Opinion of the Advocate General in the IRPH (mortgage loan reference index) transparency/unfairness case. The bank wins

16 de septiembre, 2019

Banks and litigators alike were waiting with bated breath for the Advocate General’s Opinion in Case C-125/18, which at long last came to light on 10 September. Initially, litigators and enthusiastic consumerists jumped for joy at the flashes of the headlines, but, as is often the case, the media had misread and misreported.

The Advocate General (AG) does not reveal a clear criterion by which to judge the legality or transparency of the IRPH clause. His considerations are not properly ordered and his discourse contains inaccuracies that make it difficult to venture what is the practical outcome of it all. It is clear that the IRPH clause is not covered by the exception provided for in Article 1(2) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, but this clarification is irrelevant because, despite disallowing one of the points on which the Judgment of the Supreme Court (SC) of 14 December 2017 rests, it does not affect the substance of the arguments that led to the confirmation of the transparency of the disputed clause. The AG repeats that it is necessary to make a determination on the transparency of the clause, but such a determination is what was already being made in Spain, and the AG repeats several times that it is the national judge who must make it. It could be understood, however, that the AG sets a higher standard of transparency than that the SC, but, as can be seen from the circular arguments contained in paragraphs 110, 113, 114, 119, 120, 122, 123, 124 and 126 and from the express acknowledgement that the bank in question complied with the requirement for transparency (paragraph 124), this is not the case. It is also pointed out that neither variable interest IRPH clauses produce a "significant economic impact" (as opposed, for example, to multi-currency clauses) such that the transparency requirement should be tightened, nor can the bank be required to offer a menu of different interest rates at the borrower's choice. The only thing that really implies greater stringency is the second condition of transparency included in point 2) of the AG’s conclusion, according to which the information should also "refer to the past evolution of the chosen reference index". This point, however, is not discussed anywhere in the Opinion, and is all the more surprising given that the disputed clause of Bankia (as of the rest of the banks) is considered transparent. It is not possible to predict how many contracts will comply with this requirement, nor if that at hand really is, because, as has been said, the AG opines that the clause reviewed by the judge a quo passes the transparency test.

In view of the foregoing, it is unlikely that the SC will feel obliged to change its tune on the transparency of the IRPH clause, wherefore it is doubtful that it pays to embark on lawsuits that will be most probably set aside on appeal.

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