Marketing high-risk products in Spain: new case-law?
Recently, the press has referred to a specific judgement of the Provincial Court of Madrid from 14 November as unprecedented on the ground that, in declaring the contract void and ordering the bank to pay back its client the amount of their investment, the court based its judgment on the (mere) wrong qualification of the product in question (a structured bond) and not on the concrete circumstances of each client of the product.
If this is so, we would be standing before the beginning of a new line of case-law, given that up to this date courts were analyzing on a case-by-case basis the process of contracting a product (preferred or structured bonds, swaps, etc.) and the conduct demonstrated by the bank according to the concrete circumstances of each client, without forgetting the applicable legislation (mainly the Spanish Civil Code and the Securities Market Act).
While the alluded judgement of the Provisional Court of Madrid indeed refers to an information note in which the Company admits having made a mistake in the qualification criterion of the bond in question, it is also true that this circumstance does not itself determine the reasoning of the judgment. On the contrary: once again, the court- in this case the Provisional Court of Madrid- has evaluated the contracting process (an employee of the bank presented a brochure of the product in question to the plaintiff, convincing the plaintiff to subscribe to it, with insufficient information on the risk they were taking) and the concrete circumstances of the client (neither experience nor the speculator profile to understand the product in question, with interest in saving and not in speculating, susceptible to suffering a relatively limited loss of their investment according to the suitability test, etc.). Thus, the Court concluded that the structured bond was void due to the flaw in consent and ordered the financial entity to refund the (high) amount of the investment, fees, expenses and interests.
In the end, from our point of view, the judgement so disseminated in the press for its exceptionality, in reality, does not pose any significant turn in the case-law doctrine of our courts. The doctrine re-emphasizes the necessity to evaluate the concrete circumstances of each case, hence not to base the judgment on a mere possible mistake of the financial company in the qualification of the product in question.
Mariano Jiménez
