SMALL SHAREHOLDERS AS CONSUMERS:
THE NEW CONCEPT OF MONEY SAVER – INVESTOR, LEGAL PROTECTION IN EUROPE AND THE PARTICIPATION AND REPRESANTATION STATUTE

A. DOCUMENTATION
The notion consumer
The Greek Act 2251/1994 on consumer protection adopts an extremely wide interpretation of the notion “consumer”. In order to regard a person as a consumer and to protect him with its provisions, this Act uses the criterion of the final user of the offered product or service in a market. Consequently, not only the person who is acting for purposes, which are outside his trade, business or profession, but also anyone who can be described as a final user of a product or service can take advantage of the protective function of this Act. Currently, one draws the conclusion that the term “consumer” has been separated from the standard of purposes outside trade, business or profession that are necessary, according to the directives and the rest European legislation .
However, this interpretation is not totally accepted. In Greece there is a great dispute over this width of the notion “consumer”. Many authors insist that the criterion of the final user is neither safe nor compatible with the purposes of the directives, so that another stricter interpretation of that notion has to be adopted in reference with the standard, whether the so – called consumer is acting for purposes that are outside his trade and business. In this theoretical argument one can not ignore the view that the assessment whether somebody is being protected by the provisions of the Act 2251/1994 should be drawn ad hoc under the precondition that the specific acquirer of the product needs or not protection. This proposal has the advantage that is compatible with the jurisprudence of the European Court of Justice. One has to refer to this dispute in order to show the importance and the dynamic of the notion of the consumer here in Greece, after the Act 2251/1994 has been adopted according to the directive 93/22 on unfair terms in consumer contracts.
Besides these general ideas on who can be considered as a consumer, the crucial question is whether shareholders and generally investors do or do not fall within the scope of the protective provisions for the consumer. In support of this matter two contradictory views have been expressed:
According to the first point of view all the acquirers of retail banking – including the sale/purchase or possession of stock market products, such as shares or futures – should be regarded as consumers due to the almost overwhelming power of the banks, which have the ability to promote their interests by imposing unfavorable terms of their services to the acquirers. Hence, there is a need for a wider interpretation for the term “consumer”, as he is vulnerable to many abuses at this field of the market and his legal interests are in great danger.
The second approach expresses a negative answer to the abovementioned question based on the ground that the person who speculates by investing in stocks in the hope of gaining, should not benefit from the consumers’ protective legislation, as he does not fall within the scope of a typical consumer in need for protection. The shareholder, according to this position, should be excluded from the protection provided to consumers, since this legislation does not refer to him, regardless the fact that he is a small or a big shareholder and furthermore when he is negotiating with companies or credit institutions, which possess superior to his contractual power.
One can observe that the first point of view prevails. Increasingly often, theory and jurisprudence confirm that investors cannot generally be kept out from the legislation on consumer protection, on the sole basis that they are simply investors; additionally, theory and jurisprudence demand some more preconditions, so as to recognize an investor as a consumer and to allow him to take advantage of the legal protection. This protection can not be neglected, as it extends to the prohibition of unfair terms in consumer contracts (article 2.6 and 7 of the Act 2251/1994), to the prohibition of misleading advertisement, in case companies are calling investors to spend money on specific and untrustworthy shares (article 9 of the Act 2251/1994), to the provisions about Internet or distance sales and finally to the strict obligation imposed on brokers and creditors to provide their clients with both high – quality information and advice. The violation of these prohibitions and obligations by the creditors will entitle the investor – consumer to take legal action before the Court due to his/her compensation.
The jurisprudential approach and paradigms:
I. At this point one has to describe the way the courts have used the aforementioned principles and legal framework. Many cases in reference to this matter appear due to the general tendency of English companies and especially credit institutions to introduce their contracts dispute settlement clauses stipulating the exclusive competence of the English Courts and terms concerning the application of the English Law. Based on the provisions of articles 15 and 17 of the Brussels Convention, the English Court ruled that the particular contractual term providing for extension of the jurisdiction was invalid, while it focused on the unfair treatment of the parties which consisted in putting excessive financial burden upon the Greek investor in case the disputed contract was to be found valid. V.Douvlis commenting on this decision emphasizes on the fact that the same conclusion regarding the abusive character of the particular clause would be reached by reference to the regulating framework of the Treaty of Rome and the provisions of the Greek Act 2251/1994. Generally, one can spot an extension in the submission of non-professional contracts to the rules regarding the consumer protection, in both national and European level.
II. On the validity of such terms stipulating the exclusive competence of foreign to consumer courts, Athens Court of Appeal also ruled that the investor in financial products is not separated from the consumers’ protective legislation, but also does not fall within the scope of the Brussels Convention on the sole basis of the fact that he is comparatively weaker than the other party and invokes a different activity from his principal profession. Criteria such as the type , the value and the characteristics of the financial product as well as the role of the investor related to the function of the product, are crucial in order to be assessed whether he is in an “objectively” weak position or acts in a way that cannot be deemed as a professional occupation. Only the fulfillment of these two prerequisites being indispensable in order for investors to invoke the abovementioned procedural provisions can lead to the description of an investor as a consumer. This interpretation of the Brussels Convention finds itself in accordance with the interpretation conducted by the ECJ.
The ECJ, which determines the notion “consumer” in an authentic manner based on the framework of the Brussels Convention, has repeatedly ruled that the Convention is inspired by the concern to protect the consumer as the party deemed to be economically weaker and less experienced in legal matters than the other party to the contract . The protective role fulfilled by those provisions implies that the application of the rules of special jurisdiction laid down by the Convention should not be extended to the people for whom that protection is not justified . Hence, the justification of the protection will be judged upon the fulfillment of the two-abovementioned prerequisites. The investor will be regarded as a consumer and will enjoy the benefit of the protective rules, only when he is a private final consumer in an objectively weak position, not engaged in trade, business or professional activities.
Small shareholder as consumer
We believe that all the abovementioned preconditions being indispensable for the investor in order to be deemed as a consumer, are fulfilled in the case of small shareholders. In fact, the small shareholder is the one who is in an objectively weak position and who is not acting for purposes connected with his profession or trade. He only tries to save some money without having any particular knowledge or interest in stock products. Consequently, through all these criteria one can identify a small shareholder. That is why he has to be considered as a consumer, so the legally offered protection seems to be justified, as the ECJ strictly demands. However, the answer to this question, whether somebody can be considered as a small shareholder and therefore a consumer, should be assessed ad hoc in reference to the described criteria.
B. NATIONAL LEGISLATION
The Act 2251/1994 maintains an undisputable importance in the field of consumer protection, even in the case that a small shareholder can be regarded as a consumer and needs protection. This Act may very well be applied to the field of share stock exchange sufficiently covering the need for protection. In particular :
? Article 2 paragraph 6, states a general prohibition for unfair terms in consumer contracts, so that each time a contractual term causes a “significant imbalance” should be considered to be invalid and abusive.
? Article 2 paragraph 8 that contains a catalogue with indicatively unfair terms.
? Article 9, which refers to misleading advertisement, can also be applied, in case a firm or a bank provides services of free stock exchange transactions without fulfilling the legal prerequisites.
Apart from the Act 2251/1994, the Deontology Code for Brokers needs to be mentioned. The aforesaid Code incumbents upon the brokers the duty of providing their customers with all the accurate information regarding the customers’ experience, knowledge and skills. This duty for providing information appears to be a very important factor for a true and effective consumer protection, since this Code does not allow the brokers to exclude contractually this obligation. Any exclusion will be regarded as invalid, as long as the investor – consumer needs to be informed. Between this Code and the Act 2251/1994 a significant connection can be spotted, so that a better legal framework for consumers to be drawn .

C. EUROPEAN LEGISLATION
The EU perspective is that, in order to create a safe market for investors, customers should be classified, enabling regulatory protection to be focused on those that need it the most, plus allowing a lighter touch for inter-professional business. One of the recitals to the 93/22 Directive on investment services in the securities field states that “ whereas it is therefore appropriate to take account of the different requirements for protections of various categories of investors and of their levels of professional expertise...”. The operative provisions related to this concert can be found in Article 11, in particular: “ …that an investment firm makes adequate disclosure of relevant material information in its dealing with clients” in a way as to “ take account of the professional nature of people for whom the service is provided”.
Hence, European Union adopts the view that investors should be protected by the creation of a market that is safe and fair for them. This point of view is positive to the differentiation of the duty to inform according to the type of investor . Consequently, it is accepted throughout the EU that investors need to be protected from those who operate in financial markets, that the closer the investor is to the market the less protection he needs, and that it is unnecessary for market operators to protect those who do not need protection. Customer classification appears to be a useful regulatory tool. As far as classification concerns, the Forum of European Securities Commissions (FESCO) focuses on the top level category of “professional investors” identifying a category of investors who may be presumed to be experts in all investment services and products, in order to be prudent to take the initiative of seeking additional information and advice .
According to all the above choices one can draw the conclusion that the small shareholder is being protected by the provisions and purposes of the Directive 93/22, which ensure that he will have an adequate and fair access to information that is very important in this field. Both the role and criteria of customers’ classification have a positive effect on the protection of small shareholders as consumers.

D. PROPOSALS
The legal framework of small shareholders can be described as sufficient, at least for the time being. Jurisprudence and theory have successfully played the part in defining the interpretations of legal dispositions and moreover extending the consumers’ protection for investors of such type, who are vulnerable to abusive attitudes by the market operators. Small shareholders have the ability to enjoy the offered protection in the fields of unfair contractual terms, misleading advertisement as well as sufficient and fair information.
Apart from these positive steps our belief is that a trend towards widening the scope for those who need protection, should be encouraged. In order to make our proposal more effective we suggest that the notion of a small shareholder should be strictly determined not upon quantitative criteria that lead to a strict, inflexible legal status but upon the ad hoc examination of each case. In particular, criteria such as the type, the value and the characteristics of the financial product as well as the role of the investor related to the function of the product, should be decisive in order to be assessed whether he is in an “objectively” weak position or acts in a way that cannot be deemed as a professional occupation. Our suggestion would take effect by adopting a legislation that takes the aforementioned analysis of jurisprudence and theory into consideration. This would lead to a more standard and effective approach of the matter.
This proposal appears to be necessary, as long as more and more consumers interfere with such products and transactions without any particular knowledge or experience, but only in hope to save some money. Since all these people cannot be described as professionals along with their weak position against creditors, the need for protection seems to be indispensable.