Please note that the answers to these questionnaires have...

Commission européenne, B-1049 Bruxelles / Europese Commissie, B-1049 Brussel - Belgium. Telephone: (32-2) 299 11 11. Office: C107 01/22. Telephone: direct line (32-2) 298.45.87. Fax: (32-2) 295.07.50. http://europa.eu.int/comm/internal_market/ E-mail: [email protected]

EUROPEAN COMMISSION Internal Market DG FINANCIAL INSTITUTIONS Retail issues and payment systems

Brussels, 24 September 2003 MARKT/4011/2003 – Final Draft

A POSSIBLE LEGAL FRAMEWORK FOR THE SINGLE PAYMENT AREA IN THE INTERNAL MARKET

CONSEQUENTIAL DAMAGE

- SUMMARY-TABLE OF RESPONSES TO THE QUESTIONNAIRE –

Please note that the answers to these questionnaires have not been checked or in any way approved by the Commission services and should not be relied upon as a statement of the Commission's views. The European Commission does not guarantee the accuracy of the data included in the questionnaires, nor does it accept responsibility for any use made thereof.

Contact: Lars MEINHARDT, Telephone:(32-2) 298.45.87, [email protected]

mailto:[email protected]

1

Updated: 14.04.2003

A possible Legal Framework for the Single Payment Area in the Internal Market

Consequential Damage

- Summary-Table of responses to the questionnaire –

The following table summarises the responses on the “Questionnaire on consequential damage rules relating to payment services (MARKT/4017/2002). I. Consequential damage in the case of non-execution or defective execution of a payment ordered Legal requirements (general principle or specific rule) Predominant case-law Predominant

contractual practise Austria No special legal regulations for payment systems, payment

instructions or instruments exist; claims for damages based on fault are possible in accordance with the general provisions set out in § 1295 ff. of the ABGB (Civil Code). As a general rule, liability of a party willfully or negligently defaulting under a contract includes consequential damages. Only damages which could not have been reasonably foreseen (extraordinary changing of circumstances) or damages not within the purpose of a rule are excluded. This rule also applies for any default by the bank regarding payment orders, unavailability of a payment service and the like.

2

Belgium Art. 7, § 2, 1°+ 4°: l'émetteur est responbsable pour le montant de

l'opération non exécutée ou fautivement exécutée + évt. Augmenté des intérêts (dans le 1°) + les autres conséq. financières éventuelles (4°)

Denmark Cf. art. 12 in the enclosed "Act in Certain Payment Instruments" where the issue is regulated in details.

- -

Finland There are no specific rules on consequential damages in payment services. At present, we have such specific rules mainly in the field of sale of goods and in respect of some services, e.g. provision of electricity, gas and water. All these provisions cover only contractual liability. There is no exact definition on consequential damage, only non-exhaustive lists of examples. According to those provisions the seller/supplier is liable for consequential damages only if he has acted negligently. It is, however, possible to apply similar principles to payment services, but as there is no case law, the legal situation is somewhat unclear. According to the general rules on non-contractual liability, consequential damages are compensated only in exceptional cases.

It seems that in the areas where there are no rules of law concerning consequential damages, such damages are generally exempted from liability by contract terms.

France We understand as “consequential damages” what is defined as “dommages indirects” in French law.

There are two basis for the indemnification of defective execution

Courts tend to evaluate direct damages as well as consequential damages globally, whatever the basis

Contractual practice tend to exclude the indemnification of consequential

3

: rules governing contracts and, rules governing “responsabilité délictuelle”.

Rules governing contracts are rather restrictive vis à vis consequential damages, since Article 1151 of the civil code provides that in case of wilful misconduct, the party liable for the execution of an obligation (i.e.: the payment services provider) is held responsible only for direct damages. It is however always possible to add in the agreement provisions granting the indemnification of consequential dammages.

Rules governing “responsabilité délictuelle” which protect third party victims, are also applicable in the context of payments (i.e., the beneficiary of a cheque is a third party towards the drawee). Rules governing “responsabilité délictuelle” provide for the indemnification of consequential damages provided that they are foreseeable. This allow in particular the indemnification of moral damages, of third parties, and in certain cases of the loss of an opportunity.

of indemnification : “defective execution of a contractual obligation” if the victim is contractually bound with the payment provider (1147cc) or “responsabilité civile”.

Consequential damages can be appreciated at different levels : loss of an opportunity, moral damage, damages caused to a third party, etc. However, there is a principle of predictability of the damages and consequential damages being less predictable, there is also a tendency to compensate them less. However if the fault of the payment provider is characterised as a “faute lourde”, the courts tend to indemnify consequential dammages.

damages.

Germany Generally, the obligation to pay damages for non-execution or defective execution of payments comprises also consequential

In practise, as far as legally permitted, the

4

damages. However, losses, which lie beyond the protective purpose of the law infringed, are not to be compensated, and the causal connection must be proximate.In addition, the liability for consequential damages higher than € 12.500 may be excluded by General Terms and Conditions. This does not apply for losses of interest, nor in the case of gross negligence or intentional misconduct, nor in the case a risk has been specially assumed by the credit institution. (s. 676 (4) sentence 5 BGB)

liability for consequential damages is excluded by General Terms and Conditions

Greece The general civil law rules on restitution apply. Compensation aims at recovering all damages sustained by the injured party. Damages include the reduction of the party’s assets as well as lost profit. To the extent that any consequential damages can be attributed to the debtor (i.e. the payment provider) through the establishment of a causal link between the cause and the damage itself, the debtor can be held liable. Exclusion of liability for consequential damages is valid only in the event of ordinary negligence and it is not permitted in the event of wilful misconduct or gross negligence. Exclusion of liability for consequential damages is invalid even in the event of slight negligence in the case of standardised contractual terms. With specific regard to consumers: Art. 8 of Law 2251/1994 on consumer protection stipulates that the ‘service provider’ shall be liable for any damage caused by its fault (i.e. any damage resulting from wilful misconduct or negligence), in the course of the provision of services. Limitation or exoneration clauses are invalid. Code of Banking Ethics (released by the Hellenic Bank Federation): Consequential damages shall be governed by the legislation in force. It should be noted that the Code of Banking Ethics does not have the force of law but sets rules of good conduct and standards of good

5

banking practice for the relations between the credit institutions and their customers.

Ireland Consequential damage

is generally a matter for contracts and is dealt with between the bank and the customer. In practice, the point of failure within the payment process would need to be identified to establish liability.

Italy According to the general principles, the payment provider is responsible for damages caused to the payer as a direct and immediate consequence of his negligent or fraudulent behaviour. In case of negligence the liability is limited to foreseeable damages (art. 1225 cod. civ.). Indirect damages which are the mediate effect of the negligent or fraudulent behaviour can be restored only on the basis of an ordinary causation link. The compensation is comprehensive of the “damnum emergens” as well as of the “lucrum cessant” (art. 1223 civil code). The underlying principle is to grant the injured party the restitution in the previous economic condition. There is no contractual liability for losses caused to any third party.

No specific provisions.

6

Luxembourg La loi du 5 avril 1993 relative au secteur financier telle que

modifiée prévoit dans son article 41-8 concernant les virements transfrontaliers une responsabilité objective. (voir loi en annexe)

Néant néant

Netherlands General principle. All parties who have committed themselves to something are liable for every shortcoming in meeting an obligation. They are forced to pay for the damage of the creditor (if full compliance has become impossible), unless the shortcoming can not be ascribed to the debtor. A shortcoming cannot be ascribed to the provider when he is not to blame, nor is responsible because of law or social usance. Of course there should be a sufficient clear causal relationship between the action and the resulting damage (article 98 of the Dutch civil code). This relationship will differ for each case. Important elements are: can the damage reasonably be expected as a result of the action. Is liability based on quilt or not (in the first case damage will be attributed sooner) and the remaining circumstances. There are no special legal arrangements for payment services. Liability can be restricted by contractual agreement, within the restrictions of reasonability and fairness.

Article 10 of the general banking terms and conditions states that the bank guarantees the correct execution within a reasonable time of correctly given transfer orders given in guilders if these orders can be executed within the Dutch Giro system. The bank has to compensate the holder for damages sustained due to shortcomings in the execution of orders up to a maximum of € 226.89 per order without prejudice to the remaining obligation to execute the order without

7

further cost. If reasonable the bank will not invoke the maximum of € 226.89.

Portugal Spain The general rule from the Civil Code establishes that those

that unfulfil their obligations, due to wilful misconduct, negligence, delays in payment or other reasons, shall be liable for consequential damages (Civil Code art. 1101). The compensation on consequential damages should cover the loss effectively suffered as well as the earnings that the creditor would have obtained in case the obligation was fulfilled as agreed (art 1106). Should the obligation consist in the payment of a sum of money, if not agreed otherwise, the consequential damages would be the payment of the interest agreed, and the legal interest on money if no explicit interest was agreed.

In Spanish legislation, traditionally, parties different from those intervening in the original obligation are not legitimated to request consequential damages. In principle, the covenants modifying liability (including consequential damages) are in principle admitted, with the limitation that they can not contravene the law (see above), the moral and the public order (art.1255 Civil Code), and moreover the contractual good faith (art.7 Civil Code and 57 Commercial Code)

8

Sweden General: If a person doesn’t fulfil a given commission, it follows

from the general principle of breach of contract that his counterpart is entitled to consequential damages. In this case, the payment provider has to compensate the payer for consequential damages. However, the parties may have agreed upon the consequences of the breach of contract in another way, and as a main rule the condition of an agreement is binding. The Cross-Border Credit Transfers Directive: Art. 8 of 97/5/EC is transposed into national legislation. This Article introduces the principle of strict liability of the originator’s bank to pay refund (12 500 euro) in case of a lost transfer. Beyond that amount general civil law is applicable.

-

-

UK The general principle of consequential damage under English law, is that where a party is liable to another for breach of contract [eg failure to provide a service or to carry out instructions as previously agreed] then that party is liable for all damages or losses that arise [subject to them being within the reasonable or actual contemplation of the parties] as a consequence of that breach/failure. This principle would apply to a payment provider [eg a bank] offering payment services.

However, the usual contractual practice might be for such a provider to seek to limit or exclude its liability for consequential loss say by reference to a fixed amount or fixed reference [eg limit liability to loss of interest on money] or so as to exclude compensation for certain types of loss in any event [eg no

9

liability for loss of profit].

Norway The institution that has accepted the payment assignment is liable to the payer for the amount to be transferred from the time when the means of payment are made available to the time that payment is considered to have taken place. The institutions responsible for a payment transfer are liable for loss of interest incurred by the payer or payee as a result of a delay in the payment transfer. Where the amount is to be credited to the payee's account, the rules concerning calculation of interest apply correspondingly. If the lost interest exceeds the interest paid the payee may demand reimbursement of the additional loss. An institution that has reimbursed interest lost may demand coverage of the loss by the institution that caused the delay. If the payee demands penalty interest or other compensation from the payer owing to late payment, interest received by the payee from the institution shall be deducted from the amount demanded. The institutions responsible for the payment transfer are liable for other direct losses, including losses due to exchange rate changes, collection charges etc., incurred by the payer or payee as a result of a delayed payment transfer. However, this does not apply if the institution proves that the delay is due to an impediment beyond its control which it could not reasonably be expected to have had in

10

mind at the time the agreement was entered into or to avoid or to overcome the consequences of. Exemption from liability pursuant to the previous sentence applies for the duration of the impediment. If the institution has given another party the task of facilitating the implementation of a payment assignment and the error or delay is attributable to such party, the institution is exempt from liability only if the party is also exempt under the rules of the first paragraph. The institution is liable for indirect loss incurred by the payer or the payee if such was caused by gross negligence or intent on the part of the institution. If the institution has assumed a specific, unconditional responsibility for ensuring that payment reaches the payee within a particular time-limit, the customer may without regard to the rules of this section demand reimbursement of the loss from the institution. If the payer or payee has been instrumental in the delay of the payment transfer, the institution's liability may be reduced.

II. Consequential damage in the case of fraudulent or unauthorised transactions Legal requirements (general principle or specific rule) Predominant case-law Predominant


11


Belgium * unauthorised transactions: art.7, § 2, 2°: la somme évt. Nécessaire pour rétablir le titulaire dans la situation avant l'opération + évt. Les intérêts + les autres conséq. financières évt. * en cas de contrefaçon (art. 7, § 1er, 3°, § 2, 3° et 4°), l'émetteur est responsable, et il doit rétablir le titulaire dans la situation antérieure + évt. Les intérêts + autres conséq. financières évt. * perte ou vol: voir quest. 4016: la responsabilité principielle porte aussi sur le "consequential damage;

Denmark Cf. art. 11 in the "Act on Certain Paayment Instruments" where the issue is regulated In details". See: http://www.fs.dk/uk/acts/ukbtf.pdf

- -

Finland There are no specific rules on consequential damages in payment services. At present, we have such specific rules mainly in the

12

field of sale of goods and in respect of some services, e.g. provision of electricity, gas and water. All these provisions cover only contractual liability. There is no exact definition on consequential damage, only non-exhaustive lists of examples. According to those provisions the seller/supplier is liable for consequential damages only if he has acted negligently. It is, however, possible to apply similar principles to payment services, but as there is no case law, the legal situation is somewhat unclear. According to the general rules on non-contractual liability, consequential damages are compensated only in exceptional cases.

France This case is also covered by general responsibility rules provided by the civil code. The indemnification of consequential damages of a fraudulent or unauthorised transaction executed by the payment provider is possible as far as it has been provided by contractual means.

In the cases where the payment provider has not made appropriate checkings, courts will tend to recharacterize its fault into a “faute lourde” and may then extend the indemnification to consequential damages even though consequential dammages have been explicitly excluded

Generally, payment services agreements and account agreements provide for numerous ways of identification of the orderer or of the originator as well as of its agents. Exclusions of responsibility generally depend on the reliableness of the

13

mean of identification used : i.e., in the case of the use of fax by the originator, such agreements may provide for an overall exclusion of responsibility of the payment provider, excluding the indemnification of direct damages as well as of indirect damages.

Germany Generally, the obligation to pay damages for non-execution or defective execution of payments comprises also consequential damages. However, losses, which lie beyond the protective purpose of the law infringed, are not to be compensated, and the causal connection must be proximate.

Greece The general civil law rules on restitution apply. Compensation aims at recovering all damages sustained by the injured party. Damages include the reduction of the party’s assets as well as lost profit. To the extent that any consequential damages can be attributed to the debtor (i.e. the payment provider) through the establishment of a causal link between the cause and the damage itself, the debtor can be held liable. Exclusion of liability for consequential damages is valid only in the event of ordinary negligence and it is not permitted in the event of wilful misconduct or gross negligence. Exclusion of

14

liability for consequential damages is invalid even in the event of slight negligence in the case of standardised contractual terms. With specific regard to consumers: Art. 8 of Law 2251/1994 on consumer protection stipulates that the ‘service provider’ shall be liable for any damage caused by its fault (i.e. any damage resulting from wilful misconduct or negligence), in the course of the provision of services. Limitation or exoneration clauses are invalid. Code of Banking Ethics (released by the Hellenic Bank Federation): Consequential damages shall be governed by the legislation in force. It should be noted that the Code of Banking Ethics does not have the force of law but sets rules of good conduct and standards of good banking practice for the relations between the credit institutions and their customers.


is generally a matter for contracts and is dealt with between the bank and the customer. In practice, the point of failure within the payment process would need to be identified to establish liability.

Italy According to the general principles, the payment provider is responsible for damages caused to the payer as a direct and

No specific provisions.

15

immediate consequence of his negligent or fraudulent behaviour. In case of negligence the liability is limited to foreseeable damages (art. 1225 cod. civ.). Indirect damages which are the mediate effect of the negligent or fraudulent behaviour can be restored only on the basis of an ordinary causation link. The compensation is comprehensive of the “damnum emergens” as well as of the “lucrum cessant” (art. 1223 civil code). The underlying principle is to grant the injured party the restitution in the previous economic condition. There is no contractual liability for losses caused to any third party.

Luxembourg D’après l’article 68 de la loi du 14 août 2000 relative au commerce électronique, le titulaire d’un instrument de paiement électronique a l’obligation de notifier à l’émetteur – ou à l’entité désignée par lui – dès qu’il en a connaissance, la perte ou le vol de cet instrument ou des moyens qui en permettent l’utilisation, ainsi que toute utilisation frauduleuse; ainsi que la perte ou le vol de l’instrument de paiement électronique rechargeable. Sauf dans les cas où il s’est rendu coupable d’une fraude ou de négligence grave, le titulaire d’un instrument de paiement électronique, assume jusqu’à la notification prévue au paragraphe précédent les conséquences liées à la perte, au vol ou à son utilisation frauduleuse par un tiers, à concurrence d’un montant fixé par règlement grand-ducal. Ce montant ne peut dépasser 150 euros.

Néant Néant

16

L’émetteur n’est cependant pas responsable de la perte de la valeur stockée sur l’instrument de paiement électronique rechargeable, lorsque celle-ci est la conséquence de l’utilisation de celui-ci par un tiers non autorisé, même après la notification prévue dans le présent article. Le titulaire est dégagé de toute responsabilité de l’utilisation de l’instrument de paiement électronique après la notification.

Netherlands There are differences between the different payment services. The obligations and liabilities of both parties if an payment card is lost or stolen is as follows. A holder must notify his issuer as soon as possible in case of loss or theft. In some cases his liability for unauthorised transactions is limited to € 158.82 to the moment of notification, after which he is not liable

17

at all. In other cases however, holders appear to be held fully liable for the sustained damages, e.g. in the case of purpose, clear guilt etc. In that case the bank is obliged to diminish the damage as much as possible.

A Client is not liable for damage of unauthorised use of the card after the moment of notification. Not reporting loss or theft of the payment card means that the client is full responsible for the damage. The bank has an obligation to diminish the damage as much as possible when the bank has got information about the

18

unauthorised transaction.




Sweden General: If a person doesn’t fulfil a given commission, it follows from the general principle of breach of contract that his counterpart is entitled to consequential damages. In this case, the

- -

19

payment provider has to compensate the payer for consequential damages. However, the parties may have agreed upon the consequences of the breach of contract in another way, and as a main rule the condition of an agreement is binding. The Cross-Border Credit Transfers Directive: Art. 8 of 97/5/EC is transposed into national legislation. This Article introduces the principle of strict liability of the originator’s bank to pay refund (12 500 euro) in case of a lost transfer. Beyond that amount general civil law is applicable.

UK If an instruction is fraudulent or unauthorised, then the payment provider would not be making a payment in accordance with the terms of its mandate [ie which assumes that the payment provider is only entitled to act when in receipt of instructions given by its customer]. Therefore, if an instruction is fraudulent or unauthorised, the payment provider itself will be liable to reimburse the customer for any amounts debited to its account as a consequence of that instruction.

As a matter of contractual practice however, it is usual for payment methods such as debit/credit cards and ATM cards to be provided on the express contractual terms that in the absence of fraud or failure to exercise reasonable care on the part of the customer, the customer's liability for lost or stolen cards is limited to a fixed amount prior to giving notice to the payment provider concerned; in this case therefore,

20

the payment provider's liability is being limited, although in practice, it is thought that these exceptions are not usually relied upon by the banks concerned.

Norway The institution that has accepted the payment assignment is liable to the payer for the amount to be transferred from the time when the means of payment are made available to the time that payment is considered to have taken place. The institutions responsible for a payment transfer are liable for loss of interest incurred by the payer or payee as a result of a delay in the payment transfer. Where the amount is to be credited to the payee's account, the rules concerning calculation of interest apply correspondingly. If the lost interest exceeds the interest paid the payee may demand reimbursement of the additional loss. An institution that has reimbursed interest lost may demand coverage of the loss by the institution that caused the delay. If the payee demands penalty interest or other compensation from the payer owing to late payment, interest received by the payee from the institution shall be deducted from the amount demanded.

21

The institutions responsible for the payment transfer are liable for other direct losses, including losses due to exchange rate changes, collection charges etc., incurred by the payer or payee as a result of a delayed payment transfer. However, this does not apply if the institution proves that the delay is due to an impediment beyond its control which it could not reasonably be expected to have had in mind at the time the agreement was entered into or to avoid or to overcome the consequences of. Exemption from liability pursuant to the previous sentence applies for the duration of the impediment. If the institution has given another party the task of facilitating the implementation of a payment assignment and the error or delay is attributable to such party, the institution is exempt from liability only if the party is also exempt under the rules of the first paragraph. The institution is liable for indirect loss incurred by the payer or the payee if such was caused by gross negligence or intent on the part of the institution. If the institution has assumed a specific, unconditional responsibility for ensuring that payment reaches the payee within a particular time-limit, the customer may without regard to the rules of this section demand reimbursement of the loss from the institution. If the payer or payee has been instrumental in the delay of the payment transfer, the institution's liability may be reduced.

22

III. Consequential damage in the case of unavailability of a payment service (e.g. ATM out of order etc.) Legal requirements (general principle or specific rule) Predominant case-law Predominant



The terms and conditions for ATM in the context of the maestro service (no 8) explicitly state that this general rule also applies for consequential damages caused by non-usability of the payment instrument, fault or inadequate operativeness of the cash dispenser.

Belgium Not regulated Denmark There are no legal requirements regarding unavailability of a

payment service. A payment service provider may be responsible due to normal contract law/-principles e.g. if availability of a certain payment service is guaranteed or based on liability in negligence which has coursed a financial loss

-

23

and the failure is not due to causes beyond the service providers reasonable control (force majeure)

Finland There are no specific rules on consequential damages in payment services. At present, we have such specific rules mainly in the field of sale of goods and in respect of some services, e.g. provision of electricity, gas and water. All these provisions cover only contractual liability. There is no exact definition on consequential damage, only non-exhaustive lists of examples. According to those provisions the seller/supplier is liable for consequential damages only if he has acted negligently. It is, however, possible to apply similar principles to payment services, but as there is no case law, the legal situation is somewhat unclear. According to the general rules on non-contractual liability, consequential damages are compensated only in exceptional cases.

France This case is also covered by general responsibility rules provided by the civil code.

The same solutions apply. Although we have no data , the courts will probably appreciate the facts “in concreto”, by taking into account the number of ATM available in the

There are no particular provisions in the existing contracts regarding the unavailability of ATM.

24

neighbourhood of the unavailable ATM.


Greece The general civil law rules on restitution apply. Compensation aims at recovering all damages sustained by the injured party. Damages include the reduction of the party’s assets as well as lost profit. To the extent that any consequential damages can be attributed to the debtor (i.e. the payment provider) through the establishment of a causal link between the cause and the damage itself, the debtor can be held liable. Exclusion of liability for consequential damages is valid only in the event of ordinary negligence and it is not permitted in the event of wilful misconduct or gross negligence. Exclusion of liability for consequential damages is invalid even in the event of slight negligence in the case of standardised contractual terms. With specific regard to consumers: Art. 8 of Law 2251/1994 on consumer protection stipulates that the ‘service provider’ shall be liable for any damage caused by its fault (i.e. any damage resulting from wilful misconduct or negligence), in the course of the provision of services. Limitation or exoneration clauses are invalid. Code of Banking Ethics (released by the Hellenic Bank Federation): Consequential damages shall be governed by the legislation in force. It should be noted that the Code of Banking Ethics does not have the force of law but sets rules of good conduct and standards of good

25

banking practice for the relations between the credit institutions and their customers.


is generally a matter for contracts and Is dealt with between the bank and the customer. In practice, the point of failure within the payment process would need to be identified to establish liability.

Italy There are no rules about the unavailability of payment services; general rules on breach of contracts apply.

The payment provider ensures the smooth functioning of the payment services in specified hours. However, in case of an unavailability of the payment service, the client must abstain from making further operations.

Luxembourg Néant Néant Néant Netherlands Portugal

26

Spain The general rule from the Civil Code establishes that those that unfulfil their obligations, due to wilful misconduct, negligence, delays in payment or other reasons, shall be liable for consequential damages (Civil Code art. 1101). The compensation on consequential damages should cover the loss effectively suffered as well as the earnings that the creditor would have obtained in case the obligation was fulfilled as agreed (art 1106). Should the obligation consist in the payment of a sum of money, if not agreed otherwise, the consequential damages would be the payment of the interest agreed, and the legal interest on money if no explicit interest was agreed.


Sweden General: If a person doesn’t fulfil a given commission, it follows from the general principle of breach of contract that his counterpart is entitled to consequential damages. In this case, the payment provider has to compensate the payer for consequential damages. However, the parties may have agreed upon the consequences of the breach of contract in another way, and as a

- -

27

main rule the condition of an agreement is binding. The Cross-Border Credit Transfers Directive: Art. 8 of 97/5/EC is transposed into national legislation. This Article introduces the principle of strict liability of the originator’s bank to pay refund (12 500 euro) in case of a lost transfer. Beyond that amount general civil law is applicable.

UK The general principle as mentioned in Category 1 would apply, although in practice, it is thought that banks would seek to exclude any liability arising out of the non-availability or failure in operating status of ATM machines/networks.

Norway No regulation IV. Consequential damage in the case where 3 or more parties are involved (e.g. a payer, a payment provider, and a merchant) disputing a breach of contract (e.g. non-delivery or non-conformity of product/service) Legal requirements (general principle or specific rule) Predominant case-law Predominant


instructions or instruments exist; claims for damages based on fault are possible in accordance with the general provisions set out in § 1295 ff. of the ABGB (Civil Code). As a general rule, liability of a party willfully or negligently defaulting under a contract includes consequential damages. Only damages which could not have been reasonably foreseen (extraordinary changing of circumstances) or damages not within

In general, disputes on basic business are to be clarified between the cardholder and the company. In this case, liability on the part of the system operator is regularly precluded.

28

the purpose of a rule are excluded. This rule also applies for any default by the bank regarding payment orders, unavailability of a payment service and the like.

Belgium La loi IPE porte seulement sur l'exécution correcte des opérations effectuées au moyen d'un IPE, et ne porte pas sur les conflits qui naîtraient du contrat sous-jacent.

Denmark The Danish Consumer Ombudsman has under the authority of the Danish "Act on Certain Payment Instruments" (reference under question 2) and the Danish Marketing Practices Act (http://www.fs.dk/index-uk.htm) made guidelines for distance selling in connection with payment systems based in payment cards (see the enclosed copy). According to nr. 5, a cardholder is protected in case of non-delivery of a product/service.

- -

Finland There are no specific rules on consequential damages in payment services. At present, we have such specific rules mainly in the field of sale of goods and in respect of some services, e.g. provision of electricity, gas and water. All these provisions cover only contractual liability. There is no exact definition on consequential damage, only non-exhaustive lists of examples. According to those provisions the seller/supplier is liable for consequential damages only if he has acted negligently. It is, however, possible to apply similar principles to payment services, but as there is no case law, the legal situation is somewhat unclear. According to the general rules on non-contractual liability,

http://www.fs.dk/index-uk.htm

29

consequential damages are compensated only in exceptional cases.

France Under the principle of “relativity”, the contractual relationship between the payer and the payment provider on one side and the merchant and the payment provider on the other side remain distinct. The payment provider cannot be held responsible by the payer of the non execution of the underlying transaction between the payer and the merchant.

NA NA


Greece The general civil law rules on restitution apply. Compensation aims at recovering all damages sustained by the injured party. Damages include the reduction of the party’s assets as well as lost profit. To the extent that any consequential damages can be attributed to the debtor (i.e. the payment provider) through the establishment of a causal link between the cause and the damage itself, the debtor can be held liable. Exclusion of liability for consequential damages is valid only in the event of ordinary negligence and it is not permitted in the event of wilful misconduct or gross negligence. Exclusion of liability for consequential damages is invalid even in the event of slight

30

negligence in the case of standardised contractual terms. With specific regard to consumers: Art. 8 of Law 2251/1994 on consumer protection stipulates that the ‘service provider’ shall be liable for any damage caused by its fault (i.e. any damage resulting from wilful misconduct or negligence), in the course of the provision of services. Limitation or exoneration clauses are invalid. Code of Banking Ethics (released by the Hellenic Bank Federation): Consequential damages shall be governed by the legislation in force. It should be noted that the Code of Banking Ethics does not have the force of law but sets rules of good conduct and standards of good banking practice for the relations between the credit institutions and their customers.


is generally a matter for contracts and Is dealt with between the bank and the customer. In practice, the point of failure within the payment process would need to be identified to establish liability.

Italy According to the general principles, the payment provider is liable No specific

31

only for the damages caused to the payer, and conversely only the payer is entitled to claims for compensation against the payment provider.

provisions.

Luxembourg L’émetteur est tiers par rapport au litige entre le titulaire de carte et le commerçant ou l’entreprise affiliée. Il en résulte que l’existence d’un tel litige ne dégage pas le titulaire de compte de l’obligation de rembourser les sommes dont il est redevable envers l’émetteur du fait de l’utilisation de la carte. Dans le cadre d’un litige entre un commerçant et un consommateur les règles du droit civil sont d’application.

Néant Dans l’hypothèse d’un litige les dispositions du droit civil sont applicables.

Netherlands In the general banking terms the following is stated. On the relationship between a bank and his client Dutch law is applicable. Disputes between a client and a bank are brought before the competent Dutch judge, unless law or treaties prescribe something different. A client can also turn to the competent Dutch ‘Geschillencie Bankzaken’.

32




Sweden General: The liability depends on the contents of the agreements. The Consumer Credit Act (1992:830): Section 16, third paragraph: If, by reason of a credit sale, the purchaser has a claim against the seller for repayment of the price,

- -

33

damages or other money claim, the creditor is responsible to the same extent as the seller for satisfaction of the claim. However, the creditor is not responsible to pay more than he has received from the purchaser as a result of the credit.

UK The general principles mentioned in Category 1) would apply, although in the case of 3 or more parties, the possibility of contractual exclusions of liability would be increased and would of course depend on the express terms of the documents concerned subject also to the intervention of any statutory rules as may be relevant under Consumer Protection legislation [eg implementing EU Directives].

Norway A payment provider is not included in a dispute between a payer and a merchant about non-delivery or non-conformity of products/services

Please note that the answers to these questionnaires have...

Documents

Transcript of Please note that the answers to these questionnaires have...