In a ruling handed down yesterday, the CJEU said a contract must allow the consumer to assess the approximate total cost of the services, for example by including an estimate of the expected or minimum number of hours or a commitment to send bills or periodic reports indicating the number of hours worked.

The case was referred to Luxembourg by the Supreme Court of Lithuania, which was hearing an appeal brought by a lawyer in a dispute with a consumer who racked up and failed to pay a bill of over €10,000 for legal services.

The consumer, M.A., concluded five contracts for the provision of legal services for consideration with D.V. in her capacity as a lawyer. Each of those contracts provided that the fees were calculated on the basis of an hourly rate, fixed at €100 for each hour of consultation or of provision of legal services to M.A.

D.V. provided legal services in 2018 and 2019 and issued bills for all the services provided in March 2019. When she did not receive all the fees claimed, D.V. brought an action before the Lithuanian court of first instance seeking an order that M.A. pay the sum of €9,900 in respect of the legal services performed and €194.30 in respect of the expenses incurred in the performance of the contracts.

The court of first instance upheld D.V.’s application in part. An appeal brought by D.V. was dismissed by the appeal court. In 2020, D.V. brought an appeal on a point of law before the Supreme Court of Lithuania.

The Supreme Court subsequently asked the CJEU how to interpret provisions of Directive 93/13/EEC on unfair terms in consumer contracts, in particular with regard to the scope of the requirement that a term in a contract for the provision of legal services must be drafted in plain, intelligible language and to the effects of a finding that a term setting the price of those services is unfair.

In the judgment, the CJEU noted that it is for the national court to assess, taking into account all the relevant factors surrounding the conclusion of that contract, whether the information provided by the seller or supplier before the conclusion of the contract enabled the consumer to take a prudent decision in full knowledge of the financial consequences of concluding the contract.

It also noted that a term in a contract for the provision of legal services which sets the price on the basis of an hourly rate is not to be considered unfair simply on the ground that it does not satisfy the requirement of transparency, unless national legislation expressly provides for classification as an unfair term simply on that ground.

Where, pursuant to the relevant provisions of national law, a contract for the provision of legal services is not be capable of continuing in existence after the term regarding cost has been removed, Directive 93/13 does not preclude the invalidation of that contract, even if, as a result, the seller or supplier does not receive any remuneration for the services provided.

However, the referring court has the exceptional possibility of replacing an unfair term that has been annulled with a supplementary provision of national law if the invalidation of contract in its entirety would expose the consumer to particularly unfavourable consequences.

In the light of those considerations, the CJEU ruled that if the invalidity of the contract in its entirety would expose the consumer to particularly unfavourable consequences, EU law does not preclude the national court from remedying the invalidity of that term by replacing it with a supplementary provision of national law or a provision of national law applied by mutual agreement of the parties.

On the other hand, EU law precludes the national court from replacing the unfair term that has been annulled with a judicial assessment of the level of remuneration due for the services provided.