The Court of Justice of the European Union has ruled on the limitation period for banks’ claims for the return of capital paid to customers. The CJEU decided that when the limitation period for consumer claims related to the invalidity of a loan agreement begins earlier than in the case of bank claims, this leads to an asymmetry that may violate consumer protection.
The Court noted that in the context of mortgage loan agreements, which are usually executed over a long period, an asymmetric solution may prove to be incompatible with the principle of effectiveness.
“It may make the consumer’s exercise of rights derived from EU law excessively difficult or practically impossible. In particular, it does not make it possible to eliminate the risk of the consumer’s claims being time-barred even before the limitation period for the bank’s claims begins to run. It also does not serve the purpose of out-of-court enforcement of rights by the consumer,” he said. CJEU.
“Assuming that the limitation period for a bank’s claims runs only from the date the judgment becomes final may encourage the bank to remain inactive or prolong negotiations with the consumer so that the limitation period for its claims expires before the limitation period for the bank’s claims begins to run. It could also lead to the consumer being deprived of interest for delay from the date of filing a lawsuit requesting the bank to refund the amounts paid under the canceled contract,” the Tribunal added.
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