ECJ Rules on Powers of National Courts to Modify or Replace Unfair Terms in Consumer Contracts


In two joined cases, Abanca Corporación Bancaria SA v García Salamanca Santos (Case C-70/17) and Bankia SA v Lau Mendoza and Rodríguez Ramírez (Case C-179/17) EU:2019:250, the European Court of Justice (ECJ) considered the power of national courts to substitute national law provisions to save a loan where deleting unfair terms would prejudice the consumer. Under Article 6(1) of the Unfair Contract Terms Directive (93/13/EEC) member states must ensure that unfair terms in consumer contracts are not binding on consumers, but that the contract will survive if it can do so without the unfair terms. The ECJ ruled that a court can substitute national law for an unfair term where deleting it would end the contract with negative consequences for the consumer.

Specifically, the ECJ confirmed that:

  • As per its decision in Banco Español de Crédito, C618/10, EU:C:2012:349, a national court cannot simply revise an unfair term to make it fair. If this were the case suppliers would continue to use unfair terms, safe in the knowledge that the court would merely amend them to make them fair; Article 6(1) would not have its intended dissuasive effect.
  • As per Kásler and Káslerné Rábai, C26/13, EU:C:2014:282, Article 6(1) does not preclude a national court from removing an unfair term and replacing it with a provision of national law if simply removing the unfair term would require the court to annul the contract in its entirety and this would penalise the consumer.

This is not new law, but highlights the ECJ’s interpretation of Article 6(1).

ECJ Clarifies Payment Services Directive


On January 26, 2017, the Court of Justice of the EU (“ECJ“) published its judgment in BAWAG PSK Bank für Arbeit and others v. Verein für Konsumenteninformation (Case C-375/15) [2017] ECLI:EU:C:2017:38.

The judgment responds to a request for a preliminary ruling from the Oberster Gerichtshof (Austrian Supreme Court) concerning the interpretation of articles 36(1) and 41(1) of the Payment Services Directive (Directive 2007/64/EC) (“PSD“). The request was made during the proceedings relating to a clause included in the contracts of BAWAG PSK Bank für Arbeit (the “Bank“) entered into with consumers for the provision of e-banking services.

The ECJ was required to consider whether the information given by the Bank to its customers through an e-banking mailbox is “provided,” as opposed to being “made available,” through a “durable medium” for the purposes of the PSD.

The ECJ’s conclusion was that articles 41(1) and 44(1) of the PSD should be read in conjunction with article 4(25), meaning that the changes to the information and conditions as well as changes to the framework contract that are transmitted by the Bank to the customer through the electronic mailbox of an online banking website may not be considered to have been provided on a durable medium unless the following two conditions are met:

  1. The website must allow the user to store information addressed to them personally in such a way that they may access and reproduce it unchanged for an adequate period, without any unilateral alteration of its content by the user or any other professional being possible; and
  2. If the user is obliged to consult the website to become aware of that information, the transmission of that information must be accompanied by active behavior on the part of the user, aimed at drawing attention to the existence and availability of the information on the website.

If the user is obliged to consult a website to become aware of the relevant information, that information is merely made available to the user when the transmission of that information is not accompanied by such active behavior on the part of the user. The Austrian Supreme Court must now determine whether, in the case of the main proceeding, the two specified conditions have been met and whether the changes to the information and conditions, and the relevant framework contract, can be regarded as having been actively communicated by the Bank to the user of those services.