Case C-346/23 Banco Santander SA v Auge ECLI:EU:C:2025:13
The Markets in Financial Instruments Directive (MiFID)[1] ensures inter alia the protection of investor consumers in the financial sector. Part of the protection is allowing consumer organisations to bring actions in the general interest of the organisation or the individual interest of its members per – then – Article 52(2) of the Directive (now Article 74(2) MiFID).[2] The latter is up to national law to provide or not. When such standing is granted to a consumer organisation, can it be restricted by case-law depending on certain circumstances of the investor? For example, should investors of high-value speculative financial products be protected by a consumer organisation in a collective action? If yes, should this consumer organisation also benefit from legal aid granted in such procedures?
These are the underlying issues of the question that the Tribunal Supremo (Supreme Court, Spain) posed to the European Court of Justice (ECJ) for a preliminary ruling, with a decision rendered on 16 January 2025.Between 2007 and 2010, Andrea and Alberto subscribed for several purchase orders of financial products with Banco Banif for a sum of EUR 900 000.Auge, a consumer organisation, brought an action against the bank to declare the orders null and void in addition to reimbursing the investors, with the argument that the bank did not take account of the customers’ investor profile and did not provide them with clear and complete pre-contractual information concerning the risks associated with the products that they agreed to invest in. The bank, in turn, argued that Auge does not have standing to bring legal proceedings on behalf of Andrea and Alberto because the products subscribed for are high-value speculative financial products and not products of common and widespread use, rendering the action outside the scope of consumer protection.
In light of these facts, the posed question is threefold. First, whether a consumer organisation can bring an action to defend the individual interests of some of its consumers or is that right reserved only to defend their general interest. The ECJ noted here that Article 52(2) of MiFID refers to ‘consumers’ in the plural, meaning that the action brought by the consumer organisation must relate to the interests of a plurality of consumers, leaving the final answer for the national law to define. The Spanish legislature has opted for granting consumer associations standing to bring legal proceedings in order to defend the individual interests of their members.Therefore, Auge enjoys the right to bring legal action to protect the individual interests of its two members.[3]
Once the right of standing for Auge is established, the question remains whether high-worth investors, whose transactions cannot be considered ordinary and of widespread use, can actually fall under the category of consumers. The ECJ responded positively. Article 52(2) of MiFID encompasses all consumer-investors without distinguishing them based on their financial means or the financial instruments in which they have invested, provided that the instruments fall within the scope of the MiFID.
Lastly, according to Spanish law,[4]in principle, Auge would beentitled to legal aid when bringing legal action. However, the referring court is cautious in granting legal aid because it can potentially be misused by wealthier investors. Legal aid would exempt them from bearing the legal costs of an action, from paying the costs incurred from the opposing party if the investor is unsuccessful, without depriving that investor of the independent right to bring legal proceedings. Therefore, part of the question asked by the referring court is whether the standing can be restricted with regard to legal aid so that when the consumer organisation defends the interests of high-value investors, they do not benefit from the legal aid scheme. The ECJ clarified that Article 52(2) of MiFID only grants consumer organisations the right to take action but does not require legal aid to be granted to facilitate the process. Hence, the decision to do so and, when applicable, the criteria to restrict it are left to national law based on the principle of procedural autonomy. In other words, the ECJ does not preclude the national court from using criteria such as the financial means of the members of the consumer organisation, the monetary value and the type or complexity of the financial products invested in to determine whether the organisation is entitled to legal aid.
This recent judgment reaffirms the wide concept of consumer, with collective actions encompassing also wealthy investors. However, the consolidated consumer protection is balanced with Member States’ autonomy to ensure that the safeguards it comes with – like legal aid in this case – are availed by the intended categories of consumers.
Eugerta Muçi[5]
[1]Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU.
[2] The Directive has been amended, so currently, it is Article 74(2).
[3]Article 11(1) of Ley de Enjuiciamiento Civil 1/2000 (Law 1/2000 on Civil Procedure) of 7 January 2000 (BOE No 7 of8 January 2000, p. 575.
[4]The second additional provision of Ley 1/1996 de asistenciajurídicagratuita (Law 1/1996 on legal aid) of 10 January 1996 (BOE No 11 of 12 January 1996, p. 793).
[5]Faculty of Law, Erasmus University Rotterdam, the Netherlands.
