case.
Lastly, the referring court asks how the apportionment of the burden of proof functions and, in particular, which matters it is for the consumer to establish.
The Court states that if the lack of conformity has become apparent within six months of delivery of the goods, the directive relaxes the burden of proof which is borne by the consumer by providing that the lack of conformity is presumed to have existed at the time of delivery. In order to benefit from that relaxation the consumer must nevertheless furnish evidence of certain facts.
Firstly, the consumer must allege and furnish evidence that the goods sold are not in conformity with the contract in so far as, for example, they do not have the qualities agreed on or even are not fit for the purpose which that type of goods is normally expected to have. The consumer is required to prove only that the lack of conformity exists. He is not required to prove the cause of that lack of conformity or to establish that its origin is attributable to the seller.
Secondly, the consumer must prove that the lack of conformity in question became apparent, that is to say, became physically apparent, within six months of delivery of the goods.
Once he has established those facts, the consumer is relieved of the obligation of establishing that the lack of conformity existed at the time of delivery of the goods. The occurrence of that lack of conformity within the short period of six months makes it possible to assume that, although it became apparent only after the delivery of the goods, it already existed ‘in embryonic form’ in those goods at the time of delivery.
It is therefore for the professional seller to provide, as the case may be, evidence that the lack of conformity did not exist at the time of delivery of the goods, by establishing that the cause or origin of that lack of conformity is to be found in an act or omission which took place after that delivery. 

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