Banking disputes on the rise – Ramón y Cajal

Civil litigation in Spain is gaining more prominence, remarks Ramón Fernández-Aceytuno, a partner at Ramón y Cajal. He suggests that a major driver for the increased activity is the growing desire of clients to sue banks for the miss-selling of certain financial products.

Fernández-Aceytuno cites cases involving swaps, “floor clauses” mortgages and foreclosures, as well as deals such as Bankia´s IPO as reasons for disputes.
“In the last five years the financial sector has generated opportunities particularly because of the flood of claims against the banks which have received mixed results” Fernández-Aceytuno states. “At the moment, as a consequence of the last ruling of the Supreme Court (Tribunal Supremo) against Bankia and its Public Stock Offering, clients who might want to sue the bank, will have to decided whether to go through with the claim or reach a global agreement.”
The mortgage market is another source of claims, points out Fernández-Aceytuno. For some time foreclosure was a summary and executive procedure, with very few excuses and started when one receipt was unpaid, and “now is more complicated with the possible paralysis of the foreclosure because of possible unfair clauses in the mortgage contract”.  
Fernández-Aceytuno does not believe that ADR, including arbitration and mediation, is becoming more popular with clients. However, he regularly recommends ADR to clients as an alternative to court. He adds that mediation is sometimes given a wide berth “probably because the potential parties do not trust this method”.
“On the companies’ side, arbitration has been adversely affected as a consequence of the nullity of some arbitration awards agreed by the High Courts of Justice, based on the ‘public order questions’, arising for the first time in this discipline,” he continues. “Furthermore, the costs of arbitration are higher.”