CJEU: Beginning of the limitation period depends on knowledge of the law

In its judgment of 25 January 2024, the Court of Justice of the European Union (CJEU) ruled, following a reference for a preliminary ruling from a Spanish court, that consumer claims for restitution based on invalid general terms and conditions may not be time-barred solely on the basis of knowledge of the facts giving rise to the claim, but that knowledge of the legal assessment of the facts is necessary. This judgement also has implications for German domestic law.

I. Background

The starting point for the judgement in Joined Cases C-810/21 to C-813/21 (Caixabank SA and others) were several references for a preliminary ruling from the Provincial Court of Barcelona on the interpretation of Art. 6 (1) and Art. 7 (1) of the Directive 93/13/EEC.

Based on mortgage loan agreements concluded in 2004 and 2006, the claimants paid notary, registration and administration fees to the lending bank approximately three to four months after the conclusion of the contracts. In a judgement of 23 December 2015, the Spanish Supreme Court declared the clause on which the payments were based to be null and void. In 2017 and 2018, i.e. 11, 13 and almost 14 years after payment of the costs, the borrowers filed claims for repayment of the fees (see summary of questions referred).

According to the applicable Spanish respectively Catalan law, a limitation period of 10 years applies. The limitation period begins to run – similar to Section 199 (1) of the German Civil Code – "once the claim has arisen and becomes enforceable, and once the holder of the claim is, or could reasonably be, aware of the circumstances giving rise to the claim and the person against whom it may be brought."

II. Questions referred for a preliminary ruling

The referring court had doubts as to whether the principle of effectiveness in the light of the Directive 93/13/EEC allows knowledge of the facts to be sufficient for the commencement of the limitation period. For this reason, it referred the following questions to the CJEU, inter alia, as to whether

• the knowledge of the consumer necessary for the commencement of the limitation period must also include the legal assessment of these facts,
• and (ii) in the affirmative, whether the start of the period must be postponed until established case law on the invalidity of the clause has been formed.

III. CJEU-decision

Knowledge of the legal assessment of the facts giving rise to the claim required

With regard to the commencement of a limitation period, the CJEU has ruled that a limitation period is only compatible with the principle of effectiveness if consumers are not only aware of the facts giving rise to the claim, but also of their legal assessment. Otherwise, it may not be assumed that consumers had the opportunity to become aware of their rights (para. 48–55).

Established case law alone is not sufficient to prove knowledge

With regard to the question of what information must be available to the average consumer in order to be able to assume knowledge of the legal assessment, the CJEU focused primarily on the information asymmetry between the consumer and the trader who has used the contractual clause in question. Since the consumer cannot be expected to follow the case law, such case law may not be decisive for the start of the limitation period (para. 56–61). In this context, the reference to the CAJASUR Banco case (C-35/22), where the CJEU expects the trader who has used the contractual clause to inform its customers of the invalidity of the contractual provision in question (para. 58), might be considered as an indication of what the CJEU expects to establish sufficient knowledge of the consumer.

IV. Evaluation and practical implications

In practice, the question arises as to whether the German statute of limitations in the scope of application of the Directive 93/13/EEC should be interpreted beyond the wording of Section 199 the German Civil Code and whether the consumer's knowledge of the legal assessment of the facts giving rise to the claim should be required.

The better view is that such an interpretation would contradicted the case law of the German Federal Court of Justice (FCJ). The FCJ increasingly only considers an interpretation in line with a European Directives to be possible within very narrow limits and has accordingly rejected such an interpretation more frequently in recent years (e.g. FCJ, 03.11.2022, VII ZR 724/21; FCJ, 04.07.2023, XI ZR 77/22). The prerequisite for such an interpretation is that the domestic provision actually allows for different interpretations within the framework of what corresponds to the legislative purpose and objective. A provision that is unambiguous in terms of its wording and meaning must therefore not be given a contrary meaning and the normative content of the provision must not be fundamentally redefined (FCJ, 03.11.2022, VII ZR 724/21, para. 42; FCJ, 04.07.2023, XI ZR 77/22, para. 25). However, this would be the case here. This is because the legislator deliberately links Section 199 (1) the German Civil Code solely to knowledge of the facts (see BT-Drs. 14/6040, p. 102). It also emphasizes the need to create legal certainty and legal stability (cf. BT-Drs. 14/6040, p. 100). Requiring legal knowledge, as envisaged by the CJEU, would not be compatible with this legislative concept and would in fact reverse the meaning Section 199 the German Civil Code

Against this background, the question arises as to whether the legislator should initiate an amendment to the Directive 93/13/EEC, in order to prevent the German regulatory concept from being abolished by the CJEU case law. In view of the political challenges of such an endeavor, it is probably more realistic that the German provisions on limitation will be revised in the medium term, with the interest of the clause user in legal stability and legal certainty clearly taking a back seat. This applies all the more if the CJEU's indications are understood to mean that the beginning of the limitation period depends on the user of the clause informing its customers.