Although today in Spain is the Feast of the Three Kings or Día de Los Reyes Magos, or most commonly known as The Epiphany, news arrived late yesterday of yet another case involving “Jurisdiction” of contracts. This is a very important decision from the courts and is following all other rulings made by various courts around Spain on this matter, that Spanish Courts do have “Jurisdiction” on any contract purchased, signed and paid for in Spain, regardless of the “clauses” in the contract.
Over the past couple of years, we have seen many cases being delayed due to this particular clause, with some of the very first cases being against Club la Costa with others such as Diamond following suit.
Once again it is an attempt to bypass Spanish Law by claiming the contracts fall under the jurisdiction of UK law and UK courts, which in the beginning they did succeed in doing. But through the tenacity of various lawyers who argued that consumers were entitled to the full protection of Spanish Law and that timeshare operators cannot decide which jurisdiction their contracts come under. By doing so they are taking away all the rights a consumer has.
The latest case involves Diamond Resorts (Europe) Ltd, a UK registered company which was operating sales of timeshare in Spain. Their contract stipulated that it was subject to “the jurisdiction of UK law and UK Courts” which is blatantly taking away consumers rights.
It should also be noted that under the RDO Code of Conduct, Part I, Chapter 3, Paragraph 3.5 actually states:
“To comply with all laws, which apply to Member’s, business in the jurisdiction in which the Member operates.”
Obviously, the use of the “jurisdiction” clause is a breach of these rules as to comply with “all laws” of the country in which the member operates must be abided by. If this isn’t a breach of RDO rules then we don’t know what is!
As we have seen in all previous cases of this nature, the Judge immediately dismissed Diamond’s appeal on Jurisdiction, referring once again to the rulings of the High Court of Malaga. This court along with High Courts in other provinces have all consistently ruled in favour of the consumer that they (Spanish Courts) do and will have full jurisdiction on any contract sold in Spain.
In this case, the Judge ordered that Diamond repay the client 17,572€ plus legal interest and the return of all legal costs. The client will also receive a further 8,513€ in respect of original purchases and a further 9,059€ which is double the deposit taken illegally on the day.
The contract has also been declared null and void leaving the client timeshare and maintenance-free.
The case was prepared and presented by the CLA Lead Lawyer Eva Gutierrez with the client being assisted by Claims Consultant Jake Kaiser.
Once again we see the court’s ruling in favour of consumers and declaring contracts illegal, as we have said before, it is a problem of their own making, after all, the laws were enacted in January 1999 yet they continued to sell as they had done before believing they knew better. But now they are finding that was a very expensive assumption to make.
If you would like to know more and see if you have an illegal contract and what your legal rights are, please use our contact page and Inside Timeshare will get back to you.
Following on from yesterday’s article on the history of timeshare, today we revisit the story of Spanish Legal History and the first Supreme Court Rulings that changed the timeshare laws. It was a long-running battle as when the Timeshare Law 42/98 was enacted on 5 January 1999, the timeshare industry did not change their practices in accordance with the new laws. These were put into place as a result of various EU Timeshare Directives which sought to protect consumers of malpractice and lay down regulations on the sale of timeshare, which previously had been totally unregulated. The timeshare industry believed they were “untouchable”, that they were too big and strong and the law was wrong. As you will see this was not to be the case.
When the Timeshare Laws were enacted in 1999, the timeshare industry was given the opportunity to get their act together and adapt their contracts to comply with the law. They were also allowed what was known as a “deed of adaptation”, this allowed those contracts sold before the enactment of Law 42/98 to remain legal as they were sold before the law was put into place, but new contracts must comply.
Many timeshare companies saw this in a different light, they interpreted the law differently, they believed that the “deed of adaptation” meant that if the resort was running before the law came into force then that meant all contracts remain the same.
As with any new laws, these must be tested in the courts and placed into jurisprudence, which means they are now “set in stone”. In the beginning, very few cases ever got to court and those which did tend to be found in favour of the timeshare companies. Many lawyers would not take these cases on, it was a new law and they did not understand it. also, they believed the timeshare companies were too big, powerful and had plenty of money, they actually believed that they would never stand a chance of winning.
All this changed on 1st April 2015 when the Supreme Court ruled on the very first timeshare case to be brought before Spain’s Highest Court.
The story begins in 2001 When a Norwegian lady, Mrs Tove Grimsbo and her husband attended a presentation at the Anfi Resort in Gran Canaria. At the time this was a relatively new resort which was the dream of the Norwegian entrepreneur Bjorn Lyng and it was also still under development. It eventually turned into one of the flagship resorts in the timeshare world.
At the time, anyone who attended a presentation was impressed with the quality of the resort and the plans that were also in place for expansion, Mr & Mrs Grimsbo were themselves impressed and they were persuaded to purchase. They duly signed the contract and paid a deposit of 700€ by credit card, this along with the fact the contract was “in perpetuity” and not limited to the maximum of 50 years allowed by the new law made this contract illegal.
But at the time this did not seem to bother them, after all, they would have been totally unaware of the law and the fact that Anfi had disregarded it. It was not until Mr Grimsbo passed away and Mrs Grimsbo was left with ever-increasing maintenance fees and no foreseeable way out of the contract, that things changed. As they had been told during the presentation that Anfi would “buy back” their “weeks” for the same price they paid, Mrs Grimsbo approached Anfi. It is no surprise that Anfi told her that they did not buy back weeks, but they could place it on the resale market. Until then she was stuck with a timeshare she did not want or wanted to use. This is not surprising considering she did not want to return to Anfi because of the memories of her late husband.
She eventually decided to speak with a local lawyer, Miguel Rodriguez Cabello, a native of Arguineguin and one of the founding lawyers of Canarian Legal Alliance. He and other lawyers worked tirelessly to research the law and eventually found that Mrs Grimsbo did indeed have a very good case. This would now make legal history.
After some time, the case went in front of the Court of First Instance of San Bartelomé de Tirajana, this court found in favour of Mrs Grimsbo and declared the contract null and void plus the return of the full purchase price. Anfi immediately appealed to the High Court of Las Palmas Gran Canaria. This court confirmed the ruling and sentence of the Court of First Instance, another win for the lawyers.
Anfi did not accept this decision, they still believed that the law was wrong, that their contract was legal because they had the “deed of adaptation”, so they took the case to the Supreme Court.
After much debate between the panel of Judges they unanimously ruled that the case of Mrs Grimsbo v Anfi was in favour of Mrs Grimsbo and that the rulings and sentences of the previous courts were confirmed. Legal history had been made, the very first timeshare case had its first major test.
The court’s ruling would have a profound effect on timeshare and would open the gates for many more claims and cases to be taken to court. In their ruling, the Judges declared that the taking of any payment even by a third party within the Statutory 14 days cooling-off period was illegal. Taking payments within this period they believed had the effect of cancelling out the cooling-off period which was designed to give consumers the chance to read the contract, terms and conditions and also reflect on whether they made the right decision.
In their ruling on the “perpetuity” side of the contract, the Judges ruled that the Law 42/98 clearly stated that all contracts be limited to a minimum of 3 years and a maximum of 50 years. The Supreme Court upheld the rulings from the lower courts and confirmed the contract was illegal.
Anfi issued a statement that the Supreme Court’s ruling was in error and they required clarification. On 7 May 2015, the Supreme Court confirmed their original ruling and dismissed the appeal.
Anfi then issued a statement that the Supreme Court’s ruling was in error and wanted clarification, it should also be pointed out that the RDO (Resorts Development Organisation) backed up the statement by Anfi. The Supreme Court dismissed Anfi’s appeal for clarification and upheld their previous ruling, again unanimously. This left Anfi with no other course of appeal and they were ordered to pay double the deposit and all of the initial payments including costs and interest. This amounted to around 40.000€.
This particular case took almost 6 years to complete, now cases are being heard quicker with the Courts of First Instance now applying the sentence at the pre-trial stage instead of allowing a full-blown trial. Unfortunately, Anfi has continued to appeal to the High Court which then upholds and confirms the sentence of the First Court. They have even tried further appeals to the Supreme Court which have been rejected.
Not long after this case, another CLA client had their case placed before the Supreme Court, once again the Judges ruled in favour of the client against Anfi.
So far there have been 130 cases heard in the Supreme Court and all have been found in favour of the consumer. Within these rulings, there was also a clarification of the points and floating weeks systems, the Supreme Court deemed that these were also illegal as “they contained nothing of substance”. In other words, unlike the fixed week system where you are guaranteed your period of use, these systems are subject to “availability”.
With these first cases, the law had been tested and these rulings were now jurisprudence. This opened up a whole new avenue for disgruntled timeshare owners who have constantly battled to terminate their contracts when the need arises.
It also sent a message to the timeshare companies that they must comply with the law and ensure that they sell in accordance with those laws or the full weight of the law will be brought to bear. We have seen this consistently over the past 5 years with increased payouts awarded by the appeal courts as a way of sanctioning the timeshare companies for their frivolous appeals.
Anfi contracts are not the only ones which have been the subject of these cases, others have included Diamond and Club la Costa which are also two of the major players in the timeshare industry in Europe.
The timeshare laws were further enhanced with the inclusion of Law 4/12, which updated the previous regulations. It is very clear that the law and the courts are totally on the side of the consumer and that the days of the “invincibility” of timeshare companies have ended.
If you would like further information on this subject and to find out if your own contract is illegal along with your legal options, please use our contact page and Inside Timeshare will get back to you.
Today Inside Timeshare looks at some of the court cases which have come to our attention this week. These cases have been brought on behalf of clients by two law firms and one independent lawyer, involving several Anfi, Diamond and Club la Costa cases. This article is published to show that timeshare companies are losing all over Spain proving the courts are following the rulings laid down by the Supreme Court.
The appeal court once again confirmed and supported the original sentence laid down by the Court of First Instance Number 4 of San Bartelomé de Tirajana where the contract was declared null and void along with the return of 59,163€ plus legal interest.
The contract was declared null and void due to several breaches of timeshare law which included, length of the contract was for more than the permitted 50 years, it contained floating weeks and also the illegally taken deposits within the statutory cooling-off period.
The original sentence also included the repayment of the illegal deposit in double, this was also confirmed by the appeal court judges.
Another law firm which has been having considerable success in the courts is M1 Legal, they are based in Mijas Costa and currently have around 1300 cases against various timeshare resorts in the courts. Of these cases, there are currently 577 against Club la Costa alone with claims to the value of £12.1million.
It appears the first week of November was a very busy one for their legal team as they had six cases against Club la Costa with all contracts being declared null and void.
The largest amount awarded in one case was £30,870 with a total for all cases coming in at over £105,387.
The contracts were all in breach of the current timeshare laws with contracts being in excess of 50 years and all containing the points system and not the permitted fixed week fixed apartment system.
Along with these cases, there were a further six cases being heard by the courts in Fuengirola, these cases were arguments on the grounds of jurisdiction. Club la Costa maintains that their contracts are subject to UK law and the jurisdiction of UK courts. This is an argument that has been going on for some time, even though many courts around Spain including the High Court in Malaga have ruled that Spanish law and courts do have jurisdiction.
In these six cases, the courts in Fuengirola agreed and accepted the cases on the grounds that they do have jurisdiction. So we can expect to hear successful outcomes for these clients in the future.
M1 Legal also had very good results in other cases against Diamond Resorts and our old friends at Anfi. The Anfi contract was declared null and void as it was also determined that the contract contained insufficient information on the product being purchased. This also included the fact that there was no time period specified on the contract, this is in breach of the law on the duration which as we have stated before is for a minimum of 3 years and a maximum of 50 years.
The Anfi client was awarded over £16,027 and the three Diamond cases totalling over £31,000 with those contracts also being declared null and void.
We now move to a case brought on behalf of an Anfi client by the independent lawyer Javier Correa.
Javier was born in Las Palmas de Gran Canaria which is where he now practices and resides. Between 1984 and 1989 he studied law at the University of Navarra and later at the University College London. He then went on to complete his Master’s degree.
This case was originally brought at the Court of First Instance where this court declared the contract null and void with the return of the purchase price plus double the deposit illegally taken at the time of purchase.
As we have seen in previous appeals made by Anfi, the court rejected the appeal and confirmed the original sentence in its entirety.
The contract was for two standard two-bedroom suites on the floating week’s system at Monte Anfi. The client also paid 4,431.38€ as a deposit on the day of purchase and signing the contracts, this was ordered by the court to be paid back to the client in double in accordance with the rulings made by the Supreme Court.
The client will now be receiving over 41,000€ and is also timeshare free and no longer liable for the annual maintenance fees.
Just on these cases alone, it is very clear that the timeshare industry is fighting a losing battle in the courts, well they did have many years in which they could have issued contracts which compiled with Spain’s timeshare laws. So really they only have themselves to blame.
This also answers the many questions received by Inside Timeshare, “are there any genuine lawyers out there actually doing what they say and winning?” As you can see the answer is yes there are genuine lawyers doing a superb job on behalf of timeshare consumers.
If you would like to know more about these cases wondering if you have a valid and viable case please use our contact page and Inside Timeshare will get back to you and explain your legal options.