GENERAL CONDITIONS AND UNFAIR TERMS IN FINANCIAL CONTRACTS

The adhesion contracts and the judicial and extrajudicial injunction

I. - Introduction

General conditions of the contracts are direct consequence of a market that has gone in a constant evolution, characterized, among other circumstances, mainly by a continued growth of the mercantile traffic. Concretely, they are the result of a necessity of the suppliers, they have to distribute an important number of products or homogenous services, and for it they need speed, agility and fluidity, reason by which, they are forced to make homogeneous the contracts by which they carry out the sale, distribution or provision. They do not have time to negotiate individually each agreement or contract in a meticulous form, but it is created a contract model that obligatorily must be signed by all that wish to acquire the product. They are called “Adhesion contracts”, whose content is settled down beforehand in general conditions that rarely undergo modifications by particular exigencies of the clients, who are practically forced to contract with the conditions imposed by the supplier.

The practical result of the use of this type of contracts has two opposed faces, in one side it is unquestionable the enormously benefices that for consumer and supplier is the rapidity and fluidity in the traffic that they originate, and mainly the rationalization of the economic activity that they generate, allowing a cut in the product costs; on the other hand we are whereupon at the same time they can be the origin of abuses and imbalances of the contracts that seriously harm the consumer, mainly because in the subscription of these "adhesion contracts" is obvious that an equality between the contracting parts does not exist, because the supplier always shows a privileged position which makes possible to him to impose his will to consumers, tending in addition "to overprotect himself" introducing all type of clauses that guarantee their interests, mainly in which are adjacent elements to the main object of the contract. Consumers do not have any possibility of negotiating the content of contracts, but their clauses are imposed to him, limiting in this way his capacity of decision.

It is at this point where appears the main problematic question for consumers, because if we do not discuss the contract to adapt it to the concrete interests of the consumer, the result in many cases is that the specific needs of the client-consumer are not covered.

The European legislator has not been able to be away of this problem and he has tried to create a norm that mainly protects the consumer of the abuses that through these contracts are originated to the consumer on the side of the supplier, mainly considering that such measures are essential to obtain the communitarian objectives of an inner market without borders and where it is guaranteed the free circulation of goods, people, services and capitals. It is for this reason that different norms arise, a communitarian and state level, to regulate such situations. Nevertheless, the experience has demonstrated that neither these, nor the other norms and measures existing at the moment, have been enough to obtain an efficient protection of the consumer, because as it happens commonly, the trap of the supplier always goes in front of the norm of the turn legislator, and thus in most of the situations it occurs when the existence of a certain unfair term in an precise type of adhesion contract is stated, or have been signed hundreds or even thousands of them by the off guard consumers, much more at the moment with the technology, where the contracts can transfer borders very easily (electronic bank, distance sale, etc.).

For all these reasons, we are going to analyze, among other questions, mainly the problematic ones to which, in this scope, faces the consumer-user, to develop simultaneously diverse proposals of normative evolution to obtain an homogenization and improvement of the European legislation the most beneficial possible for the European consumer, emphasizing mainly what is referred to actions and preventive measures, and it with a special attention to the financial consumer scope, that due not only to its important number, but also, to the high economic quantities they move, and mainly, to the technical - legal difficulties that entails normally its interpretation and understanding, it is one of the sectors where the adhesion contracts have been more questioned, specially in which talks about the called “retailer bank" and the "values contracts".

II. - ANALYSIS

That the consumer is not able to compare the different adhesion contracts offered by each one of the companies is something evident, circumstance that on the other hand breaks from the beginning the theoretical equality between the contracting parts placing in a clear situation of superiority the supplier. So that the consumer is practically forced to contract though conditions unilaterally imposed by the supplier, without having the opportunity to negotiate the conditions with this one, and without have been able to compare them with which that offer the other suppliers of the sector.

This complex situation hits the persecuted way towards an European single market that has a same judicial – legal state, and that obviously has to seat the free market, for which is necessary to establish measures that eliminate that feeling of defenselessness that has the European consumer when contracting with companies of a different State, to achieve greater transparency in contracts and in this way compensate the evident situation of superiority in which are involve the suppliers before the consumer in concrete facts such these contracts of adhesion, being the financial sector, maybe, as we say, one of the most needed by these measures.

Concerning the regulation of the general conditions of the contracts and the consequent protection of the unfair terms, at state level once again we are whereupon that historically a different norm in the different communitarian States has existed, thus, in legislations as the German, during long time the only protection against the unfair terms was the one that provided the concrete intervention of the Courts in each concrete case. On the other hand, few legislators as for example the Italian understood from the first moment the importance of giving an effective regulation in the matter.
At communitarian level the main reference of consumer protection is the Directive 93/13/CEE of the Council of 5 April 1993, on unfair terms in contracts celebrated with consumers. This Directive brings a regulation of minimums applicable, because it is not focused in a concrete economic sector, but it is applicable to all the sectors, including the financier, with the only imposed limitation that the contracts have been celebrated between a professional and a consumer. With this norm we try to obtain more effective protection of the consumer though the adoption of uniform norms on unfair terms, though the approach of the legal, prescribed and administrative regulations of the States member unfair terms in contracts celebrated between professionals and consumers.

We can find the origin of this text once again in the obligations that towards the protection of the consumer impose the article 129A of the Treaty of the European Economic Community, and mainly the article 100 A of the Constitutive Treaty, being its legislative progression in the initial Proposal of 1990, the modified Proposal of Directive of the Council of 1992 and the Proposal of Directive of the Council on unfair terms in contracts celebrated with consumers.

The other pillar of the present communitarian norm in protection of consumers interests in front of adhesion contracts is more recent, is the Directive 98/27/CE of the European Parliament and the Council of 19 May 1998 on injunctions for the protection of consumers’ interests, created as complement of all the other existing norms, it looks for to obtain guarantees of its effective fulfilment, and before the inefficiency of the existing mechanisms until that moment, having as objective to approach all the legal, prescribed and administrative regulations of the pre-existing in the States member in relation to injunctions, very similar to which in Anglo-Saxon is known as "class actions".

Entering in which is the analysis of the particular aspects of the existing norm, we should talk about:

Extension of the concept of consumer. - From the first moment we already find an important limitation at the time of applying the communitarian Directive 93/13/CEE on unfair terms, since this one, initially addresses only those contracts celebrated between professionals and consumers; excluding specifically from its scope of protection all that purchaser who acts in his professional activity, who are totally outside the application of the norm.

Thus, in particular, a case which worries, is that in this situation it has systematically discarded that different "purchasers" could be considered "consumers" with the object of the Directive, by the simple fact of being subjects who operate with a minimum of "professionalism" in the market. This criterion is unsatisfactory, because as indicates Carrillo Pozo, with this interpretation is left without protection the small retailer who contracts with the big company, when to all the effects it is more a consumer than a supplier is.

The solution to this problem goes through the legal redefinition of the concept "Consumer", and in this sense, a good solution is the one that proposes Calvo Caravaca to simply define consumer as "the weaker contractual part" of a legal business, which would open the frame of possibilities of inclusion of the protection of determined collective which when operate with big companies, are consumers, and the present concept should be applied in an extensive way.

Another good solution is the one that is already settled down in the present Greek regulation, that uses to define the concept "consumer" the simplest criterion of "final user", giving therefore an ample and much more clear notion, that the one of the communitarian Directive.

Improving the level of detection and control of the unfair terms. - The experience has demonstrated us that there are not few the contracts written up by the own financial organizations which contain unfair terms, that is to say, contractual conditions that deprive the fundamental rights of the consumer. Against this it is difficult to act, since, although even certainly its invalidity seems evident, is necessary that decrees it a judicial body, for which previously must be opposed judicially and lamentably normally this does not happen, mainly with regard to adhesion contracts of insurers and banks, since these organizations avoid to go to the last judicial instances, thus jurisprudence is not created on its terms, in such a way that, when it does not happen, those conditions will be applied. It is more, when the user tries to denounce the applicability and legality of that type of terms, the financial organization normally will try to reach an economic agreement with the consumer, in such a way that the term in the contract is going to be conserved, term that is written up by the own company and that is used to celebrate mass contracts.

But even when the user was completely determined to denounce them, we were whereupon it continues being enough complex to locate these unfair terms because they have many shapes and normally we only recognize them if we observe them in relation to other clauses which complement them, and of whose conjunction really arises the abuse, demanding like this certain ability and knowledge for its location.

This concrete aspect relative to the function of watching adhesion contracts of the financial organizations has had an attempt of solution through the commented Directive of Unfair Terms and the legislative adaptations of each State, however, the Directive although it provides an enumeration of clauses that could be considered unfair, does not reproduce an exhaustive enumeration and neither make it the adaptations legislative, because among other things it is impossible because they are in constant inventive, nevertheless if we think that, at least, the enumerations of unfair terms that are made they would have to be considered as imperative, that is to say, not leaving in the air its possible declaration as unfair (as makes the Directive), but specifically define these as abusive (as for example establishes the Greek legislation). This is important, because given the obvious difficulties that supposes to find a notion of unfair term, sufficiently ample and simultaneously clear, that allows to fit them without discussion; these annexes (or registries) of unfair terms, that on the other hand would go in constant evolution incorporating those that have arising, would allow that as minimum, could be avoided the effects of the already catalogued, and thus for which that are not previously including in these listings we would find the eternal problem that previously it is necessary to go to the courts to obtain that a specific clause is declared unfair.

As positive aspect in this fight, we must emphasize the important advance in the consumer defense that has supposed allowing the appreciation of office of the unfair terms on the side of the Courts, which gives a greater manoeuvre margin to the Courts when correcting the injustices that can be produced as a result of imposed contracts to the consumers (Sentences of the Court of Justice of the European Union of 27 June 2000 and 21 November 2002).

Before this complicated perspective, we understand that a deep reform of the existing mechanisms must be carried out, with the purpose of looking for alternative solutions to the last control of the courts. Alternatives, that on the other hand we understand that they must go mainly oriented to which is the prevention of the abuse. In this way, we think that the establishment of the following measures would be positive:

a) Redefining the concept of unfair terms giving to it greater forcefulness when expressing that are unfair the terms that incur in the circumstances established in the Directive.

b) Establishing normatively that in an imperative way should be considered unfair all the terms contained in the Annex of the Directive, with no need of determining it case by case by the competent Court, such terms are considered void and they will be considered as not settled (in a similar way to which has become in the Greek and the Spanish right, in which has been called black list).

c) Thought periods: It is of special importance the establishment of thought periods or the denominated periods of grace in contracts of acquisition of financial goods and services, similar to the established in the Spanish legislation related to contracts celebrated outside mercantile establishments. Consumers are themselves impelled to accept contracts that perhaps studied quietly during a thought period could see that they are detrimental to them and not make them.

d) Creation of an European Registry of General Conditions of the Contracts: Whose aim would be to have a system of control and supervision at communitarian level, which contributes to give greater security and transparency to the user at the time of contracting in the different communitarian states.

It would be an open public registry, similar to the already established in Spain, where they would register with non voluntary character, but obligatory the terms-type that at the time of celebrating contracts use the companies that operate at communitarian level in more than one State, like those conditions that in certain sectors prevail by the side of the communitarian or state bodies, as well as the sentences that all the Courts declare null, by unfair, the terms contained in a contract. Also, similar to the Spanish one, it would have certain conciliatory and even arbitration function.

The terms that are registered in this registry will be considered to all the effects as void and they will be considered as not made.

In this new registry the direct intervention of the Consumer Associations would have to be concrete, stipulating among other things the possibility that the Consumer Associations could examine deeply all adhesion contracts with previous character to their exit to the market, giving them the legal possibility of paralyzing temporarily its effective exit if they detect that some kind of problem for the consumer could arise from them, in order that this one cannot be preventively contracted while the Consumer Associations initiate the judicial proceedings for their total or partial opposition.

e) Giving greater implication to the official organisms, and in general of all the public administrations in the fight in front the unfair terms, among other measures, through a direct use of the injunctions, for which they are legitimized.

f) Reaching greater implication of the public registers (notaries, bookmakers, etc.) in its detection, who will not only have the obligation of not allowing the subscription of any contract that contains terms that already have been catalogued as unfair, but in addition it should be impose to them the legal obligation of communicating to the competent Public Administration any term that according to their criterion, could cause some type of unfairness for consumers.

Injunctions. - In this line relative to the opposition of contracts, and focusing us in the effective judicial control of the Courts, it must be indicated in first place, that to this one it is possible to arrive through individual actions exercised by the adherent, or, through collective actions. This last one is perhaps one of the biggest legislative news that it has been introduced recently to give protection to the consumer in the matter of unfair terms, because without any doubt these called collective actions have supposed a great advance in the defense of the interests of the European consumers.

Concretely the European Parliament and the Council approved the Directive 98/27/CE, the 19th May 1998, on injunctions for the protection of consumer’ interests, Directive that the diverse States that formed the EU have been incorporating to their respective state legislations. Nevertheless we think that it is not enough with this, but it is necessary in addition to pick up the figure of the Consumer Associations as legitimized part to act in other jurisdictional scopes as it is mainly the penal jurisdiction, where till now, for their intervention have been forced to go to different figures as are the Particular or Popular Accusation. In any case, the certain thing is that the legitimation of the Consumer Associations in states as the Spanish is clearly decreased as far as although it is specifically recognized their right to the free legal attendance this is not complete because it is not present in all the jurisdictions, and mainly for the lack of economic protection that the Consumer Associations have at the time of initiating them, among other things by the reservations introduced with respect to the part of sentence in costs corresponding to the lawyers expenses of the opposite part, which entails an important economic risk and mainly for not having the express exemption to lend guarantees in all the procedural scopes and moments (See as example the Opinion of the Legal Service of the Spanish State for the Benefit de Free Justice of the Consumer Associations, Civil RD 523/98).
Focusing us already in the Directive 98/27, we have to say that the European Union chose a Directive of minimums which at the time of its transposition to the internal orderings could be reinforced by each one of the States member. Its objective was to approximate the legal, prescribed and administrative regulations of the States member that existed until that moment, with the aim of guaranteeing the good performance of the inner market, looking for stopping the harmful behavior, as the judicial prohibition of future reiteration of that behavior if it exits enough indications that make fear its reiteration.

Given the evident force and repercussion of this type of actions, it is necessary that the legitimation for its exercise is perfectly delimited, nevertheless, the certain thing is that the Directive defines in a too generic and ample form the characteristics that must fulfill all "qualified organization" to exercise an action, although we think that it is not question to limit the number of organizations that have this legitimation, but rather to notice which organizations really look for legitimate purposes at the time of raising them, which, taking advantage of this legal rating must take advantage of it and make use of it when they think that a situation of abuse can exist, does not matter if it is Consumer Association, Ombudsman, or even official organisms. Nevertheless, it is sure that in spite of this ample extension in the legitimation that even includes the consumer public administrations and other qualified organisms, it is been vain, because actually only the Consumer Associations are really making a true use of them. The Consumer Administration and the other public organisms in general, are not doing practically use of administrative actions neither judicial of cessation, leaving everything into the hands of the Consumer Associations, which on the other hand in spite of having to support such charge, have not received an economic compensation of the administration that compensates the important effort that supposes to carry out some functions that in many cases would have to be exercised directly by them.

In this sense it is necessary to show a concrete critic to the performance in Spain of the Fiscal Ministry, the National Institute of Consumer and the consumer organisms on of the Autonomous Communities and the Local Corporations, which in spite of having granted them legitimation to exercise injunctions, till now they have not shown any interest in using such faculty.

Finally, to conclude this report, and in agreement with which have been said, we want to express some measures that we think that at communitarian level would have to be taken with the aim of improving the utility of this class of actions:

a) Giving the collective actions a greater preventive or repairing character together with a proceeding of highly summarized procedure.

b) Establishing with greater concretion which organizations really look for legitimate purposes at the time of raising injunctions.

c) Allowing the accumulation of the actions interposed by the different legitimized ones.

d) Concreting the form of free publicity of the demands that are interposed, which as minimum always would be in bulletins and state mass media, being created in addition a "special registry" to know the judgements on collective injunctions already initiates. This registry would avoid bringing different suits on the same cause and their possible contradictory resolutions.

e) Establishing specifically the dispensation of caution to some Associations or groups that by their representativeness are considered specially legitimized.

f) Creation of a fund that allows joining the indemnities that are established by the courts for repairing the damaged interests or by paid amounts in case of breach of the condemned of the implementation times. These amounts would be destined to palliate the shortage of funds destined to the consumer associations so that, with fulfillment of a series of guarantees, they can use them in order to cover the expenses that suppose the fact of exercising injunctions.

g) Establishing a subsidiary action to the one of injunction of claim of damages, is to say an action of indemnity for the damage caused by the illicit action.

In conclusion, to reach the persecuted aim of the European single market all goes firstly though seating the free market, for that it is necessary to create measures that eliminate the feeling of defenselessness that has the communitarian consumer when contracting in other States member. In this line, the followed way in the fight against the abuses produced with the General Conditions of the Contract is correct, but it must be completed, because it is not enough with creating norms, legal actions, etc., if its use it is not promoted and the organizations which have to exercise them do not have the economic means to do it. In addition, this protective norm of the consumer must be something more than simple rules of common minimums of character merely orientative that leaves practically everything into the hands of the States member, but that must be a clear and precise norm, that it delimits with exactitude the margins of protection of the consumer without opening to the States possible ways of escape at the time of its application. If a clause is abusive and like this it has been declared already by a Court, to all the effects must be considered like that, with no need that every time the Courts demand its declaration.