Consumer’s Right of Withdrawal in Distance Contracts – Duty to Provide Information Clarified by EU Court of Justice

On 23 January 2019, the Court of Justice of the European Union (“ECJ”) handed down its judgment in Case C-430/17, Walbusch Walter Busch, in which it clarifies the scope of a trader’s duty of information in distance contracts with consumers pursuant to Directive 2011/83/EU of 25 October 2011 on consumer rights (the “Consumer Rights Directive”).

The facts of the case date back to 2014 when Walbusch Walter Busch (“Walbusch”), a clothing retailer, distributed an advertising leaflet with a detachable mail order coupon as a supplement to various newspapers and magazines. The coupon contained specific information about the trader, as well as information about the consumer’s right of withdrawal coupled with a reference to a website link giving access to the model withdrawal form.

The Zentrale zur Bekämpfung unlauteren Wettbewerbs Frankfurt am Main eV, a consumer association, submitted an application to the Landgericht Wuppertal (Wuppertal Regional Court, Germany) for an order stopping the publication of that leaflet as it considered that the information provided for on the leaflet did not satisfy the formal information requirements relating to the consumer’s right of withdrawal in distance contracts as set out in Article 6(h) of the Consumer Rights Directive.

Having made its way up through the national court system, the dispute eventually reached the Bundesgerichtshof (Federal Court of Justice, Germany) which stayed the proceedings and referred several questions on the scope of the duty to provide information in distance contracts to the ECJ in order to obtain a preliminary ruling.

Article 6(1) of the Consumer Rights Directive provides that in distance or off-premises contracts, or any corresponding offers, the trader must provide the consumer with specific pre-contractual information relating to that contract or offer in a clear and comprehensible manner. If there is a right of withdrawal, Article 6(1)(h) of the Consumer Rights Directive requires the trader to provide the consumer with the model withdrawal form set out in Annex I(B) to the Directive.

However, if the contract is concluded through a means of distance communication which allows for only limited space or time to display the information, Article 8(4) of the Consumer Rights Directive only requires the trader to provide the consumer in plain and intelligible language with specific pre-contractual information, including the information concerning the right of withdrawal, in a way that is appropriate to the means of distance communication used.

The key question in the case before the ECJ was whether Walbusch was obliged to provide all information listed in Article 6(1)(h) of the Consumer Rights Directive in relation to the consumer’s right of withdrawal or whether it could benefit from the less stringent regime of Article 8(4). In other words, does limited space mean that traders can just mention the existence of the right of withdrawal, without including any information on the contents and exercise of that right and without attaching the model withdrawal form?

The ECJ pointed out that the purpose of the Consumer Rights Directive is to afford consumers, in distance contracts, extensive protection by ensuring that they are informed and by conferring on them a number of rights. According to the ECJ, the pre-contractual information is of fundamental importance for a consumer, since it is on the basis of that information that the consumer decides whether he or she wishes to be contractually bound to the trader.

Referring to recital 36 of the Consumer Rights Directive, the ECJ held that, in the case of distance contracts, the information requirements should be adapted to take into account the technical constraints of specific media, such as restrictions on the number of characters on specific mobile telephone screens or the time constraint on television sales spots. Such a situation arises “as a result of either the inherent characteristics of the means concerned or limitations arising from the trader’s economic choice relating, in particular, to the duration and space of the marketing communication”. The ECJ ultimately found that, if there is limited space, the trader should comply with a minimum set of information requirements and refer the consumer to another source of information, for instance by providing a toll free telephone number or a hypertext link to a webpage of the trader where the relevant information is directly available and easily accessible.

In assessing whether, in a specific case, the means of communication allows limited space or time to display the information, the ECJ favoured a case-by-case approach having regard to all of the technical features of the trader’s marketing communication, such as the space and time occupied by the communication and the minimum size of the typeface which is appropriate for the average consumer targeted by that communication.

According to the ECJ, the underlying rationale of this approach ensures “the right balance between a high level of consumer protection and the competitiveness of undertakings” and refrains from imposing a disproportionate burden on the trader. Furthermore, the ECJ emphasised that what really matters is that the consumer is “aware of the conditions, time limits and procedures for exercising the right of withdrawal” because “being in possession of the withdrawal form before the conclusion of the contract is not a circumstance that could influence the consumer’s decision on whether or not to conclude a distance contract”. It follows that the communication of that model by another source, in plain and intelligible language, will suffice.

Koen T'Syen

Charlotte Woolfson