1. General

The final draft of the new legislation on consumers' protection was given to a public consultation on 12 March. The draft law titled "Amendment to law 2251/1994 on consumer's protection" (the New Law) was circulated by the Ministry of Development (being the competent Ministry for consumer affairs in general) initially in early October 2006 for a public consultation, which ended on 1 November 2006. The comments made by various bodies were taken into account in the meantime whereas during this second and final round scheduled to last until 20 March further changes may occur, however they are not expected to be significant ones. Thus this final draft is what the new consumers' regime will be.

Although the New Law follows the basic topics regulated by law 2251/1994 (Law 2251) on various consumers' issues, it includes a number of significant changes which basically are:

a) The codification of various relevant legal provisions enacted since 1994 into a single text;

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).

This legal note deals in particular with the provisions of the New Law on product liability (below under 2) and collective actions (below under 3). We may revert with a summary on other provisions of the New Law being of a special interest, in the future.

2. Product liability

The New Law (art. 7) follows Law 2251 (art. 6, incorporating the respective EU Directive 85/374/EEC - the Directive) in general terms. There are however some issues on which interesting points may be raised, such as:

2.1. The definition of a defective product

A broader definition is made 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 specific capabilities (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 is not reasoned by the New Law. Whether this proposed change will be eventually included in the law to be passed from the Parliament remains to be seen. In particular:

• 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).

• 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 would be a wrong legislative choice and also for this reason the new definition will create problems in its application (if remains in the law to be published).

2.2. Material damages

The New Law (art. 7, para.6) adds to the indicative list of material damages compensated under the product liability regime the "right of use of environmental goods". Although this change is in line with the Directive, the expression chosen has a rather broad meaning and it will have to be specified by the case law in the future.

2.3. Non material damages

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

According to the new wording of the New Law (art. 7, para.7): "in the protective field of this article, the moral satisfaction due to moral harm or mental distress is included". Whether the New Law purports to submit to its objective liability regime for defective products the compensation for non material damages or not remains to be seen; this wording however may also cause ambiguity in its application.

3. Collective actions

Interesting changes to Law 2251 are introduced on the overall regulation of consumer organisations, including their right to bring collective actions. Generally (but with regard to our subject matter) the New Law:

a) Allows for the first time ever the formation of second-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; and

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

In particular:

3.1. Subject matter of the collective action

By its action the consumer organisation (of a first and/or a second level) may request:

a) that a producer ceases an unlawful behaviour, 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 which is clearly differentiated from the moral damages awarded for a tort (art. 932 of GCC);

c) appropriate injunctive measures; 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 (art. 19, para.14 of New Law).

Lastly, under the New Law moral damages may be also claimed by chambers (similarly under Law 2251) and third level unions (new enactment, art. 19, para.20 of New Law).

3.2. Effect of a decision on a collective action

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 (art. 19, para.17). 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 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.

Under the New Law (art. 19, para.17 of New Law):

a) Following such a decision, any damaged consumer may notify his claim to the producer (defining it at same time) and after the lapse of the period "for filing of ordinary legal means", the consumer may ask by the competent court for the issue of a judicial order so that it is enforced against the producer;

b) The claims of any other consumer also damaged are not affected;

c) In case the decision rejects the collective action, consumers are not deprived of their right to file an individual actions; and

d) Lastly, the Minister of Development is entitled to proceed to 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.

4. Conclusion

Significant legal discussion will definitely commence after the enactment of the New Law and the first court decisions on its new provisions will be expected with great interest. One is certain: after 13 years, Greece will shortly have a new general consumers' law.