Judgment of the Court (Eighth Chamber) of 7 November 2024.ERB New Europe Funding II v YI.Reference for a preliminary ruling – Consumer protection – Directive 93/13/EEC – Article 7(1) – Unfair terms in consumer contracts – Powers and obligations of the national court – First legal remedy pursued by the consumer before the court of the place where the seller or supplier has its registered office, without the assistance of a lawyer and without that consumer attending the hearing – Second legal remedy pursued by the consumer before the court of his or her place of domicile, with the assistance of a lawyer – Res judicata – Article 47 of the Charter of Fundamental Rights of the European Union – Effective judicial protection of the consumer.Case C-178/23.

This judgment concerns the interpretation of EU consumer protection law, specifically regarding unfair terms in consumer contracts and the principle of res judicata (finality of court decisions). The case arose from a dispute between a debt collection company and a consumer in Romania regarding unfair terms in a credit agreement.The judgment’s structure consists of three main parts: examination of admissibility of the preliminary ruling request, analysis of the substance of the case, and the final ruling. The Court first confirms the admissibility of the case despite objections, then analyzes the balance between consumer protection and the principle of res judicata.The key provisions established by the Court are:

• A national court is not required to re-examine contract terms that were already examined by another court with final decision
• This applies even if the consumer was not represented by a lawyer or didn’t attend the hearing in the first proceedings
• However, this is conditional on:
  • The decision being properly notified to the consumer
  • Information about available remedies being provided
  • No procedural irregularities that could have prevented the consumer from exercising their rights

The judgment significantly clarifies the relationship between consumer protection under EU law and the principle of res judicata, establishing clear conditions under which final court decisions on unfair contract terms must be respected.