It’s election fever in Hungary. The national elections the 6th April will decide and show important things. As soon as they will be over and the parties have digested their results, the European election campaign will start. Usually, European elections are used as risk-free safety valves – discontent with governing (or in general „establishment” or mainstream parties can be expressed, without a consequence on domestic politics. In Hungary this time this doesn’t have to be so: domestic political opinions can be expressed in April and there will be no experience on the performance of the new government (which will be formed about a month after the elections only). Hungarian national elections also have seen a lot of protest votes and this time this will not be different. But this is another story. It can be expected that the campaign and the voting will really be about Europe, and also that only those go voting, who are interested in Europe. Thus, less Eurosceptic votes can be expected – save some surprise and a huge mobilisation by the eurosceptics – who cannot expect domestic advantage from the votes. What message can the parties give? More Europe, roaming fees, federalism, Agenda 2020, peace – or on the other side: national independence, exploitation, eurocracy – the latter are easy and popular messages but do not mean more than the ones in the first group. If we investigate, however, the national interests which Europe can support or hinder, there can be clearer messages. Hungary is dependent on imports (among them energy from Russia) and also on exports. Foreign capital is an important factor in creating employment. Hungarians are not as mobile as some other East- and Central-Europeans but still fairly mobile. Learning languages is paramount for young people and for job-seekers. Free movement in the EU is in our interest. To be able to export, we are interested in all measures to provide not just a level playing field but also abolishing administrative barriers, thus: unification of rules and practices in the area of trade, technical and security requirements, standards. And this also extends to the legal field: consumers in Hungary should be safe in buying European products and Hungarian products should be accepted in the EU as equally good quality and secure. Hungarian companies provide services abroad, competing with lower prices. It is our interest that fears from “social dumping” should not hinder our companies working abroad and our compatriots who want to work or study there. We do not want that Hungarians working abroad should have less social security because working abroad. So we are interested in a level playing field, good rules hindering social dumping so that this allegation should not have a basis. However, our budget and social security is not strong enough to provide the level in some richer countries and if we were forced to do that, we would lose our competitivity and even face serious financial problems at home. In the area of consumer protection and data protection, we favour a common approach and the possibility that the consumer or citizen (who would like to complain against abuse of personal data or unfair practices in selling or servicing goods) should be able to do it without having to b entangled in legal disputes in a faraway country. I will also go on to talk about other areas but would like to raise another question: who should be the Hungarian Commissioner and what function could he/she target? We already have some experience in the dealings and also the pitfalls of the distribution of responsibilities in the Commission.

European Court Cases affecting Hungary - part two

This time about a case which got some publicity in Hungary and one which did not. It concerns customer protection, which is in the powers of the EU as a unified market clearly requires uniform consumer protection rules. The cases were so-called "references for preliminary ruling" where a national court dealing with a topic which is subject to European law, can ask the European Court of Justice to interpret a European regulation or directive. A lot of these cases are about whether a certain national law is in line with European legislation as if it is not, it cannot be applied. In most cases if a directive is not implemented correctly, the directive should be applied, except against individuals if the national law is unfavourable to the State (this means that a Member State cannot benefit from its own failure to implement the directive). (for example Case 8/81, Ursula Becker v Finanzamt Münster-Innenstadt). But also interpretation of a regulation can be asked from the Court. In the case (C 472/10) between the National Authority for Consumer Protection (Nemzeti Fogyasztóvédelmi Hatóság) and Invitel Távközlési Zrt, a telecommunications company, the Hungarian court proceedings were about the right of the provider to charge its cost from expenses due to a specific form of payment to the client who chose this form of payment. The client had a contract - fairly frequent - where in exchange for a benefit (like free or cheaper purchase of equipment) the client undertook not to cancel the contract for a certain binding period. Thus, it did not have the possibility to chose another provider due to the increase of the charge. Another aspect of the fee increase was also taken into account by the Court: " term included in the general business conditions of consumer contracts" enabling "unilateral amendment of fees connected with the service to be provided, without setting out clearly the method of fixing those fees or specifying a valid reason for that amendment". The Court set out some guidelines in judging terms in the general conditions invalid: "The national court must determine, inter alia, whether, in light of all the terms appearing in the general business conditions" "and in the light of the national legislation" whether "the reasons for, or the method of, the amendment of the fees connected with the service to be provided are set out in plain, intelligible language and, as the case may be, whether consumers have a right to terminate the contract". Thus, the reason and method of the change of price must be set out clearly in the general conditions, but the absence of the right to terminate the contract is also a factor to be considered. Thus, the general interpretation in the Hungarian press that all clauses in the general conditions which give the provider the right to change the price are invalid, is too wide, there are conditions under which price increases - in particular if there are elements of cost which change - can be valid. There is one factor I miss actually from among these factors: it is the possibility of the consumer to change some behaviour to escape from the price increase. In this concrete case, the fee was tied to a certain method of payment and the change of payment method may have been open to the customer. The other question was whether the national authority has the right to declare the clause found invalid by the national court invalid in respect of all other contracts. The answer of the European Court of Justice to this question was also yes: "it does not preclude the declaration of invalidity of an unfair term included in the standard terms of consumer contracts in an action for an injunction, provided for in Article 7 of that directive, brought against a seller or supplier in the public interest, and on behalf of consumers, by a body appointed by national legislation from producing, in accordance with that legislation, effects with regard to all consumers who concluded with the seller or supplier concerned a contract to which the same general business conditions apply, including with regard to those consumers who were not party to the injunction proceedings" This means that if national legislation gives the right to the consumer protection or similar authority to declare invalid the clause which was found invalid by a court also in respect of consumers who were not parties to these court proceedings. The other case (C 137/08) between VB Pénzügyi Lízing Zrt. and Ferenc Schneider , the question again is the validity of a clause in the general conditions, this time the court having jurisdiction for a case between the service provider and the client. It is normal practice to assign a court which has jurisdiction in a case. This is also often contained in the clauses of general contractual conditions. Under Hungarian law, the court on the seat or residence of the defender has default jurisdiction. That would mean that the service providers suing customers would have to sue them at the court where they live and this is usually avoided by this clause, prescribing the jurisdiction of the court close to the service provider. As these are in the bigger cities, typically in Budapest, they can be assumed to be usually more experienced in business law. The court in which the case, in conjunction with which the preliminary ruling was requested, suspected that this clause of assigning jurisdiction may be invalid and thus asked the European Court of Justice whether it can refuse to handle it. The question was also raised whether a clause in a contract can be considered invalid when the client did not contest its validity before. The Court suspended the case until the judgment in another (C243/08) between Pannon GSM Zrt. and Erzsébet Sustikné Győrfi where it was established that: "The national court is required to examine, of its own motion, the unfairness of a contractual term where it has available to it the legal and factual elements necessary for that task." Thus, the court could declare on its own motion invalid the its assignment and refuse to handle the case. A more interesting question is, which finally has to be decided by the national court and sorry enough, I did not find any information about the result of the case in the Hungarian court, whether such an assignment can be declared invalid. The court found that a “term whose purpose is to confer jurisdiction in respect of all disputes arising under the contract on the court in the territorial jurisdiction of which the seller or supplier has his principal place of business, obliges the consumer to submit to the exclusive jurisdiction of a court which may be a long way from his domicile. This may make it difficult for him to enter an appearance. In the case of disputes concerning limited amounts of money, the costs relating to the consumer’s entering an appearance could be a deterrent and cause him to forgo any legal remedy or defence. Such a term thus falls within the category of terms which have the object or effect of excluding or hindering the consumer’s right to take legal action”. Thus, taking into account the circumstances, such a term may be invalid. The court did not establish that such a term is necessarily invalid, just that it can be invalid (“must be considered in the light of the particular circumstances of the case in question (see Freiburger Kommunalbauten, paragraph 22)”) and that if it is, the court assigned in the contract can refuse to deal with the case. There is one gap in the argumentation of the court: as mentioned, in Hungary the default court is the one on the seat or domicile of the defendant, thus, when the customer wants to sue the provider, the default court is also not necessarily one close to him/her. On the other hand, the argument is valid when (as in the concrete case) the provider sues the customer.