Thursday, 9 February 2017

Cláusulas suelo: the aftermath (Real Decreto-ley 1/2017)

In the aftermath of the judgment of the EU Court of Justice on Spanish 'floor clauses' (cláusulas suelo) of 21 December 2016, reported by us here, the Spanish government has issued a 'Royal Decree' which establishes an extrajudicial mechanism for the swift resolution of disputes concerning these clauses: Real Decreto-ley 1/2017 (full text available here, in Spanish). According to the Decree, it is foreseeable that the CJEU's judgment will lead to an increase in claims of affected consumers, who demand repayment of the amounts overpaid by them on the basis of 'floor clauses' in their mortgage contracts. The Decree's aim is to facilitate consumers and credit institutions to settle any claims by reaching an agreement about the amount to be paid back. The Decree also seeks to prevent high costs for the administration of justice.

Article 3 of the Decree obliges credit institutions to implement a (free) system for alternative dispute resolution, which is voluntary for consumers and allows them to file a request for repayment. The credit institution then must calculate the amount to be repaid and make an offer to the consumer within three months after the request has been filed. If this does not result in an agreement, the consumer may still go to court. This is not only the case if the consumer rejects the offer, but also if the credit institution rejects the consumer's request, or if the three-month period expires without an offer having been made or without the offered amount having been paid to the consumer. During the three-month period, however, neither party may bring a judicial action. Credit institutions must ensure that consumers are aware of the availability of this ADR system.

In addition, Article 4 of the Decree stipulates that, in case court proceedings are initiated after the conclusion of the out-of-court procedure, the credit institution can only be ordered to pay costs if the consumer has rejected the offer and obtains a more favourable judgment in court. A similar rule applies if the credit institution commits itself to pay a certain amount before submitting a defence: it can only be ordered to pay costs if the judgment is more favourable.

The Decree has already been criticised for not being specific enough as to the substantive right to repayment. It only defines the general scope (Article 2), but leaves the question what constitutes an unfair term for lack of transparency open to interpretation. The methods of calculation of amounts and interests are left entirely for the credit institutions to decide. Therefore, the Decree may induce litigation when parties ask the courts for further guidance. Moreover, it is unclear to what extent consumers' right to effective judicial protection - safeguarded by Article 47 of the EU Charter of Fundamental Rights - is limited and whether such a limitation is justified (cf. Alassini, C-317/08). The regulation of costs in Article 4, in particular, could be problematic from the perspective of access to court. It might deter consumers to go to court and compel them to accept the credit institution's offer.

In the next few months, we will see how effective the Degree will be in practice.

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