Constitutional Court issues precedent ruling on bank fees
Czech banking institutions, most of whom still observe the unpopular practice of charging fees for managing loan and mortgage accounts, can breathe a sigh of relief. In a closely watched case the Constitutional Court on Tuesday ruled that the practice of charging such fees is not illegal, dashing the hopes of tens of thousands of people who have signed up to class actions to try and get their money back.
However the sum at stake was far more than the said 7,200 crowns. In the past year 300,000 clients have filed complaints against banking institutions charging clients for managing loan and mortgage accounts. These actions were encouraged by a 2011 verdict by the German Supreme Court which ruled that such fees were illegal and an isolated case in the Czech Republic which went in the client’s favour. In the majority of cases where Czech courts have already issued verdicts the ruling has gone in the banks’ favour, but a ruling by the Constitutional Court could have reopened many of these cases and cost Czech banks hundreds of millions of crowns.
“It was clear from the outset that this would be a big legal battle. You can see from similar rulings by German and British courts that there are two tendencies in Europe – one defends the interests of the consumer, the other is based on what we call autonomous will. We hoped that the Czech Constitutional Court would defend consumers and give them better protection. This did not happen and all I can say is that we did what we could.”