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El blog de Maria

Your daily Spanish Law reporter. Have it with a cafe con leche.

Legal tip 1475- A Forum Conversation on banks and lawyers
Tuesday, December 1, 2020 @ 11:43 AM

Conversation with Ads at the Forum, our comments/ answers in bold below:

Dear Maria,

The only aspect that Banks appear to respond to is when they are made sufficiently financially accountable for their behaviour and disrespect of law in place to protect. That´s good. Sign of acceptable democracy system working. At present it would appear that the final financial penalty is insufficient to act as EFFECTIVE deterrent against their continuing exploitative behaviour.

In the case of Ley 57/68 claims, costs are not always fully recoverable and interest is backdated but is not continued to the point of final rulings, which acts as little disincentive to continue with their ploys and "play the system of delays" and significantly overload the courts and justice system in that process. I agree with you. Interests and costs are the pain for them. If those start being lowered down, they lose that punitve and reformative effect. Also, I was thinking some days ago: lawyers who intervned in conveyancing processes: stronger sanctions are needed. A big deal of the problem falls into the lack of independence of them. It is true that punishing the banks have been a healthy medicine for the off plan system in the future but.... that work in regards to lawyers is still to be done. We, lawyers in Spain--- I dare  to say--- are too comfortable in the lack of control and sanctions by our regulatory bodies. An individual certificate of Guarantee would have refurned moeny back to clients since day one.

The problem that many appear to have been exposed to is the way that banks, in full knowledge of SC rulings that took  years to achieve, continued to proliferate appeals which undermined courts ability to “cope” under the interim growing pressure, continuing to suggest elements of doubt until such time as SC doctrine was fully established ( requiring 2 SC rulings on the exact same point of law). Yes, there is still debatable angles and points that Banks fight: Specially now, these two: Consumer Law doctrine and application to Law 57/68 cases and extent of depositor Bank´s liabilities- when is the moment a bank receiving off plan amounts start being liable. I am personally not too happy with any of the two approaches which at the moment are being taken by the Supreme Court on these. 

So final clarification of law (SC doctrine) with regard to return of principle monies took years to achieve following major proliferation of appeals, but then to witness a repeat of this purposeful "tactic " with regard to gaining clarification of correctly backdated interest became highly questionable. And all without recognition of specialised courts to fast track and assist, as called for by Keith Rule all too many years ago! Keith keeps being there in the fight.  Now against " hidden developers"  ( OVP, Palmera Properties) and for illegal properties to be dealt by Law 57/68 doctrine.

Likewise to witness Bank submission of cassation appeal and then at the last minute withdraw their submission ( the detail of which was highly questionable from the outset) , again in full knowledge of how this significant delay subsequently compromised the innocent claimant, let alone the impact on those who follow, without “adequate” financial additional penalty to deter such exploitative behaviour I.e. in full recognition of bad intent, just beggars belief. Totally true.

The “ relative “ monies involved to make Banks accountable are but small fry (comparatively small) to the Banks, but are significant to individual innocent claimants when they are left waiting in many cases a decade and a half for justice and rightful retrieval of all their monies, including interest and costs, when deposited monies ironically were supposedly protected from the outset under INALIENABLE rights according to law.

The Bank of Spain does not appear to have acted in any responsible way to act as regulator to ensure that their Banks remained compliant with law in place to protect, nor ensure that they adhere to their so called “ mission statements”, that to the common man gives the false impression upon reading the statements that they are to be trusted and are adhering to compliant rules. Law 57/68 has been reviewed but that´s it. Banks and Lawyers regulatory bodies should be encouraged to lose shyness.

It’s hypocrisy of the highest order, and has done untold damage to trust  within the Spanish real estate industry. 

But the saddest aspect of all is that Banks have been allowed to undermine trust in the justice system itself. In my opinion, there is a new current in Law and a new generation of Lawyers much involved in controlling and punishing banks.

The whole scenario needs review from a much higher perspective in terms of adequate financial penalties where innocents are no longer scapegoated in this scenario, and good law firms AND clients alike can reclaim trust both in one another and the whole sorry system. Totally agree, Ads.

The Banks should never be allowed to divide and rule in this manner where again they exploited vulnerabilities with hidden agendas by working with law firms who it transpired were also duped ( or in some cases transpired to be knowingly complicit) in their failures to provide legal BGs  ( non independence) as Banks purposefully turned blind eyes to such essential adherence to BG law with full adherence to safeguarding of deposited monies. Totally agree, Ads. Wrong, illegal, corrupt system.

Their manipulative behaviour has done untold damage to trust which will sadly take years to overcome unless more is done to swiftly call for the Bank of Spain to act as effective regulator and the Government provide adequate resources in the interim, in the form of specialised courts for competent trusted and effective fast tracking of outstanding claims with timely  judicial enforcement. My wonder is if, aparto to those of us who are still currently involved in solutions to the problems, there is a real interest there.

In the interim, thank you for your patience to listen, to continue to educate, and willingness to seek out ways to improve the status quo. I hope and trust that those who have problems re communicating will also gain some understanding of the complex and highly procedural elements to achieve justice under the status quo, which accounts for all too many of the significant background delays associated with rightful  recovery of all of their entitled monies. Thanks.

Stay safe and strong and good luck with all your continuing endeavours. Likewise. It seems we are reaching the end of the tunnel with COVID.

Best regards

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