This article is intended to analyse the Order issued by the European Union Court of Justice deciding on the preliminary question raised by the Regional Court of Barcelona in relation to the existing conflict between EU law in regards to the protection that should be granted to consumers in professional commercial relations and the Spanish law that does not entitle judges to declare ex oficio payment procedure, and in limine Litis, the nullity of clauses that may be unfair to consumers.
The origin of the question arose from the payment procedure initiated, upon the request of Banco Sabadell, against a consumer for a failure to comply with the payment of a loan granted by the bank to buy a vehicle.
In the mentioned claim it was requested the payment of the remaining balance on the loan and the agreed late payment interest which were agreed at 29%.
The judge in the Court of First Instance, taking into account the EURIBOR and ECB interest rate, declared ex oficio the clause of interest penalties to be null and void for being abusive and fixed the interest rate on arrears at 19% based on the legal interest.
An appeal was submitted in the Regional Court of Barcelona against the Court of First Instance raising a question on the ruling.
The Regional Court first reviewed the Spanish regulations in regards to consumer and user interest protection, as well as the European regulation on payment procedure. They observed that in neither case exists the ability of judges to assess, in limine Litis, the abusive clauses within the payment procedure.
In contrast, the Regional Court highlighted the case law of the EU Court of Justice that has interpreted Article 6, paragraph 1 of Directive 93/13 stating the obligation for national judges to examine, ex oficio, the nullity and inapplicability of abusive clauses, even when the parties have not requested such examination.
Given such a legal discrepancy, the Regional Court of Barcelona raises two questions to the EU Court of Justice:
- Is it contrary to EU law, especially the Law on consumers and users, that a National judge makes a pronouncement, ab limine Litis, at any stage of the proceedings, on the nullity or the integration of an interest clause on a consumer loan?
- How should Article 6, paragraph 1 of Directive 93/13 and Article 2 of Directive 2009/22 be interpreted in relation to Article 83 of Royal Legislative Decree 1207 that permits national judges to modify the content of an abusive clause?
These issues were raised before the Court of Justice which states in regards to the first matter raised, that the aim of Directive 93/13 is to balance situations of inequality existent between consumers and professional services providers, with a positive intervention from a source other than those parties to the contract.
The mentioned positive intervention has come from the national judges that not only should rule on the possible abusive nature of contractual clauses, but they also have the obligation to examine by the Court’s own motion these questions and to do so according to the relevant evidences.
Therefore, regardless whether or not the parties apply for opposition to the claim, the national judge should, for the purpose of consumer protection, examine, ex oficio, clauses that might be considered abusive.
In regards to the second question, regarding the interpretation of Directive 93/13, the Court of Justice responded that Article 6 precludes application of Member State legislation, as is the case of Article 83 of Legislative Royal Decree 1/2007, that attributes to the national judge the ability to revise the content of contracts, modifying clauses that have been declared abusive.
Therefore, national judges, dealing with any judicial proceeding, should examine ex oficio abusive clauses for consumers, declaring them null, ex oficio and in limine Litis, but they may not revise the content of a contract to modify the subject abusive clauses.