delivered on 5 September 2024 (1)

Case C‑346/23

Banco Santander SA, successor to Banco Banif SA

Asociación de Consumidores y Usuarios de Servicios Generales-Auge, on behalf of its members: Andrea and Alberto

(Request for a preliminary ruling from the Tribunal Supremo (Supreme Court, Spain))

(Reference for a preliminary ruling – Markets in financial instruments – Directive 2004/39/EC – Action in the interests of consumers – Article 52(2) – Standing of consumer associations to represent individual consumers – Investors-consumers – Legal aid to consumer associations – Exemption from paying the fees of the opposing party – Risk of abusive litigation)

1.The present case concerns the interpretation of the rules related to the standing of consumer associations to bring proceedings in the interests of consumers in the context of markets in financial instruments, according to Article 52(2) of Directive 2004/39/EC (2) (‘the MiFID I Directive’). The main issue raised is whether it is possible to accept limitations on the standing of a consumer association acting on behalf of individual investors who qualify as consumers, on the basis of the nature and value of the financial products in which the latter have invested. The Court will thus have the occasion to explore the intersection between investor protection, consumer protection and the mechanisms of redress available in the interests of consumers.

II. Legal Framework

European Union law

The MiFID I Directive

Article 52 of the MiFID I Directive, entitled ‘Right of appeal’, was worded as follows:

1. Member States shall ensure that any decision taken under laws, regulations or administrative provisions adopted in accordance with this Directive is properly reasoned and is subject to the right to apply to the courts. The right to apply to the courts shall also apply where, in respect of an application for authorisation which provides all the information required, no decision is taken within six months of its submission.

(a) public bodies or their representatives;

(b) consumer organisations having a legitimate interest in protecting consumers;

(c) professional organisations having a legitimate interest in acting to protect their members.’

Article 53 of the MiFID I Directive, entitled ‘Extra-judicial mechanism for investors’ complaints’, was worded as follows:

1. Member States shall encourage the setting-up of efficient and effective complaints and redress procedures for the out-of-court settlement of consumer disputes concerning the provision of investment and ancillary services provided by investment firms, using existing bodies where appropriate.

…

Directive 2014/65/EU (MiFID II)

Article 74(2) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ 2014 L 173, p. 349) (‘the MiFID II Directive’), is worded as follows:

(a) public bodies or their representatives;

(b) consumer organisations having a legitimate interest in protecting consumers;

(c) professional organisations having a legitimate interest in acting to protect their members.’

Spanish law

Article 11(1) of the Ley de Enjuiciamiento Civil (Law on Civil Procedure) of 7 January 2000 (BOE No 7 of 8 January 2000, p. 575; ‘the LEC’) provides that, without prejudice to the individual right of injured parties to bring proceedings, legally established consumer and user associations shall have standing to defend in a court of law the rights and interests of their members and of the association, as well as the general interests of consumers and users.

Under the Second Additional Provision of the Ley 1/1996 de asistencia jurídica gratuita (Law 1/1996 on legal aid) of 10 January 1996 (BOE No 11 of 12 January 1996, p. 793; ‘Law 1/1996’), consumer associations are entitled to legal aid where the actions brought ‘relate directly to products or services of common, ordinary and widespread use or consumption’.

Pursuant to Article 36(2) of Law 1/1996, if the association is unsuccessful, it does not have to pay the costs of the opposing party, however high the value of the proceedings, nor would those costs be paid by the individual members whom that association represents in the proceedings.

Annex I(c)(13) to the Real Decreto 1507/2000 por el que se actualizan los catálogos de productos y servicios de uso o consumo común, ordinario y generalizado y de bienes de naturaleza duradera, a efectos de lo dispuesto, respectivamente, en los artículos 2, apartado 2, y 11, apartados 2 y 5, de la Ley General para la Defensa de los Consumidores y Usuarios y normas concordantes [(Royal Decree 1507/2000 updating the catalogues of products and services of common, ordinary and widespread use and of goods of durable nature, for the purposes of the provisions, respectively, of Article 2(2) and of Article 11(2) and (5), of the General Law for the protection of consumers and users and relevant provisions)] of 1 September 2000 (BOE No 219 of 12 September 2000, p. 31349) lists, in general terms, banking and financial services among those products and services of common, ordinary and widespread use.

Both Article 11(2) of the Ley Orgánica del Poder Judicial (Basic Law on the Judiciary) of 1 July 1985 (BOE No 157 of 2 July 1985, p. 20632) and Article 247(2) of the LEC provide, in the same terms, that the courts are to reject by way of a reasoned decision claims, proceedings or complaints brought in a clear abuse of rights or in circumvention of the law or procedure.

III. Facts, procedure and the question referred

Between May 2007 and March 2009, two natural persons, Mr Alberto and Ms Andrea, made five purchase orders for five financial products with Banco Banif SA (now Banco Santander SA, ‘Banco Santander’) for amounts ranging from EUR 150000 to EUR 300000 and worth a total of EUR 900000.

All the purchases were carried out under the MiFID I Directive.

The Asociación de Consumidores y Usuarios de Servicios Generales-Auge (Association of Consumers and Users of General Services – Auge; ‘Auge’) brought an action against Banco Banif SA on behalf of its members, Mr Alberto and Ms Andrea. It sought a declaration that the abovementioned contracts for the purchase of financial products were null and void on the ground of vitiated consent. It also sought an order that the investors be reimbursed the sum of EUR 481 634.14, plus fees, expenses and interest. That action was upheld in part at first instance in respect of certain purchase orders. Consequently, the banking institution was ordered to repay the applicants the sum of EUR 462 515.74, plus statutory interest from the date of the respective cancelled investments.

The defendant banking institution lodged an appeal against the first-instance judgment before the Audiencia Provincial de Granada (Provincial Court, Granada, Spain). That court dismissed the appeal and confirmed the first-instance judgment, on the grounds that the defendant had not taken into account the investor profile of the clients and had not provided them with clear and complete pre-contractual information on the risks of the products they were contracting to invest in.

The defendant banking institution lodged an exceptional appeal for breach of procedure and an appeal on a point of law before the referring court. It argues that Auge does not have standing to bring proceedings on behalf of its members since the contracted products are not of common and widespread use but are rather speculative financial products of high economic value which go beyond common consumer products.

The Tribunal Supremo (Supreme Court, Spain) emphasises that as a general rule it has accepted that consumer associations have standing to bring proceedings to defend their members in actions covered by the MiFID I Directive rules, including in proceedings to which Auge has been a party.

However, in two specific cases, the Tribunal Supremo (Supreme Court) found that Auge, as a consumer association, did not have standing to defend the individual interests of consumers in relation to investments in speculative financial products of high economic value to the extent that those were not products or services of common, ordinary or widespread use. In that regard, it considered that under Spanish law the legal standing of consumer and user associations is linked to the protection of their rights where they are directly related to goods or services of common, ordinary and widespread use or consumption.

In those judgments, the Tribunal Supremo (Supreme Court) found that there are financial services that, due to their nature and circumstances – in view of the large sums of money involved and speculative nature – go beyond the classification of ‘services of common, ordinary and widespread use’. That does not mean that the individual investors concerned cannot themselves bring proceedings to defend their rights, but they are not justified in doing so through a consumer association in order not to pay the court fees required to bring proceedings and to avoid the risk of being ordered to pay the costs in the proceedings and on appeal.

The aim is thereby to avoid the fraudulent or abusive use of the special standing of consumer associations in cases in which the status of being a consumer is weakened in view of the characteristics of the dispute and the amount at issue. Otherwise, the referring court points out, advantage could be taken of the right to legal aid which is granted to those associations when they assert the interests of their members in court.

Lastly, the Tribunal Supremo (Supreme Court) explains that, in its case-law, it has not denied the status of consumer to profit-seeking investors acting in a field that is beyond their commercial or professional activity, even where their investments are complex or significant. It has questioned, however, the legal standing of a consumer association in certain specific cases where, in view of the circumstances, a circumvention of procedure occur. That circumvention consists in avoiding paying court fees and the costs of the opposing party by not bringing proceedings in person but through a consumer association, all to the detriment of the opposing party and the State Treasury.

It is in those circumstances that the Tribunal Supremo (Supreme Court) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘On the basis that consumer associations have standing to represent in legal proceedings investors/consumers claiming a breach of duty by an investment firm in the marketing of complex financial products, can that standing be restricted exceptionally by national courts, in the context of an individual claim, in cases involving high-worth investors who carry out transactions that cannot be regarded as being of ordinary and widespread use and who bring proceedings under the aegis of a consumer association with the result that they are able to benefit from a possible exemption from legal costs in very high-value court proceedings, avoiding the payment of court fees and avoiding paying the costs of the opposing party in the case of unfounded or even frivolous claims?’

Written observations have been submitted by Auge, Banco Santander, the Spanish Government and the European Commission. Those parties presented oral argument at the hearing that took place on 8 May 2024 and answered questions put by the Court.

By its sole question, the referring court asks, in essence, whether Article 52(2) of the MiFID I Directive must be interpreted as precluding national case-law that exceptionally limits the standing of consumer associations to represent the individual interests of certain categories of investors having the status of consumers, on the basis of the monetary value and nature of the financial products in which they have invested. The referring court also enquires on the relevance of the fact that in such situations consumer associations benefit from legal aid and that the persons they represent avoid the payment of court fees and the costs of the opposing party.

The question put by the referring court stems from two specific aspects of Spanish law. The first is that consumer associations have standing to defend not only the ‘general interests of consumers’ but also ‘the rights and interests of their members’. (3) The second is that consumer associations are entitled to legal aid where the actions brought ‘relate directly to products or services of common, ordinary and widespread use or consumption’. (4) In such cases, if the association is unsuccessful, it does not have to pay the costs of the opposing party; costs are likewise not paid by the individual members whom that association represents in the proceedings.

The doubts of the referring court concern the compatibility with Article 52(2) of the MiFID I Directive of a judicial interpretation imposing limits on the standing of a consumer association.

The referring court explains that according to its case-law investors qualify as consumers when they act in a field that is beyond their commercial or professional activity (‘investors-consumers’). (5) It has also accepted that consumer associations, in general, have standing to defend investors-consumers. However, it questions whether the standing of consumer associations such as Auge may be restricted when they act on behalf of the individual interests of their members on the basis of the nature and value of the investments carried out, which may not be considered as products of common, ordinary and widespread use or consumption. The referring court explains that in view of the system of legal aid applicable to consumer associations, the recognition of standing to consumer associations in such circumstances could lead to a circumvention of procedure consisting in the avoidance of the payment of court fees and litigation costs.

Before addressing the question put by the referring court, it is necessary, at the outset, to determine the applicable provision ratione temporis in the case in the main proceedings.

Preliminary observations on the applicable provision ratione temporis

The MiFID I Directive was repealed with effect from 3 January 2017, when the MiFID II Directive entered into force. (6) Article 74(2) of the MiFID II Directive governs the right of the bodies listed therein to bring proceedings in the interests of consumers. It is worded in terms that are almost identical to Article 52(2) of the MiFID I Directive. The first sentence of Article 74(2) of the MiFID II Directive includes the adverb ‘also’, making it clear that the right of action of the bodies listed therein is complementary to the right of appeal, set out in paragraph 1 of that article.

The referring court considers that the applicable provision <span class="coj-italic">ratione temporis</span> in the case in the main proceedings is Article 52(2) of the MiFID I Directive, to the extent that the financial transactions concerned were all concluded when that directive was applicable.

At the hearing, the Court asked the Commission whether the relevant provision governing the right of action is substantive or procedural in determining which directive is applicable <span class="coj-italic">ratione temporis</span>. The Commission took the view that the provision concerned is procedural in nature and that the applicability of the MiFID I or MiFID II Directives must be determined on the basis of when the action was brought.

In that regard, it should be recalled that according to settled case-law, procedural rules are generally taken to apply from the date on which they enter into force, unlike substantive rules, which are usually interpreted as applying to situations existing before their entry into force only in so far as it follows clearly from their terms, their objectives or their general scheme that such an effect must be given to them. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0007" href="#t-ECR_62023CC0346_EN_01-E0007">7</a></span>)

Auge submitted at the hearing that it brought its action in 2015. It appears from the file before the Court that the action was lodged before 2017.

To the extent that the action of Auge was brought before the MiFID II Directive entered into force, which is a matter for the referring court to determine, the applicable provision <span class="coj-italic">ratione temporis</span> is Article 52(2) of the MiFID I Directive. It does not appear necessary therefore to determine whether Article 52(2) of the MiFID I Directive and Article 74(2) of the MiFID II Directive establish procedural or substantive rules.

In any event, as the Commission observed at the hearing, since the wording of Article 74(2) of the MiFID II Directive is almost identical to that of Article 52(2) of the MiFID I Directive, any interpretation adopted in relation to the latter provision is equally valid with respect to the former.

In view of the above, my analysis is based on the premiss that the applicable provision <span class="coj-italic">ratione temporis</span> is Article 52(2) of the MiFID I Directive.

(b) The scope of the action in ‘the interests of consumers’ under Article 52(2) of the MiFID I Directive: collective or also individual interests?

Banco Santander and the Spanish Government submit, essentially, that the issue raised in the case in the main proceedings is a matter that falls outside the scope of EU law and that the Court does not have jurisdiction to answer the question raised. In their view, Article 52(2) of the MiFID I Directive governs only the right of consumer associations to take action in the <span class="coj-italic">collective</span> interests of consumers, as opposed to their <span class="coj-italic">individual</span> interests. Thus, in their submission, the issue raised concerns the interpretation of Spanish law, which gives standing to consumer associations to bring proceedings in order to defend not only collective, but also individual interests.

In so far as Banco Santander and the Spanish Government contest the jurisdiction of the Court, suffice it to note that, by that question, the referring court seeks guidance on the interpretation of a provision of EU law. In that regard, it must be pointed out that if, in proceedings brought on the basis of Article 267 TFEU, the interpretation of provisions of national law is a matter for the courts of the Member States, as opposed to the Court of Justice, and the Court has no jurisdiction to rule on the compatibility of rules of national law with EU law, the Court does have jurisdiction to provide the national court with all the guidance as to the interpretation of EU law necessary to enable that court to determine whether those national rules are compatible with EU law. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0008" href="#t-ECR_62023CC0346_EN_01-E0008">8</a></span>)

In the case at hand, the question of the referring court requires a determination of the scope of the term ‘the interests of consumers’ in the context of an action brought under Article 52(2) of the MiFID I Directive. That issue pertains to the material scope of application of that provision. It follows that the Court has jurisdiction to answer the question.

With regard to the substance of the question, it must be observed that Article 52(2) of the MiFID I Directive requires Member States to provide that one or more of the bodies listed under that provision, as determined by national law, may, in the interests of consumers and in accordance with national law, take action before the courts or competent administrative bodies to ensure that the national provisions for the implementation of that directive are applied. The bodies listed in that provision are the following: (a) public bodies or their representatives; (b) consumer organisations having a legitimate interest in protecting consumers; and (c) professional organisations having a legitimate interest in acting to protect their members.

For the reasons that I will set out below, I consider that the term ‘the interests of consumers’ employed in that provision is broad enough and leaves the Member States discretion to determine the precise scope of those interests, which can be collective as well as individual.

More particularly, it must be pointed out that the word ‘consumers’ in Article 52(2) of the MiFID I Directive is expressed in the plural. The use of the plural indicates that the action concerned has a <span class="coj-italic">collective</span> dimension. Member States must provide for a mechanism that allows one or more of the bodies listed therein to have standing to defend a <span class="coj-italic">plurality</span> of consumers and their interests in the field of financial and investment services.

For the rest, Article 52(2) does not specify the exact scope of the consumer interests in question or, more precisely, whether the bodies having standing to bring proceedings are entitled to defend exclusively the <span class="coj-italic">collective interests</span> of consumers, understood as the general interest of consumers, (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0009" href="#t-ECR_62023CC0346_EN_01-E0009">9</a></span>) or also the <span class="coj-italic">individual</span> interests of an identified group of consumers.

It is then for the internal legal order of each Member State to determine the exact scope of any actions under Article 52(2) of the MiFID I Directive with regard to the consumer interests which those actions are intended to protect.

Indeed, Article 52(2) of the MiFID I Directive is worded in general terms and does not amount to an exhaustive harmonisation of the national provisions governing the actions that may be brought by the bodies listed therein, including by consumer organisations.

In that regard, it follows from recital 2 thereof that the MiFID I Directive provides ‘<span class="coj-italic">for the degree of harmonisation needed</span> to offer investors a high level of protection’. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0010" href="#t-ECR_62023CC0346_EN_01-E0010">10</a></span>) While that directive, pursuant to recital 5, establishes a ‘comprehensive regulatory regime’ in certain areas of financial markets, (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0011" href="#t-ECR_62023CC0346_EN_01-E0011">11</a></span>) the means for enforcement of its provisions is not the subject of exhaustive harmonisation.

That is apparent from the wording of Article 52(2) of the MiFID I Directive, which refers twice to national law. First, national law determines which of the bodies listed therein have the right to bring proceedings. Second, the right of those bodies to take action is exercised ‘in accordance with national law’. Thus, by referring to national law, the EU legislature has left it to the discretion of each Member State to designate the bodies which may take action and to determine the model of enforcement, the mechanisms of redress, the scope of consumer interests protected and the conditions for the exercise of actions.

The different categories of bodies listed under Article 52(2) of the MiFID I Directive that may bring proceedings, depending on national law, in order to protect consumer interests in the field of financial services, reflects the different approaches and traditions of Member States with respect to the primary responsibility for the enforcement of rules that protect consumer interests. The distinction consists, broadly, in whether the primary responsibility for enforcement rests with public authorities (public enforcement) or with consumer associations and professional bodies (private enforcement) or a mixture of both. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0012" href="#t-ECR_62023CC0346_EN_01-E0012">12</a></span>) Thus, depending on the choice made by Member States, the sole or primary responsibility to take action in the interests of consumers to ensure that the national provisions for the implementation of the MiFID I Directive are applied may fall on public bodies or their representatives (Article 52(2)(a)) (the public enforcement model). (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0013" href="#t-ECR_62023CC0346_EN_01-E0013">13</a></span>) Member States may also decide that the sole or primary responsibility falls on consumer organisations having a legitimate interest in protecting consumers, according to Article 52(2)(b) and/or professional organisations having a legitimate interest in acting to protect their members, according to Article 52(2)(c) (the private enforcement model).

The choice of the model of enforcement has an impact on the scope of the consumer interests protected. Public bodies protect the general interest. Consumer organisations protect also, primarily, the general consumer interest. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0014" href="#t-ECR_62023CC0346_EN_01-E0014">14</a></span>) However, it cannot be excluded that, depending on national law, consumer associations may be enabled to take action to defend individual interests. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0015" href="#t-ECR_62023CC0346_EN_01-E0015">15</a></span>) The defence of the individual interests of consumers (in the area of financial and investment services) appears particularly relevant for the enforcement option listed in Article 52(2)(c) of the MiFID I Directive, to the extent that it refers to ‘professional organisations having a legitimate interest in acting <span class="coj-italic">to protect their members</span>’. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0016" href="#t-ECR_62023CC0346_EN_01-E0016">16</a></span>)

Within a broader context, it is important to take into account the fact that at the time of the adoption of the MiFID I Directive (in 2004), the degree of harmonisation of the means of redress in the European Union for the protection of consumer interests in general was <span class="coj-italic">extremely low</span>. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0017" href="#t-ECR_62023CC0346_EN_01-E0017">17</a></span>)

Only some areas relevant for consumer protection provided for a mechanism of injunctive relief to protect the collective interests of consumers without repealing existing mechanisms of redress for the protection of consumers.

The most important of those provisions, which is still in force, is Article 7(2) of Directive 93/13/EEC. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0018" href="#t-ECR_62023CC0346_EN_01-E0018">18</a></span>) The mechanism provided for in that provision allows Member States to introduce a check on unfair terms contained in standard contracts by means of actions for an injunction brought in the public interest by consumer-protection associations. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0019" href="#t-ECR_62023CC0346_EN_01-E0019">19</a></span>)

Directive 98/27/EC (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0020" href="#t-ECR_62023CC0346_EN_01-E0020">20</a></span>) brought about an approximation of laws, regulations and administrative provisions relating to actions for an injunction aimed at the protection of the collective interests of consumers included in the directives listed in its annex. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0021" href="#t-ECR_62023CC0346_EN_01-E0021">21</a></span>) Pursuant to recital 2 of Directive 98/27, the ‘collective interests’ of consumers must be understood as ‘interests which do not include the cumulation of interests of individuals who have been harmed by an infringement’.

Directive 98/27 did not include in its annex any reference to the predecessor to the MiFID I Directive, namely Directive 93/22/EEC. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0022" href="#t-ECR_62023CC0346_EN_01-E0022">22</a></span>) That appears appropriate as Directive 93/22 sought merely to harmonise the initial authorisation and operating requirements for investment firms and was not of great relevance for the protection of consumers acting in the area of financial and investment services. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0023" href="#t-ECR_62023CC0346_EN_01-E0023">23</a></span>)

After the MiFID I Directive entered into force, and despite the reference to ‘the interests of consumers’ in Article 52(2) of the MiFID I Directive, there was no amendment of the annex to Directive 98/27. Directive 2009/22/EC on injunctions for the protection of consumer interests (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0024" href="#t-ECR_62023CC0346_EN_01-E0024">24</a></span>) did not include either the MiFID I Directive in its annex. The omission of the MiFID I Directive from the scope of Directive 2009/22 serves to further indicate that the harmonisation of the mechanisms of redress to protect the interests of consumers in the field of the MiFID I Directive was low and remained so.

Directive (EU) 2020/1828 on representative actions for the protection of the collective interests of consumers (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0025" href="#t-ECR_62023CC0346_EN_01-E0025">25</a></span>) brought about a first more substantial harmonisation of collective redress at the level of the European Union, (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0026" href="#t-ECR_62023CC0346_EN_01-E0026">26</a></span>) covering injunctive as well as redress measures. That directive defines the ‘collective interests of consumers’ as ‘the general interest of consumers and, in particular for the purposes of redress measures, the interests of a group of consumers’. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0027" href="#t-ECR_62023CC0346_EN_01-E0027">27</a></span>)

The scope of Directive 2020/1828 is particularly broad. It intends to achieve a high level of consumer protection in many areas involving the interests of consumers, including in financial services. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0028" href="#t-ECR_62023CC0346_EN_01-E0028">28</a></span>) Its annex covers, in particular, Articles 23 to 29 of the MiFID II Directive, which set out provisions to ensure investor protection.

Some recitals of Directive 2020/1828 reveal the variety of redress mechanisms existing at the time of its adoption to protect the individual as well as the collective interests of consumers including in the area of financial services. More particularly, recital 13 states that a high level of consumer protection requires that ‘areas such as … financial services … be covered by [that directive] in addition to general consumer law’ and that ‘as there is increased consumer demand for financial and investment services, it is important to improve the enforcement of consumer law in those areas’. Recital 11 of Directive 2020/1828 states that it ‘should not replace <span class="coj-italic">existing national procedural mechanisms</span> for the protection of <span class="coj-italic">collective or individual</span> consumer interests’. (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0029" href="#t-ECR_62023CC0346_EN_01-E0029">29</a></span>) Finally, recital 48 states that ‘Member States should lay down rules for the coordination of representative actions, individual actions brought by consumers and <span class="coj-italic">any other actions for the protection of the individual and collective interests of consumers</span> as provided under Union and national law.’ (<span class="coj-note"><a id="c-ECR_62023CC0346_EN_01-E0030" href="#t-ECR_62023CC0346_EN_01-E0030">30</a></span>)

It follows from all the above that the scope of the term ‘the interests of consumers’ under Article 52(2) of the MiFID I Directive is to be understood broadly, allowing Member States to provide for actions to defend the collective but also the individual interests of consumers depending on national traditions, which may vary considerably.

Thus, Member States have the discretion, if they decide to give standing to consumer associations to bring proceedings pursuant to Article 52(2)(b) of the MiFID I Directive, to limit the action to the defence of the collective interests of consumers. They also have the discretion to recognise, as is the case in Spain, that consumer associations have standing to defend not only the collective and general interest of consumers but also the individual interests of their members.

However, as I will explain in the next section, the margin of discretion left to the Member States to determine the scope of an action in that regard has limitations.

(c) The limits to the discretion of Member States when implementing Article 52(2) of the MiFID I Directive

Article 52(2) of the MiFID I Directive requires the Member States to provide that one or more of the bodies designated therein may, in the interests of consumers and ‘in accordance with national law’ take action to ensure the application of the national provisions for the implementation of that directive. However, when the Member States exercise the discretion given to them under Article 52(2) of the MiFID I Directive, they must use their discretion, as the Commission has essentially observed, within the limits laid down by that provision. More specifically, the relevant regulation by national law may not undermine the useful effect of that provision, taking into account of the aims of that directive. (31)

With regard, more specifically, to the material scope of the action under Article 52(2) of the MiFID I Directive, it follows from that provision that it covers the correct application of the national provisions for the implementation of that directive in the interests of consumers, without excluding any investors that qualify as consumers. (32)

The concept of ‘consumer’ is not defined in Article 52(2) of the MiFID I Directive or in any other provision thereof. Article 4 of the MiFID I Directive, by contrast, defines the concept of ‘client’ and the two categories of clients (retail and professional). (33)

As rightly observed in the academic literature, there is no single definition of the concept of ‘consumer’ across EU law. (34) Each directive defines its scope of application and each contains its own definition of the ‘consumer’ that is relevant for that act. However, the MiFID I Directive does not define what constitutes a ‘consumer’. Thus, in order to ensure compliance with the objectives pursued by the European legislature in the sphere of consumer contracts, and the consistency of EU law, account must be taken, in particular, of the definition of ‘consumer’ in other rules of EU law. (35) The legal instruments relevant for the protection of consumer interests at the time of adoption of the MiFID I Directive (36) reveal convergence on certain essential elements of the definition of the concept of the ‘consumer’. (37) The consumer is a natural person who acts outside and independently of any trade or professional activity or purpose, solely for the purpose of satisfying his or her own individual needs in terms of private consumption.

That understanding of the concept of consumer, based on the criterion of the natural person acting outside his or her trade or profession, is objective in nature. (38) There is no indication in Article 52(2) of the MiFID I Directive that, for the purpose of classifying an investor as a ‘consumer’ under that provision, it is relevant to take into account the financial situation of that person at the time when he or she made the investment and the nature and the value of the financial instruments that were invested in.

The reference to ‘the interests of consumers’ under Article 52(2) of the MiFID I Directive, indicates that investors who may be classified as consumers wear two ‘hats’, that of the consumer and the investor. Article 53 of the MiFID I Directive corroborates that dual status. As stated in the title of that provision, it governs the extra-judicial mechanism for investors’ complaints. That provision states that Member States are to encourage the setting-up of efficient and effective complaints and redress procedures for the out-of-court settlement of ‘consumer disputes concerning the provision of investment and ancillary services’. It follows from that provision that there are investor disputes that qualify as consumer disputes. (39)

The dual status of the investor-consumer is confirmed by the MiFID II Directive, which refers in its recitals to the objective of investor and consumer protection. (40)

Directive 2020/1828 also supports that dual status. Recital 14 states that that directive covers infringements of the provisions of EU law referred to in Annex I, including the MiFID II Directive, to the extent that those provisions protect the interests of consumers, ‘regardless of whether those consumers are referred to as consumers, … customers, retail investors, retail clients, … or something else’ (emphasis added).

It follows from the above that in the context of Article 52(2) of the MiFID I Directive, the concepts of investor and consumer coexist forming a ‘composite concept’ (41) of the ‘investor-consumer’.

That coexistence does not involve any threshold pertaining to financial means or the value of financial instruments with regard to the right of taking action as set out under Article 52(2) of the MiFID I Directive. Thus, for the purposes of that provision, the way the consumer behaves as an investor, and in particular, the amount which he or she invested, or the complexity or value of the instruments, does not deprive that person of the status of consumer to the extent that he or she acts outside his or her profession. (42)

It follows as a corollary from the foregoing that such factors may not be relevant for the determination of the standing of the bodies listed therein to bring proceedings in the interests of investors-consumers. In other words, standing under Article 52(2) of the MiFID I Directive may not be dissociated from the status of the investors as consumers.

Excluding the right of those bodies, and in particular of consumer associations, to bring proceedings with regard to certain investors who have the status of consumers would indirectly weaken that status, although it is in fact not subject to any qualifications or reservations. Moreover, excluding that right would undermine the useful effect of Article 52(2) of the MiFID I Directive, which consists in providing a right to bring proceedings in the interests of all investors-consumers, without distinguishing different levels of that right depending on the size or nature of the investment. In that regard, it must also be taken into account that the objective of the MiFID I Directive consists, according to recitals 2 and 31, in offering investors a high level of protection.

In this instance, it is common ground that Spanish law recognises standing to consumer associations to represent the rights and interests of their members and the general interests of consumers. The referring court points out that the natural persons involved in the case in the main proceedings are consumers and that their status as consumers is established. Moreover, that court stated that in general it has recognised the standing of consumer associations to defend their members in disputes covered by the MiFID I Directive. It considers, however, that the standing of consumer associations should be limited when they represent the interests of consumers who have invested in complex financial products.

However, for the reasons explained in points 69 to 71 above, such a judicial interpretation, which limits the standing of those associations on the basis of the value or the nature of the financial product, is liable to undermine the useful effect of Article 52(2) of the MiFID I Directive.

(d) Standing and abuse of procedure in view of the applicable regime of legal aid

The referring court has stated that according to Spanish law consumer associations are entitled to legal aid where the actions brought ‘relate directly to products or services of common, ordinary and widespread use or consumption’. This means, according to the applicable national law, (43) that consumer associations are not required to pay the costs of the opposing party even when they lose. Moreover, consumer associations are not obliged to pay the legal fees linked to the bringing of the action.

The referring court considers that in situations in which a consumer association lodges an action which does not ‘relate directly to products or services of common, ordinary and widespread use or consumption’, such as complex financial products which fall under the MiFID I Directive, there is a risk of the fraudulent or abusive use of standing. That abuse consists in the consumer association taking undue advantage of the ‘privileged’ regime of legal aid.

In that regard, it must be pointed out, in the first place, that it falls on the referring court to interpret the conditions set out under national law entitling a consumer association to legal aid. More specifically, it falls on the national court to determine whether complex financial products of high value should be considered as falling within or outside the scope of ‘products or services of common, ordinary and widespread use or consumption’. It is also for the national court to determine the consequences of the classification of such products in relation to the applicability of the national regime on legal aid.

In the second place, a clear distinction must be drawn between the standing of consumer associations in the context of the MiFID I Directive and the issue of legal aid or any possible abuse of procedure.

The view that I take in this Opinion, that the standing of consumer associations under Article 52(2) of the MiFID I Directive may not be limited on the basis of the value or the nature of the financial products concerned, is without prejudice to the question of whether legal aid to those associations may be restricted on the basis of such a criterion.

In that regard, it must be observed that Article 52(2) of the MiFID I Directive (or any other piece of EU legislation applicable at that time) does not contain any provision governing legal aid to the bodies that have standing to bring proceedings. It follows that, in the absence of EU legislation concerning the granting of legal aid to consumer associations when they take action in the interests of consumers in the context of Article 52(2) of the MiFID I Directive, it is for the national legal order of each Member State to establish such rules, in accordance with the principle of procedural autonomy, provided, however, that those rules are not less favourable than those governing similar domestic situations (principle of equivalence) and that they do not make it excessively difficult or impossible in practice to exercise the rights conferred by EU law (principle of effectiveness). (44)

As regards the principle of equivalence, it must be observed that the Court does not have before it any evidence which might raise doubts as to the compliance of the procedural rules at issue in the main proceedings with that principle.

Subject to determinations to be made by the referring court, it is clear from the Second Additional Provision of Law 1/1996 that the rule under which consumer associations are entitled to legal aid where the actions brought relate directly to products or services of common, ordinary and widespread use or consumption applies to all relevant actions, irrespective of whether they are based on European Union or national law.

As regards the principle of effectiveness, the Court has already held that every case in which the question arises as to whether a national procedural provision makes the application of European Union law impossible or excessively difficult must be analysed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national bodies. In that context, it is necessary to take into consideration, where relevant, the principles which lie at the basis of the national legal system, such as the protection of the rights of the defence, the principle of legal certainty and the proper conduct of the proceedings. (45)

Moreover, national rules restricting access to legal aid can have an impact on the right to access to court and on the principle of effective judicial protection as enshrined in Article 47 of the Charter of the Fundamental Rights of the European Union. (46) That right entails the provision of legal aid to those who lack sufficient resources in so far as such aid is necessary to ensure effective access to justice. (47)

In the instant case, subject to verification by the national court, it appears that the benefit of legal aid for consumer associations does not depend on the financial situation of the association but only on the nature of the products or services concerned by the dispute. It also appears that the national applicable law has the effect of suspending the ‘“loser pays” principle’ to the benefit of consumer associations. (48)

To the extent that the national law establishes a favourable regime for consumer associations and derogates from the ‘“loser pays” principle’, the criteria set out by national law in order to benefit from that regime, in relation to the nature of the product, as interpreted by national courts, do not appear capable of undermining the principle of effectiveness. (49)

Moreover, to the extent that Article 52(2) of the MiFID I Directive reaffirms the right to an effective remedy enshrined in Article 47 of the Charter, (50) it must be observed that the national regime in question makes it possible to grant legal aid to consumer associations without requiring proof of a lack of sufficient resources. Under such circumstances, that specific regime of legal aid does not appear capable of affecting the right to an effective judicial remedy on the part of the consumer association.

It must also be added that the criteria set out by national law in order for consumer associations to benefit from the specific regime of legal aid does not affect, as the Spanish Government submitted at the hearing and subject to verification by the referring court, the right of individual investors who have the status of consumers to bring an individual action and request legal aid if they lack sufficient resources, in accordance with the relevant provisions of national law.

It is also a matter for the national court to apply national legislation to sanction abusive litigation and unmeritorious claims. (51)

That being so, it must be pointed out that the mere fact that a consumer association takes action on behalf of investors-consumers who have significant financial means and have invested in complex products does not amount, as such, to an abuse of procedure that would deprive the consumer association of standing.

Any other interpretation, in accordance with my analysis above, (52) would undermine the useful effect of Article 52(2) of the MiFID I Directive.

In view of all the foregoing, Article 52(2) of the MiFID I Directive must be interpreted as precluding national case-law that exceptionally limits the standing of consumer associations to represent the individual interests of certain categories of investors having the status of consumers, on the basis of the value and nature of the financial products in which they have invested. That is without prejudice to the question of whether legal aid and the concomitant exemption from the payment of court fees and the costs of the opposing party may be restricted on the basis of such criteria.

I propose that the Court answer the question referred for a preliminary ruling by the Tribunal Supremo (Supreme Court, Spain) as follows:

Article 52(2) of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC must be interpreted as precluding national case-law that exceptionally limits the standing of consumer associations to represent the individual interests of certain categories of investors having the status of consumers, on the basis of the value and nature of the financial products in which they have invested. That is without prejudice to the question of whether legal aid and the concomitant exemption from the payment of court fees and the costs of the opposing party may be restricted on the basis of such criteria.

—

(1) Original language: English.

(2) Directive of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC (OJ 2004 L 145, p. 1). It is commonly known as ‘MiFID I’.

(3) Article 11(1) of the LEC. See point 5 of the present Opinion.

(4) Second Additional Provision of Law 1/1996. See point 6 of the present Opinion.

(5) I explore the term investors-consumers below, in point 65 et seq. of the present Opinion.

(6) Under the conditions set out in Article 93(1) of the MiFID II Directive.

(7) Judgment of 3 June 2021, Jumbocarry Trading (C‑39/20, EU:C:2021:435, paragraph 28).

(8) See, to that effect, judgment of 8 May 2024, Asociaţia Forumul Judecătorilor din România (Associations of judges) (C‑53/23, EU:C:2024:388, paragraph 14), and judgment of 21 June 2022, Ligue des droits humains (C‑817/19, EU:C:2022:491, paragraph 240).

(9) The definition of the collective interests has been a matter of discussion in legal literature. See Boré, L., La défense des intérêts collectifs par les associations devant les juridictions administratives et judiciaires, LGDJ, Paris, 1997, p. 3, who points out that the collective interest involves at least two persons, without being important whether it concerns two persons or two billion persons because this is ‘the literal meaning of the word; it is clear and simple’ (‘C’est un intérêt qui concerne au moins deux personnes. Qu’il en concerne deux ou deux milliards, peu importe, cela reste un intérêt collectif. Tel est le sens littéral du mot; il est clair et simple’). By contrast, with respect to the legal definition of the collective interest that same author recognises that it is ‘obscure and subject to debate’ (‘Son sens juridique, au contraire, est obscure et discuté’). See Calais-Auloy, J., Temple, H. and Depincé, M., Droit de la consommation, 10th ed., Paris, Dalloz, 2020, p. 719, who define the collective interest as an ‘interest that is mid-way between the individual interests of some consumers and the general interest of all citizens’ (‘interêt qui se trouve à mi-chemin entre les intérêts individuels de quelques consommateurs et l’intérêt général de tous les citoyens’). See below, point 48 et seq. of this Opinion.

(10) Emphasis added. See Opinion of Advocate General Campos Sánchez-Bordona in Khorassani (C‑678/15, EU:C:2017:100, footnote 21).

(11) See Daams, L., Private enforcement im Kapitalmarktrecht – Das Verhältnis von Aufsichts- und Zivilrecht nach der MiFID II, Verlag Dr. Kovač, Hamburg, 2021, p. 96, referring to an ‘area-specific maximum harmonisation’ (‘bereichsspezifische Vollharmonisierung’). Recital 7 of the MiFID II Directive states that ‘since the main objective and subject matter of [the MiFID II Directive] is to harmonise national provisions concerning the areas referred to, it should be based on Article 53(1) of the Treaty on the Functioning of the European Union (TFEU).’

(12) See, in general, Cafaggi, F. and Micklitz, H.W., New Frontiers of Consumer Protection: The Interplay between Private and Public Enforcement, Intersentia, Antwerp, 2009; Fairgrieve, D. and Lein, E., Extraterritoriality and Collective Redress, Oxford University Press, Oxford, 2012; Hodges, C., The Reform of Class and Representative Actions in European Legal Systems: A New Framework for Collective Redress in Europe, Hart, Oxford, 2008, p. 15 et seq.

(13) The right to take action under Article 52(2) of the MiFID I Directive is without prejudice to the power of the competent authorities to require the cessation of any practice that is contrary to the provisions adopted in the implementation of the MiFID I Directive, pursuant to Article 50(2)(e) thereof, as well as the power to adopt administrative sanctions, in accordance with Article 51 of the MiFID I Directive.

(14) See Hodges, C., The Reform of Class and Representative Actions in European Legal Systems, op. cit. footnote 12, p. 15, pointing out that ‘the subject matter over which the private entity, a consumer association, can take action has traditionally been limited to injunctive relief to protect the general consumer interest, rather than to pursue individual interests or losses’.

(15) That appears to be the case in the Spanish legal system, as presented by the referring court. French consumer law also has examples of actions involving the individual interests of a group of consumers. One example is the action de groupe simplifiée (simplified group action) provided for under Article L623-14 of the code de la consommation (Consumer Code). That provision allows consumer associations to bring an action when the identity and the number of consumers is known and when the consumers have suffered the same damage. Another example is the action en représentation conjointe (action of joint representation), provided for under Article L622-1 of the Consumer Code. That provision gives the right to any consumer association recognised as being represented nationwide, to sue for damages when several identified consumers have suffered personal prejudice having a common origin through the actions of the same person, if mandated to do so by at least two of the consumers concerned. The academic literature points to the distinctive character of that action ‘made in France’ in that it is detached from the collective interests of consumers and in that its purpose is to defend a ‘collection of individual interests’; see Poillot, E., ‘L’action des associations en représentation conjointe’, in Sauphanor-Brouillaud, N. et al., Les Contrats de Consommation. Règles Communes, Traité de Droit Civil sous la direction de Jacques Ghestin, LGDJ, 2011, p. 1075 (emphasis added).

(16) Emphasis added. In France, Article L452-2 of the code monétaire et financier (Monetary and Financial Code) gives standing to designated associations of investors to sue for damages, if mandated to do so by at least two of the investors concerned, on behalf of those investors, in circumstances in which several identified investors have suffered personal prejudice having a common origin through the actions of the same person.

(17) See Hodges, C. and Voet, S., Delivering Collective Redress: New Technologies, Oxford, Hart, 2018, p. 12, observing that ‘for many years, Europe struggled with taking a clear position on collective redress and establishing a coherent legal framework’. See also Mullenix, L.S., ‘For the Defense: 28 Shades of European Class Actions’, in Uzelac, A. and Voet, S. (eds), Class Actions in Europe, Holy Grail or Wrong Trail?, Springer, 2021, pp. 43 to 69.

(18) Council Directive of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29).

(19) See, to that effect, judgment of 4 July 2024, Caixabank and Others (Review of transparency in collective actions) (C‑450/22, EU:C:2024:577, paragraph 26 and the case-law cited).

(20) Directive of the European Parliament and of the Council of 19 May 1998 on injunctions for the protection of consumers’ interests (OJ 1998 L 166, p. 51).

(21) See the critical view of Hodges, C., The Reform of Class and Representative Actions in European Legal Systems, op. cit. footnote 12, p. 10, observing that ‘it is a mistake to imagine that EU measures, notably Directive 98/27 on injunctions, harmonise much of the pre-existing national collective mechanisms. It may even be said that the effect of that directive is to obscure rather than harmonise or simplify the overall position’.

(22) Council Directive of 10 May 1993 on investment services in the securities field (OJ 1993 L 141, p. 27).

(23) See recital 2 of the MiFID I Directive.

(24) Directive of the European Parliament and of the Council of 23 April 2009 (OJ 2009 L 110, p. 30).

(25) Directive of the European Parliament and of the Council of 25 November 2020 and repealing Directive 2009/22/EC (OJ 2020 L 409, p. 1).

(26) See, Kodek, G., ‘Representative Actions – a Judge’s View’, Praefatio, Lex & Forum, Vol. 1, 2024, p. 1, who points out that Directive 2020/1828 ‘reflects the sceptical and, indeed, restrictive approach which already characterised prior EU initiatives’.

(27) Article 3(3) of Directive 2020/1828.

(28) See recital 13 of Directive 2020/1828, stating that ‘in particular, as there is increased consumer demand for financial and investment services, it is important to improve the enforcement of consumer law in those areas.’

(29) Emphasis added. See also recital 15, which states that Directive 2020/1828 ‘should be without prejudice to the legal acts listed in Annex I and therefore it should not … replace any enforcement mechanism that those legal acts might contain’.

(30) Emphasis added.

(31) See, to that effect, judgment of 11 January 2024, G (Early termination fees) (C‑371/22, EU:C:2024:21, paragraph 50 and the case-law cited).

(32) The legislative history of Article 52(2) of the MiFID I Directive demonstrates that the legislature intended to give a broad scope to the action referred to therein. Article 48(2) of the Proposal for a Directive of the European Parliament and of the Council on investment services and regulated markets, and amending Council Directives 85/611/EEC, Council Directive 93/6/EEC and European Parliament and Council Directive 2000/12/EC (COM/2002/625 final), contained the introductory sentence ‘with regard to the right of appeal referred to in paragraph 1’. It thus established a direct link between the right to bring an action by one of the bodies listed therein and the right to apply to the courts against any decision taken under laws, regulations or administrative provisions, as referred to in Article 48(1) of that proposal. That introductory sentence was left out in the final text.

(33) The ‘client’ is defined as ‘any natural or legal person to whom an investment firm provides investment and/or ancillary services’. The ‘professional client’ means a client meeting the criteria laid down in Annex II, while the ‘retail client’ is defined in a negative manner, as a client who is not a professional client.

(34) Stuyck, J., ‘La notion de consommateur en droit de l’Union européenne’, in Combet, M., Le droit européen de la consommation au XXIe siècle, État des lieux et perspectives, Bruylant, 2022, p. 25.

(35) See, to that effect, judgment of 2 May 2019, Pillar Securitisation (C‑694/17, EU:C:2019:345, paragraph 34 and the case-law cited).

(38) For the objective understanding of the concept of consumer, see judgments of 4 July 2024, Caixabank and Others (Review of transparency in collective actions) (C‑450/22, EU:C:2024:577, paragraph 49 and the case-law cited), and of 3 October 2019, Petruchová (C‑208/18, EU:C:2019:825, paragraph 55). See Poillot, E., ‘Clients et consommateurs en droit bancaire et financier: entre protection subjective et protection objective de la partie faible en droit européen’, Hors-série Banque & Droit, February 2023, p. 10, at p. 13; Prorok, J., ‘La distinction entre consommateur et investisseur. Commentaire CJUE, 4e chambre, 2 avril 2020, aff. C‑500/18, AU c/ Reliantco Investments et Reliantco Investments Limassol Sucursala Bucureşti’, Banque & Droit, May-June 2020, p. 48, at p. 49.

(39) Under the MiFID II Directive the relevant provision on the extra-judicial mechanism is Article 75 and its title explicitly refers to ‘consumer complaints’.

(40) See recitals 77, 156 and 166 of the MiFID II Directive.

(41) Riassetto, I., ‘L’investisseur-consommateur à la croisée du droit financier et du droit de la consommation. The investor-consumer at the crossroads of financial and consumer law’, op. cit. footnote 37, pp. 369 to 386; Riassetto, I., ‘Prestations de services d’investissement et clauses abusives’, in Henry, X. (dir.), Des contrats civils et commerciaux aux contrats de consommation, Mélanges en l’honneur du Doyen Bernard Gross, Presses Universitaires de Nancy, 2009, p. 273. See also Poillot, E., ‘Clients et consommateurs en droit bancaire et financier: entre protection subjective et protection objective de la partie faible en droit européen’, op. cit. footnote 38, p. 15, pointing out that the coexistence and link of the two systems of protection has its origins in Article 12 TFEU.

(42) See, by analogy, judgments of 3 October 2019, Petruchová (C‑208/18, EU:C:2019:825, paragraph 42), of 2 April 2020, Reliantco Investments and Reliantco Investments Limassol Sucursala Bucureşti (C‑500/18, EU:C:2020:264, paragraph 53).

(43) See point 7 of the present Opinion.

(44) See, to that effect, judgment of 20 September 2018, EOS KSI Slovensko (C‑448/17, EU:C:2018:745, paragraph 36).

(45) Judgment of 27 February 2014, Pohotovosť (C‑470/12, EU:C:2014:101, paragraph 51).

(46) See, to that effect, judgment of 22 December 2010, DEB (C‑279/09, EU:C:2010:811, paragraphs 29 to 31).

(47) See, to that effect judgment of 27 February 2014, Pohotovosť (C‑470/12, EU:C:2014:101, paragraph 53).

(48) On the issue of the funding of consumer associations in the context of collective redress, see Hodges, C., The Reform of Class and Representative Actions in European Legal Systems, op. cit. footnote 12, at p. 234, pointing out that ‘insulating the NGO to a greater or lesser extent from the “loser pays” rule is a theoretical option, but […] unprincipled’. It can be observed that Directive 2020/1828 endorses the ‘“loser pays” principle’ in representative actions for redress measures. According to Article 12 of that directive, ‘Member States shall ensure that the unsuccessful party in a representative action for redress measures is required to pay the costs of the proceedings borne by the successful party, in accordance with conditions and exceptions provided for in national law applicable to court proceedings in general’.

(49) See, to that effect, judgment of 27 February 2014, Pohotovosť (C‑470/12, EU:C:2014:101, paragraph 54).

(50) See, to that effect, judgment of 13 September 2018, UBS Europe and Others (C‑358/16, EU:C:2018:715, paragraph 57).

(51) I note that Directive 2020/1828 leaves the issue of abusive litigation for Member States to address. Recital 39 of that directive states, ‘in order to avoid abusive litigation, Member States should adopt new rules or apply existing rules under national law so that the court or administrative authority can decide to dismiss manifestly unfounded cases as soon as the court or administrative authority has received the necessary information in order to justify the decision.’

(52) Point 71 of the present Opinion.