The ruling of the Court of the European Justice of 13th July 2023, has been resolved a preliminary question raised by the 17th Court of First Instance of Palma de Mallorca, in a legal proceeding brought by two individuals against the entity Banco Santander, in relation to a claim for nullity for unfairness of the financial clause established in a mortgage loan, relating to the interest rate, the IRPH reference index.
In this ruling of the Court of the European Justice of 13th July 2023, the Court once again, ratified its well-known doctrine according to which it is up to national judges to examine the transparency and unfairness of a contractual clause, such as the IRPH, depending on the circumstances of the case, and in the light of Directive 93/13. In that regard, paragraph 53 of that judgment literally states:
“53 In particular, the requirement that a contractual term must be drafted in a clear and comprehensible manner implies that, in the case of loan agreements, financial institutions must provide borrowers with sufficient information to enable them to take informed and prudent decisions (see, to that effect, judgment of 20 September 2017, Andriciuc and Others, C-186/16, EU:C:2017:703, paragraph 51).
In that regard, it is for the national court, when taking into account all the circumstances surrounding the conclusion of the contract, to verify that the consumer concerned was informed of all the information likely to affect the extent of his commitment and to enable him to assess it, in particular as regards the total cost of his loan ( see, to that effect, judgment of 20 September 2017, Andriciuc and Others, C-186/16, EU:C:2017:703, paragraph 47 and the case-law cited)’.
This Court has gone even further, if possible, in the analysis of the requirement of transparency of the contractual clauses signed with consumers, stating that they should be informed by financial institutions about the main elements in the calculation of this index, thus in its paragraph 56 it states:
‘56 The relevant factors to be taken into consideration by the national court when carrying out the necessary checks in this regard include not only the content of the information provided by the lender in the context of the negotiation of a given loan agreement, but also the fact that the main elements relating to the calculation of the benchmark are readily available because they have been published ( see, to this effect, the judgment of 3 March 2020, Gómez del Moral Guasch, C-125/18, EU:C:2020:138, paragraphs 52, 53 and 56)’.
Likewise, the ruling of The Court of Justicice of the European Union (CJEU) of July 2023, in paragraph 59, stated that the fact that the Bank of Spain, in its circular 5/1994, had established in its preamble the need to apply a negative differential to the IRPH, in order to bring it into line with the market interest rate (implicitly referring to the Euribor), constitutes an indication of the usefulness of this information for the consumer. Specifically, it literally provides:
‘59 As regards the question whether actual knowledge of the methods of calculating the reference rate referred to in the disputed clause – which are set out in Annex VIII to Circular 8/1990 – was sufficient to enable an average consumer to understand them and be aware of their economic consequences, since the information set out in the preamble to Circular 5/1994 had not also been communicated to him, the national court must take into account the importance of that information for that consumer to be able correctly to assess the financial consequences of concluding the mortgage loan agreement at issue in the main proceedings.
In that regard, the fact that the institution which drafted Circular 5/1994 considered it appropriate, in that preamble, to draw the attention of credit institutions to the rate of the IRPH in relation to the market interest rate and to the need to apply a negative spread in order to bring them into line with the said rate of interest is a relevant indication of the usefulness of the information to the consumer”.
Therefore in paragraph 69 of the ruling of the Court of the European Justice of 13th July 2023 , explicitly responds to the fourth question referred for a preliminary ruling by the corresponding Spanish court, stating that it is relevant for the consumer to receive information about the need to apply a negative differential to the IRPH index, in order to make it equal to the market interest rate (Euribor), in order to bring that index into line with the market interest rate (Euribor), a statement which recognises that the IRPH itself is a higher index than Euribor, and in accordance with the principle governing consumer law of reciprocity in the obligations and rights of the consumer and the company acting, it must be assessed.
“69 In the light of all the foregoing considerations, the answer to the fourth question referred for a preliminary ruling must be that Articles 3(1), 3(4) and 5 of Directive 93/13 must be interpreted as meaning that, in order to assess the transparency and possibly the unfairness of a clause in a variable-rate mortgage loan agreement which designates as the reference rate for the periodic review of the interest rate applicable to that loanan index. Established by a circular which was officially published and to whichan increase is applied, the contentof the information contained in another circular is relevant, as the reference rate for the periodic review of the interest rate applicable to that loan, an index established by a circular which was officially published and to which an increase is applied. The content of the information contained in another circular, from which it is apparent that it is necessary to apply to that index, given its method of calculation, a negative differential in order to bring that interest rate into line with the market interest rate, is relevant. It is also relevant to determine whether this information is sufficiently accessible to the average consumer”.
Therefore, and in conclusion, following the consolidated European jurisprudence, clarified in the latest ruling of 13 July 2023, it is up to the national judge to determine the transparency and abusiveness of the IRPH clause. This European Court assumes that as the IRPH is a higher interest rate than the market interest rate, referring implicitly to the Euribor, according to the Bank of Spain Circular 5/1994, the bank information to the consumer that in relation to the IRPH, a negative differential should have been applied, is relevant information for the consumer. This information should have been accessible to the average consumer, in order to determine the transparency of the corresponding interest rate.
From this professional office, we understand that this ruling will be a great step forward in the defence of the rights of bank consumers with ‘Clausula IRPH’. Those who are going to be able to claim judicially and with guarantee, the nullity of this clause, being that unfortunately until now in many cases, they had suffered a comparative grievance, in relation to bank consumers with other non-transparent and abusive mortgage clauses, such as the floor clause, mortgage expenses, or revolving loans and cards, which had seen their claims satisfied in this regard. It is neither understandable nor acceptable in our current legal system for such a comparative grievance.
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Jesús Picossi Ávila
Abogado y director de Asesoría Alhamar
