In the recently published grounds to a judgment dated 14 May 2015 concerning a class action filed by CHF borrowers against mBank (case file no. II CSK 768/14), the Supreme Court held that in a class action nothing prevents carrying out incidental control of individual contracts with consumers in terms of whether the provisions of such contracts are abusive – i.e. contrary to good custom and in gross violation of consumer interests. It seems that this position may cause practical problems for consumers themselves in later individual proceedings against the bank for payment. It can also contradict the purpose of class action, which is a more efficient settlement of the case, relating to all group members at once, because determining whether a provision is abusive in relation to any given consumer would in many cases require meticulous analysis of each separate contract.

From the perspective of the defendant (for example, an insurance company or a bank) the Supreme Court’s position on the mBank case is important in so far as  it may be repeated by other courts and could encourage current or future initiators of class actions to base claims solely on propositions of abusiveness of contractual provisions. It seems, however, that despite the judgment, the case is not a foregone conclusion, as there are still serious arguments in favour of rejecting – at the stage of admissibility – parts of claims constructed in this way, due to the fact that they are not suited to be recognised in a class action.

The Supreme Court’s approach may raise serious doubts, especially since the most recent jurisprudence in the lower courts has taken the opposite approach, complying with the spirit of the Act on class actions and the statutory model of incidental control. The Supreme Court stated,inter alia, that as [the borrowers] derive their claims for damages from the standard content of mortgage contracts concluded with the same lender (...), they demand recognition as an abusive contractual clause (...) and they infer similar legal consequences for any potential finding of such abusiveness, then we are dealing with the same factual basis of the claims. Therefore, according to the Supreme Court, the basic condition has been satisfied for the matter to be resolved in a class action. As it did not see any obstacles in conducting incidental control in the class action, the Supreme Court adopted a significantly mitigated model – very similar to abstract control characteristic for the Court of Competition and Consumer Protection.

It is, however, doubtful whether the Act on class actions allows such flexibility. There will hardly ever be a situation in which a given provision of an agreement is going to be abusive for all members of the group, as members of the group who are e.g. brokers, lawyers or insurance agents can be regarded as consumers with increased awareness of the incurred obligations, and the degree of the remaining group members’ understanding of the provisions and consequences of the concluded agreement may also vary. These very elements were decisive in the rejection of the class action in a case against Getin Noble Bank (XXV C 531/14) and in CMS’s win on behalf of a bank sued by more than 3,200 CHF borrowers at the admissibility stage (I C 691/14) (both decisions are not final, issued by the Regional Court in Warsaw).

Adoption of the Supreme Court’s position could lead to a situation in which a court in a class action – de facto fulfilling the role of the Court of Competition and Consumer Protection – considers in a general way the existence of the defendant’s liability for the use of an abusive provision included in the standard contract. Then, however, it could be demonstrated in individual proceedings for payment that, e.g. in relation to a specific consumer, the provision of the agreement (recognised as abusive in the de facto abstract control) has not grossly violated the consumer’s interests and therefore cannot be asserted as abusive.

In the light of the judgment, the question arises as to how the current Act on class actions is to be interpreted: either in line with its objective – which was the replacement of many individual proceedings with one class action, or in line with the expectations of some of the consumers – which in turn forces the mitigation of the class action admissibility conditions, for which the current wording of the Act does not give grounds.

Link to the judgement