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Protection of guarantors by the ECJ
The new 2008 directive on credit agreements discussed above does not mention the protection of consumer guarantors and the literature has extensively debated whether this directive (and its predecessor) might be applicable to consumer guarantors. Two related cases suggest that the answer is likely to be negative.
In Dietzinger (1998), a case similar to the German guarantee case discussed in subsection 3.2, the ECJ showed judicial self-restraint and decided that a consumer directive which potentially could have protected a guarantor was not applicable. Mr Dietzinger, who was without a regular income, had provided a guarantee for his parents’ business debts. He tried to free himself of the contractual obligation by arguing that the guarantee had been signed away from business premises, and that he had not acted rationally. Moreover, he maintained that he had not been informed of his right of withdrawal, basing his claim on the Doorstep Selling Directive 85/577, implemented by the German law. The ECJ, however, ruled that the directive was not applicable in this case. Indeed, it stated that, even if a guarantee contract has been concluded by a person who is not acting in the course ofhis or her profession, it still does not fall within the scope of the directive if the guaranteed debt itself has been contracted by another person who is acting in the course of his or her profession.
Thus, the ECJ expressed a formal opinion on the applicability of the directive, without entering into the merits of the contract itself. This attitude of the Court, which is plainly different from that of the German court mentioned in the previous subsection, was criticized by a number of scholars. On the other hand it could be argued that the ECJ lacked a precise legal reference on which it could have reached a different conclusion, such as the basis which exists for courts in Germany under its national law.
An even stronger suggestion that the 2008 directive on credit agreements will not protect guarantors comes from the Berliner Kindl Brauerei AG v Siegert case (2000). Here, the ECJ explicitly negated the applicability of the predecessor of the 2008 directive (the Consumer Credit Directive 87/102) to a contract of guarantee for the repayment of a credit. A German brewery (the Berliner Kindl Brauerei—BKB) had granted a loan to a principal debtor for the opening of a restaurant. In turn Mr Siegert, a private citizen, acted as a surety to BKB for the repayment of the loan, acting outside his trade or profession. When he tried to withdraw from the contract, Mr Siegert argued that he had validly cancelled the contract pursuant to the German Consumer Credit Law (Verbraucherkreditgesetz 1990), which had implemented the former Consumer Credit Directive 87/102. The case was referred by the Potsdam Court to the ECJ for a preliminary ruling and the ECJ ruled that the directive does not cover a contract of guarantee for repayment of credit. In particular, the ECJ argued that the exclusion of the guarantor from the directive could be inferred, because it aims to provide information to the debtor on the conditions and effects of the agreement, but barely mentions the guarantors and does not concern itself with their protection.
These cases show that the non-professional guarantor did not benefit from specific protection in a number of consumer laws. However, these judgments took place before the adoption of the Charter in 2000 and were limited because of the restrictive scope of the relevant directive. More recent ECJ jurisprudence on consumer credit and doorstep selling already puts more emphasis on the protection of the consumer as the weaker party, albeit without referring to the Charter.It seems likely that, as time goes by, the Charter will play a growing role in consumer protection. As we have seen in previous chapters, fundamental rights have increasingly been recognized in the EU, reaching binding status, and have been referred to by the ECJ more regularly since the adoption of the Lisbon Treaty.
In addition to this, fundamental rights may play an important role in strengthening specific principles or values in the financial services field. This can occur in a different context and way than in the cases we have just seen, as will be shown in the next section.
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