19.07.2021.
At today’s press conference, a group of lawyers, presenting themselves as members of the Protest Committee of Attorneys-at-Law, voiced numerous falsehoods, while remaining tacit about the facts that do not speak in their favour.
First of all, it is absolutely untrue that the EU Court of Justice has ruled in any case, not even in the cases cited by these lawyers (C-621/17 (case from Hungary), C 259/19 (case from Spain), C-84/19, C222/19, C-252/19 (cases from Poland)), that banks have to explain the structure of their charges and the methodology of their calculation, or that in each individual case they have to prove these charges, as required by national courts.
The Court of Justice acted in the above cases upon the request of national courts, before which consumers disputed bank charges, and provided opinion (interpretation) about the application of the Directive on Unfair Terms in Consumer Contracts (93/13), implemented in the national legislation of member states, but also in the legislation of the Republic of Serbia (through the Law on Consumer Protection and Law on the Protection of Financial Service Consumers). In all these judgments, the Court of Justice invariably refers to its hitherto practice and prior cases, aiming with each new judgment to specify further its previously issued interpretations. The position of this court in all those judgments may be summarized in the following way: banks have the right to charge fees and commissions, but in return for specific services or activities. In the Spanish case, the very EU Court of Justice indicates that the Spanish regulation transposing Directive 93/13 is rather specific and that in forming an opinion it had to take into account this specificity, which is why the judgment reads that the loan processing fee may be unfair unless demonstrated that the fee corresponds to the services actually provided. Not a single judgment of the EU Court of Justice, however, stipulates that demonstrating that the services paid by the consumer were actually provided means that banks should perform the calculation of their costs in each individual case or that they should prove in court how they made such calculation. Otherwise, it would be probatio diabolica.
Even after the Supreme Court of Cassation issued its Legal Opinion on the matter, Serbian courts vindicated their view that banks have to prove in detail the calculation of costs for each individual consumer by referring to one sentence from the explanation of the Legal Opinion: banks are required to indicate in their offer the data on costs in a way that does not mislead the clients for a moment as to what these costs are about. This sentence is the paraphrased provision of Section 5, paragraph 2 of the Decision on the Uniform Method of Calculating and Disclosing Effective Interest Rate on Deposits and Loans, adopted by the NBS in 2006.
Hence, it is not true that only the provisions of the Law of Contract and Torts governing credit contracts, constitute the grounds for the annulment of contractual provisions on bank fees. Namely, even though before the reaction of the Supreme Court of Cassation lower-instance courts had wrongly referred to the definition of credit contract set out in Article 1065, the Legal Opinion of the Supreme Court of Cassation clearly stated that the provisions on fees and charges are in accordance with Articles 1065 and 1066 of the Law of Contract and Torts. This means that these provisions do not constitute a reason for annulling the contractual provisions on bank fees, as said today by the mentioned lawyers. Please note that credit contracts have been regulated by a separate law for ten years already, i.e. since the adoption of the Law on the Protection of Financial Service Consumers. The provisions of this Law and the supporting by-laws, drafted in accordance with the relevant EU directives, regulate in detail the manner in which banks should disclose the fees and costs they charge. This notwithstanding, the explanations of court decisions relating to credit contracts and made after the adoption of the mentioned regulations take no heed or note of these regulations, but instead refer to the sentence cited above, which represents an interpretation of the Decision that ceased to be valid back in 2009. In other words, it is evident that in these disputes the differences in the regulations in force at the time of concluding a specific credit contract are not taken into account, and that there is a linear application of the questionable interpretation of the principle of reciprocity and of the misinterpretation of the NBS Decision that was repealed twelve years ago.
Since this provision of the regulation adopted by the NBS (in accordance with EU regulations) constitutes the grounds for courts to require from banks to demonstrate the structure and methodology of costs calculation – the NBS is of the view that it is absolutely legitimate and legal, particularly having in mind its position enshrined in the Constitution, to give its opinion about the manner of interpretation and application of this decision, even more so when the wrongful interpretation, which is not in line with the aim of that provision and decision in the first place, brings into question the stability of the financial system.
The practice of the EU Court of Justice is important because, as said above, EU regulations governing credit contracts and unfair contract terms are implemented into domestic legislation, and though there is no formal obligation, local courts should take into account how the Court of Justice interprets the regulations that they too should apply. Let us recall that in the case of the unilateral increase in interest rates (undefinability of contractual obligation) and in the case of CHF-indexed loans, the Supreme Court of Cassation made decisions, i.e. issued opinions and interpretations which were in line with the practice of the EU Court of Justice. In the case of fees, the Supreme Court of Cassation published a Legal Opinion, which is again in line with the practice of the EU Court of Justice, though one sentence in the explanation of that opinion (regarding the application of the NBS Decision from 2006) is, in our view, wrongly applied by lower-instance courts, and the Supreme Court of Cassation failed to recognise this, confirming such practice in some cases (not all).
Finally, the public should be aware that the EU Court of Justice does not judge on cost refunds for consumers as this is the competence of national courts. According to data available to us, it was only the German Federal Court of Justice that in 2014 issued the decision prohibiting the contracting of fees and charges through banks’ general terms of business. However, in Germany the refund of fees and charges can be requested from a bank only within three years from the moment the fees were paid, which is contrary to the Serbian practice where there are no time limits. Furthermore, the German Civil Code has a long history and specificities and such position cannot be fully applied to the interpretation of domestic regulations on loan contracts. Nonetheless, it was not only the German court that issued a decision on bank fees. The supreme courts of Austria and the Czech Republic also did, but taking a position entirely opposite to that of the German court.
Let us conclude. Relevant for Serbian court practice are the decisions of the EU Court of Justice as it interprets the regulations transposed to domestic legislation currently in force. On the other hand, the decisions of national courts of some countries cannot be relevant in the same way as the decisions of the EU Court of Justice as the Directive is not applied in the same way in each member state (the requirements from the Directive are more strictly applied in some countries), which is also the case with Serbia.
Speaking of the adoption of a new directive on consumer loans, there is no officially available information that the directive would be adopted for the sake of bank fees. Such statement is simply ungrounded. The current Directive on credit agreements for consumers was issued in 2008 and, following its usual practice, the European Commission, after some time, proposes amendments to a regulation in order to enhance the relevant field. For instance, the European Commission has not proposed amendments to the Mortgage Credit Directive although bank fees charged for housing loans are much higher in absolute terms. Anyway, the rationale for adopting a directive is always explained in detail in the recital.
In terms of court costs, we must highlight that we have spoken about average amounts and the majority. There certainly are claims with higher amounts implied, but such cases are not dominant. This is supported by data of individual banks – total amounts (without the costs of their representation) which banks paid in respect of judgments are even three times higher than the amounts received by consumers (including default interest). It is clear that lawyers receive much more money on average than their clients. Banks and courts possess those data and it is quite easy to determine the truth.
We invite lawyers who today tried to refute the Governor’s statement by giving purported evidence, but in fact presenting their intentionally erroneous interpretations and falsehoods, to publicly state how many clients they represent in disputes against banks, how they made contact with those clients and whether they met their clients in person. They should also say how it is possible to represent thousands of clients at the same time, while respecting the lawyers’ code of ethics and applying due professional care.
In regard to a purported criminal offence, we wish to inform the public that the NBS is addressed by citizens claiming they are contacted by unknown persons and offered to institute legal actions against banks. This can certainly be the motive for examining whether there are the elements of a criminal offence of unauthorised collection of personal data and the abuse of trust.
Finally, we wish to underscore that the NBS is the central bank of the Republic of Serbia. Under the Constitution, it is autonomous and accountable for its work only to the National Assembly. Courts are independent and everyone must comply with their decisions, i.e. implement them in individual cases, though court practice is not the source of law in the Republic of Serbia. The Constitution guarantees the freedom of opinion and expression of each citizen, including the NBS Governor. More specifically, the NBS Governor has the right to give her opinions about the manner of application of regulations under the NBS remit, particularly in the situation when thousands of cases are decided upon by courts based on regulations adopted by the NBS, or when in issuing decisions no account is taken of applicable laws which regulate this field and were proposed by the NBS. The Governor’s duty is to warn the public and the government of the instances when the irresponsibility of some entities can prejudice the achieved financial stability, which is one of the NBS’s main objectives and a precondition for economic welfare of the entire society.
Governor's Office
