Consumer Protection: what is an ‘international element’ for the purposes of the Judgments Regulation (Brussels I)?

Consumer Protection: what is an ‘international element’ for the purposes of the Judgments Regulation (Brussels I)?

Are parallel proceedings required?

Many consumers use websites to purchase holidays etc but what happens when a dispute arises?  The consumer may find that the company it contracted with is not the only one against whom proceedings need to be brought.  It may also find that the relevant defendants are domiciled in different countries to each other.  Does that mean that parallel proceedings need to be brought against the relevant defendants? That was issue facing a family from Austria who booked a holiday on the internet through in Maletics v C-478/12.

Defendants in different jurisdictions

In a scenario that may well resonate with many, the hotel they thought they had booked turned out not to be the one booked for them and they ended up paying additional monies to upgrade to their preferred hotel.  Whilst, the travel agency, is domiciled in Germany, the travel company was domiciled in Austria, the same country as the consumer. The consumer commenced proceedings in their home court in Austria.  All well and good?

Judgments Regulation (Brussels I)

Could they rely on the provisions in the Judgments Regulation (Brussels I) which enable a consumer to bring proceedings in their own country of domicile? For the Judgments Regulation to apply there needs to be an international element to the dispute. The question is whether there is an international aspect if, as in this case, the travel company who provided the holiday is actually domiciled in the same country as the consumer.  In this case, the consumer's local court held that there is no international element as between the  consumer and the holiday company and so applied national laws, rather than the Judgments Regulation,  and held it did not have jurisdiction in relation to the claim against the holiday company.  This left the consumer in a position of having to pursue parallel proceedings against both the travel agent and the travel company in different jurisdictions.  However, this result flies in the face of the provisions within the Judgments Regulation which are aimed at protecting the consumer as the weaker party and preventing parallel proceedings with all the inherent risks they entail.

The consumer appealed and that resulted in a reference to the CJEU who ruled that the Judgments Regulation applied to both the travel agent and the travel company.  It ruled that the fact there was an international element between the consumer and the travel agent was sufficient to bring the travel company, as the contracting partner of the travel agent, within the ambit of the Judgment Regulation provisions. The consumer could pursue a claim against both companies in his home court.

One has to feel some sympathy for the consumer who in making a claim for £1,000 plus interests and costs ie a relatively small amount, has ended up in the CJEU.

Though, due to the circumstances of the case, this may be of limited application it will provide comfort to those advising consumers that only one set of proceedings need be commenced and that it can be in their home court.

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About the author:

Janna is a dispute resolution lawyer. She deals primarily with cross border issues and is active in the work being undertaken in relation to the implications of Brexit for Dispute Resolution lawyers. Janna also heads up a LexisNexis costs team bringing together expertise from across the company to deal with the costs issues facing the profession.