On 12 January 2023, in a judgment, the European Court of Justice (ECJ) decided that the term in a contract for the provision of legal services concluded between a lawyer and a consumer that sets the price on the basis of an hourly rate, without including any further details, does not satisfy the requirement of being drafted in plain intelligible language.

Regarding the scope of the requirement that a term in a contract for the provision of legal services must be drafted in plain intelligible language, the Court emphasises that, under Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (UTCCR), that requirement must be understood in a broad sense. This requires that the contract should set out transparently the specific functioning of the mechanism to which the relevant term relates, so that that consumer is in a position to evaluate and understand, on the basis of clear, intelligible criteria, the economic consequences for him or her which derive from it.

The Court ruled that a term in a contract for the provision of legal services which sets the price on the basis of an hourly rate, without the consumer being provided beforehand with information that enables him or her to take a prudent decision in full knowledge of the economic consequences of concluding that contract, does not satisfy the requirement of being drafted in plain intelligible language within the meaning of EU law.

To clarify, the judgment relates to “consumers” as defined under the UTCCR, which is defined as “a natural person who, in contracts covered by this Directive, is acting for purposes which are outside his trade, business or profession.”

The ECJ judgement can be found here.

The UTCCR is available here.