After the preferential or ground clauses, the law firms already think of a new front
- It is expected that the new calculation of the Euribor will enter into force in mid-2017
- Experts warn that it may lead to new litigation
The law offices are grown. The judges are giving the reason to banking clients in financial cases and nurturing the business of the most belligerent law firms. With this road wide open, they already think about how to continue exploiting it. And they see a new opportunity on the horizon: the reform of the Euribor calculation.
The Euribor is at historic lows
In an environment in which the Euribor is at historic lows, the new calculation methodology of the index on which the European Monetary Markets Institute ( EMMI) is already working can lead to a battle between banking entities and customers. “It can even reach the courts,” says Juan Ignacio Navas, partner-director of the Navas & Cusí law firm.
The problems will be “obvious” and “the judicial importance very important,” the expert emphasizes since individual actions against banks are legally recognized. Customers with variable-rate mortgages that see how the index is increasing may think that the increases are due to this new calculation, an association that can serve as another wave of complaints.
This aspect seems key, especially since the entry into force of the new calculation, scheduled for mid-2017, may coincide with the start of the Euribor rise. And although this shift would also occur with the current calculation formula can trigger a new controversy to occur at the same time as the arrival of the new calculation.
In this sense, Ignacio Benejam and Juan Manuel de Castro, partners in the procedural area of RCD – Rousaud Costas Durán, consider that the “real” relevant will be if the new method of calculation increases or reduces the price of the loan with respect to the current calculation method.
For Navas, the regulations that have been established to follow “very diffuse” lines and the way to calculate it is “generic”. The bank is responsible for transmitting the data and from there proceeds to the calculation, so that financial institutions “come out with an advantage”.
In addition, Navas believes that the proposed methodology “will not improve much” the index. In his opinion, it is necessary to establish ” more strict criteria to make it more transparent “.
The index is calculated from the data shown by the bank’s panel entities of the Euribor
In the same line, from Arriaga Associates believe that “little, or very little, is known about the changes in the calculation parameters that will be used”. The experts of the firm to highlight the “transparency of the new calculation”, but they say that “it will harm the consumer”. Specifically, they explain that when using real data for its calculation, the index “must go up”, since “no bank pays interest for leaving money”.
For José Manuel Marín Granada, a lawyer at the Marín Law Firm, “the search for transparency is achieved”. Specifically, the expert underlines that in the current formula of calculating the Euribor there is the possibility of manipulating it, as occurred between 2005 and 2009 by some entities, but the implementation of this new methodology is carried out precisely “for avoiding it. ”
To do this, introduce a key novelty. Now, the Euribor is calculated from the data shown by the entities that are part of the Euribor bank panel. These data reflect the interest to which they are willing to lend money to other banks for a period of 12 months. That is, it is based on intentions, not real operations data. In the new methodology, the Euribor will be calculated from the data obtained in the real operations that do occur in the market. With this change, EMMI wants to give the calculation more transparency, solidity, and representativeness. And, above all, it wants to put an end to the suspicions surrounding the calculation of the index.
SOON TO ADVANCE CONCLUSIONS
At the moment, all the experts with whom ‘Bolsamania’ have had the opportunity to speak agree that it is too early to issue verdicts and it is difficult to advance conclusions. Arriaga Asociados believes that the overlap of this new methodology in the sense of its application in the already subscribed loans must be known.
Thus, experts from the law firm clarify that until the repercussions are known, “it is difficult to venture into a possible claim and the outcome of it.” However, they do affirm that ” if the rights of the consumers are violated, it would be perfectly possible to claim a judgment and therefore, it would be feasible”.
Experts agree that it is ready to issue verdicts
In the same vein, Benejam and Castro do not rule out consumer demands that consider the new method to be “a condition different from the one agreed upon and not accepted by them.” “The change of calculation of the Euribor may lead to new litigation if both the mortgaged and the companies that have made operations based on the Euribor feel handicapped by the new calculation”, warns Pau Monserrat, an expert in financial products of iAhorro and Future legal.
Although for the lawyers of RCD – Rousaud Costas Durán the “great difficulty” will be to demonstrate that the new calculation has supposed an increase of the type of interest with respect to which they would have if the method continued being the previous one.