The European Court of Justice (CJEU) has laid down an important ruling overturning the cap limiting reimbursement for losses sustained due to excess charges by financial entities to May 2013 (established in the Spanish Supreme Court judgement) declaring the cap incompatible with EU regulations.
Therefore, the CJEU ruling establishes that the time-frame should be extended to the entire period of the loan, permitting recovery of the total amount unduly charged.
Given this new scenario we must keep in mind that the CJEU ruling does not imply an immediate reimbursement of amounts unduly charged by the banks. It is necessary to follow the claim process that we will explain below. In the case of absence of reaction from the banks, it would be necessary to take the claim to court and obtain an order rendering the fixed minimum rate clauses null and void to claim reimbursement of the undue excess charges.
Since the Supreme Court judgement that favoured the claimants on undue charges after May 2013, there have been numerous court claims. It is therefore necessary to differentiate between the types of situations that those affected may find themselves in, depending on the action they have taken to date:
– Those affected by fixed minimum interest rate clauses that following court action have obtained a court order. This scenario could be the most complicated as the claim has already been tried
– Those affected by fixed minimum interest rate clauses that have not made a claim to date. In this scenario it is possible to claim reimbursement for undue charges as from the date of entry into force of the clause
– Those affected that have come to an out of court settlement with the financial entity and have signed a waiver for future legal action to claim further amounts.
In this scenario it is important to underline the fact that various court rulings have established the aforementioned waivers to be null and void.
In any of the aforementioned scenarios, as always we recommend you contact a Law Firm specialised in the field, to study your case and determine whether it is feasible to initiate a claim.
Recommended action for the initiation of your claim
Always contact a Law Firm specialised in the field so as to determine the feasibility of your claim. In order to be able to recover your money, it is necessary for the clause in your mortgage agreement to have been declared null and void previously by the courts.
As in any proceedings you should always try to negotiate an out of court settlement with the financial entity, and if you do not reach a settlement or it is not satisfactory, then proceed to lodge the corresponding court claim.
First, and previous to lodging a court claim, you should make a formal complaint directly to the Customer Services Department of the Bank with which you signed the mortgage agreement, requesting the elimination of the clause and the reimbursement of the amount unduly charged. The Customer Services Department has 30 days from the date of receipt of the request in which to decide whether or not to accept the claim.
In the case that our claim is dismissed or no reply has been received within the stipulated 60-day period, the client may also take the complaint to the Bank of Spain. In any event the decision of the Bank of Spain is not binding.
Finally, if our out of court claims are disregarded, the party affected by the fixed minimum interest rate clause has the option of issuing a court claim in order to render the clause null and void, and demand the reimbursement of the excess amounts payed. The claim would include the undue excess payed plus interest at the legal rate (currently over 3%), plus legal costs (meaning that the court proceedings would not cost you anything). There is no expiry date for claiming the clauses null and void.
Possible out of court settlements with the financial entities.
As in previous cases, due to this new CJEU ruling, it is likely that financial entities begin to offer to sign agreements with their clients to reimburse excess amounts paid.
Nonetheless, these agreements must be well revised, as among other aspects they should include the interest generated. Therefore, the agreements offered by the banks should always be thoroughly checked by a legal expert.
At MSG LEGAL we have intervened in diverse claim proceedings for clients affected by fixed minimum interest rate clauses, and have proven successful results in both out of court settlements and court claims. We are at your disposal for any enquiry that you may wish to make at no cost, and will inform and advise you on the feasibility of your claim.
Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice.