In response to recent postings suggesting legal costs associated with Bank claims be recoverable from interest payments, prospective clients need to be aware that some courts in Spain have not awarded return of costs as part of their judicial rulings and the 6% interest rate as stipulated in Ley 57/68 has been over-ridden by later law, which looks to lower interest rates per year (law firms should be able to provide an annual table of interest rates).
Therefore there may be instances where large legal costs may exceed interest payments and costs become unrecoverable.
Likewise many Banks have appealed successful first instance rulings, which add to the legal costs.
Also major court and judicial delays (currently without any time constraints in place) have impacted the time-frames for return of monies in successful cases, which may result in interest being awarded at a much later date, so costs may be taken by law firms before return of any interest (or costs) is achieved.
It's important to have all the details explained and for legal firms to fully advise of costs (and interest) associated with both win and lose scenarios associated with Bank claims. Likewise re realistic time-frames for recovery of monies depending on the region. Full transparency is required.
Also on a wider note, be aware that there are inconsistent judicial rulings across various regions of Spain and there are still some compromising issues relating to contra legem rulings/protectionist rulings in favour of Banks which have not been fully resolved at High Court level (sadly incurring more costs and delay to return of monies.)
Unfortunately one successful ruling does not appear to fit all scenarios, therefore it is important that each case be studied in detail together with realistic appreciation of the outcome of final rulings in favour of clients, depending on which Bank is being claimed against and the region where cases are being heard.
Clients therefore still remain at risk until such time as two identical rulings from the Supreme Court/High Court fully clarify each outstanding issue, thereby achieving greater judicial consistency of rulings across regions. Sadly, although an increasing number of judges are thankfully now ruling in favour of clients, there still remains judicial inconsistency, and therefore the risks currently remain.
Keith Rule many years ago advocated in his BG petition the need for specialised courts to fairly and efficiently deal with Bank Guarantee abuse and the need for timely judicial rulings, given the large numbers of innocent offplan purchasers affected by this BG abuse… what a travesty that this was never realised and employed, and how different could the outcome have been for all those subjected to all too many years struggling to achieve justice in Spain in the interim, with all the serious disruption to social life that subsequently ensues.
Greater clarification by the High Courts and consistency of interpretation of Ley 57/68 is required across the various regions of Spain before these major risks to clients will ever be minimised. Until then, the legal lottery sadly remains.
The requirement for consistent judicial impartiality and freedom from political/economic interference should never be overlooked in this scenario, and whenever this is brought into question by contra legem rulings at whatever level, that fail to adhere to existing law Ley 57/68 in its entirety, then details should be forwarded to MEPs and the European Commission in order to ensure that effective monitoring of instances are correctly recorded so that the rule of law in Spain can be safeguarded.
Full adherence to Ley 57/68 in its entirety lies at the heart of this problem and clients drawn into this costly perpetual cycle of “corrective judicial interpretations” of this law and subjected to ever increasing legal actions should never be left to suffer the consequences of being denied return of their costs (and interests) during these lengthy and stressful periods, if moral authority is ever to be demonstrated in Spain.
Awarding of costs (and interests backdated to the date each deposited amount was paid to the developers account) acts as an effective and essential disincentive to Banks/Insurers who continue to “play” the system of delays, submit lengthy appeals in full knowledge of their legal obligations and new case law in support of consumers, and/or cynical attempts to influence the outcome by tactically disincentivising clients from proceeding with claims.
Sadly under the current system unless such disincentives are CONSISTENTLY employed by the judiciary, then innocent clients will continue to be subjected to a perpetual cycle of legal actions in order to gain correct interpretation of this good law. A law put in place to adequately protect offplan deposits, and as Keith Rule astutely highlighted in his BG petition, to deter repeated abuses and irreparable damage to trust and good faith, to ensure that inalienable rights of the purchaser are consistently upheld.
Hot off the press:
See http://www.eyeonspain.com/blogs/costaluz/15001/legal-tip-1305-new-won-case-against-zurich-insurance-plc-for-a-group-of-off-plan-buyers-from-the-developer-inmobiliaria-nadalsol-sl-at-medina-golf-residencial.aspx
If only such knowledgeable judicial rulings were consistently applied across Spain, to act as adequate disincentives to those intent on denying their legal responsibilities to adhere to Ley 57/68 in its entirety…..