IN today’s article we are going to talk about bank claims: court costs and payment of external agency fees as recent judgments by the Spanish Supreme Court (SC) have ruled on these matters.
The bank must always pay the costs when a claim is accepted
We highlight judgment number 472/2020 of September 17, 2020 of the TS.
In it, the SC states that when a claim from a consumer is accepted, the bank must always pay the entire costs of the court process. Although there are some doubts in law there is an exception, which allows, that costs are not imposed on whoever loses the court case, if there are doubts about law, or different criteria from different courts, etc.
However, the SC has indicated that the decision should be based on two principles:
1. The non-binding of consumers to abusive clauses.
2. The dissuasive effect of the use of abusive clauses in contracts with consumers
The concept is that if the bank is not forced to pay the consumer’s legal costs despite the court having ruled against the bank, the consumer would suffer a loss and in addition, there could be a ‘reverse dissuasive effect’.
In other words, the banks could continue to impose unfair terms assuming that consumers would be unlikely claim in defence of their rights for small amounts.
The Supreme Court changes its criteria regarding the payment of management expenses.
To date, the SC had indicated (in its most recent precedents) that the notary and agency expenses (for the registration of mortgage loans at the land registry) had to be paid equally on a 50 per cent basis by the bank and clients whilst the land registry expenses had to be paid in full by the bank.
Today, we highlight the recent ruling number 555/2020 of October 26, 2020 in which the SC has changed that criteria. Now, it points out, that its previous view, of payment of 50 per cent towards agency costs, does not conform to the doctrine of the European Court of Justice (ECJ) for the following reasons:
1.- Before Law 15/2019, there was no provision in Spanish law about who should pay the agency expenses.
2.-The lack of regulation, imposing the obligation of payment to the client, must mean that
3.-The banks must pay for it and therefore, must refund everything charged for this work.
The Spanish Supreme Court is rectifying some of its criteria. Let’s hope that other criteria that we believe to be erroneous will change, such as their interpretation of the IRPH.
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The information provided in this article is not intended to be legal advice, it merely conveys information related to legal issues.
Carlos Baos (Lawyer)
White & Baos
Tel: +34 966 426 185
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