The Statute Of Limitations Is Key To Many Lawsuits Between Banks And Consumers

23 May 2022 | Blog

The statute of limitations is a procedural exception that is a daily occurrence in litigation between consumers and banks, as well as on decision making tables at both national and EU courts and tribunals. Lawsuits on the distribution of mortgage expenses, claims on arrangement fees, amounts to be returned in cases of revolving credit cards with usurious interest rates, the ups and downs and the disparity of criteria regarding lawsuits filed by consumers affected by the mortgage loan reference index and controversial floor clauses, have a common denominator in terms of their object of debate and controversy: the possible prescription of brought actions.

In this context, according to David Viladecans Jiménez, Legal Department Manager at Tecnotramit, ‘there is unanimity in current doctrine and jurisprudence in concluding that the radical nullity action cannot lose effect or validity.’ Although there has been controversy regarding the restitutionary action derived from nullity, both the Court of Justice of the European Union (CJEU) and the Supreme Court (SC), as well as most public administrations, seem to opt for the prescription of the restitutionary action, subject to the general time limit for personal actions.

Spanish and EU courts set clear precedents

In the European legal field, following CJEU’s rulings from 16th July 2020 and 22nd April 2021, it has been established that the declaratory action for nullity is not time-barred; that it is compatible with the Directive that the restitutionary action linked to the declaratory action for nullity is time-barred; and that limitation periods of 2 and 3 years are reasonable and admissible.

Moreover, it was also stated that principles of ‘equivalence’ and ‘effectiveness’ must be respected. On the one hand, equivalence is respected when same time limits apply to the consumer as do to other actions. On the other one, effectiveness must ensure that consumers can effectively exercise their rights. Therefore, neither the dies a quo nor the time limit can make it impossible or excessively difficult for the consumer to exercise their rights. In fact, there is no statute of limitations in relation to the restitution of clauses which can continue to have effects, and which leave the consumer unaware of the full impact.

In Spain, the First Chamber of the Supreme Court, by Order dated 22nd July 2021, admitted the possibility of prescription and raised doubts about the day on which the period begins. The vast majority of public administrations currently admit the prescription of the restitutionary action, although dies a quo is placed at a different time. The Spanish system guarantees the principle of effectiveness by means of extended periods and interruption by a mere extrajudicial claim.