In two joined cases, Abanca Corporación Bancaria SA v García Salamanca Santos (Case C-70/17) and Bankia SA v Lau Mendoza and Rodríguez Ramírez (Case C-179/17) EU:2019:250, the European Court of Justice (ECJ) considered the power of national courts to substitute national law provisions to save a loan where deleting unfair terms would prejudice the consumer. Under Article 6(1) of the Unfair Contract Terms Directive (93/13/EEC) member states must ensure that unfair terms in consumer contracts are not binding on consumers, but that the contract will survive if it can do so without the unfair terms. The ECJ ruled that a court can substitute national law for an unfair term where deleting it would end the contract with negative consequences for the consumer.
Specifically, the ECJ confirmed that:
- As per its decision in Banco Español de Crédito, C618/10, EU:C:2012:349, a national court cannot simply revise an unfair term to make it fair. If this were the case suppliers would continue to use unfair terms, safe in the knowledge that the court would merely amend them to make them fair; Article 6(1) would not have its intended dissuasive effect.
- As per Kásler and Káslerné Rábai, C26/13, EU:C:2014:282, Article 6(1) does not preclude a national court from removing an unfair term and replacing it with a provision of national law if simply removing the unfair term would require the court to annul the contract in its entirety and this would penalise the consumer.
This is not new law, but highlights the ECJ's interpretation of Article 6(1).
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