Swaps: Recent Supreme Court doctrine
During November and December there has been a real "wave" of Supreme Court decisions on the "swaps".
Between 10 November and 10 December 2015 the Civil Chamber of the Supreme Court has issued 18 judgments on Swaps. In this post we do a compilation (not exhaustive) of the most important criteria from the appeals (leaving aside extraordinary appeals for procedural infringement):
1.- NORMATIVA APLICABLE A LOS SWAPS:
• The applicable legislation is the Securities Market Act as applicable to each version and not the banking regulations (STS 10 December 2015) or RD 629/1993 depending on the time of recruitment (STS 9 December 2015).
2.- REQUIRED INFORMATION ON SWAP:
• No basta con una información genérica, and even less with one that emphasizes the advantages of the product but leave in the background the risks for the customer. It must provide the information required by the LMV and bis artículos79 64 RD 217/2008 (STS 10 December 2015).
• It is not necessary that the bank report forecasting interest rates (STS 25 November 2015).
• Inform the client that the benefits of a party to the contract, losses correspond to each other and that there is a conflict of interest (STS 10 December 2015 and 4 December 2015).
• The bank must inform the client of what the initial market value of the swap, the, at least, how much the customer should pay compensation for the early cancellation if it occurs at the time of recruitment (STS 10 December 2015 and 4 December 2015).
• The obligation to inform the bank is active and not merely availability (STS 12 January 2015, 9 December 2015).
• The burden of proof to be properly informed about the product is on the bench (STS 4 December 2015).
3.- FITNESS TEST:
• If advice, you must perform the suitability test. And if the bank offered the swap, no advice (STS 10 December 2015).
• The lack of suitability test when advice, you only have legal title to compensation for damages (STS 10 and 13 July 2015).
4.- Exemption clauses:
• The "science statements" or mentions predisposed by the bank statements consist not of will but of knowledge or fixing certain as certain facts are ineffective and are empty of real content to be contradicted by the facts (STS 10 December 2015, 4 December 2015).
5.- Costing CANCELLATION OF SWAP:
• The bank must provide the customer a clear and correct information on how to calculate the cost of early termination of products. And this information is essential character (STS 10 December 2015).
6.- SWAP OPERATION:
• The bank must be informed in clear terms about the possible imbalances between charges than for the client assumes that the benchmark interest rate down and that the bank assumed that such rise, to the existence of barriers that limit the bank's risk if interest rate rise, since they are a key factor for the customer to understand and calibrate business risks (STS 10 December 2015 and 4 December 2015).
• The contract information should be provided in good time and not enough to his face on the contract at the time of signature (STS 10 December 2015).
8.- Poor reporting BOASTS THE ERROR:
• The provision of inadequate and insufficient information I do presuppose the existence of error in the customer "no financial expert" (STS 10 December 2015).
9.- CUSTOMER PROFILE:
• Being a director of a company and having previously concluded contracts other bank own professional activity (Loans, credits or discounts) does not make him "financial expert" (STS 10 December 2015). Nor does being a degree in economics (STS 6 December 2015).
10.- ERROR ESSENTIALITY:
• The error is essential as it affects the main assumptions that were hiring cusa swap. And the existence of the duty to inform the Bank determines the error excusability (STS 10 November 2015).
• The error is excusable because it trusted the bank was obliged to provide adequate information on who was offering investment products and advised (STS 10 December 2015).
12.- OWN ACTS:
• The previous swap, does not confirm the subsequent swap. And so there own actions, They must satisfy the conditions of knowledge and removal of the cause of nullity as required by Article 1311 Civil Code. (STS 10 November 2015).
• As a general rule, or the perception of positive settlements, or payments of negative balances, or early termination of the contract, or the delay in claiming, or even chaining several contracts, convalidantes can be considered acts of genetically business vitiated by error in the consent, since they do not constitute acts of tacit unequivocal will of validation or confirmation of the contract (STS 9 December 2015, STS 25 November 2015).
13.- Witness statements BANK EMPLOYEE:
• It is not correct that the evidence taken into consideration primarily to consider proven that the bank has fulfilled its obligation of information is the witness of their own employees, required to provide such information and, therefore, responsible for the omission if not having provided (STS 12 January 2015 and 4 December 2015).
This doctrine of the Supreme Court, very few swaps, sold to retailers and "SMEs" would get rid of the annulment.
The problem is that these criteria are to be clarified about ten years later they improperly comercializasen swaps or swaps and many victims have "fallen by the wayside" without obtaining a solution.