Head of European Court of Justice questions legality of Spanish repossession laws

Juliane Kokott, the Advocate General at the Court of Justice of the European Union (ECJ) has ruled that the Spanish law that allows mortgage defaulters to be evicted from their homes goes against EU law. The law does not guarantee effective protection for consumers in the face of possible abusive clauses in mortgage agreements, she concluded.

Her ruling is not legally binding, but the Court tends to follow her recommendations in 80% of cases. Kokott was responding specifically to a question raised by the commercial court in Barcelona, which has to rule on a case brought by a private citizen against the CatalunyaCaixa savings bank, which forced their eviction in January 2011 for non-payment of the mortgage.

The citizen in question believes one of the clauses in the mortgage contract to be null and void, and consequently requests the annulment of the judicial ruling that left them homeless.

Kokott made it clear in her conclusions that there was no unifying EU law on forced eviction, but that each member state had the right to establish its own processes. She did, however, underline that these processes could not violate consumers' rights protected by EU law, which the abusive clause in question does.

"The Spanish regulatory process is incompatible with EU law, since it impinges upon the effectiveness of the protection which this aims to achieve".

"It does not constitute effective protection aginst abusive clauses in a contract, as a result of which the consumer becomes powerless to prevent his eviction and the consequent forced sale of the property and the loss of his home, and only after the event can bring an action for damages," said Kokott.

EU law demands the opposite: "The consumer has an effective legal means to demonstrate the abusive character of his loan agreement, thanks to which he can get the eviction delayed".