GER: Decision on Premium Savings Positive for Savers

Feb 24, 2023 Benn-Ibler Rechtsanwälte

The senate of the German Federal Supreme Court (Bundesgerichtshof, hereinafter BGH) responsible for banking and capital market law has again ruled on appeals by a consumer protection association against a precedential declaratory judgement delivered by the Higher Regional Court on interest-rate change clauses in premium savings contracts.

Since the 1990s, the German Sparkasse has offered premium savings contracts with a variable interest rate on savings deposits. From year three onwards, the amount of the interest-bearing premium was staggered and, from year 15 onwards, amounted to up to 50% of the annual savings deposits. The Terms and Conditions for Savings Transactions included in such contracts include a provision on the change of the variable interest rate. It states: ‘Insofar as nothing else has been agreed, Sparkasse shall pay the customer the interest rate posted by Sparkasse in branch foyers. For existing savings deposits and unless otherwise agreed, any change in interest rates shall come into effect with the change as of the notice, irrespective of any period of notice.’

The plaintiff considered this provision to be invalid. Among other things, he wanted the ineffectiveness of the interest-rate change clause and the calculation of a reference interest rate to be determined. The BGH now confirmed its previous case law. It overturned the judgement of the Higher Regional Court insofar as that court had not determined a reference interest rate for the amount of the variable interest rate. Furthermore, the BGH ruled that interest rate adjustments must be made while maintaining the initial relative spread between the contractual interest rate and the reference interest rate (=proportional method).

According to the Federal Supreme Court, the Higher Regional Court erred in law by assuming that the reference interest rate could not be determined by way of supplementary contract interpretation due to possible individual agreements in the savings contracts.

However, individual agreements are only to be taken into account in legal proceedings between the consumers and the defendant bank and therefore exclude the binding effect of the precedential declaratory judgement, but not the performance of a supplementary contract interpretation in precedential declaratory proceedings. Thus, in the case of a supplementary interpretation of the contract, the initial relative spread between the contractual interest rate and the reference interest rate must be maintained in interest rate adjustments. This is the only way to ensure that the basic structure of the contractual conditions of savings contracts is maintained. Thus, favourable interest conditions remain favourable and unfavourable ones remain unfavourable.

BGH, XI ZR 257/21 (24.01.2023)