1. Introduction

The basic law on consumers' protection No 2251/1994 (Law 2251) was extensively amended for the first time after 13 years by law No 3587/2007 (Government Gazette Bulletin No 152A/10.7.2007), in force as from 10 July 2007 (the New Law). The New Law is titled "Amendment and supplementation to law 2251/1994 on consumers' protection, as in force - Incorporation of Directive 2005/29 of the European Parliament and Council" and its general scope was to introduce an overall new legislative environment in the current basic consumers' legislation which is incorporated in Law 2251.

Among the basic changes introduced by the New Law are:

a) The codification of various relevant legal provisions enacted since 1994 into a single text, now incorporated in Law 2251;

b) The implementation of the EU Directive on Unfair Commercial Practices (Directive 2005/29/EC of 11 May 2005);

c) The special regulation of topics such as minors' rights;

d) An overall new regime on consumers' organisations aimed at strengthening consumers' rights; and

e) The regulation by itself of the subject matter of GPSD (Directive 2001/95/EC) which was, thus far, covered by a common ministerial decision (Z3/2810/2004).

2. The definition of consumer

2.1. The broad definition of the consumer included in Law 2251 is maintained and further expanded. Thus, consumer is a) not only a natural but a legal person as well and further (for the first time), associations without a legal personality, b) to which the products /services are aimed and (previously, "or") c) which make use of those products /services, d) provided they are the final recipients of them. Consumer is also any recipient of an advertisement and, for the first time, any guarantor in favour to a consumer provided the guarantor does not act in the frame of its business or professional activities.

2.2. That broad definition does definitely not follow the EU concept per the respective legislation and case law of the European Court of Justice (ECJ - see for example Johann Gruber v Bay Was AG, C-464/01, where ECJ followed a very restrictive view), however the prevailing view among Greek scholars is that this deviation is not contrary to the EU law from the time the persons considered "consumers" under the EU directives are included in the Greek concept of the "consumer".

However, apart from this general and broad definition of the "consumer" the New Law defines the same restrictively in the various specific topics on consumers, such as in the frame of the distance sales of financial services (art. 4a) or of the unfair commercial practices (art. 9a), thus it mitigates the general significant deviation mentioned above.

3. Product liability

P/L is regulated by art. 6 of Law 2251, which incorporates the respective EU Directive 85/374/EEC (the Directive). The New Law introduced some significant changes to Law 2251, such as:

3.1. The definition of a defective product.

A broader definition was eventually introduced by the New Law since, apart from the reference to the reasonably expected safety taken into all special circumstances (art. 6, para.5 of Law 2251 similarly to art. 6, para.1 of the Directive), the New Law also refers to the expected product's performance according to its specifications (art. 7, para.5 of the New Law).

The need for such an expansion of the definition of defectiveness, especially made by the use of generic terms, is hard to be seen; also, it was not reasoned by the New Law. In particular:

a) It is doubtful whether such an expansion serves the purposes of the Directive, especially following the decisions of the European Court of Justice (ECJ) confirming the full harmonization effected by the same. In this context one may especially refer to ECJ's decisions:

i) C-154/00 of 25.4.2002, Commission v Greece, where it is characteristically stated that the subject matter of the Directive was the result of complicated balance of differing interests (paragraph 29) and

ii) C-183/00 also of 25.4.2002, Gonzalez Sanchez, held that Member States may not introduce a stricter regime than the one of the Directive offering greater protection to the consumers neither they may maintain a different general liability regime for defective products than the one of the Directive (paragraphs 27, 30, 33).

b) Further, the expansion of the definition of defectiveness by the New Law appears to connect the liability for a defective product with the same for material defects in the contract of the sale of goods under the general provisions of the Greek Civil Code (GCC - arts 534 ff, esp. art. 535 item 4). This is a wrong legislative choice and it is expected that the new definition will create problems in its application.

c) Last but not least, the introduction of this expansion of the concept of defectiveness has also problems in the wording of the new Law since the full relevant extract reads:

"A product is defective if it does not provide the expected performance according to its specifications or and the reasonably expected safety, taken into all special circumstances ...". Per the above wording two (2) cases of defectiveness are dealt with, namely:

i) where the product lacks both the expected performance according to its specifications and the reasonably expected safety; and

ii) where the product lacks the expected performance.

It appears that a third case is missing from the New Law always regarding the definition of a defective product, which is the product to meet the expected performance but lack the reasonably expected safety; it also appears that this must be an oversight of the legislator since, if this scenario was the case, one would come into an unreasonable situation and a result contrary to the Directive (art. 6).

3.2. Material damages

The New Law (art. 7, para.2) added to the indicative list of material damages compensated under the P/L regime of Law 2251 (art. 6, para.6) the damage caused to "right of use of environmental goods". Greek scholars view this addition as one indicating an express protection of consumer's personality since under Greek law the right to use environmental goods is regarded as a part of one's personality (this was accepted even prior to the new wording enacted as above). It will be for the case law to specify this new provision in due course.

3.3. Non material damages

Law 2251 (art. 6, para.7) as it was in force, in line with the Directive (art. 9, last item), leaved non material damages outside the scope of its provisions, which were therefore regulated under the general tort rules (arts 914 ff of GCC).

According to the New Law (art. 7, para.3): "moral satisfaction due to moral harm or mental distress is also due in case of a breach of the provisions of this article", namely of article 6 para.7 of Law 2251. Thus the New Law submitted the compensation due for non material damages to the objective liability regime of producer's liability for defective products. This change has all the consequences derived from the application of the P/L provisions into this topic, such as the burden of proof, the cases where the producer is released from liability, the special prescription applicable, etc. Especially on the burden of proof, it may however be noted that even under the general tort rules case law was already accepting a reversal in favour to the plaintiff /consumer so that eventually the producer had to prove his non liability, under the so-called "the theory of spheres" (art. 925 of GCC applied by analogy).

4. Collective actions

Interesting changes to Law 2251 have been introduced by the New Law on the overall regulation of consumer organisations, including an enforced right to bring collective actions. Generally (on our subject matter) the New Law:

a) Allows for the first time ever the formation of second-level consumer organisations (consisting of at least five first-level consumer organisations);

b) Funds a consumer organisation specifically, among others, with the 35% of any amount awarded as moral damages under a collective action brought by it;

c) Lowers the time period for which a consumer organisation must be registered to the respective registrar to be entitled to bring a collective action, from two years to one year; at same time, maintains the minimum number of members that a consumer organisation must have to be entitled to sue, which is 500 active members; and

d) Expands the subject matter of a collective action and introduces an increased effect to an irrevocable court decision issued on it (see below).

In particular:

4.1. Subject matter of a collective action.

By the so-called "collective action" the consumer organisation (of a first and/or a second level) may request:

a) that a producer ceases an unlawful behaviour even, before same appears; the New Law expands the indicative list of what is considered an unlawful behaviour which breaches the law; the consumer organisation may additionally request that the defective products are seized, recalled or destroyed and that any other measure required is taken, such as an appropriate publication for consumers' information;

b) moral damages, which are awarded once and they are regarded as a civil penalty (a kind of pecuniary damages under the US system) and which are damages clearly differentiated from the moral damages awarded for a tort (art. 932 of GCC); this kind of moral damages is unique under Greek law and it is interesting that one of the criteria taken into account for the amount to be awarded is the annual turnover of the defendant producer and in general how big its business is;

c) appropriate injunctive measures (eg. the seizure of dangerous products); and

d) this being a new provision, that the court recognises the damage suffered by the consumers due to the use of an unlawful behaviour.

The New Law adds that a collective action may be brought also in any case an unlawful behaviour affects the interests of at least 30 consumers (new art. 10, para.16 of Law 2251). Lastly, under the New Law moral damages (only) may be also claimed by chambers (new art. 10, para.24 of Law 2251).

4.2. Prescription and competent court

The collective action must be brought within six months from the last unlawful behaviour challenged by it, but especially action under 4.1.d above (ie. for recognition only) is subjected to a longer five year prescription period similarly to the same for an action on tort (new art. 10, para.18 of Law 2251).

The exclusively competent court is the Multi-Member First Instance one in the area of which the defendant resides /is seated (new art. 10, para.19 of Law 2251).

4.3. Effect of a decision on a collective action

a) The erga omnes effect of any decision issued on a collective action, being a unique legal concept of the Greek law, is maintained under the New Law (new art. 10, para.20 of Law 2251). There has been a continuous and extensive discussion on the legal nature of such an effect, especially within the light of supreme court decisions which held general terms and conditions void (among others, Supreme Court decision No 430/2005 regarding standard clauses of mortgaged home loans used by a bank). The discussion has not settled and, on the contrary, it is expected to go on after the enactment of the New Law due to its provision under d below.

b) But the New law goes further and introduces a res judicata effect in favour any consumer damaged but not participated into the relevant trial of the collective action, especially for a decision issued following an action of 4.1.d above (new art. 10, para.20 of Law 2251). In particular: Following an irrevocable decision, any damaged consumer may notify his /her claim to the defendant producer (also, supporting the claim) and after the lapse of a period of 30 days from such notification without consumer's compensation (or any other solution of the dispute which could be found by the parties), the consumer may ask by the competent court for the issue of a judicial order so that same is enforced against the producer (provided the claim is liquidated).

c) The New Law clarifies that any consumer claims deriving from the specific unlawful situation further to the same of the list of 4.1 above, are not harmed. To that extent the right of a consumer to bring an (individual) action is not affected by the rejection of a collective action claim per the list of 4.1 above (new art. 10, para.20 of Law 2251).

d) Lastly, the Minister of Development is entitled to enact regulatory measures related to matters decided by irrevocable decisions issued on collective actions if he considers that these matters "are of general interest for the proper operation of the market and the protection of the consumers"; for example, the Minister may order the general prohibition of use of a general term which was considered abusive by an irrevocable decision following a collective action filed against a specific entity.

5. Conclusion

Significant legal discussion among Greek scholars has already commenced on the New Law and the interpretation of its various new provisions enacted, whereas respective case law is now expected with great interest.