The conclusions presented on 13 July by the Advocate-General of the European Court of Justice regarding the compatibility of the limitation of the retroactivity of the annulment of floor clauses with EU law seem not to have entirely cleared up the matter. And not merely because, as is well known, such conclusions are not binding on the Supreme Court, which ultimately will have the last word, but especially because the conclusions cast a certain shadow over what transpires in individual cases.
The Spanish Supreme Court, in its well-known decision of 9 May 2013, restricted the effects of the declaration of annulment of floor clauses from the date of the court’s decision, a criterion that has been upheld by the decisions of the same court of 25 March and 29 April 2015.
This time limitation on the refund of the amounts unduly credited in applying floor clauses led to the referral of the preliminary rulings by different legal institutions to the European Court.
The Advocate-General commences his review by pointing out that the Supreme Court, upon adding material transparency control of floor clauses, did not exceed the level of consumer protection established in Directive 93/13, to the extent that the European Court had already declared in previous cases that the demand for transparency was not merely formal but rather, it should extend to the actual possibility of the consumer knowing the financial consequences of the contract. This point is significant, since on the one hand, having passed beyond the threshold of protection afforded by the Directive, the analysis of the compliance of the non-retroactive nature of EU law could not have been made in the light of the Directive, which protects both consumers and end users. On the other hand, as the Advocate-General describes in his conclusions, it is questionable if the time limit on the restorative effects of the declaration of annulment of the ground clauses included in the decision of the Supreme Court can be justified by the innovative nature of this ruling.
At the Advocate-General’s discretion, the Court of Justice, in its interpretation of article 6.1 of Directive 93/13 – although it has been of the view that national judges are obliged not to apply unfair clauses without having the opportunity to alter them – has not viewed annulment as the only way to comply with the mandate that the unfair clauses do not bind the consumer, but rather that, in line with the express annulment that the aforementioned provision imposes on domestic legislation, it represents only one possibility among others.
Furthermore, the Advocate-General is of the opinion that the decision of the Supreme Court is in accordance with the principles of equity and efficacy enforceable under the harmonisation of national law with EU law: firstly, because the Supreme Court has already made use of the opportunity to limit in time the effects of their rulings on purely domestic disputes; secondly, because the deterrent effect remains wholly guaranteed since the floor clauses must be removed, and there must be a refund of the amounts received since 9 May 2013.
Finally, we look at the situation prior to 9 May 2013, in order to conclude that, unusually, non-restoration of the amounts credited before this date – based on legal certainty and the endemic dimension of the use of the ground clauses as well as on the macroeconomic repercussions for a weakened banking system – does not necessarily imply that a true equilibrium has not been restored between the professional and the consumer, since firstly, this could alter banking services by virtue of a modifying of the loan agreement, and secondly, because the application of the floor clause did not involve a significant change in the amount of the monthly payments that the consumers had to pay.
In truth, the Advocate-General places particular emphasis upon reiterating that the limitation in time of the effects of the unfair action ruled by the Supreme Court is exceptional, and must be limited to the specific circumstances of the matters subject to review. He also does so by reminding us that the European Court of Justice is the only court with jurisdiction to assess the compliance with EU law of the limitation in time of the effects of the rulings of domestic legal institutions.
The uncertainties to which we referred at the beginning emerge when the Advocate-General refers to the question raised regarding the extensive effect of the limited effectiveness over time of the declaration of unfairness of the floor clauses in relation to the individual cases, because the ruling of the Supreme Court was handed down in the context of a class action. According to the Advocate-General, any legal institution before which an individual action requesting the declaration of unfairness of a floor clause is taking place has the power to make its own analysis of the circumstances and to assess if, in the specific case which it is hearing, those circumstances are identical, which should lead, where appropriate, to the application of the case law of the Supreme Court. And although the fact is that the Advocate-General concludes by confirming that the application by the other legal institutions of the solution adopted by the Supreme Court ensures the principle of equality and the principle of judicial economy, it is also true that this leaves the door open in the case of individual actions for the limit of 9 May 2013 not to be applied for the refund of the amounts wrongly credited.
Given the situation, we shall have to wait for the decision of the European Court of Justice in order to see how this matter will be resolved.
Gracia Llácer is a senior associate at Roca Junyent. She can be contacted at firstname.lastname@example.org