2023-07-19 08:37:48
On July 13, the Court of Justice of the European Union (CJEU) issued a new ruling on mortgages linked to the IRPH index. Following its usual approach, the CJEU leaves the final decision to the Supreme Court. In this article, we examine the possible impact that the new resolution may have on litigation on this matter.
The IRPH index has made rivers of ink flow in recent years. Since 2017, the Supreme Court has ratified in successive rulings that its inclusion as a reference for setting the interest rate on mortgage loans does not automatically implies the existence of abusiveness. This conclusion is based, among other reasons, on the fact that the IRPH is an official index, subject to regulation and supervised by the Bank of Spain.
The position of the Supreme Court does not leave the consumer unprotected. The clause will be void if it is shown that the standards of transparency and absence of abuse in the specific case have not been met.
Some lower courts have been reluctant to abide by the Supreme Court’s position. To do this, they sometimes seek the support of the CJEU, which usually opts for a Solomonic path, distributing the reason between consumers and banks, while leaving the final decision in this regard to the national courts.
To analyze the transparency of the IRPH clause, the courts must analyze whether it is written in an understandable manner and whether the consumer received sufficient information from their financial institution during the pre-contractual phase. It is in this second aspect where the lower courts look and where the recent pronouncement of the CJUE is framed.
The Supreme Court has confirmed in its resolutions that it is not necessary for the bank to have provided detailed explanations on how the IRPH is calculated, or the historical data of the index, since this information is accessible through public sources.
The position of the Spanish Court is equally reasonable in this regard. Arguing otherwise would imply affirming that only those consumers familiar with the formation of official indices are in a position to take out a mortgage referenced to an official index. Consumers trust that the Bank of Spain will look after their interests in this matter.
The latest ruling of the CJUE on IRPH has its origin in the initiative of a court of instance, which tried to find gaps in the jurisprudence of the Supreme Court. It analyzes a clause that establishes the interests based on the IRPH and a differential, which is positive (it will be understood later why this clarification is opportune).
The fundamental question answered by the CJEU is whether the bank should have informed the consumer that it might be more appropriate to apply a negative spread. To reach this conclusion, the CJEU relies on the explanatory statement of a Bank of Spain Circular (5/94).
When reading the sentence, it is verified that the way in which the court raised the question referred for a preliminary ruling led the CJEU to an erroneous starting point regarding the content of that norm. In Circular 5/94 it is explained that the calculation of the IRPH, by taking into account the APR of the mortgage loans, places the operations above the market and includes the following appreciation: “To equalize the APR of the latter with that of the market it would be necessary to apply a negative spread (…)”.
However, by raising the question for a preliminary ruling, the judge intends to deduce from Circular 5/94 an obligation on the part of Spanish banks to introduce negative spreads on mortgages subject to IRPH.
As we said, the CJEU dictates a Solomonic decision: on the one hand, it accepts the approach of the lower court and considers it relevant that consumers are informed about the content of this circular, from which the “need” to apply a negative differential would be inferred. in these operations. On the other hand, it points out a solution to the Supreme Court, indicating that the First Chamber must analyze whether this information is “sufficiently accessible” for an average consumer.
After the resolution, we do not know if the Supreme Court will change its position on the product. It should not be like that. In the first place, the circular of the Bank of Spain is public information. Secondly, any information would be redundant because it is already reflected in the index and in its historical evolution. Drowning the consumer in documents does not necessarily guarantee transparency.
On the other hand, financial institutions could not be forced to report their obligation to apply negative benchmarks to match the IRPH products to the market when that obligation has never existed. The opposite could even lead to an agreement on prices.
Considering the current jurisprudence of the Supreme Court, the new controversy is actually irrelevant. While the formation of the interest rate is an essential element of the contract, the possible lack of transparency that could arise from not delivering the circular or from omitting the information contained in it would not automatically lead to the nullity of the clause, but only would lead to analyze its possible abusiveness by the court, taking into account the circumstances.
Here we come to the second point of contention between the Supreme Court and the lower courts. The First Chamber has confirmed that, in general, there is no abusiveness in the IRPH clause, while offering the consumer to arrange a loan referenced to an official index cannot be considered a behavior contrary to good faith when it is not proven that the banks have known how this index was going to evolve and when the possible abusiveness cannot be established through a comparison between the Euribor and the IRPH because the contractual realities that accompanied the contracts that applied each of these indexes are different. Only time will tell us if this new challenge to the IRPH changes the jurisprudence on the product or remains a simple gesture in favor of consumers.
Laura del Campo and Íñigo Villoria, lawyers at Clifford Chance.
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