Opinion of the Advocate General — ECLI:EU:C:2023:156
Date: 2023-03-02
Language of the case: Spanish
Subject matter: Consumer protection;Approximation of laws;Fundamental rights;Charter of Fundamental Rights
Procedure: Reference for a preliminary ruling
Origin: Spain

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Translation C-35/22 – 1 
Case C-35/22 
Request for a preliminary ruling 
Date lodged:  
17 January 2022 
Referring court:  
Audiencia Provincial de Málaga (Spain) 
Date of the decision to refer:  
14 December 2021 
Appellant:  
Cajasur Banco, S. A. 
Respondents:  
JO 
IM 
  
SECCION N.° 6 DE LA AUDIENCIA PROVINCIAL DE 
MÁLAGA 
(SECTION No 6 OF THE PROVINCIAL COURT, MÁLAGA) 
[…] 
[…] [Identification of the referring court and of the parties and their 
representatives] 
EN 
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I. FACTUAL BACKGROUND 
FIRST: By judgment of 2 March 2020, the Juzgado de Primera Instancia 18 bis 
de Málaga (Court of First Instance 18a, Málaga), in proceedings […], ruled as 
follows: 
‘In the light of the foregoing, I UPHOLD the ACTION brought by MS IM AND 
MR JO […] FOR A DECLARATION AS TO THE INVALIDITY OF GENERAL 
CONDITIONS OF CONTRACT AND RECOVERY OF SUMS OWED against the 
institution CAJASUR BANCO, S. A., SOCIEDAD UNIPERSONAL (SINGLE-
MEMBER COMPANY) […] and, in consequence, make the following order: 
- I DECLARE the ‘costs clause’ contained in the MORTGAGE LOAN 
Instrument between the parties ―more specifically, the fifth clause with 
respect to costs attendant upon the mortgage ― VOID, 
- I ORDER the defendant to PAY to the applicant the SUM of EUR 488.69 by 
way of [compensation of] notarial fees (50% of the sum originally claimed), 
agency fees (50% of the sum originally claimed) and all registration fees 
with the exception of stamp duty, in the manner described, plus statutory 
interest under Article 1896 of the Código Civil (Spanish Civil Code), that is 
to say from the date of the payments made, and without prejudice to the 
provisions contained in Article 576 of the Ley de Enjuiciamiento Civil 
(Spanish Code of Civil Procedure). 
- I ORDER the defendant to REMOVE the contractual stipulation described 
above. 
- I DECLARE that the contract shall otherwise continue in being. 
- I ORDER the defendant to pay the COSTS’. 
SECOND: An appeal lodged against that judgment was scheduled for 
deliberation, voting and adjudication on 8 February 2022. 
THIRD: That appeal is directed exclusively against the order made in the 
judgment as to the imposition of costs on the defendant in accordance with 
Article 395 of the LEC-1/2000 [(Code of Civil Procedure)]. 
FOURTH: The parties had previously been given notice to express their views on 
the advisability of making a reference for a preliminary ruling to the Court of 
Justice of the European Union in the light of the recent case-law of the Tribunal 
Supremo (Spanish Supreme Court) as expressed, inter alia, in the judgment of the 
Supreme Court, Civil Chamber, First Section, of 8 June 2021 (ROJ (Official Case-
Law Repository): STS 2295/2021), judgment of the Supreme Court of 
22 September 2021— ROJ:STS 3421/2021 and judgment the Supreme Court of 
22 September 2021 – ROJ:STS 3413/2021. 
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FIFTH: […] [The referring court decides to make the present reference for a 
preliminary ruling] 
II. LEGAL GROUNDS 
First: Definition of the subject matter of the appeal. 
1 These proceedings are based on the declared invalidity on grounds of unfairness 
of a clause (costs clause) contained in the instrument creating a loan secured by 
mortgage that was concluded between the parties, the fact of one of those parties 
(the borrower) being a consumer rendering applicable Directive 93/13/EEC and 
the Spanish legislation on the protection and defence of consumers in the form of 
[Real Decreto Legislativo 1/2007, de 16 de noviembre, por el que se aprueba el 
texto refundido de la Ley General para la Defensa de los Consumidores y 
Usuarios y otras leyes complementarias (Royal Legislative Decree 1/2007 of 
16 November 2007 approving the recast text of the General Law for the Defence 
of Consumers and Users and other supplementary laws)] and [Ley 7/1998, de 13 
de abril, sobre condiciones generales de la contratación (Law 7/1998 of 13 April 
1998 on General Conditions of Contract)]. 
2 After the consumer[s] had taken legal action, the defendant acquiesced to the 
claim, albeit on the basis of specific sums which were later accepted [by the 
applicants], that is to say, on the basis of acquiescence to unfairness but not 
entirely to the sums falling to be paid as a result of that unfairness. The judgment 
sets out that acquiescence and the sums to which the defendant is said to have 
acquiesced. 
3 The judgment nonetheless ordered the defendant to pay the costs on the ground 
that, notwithstanding the acquiescence, the action had been essentially upheld. 
4 Article 395 of the Code of Civil Procedure, which governs [civil] proceedings in 
Spain, provides as follows: 
‘Article 395. Order as to costs in the event of acquiescence. 
1. A defendant acquiescing to the action before contesting it shall not be 
required to pay the costs unless the court finds, on a duly reasoned basis, that he 
has acted in bad faith. 
Bad faith shall in any event be deemed to be present if, prior to any legal action, 
the defendant has received a due and substantiated demand for payment, 
mediation proceedings have been initiated or a request for conciliation has been 
made to him. 
2. If acquiescence takes place after the statement of defence has been lodged, 
paragraph 1 of the preceding article shall apply.’ 
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Second: Recent case-law of the Tribunal Supremo (Supreme Court) in Spain. 
5 As regards acquiescence in specific matters relating to general conditions of 
contract, the Spanish Supreme Court ruled recently in the following judgments: 
judgment of the Supreme Court, Civil Chamber, First Section, of 8 June 2021 
(ROJ: STS 2295/2021), judgment of the Supreme Court of 22 September 2021 – 
ROJ:STS 3421/2021 and judgment of the Supreme Court of 22 September 2021 – 
ROJ: STS 3413/2021. 
6 The first of those judgments, of 8 June 2021, relates to the imposition of costs in a 
case where there had been a prior demand for payment issued to the defendant 
(Article 395(1) of the Civil Code) and refers to the Supreme Court’s own 
judgment 131/2021 of 9 March 2021. In interpreting circumstances in which a 
prior demand for payment had been issued to the financial institution but legal 
action was taken before the time limit for payment laid down in the demand had 
expired and the financial institution subsequently acquiesced to the action, the 
Supreme Court held that Article 395 of the Code of Civil Procedure was to be 
interpreted as meaning that the defendant did not act in bad faith and was not 
therefore required to pay the costs. 
7 The second judgment, of 22 September 2021, sets out the case-law applicable to 
the circumstances provided for in Article 395 in the same way as the other 
judgments under consideration: 
‘As this court stated in its judgment 131/2021 of 9 March 2021, one of the 
purposes of the provision reproduced is to promote out-of-court dispute 
settlement. This encourages potential applicants to seek to settle disputes without 
recourse to the courts, inasmuch as, in the case where an applicant has attempted 
to settle a dispute out of court before taking legal action but has not obtained a 
satisfactory response to his claim, the party with whom the applicant has the 
dispute will, if he acquiesces to the action, be deemed to have acted in bad faith 
and will be ordered to pay the costs. Conversely, an applicant who takes legal 
action without having attempted to secure an out-of-court settlement beforehand 
by issuing a “due and substantiated demand for payment”, initiating mediation 
proceedings or making a request for conciliation runs the risk of having to pay his 
own costs if the defendant acquiesces to the action before contesting it, since, in 
order to promote acquiescence (which expedites dispute settlement and relieves 
the justice system of the need to devote resources to disputes that do not require 
them), the law exempts a defendant who acquiesces without acting in bad faith 
from the requirement to pay costs. In this way, the potential defendant too is 
encouraged to settle the dispute out of court, since, if he does not comply with the 
out-of-court demand for payment issued to him by the future applicant and the 
latter is compelled to bring an action before the courts, the defendant will, if he 
then acquiesces to the action, be ordered to pay the costs on the ground that he 
acted in bad faith. 4.- Article 395 of the Code of Civil Procedure, applicable for 
temporal reasons, is not contrary to EU law, even when applied in disputes 
concerning unfair terms. The principle of consumer protection, one aspect of 
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which is the effective protection against unfair terms provided for in Directive 
93/13/EEC, must be reconciled with other principles of EU law, such as ensuring 
the sound administration of justice, essential to the effectiveness of the principle 
of the rule of law that is one of the pillars of the EU legal order. 5.- One aspect of 
the principle of the sound administration of justice is to ensure that the ever 
limited resources available to the courts are used to dispose of those cases which 
inevitably require a judicial settlement because an out-of-court settlement cannot 
be found. In this way, cases which can be settled out of court will not take up time 
and resources that must be devoted to other cases in which the intervention of the 
judiciary is essential. 6.- This, moreover, operates to the benefit of the consumer 
too, since litigation is a slow and expensive way of settling the disputes in which 
consumers become involved, and one that is not without its risks (missing of 
deadlines, limitation of proceedings, etc.). 7.- These are the reasons behind the 
EU’s firm commitment to promoting out-of-court dispute settlement, including for 
consumer disputes, that is reflected in provisions such as Regulation (EU) 
No 524/2013 of the European Parliament and of the Council of 21 May 2013 on 
online dispute resolution for consumer disputes, or Directive 2013/11/EU of the 
European Parliament and of the Council, also of 21 May 2013, on alternative 
dispute resolution for consumer disputes’. 
8 It is this judgment which clearly explains that an applicant who takes legal action 
without first having attempted to secure an out-of-court settlement by issuing a 
‘due and substantiated demand for payment’, initiating mediation proceedings or 
making a request for conciliation runs the risk of having to pay his own costs if 
the defendant acquiesces to the action before contesting it. In other words, the 
imposition of costs in proceedings will be determined as follows in the event of 
acquiescence: 1. If a demand for payment was issued to the bank and the latter 
failed to respond, the bank might have to pay the costs of the recovery 
proceedings if legal action is taken against it. 2. If a demand for payment was 
issued to the bank but it was not given enough time to respond, it will not have to 
pay the costs of the subsequent recovery proceedings. 3. If a demand for payment 
was not issued to the bank and the applicant proceeds directly to taking legal 
action, the bank will not have to pay the costs of the recovery proceedings if it 
acquiesces. 
9 The third judgment cited consolidates the regime described above. 
Third: Assessment of the Chamber and questions to be referred. 
10 It would seem to follow from all of the foregoing that it is the settled case-law of 
the Spanish Supreme Court that the imposition of costs on the defendant (a 
financial institution) in cases concerning general conditions of contract is to be 
determined on the basis of the existence or otherwise of an attempt to recover the 
amount owed from that institution before legal action is taken. Thus, if there has 
been a prior attempt to recover the sums owed but the financial institution has not 
settled the claim, and the applicant subsequently takes legal action, the financial 
institution will have to pay the costs even if it acquiesces. If, however, there has 
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been no prior attempt to recover the amount owed and, following the institution of 
legal proceedings, the financial institution acquiesces to the action, it will not have 
not pay the costs because it did not act in bad faith. 
11 The foregoing might adversely affect, in the first place, the right to effective 
judicial protection (Article 47 of the Charter of Fundamental Rights of the 
European Union 2000/C-364/01) in making the right to claim and obtain 
compensation thereof conditional upon compulsory prior out-of-court action. 
Thus, in order to be able to obtain full compensation, the consumer must of 
necessity take prior out-of-court action, and cannot proceed directly to legal 
action, since, in the event of acquiescence, the costs will not be refunded to him, 
notwithstanding that the case involves unfair non-binding terms. The CJEU has 
stated (Case C-243/08, Pannon GSM, paragraph 28) that the non-binding nature of 
a contract term cannot depend on whether or when a consumer raised the matter of 
the unfairness of a particular contract term or challenged its validity, as it 
confirmed when finding that ‘… Article 6(1) of the Directive must be interpreted 
as meaning that an unfair contract term is not binding on the consumer, and it is 
not necessary, in that regard, for that consumer to have successfully contested the 
validity of such a term beforehand’. 
12 Likewise, the interpretation given might adversely affect the consumer’s right to 
full compensation, since it compels him to issue a demand for payment prior to 
taking legal action as a condition of such redress (Article 6(1) of Directive 
93/13/EEC). The aforementioned judgment of the Spanish Supreme Court of 
8 June 2021 states: ‘The requirement that the consumer must first have issued an 
out-of-court demand for payment under conditions and within a timeframe such as 
to enable the party to whom the demand is addressed to give a satisfactory 
response, in order not to have to bear his own costs in the event that the defendant 
should acquiesce to the action, does not constitute a disproportionate obstacle to 
the effectiveness of Directive 93/13/EEC. In particular, that requirement does not 
stop the consumer from being able to remove himself from the binding effect of 
the unfair term without having to bear the costs of his lawyer and legal 
representative, since it does not make it impossible in practice or excessively 
difficult to exercise the rights which the Directive confers on consumers, this 
being a requirement that is easy to comply with’. 
13 Having a bearing on the foregoing is the fact that a clause similar to that under 
consideration was declared void by judgment of the Supreme Court of 
23 December 2015, and, although the Supreme Court’s definition of the 
consequences of such invalidity has evolved over the course of its case-law since 
then, that case-law has at least in part become settled for a number of years now 
(to the extent, for example, that the bank must assume all of the registration costs 
and half of the notarial fees). That being so, the approach taken by lenders is not 
to reimburse consumers in the event of a term known to be void but to wait for 
them to take legal action (and, as a result, to pay their lawyers’ and legal 
representatives’ fees) before acquiescing, thereby avoiding the requirement to pay 
the costs of the proceedings, in the absence of a prior demand for payment. This 
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too would run counter to the principle of full compensation laid down in the 
judgment of the CJEU of 21 December 2016: ‘It follows from the foregoing 
considerations that Article 6(1) of Directive 93/13 must be interpreted as meaning 
that a contractual term held to be unfair must be regarded, in principle, as never 
having existed, so that it cannot have any effect on the consumer. Therefore, the 
determination by a court that such a term is unfair must, in principle, have the 
consequence of restoring the consumer to the legal and factual situation that he 
would have been in if that term had not existed’. 
14 It should be noted that, in accordance with the relevant provision of domestic law, 
Article 395 of the aforementioned Code of Civil Procedure, bad faith is to be 
deemed to be present if, before legal action is taken, a due and substantiated 
demand for payment has been issued to the defendant; this does not mean, 
however, that bad faith may arise as a result of other stances on the part of the 
defendant, such as being aware of the unfairness of a term but refraining from 
taking proactive steps to eliminate its consequences and satisfy the consumer’s 
claim until such time as the consumer takes legal action against the defendant, in 
the knowledge that, in the absence of an out-of-court demand for payment, it will 
not be compelled to pay the costs of the proceedings, or even waiting to receive 
the out-of-court demand for payment before restoring the position to that 
prevailing before the unfairness caused by a term known to be void.  
15 […] 
[…] [Verbatim transcription of the questions referred for a preliminary ruling as 
set out below] 
THIS COURT HEREBY DECIDES TO MAKE A REFERENCE TO THE 
COURT OF JUSTICE OF THE EUROPEAN UNION FOR A 
PRELIMINARY RULING on the following questions:  
1. Is it contrary to the right to effective judicial protection and Article 47 of 
the Charter of Fundamental Rights of the European Union to require that, 
before instituting legal proceedings, the consumer must first have issued an 
out-of-court demand for payment in order for the declaration as to the 
invalidity of a particular general condition of contract on grounds of 
unfairness to give rise to all of the compensatory effects (including the costs 
of the legal proceedings) associated with such invalidity, pursuant to 
Article 6(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms 
in consumer contracts? 
2. Is it compatible with the right to full compensation and the effectiveness of 
European Union law and Article 6(1) of the aforementioned directive to make 
the imposition of costs (including legal fees) subject to a condition based on 
the existence of a prior out-of-court demand for payment issued by the 
consumer to the financial institution with a view to the removal of that term? 
[…] 
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[…] [Stay of the national proceedings and final procedural formulae]