For several dozen hours, the media have been bombarded with expert opinions regarding the CJEU judgment of December 7, 2023. This is case C-140/22, in which the parties are Swiss franc borrowers and mBank SA (the entity acted as the defendant). Of the four issues cited by the referring authority, the Court only considered two. However, this was enough for experts to conclude that Swiss franc borrowers are now in a winning position. And it’s doubly so. Firstly, the CJEU once again confirmed that the bank has no right to demand any fees or compensation for the non-contractual provision of capital. Secondly, the concept that the consumer is obliged to submit to the court a declaration of consent to the invalidity of the contract should be thrown out, after which the contract would actually be considered permanently ineffective. And this is just the tip of the iceberg that stands in the way of the banking sector stopping the wave of lawsuits. What conclusions can be drawn from the judgment C-140/22 and why will it now be even more difficult for banks to persuade customers to settle?
- On December 7, 2023, the CJEU issued a groundbreaking Swiss franc judgment, which clarifies the method of settling the parties’ settlements after the failure of the contract in court.
- Experts estimate that the judgment is in opposition to the concept developed on the basis of resolution III CZP 6/21. This concerns the charging of statutory interest for late payment and the limitation period for the bank’s claims
- After the Tribunal’s ruling, Swiss franc borrowers will gain access to higher benefits from the annulment of the contract. This includes not only a “free loan”, but also protection of funds against loss of value over time, from the moment the bank is called for payment.
- Although the judges of the Tribunal did not comment on the issue of the limitation period for claims, apart from this part of the preliminary question, experts have no illusions: the very denial of the thesis that the consumer’s declaration to the court is obligatory proves that banks may have a serious problem with recovering money in the future. paid capital.
The CJEU judgment in case C-140/22 is another breakthrough in the fight between Swiss franc borrowers and banks. Interest should be “unlocked” soon
Swiss franc borrowers have been waiting for this moment since May 7, 2021: finally, the Court of Justice of the European Union has dealt with the harmful concept, which the courts took up after issuing the resolution of the Supreme Court with reference number III CZP 6/21. It was this resolution that introduced into the national interpretation of courts the requirement for the consumer to submit a declaration of awareness of the consequences of the invalidity of the credit agreement, which in recent years has become a condition enabling such a contract to be treated as permanently invalid from the moment of its conclusion. Why was this practice so harmful to Swiss franc borrowers?
Because, according to the adopted interpretation, this event (submitting the declaration) depended on two important deadlines for Swiss franc borrowers: one of them is the one from which statutory interest should be charged to the borrower for the bank’s delay in payment. The second is the date on which the limitation period for the lender’s claims begins. Experts have long considered making the recognition of a contract permanently ineffective conditional on the submission of a formal declaration to the court as completely groundless and even contrary to Directive 93/13, which protects consumers against unfair practices of entrepreneurs. And everything indicates that they were right.
The CJEU judges, answering the first issue of the preliminary question, found that a consumer who wants to dispute unfair terms of a credit agreement cannot be required to submit the declaration described above.
The EU judges omitted the second and third issues contained in the preliminary question and went straight to answering the question about the parties’ settlements. Here, too, the judgment turned out to be unfavorable for the sector: the CJEU once again confirmed that the bank must return to the borrower ALL undue benefits provided under the invalid contract, including commissions, fees and insurance premiums. The bank cannot earn a single penny on a defective product. It’s over, period.
Banks react to the CJEU judgment. They are distorting the facts and manipulating again
Of course, the banks immediately launched a counterattack and began to point out that the judgment actually “changes nothing” because the CJEU did not expressly comment on either the limitation period or interest. Experts point out that the bankers’ explanations are absurd: the verdict could not have been different, because a negative answer for the sector to the question about the declaration itself eliminates the need to address questions about the relationship between the running of the limitation period or the calculation of interest and this particular declaration, from the point of view of the CJEU, not required to invalidate the contract.
Why do banks distort facts and manipulate? As always, to win something for yourself. The sector is in panic. Since the concept developed by the Supreme Court, according to which statutory interest is due to consumers only from the moment of submitting a declaration to the court (which usually takes place at the final stage of the process, in the second instance), collapses, lenders must be prepared for higher costs of settlements with Swiss franc borrowers.
Already in the judgment for case C-520/21 from June this year. The CJEU outlined the date from which the interest should be calculated: as it turns out, the consumer should be entitled to it from the moment the request for payment is delivered to the bank. This event occurs before the lawsuit is filed with the court. So how much can a franc borrower gain on interest now?
Let us take as an example a Swiss franc loan for the amount of PLN 700,000. zloty. Let’s assume that this is also the value of the plaintiff’s claim: the client repaid the loan principal to the bank, then filed a lawsuit together with an application for security of claims and obtained the court’s consent to suspend further repayment of the loan. The request for payment was delivered to the bank on September 1, 2023, and from that moment on, statutory default interest should be charged. According to the current reference rate (5.75%), the interest rate per annum is 11.25%. In the following months, interest rates, as well as the reference rate, may change – increase or decrease – but to simplify the calculations, let us assume that they will remain unchanged.
Now let’s assume that the borrower will wait for a final judgment in his case for 3 years, until September 1, 2026. How much will you gain in statutory interest for late payment? In total, the benefit from interest will amount to PLN 236,695.89 for the Swiss franc borrower. This means huge additional money that cannot be ignored. And which is due both to those Swiss franc borrowers who are still repaying their loans and decide to sue the bank, as well as to those who have already repaid the loan and today want to file a lawsuit for payment.
The situation is therefore disastrous for banks: their claims for any compensation for granting an invalid loan have become null and void. Now they are learning that the lifeline thrown to them by the Supreme Court in May 2021 has vanished on the wave of the pro-consumer judgment of the CJEU. As if that were not enough, it is questionable whether they are even entitled to a refund of the capital granted after the loan agreement was launched.
According to experts, the courts will now have a serious argument for counting the beginning of the limitation period for a bank’s claims from the moment it received a complaint from a customer or a lawsuit. This means that banks may have problems with recovering even a zloty from Swiss franc borrowers who filed their lawsuits three years ago and have not received a countersuit for the return of capital.
What about settlements after the CJEU judgment?
Banks still hope that Poles’ reluctance to go to court will prevail and… encourage Swiss franc borrowers to settle. But how can Swiss franc borrowers feel tempted to enter into agreements whose terms are a clear mockery of reason? An excellent example of the “benefits” of a settlement was recently revealed by the Sosnowski Adwokaci i Radcowie Prawni Law Firm, whose client has already won with the bank (the mPlan loan was invalidated by the decision of the District Court in Warsaw on October 25, 2023 – case file reference number: III C 976/19). Before the court issued its verdict, the bank proposed a settlement to the client. He proposed converting the loan into Polish zloty and writing off part of the balance – the amount of the loan would be PLN 611,500. Is the amount impressive?
Not compared to the outstanding balance the bank said the customer still owed. In 2008, the Swiss franc borrower borrowed PLN 1,936,000 from mBank. PLN for a period of 30 years. Repayment was made in equal installments. After 15 years, the client managed to repay almost the entire loan capital, specifically PLN 1,873,000. PLN, and yet his debt still amounted to PLN 2,559,000, according to the bank. zloty.
How can a client feel encouraged to settle knowing that the bank is willing to write off only about 1/4 of the remaining debt (with the principal almost fully repaid), while knowing that the chance of invalidating the contract in court is currently about 99 percent ?
Unfortunately, banks do not learn from their mistakes and continue to use the same old tricks in the hope that someone else will fall for them. Unfortunately for them, Swiss franc borrowers are perfectly familiar with their rights and no longer trust bankers. They analyze each proposal with a lawyer and are not fooled by assurances that the settlement has a limited validity period or that suing the bank involves a high risk. The sector itself is at risk, becoming involved in costly appeals and cassation appeals, costing tens of millions of zlotys per year. And until it understands that Swiss franc borrowers are now dealing the cards, it will not move forward either with the settlement program or with improving its image among consumers.
2023-12-09 19:39:03
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