The Supreme Court Ordered A Bank To Pay Legal Fees After It Failed To File A Claim On The Terms Of The Land

2021-02-01   |   by CusiGO

New adjustment of the civil division of the Supreme People’s court in mortgage litigation In its January 27 collegiate decision, the high court ruled on a case involving legal fees in land clauses that did not comply with the procedures set out in the 2017 act for the settlement of such disputes. Therefore, although the entity made a judicial decision on the client’s request and returned the amount of the claim to the client, there was no judgment fee in the first and second instance. By contrast, the Supreme Court held that the borrower’s claim against the bank was similar to the procedure provided for in the above-mentioned act and therefore held that the borrower should be exempted from litigation. The bank shall pay the costs of the trial.

In fact, the 2010 mortgage was issued by montedepieda and badahos savings bank (now Iberia). Six years later, in June 2016, the client asked the agency to refund the additional amount paid under the land terms, The bank rejected the request on the grounds that the terms of the contract were not abused, as the court of justice of the European Union and the Supreme Court themselves had established at the time. Ten months later, in April 2017, the borrower filed a lawsuit in court, and then the bank agreed to his request and intervened in the lawsuit without oral hearing.

However, between out of court and judicial claims, the government passed a royal decree in January 2017 to resolve the large number of land claims expected after the court’s ruling, which required a change in the Supreme Court’s standards. The new rules require entities to establish their own channels to meet these needs. Therefore, since the client has not appealed through this specific channel before, the court of first instance of almendralejo (Badajoz) decided not to order the bank to pay legal fees, which the client must bear. In the second instance, the provincial high court rejected the borrower’s appeal, pointing out that it had been a long time since he filed a claim directly with the bank to the court, so he could have complied with the decree of early 2017.

On the contrary, the Supreme Court disagrees. Last week’s ruling, released by the High Court on Monday, confirmed that the provincial court’s ruling was “groundless” and violated several provisions of the 2017 act itself and the European consumer protection directive. In a unanimous ruling, the judges of the civil Chamber pointed out that the parties had done exactly what the rule said: first, extrajudicial claims. They added that the entry into force of the act had nothing to do with what had happened: the customer went to the bank and the bank refused. Therefore, they believed that, as the act pointed out in these cases, the problem had to be solved fairly, If the case is brought to court and the borrower’s requirements are met, the bank will bear the costs.

The judgment pointed out that the 2017 act “is precisely to improve the protection of consumers in terms of land terms.”. However, since this issue was resolved in the first and second instance, according to the rule, “the applicant is deprived of the protection from the abuse of land clause”, that is, he is entitled to free litigation, This case provides a precedent for similar cases that may occur at that time. That is to say, the Supreme Court held that claims before 2017 are comparable to the extrajudicial channels that have been opened since then for all purposes. The judges recalled that “if consumers are asked to repeat settled out of court claims, they will be forced to invest twice as much time and money to get full compensation.”.