On 21 April 2016, the Court of Justice of the European Union (the ECJ) published its decision on Ernst Georg Radlinger and Helena Radlingerová v Finway a.s (C-377/14). The ECJ confirmed that national courts are under an obligation to assess, on their own motion, compliance with EU rules on consumer protection and consumer credit agreements, despite national law preventing them from doing so under certain circumstances.
This case revolved primarily on a question referred by a Czech regional court to the ECJ, on whether a national law provision preventing the national court to consider unfairness of terms in an insolvency proceedings matter, was in compliance with the EU laws on consumer protection. The ECJ concluded that the Unfair Terms Directive precludes national law from prohibiting a national court to consider of their own motion, compliance with EU laws on consumer protection.
In its consideration, the ECJ also concluded that:
- By virtue of the Consumer Credit Agreement Directive, a national court hearing a dispute relating to such an agreement, must also assess of its own motion whether the information relating to the credit has been clearly and concisely set out, as required.
- National courts are under an obligation to assess the cumulative effect of all terms of a consumer credit agreement, and should a number of these terms be found to be unfair, the national court is to exclude all of the unfair terms, and not merely some of them.
This case marks further development in this legislative area of EU consumer law.