Contact us

Tel: +30 210 3613379
Tel: +41 32 5101465


Important ruling by the European Court of Justice on borrowers’ protection

On the 9th of November 2016, the Court of Justice of the European Union in Luxembourg rendered an important ruling concerning the terms and conditions under which a Bank may grant a loan to individual persons within the European Union.

This ruling requires that banks and other credit institutions be obliged to provide their customers with detailed information on the individual terms and conditions of a loan agreement in a language that is understandable by the borrower before granting him a credit (Decision C-42/15). If these requirements are not met then the contract becomes partially null and void: The borrower must only pay back to the lender the original amount, without interests or any bank expenses.   

The European Court of Justice justified its decision on the contents of the European Directive 2008/48, Article 10, Paragraph 2.

The judgment was rendered on a prejudicial question submitted by a Slovak court on a case in which the borrower was unable to pay the credit repayment rates. According to this ruling, the conditions connected with the granting of the loan were insufficiently clarified. According to the European directive 2008/48, the following must be precisely described and defined in the contract:

  • Duration of the contract
  • Total amount of interest
  • Repayment date
  • Consequences in case of default
  • Detailed Interest
  • Total costs in case of non-payment
  • Conditions and costs for early termination
  • Description of legal means of contesting the contract
  • Possibility of extrajudicial procedures

This judgment is of  prime importance as it opens the possibility of direct application of the described terms and conditions that should accompany all lending contracts within the European member States.

Our Law firm -particularly active in the field of financial litigation- is closely examining the consequences of this ruling and intends to use it as jurisprudence on several ongoing Court cases on disputes with banks and other financial institutions  so as to assure a maximum and updated protection for its clients.