Effective Enforcement of Consumer Law: The Comeback of Public Law and Criminal Law

TY - CHAP

T1 - Effective Enforcement of Consumer Law: The Comeback of Public Law and Criminal Law

AU - Rott, Peter Werner

PY - 2012/1/1

Y1 - 2012/1/1

N2 - Introduction. While substantive consumer law has undergone thorough Europeanisation through the activities of the EU, and the influence of the EU is ever increasing, regulation of enforcement issues has remained largely in the competence of the Member States, and the Member States have taken different approaches towards enforcement. Germany has traditionally emphasised the enforcement of individual rights by individuals, complemented by collective private law action. Unlike in France and Belgium, where criminal law complements private enforcement, or in the United Kingdom and Scandinavia, where public bodies such as the Office of Fair Trading or the Consumer Ombudsmen play an important role and criminal law sanctions are also used, criminal law and public law have rarely ever been used in Germany for the protection of consumers. Some protective mechanisms that had been in place were removed, in part with explicit reference to the new private law mechanisms. This concerns, in particular, an earlier prohibition on the conclusion of doorstep credit contracts (see former §56 paragraph 1 no. 6 Gewerbeordnung (Trading Act; GewO; abolished with effect from 1 January 1991)), which was designed to protect, in particular, vulnerable persons from imprudent loan agreements. Its abolition has made possible the infamous ‘junk property’ cases that led to the ECJ judgments in Heininger, Schulte and Crailsheimer Volksbank. Another field is the control of gas prices by public authorities, which was abolished in 1998 with a view to the liberalisation of the gas market. Germany has recently faced mass litigation in the civil courts over gas price increases. Most authors nowadays discuss the potential of private law mechanisms, and in particular collective redress mechanisms such as class actions or group actions, to act as a second means of enforcement, standing next to public law enforcement. This has been, for example, the explicit objective of German legislation concerning model claims in the field of capital market law. This chapter takes the opposite perspective. By looking at the development of consumer law enforcement in Germany, it explores the limitations of individual and collective private law mechanisms and demonstrates how, in recent years, public law mechanisms have been, although very carefully, introduced in consumer law. Furthermore, criminal law is now beginning to play its role, in particular in the field of fraudulent practices on the internet. Bringing ECJ case law and the German experience together, the chapter makes an attempt to develop criteria for the extent to which public law sanctions, and perhaps even criminal law sanctions, are necessary to meet the EU standards of effective enforcement.

AB - Introduction. While substantive consumer law has undergone thorough Europeanisation through the activities of the EU, and the influence of the EU is ever increasing, regulation of enforcement issues has remained largely in the competence of the Member States, and the Member States have taken different approaches towards enforcement. Germany has traditionally emphasised the enforcement of individual rights by individuals, complemented by collective private law action. Unlike in France and Belgium, where criminal law complements private enforcement, or in the United Kingdom and Scandinavia, where public bodies such as the Office of Fair Trading or the Consumer Ombudsmen play an important role and criminal law sanctions are also used, criminal law and public law have rarely ever been used in Germany for the protection of consumers. Some protective mechanisms that had been in place were removed, in part with explicit reference to the new private law mechanisms. This concerns, in particular, an earlier prohibition on the conclusion of doorstep credit contracts (see former §56 paragraph 1 no. 6 Gewerbeordnung (Trading Act; GewO; abolished with effect from 1 January 1991)), which was designed to protect, in particular, vulnerable persons from imprudent loan agreements. Its abolition has made possible the infamous ‘junk property’ cases that led to the ECJ judgments in Heininger, Schulte and Crailsheimer Volksbank. Another field is the control of gas prices by public authorities, which was abolished in 1998 with a view to the liberalisation of the gas market. Germany has recently faced mass litigation in the civil courts over gas price increases. Most authors nowadays discuss the potential of private law mechanisms, and in particular collective redress mechanisms such as class actions or group actions, to act as a second means of enforcement, standing next to public law enforcement. This has been, for example, the explicit objective of German legislation concerning model claims in the field of capital market law. This chapter takes the opposite perspective. By looking at the development of consumer law enforcement in Germany, it explores the limitations of individual and collective private law mechanisms and demonstrates how, in recent years, public law mechanisms have been, although very carefully, introduced in consumer law. Furthermore, criminal law is now beginning to play its role, in particular in the field of fraudulent practices on the internet. Bringing ECJ case law and the German experience together, the chapter makes an attempt to develop criteria for the extent to which public law sanctions, and perhaps even criminal law sanctions, are necessary to meet the EU standards of effective enforcement.

M3 - Book chapter

SN - 978-1-107-01301-8

SP - 64

EP - 81

BT - European Consumer Protection: Theory and Practice

A2 - Devenney, James

A2 - Kenny, Mel

PB - Cambridge University Press

CY - Cambridge

ER -