On September 22, 2022, the Court of Justice of the European Union issued a judgment addressing the reimbursement of the costs of an out-of-court consumer dispute by the consumer.
In the Czech Republic the issue of out-of-court consumer disputes is dealt with in the Consumer Protection Act. According to this Act, the seller and the consumer bear their own costs. The out-of-court settlement of consumer disputes (in the Czech Republic, in particular before the Czech Trade Inspection Authority) is not subject to a fee. Czech legislation is therefore in accordance with the principle of effectiveness. The out-of-court settlement of disputes, as it is understood in the Czech Republic, is intended to lead to an agreement between the parties, and is therefore not a means of reaching an authoritative decision. Moreover, excluding the possibility of awarding the costs of the proceedings to one of the parties does not preclude the consumer’s right to claim from the seller, within one month, the reimbursement of the costs reasonably incurred in exercising his or her consumer rights.
The CJEU’s judgment addressed the question of whether the imposition on the consumer of payment of the costs of an out-of-court dispute to determine whether the contract contains unfair terms has a dissuasive effect. An unfair term in a consumer contract is a term that has not been arranged individually and which “contrary to the requirement of fairness causes a significant imbalance in the rights and obligations of the parties under the contract to the detriment of the consumer.” These include, for example, terms imposing an unconditional obligation on the consumer to perform while the seller or provider ties his performance to a condition, the performance of which depends only on his will; terms allowing the assignment of the contract without the consumer’s consent; terms fixing the price only at the time the goods or service are delivered; terms allowing the unilateral amendment to a condition in the contract without an appropriate reason stated in the contract or a disproportionate penalty for the consumer for a breach of contract.
According to the Court of Justice, the principle of effectiveness is not infringed if the courts of the Member States impose the costs of proceedings on the consumer. However, if during the proceedings bad faith on the part of the seller is proved, the court must attribute the costs of the proceedings to the seller.
The procedural costs of the proceedings born by the consumer should also not be excessive, constituting an obstacle to legal protection against an unfair provision.