Brussels, 22/01/2015 (Agence Europe) - Basing its position on Community law, a national court may take the view that a clause in a contract between a seller or supplier and a consumer is unfair even though that clause complies with the criteria established by the law in force in the member state, the Court of Justice of the EU ruled on Wednesday 21 January in its judgment on joint cases C-482/13, C-484/13, C-485/13 and C-487/13.
These cases related to mortgage default interest rates applied by two Spanish banks, Unicaja Banco and Caixabank (see EUROPE 11179). Spanish law states that default interest rates must not be more than three times the statutory rate. The two banks applied rates higher than this limit. The question put by the Spanish judge was whether the court had to recalculate default interest to comply with this limit, as Spanish law requires, or take the view that this is the result of an unfair clause and remove it, as provided for in the directive on unfair terms in consumer contracts (93/13: EEC).
The European judges declared that the directive does not preclude the Spanish law provided that its application (i) is without prejudice to the assessment by the national court of the unfairness of the term and (ii) does not prevent that court removing the clause if it were to find the latter to be unfair within the meaning of the directive. In that regard, that the obligation to respect the threshold corresponding to the default interest rate is without prejudice to the assessment, by the court, of the unfairness of a term setting that default interest. In fact, the Court notes that the national court may assess the possible unfairness of a term relating to default interest at a rate less than that provided by Spanish law. (JK)