The Supreme Court may put an end to disputes over bank commissions

The Economic Court of Cassation referred the case to the Joint Chamber

The Supreme Court, consisting of a panel of judges of the Economic Court of Cassation, referred a high-profile case to the Joint Chamber regarding the appeal of bank fees for the use of credit funds. This concerns the practice of banks to charge additional payments in parallel with interest on the loan.

The judges must determine the legal nature of such fees and determine whether they create a situation of actual “double payment” for the same service — the use of credit funds.

The court drew attention to disproportionate payments

The Supreme Court paid special attention to cases where the amount of the bank fee exceeds the amount of the loan itself by several times. In the opinion of the panel of judges, this may indicate a violation of the principles of good faith and proportionality in contractual legal relations.

In fact, the court questions the practice by which banks include numerous additional payments in contracts without explaining their economic essence and necessity for the borrower.

The previous approach was based on “freedom of contract”

Previously, judicial practice mainly proceeded from the fact that any commissions are legal if the borrower voluntarily signed the contract. This approach was based on the principle of freedom of contract.

However, the panel of judges of the Cassation Economic Court considers this logic insufficient. The Supreme Court emphasizes that the consent of the party alone cannot legalize conditions that create an obvious imbalance of rights and obligations or open up opportunities for abuse.

The Supreme Court expects greater transparency from banks

The case also raises the issue of transparency of loan contracts. The judges draw attention to the fact that the borrower must clearly understand for which services he is paying money and how the interest rate differs from an additional fee or commission.

It is expected that the new approach of the Supreme Court may limit the ability of banks to charge for actions that are actually carried out in their own interests.

The decision may affect all banking practice

The future legal position of the Joint Chamber of the Economic Court of Cassation may become key for all judicial practice in credit disputes. In the event of a change in approach, banks may face the need to revise the terms of credit agreements and approaches to charging commissions and fees.

For borrowers, this decision will potentially become an important tool for protection against opaque and disproportionate financial obligations.