In its ruling of April 27th, 2021 (XI ZR 26/20), the “banking chamber” of the Federal High Court of Justice (Bundesgerichtshof – BGH) determined that the clauses under No. 1 (2) and No. 12 (5) of the Bank-GTCs are invalid. The same applies to the GTCs of the savings banks with the same content, even though they were not formally subject to the decision.
For a summary of the reasons for the judgement please see under: https://paytechlaw.com/urteilsbegrundung-bgh-unwirksame-banken-klauseln/.
Scope of the judgement / Applicability to business professionals?
The ruling “merely” refers to business relations with consumers. The BGH did not have to rule on the question of whether the clauses are also invalid when used towards business professionals.
There are only few references to this issue to be found within the judgement itself. At one point, the BGH refers to the fact that “especially vis-à-vis unsophisticated consumers” the clause would amount to a unilateral and unlimited right of the bank to amend the contract. The BGH lists lethargy, disinterest, intellectual overload, awkwardness, and illness, among others, as reasons for silence in response to the bank’s proposals for amendments. Attributes that apply more to a consumer than to a business professional.
In this respect, it is worthwhile to look at comparable decisions of the deciding chamber.
In 2017, the chamber decided in almost the same composition as now on the question of whether its case law on the invalidity of processing fees for loans, which was initially also issued merely with respect to consumers, applies to business professionals as well. It answered this question in the affirmative. The principle that the use of a clause that is incompatible with the fundamental ideas of the statutory regulation generally constitutes an unreasonable disadvantage if it is not objectively justified – precisely the argumentation to which the BGH also refers in the present case – also applies in the relationship with business professionals. At that time, the Federal Court of Justice did not see any justification specific to business professionals for the processing fees at issue, in particular no relevant commercial practice or special features in commercial business transactions.
The case here may be different now: Whereas in legal transactions with consumers, silence does not constitute any declaration of intent, silence can be eloquent between business professionals, namely in the scope of application of the commercial confirmation. Whether, in view of this, a differentiated assessment is justified here remains to be seen; however, it does not appear to be ruled out.
Consequences of the judgement/need for action
The ruling concerns two clauses.
With the invalidity of the clause under No. 1 (2) Bank-GTCs, all amendments to the General Terms & Conditions and all Special Conditions “made” by means of this clause shall be null and void. Therefore, the General Terms & Conditions and Special Conditions as applicable at the very time of the establishment a business relationship shall apply in each case. To exaggerate: something different for every customer!
In order to cope with the resulting mayhem, the institutions concerned should have no choice but to agree with all customers individually on the validity of the current version of all relevant General Terms & Conditions and Special Conditions. Cheers to the flood of paperwork!
The invalidity of the clause under no. 12 (5) is likely to hit the institutions even harder. This means that all price increases ever based on this clause are invalid. Increases can be reclaimed up to the limit of the statute of limitations, i.e., for the last 3 full calendar years.
It is an interesting question whether banks themselves now also have to determine the refund claim of their customers. Consumer protection agencies affirm this with reference to sec. 10 Payment Account Law (Zahlungskontengesetz – ZKG). This provision, however, does not give consumers the right to have banks assessed the rates initially agreed upon even decades ago. It also seems questionable whether consumers are entitled to a new statement of charges if they had already been provided with one for the period at stake.
For many individual cases, an individual assessment seems appropriate. Especially in private banking with high-net-worth clients, price changes are not simply “dictated” by the bank but agreed upon in good partnership. In many other cases, forfeiture and the principles of good faith are likely to obstruct a claim for restitution.
Revision of Bank-GTCs
The associations of German banks and savings banks are expected to come up with revised versions of the Bank-GTCs in the near future. In order not to completely abandon the suitability of the conditions for mass circulation, an attempt to maintain the fictitious consent to amendments as far as possible can be expected. The judgement certainly contains some guidelines in
The BGH criticises in particular the scope of the challenged clauses. The fiction of consent does not only cover the adjustment of individual details, but rather the entire range of the bank’s activities and all main service fees. The Federal Court of Justice considers the de facto unilateral and unlimited power of amendment – especially vis-à-vis consumers – to be unreasonable. It gives the bank the power to shift the equivalence of performance and consideration considerably in its favour and thus to devalue the position of the customer.
The argumentation suggests that the chamber does not deny per se the justification of a fictitious consent based on general terms and conditions. There is little doubt that changes that are limited to the implementation of new regulatory requirements or GTC-related case law will find the court´s (future) blessing. Price increases would also be conceivable in order to – as far as permissible – pass on additional regulatory costs or to compensate for inflation. In the case of amendment powers going beyond this, the banks’ interest in the mass marketability of GTCs will have to be weighed with the gold scale against the due interests of bank customers.
Impacts far beyond the banking industry, especially for payment service providers
With its ruling, the Federal Court of Justice clearly rejects fictitious consent unlimited by content based on general terms and conditions. It can be assumed that the other chambers of the Federal High Court of Justice also see it this way. In this respect, the ruling does not only affect the banking but all industries.
This is particularly true for payment service providers. Without this being necessary for the present decision, the chamber deals intensively with the provision of section 675g par. 2 sentence 1 German Civil Code (Bürgerliches Gesetzbuch – BGB). Against the background of the European Payment Services Directive and the ECJ’s DenizBank ruling, the BGH concludes that fictitious consent for amendments to master payment service agreements is not per se permissible. For section 675g par 2 BGB to apply the fictitious consent must be validly stipulated in accordance with the general principles of contract law. If so sec. 675g BGB grants the consumer further rights.
Therefore, not only banks, but also many payment service providers are under pressure to have their GTC revised! Irony of fate: The invalidity of all-encompassing fictions of consent means that when introducing new clauses to maintain a rump fiction, it is precisely not possible to work with such fiction of consent.
A further article on the BGH ruling: https://paytechlaw.com/en/fee-and-contract-amendment-clauses-invalid/
Cover picture: Copyright © Adobe/agcreativelab