Consumer Protection in the Polish Civil Code Lukasz Szymanski, assistant lecturer, Cardinal Stefan Wyszynski University, Warsaw Poland, Faculty of Law, Civil Law Department 31 th March 2011

Polish Civil Code – origins In 1918 Poland recovered freedom after 123 years In 1933 the first Civil Code (precisely Obligation Code) was established In 1964, after II WW, the new Civil Code was established,which is binding up to now The biggest influence on the Polish Civil Code (PCC) has the german BGB (Bürgerliches Gesetzbuch)

Consumer protection in the Polish Civil Code - origins Most of the regulations related to consumer protection in the Polish Civil Code have their roots from the European Law The best example is the COUNCIL DIRECTIVE 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts which was implemented directly into the Polish Civil Code Other typical European law consumer protection directives like: -Consumer Credit Directive, -Distance Selling Directive, -Sale of consumer goods and associated guarantees where implemented to the separate acts (not to the PCC)

Consumer protection – general ideas Why should we protect consumers at all? There are weaker parties to the contract They are no professionals They do not have experience and knowledge as the opposite party does It is clear for example when a consumer concludes a contract related to the financial market (very sophisticated) - insurance contract

Definition of the consumer Stipulated in article nr 22(1) of the Polish Civil Code (PCC) The consumer shall be any natural person who performs acts in law which are not directly connected to his economic or professional activity.

Definition of the consumer only natural person performs acts – very wide (could be also unilateral) not directly connected – can create interpretation problems where a decision has to be made, when the activity is not directly connected and when it is directly connected, for example: consumer buys a new suit which he uses both for private and business purposes

Definition of the consumer not directly connected with his economic or professional activity – excluding small business, e.g.: tailor concludes banking account contract; dentist buys computer to surgery etc. Theoretically the definition does not exclude the possibility of calling a contract between two natural persons consumer contract, but this interpretation is against the ratio legis of this regulation

Model forms and consumers Most of the contracts concluded by consumers are operated by the model forms (e.g. general terms, general conditions, standard forms) Those contracts are called adhesion contracts A type of contract, in which one side has all the bargaining power and uses it to write the contract primarily to his or her advantage. "take it or leave it" basis.

Model forms regulation in the PCC Art. 384 par. 1 PCC A model form of a contract set up by one of the parties, in particular general conditions of contracts, standard forms of contracts and rules shall be binding upon another party if having been delivered to such party before concluding the contract. Problems in practice…

Model forms regulation in the PCC Art. 384 par. 2 PCC Where the usage of a model form is customarily accepted in a given kind of relationships, it shalI also be binding upon the other party if such party might have easily learned about its contents. This shall not be valid, however, for contracts concluded with the participation of consumers, except for contracts commonly made in petty current matters of quotidian life.

Model forms regulation in the PCC E.g.: legal person concludes banking account contract: …might have easily learned about its contents E.g.: consumer opens bank account: …having been delivered to such party before concluding the contract E.g.: consumer buys bus ticket: …might have easily learned about its contents

Model forms regulation in the PCC If one of the parties applies an electronic model form of contract it should render it accessibly to the other party prior to conclusion of the contract in a manner which enables the other party to keep and display it in the normal course of business. Very difficult to interprete. Should general terms be delivered e.g. by ? Probably not: only make it accessible (e.g. on the web page)

Changing of the model forms Article 385 (1) PCC stipulates a rule for changing model forms: The model form delivered within the duration of a contractual relationship of a continuous nature shall be binding upon the other party if the conditions specified in Article 384 have been met and the party concerned has not terminated the contract by notice at the earliest possible date of dissolution.

Other rules related to the model forms Art. 385 par. 1 PCC In the event of any discrepancies between the contents of a contract and the model form thereof, the parties shall be bound by the contract.

Other rules related to the model forms Art. 385 par. 2 PCC The model form of a contract must render its contents explicitly and comprehensibly. Controversial provisions must be interpreted for the benefit of the consumer. Very important interpretation rule for the courts: in dubio contra proferentem Judgment of the Polish Supreme Court IV CKN 1526/00

Abusive clauses Provisions of a contract concluded with a consumer, which have not been individually agreed with him, shall not be binding thereupon, if his rights and duties have been stipulated in conflict with public decency and in flagrant violation of his interest (wrongful contractual provisions). This shall not relate to the provisions which specify basic performances of the parties, including the price and remuneration if determined explicitly.

Abusive clauses Where the provision is considered as an abusive clause, the parties shall be bound by the remaining provisions of the contract. Consumer – art. 22(1) PCC not been individually agreed – art. 385(1) par. 3 i 4 PCC

Provisions not individually agreed The provisions not individually agreed are such provisions of the contract on which the consumer had no actual influence. It shall concern, in particular, the provisions of the contract taken over from the model form of contract offered to a consumer by a contracting party. The burden of proof that the provision has been agreed on individually shall be borne by the party who claims it.

Basic perfomances The clause cannot be considered as abusive when it is related to the provisions which specify basic performances of the parties, including the price and remuneration if determined explicitly. This regulation creates practical problems in interpretation. It is not easy to answer in concreto if aclause stipulates basic performances This was the case in the Polish Supreme Court ruling from 06th April 2004 (I CK 472/03). The problem was related to a clause which stipulated a banking fee for usage of a current bank account. Lawyers from the Polish Banking Association claimed that those are basic performances and so they cannot be considered as abusive clauses. However the Supreme Court decided that those clauses are not basic performances clauses

List of abusive clauses Art. 385(3) PCC stipulates open list of examples of clauses In the case of doubt, the wrongful contractual provisions shall be those, in particular, which: exclude or limit the liability to the consumer for body injury to a person; exclude or substantially limit the liability to the consumer for non- performance or improper performance of an obligation; exclude or substantially limit the setting off of a consumer's receivable debt against a receivable debt of another party; include the contents that the consumer was not able to learn about before the conclusion of the contract; allow a party contracting with the consumer to transfer rights and duties resulting from the contract without consent of the consumer; …

Insurance contract – exception We can only talk about abusive clauses when related to the contract with a consumer in the meaning of article 22(1) PCC – The consumer shall be deemed to be any natural person who performs acts in law which are not directly connected with his economic or professional activity However an exception was made in the case of insurance contracts. Art. 805 par 4 PCC stipulates that: The provisions of Articles 385(1) to 385(3) [abusive clauses] shall apply accordingly if the policyholder is a naturał person entering into a contract directly related to the person's economic or professional activity. E.g. tailor buys insurance for his workshop.

Control systems for abusive clauses incidental control process abstract control process In the polish civil law there are two ways to confirm that a concrete clause is abusive It is possible in so called:

Incidental control process It is applied by the court within the normal court proceeding In practice the court is analyses this issue only on the plaintiffs explicit claim A judgment only influences the case and the parties of this particular case

Abstract control process The claim can be only issued in front of a special court situated in Warsaw: it is the Competition and Consumer Protection Court, which is in the rank of a district court There is a very wide list of plaintiffs. Claims can be issued against entrepreneurs by e.g.: consumers who can potentially become a party of the contract consumer groups or associations The president of the Office of Competition and Consumer Protection local consumers ombudsman

Abstract control process The court is responsible only for the declaration if a clause is abusive or not. There are no judgments of money etc. When the court holds that the clause is abusive it will be listed on the List of Abusive Clauses which is issued by the Office of Competition and Consumer Protection The judgment binds not only the parties of the dispute: since an abusive clause is listed none of the entrepreneurs in Poland should use the same clause in their general terms

Abstract control process The entrepreneurs which still use abusive clauses after having them published on the List of Abusive Clauses can be fined up to PLN There can be also issued administrative fines by the Office of Competition and Consumer Protection

Brokerage house can refuse to accept order from investor due to important reasons A bank opinion about the credit issues costs of 250 PLN (approx. 75 EUR)

The List of Abusive Clauses In practice the benefit for consumers from this list is questionable E.g.: A bank starts using the clause: A bank opinion for the credit issues costs of 200 PLN (approx. 50 EUR). It is not clear if this would be an abusive clause or not

Bibliography 1.Z.Radwański, Zobowiązania – część ogólna, Warszawa 2008, 2.M.Skory, Klauzule abuzywne w polskim prawie ochrony konsumenta, Zakamycze 2005, 3.W.Czachórski, Zobowiązania, Warszawa 2004, 4.E.Kowalewski, D.Fuchs, W.W. Mogilski, M.Serwach, Prawo ubezpieczeń gospodarczych, Bydgoszcz – Toruń, D. Fuchs, Kilka uwag o obowiązywaniu wzorców w umowie ubezpieczenia w świetle nowelizacji art. 384 oraz 812 kodeksu cywilnego, [w:] Umowa ubezpieczenia, Warszawa 2007r., s. 92 i n 6.D. Fuchs, Znaczenie regulacji ustawy o ochronie niektórych praw konsumentów oraz o odpowiedzialności za szkodę wyrządzoną przez produkt niebezpieczny dla ubezpieczeń gospodarczych (cz. 1), Prawo asekuracyjne 3/2001, s. 16 i n. oraz cz.2, Prawo asekuracyjne 4/2001, s. 16 i n. 7.D. Fuchs, Wybrane zagadnienia ochrony konsumenta usługi ubezpieczeniowej, Prawo asekuracyjne, nr 4/2000, s R.Trzaskowski, Granice swobody kształtowania…, 2005