The European Court of Justice decision from December 2016 marked a turning point in how standard mortgage clauses were treated in many member states. It clarified how basic provisions could be challenged both before and after a contract was signed, reshaping mortgage litigation thresholds. Even years later, lawsuits continue to flood courts, and the resulting delays mean many borrowers must endure lengthy waits to recover any excess charges. A case from the city of Olívica in September 2016 illustrates this pattern: a dispute started well before the European ruling was public, and only recently reached a final resolution. In practice, lenders may be required to return portions of fees charged beyond the legitimate amount, with some borrowers reclaiming a little over 5,000 euros related to disputed grounds.
To grasp the sequence, it helps to look back to 2015 when a man challenged the base clause that formed part of a mortgage loan contract with what was then Banco de Galicia. In June 2016, the Vigo Commercial Court ruled the clause null and void. Soon after, in September, the same party pursued a second action, seeking compensation for amounts overpaid since May 2013, a cap that had been set by judicial authorities at the time. The legal premise was that the clause did not withstand scrutiny, and the overpayments were subject to reimbursement.
The initial ruling in this matter came from the Vigo Second Instance Court, which partially upheld the claim. In January 2017, the court ordered the bank to refund 5,063 euros to the claimant plus statutory interest. The decision was appealed to the Sixth Division of the Pontevedra State Court, which subsequently reversed the first sentence and cleared the bank of liability, effectively confirming that the case did not justify the later judgment. This turn of events prompted the plaintiff to pursue an extraordinary appeal for breach of procedure, and to escalate the matter to the Supreme Court seeking a final resolution.
In the ensuing years, the Civil Chamber of the Supreme Court faced a prolonged period of uncertainty. From 2018 onward, even as appeals were filed, there was no definitive penalty or final ruling until the court released its conclusions on April 21. The justices determined that the initial decision, which had given reasoning in favor of the mortgagee, should stand only if the surrounding legal framework clearly supported such a result. The pivotal moment arrived with the CJEU’s landmark decision in December 2016. It recalled that the scope of the dispute over extricable terms had not been finally settled even after the 2015 ruling that upended the clause’s validity. The consequence was that the refund process, which began in a subsequent action, finally concluded. In essence, the legal uncertainty identified at that time did not render the refund strategy invalid, but it did shape how and when refunds could be pursued and awarded.
Legal uncertainty
The narrative of this case underscores how European jurisprudence can influence national courts long after the initial judgments. While some courts embraced the opportunity to remedy excessive charges by refunding borrowers, others insisted on a cautious approach, requiring careful analysis of each contract and the specific terms in question. The 2016 CJEU ruling provided a critical reference point, reminding courts that the analysis of base clauses must consider the broader context of consumer protection and financial fairness. As a result, many cases were revisited or reopened, with borrowers waiting to see whether their own mortgage terms would be deemed unfair and actionable. This ongoing dialogue between national courts and European jurisprudence continues to shape mortgage litigation, ensuring that consumers have a viable path to reclaim sums that may have been charged beyond lawful limits.