Two rulings oblige Banco Sabadell and its insurer to return the full premium for life insurance linked to mortgages
Two recent court rulings have condemned Banco Sabadell and its insurer to return the full amount of the single premium for life insurance policies associated with mortgage loans. According to the law firm Constitución Abogados, "these rulings represent a step forward in the fight against the effects of abusive life insurance linked to mortgages".
In particular, Courts of First Instance No. 5 of Lleida and No. 9 of Zaragoza have issued decisions ordering the full refund of premiums paid, not limited only to the unearned portion.
Up to now, the firm explains, the rulings annulled these insurance policies, but only obliged to return the proportional part of the unused premium, arguing that the insured had been covered during the time elapsed. However, these new rulings accept the claim filed by Constitución Abogados and establish the total refund of the amounts paid: 11,000 euros in one case and 2,500 euros in the other.
Lawyer José Luis Carrera argues that these decisions are based on Article 1303 of the Civil Code and on the principle of deterrent effect assumed by the Court of Justice of the European Union (CJEU) against abusive practices towards consumers. According to article 1303 of the Civil Code, in the event of contractual nullity, "the contracting parties must reciprocally return to each other the things that were the subject matter of the contract". Carrera points out that, despite the clarity of this article, many previous rulings limited the refund by considering that the insurance had been in force for a period of time.
The judgment of the Lleida Court refutes this interpretation, establishing that there is no unjust enrichment when the temporary coverage derives exclusively from the bad practices of the defendant parties, and not from the consumer. Thus, it concludes that the full refund reinforces the deterrent effect that seeks to neutralize this type of abuse.
José Luis Carrera stresses that the deterrent effect penalizes the bank for its abusive conduct, preventing it from benefiting financially from the time the insurance was in force. "Allowing the bank to keep a high premium for this period would be tantamount to rewarding its malpractice," he concludes.
- See sentence of the Court of Lleida: Sentence nº 699/2024
- See sentence of the Court of Zaragoza: Sentence nº 000535/2024
Source: Insurance News
