European justice rules that a consumer with an abusive mortgage can ask the bank for additional compensation

A consumer who sees his loan contract canceled as a result of an abusive clause has the right to claim additional compensation from the bank in addition to the return of the installments paid and late-payment interest. That is what the Court of Justice of the European Union (CJEU) has ruled in a ruling released this Thursday that estimates, on the other hand, that an entity cannot do the same against a borrower. The Court of Luxembourg considers that this could be dissuasive when filing a claim, and leaves the final decision in the hands of the Member States. He warns, however, that the argument of the stability of financial markets cannot be used when interpreting the Community directive.

The ruling stems from a mortgage signed in Poland in 2008, which was referenced to Swiss francs but was paid in Polish zlotys according to the exchange rate published by the entity that granted the loan. As this conversion clause was abusive, the contract was invalidated in its entirety. And the couple who had received the mortgage sued the bank in a Warsaw court demanding that it pay them half of the profits they had obtained as a result of the installments they had been paying.

Before making its decision, the Polish Justice asked the CJEU if the European directive on unfair terms allows the restitution of amounts that exceed the money that has been paid and the corresponding late payment interest. The response of the Luxembourg court is that the directive does not regulate the consequences of the invalidity of a loan contract when, by eliminating the abusive clauses it contains, it cannot subsist. Therefore, it is up to each State to determine these consequences, always respecting the spirit of the directive, which states that the consumer must be left in the same situation that they would be in if the contract had not been concluded and that there cannot be a deterrent effect for others to claim . European regulations do not oppose additional claims, because they believe that this does not jeopardize these two objectives.

On the other hand, the sentence does indicate that the same could not happen in the opposite direction. In other words, the bank could not obtain anything beyond the amounts paid by the consumer and interest on late payment. This is so because the CJEU argues that, otherwise, the borrower could be more interested in continuing to have a contract with unfair terms than claiming it and having it annulled. In other words, it could have the dreaded deterrent effect. In addition, the European court highlights that in this case the cancellation of the contract brings into account an abusive clause that the bank put, and that, therefore, it would not make sense for it to obtain additional benefits or compensation for “illicit behavior.”

Finally, the European Justice recalls that when interpreting the unfair terms directive it is not pertinent to use the argument of the stability of the financial markets. The community norm, remember, has the objective of protecting consumers and companies and professionals in a sector cannot avoid this objective to preserve the aforementioned stability. The banks, add the magistrates of Luxembourg, have to organize their activities and products respecting the spirit of the European guidelines.

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