The CJEU gives lime and sand with the novation of the floor clauses: they are legal, but only if the client understood all the consequences

Not all controversial and apparently opaque clauses are abusive and even those that are potentially abusive can be subject to a legally agreed amendment. This is indicated by the Court of Justice of the EU has published this Thursday a long-awaited sentence that gives some respite to the Spanish bank, but that also opens the doors to a multitude of individualized complaints before national courts and in fact invites magistrates to act even ex officio to clarify whether those who signed a contract understood well what they accepted and the serious consequences that followed.

The case is complicated and deals with mortgage loans, novation contracts and the agreements whereby two parties, client and entity, commit in writing and in advance not to take subsequent legal action if there is discontent. In its judgment, the Court affirms, in the first place, that the current Community Directive "does not preclude a clause in a contract concluded between a professional and a consumer, the abusive nature of which can be judicially declared, may be the subject of a contract of novation between that professional and that consumer, through which the latter waives the effects that may derive from the declaration of the abusive nature of that clause ". But at the same time it stresses that the legislation allows it "as long as the resignation comes from a free and informed consent by the consumer, this being the point to be verified by the national judge."

Last January, the EU's general counsel stipulated that judges should check, even ex officio, whether each contract had free and informed consent or was the result of an abuse of power. And today the judges hold the line. The thesis is that when an agreement has been concluded by the consumer with full knowledge of the cause, it must also be binding on him, since a transaction must offer legal certainty to all parties, so it cannot be without binding effects for a of them. However, not everything goes, since, in general, the person who signs a mortgage starts from a "situation of inferiority with respect to the professional. Therefore, when concluding with the professional an agreement that contains that resignation," the consumer cannot renounce all effective judicial protection and this situation of inferiority must be able to be compensated by means of a 'positive intervention' of the judge ".

The Luxembourg Court of Justice notes that the European Directive does not go so far as to make the system of protection against the use of unfair terms by professionals established for the benefit of consumers mandatory. Therefore, "when the consumer prefers not to use this protection system, it will not apply". However, says the CJEU today, the resignation of a consumer to enforce the invalidity of an abusive clause can only be taken into consideration if, at the time of the resignation, the consumer was aware of the non-binding nature of that clause and of the consequences that this entailed. Only in this case can it be considered that consumer adherence to the novation of such clause comes from free and informed consent. "

THE CASE OF THE POLEMIC

The case that gave rise to the sentence dates back to 2010, when the constructor and developer Obras y Excavaciones Collados SL, signed an authentic act with Ibercaja for the extension of a loan for the new construction of a property under horizontal ownership. That act, the origin of everything, contained a clause that established that the annual interest rate could not exceed 9.75% nor be less than 3.25%. And it is the lower limit that will later generate the problems.

In 2011, the real estate developer and an unidentified consumer, which is the one that subsequently resorted to a court in Teruel, which in turn is the one that has forwarded the questions to the Luxembourg Court, closed a sale with a mortgage loan subrogation in Ibercaja favor. And in that contract it was stipulated that the consumer was subrogated in the obligations of the original debtor, the developer.

Three years later, in 2014, Ibercaja and the consumer in turn signed a new contract, one of novation that modified the original mortgage loan contract and established that the variable interest rate could not be less than 2, 35%. The clause was accepted by the consumer. That, in addition, she gave her consent to another in which it was foreseen that the two parties waived the legal actions or filed appeals in relation to the contractual clauses.

However, some time later, the buyer filed a lawsuit before the Court of First Instance of Teruel requesting that an abusive clause provided for in the 2011 mortgage be declared null and void, and that the amounts considered unfairly paid in respect of that abusive clause. Ibercaja refused to consider the clause limiting the interest rate downward as null, since it claimed to have informed the client of its existence and implications when in 2014 they signed the novation contract. And not knowing what to do, the Teruel Court asked the CJEU what to do.

LUXEMBOURG GETS WET

And this is where the High Court enters today, affirming that, according to the Community Directive, "it is possible to consider that the very clause of a contract concluded between a professional and a consumer, in order to modify a potentially abusive clause of a previous contract held between the two or to determine the consequences of the abusive nature of the same, has not been individually negotiated and may, where appropriate, be declared abusive ", a stick for financial institutions.

The CJEU maintains that the national magistrates have to analyze all the circumstances of each case, and affirms that not even the fact that the plaintiff indicated before signing the novation contract, the written mention of his handwriting in the which indicated that it understood the mechanism of the floor clause, "does not, by itself, allow us to conclude that this clause was individually negotiated and that the consumer was able to effectively influence its content."

The European Justice maintains that the requirement of transparency imposes on a professional who does what is necessary to ensure that the consumer is in a position to understand the economic consequences derived from the floor clauses for him, "providing in particular information regarding the evolution past the index from which the interest rate is calculated, "for example.

ABUSE IS NOT BINDING

The last part of the sentence is also a victory for the plaintiff organizations. Luxembourg considers that a clause included for the solution of an existing dispute, and by means of which the consumer waives to assert before the national judge the claims that he could have asserted in the absence of that clause, "may be classified as abusive, in particular when the consumer has not been able to have the pertinent information that would have allowed him to understand the legal consequences that derived from said clause ". And it concludes that "the clause by means of which the same consumer waives, in relation to future controversies, the legal actions based on the rights that the Directive recognizes does not bind the consumer.

Why? Because by definition, "the consumer cannot understand the consequences of their adherence to a clause of this nature regarding the controversies that may arise in the future", and admit the possibility that the consumer previously renounce the rights conferred by the protection system established by the Directive "would be contrary to the imperative nature of the rule and would jeopardize the effectiveness of this system".

According to the criteria of The Trust Project

• Teruel
• Floor clause
• Mortgages

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