The courts against the “floor clause”
Indeed, new articles referring to the “floor clause” are appearing on a daily basis. For those who are still unaware of this phenomenon, we could define this clause as a kind of minimum interest rate included by banking institutions in their mortgage loan contracts at a variable rate (as a rule, this would be the EURIBOR).
Going back to 2010, nobody was really aware of this type of clause, as not even the courts had passed a single sentence in this regard. At the time, those among us who were challenging these kinds of clauses only encountered negative reactions, such as “… you don’t stand a chance; this clause was signed before a notary”, “you are out of your mind, you won’t get anywhere”, “… the bank is too powerful, I won’t sue them; they could take reprisals against me”, etc. etc. But the truth is banks don’t always win. In fact, four years later the Supreme Court and the Tribunals of Málaga did pronounce themselves, underlining, among other aspects, the importance of the bank’s obligation to provide adequate information concerning the “floor clauses”. I won’t go into all the reasons why the Supreme Court considers that the floor clauses are abusive, I merely want to make it clear that the position in which a large majority of consumers have been placed is manifestly abusive.
The floor clause has been branded by the media and most courts as a clause that was added to the (mortgage loan) contracts in order to deprive consumers from the benefit of a lower Euribor rate by reducing the amount of their monthly payment. By introducing this clause the Banks made sure that, regardless of how low interests fell, the consumer would always pay a minimum amount, even if, as has often been the case, the actual interest rate was lower than the limit imposed as “floor clause”.
This is the cornerstone of the argument concerning the amounts paid in excess as a result of this “floor clause”. As a matter of fact, to this day there is no uniform judicial criterion at the national level in this matter. Whereas some provincial courts deny the reimbursement of the amounts collected in excess by the financial entities, other courts take the view that the entities must pay these amounts back to the consumer. Such is the case with our Provincial Court in Málaga, which recently passed the first judgement ordering a financial entity to remove the floor clause and return the amounts collected in excess to the consumer on the basis of this clause. The decision passed by the Provincial Court of Málaga on March 14th is unequivocal as regards the reimbursement of the amounts, as shown by the following extracts:
“The inclusion of a clause as the one under consideration indicates a lack of good faith on the part of the defendant entity, as the latter guarantees itself a profit by establishing the floor clause, in the knowledge that the loss that could result from the top rate clause is extremely unlikely to occur.”
“…this Court considers that such a statement of non-retroacteness is not of mandatory application to the case at hand, where the claim filed is a personal and individual claim for nullity due to the abusive nature of a clause included in a contract formalised with consumers and in which, furthermore, the plaintiff, in his request for reimbursement of the amounts unduly collected under the said
clause, has applied for such declaration of nullity to have a retroactive effect, in which case article 1.303 of the CC would become applicable…”
Not surprisingly, this judgement has led to an avalanche of claims being filed with the courts of Málaga and shows us the general direction of future decisions. However, it does not necessarily indicate the result of every single claim brought before the courts, as not all mortgages are viable for the filing of a suit. We must examine them on a case-by-case basis and analyse each mortgage loan deed to decide whether or not a claim can be brought with a reasonable chance of success.
If you are subject to this type of clauses, do not hesitate to contact our firm. We will carry out a viability study free of charge. Remember:
Although time has shown that we were in the right and are not as mad as we were told back in 2010, you must understand that we cannot simply follow the fashion of suing banks. First we need to know the details of each particular case, in order to guarantee you a better chance of success of your claim.
By: Fernando Sánchez Pérez