The Government will pass a procedure for floor clauses refund
In view of the predictable wave of claims following the ruling of the CJEU, the government will provide banks with a code of good practice, in order for them to give back the floor clauses to their clients.
The government will endorse an extrajudicial procedure for the banks to process the refunding of the floor clauses to their clients. Following the recent sentence of the CJEU recognizing the total retroactivity of such clauses, those affected are entitled to claim all overpaid amounts for their mortgages.
This new procedure consists of an specific Code of Good Practice for bank entities to refund their floor clauses. Although voluntary in nature, once signed, the bank is obliged to comply with it. The government will proceed it in the Parliament through a Royal Decree-Law, and, once approved, will allow client claim speedup and cost saving.
In view of the predictable wave of judicial claims, this new system could ease the burden of the courts. The application of the code, however, varies depending on whether the mortgage is paid or in progress, or whether the case is in court or not.
In the case of an overdue mortgage, it could be declared void in court by virtue of the the CJEU sentence, as well as for mortgages already immersed in a judicial process. If the mortgage was not overdue and not judicialized, the client could benefit from an extrajudicial procedure, such as consumer arbitration.
To deal with these claims, banks will create floor clause refund special units in order to review and assess the clients’ records and reach agreements with them. In this way, these amounts can be refunded in a very short time and appealings can be avoided, as well.
In this sense, those affected by the floor clauses can ask their banks to refund all the money overpaid or ask that the money be deducted from the amount still unpaid on their mortgages.
The recognition, finally, of the total retroactivity of the floor clauses by the CJEU provides legal certainty to both, banks and citizens.
At Del Canto Chambers, we are specialized in tax and commercial law, in particular in legal claims and before the Spanish Tax Office. We can be contacted at our platform www.spanishbank.co.uk and at clerk@delcantochambers.com.
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