The CJEU (Court of Justice of the European Union) has issued a ruling in favour of the retroactivity of floor clauses , contrary to the Opinion of the Advocate General and the ruling of the Supreme Court which limited the retroactive effects of this figure.
To understand this long-awaited ruling from the Court of Justice, we must know what a floor clause is.
What is a floor clause?
Most credit contracts depend on the Euribor; when granting a loan, banks require the repayment of the Euribor plus a spread. For example, a mortgage loan required the repayment of gambling data brazil the Euribor+1 (meaning it has the Euribor interest rate plus an extra point).
The Euribor fluctuates and for this reason many credit contracts include floor and ceiling clauses . These clauses stipulate that even if the interest rate is above a certain threshold (ceiling) or below (floor), the consumer will continue to pay a minimum interest rate equivalent to that threshold and in the case of floor clauses a lower rate will not be applied.
What has happened with the floor clauses?
In 2008, the Euribor reached its maximum of 5% and debtors were paying more than 6% interest. But couldn't this have been avoided with ceiling clauses? No, since they were never activated. In the contracts, the ceiling clauses had been set at an average of 13%.
From 2009 onwards, the Euribor began to fall rapidly. Many mortgage holders did not see their payments fall, due to the floor clauses contained in their contracts. These clauses were activated because the limits were generally set at around 2% or 3%, a more realistic percentage to reach compared to the ceiling clauses.
As a result, many consumers began to file lawsuits because they were unable to take advantage of the drop in the Euribor, claiming that they were not aware of the existence of this clause in their contract and that the differences between the floor and ceiling clauses were abusive.
Thus began a long judicial process leading to the ruling of the Court of Justice of the European Union.
Judicial history
Supreme Court ruling
On May 9, 2013, the Supreme Court ruled and considered the floor clauses to be abusive . It argued that consumers had not been properly informed about the consequences of these clauses. However, it limited the effects of the declaration of nullity of these clauses, which only have retroactive effects until the date on which the sentence was issued. In other words, claims can be made from May 9, 2013.
This limitation on the retroactivity of its effects is based on the principle of legal certainty.
A ruling of 25 March 2015 of the Supreme Court confirmed this limitation on retroactivity and limited the restitution obligation only to the amounts unduly paid after the ruling of 9 May 2013.