When we talk about transformative private law, an important question we should ask is: who are the drivers of transformation – private parties, legal scholars, legislatures, or the EU? This blog post revolves around the transformative role of the judiciary in European private law, which is also the topic of a recently published article I have co-authored with Laura Burgers and Chantal Mak (‘Judges in Utopia’, ERPL 2020/4, pp. 865-884). We submit that when courts address societal problems in cases brought before them through private law, they may at the same time transform private law itself. We do not merely refer to the role of judicial decision-making in the development of the law; our focus is on civil courts being confronted with sensitive political issues that are the topic of extensive national and transnational debates.
An example is the response of Spanish civil courts to crisis-induced litigation in cases concerning mortgage enforcement against consumer-debtors. The burst of the so-called ‘housing bubble’ in Spain in 2008 was followed by a social emergency: large numbers of foreclosures affected thousands of citizens. The relationship between creditors and debtors came to be regarded as asymmetrical and unbalanced in terms of bargaining power, knowledge, financial means, and the legal instruments available to them.
Substantive and procedural inequalities are not only aggravated when debtors face eviction from their family home, which increases their vulnerability, but also by a lack of effective (judicial) remedies and procedural safeguards, which puts them in an even more subordinated position. These inequalities, as well as the failure of the Spanish legal order to provide satisfactory solutions, caused civil courts to question the balance struck between the interests at stake (see e.g. Case C-179/17 Bankia v Lau Mendoza). They started making requests for preliminary rulings to the Court of Justice in Luxembourg – elevating gaps in their legal system to the EU level and indicating the need for change, inter alia by reference to Article 47 of the EU Charter of Fundamental Rights. The Unfair Contract Terms Directive was a portal to EU law as a way to enhance the judicial protection of citizens in their capacity of consumers. This, in turn, helped to mitigate some of the harsh consequences of mortgage enforcement proceedings and contributed to more social justice.
In an earlier journal article, I referred to the transformative potential of Article 47 of the Charter in the context of the above-mentioned Directive, where the legal discourse on the Europeanization of private law crystallizes (‘Metamorphosis?’, EuCML 2017/6, pp. 190-198). Article 47 guarantees the right to a fair hearing and an effective remedy before a court of law. In my PhD thesis, I claim that a reference to Article 47 may primarily have a signaling function, where national private law, in particular civil procedure, does not ensure justiciability in a broad sense, i.e. actual access to a court that can adjudicate the rights individuals (including consumers) derive from EU law. Such a signaling function may trigger a ‘trialogue’ between national courts, legislatures and the Court of Justice about structural issues in the civil justice system; think, for instance, of procedural obstacles, such as time-limits or costs, that deter consumers from exercising their rights or prevent courts from protecting those rights. The fundamental rights dimension emphasizes the seriousness of the problem and the urgency of resolving it. Courts may refer to Article 47 to set reforms in motion, with the aim of opening up rigid (procedural) rules that restrict the scope for judicial intervention – which can be problematic for the effective enforcement of EU (consumer) law as well as from the perspective of securing access to justice and the ‘rule of law’. The rain does not only stay in Spain: in the Netherlands there have been problems too with opportunistic debt collection practices and the circumvention of judicial control (see e.g. the e-Court saga).
The transformative role of courts in this respect reminds us of the phenomenon of ’hybridization’ famously introduced by Norbert Reich: remedies and procedures are (re)interpreted and developed in light of the EU (consumer) rights they serve to protect, and are ’upgraded’ into hybrids in so far as they incorporate both national and European elements. It is a cycle of (judicial) interpretation – action and reaction – with courts playing a key role in the transformation process. I consider this to be part of courts’ responsibility as decentralized EU-judges, rather than a form of judicial activism. As Martijn Hesselink has observed, transformation is not a goal in and of itself; it goes in a certain direction that may or may not be welcomed, depending on one’s point of view. Transformation may also have disruptive effects, giving rise to resistance. In the Spanish cases I have analyzed, there was a missing link between substantive and procedural protection, which required (further) assimilation of EU consumer law into national civil procedure. However, the proactive stance of Spanish courts in the wake of the 2008 financial crisis has not been met with unanimous support. The increased protection of consumer-debtors has allegedly led to fragmentation and legal uncertainty. It is not necessarily up to the courts to fix this, but I concur with Carla Sieburgh that they should make an effort to openly discuss conflicts and discrepancies, or at least motivate why a certain path is chosen. Judicial reasoning in a discursive manner is crucial where national law meets EU law. My research shows that Article 47 has discursive value, even – or especially – if there are tensions that need to be resolved. Courts can thus be catalysts of transformation, a theme I will continue to explore in future research and on this blog.
Click here for a more elaborate summary of my thesis, which I will defend on 23 October 2020 at 14:00.