Aggressive practices and the use of standard forms to complete distance contracts

A case law update on Prezes Urzedu OchronyKonkurencji i Konsumentow v Orange Polska S.A. ( Case C-628/17).

What was the case about?

This case was brought by the Polish Office of Competition and Consumer Protection (OCPP) against the Polish telecommunications company, Orange Polska S.A. (Orange). It concerns the process used by Orange to conclude or amend consumer contracts for the supply of telecommunication services, such as broadband, telephone and mobile services.

The question to be decided was whether the process was an unfair commercial practice, because it was aggressive due to undue influence. The case was a request for a preliminary ruling from the Court of Justice of the European Union (CJEU) by the Supreme Court in Poland under the Unfair Commercial Practices Directive 2005/29/EC (UCPD). There are similarities for the UK because the law is based on a maximum harmonisation EU Directive. (Maximum harmonisation means that ‘EU countries may not introduce rules that are stricter than those set out in the Directive’).The UCPD has been implemented into UK law by the Consumer Protection from Unfair Trading Regulations 2008 (CPUT Regs).

The UCPD prohibits unfair commercial practices and defines various types of unfair practices, including those that are aggressive. Some aggressive practices are listed as banned practices in Annex 1 (Schedule 1, CPUT Regs), however, there is also a general prohibition covering other aggressive practices, as covered by Article 8 (s7(1) of the CPUT Regs):

“A commercial practice shall be regarded as aggressive if, in its factual context, taking account of all its features and circumstances, by harassment, coercion, including the use of physical force, or undue influence, it significantly impairs or is likely to significantly impair the average consumer’s freedom of choice or conduct with regard to the product and thereby causes him or is likely to cause him to take a transactional decision that he would not have taken otherwise”.

This is supplemented by Article 9 (s7(2), CPUT Regs), which requires account to be taken of certain factors when determining whether an unfair aggressive practice has taken place, namely:

• the timing, location, nature or persistence of the harassment, coercion or undue influence
• whether any threatening or abusive language or behaviour was used
• whether the trader exploited any specific misfortune or circumstance, of which he was aware, to such an extent as to impair the consumer’s judgment to influence their decision about the product
• whether the trader imposed any onerous or disproportionate non-contractual barriers to a consumer wanting to exercise their rights under the contract, including any rights to end it or switch to another product or trader
• whether there were any threats to take any action that could not legally be taken

The process Orange used to conclude or amend contracts with consumers, through its online shop, involved the following steps:

• the consumer looks at the website, notes the trader’s offer and accesses standard-form contracts via links provided
• the consumer selects the product or contract they want
• the consumer places their order, without having to declare that they have seen the standard-form contract
• the consumer confirms their order
• a courier completes the order by delivering a draft contract or amendment, with all the documents that form part of it, for example, annexes, terms, and price lists, all pre-signed by the trader
• the contract, or amendment, is concluded, and any goods are delivered, when the contract or amendment is signed by the consumer in the courier’s presence, with consumer declarations that they: acknowledge the documents delivered, have accepted their contents, must go to a physical retail outlet or reorder online or by telephone if they are unable to provide a signature
• the contract is activated

The telephone process is similar but involves a telephone call between the consumer and the trader’s operator.

What did the court decide?

The OCCP ordered Orange to stop this process because it considered that requiring consumers to make a decision about the contract in the courier’s presence without being allowed to freely read its content, was unfair. Having been through all the Polish court processes this ended up with the CJEU, which dismissed the OCCP appeal, deciding that the activities were not aggressive unfair practices. The CJEU had to decide if the use of standard forms for concluding distance contracts, where the consumer has to make the final decision in a courier’s presence when being handed those forms, is an aggressive commercial practice owing to undue influence, in all or some circumstances. It decided that this:

(1) is not an aggressive commercial practice in all circumstances because the use of standard-form contracts in this way does not appear in the list of banned practices so cannot always automatically be an aggressive practice (paras 25–27)

(2) is not an aggressive commercial practice just because not all standard form contracts were sent to every individual consumer beforehand by email or post, since there was an opportunity to study them on the trader’s website before the courier visit (paras 38–40)

(3) can be a commercial aggressive practice if the trader or courier adopts unfair conduct that puts pressure on the consumer concerning the transactional decision that needs to be made, if it (i) significantly impairs freedom of choice, (ii) makes them feel uncomfortable or (iii) confuses their thinking

The court also pointed out that as this was a preliminary ruling it would be for the Polish Supreme court to actually decide whether the process in question was an unfair commercial practice (para 37). In particular, in relation to the second question, it would have to decide whether in the case of telesales, the quality of information received by a specific consumer in a telephone call was as good as that provided online, enough to say that freedom of choice was given (para 42).

What does this mean for advisers?

There are other grounds in the UCPD for challenging trader activities and conduct as being unfair, besides aggressive. The case was specifically formulated in relation to whether there was undue influence making the practice aggressive (para 32) so the court could not consider whether any of the other grounds or other elements of the definition of aggressive, such as harassment or coercion, would have been a more appropriate charge.

Remedies for individual consumers were brought in by the UK government as an amendment to the CPUT Regs 2008 and are not in the Directive. They came into effect on 1st October 2014. The remedies are summarised on our website: if you were misled or pressured into buying something you didn’t want.

The remedies only apply to aggressive (and misleading) practices around entering into the contract. So they wouldn’t apply to aggressive behaviour shown to a consumer when trying to exercise cancellation rights, for example, as this is after the contract has started. This could still be an unfair commercial practice for enforcement purposes however, so should still be reported to the relevant trading standards service via the Citizens Advice consumer service.

Kate Hobson is a consumer expert in the Expert Advice Team at Citizens Advice

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