On June 15, 2023, the Court of Justice of the European Union issued two rulings in cases concerning foreign-currency loans. The first judgment confirmed what the legal community had known for a long time: banks that use prohibited contractual terms are not entitled to any compensation. The second CJEU ruling, however, is more interesting. It addresses the issue of protecting consumers whose interests have been jeopardized as a result of unfair terms in loan agreements. The point is that borrowers must wait years for a final court ruling, and during that time they are still theoretically obligated to make monthly loan payments to the bank, even though the loan agreement contains unfair terms. In such a situation, it is therefore difficult to say that the interests of consumers—that is, borrowers—are protected.
In order to effectively protect consumers’ interests, it is essential that the court of first instance issue an order securing the claim at the very beginning of the proceedings—that is, immediately after the borrower files a complaint with the court. This order should exempt the borrower from the obligation to make loan payments until the court proceedings are finally concluded. To date, the practice regarding such protective measures has varied. Courts often refused to grant the borrower such relief, and in the case of banks subject to compulsory restructuring (e.g., Getin Noble Bank), Polish courts held that it was not possible at all to suspend the obligation to make loan payments.
In its ruling, the CJEU ruled in favor of the borrowers’ attorneys. The Court explained that the overriding objective of European Union law is to protect consumers—that is, borrowers who took out a loan for housing purposes, unrelated to either their business or professional activities. Consumer protection requires that they not be required to make loan payments while litigation is pending with the bank regarding the validity of the loan agreement. The obligation to make monthly loan payments results in the amount unduly paid to the bank to continue to increase, and in practice, it becomes impossible for a final court judgment invalidating the loan agreement to order the return of the entire amount transferred by the consumer to the bank as loan repayment. This exposes the consumer to the risk of having to file an additional lawsuit against the bank to recover the installments paid during the first lawsuit, which were not taken into account in the initial judgment. Such a situation, however, runs counter to the purpose of court proceedings, which is to provide a comprehensive resolution of the case.
The CJEU has now ruled that such a situation is contrary to the objective of European Union law, which is to protect consumers. Furthermore, the CJEU has ruled that any provisions of national law which national courts have hitherto interpreted as prohibiting the suspension of the obligation to make loan payments during the course of proceedings must be interpreted in accordance with European Union law—that is, in such a way as to allow the borrower’s claim to be secured. In practice, this means that the CJEU has provided Polish courts with clear guidance: motions to secure borrowers’ claims must be granted, and Polish courts must suspend the obligation to make loan payments for the duration of the proceedings.
Therefore, all borrowers who are already involved in lawsuits against banks—and whose requests to suspend their obligation to make loan payments have so far been denied by the courts—should resubmit their applications for relief as soon as possible. On the other hand, borrowers who are only now deciding to sue a bank can expect to be exempted from their obligation to make loan payments within one to two months of filing the lawsuit with the court.
