What does this mean? How does the judgment affect the way an annulled Swiss franc loan agreement is settled? We answer.

What does the CJEU judgment mean in the case of unauthorized use of capital?

As mentioned in the introduction, in its judgment announced on 15 June 2023, the Court of Justice of the European Union ruled that banks have no right to demand remuneration for the unauthorized use of capital lent to a customer when a Swiss franc loan agreement is declared invalid. This confirmed the previously issued Opinion of the CJEU Advocate General, whose position on the matter was identical. Moreover, the CJEU judgment also establishes that:

  • Swiss franc borrowers may demand additional payments from banks in the form of remuneration exceeding the costs resulting from the settlement of the annulled loan agreement;
  • interest due to consumers (Swiss franc borrowers) should be calculated from the date of delay in fulfilling the obligation. Therefore, it may not be awarded from the date of the so-called informing of the consumer about the consequences of declaring the Swiss franc loan agreement invalid.

What does this case law mean in practice? Above all, it means that Swiss franc borrowers should not be afraid to pursue their claims in court, because in most cases the annulment of a Swiss franc loan agreement will result in a favorable settlement for them. As a result, a significant increase in the number of lawsuits filed against banks can be expected, because as a result of the CJEU judgment they have lost the argument that discouraged consumers from taking this type of action.

Settlement of an annulled agreement in accordance with the CJEU judgment

The CJEU judgment directly affects the way an annulled Swiss franc loan agreement is settled. This involves the return of mutual benefits, as explained by legal counsel Michał Śląski using the following example:

Let us assume that the borrower received PLN 200,000 from the bank. To date, the borrower has repaid PLN 250,000 to the bank in principal and interest installments and other fees (commission and insurance). If the agreement is invalid, the bank will have to return the overpaid capital, namely PLN 50,000.

Based on the example above, it can be concluded that pursuing one's rights in court in order to annul a Swiss franc loan agreement may not only allow the borrower to be released from this obligation, but also to recover the overpaid capital. In many cases, it may be truly substantial, which is why banks are already expecting a wave of new lawsuits.

A lawsuit against a bank to annul a Swiss franc loan—why is it worth seeking professional legal assistance?

The favorable settlement of a Swiss franc loan presented above is possible only if the agreement underlying the obligation is annulled. Therefore, it is necessary to pursue one's rights in court, which may result in a favorable judgment. When deciding to take such a step, it is worth seeking professional legal assistance, because an experienced lawyer can identify provisions that will provide grounds for annulling the agreement and assess the chances of success in such a case. Moreover, legal services also include recovering overpaid money, which is offered, among others, by Kancelaria Radcy Prawnego Michał Śląski.

In conclusion, the CJEU judgment, as a result of which banks lose the right to demand additional remuneration for the unauthorized use of capital, is a major success for consumer protection. It also provides an argument for people who have so far feared an unfavorable settlement of their loan agreement and the negative consequences associated with it to take action against the bank. Naturally, it should be remembered that the basis for a favorable settlement, and consequently for the return of overpaid capital, is the annulment of the relevant agreement by a court.