Thursday, 29 October 2015

ECJ in BBVA v Gabarro: personal notification of new rights, please!

In today's decision concerning the case of BBVA SA v Gabarro et al (case C-8/14)- another episode in the post-Aziz saga, the Court of Justice sets fairly high requirements for transitional rules including time limitations for the exercise of new rights. In doing so, it follows and specifies the opinion of AG Szpunar, which we had reported on earlier this year
The case concerns a provision in the 2013 Spanish law reinforcing the protection of mortgage debtors. With reference to cases in which enforcement proceedings were pending and no unfair terms control had been exerted under the pre-existing (consumer-unfriendly) procedural rules, the law granted consumers a one-month period to bring an action based on the claimed unfairness of a given contractual term. The period started to run with the publication of Law 1/2013.

Already the AG had concluded that, while the one-month limitation seemed proportionate to the needs to legal certainty and all in all did not appear excessively short, the moment at which the period started to run was problematic. The Court follows the same approach. It observed that under Spanish law consumers were informed of the fact that enforcement proceedings against them had been instituted and of their right to oppose enforcement within 10 days of the notification. The new law, however, did not provide for such a notification. As a consequence, consumers "could not reasonablt take advantage of a further opportunity to make an application objecting to enforcement", since "they were notified about it through the same procedural means used to convey the initial information"[para 38]. On light of that, the transitional provision was not such as to guarantee full enjoyment of that period and, therefore, the effective exercise of the new right" [para 39]. 

In other words, the court seems to suggest that such a time limit should only start running after the consumers are individually notified of the fact that an adopted law grants them a new right. While consumer-friendly and also respectful of legal certainty, following it might entail imposing a non-negligible burden on court offices. It is hard, however, to imagine a different solution. What do you think?

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