Impact of CJEU’s C-774/22 Ruling on Jurisdictional Rules in EU Consumer Disputes

Introduction

A recent ruling, C-774/22, by the Court of Justice of the European Union (CJEU) on July 29, 2024, has clarified the scope of jurisdictional rules in consumer law, as established by Regulation (EU) No 1215/2012 (the “Brussels Ibis Regulation” or “the Regulation”).

This ruling provides crucial insights into applying these rules, thereby strengthening consumer protection in cross-border disputes.

The Brussels Ibis Regulation establishes uniform rules to determine the jurisdiction of courts in civil and commercial disputes within the European Union.

Its primary objective is to ensure predictable and fair legal protection for litigants, including consumers, in cross-border cases.

The provisions of the Brussels Ibis Regulation (Section 4, Articles 17 to 19) allow protected consumers (Article 17) to bring an action (i) either before the courts of the Member State where the company is domiciled, or (ii) before the courts of their place of domicile (Article 18.1).

Conversely, a company can only sue a consumer before the courts of the consumer’s place of domicile (Article 18.2).

These rules can only be derogated under strict conditions (Article 19).

These provisions ensure that consumers are not forced to defend themselves in distant jurisdictions, thus offering them easier access to justice.

German Law and the Practical Interest for Consumers in Invoking the Brussels Ibis Regulation

On December 15, 2021, JX, a private individual residing in Nuremberg, booked a package tour with FTI Touristik, a travel organizer based in Munich.

This booking was made through a travel agency in Nuremberg, which is not directly affiliated with FTI Touristik. JX, believing he had not been properly informed about the entry requirements and visas necessary for his trip abroad, filed a lawsuit in the Nuremberg court, claiming €1,499.86 in damages. He invoked Articles 17 and 18 of the Brussels Ibis Regulation to justify the territorial jurisdiction of this court.

Under German law (ZPO), jurisdiction generally lies with the court where the defendant company is domiciled.

This principle applies even if the claimant is a consumer.

There are exceptions for disputes related to branches or the execution of the contract, but these did not apply in the case brought before the Court.

For the consumer, it was therefore crucial to apply the Brussels Ibis Regulation, which granted him the right to bring the case before the court of his place of residence (Nuremberg).

This regulation provided him with easier access to justice, unlike German law, which would have required him to file the case in the courts where the company’s headquarters were located (Munich), far from his residence.

Questions Referred to the CJEU

Essentially, the questions the Court had to answer in its July 29, 2024 ruling were as follows:

• Does the Brussels Ibis Regulation apply when both the company and the consumer are domiciled in the same Member State? In other words, can a foreign element other than the domicile of the parties justify the application of the Brussels Ibis Regulation, or should the national court always, in such cases, exclude the application of this Regulation and refer to the jurisdictional rules of its national law?
• If the Brussels Ibis Regulation applies, do the protective rules it provides determine only the international jurisdiction of the courts of the Member States, or do they also govern the internal territorial jurisdiction of these courts, which can have significant practical consequences in large European countries like Germany or France?

CJEU’s Response

• The Territorial Scope of the Regulation: More Than Just the Domicile of the Parties!

The CJEU’s ruling in C-774/22 highlights a crucial point: even if a dispute seems purely internal, given that both parties are domiciled in the same Member State, another foreign element besides domicile may be present and trigger the application of the Brussels Ibis Regulation.

This was the case here, as the destination of the trip sold by the tourism professional to the consumer was in a foreign country.

According to the Court, this fact can constitute a sufficient foreign element to invoke the application of the Brussels Ibis Regulation.

This rule applies particularly in cross-border sectors like tourism.

Professionals must be aware that even when the parties to a dispute are domiciled in the same Member State, the dispute may fall under European regulation, obliging them to respond before a court far from their headquarters.

• The Extent of the Consumer’s Home Court Jurisdiction

Article 18(2) of the Brussels Ibis Regulation establishes international jurisdiction and determines internal territorial jurisdiction, conferring jurisdiction on the court where, within the borders of that Member State, the consumer is domiciled.

In large countries like Germany or France, this means that professionals can be summoned to courts located on the other side of the country, far from their headquarters.

For businesses, this represents a significant legal and logistical risk, requiring increased vigilance in contracts and the information provided to clients to minimize disputes.

However, Article 19 of the Brussels Ibis Regulation allows professionals to limit this risk in certain situations.

For instance, a professional could include a clause in their general terms and conditions designating the courts of their headquarters as competent to resolve any dispute, allowing them to control where a potential dispute will be handled, thereby avoiding surprises related to the automatic application of consumer-friendly jurisdictional rules.

However, such a clause will only be valid if, on the one hand, the parties reside, at the time the contract is concluded, in the same country, and if, on the other hand, the legislation of the concerned Member State allows such agreements (Article 19.3 of the Brussels Ibis Regulation).

Conclusion

The CJEU’s ruling in C-774/22 is an important reminder of the potential impact of international jurisdiction rules in consumer law disputes, even within a single Member State.

Professionals should integrate these implications into their legal strategy to avoid complications and unforeseen costs.