Payment protection insurance, restrictive clauses and contract interpretation

Seguro proteccion pagos


A payment protection insurance, the lack of clarity of the clauses must be interpreted in favor of the customer and qualifying clauses must comply with Article 3 LCS


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Section 20th of Madrid Provincial Court in Case 28 June 2019 with No.. resolution 313/2019 resolved the dispute arising from contract Payment protection insurance to the client: He signed a Payment protection insurance as a prerequisite for granting a mortgage. In the insurance contract included limitation clauses of which was not reported by the insured. The Court considered the insurers are obliged to express them clearly and to place on record that policyholders understand their scope and significance.

Fact background,,es,Juan Alberto and Paulina filed suit against FTA,,es,Asset Securitization Fund,,es,requesting the declaration of nullity for abusive of the floor and ceiling clauses contained in the novation contract of the mortgage loan of,,es,with the corresponding refund of amounts unduly collected,,es,The Securitization Fund Management Company,,es,Beech,,es,acting on behalf of FTA, he responded to said claim alleging that he lacked passive legitimacy since the entity had no legal personality and that it constituted only a private and open fund and that therefore the passive legitimization corresponded to BBVA as successor of Catalunya Banc that was the Company fund constituent,,es

In 2009 D. Joseph signed a contrato de préstamo con garantía hipotecaria with the entity BARCLAYS BANK.

So good, the grant was conditional on the signing of a contract payment protection insurance. In this, the Aseguradora was CARDIFF COMMUNICATION Risques Divers (hereinafter CARDIFF) and the beneficiary the lender, Barclays Bank.

Later D. Joseph was declared for temporary disability for a year.

Finally, in the year 2015, D. Joseph died.

Causing the insured (D. Justin, Ms.. Encarna and D. Laureano) They requested compensation Payment protection insurance.

The insurance company refused, He is claiming that he was only covered the death by accident and not by disease.

Given these facts, They causing filed suit against the insurer CARDIFF.

In its brief argued that, by reflecting on contract guarantees and capital insured, the insurer CARDIFF caused a deliberately ambiguous wording. Specifically:

as regards the security of death, He said covering "death or total permanent disability by accident ".

Therefore the plaintiffs argued that this provision should be interpreted as meaning that the risk covered death also understood that produced by natural disease ,  and not just the death occurred by accident.

Accordingly, having been the deceased insured person incapacitated for one year, He was to receive the amount of 8.181,56 euros. In addition they should receive the sum stipulated in the event of death.

The defendant opposed its claims:

First, with respect to the claim for the death 150,886.94 €, the insurer held the signed policy did not cover the guarantee of death by disease, but only, Cover of death was accident, since it was not life insurance.

Second, la demandada He acquiesced partially regarding compensation for the guarantee of temporary incapacity of the deceased, in the amount of 4647.60 €.

The 8 February 2018 Partial dictated Auto Burglary.

The plaintiffs opposed the partial acquiescence. Requested it be considered as an acknowledgment of the principal owed.

The court issued an order in part by estimating demand and condemning the defendant to pay the amount appropriated. He continued the procedure regarding the remaining claims.

Primera Instancia

The 10 January 2019, the Court of 1st Instance No.. 33 Madrid issued a decision partially upholding the complaint filed against CARDIF.

The ruling stated there is no place to pay for the death by disease. It was estimated that It was only subject to guarantee the accidental death.

the claims were estimated in accordance with the partial Burglary Auto so the defendant was ordered to pay the actors 4.647,60 euros.

Segunda Instancia

Against the judgment of first instance, actors appealed to be organized around the two proceedings instituted.

– As for the claim made by the death of the deceased plaintiffs and secured:

The reason was focused on how it should be interpreted insurance payment protection.

The appellants argued that this did not meet the requirements of transparency to the consumer and this "You are obliged to take out insurance, a general condition of the recruitment of home equity loan, that infringes the Spanish and EU regulations consumer protection, as there has been individually negotiated, or exceeds transparency controls, therefore its ambiguity, and the consequences that the contract was concluded ...”.

Therefore they requested that consideration be included in the contract, insurance coverage, death from any cause, not just by accident.

They alluded, moreover, to irrelevance that attributed to the condition of the insurance contract qualification risk clause boundary or limiting clause.

They also felt that the contested judgment infringed art. 3 LCS and case law that interpreted. As well as the lack of health questionnaire only produced effects against the insurer and not against the insured. They understood violated art. 10 LCS and jurisprudence that developed.

– Regarding the second action brought:

The appellants disagreed on the interpretation of the contract as, to the obscure wording of it, should prevail favoring the insured.

The 28 June 2019, 20th Section of the Provincial Court of Madrid issued its judgment in No.. resolution 313/2019.

The Court considered that, focusing the discrepancy in the interpretation of the clauses of the payment protection insurance, I had to make a interpretative work. So, It had to be taken into account:

– First, the entailment existing between equity loan (BARCLAYS concluded with insurance and payment protection (with an entity belonging to the business group of the lender or closely linked).

– Second, the As consumers who held the plaintiffs.

– Y por último, the qualification of the contract as a membership contract next tax borrowers and secured in order to ensure repayment of the loan when situations occur hedged.

The Court noted that, the jurisprudence of the Supreme Court had doctrine, for which it was taken as a criterion literal interpretation of the clauses of the contract based on the art. 1.281 CC. So when "they consider doubts about the scope of a specific contractual provision, derived from an insufficiently clear wording, the same jurisprudential notes that must be made to hermeneutical criterion, contrary to who drafted the contract, principle expressly contemplated in the art. 1288 CC, to protect the weaker contracting party, and finds its manifestation in the consumer protection legislation ... ".

On the other hand, the general conditions delimiting risk or restrictive rights Hearing STS highlighted 22 April 2016, by which "these clauses may be valid, but this requires the insured has introduced restrictions known -that, not surprise you- and reasonable, not empty the contents contract and not frustrate economic order, and therefore, not deprive him of his cause ".

So, the application of the doctrine to the case led the Court to disagree with the decision of the Judging Instance.

Thus, the Court concluded that what was guaranteed in the clause were two different risks "the death <<and>> the absolute permanent disability, the reference to the origin of coverage should be an accident, only it has done from the second, not the first ...It can not be differentiated by the unilateral decision of one party and less if this is what has caused the possible dark.

Doubts and confusion in the wording should be clarified at the time of conclusion of the insurance. That obligation was for the entity being sued professional in the field and to provide such wording to policyholders. Insureds who held the status of consumers and were required to conclude the policy as a condition for granting the loan.

A clause defining risk and other determined the duration of the warranty:  The latter was setting a limitation of the rights of policyholders. Therefore the limitation accentuated "the obligation of the insurer to clarify and explain the hedged risk and check on their part, the insured had an exact knowledge of the risk she claims to be ensuring…”.

The confusion caused by the insurer could not encourage it and harm policyholders, that insurance regulation and consumer protection accorded special.

It is required to the insured, to inform and let express and clear record, at the time of concluding the contract, any circumstance that delimits or restrict the rights of the insured…”,  aCTION it not carried out in the case by the insurer.

For all these reasons the Court considered it appropriate for allowing the request made itself harbored insurance risk death by disease. Therefore, He ordered the defendant to pay agency the quantities of such coverage (150.886,94 euros), plus accrued interest of art. 20 LCS.


When they introduced clauses limiting rights in an insurance contract is the obligation of the insurer to place on record that, at the time of signing the contract, makers know and understand those terms scope and meet the requirement of the “double signature” Item 3 LCS. And if dark in a contract of adhesion, the interpretation should be made in favor of the insured and consumer.

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