Jurisdiction EU Consumers

Consumer Contracts

Consumer contract rules relate to a dispute arising out of a contract.  One of the parties must have entered the contract outside his trade or profession. The contract must relate to one of the following:

• sale of goods or supplies,
• instalment credit terms,
• contract for a loan repayable in instalments or
• other contract to refinance the sale of goods,
• contract for sale of goods on instalment credit terms,
• loan repayable by instalments or other credit paid to finance the sale of goods

More generally, it covers a contract concluded with a person or entity who pursues commercial or professional activities in the state of the member’s domicile or by means directs such activities to that state, and the contract falls within the scope of the activities. This implies that the consumer contract is concluded via an interactive website accessible in the State of domicile.

The consumer may sue the supplier either in his State of domicile or where it has a branch or is deemed domiciled by having a branch or where the consumer is domiciled.  The consumer himself may only be sued where he is domiciled.

Employment

The employee may sue the employer in the State of the employer’s domicile or place where the employee habitually carries out work.  If he does not officially carry out work in one country, he can sue the employer in the place where the employer’s business is situated.  The employee may only be sued in the State where he is domiciled.

The rules may only be departed from where the dispute arose after the agreement is entered after the dispute arose or where the agreement allows the employee to bring proceedings other than those designated (Article 21).

Broadly speaking, the effect of the rules is that the defendant must be sued in his home jurisdiction.  Generally,  the consumer, employee or policyholder has the option of suing in the other party’s jurisdiction or in his own.

Insurance

The insurer may only bring proceedings generally where the defendant is domiciled. An insurance company domiciled in one EU state may be sued where he is domiciled or where the policyholder is domiciled. The same principle applies to an insurer who is not domiciled in the EU but has a branch or agency.  The rule applies in this case in relation to disputes arising out of the operations of that branch or agency, i.e., policies issued by it.

In the case of buildings, insurance or liability policies, the insurer may be sued where the event occurred, and the insurer may be joined in proceedings brought by the injured party against the insured.

Choice of State Consumer

A contract choosing a particular jurisdiction is only effective in one of the following circumstances

• concluded after the dispute:
• gives consumers wider choice than the Regulation allows
• state where the consumer and supplier are domiciled or habitually resident in the same Member State and which confers jurisdiction on the courts of that Member State.

The rules do not apply to an assignee. If a consumer assigns his rights under the contract, the assignee is not entitled to the benefit of the rules. This is because he is not a consumer.

Choice of State Insurer

A clause conferring jurisdiction is valid only if

• it was agreed after the dispute arose,
• gives the insured a wider choice than otherwise would be allowed or gives jurisdiction to the country in which both the policyholder and insured are domiciled or
• if the policyholder is not domiciled in a Member State or the insurance deals with major risks such as maritime insurance (major risks are defined).