An analysis of the judgment of the Court of Justice of the European Union of December 7, 2023, in Case C-140/22 leads to the conclusion that the European Union’s highest court has once again, and with unwavering consistency, taken the position that in cases of unfair business practices in contracts with consumers, protection is due to the consumers, not to the unfair businesses. However, as can be seen, national courts have difficulty applying this seemingly simple principle. Over the past 7–8 years, the case law of Polish courts has undergone a remarkable evolution, thanks to the CJEU’s unyielding stance. Just a few years ago, there were court rulings in which Swiss franc loan claims were dismissed in their entirety; later, there was a period during which courts only partially invalidated Swiss franc loan agreements.
Subsequently, as a trend toward declaring loan agreements null and void in their entirety began to prevail in case law, the issue of the bank’s compensation for the use of the loan principal arose. Once this latter issue was also resolved by the CJEU in favor of consumers, it was time to address the issue of interest calculation. This was precisely the subject of the CJEU ruling cited at the beginning. The point is that a practice has emerged in Polish court case law of linking the starting date for the bank’s accrual of default interest to the repayment of funds to borrowers from the moment the borrower, in the course of court proceedings, completes, signs, and submits a special form to the court. Although, according to the provisions of the Civil Code (Art. 455 and Art. 481 of the Civil Code), interest should be calculated from the moment the bank, having been requested by the consumer to refund the money paid, exceeds the payment deadline specified therein. However, some courts held that this form was still necessary. This practice stemmed from the content of the Supreme Court’s resolution of May 7, 2021, and the concept of so-called “suspended ineffectiveness” contained therein. According to this concept, even if a loan agreement contains prohibited contractual provisions whose removal would lead to the nullification of the entire agreement, the occurrence of such a consequence depends on the decision of the borrower, i.e., the consumer.
Sometimes, in the event of a contract default, a consumer could find themselves in serious financial trouble because they would have to repay the entire principal amount of the loan to the bank overnight, whereas the total amount of installments they had paid so far was much lower than the loan amount. Precisely to protect consumers from such a situation, the Supreme Court, following the CJEU judgment of October 3, 2019, (the so-called “Dziubak case”), held that it is the consumer who should decide—with full awareness of the consequences—whether they wish to have the loan agreement voided or whether they wish for the agreement to remain in effect. In practice, the courts have begun sending forms to borrowers, which, in addition to a notice about the bank’s right to demand repayment of the entire loan principal, included information about alleged claims by banks against consumers for compensation for the use of the principal, indexation, or other forms of compensation for the banks. Reading such forms, consumers had every right to be afraid. Although I must admit, to my admiration, that I do not know of a single case in which a consumer withdrew their request to void a loan agreement as a result of the form. Some judges began to treat this form as the starting date for calculating interest on amounts owed to borrowers as reimbursement for installments, additional fees, commissions, etc., that had been wrongfully collected by the banks. This created a problem, as such judicial practice harmed consumers. Typically, several to over a dozen months elapsed between the date of the pre-litigation demand for payment sent to the bank and the date the consumer received the form from the court. Consequently, postponing the starting date for interest accrual led to the loss of significant funds, but—just as importantly—it diminished banks’ interest in reaching settlements at the pre-trial stage, since no interest was accrued during that period anyway. On this issue as well, the CJEU reliably came to the consumers’ aid, unequivocally ruling that linking the starting date for interest accrual to the form is inconsistent with the principle of effectiveness.
The Court once again emphasized the primacy of the principle of effective consumer protection under Council Directive 93/13/EEC of April 5, 1993, on unfair terms in consumer contracts. The principle of effectiveness means that every action taken by judicial authorities should aim to ensure that consumer protection is realized in practice. So that consumers can feel, as quickly as possible and to the greatest extent possible, that the legal system protects them, rather than throwing more obstacles in their path by forcing them to complete yet more complicated formalities, fill out yet more forms, and wait years for a ruling, all while spending money and time on the process. Long live the principle of effectiveness!
