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they can apply appropriate and effective ations, chambers of commerce, of industry, means to prevent the continued use of such of crafts and of agriculture may bring terms. proceedings against undertakings and trade associations using terms of contract drawn up for general use and seek an order from the courts prohibiting the use of unfair terms. 4

3. With due regard for national laws, the legal remedies referred to in paragraph 2 may be directed separately or jointly against a number of sellers or suppliers from the same economic sector or their associations which use or recommend the use of the same general or contractual 5. In the present action the Italian Govern- terms or similar terms.' ment further submits that Article 7 has also been transposed by Article 3 of Law No 281 of 30 July 1998 ('Law No 281/98'). 5This provides that consumer and user associ- ations registered on the list provided for by Article 5 of Law No 281/98 may initiate 3. Under Article 10 the directive was to be legal proceedings to protect collective inter- t r a n s p o s e d into n a t i o n a l law by ests. In particular, they may seek an order 31 December 1994. prohibiting acts and conduct which preju- dice the interests of consumers. 6

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tained by the Minister for Industry, Com- 8. The Italian Republic requests the Court: merce and Trade Crafts.

(1) to reject the complaint;

III— Procedure and forms of order sought

(2) to order the Commission to pay the costs. 7. In the course of the requisite pre-liti- gation proceedings, the Commission delivered its reasoned opinion to the Italian Government on 18 December 1998. Hav- ing taken the view that the Italian Govern- ment's response of 15 March 1999 was unsatisfactory, the Commission brought IV — Submissions of the parties proceedings against the Italian Republic on 6 October 1999. Three of the original grounds of complaint were withdrawn in writing on 19 May 2000. The Commission now claims that the Court should: (1) The Commission

further refers to Article 7(3), which legal rights and accordingly cannot form expressly anticipates provision for a rem- the basis of a right to bring proceedings, the edy against recommendation of the use of Commission observes that in practice rec- unfair terms. The preventive character of ommendations are given effect to and Article 7 is also demonstrated by its therefore the Community legislator had juxtaposition with Article 6 of the direc- intentionally incorporated into the directive tive, which governs the legal consequence the right to take action on a preventive of the use of an unfair term, namely that it basis. Furthermore, a Member State may is not binding. Thus only when preventive not plead the requirements of its internal measures directed against even a recom- legal system as a means of avoiding its duty mendation as to the use of these terms are to transpose directives into national law. in place can it be said that adequate and effective means are available to put an end to the use of unfair clauses. Finally, the Commission refers to the background to the adoption of Directive 93/13 and to the reasons given for the amended Commission draft text, expressly stating that purely preventive proceedings were to be admiss- 12. In the Commission's view, Article 3 of ible. The Council approved this reasoning Law No 281/98 is wholly inapplicable on by adopting the Commission's proposals in grounds of legal principle alone. It repre- this respect without amendment. sents a general rule, which under the principle of lex specialis derogat generali is displaced by the more specific provisions of Article 1469e of the Civil Code.

14. Furthermore, Article 3 results in an implies that such terms are actually used in unacceptable restriction of the category of contracts. The actual, and not simply the persons entitled to bring proceedings. Italy potential, use of the terms is an important made use of its power under Article 7(3) to condition for enabling legal proceedings to define that category by enacting be brought. Article 1469e. The category of persons entitled to bring proceedings under this article is wider than that determined by Article 3 of Law No 281/98. Defining a category differently depending on whether the proceedings challenge the use of a term — in this case, the wider set provided 17. A right of action against a recommen- for by Article 1469e of the Civil Code — dation is fundamentally inadmissible. A or a recommendation as to the use of a recommendation has no binding effect, term — in this case, the narrower set and accordingly cannot prejudice a per- s p e c i f i e d in A r t i c l e 3 of Law son's legal rights. It follows that where a No 281/98 — is not in accordance with recommendation is involved no one would the objects of Article 7 of Directive 93/13. have the interest to sue which Article 100 of the Code of Civil Procedure requires for proceedings to be admissible.

(2) The Italian Government 18. If it can be shown, however, that even action which falls short of use of a term is unfair to consumers, it is open to the courts to prohibit the use of such measures, too, on the basis of Article 3 of Law No 281/98. 15. The Italian Government denies that Recommendations might also be covered there has been any failure to fulfil its under this head. The remedy provided for Treaty obligations. It submits that the by Article 3 of Law No 281/98 may be used provisions of Article 7(3) of Directive 93/13 against any party responsible for conduct have been fully transposed into Italian law. which prejudiced the interests of con- sumers. That might include the party who had recommended the use of an unfair term.

20. A parallel application of the provisions is not excluded by the principle of lex specialis. The matter involves procedural rules and not substantive norms. 22. In response, the Commission refers to the text of Article 7, to its juxtaposition with Article 6 in the structure of Directive 93/13, as also to the background to the directive to support its view that the directive is intended to be preventive. That aim would be inadequately served if no V — Legal appraisal means were in place to bring proceedings in respect of mere recommendations as to the use of unfair terms, even if there was no actual use. Proceedings to challenge a recommendation are a very effective means of protecting consumers, as the unfairness of a particular term can be established once (1) Defining the scope of the duty to and for all at an early stage and its use in transpose Article 7(3) of Directive 93/13 countless cases in practice can thus be prevented.

21. The first point to establish is the scope of the duty imposed on Italy to transpose the provisions of Article 7(3) of Directive 93/13, as the parties are in dispute as to 23. The determination of the scope of the how far the preventive objects of application and of the protection afforded Article 7(3) extend. By reference to the by Article 7(3) of Directive 93/13 must be wording of Article 7(1) of the directive, based on its wording. It distinguishes which states that the continued 'use' of between use and recommendations as to unfair terms should be prevented, the the use of an unfair term. It follows from Italian Government claims that the unfair this that the text seeks to regulate two

25. The Italian Government's argument based on Article 100 of the Code of Civil Procedure is unsound. There is settled case-law to the effect that a Member State may not plead provisions, practices or 24. The reference to the requirements of circumstances in its internal legal system the Italian Code of Civil Procedure makes it in order to justify failure to comply with clear that Article 7(3) of the directive the obligations laid down by Community requires the introduction of a special pro­ law. 8Even if Article 100 of the Code of tective remedy into the legal systems of the Civil Procedure lays down as a matter of Member States, in the form of a preventive principle that an action is not admissible collective action. The references both to where there is no legal interest to be preventive remedies and to remedies in the protected, this does not relieve the Italian form of collective actions indicate that the legislature of its duty to transpose Directive infringement of rights personal to the 93/13 by creating a right of action in plaintiff is not required. They do not respect of recommendations as to the use correspond to classical remedies, whose of unfair terms, even if the result is that the admissibility is predicated on prejudice requirements of Article 100 of the Code of being done to the personal interests of the Civil Procedure are not complied with.

7 — Spanish: '... utilicen o recomienden que se utilicen ...'; Danish: '... anvender eller opfordrer til anvendelse ...'; German: '... verwenden oder deren Verwendung emp­ fehlen ...'; English: '... use or recommend the use ...'; French: '... utilisent ou recommandent l'utilisation ...'; Greek: '... που χρησιμοποιούν ή συνιστούν τη χρησιμοποί­ ηση των αυτών ...': 26. The reference by the Italian Govern­ Itahan: '... utilizzano o raccomandano l'inserzione ...'; Dutch: '... gebruik maken dan wel het gebruik aan­ ment to Article 7(1) is as unproductive as bevelen ...'; Portuguese: "... utilizem ou recomendem a utilização ...'; Finnisn: *... kayttävat ... samanlaisia chtoia tai suosittavat niiden kayttöa;' Swedish: '... använder eller rekommenderar använd- 8 —Case C-423/99 Commission v Italy [20001 ECR I - 11167, andet ...'. paragraph 10 and the references contained therein.

27. The Commission's reference to Article 6 for the purposes of comparison is also of little assistance. This provision stipulates that the legal consequence of the use of an unfair term is that it is not binding. This substantive provision does not assist in reaching a conclusion on the procedural question whether or not actions against a recommendation are admissible. 29. Nevertheless, this exclusion refers only to 'general conditions' obtaining in indi- vidual economic sectors. The text does not elaborate further upon this concept, either in this recital or in other provisions. Its meaning is therefore not beyond doubt. It can be said however that it does not extend to express contractual terms. Otherwise, it would have incorporated a reference to this notion, which is to be found in other 28. Reference should be made to the pen- recitals (for example in the second, eighth ultimate recital of the directive, however. It and twelfth recitals) and in the operative states that 'persons or organisations, if part of the directive (for example in regarded under the law of a Member State Article 1(2) and Article 2(a)), also in the as having a legitimate interest in the matter, penultimate recital. Furthermore, a 'prior must have facilities for initiating proceed- verification' is not necessarily to be ident- ings concerning terms of contract drawn up ified with the admissibility of a preventive for general use in contracts concluded with remedy which is concerned with recom- consumers, and in particular unfair terms, mendations as to the use of specific terms. either before a court or before an adminis- A prior verification could also be a form of trative authority competent to decide upon negative clearance. It follows that the complaints or to initiate appropriate legal penultimate recital does not prevent an proceedings; ... this possibility does not, interpretation of Article 7(3) of the direc- however, entail prior verification of the tive which requires protective remedies to general conditions obtaining in individual be created. This corresponds with the

31. The Italian Government does not favour this interpretation, however. Its submission is that a preventive remedy 30. Once it is accepted that Italy is required may be founded primarily on Article 3 of by virtue of Article 7(3) of Directive 93/13 Law No 281/98. In the context of an to introduce a form of action against enquiry into the extent to which Article 3 recommendations as to the use of unfair of Law No 281/98 provides for a form of terms, it remains to be established to what action against recommendations as to the extent this requirement has been met. The use of unfair terms, the first question is text of Article 1469e of the Civil Code whether, given the terms of Article 1469e refers only to a right of action against the of the Civil Code, the provision can be use of contractual terms. The Italian applicable at all. The Commission disputes courts 10 and most Italian legal writers 11 this, referring to the general character of Law No 281/98. Under the principle of lex specialis Article 1469e of the Civil Code 9 — Joined Cases C-240/98 to C-244/98 Océano and Others takes precedence as the more specific [2000) ECR 1-4941, paragraph 27.

1 Contratti 1998, p. 580; decision of the Tribunale di regards recommendations as to the use of Palermo of 23 February 1997, Vita notarile 1997, p. 704; an unfair term. The scope of this provision Bellelli, A-, 'La tutela inibitoria, Commentario al Capo XIV bis del Codice Civile: dei contratti del consumatore'. accordingly extends at least in that respect Le Nuove Leggi civili Commentate 1997, p. 1264; Calvi, G., Commento sub att. 1469e, in Cesaro (Ed.), Clausole beyond that of Article 1469e of the Civil vessatorie e contratto del consumatore, Padua, p. 675.

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that the Italian legislator had intentionally (3) The existence of a legal remedy in sought in Article 1469e of the Civil Code to respect of recommendations exclude the possibility of introducing a right of action in respect of recommen- dations as to the use of a term. This would give substance to the Italian Government's initial submission that an action to chal- lenge a recommendation would be funda- 38. Once it is accepted that Article 7(3) of mentally inadmissible, as a recommen- Directive 93/13 requires the existence of a dation has no binding legal effect and preventive remedy against recommen- accordingly cannot affect the rights of a dations as to the use of an unfair term, consumer. On this reasoning, there is no and that the application of Article 3 of Law legal interest to be protected, and such an No 281/98 is not excluded by Article 1469e interest is required as a matter of principle of the Civil Code, the question remains as for an action to be admissible under to whether Italy has complied with its duty Article 100 of the Code of Civil Procedure. to transpose the directive with the enact- ment of Article 1469e of the Civil Code and Article 3 of Law No 281/98.

36. Against such an interpretation of the 39. As already established, Article 3 of Law Italian Government's case there is however No 281/98 expressly provides for a remedy the fact that in its view Italian law provides against measures and conduct prejudicial to a remedy in respect of recommendations, the interests of consumers and users. 13 by virtue of Article 3 of Law No 281/98. Those terms may be construed so as to The Commission, which denies that include recommendations to use a particu- Article 7(3) has been transposed, does not lar unfair term in general conditions of seek to rely on any suggestion that the contract. In terms of its content, therefore, Italian legislator in enacting Article 1469e Article 3(l)(a) of Law No 281/98 satisfies of the Civil Code intentionally sought to the requirement to transpose Article 7(3) of exclude a remedy in respect of recommen- Directive 93/13. dations.

44. The Commission's argument is that Italy exercised its power with the adoption of Article 1469e and defined the category of persons entitled to bring proceedings as (a) Restriction of the category of persons early as 1996. It cannot modify this by entitled to bring proceedings under Article 3 measures taken afterwards, in particular by of Law No 281/98 the enactment of Article 3 of Law No 281/98. But there is no authority for such an interpretation in the text of the directive. Member States who have defined the category of persons entitled to bring proceedings are not prevented from chang- ing them. Even if the Italian Republic were 42. As to the Commission's first complaint, to have exhausted its power to define the it observes that the Italian legislature had categories of persons entitled to bring already taken the opportunity on enacting proceedings in enacting Article 1469e of Article 1469e of the Civil Code to define the Civil Code, there is nothing whatsoever the category of persons who may bring that prevents it from changing them by proceedings. The Italian Republic's defence enacting Law No 281/98. on this is merely to refer to the text of Article 7(3) of Directive 93/13, which provides that regard is to be had for national laws in establishing which parties are to have this right. 45. Since the provisions of Article 1469e of the Civil Code and of Article 3 of Law No 281/98 are of different scope, as 14 — Decision of the Tribunale di Torino of 3 October 2000, II Corriere Giuridico 2001, p. 389 et seq. mentioned above, there can also be no

objection in principle to setting different certainty and legal clarity. The Commission limits on the respective categories of per- submits that to interpret Article 3 of Law sons entitled to bring an action. The direc- No 281/98 so as to allow for a remedy in tive does not specify that the category of respect of recommendations would be those entitled to challenge the use of an totally contradictory to Article 1469e of unfair term may not be wider than that of the Civil Code and Article 100 of the Code those entitled to challenge recommen- of Civil Procedure. Persons and associ- dations as to use. Such a distinction might ations entitled to bring an action are in certain circumstances even be advisable. thereby placed in a position where it is As confirmed by the observations of the not clear what rights they have and Italian Government, the use of unfair terms whether they may rely on them before the is always prejudicial to the interests of courts in appropriate cases. protected consumers. That corresponds rather to the classical situation in which recourse to legal remedies is regarded as admissible. On the other hand, a mere recommendation as to the use of unfair terms does not prejudice the legal interests of consumers but merely threatens to do so. To balance the conflicting interests of the users of such terms and of the consumer, it would not be unreasonable for this pre- ventive form of legal protection to be available only to a limited and specially 47. Under Article 189 of the EC Treaty qualified set of persons and organisations, (now Article 249 EC) a directive is binding so that abuses of process may be avoided. on the Member State to which it is This might serve to avoid unnecessary addressed as regards the result to be proceedings. The Commission's objection achieved, but the choice of form and in this respect must therefore be rejected. methods is left to the national authorities. Similarly, the Court has made it clear that there is no requirement that the provisions of a directive be incorporated formally and verbatim in a national law. A general legal context may, depending on the content of the directive, be adequate. In particular, general principles of constitutional or administrative law may make transposition by way of special legal or administrative (b) Lack of legal certainty and legal clarity provisions superfluous. In any event, the legal result arising from these principles must be adequately definite and clear, particularly where the directive confers rights on individuals. It must enable those who are intended to benefit to ascertain the full extent of their rights and where appro- priate rely on them before the national courts. The last condition is of particular 46. The Commission's second ground of importance where the directive in question complaint relates to the principles of legal is intended to accord rights to nationals of

49. For these reasons, it is not appropriate 48. The case-law therefore makes it clear in this case to follow the reasoning set out that the fact that Article 3 of Law in the judgment in Case C-144/99. That No 281/98 does not expressly refer to the case concerned the transposition of right to bring proceedings in respect of Articles 4 and 5 of the directive, which 'recommendations' is not objectionable in are directed to consumers. The present case principle. It should also be noted that the involves qualified addressees. They may be parties who benefited in terms of expected to be familiar with the case-law Article 7(2) and (3) of Directive 93/13 concerning the admissibility of actions to consist of qualified addressees. The persons challenge recommendations as also the and organisations entitled to bring proceed- interpretation of Article 1469e of the Civil ings under this provision are interest groups Code and Article 3 of Law No 281/98. whose objects include the protection of the interests of consumers. There is settled case-law to the effect that the question of whether or not the necessary precision and clarity are present is to be determined from the point of view of the parties intended to 50. According to the Report from the benefit from the measure. 16 In her Opinion Commission of 27 April 2000 on the in Case C-145/99 Advocate General Stix- implementation of Directive 93/13, the Hackl stated that where the parties con- Commission has initiated proceedings cerned by a measure are qualified, higher against all the Member States for failure standards are to be imposed than would to fulfil their Treaty obligations on the normally be the case. 17 An equivalent grounds of defective transposition of Direc- approach is to be taken in the present case tive 93/13. 18 In this context, it is worth as regards the necessary legal precision and mentioning that the legal systems of several legal clarity, given that the group in ques- of the Member States produce a result tion consists of experts and not the end- which appears to be similar to that which applies in Italy. But apparently as yet the Commission has in no case taken the 15 —Judgments in Case 29/84 Commission v Germany [1985] proceedings for failure to implement Treaty ECR 1661, paragraph 23, Case 363/85 Commission v Italy obligations as far as it has taken them [1987] ECR 1733, paragraph 7, and Case C-236/95 Commission v Greece [1996] ECR I-4459, paragraph 13. against Italy. 19 16—Judgments in Case C-131/88 Commission v Germany [1991] ECR 1-825, paragraph 6, and Case C-59/89 Commission v Germany [1991] ECR I-2607, paragraph 18. 17 — Opinion in Case C-145/99 Commission v Italy [2002] 18 — COM(2000) 248 final, p. 7. ECR I-2235, paragraphs 46 and 47. 19 — See the description at pp. 23 to 27 of the Report.

53. On the other hand, it must be noted that national case-law interpreting provi- sions of domestic law in a manner in conformity with Community law is not sufficient to make those provisions into measures transposing the directive in ques- tion. 22 In its judgment in Case C-144/99, 52. The Commission delivered its reasoned the Court of Justice decided as regards opinion under Article 169 of the EC Treaty Directive 93/13 that interpretation of (now Article 226 EC) in December 1998. national legislation by the national courts At that time, the Italian courts provided in such a way as to ensure conformity with protection against recommendations as to the directive did not amount to full trans- the use of unfair terms. They relied in this position of its provisions, as it could not regard on either Article 1469e of the Civil provide the clarity and precision needed to Code or Article 3 of Law No 281/98. That meet the requirement of legal certainty. is also in accordance with the prevailing That was particularly true in the field of academic view. It is accordingly arguable consumer protection. 23 I agree with the that the object of the directive of providing reasoning of Advocate General Tizzano in protection against recommendations as to his Opinion in this case, to the effect that the use of unfair terms has been met. The recourse to the principle of interpretation in decision of the Italian legislator to achieve the light of Community law by a national this protection by enacting two provisions court cannot replace the obligation of the of partially overlapping scope falls within legislature of that Member State to trans- the freedom provided by Article 189 of the pose the directive in a manner which is EC Treaty (now Article 249 EC) to choose the means by which a directive is trans- 22 — Opinion of Advocate General Léger in Case C-236/95 Commission v Greece [1996] ECR I-4467, paragraph 26; Opinion of Advocate General Tizzano in Case C-144/99 20 — Page 9 or the Report. Commission v Netherlands (cited in footnote 21, above], 21 — Page 8 of the Report. See the judgment in Case C-144/99 paragraph 36. Commission v Netherlands [2001] ECR I-3541. 23 — Judgment in Case C-144/99, paragraph 21.

24 — Opinion in Case C-144/99, paragraph 35. 25 — Judgment in Case 14/83 von Colson and Kamann [1984] 56. Under Article 69(2) of the Rules of ECR 1891, paragraph 26, and Case C-106/89 Marleasing Procedure, the unsuccessful party is to be [1990] ECR I-4135, paragraph 8. 26 — Judgments in Case C-339/87 Commission v Netherlands ordered to pay the costs. Since the Italian [1990] ECR I-851, paragraph 25, Case C-59/89 Commis- sion v Germany [1991] ECR I-2607, paragraph 28, and Republic has failed in its submissions, and Case C-340/96 Commission v United Kingdom [1999] the Commission has sought payment of its ECR I-2023, paragraph 27. 27 — Decision of the Tribunali di Roma of 21 January 2000, II costs, the Italian Republic should be Corriere Giuridico 2000, p. 496. ordered to pay the costs.

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V I I— Conclusion

57. I accordingly propose that the Court should hold that:

(1) The Italian Republic is in breach of its obligations under Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts by having failed to adopt the measures necessary to transpose in its entirety Article 7(3) of the directive.