The European Court of Justice (ECJ) has ruled that a long-standing practice in German case law is incompatible with EU law. This affects millions of consumers who receive district heating and may have been paying excessive prices for years. The judgement of 24 September 2026 has far-reaching consequences.
What has been the legal position to date?
Many district heating supply contracts contain what are known as price adjustment clauses. These allow the supplier to unilaterally increase the price during the term of the contract. If such clauses are legally invalid, the question arises: what applies to any excess amounts already paid?
The Federal Court of Justice (BGH) had developed the so-called ‘three-year solution’ for such cases. It stipulated that if a consumer did not object to a price increase within three years, the increased price would be deemed to have been agreed with retroactive effect. This allowed utility companies to retain their price increases even where the underlying clauses were in fact invalid. This significantly restricted customers’ ability to claim a refund.
Why did the ECJ overturn this provision?
The Berlin Court of Appeal had asked the European Court of Justice for an opinion in the context of ongoing proceedings. The case stemmed from a claim brought by a civil-law partnership against its district heating supplier, which had begun as early as 2019.
The ECJ ruled that the Federal Court of Justice’s case law contravenes Article 6(1) of the EU Directive on unfair terms in consumer contracts. This Directive stipulates that invalid terms simply cannot be binding on consumers. Under EU law, it is not permissible for a consumer to be bound by a legally invalid price increase solely on the grounds that time has elapsed.
Another aspect of the judgement is particularly noteworthy: the ECJ also criticised the fact that, under previous German case law, suppliers were permitted to unilaterally replace an invalid clause with a valid one without the consumer’s consent. According to the ECJ, this runs counter to the fundamental principle of consumer protection. Consumers must not be forced to remain bound by a contract that has been unilaterally amended without their consent.
What does this mean in practical terms for district heating customers?
Anyone who receives district heating and suspects that their contract contains an invalid price adjustment clause can now claim back any overpayments. The general three-year limitation period under German law applies in this case. This means that, at present, claims can be made for payments made from 1 January 2023 onwards.
- Affected customers should have their contracts checked for price adjustment clauses.
- The three-year limitation period expires at the end of each year.
- Consumer protection organisations are already considering coordinated class actions.
- Utility companies are expecting claims for reimbursement running into the billions.
The Berlin Court of Appeal must now rule on the specific claims for reimbursement in the main proceedings, taking into account the guidelines laid down by the European Court of Justice.
What should those affected do?
Anyone who receives district heating and has accepted price increases in recent years without objecting should examine the legal position in their specific case. Whether claims for a refund actually exist, and if so, to what extent, depends on the specific terms of the contract. It is advisable to seek legal advice in such cases.
Reference number: ECJ, Judgment of 24 September 2026, C‑900/24; Federal Court of Justice (BGH), judgments of 14 March 2012, VIII ZR 113/11, and of 25 September 2024, VIII ZR 165/21 and VIII ZR 20/22.
Source: Haufe: Property
This post and the accompanying image were created with the help of AI and have been editorially reviewed.
