The Counihan case

In December 2016, the High Court delivered a landmark judgment in AIB v Counihan & Anor.

In this debt litigation case, Barrett J affirmed a long-standing principle of EU law: that a judge must carry out an assessment of the terms of a contract of his own motion if the facts of the case fall within the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995(SI 27/1995). These regulations implement Directive 93/13 on unfair terms in consumer contracts.

European jurisprudence

The ability of courts to carry out an assessment of the fairness of contractual terms on their own motion has long been set out at EU level, writes Gary Fitzgerald, director of the Irish Centre for European Law.

Ruling on C-240/98 Oceano Grupo Editorial in 2000, the ECJ stated that the system of consumer protection in the directive was based on the idea that the consumer is in a weak position as against the business, and therefore agreed to terms drawn up in advance by the business without being able to influence them.

In that case, the own-motion assessment was not phrased as an obligation on the national court, but was something that the national court had to have the jurisdiction to do, in order to protect the rights of the consumer. In subsequent cases, this own-motion assessment has been made obligatory on national courts.

Implications today

The High Court’s reaffirmation of this principle should have led to a fundamental change in the way that home repossessions have been carried out by Circuit Court judges and county registrars, writes Fitzgerald. However, this change does not appear to have taken place. In the Gazette, Fitzgerald sets out the implications of this key case for practitioners representing both debtors and creditors in the courts.

• Read the full article in the April 2017 Gazette

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