Is a collective action suitable to prosecute unfair terms and practices for consumers? The CJEU is clear

10 July 2024 

The Court of Justice of the European Union (CJEU) has ruled, at the request of the Tribunal Supremo  (Spanish High Court), on case C-450/22, a class action brought by a consumer association against 101 financial institutions (practically the entire Spanish banking system). The lawsuit brought against 101 financial institutions (practically the entire Spanish banking system) by an association of consumers, which is concerned with the abusive nature of the floor clauses included in loan contracts signed with consumers, which obviously affects a huge number of contracts. 

The reluctance that may a priori be generated by the fact that this task of judging a large number of contracts, with non-identical wording of the disputed clauses and signed at different points in time, is carried out in a collective action and not through the exercise of individual actions, is categorically dispelled by the European Court. 
The CJEU states that it is perfectly in line with the European directives for a court to carry out a review of the transparency of a contractual term in the context of a collective action directed against numerous professionals belonging to the same economic sector and involving a very large number of contracts, provided that these contracts contain the same or similar terms. 

The CJEU is clear on the suitability of class actions as a vehicle for the prosecution of unfair terms and practices for consumers, regardless of the ‘complexity’ offered by the large number of defendants that the class action brings together, or the greater or lesser standardisation of the contractual terms analysed, provided that a sufficient degree of similarity is met. 

In its recent judgment, the CJEU responds to the Supreme Court by clarifying the doubts submitted by the latter and offering a strong argument in favour of collective actions: ‘Judicial review of the transparency of contractual terms cannot be limited only to those which are the subject of individual actions’.