Case C‑450/22

Caixabank SA and Others

v

Asociación de Usuarios de Bancos, Cajas de Ahorros y Seguros de España (Adicae) and Others

(Request for a preliminary ruling from the Tribunal Supremo)

Judgment of the Court (Fourth Chamber) of 4 July 2024

(Reference for a preliminary ruling – Unfair terms in consumer contracts – Directive 93/13/EEC – Mortgage loan agreements – Clauses limiting the variation of the interest rates – ‘Floor’ clauses – Collective action seeking an order to cease and desist from using those clauses and reimbursement of the payments made in that respect, involving a significant number of sellers or suppliers and consumers – Plain and intelligible nature of those clauses – Concept of the ‘average consumer who is reasonably well informed and reasonably observant and circumspect’)

1. Consumer protection – Unfair terms in consumer contracts – Directive 93/13 – Collective action seeking an order to cease and desist from using certain contractual terms, involving a significant number of sellers or suppliers from the same economic sector – Floor clauses inserted in a very large number of mortgage-loan agreements and used over a very long period of time – Power of the national court to examine compliance with the requirement of transparency in the context of such an action – Condition

   (Council Directive 93/13, Arts 4(1) and 7(3))

   (see paragraphs 26, 28-32, 35-38, 39-46, operative part 1)

2. Consumer protection – Unfair terms in consumer contracts – Directive 93/13 – Collective action seeking an order to cease and desist from using certain contractual terms, involving a significant number of sellers or suppliers from the same economic sector – Floor clauses inserted in a very large number of mortgage-loan agreements and used over a very long period of time – Examination by the national court of compliance with the requirement of transparency in the context of such an action – Criteria for assessment – Concept of the average consumer who is reasonably well informed and reasonably observant and circumspect – Scope – Taking account of the change in that consumer’s perception

   (Council Directive 93/13, Arts 4(2) and 7(3))

   (see paragraphs 49, 50, 52-57, operative part 2)

Résumé

Ruling on a request for a preliminary ruling from the Tribunal Supremo (Supreme Court, Spain), the Court of Justice clarifies the scope of the concept of ‘average consumer’ and identifies the criteria applicable to the examination of the transparency of a contractual term in the light of Directive 93/13, ( 1 ) in the context of a collective action seeking an order to cease and desist from using a ‘floor’ clause, ( 2 ) brought against a significant number of sellers or suppliers from the same economic sector who have used that clause for a very long period.

In November 2010, a Spanish association of users of banks, savings banks and insurance ( 3 ) brought, before the Juzgado de lo Mercantil No 11 de Madrid (Commercial Court No 11, Madrid, Spain) a collective action, ultimately against more than one hundred credit institutions, seeking an order to cease and desist from using the floor clause contained in the general conditions of mortgage loan agreements used by those credit institutions, as well as reimbursement of the sums paid on the basis of that clause by the consumers concerned. That court upheld that action in respect of almost all the credit institutions in question, finding that the floor clause was null and void and ordering that that clause cease to be used, while also requiring those institutions to reimburse the sums unduly received pursuant to that clause. ( 4 )

Almost all the appeals brought by those credit institutions were dismissed by the Audiencia Provincial de Madrid (Provincial Court, Madrid, Spain). The credit institutions that were unsuccessful on appeal lodged appeals on a point of law before the referring court, which has doubts concerning two legal issues. The first concerns whether a collective action is an appropriate procedural mechanism for examining the transparency of floor clauses, while the second relates to the difficulty of applying the concept of ‘average consumer’ in the main proceedings given that those clauses are aimed at various categories of consumers and were used for a very long period during which the degree of awareness of those clauses was developing.

Findings of the Court

The Court examines, in the first place, whether a national court may review the transparency of a contractual term in the context of a collective action brought against a large number of sellers or suppliers operating in the same economic sector, and concerning a very large number of contracts.

In that context, the Court notes, at the outset, that in parallel to the individual right of a consumer to bring an individual action before a court for examination of whether the terms of a contract to which he or she is a party are unfair, Directive 93/13 ( 5 ) allows Member States to introduce a check on such terms contained in standard contracts by means of collective actions for an injunction brought in the public interest by consumer-protection associations. While those actions have different purposes and legal effects, the taking into account of all the circumstances attending the conclusion of a contract when assessing of the court’s own motion the unfairness of a contractual term, which characterises individual actions, must not preclude the bringing of a collective action. Furthermore, as regards the relationship between individual actions and collective actions, while it is for each internal legal order to establish the rules governing that relationship, under the principle of procedural autonomy, those rules cannot undermine the exercise of the freedom of choice, afforded to consumers under Directive 93/13, to assert their rights either by means of an individual action or by means of a collective action.

Thus, the Court states, first, that the scope of the obligation to draft contractual terms in plain, intelligible language, incumbent on sellers or suppliers, does not depend on the type of action, whether individual or collective, by which a consumer or an organisation having a legitimate interest in protecting him or her seeks to assert the rights recognised by Directive 93/13. To that effect, it clarifies that its case-law concerning the scope of the requirement of transparency of contractual terms, arising from individual actions, is transposable to collective actions. For those reasons, judicial review of the transparency of contractual terms cannot be limited solely to terms which form the subject matter of individual actions. Indeed, no provision of Directive 93/13 permits the inference that that review is excluded as regards terms that form the subject matter of collective actions, provided, however, that where a collective action is brought against a number of sellers or suppliers, that action is directed against sellers or suppliers from the same economic sector, which use or recommend the use of the same general contractual terms or similar terms. ( 6 )

Second, the Court observes that, by its very nature, the examination of the transparency of a contractual term, which is carried out by the national court in the context of a collective action, cannot concern circumstances specific to individual situations, but would relate to standardised practices of sellers or suppliers. Thus, when assessing the transparency of a floor clause, it is for the national court to examine, in the light of the nature of the goods or services which are the subject matter of the contracts concerned, whether the average consumer, who is reasonably well informed and reasonably observant and circumspect, is in a position, at the time the contact is concluded, to understand the functioning of that term and to evaluate its potentially significant economic consequences. To that end, that court must take into account all the standard contractual and pre-contractual practices followed by each seller or supplier concerned and any other circumstances which the court might consider relevant in order to exercise its power of review with regard to each of the defendants.

Third, the Court points out that the complexity of a case, as a result of the very large number of defendants and the multiple different wording of the terms concerned, is not a relevant criterion for assessing the national court’s obligation to examine the transparency of contractual terms in the context of a collective action, provided that the conditions laid down in Article 7(3) of Directive 93/13 are satisfied. Consequently, Directive 93/13 ( 7 ) allows a national court to review the transparency of a contractual term in the context of a collective action brought against a large number of sellers or suppliers operating in the same economic sector and concerning a very large number of contracts, provided that those contracts contain the same term or similar terms.

In the second place, the Court clarifies the concept of ‘average consumer who is reasonably well informed and reasonably observant and circumspect’, in the context of the examination of the transparency of a contractual term forming part of contracts aimed at specific categories of consumers and which has been used for a very long period of time during which the degree of awareness of that term was developing.

Thus, the Court points out that, in a similar way to the generic concept of ‘consumer’, ( 8 ) which is objective in nature and is distinct from the knowledge and concrete information that the person concerned actually has, the use of an abstract reference criterion, such as that of ‘the average consumer’, for reviewing the transparency of a contractual term, makes it possible to avoid making that review dependent on the combination of a complex set of subjective factors which it is difficult, if not impossible, to establish. Indeed, since, in the context of an individual action, the specific knowledge that a consumer may be deemed to have is not capable of justifying a deviation from the level of knowledge of the average consumer, the individual characteristics of different categories of consumers cannot, a fortiori, be taken into consideration in the context of a collective action. According to the Court, it is precisely the heterogeneity of the public concerned, relating in the present case to various categories of consumers which are difficult to group together, which makes it necessary to have recourse to the legal fiction of the average consumer. This entails understanding the latter as being a single abstract entity whose overall perception is relevant for the purposes of its examination.

Consequently, in its analysis of the transparency of floor clauses at the time the mortgage loan agreements concerned were concluded, it will be for the referring court to rely on the perception of the average consumer, who is reasonably well informed and reasonably observant and circumspect, irrespective of the differences which may exist between each individual consumer to whom the agreements in question are aimed, in particular as regards the degree of awareness of the floor clause, income level, age, or occupation. The fact that those agreements are aimed at specific categories of consumers is not such as to lead to a different conclusion.

However, it cannot be excluded a priori that, as a result of the occurrence of an objective event or a matter of common knowledge, such as an amendment to the applicable legislation or a development in case-law widely disseminated and discussed, the referring court considers that the average consumer’s overall perception of the floor clause was, during the reference period, altered and enabled the latter to become aware of the potentially significant economic consequences entailed by that clause. In such a situation, Directive 93/13 does not preclude account being taken of changes, during that period, in the perception of the average consumer, with the level of information and attention of that consumer thus being able to depend on the time at which the mortgage loan agreements are concluded.

( 1 ) Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29).

( 2 ) That clause was used by credit institutions and provided for a minimum rate below which the variable interest rate could not fall (‘the floor clause’).

( 3 ) The Asociación de Usuarios de Bancos, Cajas de Ahorros y Seguros de España (Adicae).

( 4 ) The reimbursement concerned the sums unduly received as from 9 May 2013, the date of publication of judgment No 214/2013 of the Supreme Court by which that court decided that the declaration that a floor clause was null and void produced effects ex nunc.

( 5 ) And, more specifically, the mechanism laid down in Article 7(2) of Directive 93/13.

( 6 ) Conditions laid down in Article 7(3) of Directive 93/13.

( 7 ) And, in particular, Articles 4(1) and 7(3) thereof.

( 8 ) As laid down in Article 2(b) of Directive 93/13.