On the Transparency Requirements of Arrangement Fees – CJEU in Justa v Banco Bilbao Vizcaya Argentaria SA (Case C-39/24)

Consolidating Caixabank SA (C‑224/19) and CaixaBank SA (C‑565/21) in Case C-39/2024 of 30 April 2025, the Court of Justice (CJEU) ruled on the transparency of arrangement fees and further clarified the threshold for meeting its requirements. 

Facts of the case

In November 2005, Just and Banco Bilbao Vizcaya Argentaria concluded a loan agreement secured by a mortgage. According to the contract, upon signing the agreement, Justa had to pay an arrangement fee equal to 0.25% of the capital loan. Justa brought an action before the Court of First Instance of Ceuta against Banco Bilbao seeking a declaration that the term establishing the arrangement fee was unfair. 

Question referred

The Court of First Instance of Ceuta referred two questions, one of which is admissible. The second, regarding the application of Directive 2014/17/EU is inapplicable ratione temporis.

By the admissible question, the referring court is asking whether Article 4(2) of Directive 93/13/EEC on Unfair Terms in Consumer Contracts (hereinafter, UCTD) must be interpreted as precluding the case law of the Tribunal Supremo (Supreme Court) which considers the term imposing an arrangement fee to remunerate services ‘connected with the examination, granting or processing of the mortgage loan’, to be transparent without the term specifying the services supplied in exchange for the fee or the time needed to perform them (para 28). 

Ruling

First, the CJEU observes that a term establishing an arrangement fee cannot be considered as pertaining to the main subject matter of the contract. The essential obligations of a credit contract are in fact that the lender ‘undertakes (…) to make available to the borrower a certain sum of money and that the latter undertakes (…) to repay that sum’ (para 31). With this, the CJEU further consolidates its ruling in Caixabank and Banco Bilbao Vizcaya Argentaria (C-224/19 and C-259/19, EU:C:2020:578, para 64). 

Irrespective, Article 5 of the UCTD imposes the same requirement for transparency for contractual terms in writing, which, as per that provision, must ‘always’ be written in plain and intelligible language. As already noted in 2023 in Caixabank (Loan arrangement fees), C-565/21, the requirement for transparency of Article 4(2) has the same scope as the requirement laid down in Article 5. Therefore, the question of the referring court must be reformulated with reference to Article 5 instead of Article 4(2). 

The CJEU holds that the requirement should not be understood as only demanding that the terms are formally and grammatically intelligible. The transparency of the terms must be understood broadly, in light of the provision’s rationale that is to protect consumers’ weaker position vis-à-vis businesses (see also Caixabank (Loan arrangement fees), C-565/21, EU:C:2023:212, para 30). The consumer must be able to understand what ‘economic consequences’ derive for her or him from the term (para 38, emphasis added) and the ‘nature of the services’ she or he receives (para 39, emphasis added). 

The national court will be in charge of determining whether the financial institution has provided sufficient information for her or him to understand the content and functioning of the term (para 40). The court will thus assess the transparency of the terms, taking into consideration ‘all the relevant factual elements’, which include also the advertising that the bank makes of the particular agreement (para 41; see also Caixabank (Loan arrangement fees), C-565/21, EU:C:2023:212, para 40). 

To summarise, the transparency requirement is intended to ensure that the consumer can assess the financial consequences of the term. Crucially, the requirement does not entail that the bank must detail the nature of the services supplied or the number of hours devoted to offering those services (para 44). 

The Court concludes that, like in the case at hand, where the legislation defines the term imposing the arrangement fee as remuneration for services connected with the examination, granting or processing of the mortgage loan, it is not necessary that the term includes ‘a detailed description of the nature of those services or an indication of the time devoted to their performance’ (para 47). 

It is however necessary that ‘the consumer has indeed been placed in a position to assess the economic consequence for him or her, to understand the nature of the services (…) and to ascertain that there is no overlap between the various costs provided for in the contract or between the services for which those costs are paid’ (para 47).

The national case law of the Supreme Court is thus not precluded by Article 5 of the UCTD. 

A milestone for Polish consumers claiming unfairness of Swiss francs mortgage loans - CJEU in Lubreczlik (C-396/24)

Yesterday, the CJEU issued a new judgment in the Swiss franc mortgage loans and their unfair contract terms saga, following a referral from a Polish court, in the case known as Lubreczlik (C-396/24). The referral was based on two cases, in which consumers concluded mortgage loans indexed to the Swiss franc rate. In both cases consumers claimed repayment of sums they had paid to the bank on the basis of their mortgage contracts being void due to unfair contract terms they contained. The bank counterclaimed seeking that consumers paid the full loan amount back to the bank. 

Previously, the Polish Supreme Court issued a judgment with a so-called 'two claims' theory (see declaration III CZP 11/20 from 16 February 2021 - in Polish here). This theory acknowledged that after a loan agreement is declared invalid, both parties (consumer and lender) have a right, "distinct and independent of each other, to repayment of monetary payments made in performance of that agreement. Each of the parties could therefore claim full repayment of the sums paid, whether or not it is still a debtor of the other party and regardless of the amount of its own debt" (para 26).

Imagine now situations (very common in practice), in which consumers have already paid the whole amount of their loan to the bank, or even paid to the bank sums exceeding the total loan value, on the basis of high interest rates. While waiting for their claims of unfairness to be adjudicated by Polish courts or the judgments to become final and the bank to return their money to them, they receive a lawsuit from the bank for the repayment of the full amount of the loan. Often, such a (de facto, repeated) repayment would either be financially impossible or significantly detrimental to consumers (even if made in the expectation of the eventual repayment by the bank of the same or higher sum of money) (para 27). Further procedural rules make it also feasible that any repayment by a consumer of the money to the bank will be immediately enforceable, while the bank's obligation to repay the consumer may take a long time to reach that stage (para 32). Consumers could theoretically argue for a set-off of reciprocal claims, but Polish procedural rules make such a declaration complex and not necessarily favouring consumer interests (para 28).

Repayment of the loan amount by a consumer

The CJEU leaves no doubt that Polish (case) law may not allow banks to claim repayment of the full loan amount, regardless of the value of repayments already made by consumers in performance of the loan agreement and "irrespective of the amount remaining due" (para 44). The CJEU recalls the need for the Member States to ensure that the national protection against unfair contract terms is a deterrent for sellers and suppliers against embedding such terms in their contracts (para 38). Further, national law needs to protect consumers against the detriment of having their contract's annulled as a result of them containing unfair contract terms (para 39). These obligations may result in Polish courts being required to "change established case-law", if following such national case law would lead to undermining EU consumer protection's objectives (para 43).

Polish courts should then disregard the Polish Supreme Court's theory of "two claims" in assessing the banks' claims for repayment of the full amount of loan by consumers, if consumers already had paid back at least part of the mortgage loan to the bank. This should mean in practice that banks claims filed against consumers should be scaled down in consideration of the actual repayments that consumers have already made. Strategic litigation by banks against consumers for the repayment of full loan amounts becomes much more risky as a result of this judgment.

Immediate enforceability of consumer repayments

The CJEU also addressed the matter of Polish courts being required to award of their own motion immediate enforceability to repayment claims made by banks against consumers, if consumers accepted such claims (and they may have good reasons to accept them - see para 51 of the judgment for more information). The Court considers also this practice contrary to EU consumer protection objectives, as long as Polish courts are not allowed to consider in their decision-making detriment to the consumer that such an immediate enforceability order would have (para 58). 

This part of the CJEU's judgment protects consumers against the immediate need to repay the money to the bank, which could have dissuaded them from progressing with their unfairness claims.

Overall, this judgment raises financial risks for these banks that were not keen so far to settle consumer cases and which have used various intimidation tactics to dissuade consumers from pursuing their claims. It may also lead to banks proposing more beneficial settlements to consumers and encourage consumers to negotiate settlement terms.