Bank clients, who are still fighting to be reimbursed for the amounts paid for the floor clauses of their mortgages, scored this Thursday an important victory in their long battle to assert their rights against the financial entities’ intention to limit and study possible refunds on a case-by-case basis.
The Attorney General of the European Union, Laila Medina, declared this Thursday that “nothing in the directive” on abusive clauses “suggests that the control of this transparency cannot be carried out in the context of a collective action”, a conclusion which, if supported by the Court of Justice, would validate the lawsuit filed by the Association of Users of Banks, Savings Banks and Insurance of Spain (ADICAE) against 101 entities in order for them to stop using floor clauses and restore to their clients the amounts paid. A total of 820 consumers have come forward to support this collective action.
The so-called floor clauses appeared in many variable interest mortgages subscribed in Spain and set a threshold below which clients could not benefit from their evolution, even when the reference, the Euribor, was lower. With the widespread lowering of interest rates a decade ago, many consumers found themselves having to continue paying a minimum interest rate that was often between 2% and 5%.
ADICAE launched the class action lawsuit in 2010. On May 9, 2013, the Supreme Court concluded that these clauses were illegal but set the start of their nullity on that date, a time limit that was appealed before the Court of Justice of the EU ( CJEU), which in 2016 ruled against these limitations and endorsed the full refund to consumers of the amounts paid, including those prior to the ruling. European justice returned to the case in 2022, with a similar ruling.
ADICAE’s macro lawsuit continued its journey in the Spanish courts, which ruled against the banks in many cases. The entities once again appealed to the Supreme Court, which stated that it “has doubts” about the possibility of examining the transparency of the floor clauses to assess whether they are abusive through collective action, given the high number of individuals and entities affected, for which it referred two questions referred to Luxembourg, seat of the CJEU.
“Excluding the examination of the transparency of contractual clauses in the framework of collective procedures would be contrary to the purpose of collective actions and would be incompatible and incoherent with Union legislation that seeks to strengthen judicial protection of the collective interests of consumers,” the Attorney General concluded this Thursday. It is up to the Supreme Court, the CJEU statement adds, “to determine whether there is a sufficient degree of similarity to allow the collective action to proceed” between the reported cases. Medina also considers that “it is possible to use the standard of the average consumer to carry out transparency control.”
The opinion of the EU Advocate General is not binding but in approximately three out of four cases the CJEU judges support her conclusions. His sentence will be known in a few months and will mark the way for the Supreme Court to resolve the bank’s appeals and issue the final sentence.
