On 4 January 2012, the Ghent Court of Appeal (Hof van Beroep/Cour d'Appel) held that a court must at its own initiative review consumer agreements and annul those provisions that are blacklisted in the Law on Market Practices and Consumer Protection of 6 April 2010 (the "Law"). The Law implements the blacklisted clauses of EU Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts. In addition, the Ghent Court of Appeal ruled that when a contractual remedy is provided for the benefit of a trader, the agreement must foresee a similar remedy in equivalent situations to the advantage of the consumer.
Standard agreements between hospitals and their patients usually contain damage clauses to penalise a default on payments. In the case at hand, the hospitalisation agreement provided for (i) an interest rate of 1% per month on the unpaid amount and (ii) damages equal to 20% of the unpaid amount.
In its writ of summons against a patient, the hospital voluntarily requested less than its contractual rights, asking only (i) an interest rate of 10% per year, and (ii) damages equal to 10% of the unpaid amount. In his reply, the patient claimed that notwithstanding the voluntary reduction by the hospital, the damage clauses were punitive clauses, and thus void. However, the patient did not base his defence on consumer law.
Entirely at its own initiative, the Court of First Instance (Rechtbank van Eerste Aanleg/Tribunal de Première Instance) held that consumer law applied to the hospitalisation agreement. The Court went on to affirm that the voluntary mitigation of the exercise of contractual rights by the hospital does not prevent the Court from reviewing the contested clauses in the contract. Finally, the Court declared the damage clauses void as the contract did not provide for a contractual remedy for the benefit of the consumer in equivalent situations. In particular, the consumer would not enjoy a contractual interest rate higher than the statutory interest rate in case the hospital were to default on payments.
On appeal, the Ghent Court of Appeal confirmed that the Court of First instance could apply the blacklisted provisions at its own initiative. In this respect, the Court of Appeal followed the judgments of the Court of Justice of the European Union in Pannon on 4 June 2009 (See, VBB on Belgian Business Law,, Volume 2009, No. 6, p. 4, available at www.vbb.om) and in VB Penzugiye on 9 November 2010.
The Ghent Court of Appeal also confirmed that the damage clauses in the hospitalisation agreement are void. The contested contractual clauses penalise a default in payments. As the hospital could also default on payments, a similar remedy should have been provided for the consumer who finds himself in an equivalent situation.
As the damage clauses are void, the Ghent Court of Appeal applied the general law of obligations. Consequently, the indemnification for default on payment was the statutory interest rate (Article 1153, Civil Code).
