mBank v. borrowers

In September 2016, the Warsaw District Court reviewed an appeal by individuals who mortgaged their homes at mBank and claimed abusive contractual clauses. On appeal, the court reversed the judgment of the court of first instance, finding that mBank established unclear, and therefore abusive, terms and conditions for setting the interest rate in CHF, allowing discretionary rate changes.

In 2013, borrowers sued mBank for using illegal clauses, but the court found that since the plaintiffs had reviewed the agreement with the bank, the clauses could not be deemed abusive.

However, the court of second instance rejected this argument. It found that the opportunity to review the agreement has no bearing on a finding of abusive language in a contract. Further, it voided agreement provisions and established the interest applicable on the date of the conclusion of the agreement. It thereby ordered the bank to refund the wrongfully charged amounts. The Warsaw District Court also criticized a recent Supreme Court verdict regarding the cassation of the class-action suit against mBank.

The Office of Competition and Consumer Protection and the Financial Ombudsman joined the case and upon plaintiffs’ request and filed briefs, both of which deemed the contract provisions concerning interest rate changes abusive.

This is an important verdict for consumers in the opinion of Paweł Michalak, counsel for the plaintiffs. Mr. Michalak feels the judgment clearly found that a clause specifying an ability to vary the interest rate (at a bank’s discretion) is not permitted. However, it is difficult to foresee whether the District Court ruling will be of material significance for other borrowers who seek similar claims. In the opinion of Mr. Michalak, there is no basis to think the courts will begin ruling otherwise. Still, he feels courts have again begun to rule in favor of consumers, turning the tide since the Supreme Court decision against class-action suits caused a negative trend.