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For a decade, the first civil chamber and the commercial chamber disagreed on the issue of the liability of credit providers for granting credit deemed excessive in relation to the borrower’s repayment capacity.
As early as 1995, the first civil chamber of the Court of Cassation required the banker to submit to a duty to advise. This consisted of “warning” borrowers about the importance of the indebtedness linked to the loans taken out. It therefore failed in its obligation to advise, even if the borrowers were fully aware of the risks they were incurring, having been informed of them by another credit institution, the banker who granted excessive credit.
The scope of this duty and even the qualification adopted were controversial at the time. Some authors have in fact qualified the duty of advice enshrined by the first civil chamber as a “negative duty”, a duty which in reality amounted to a “warning”.
The commercial chamber had, for its part, expressly excluded the existence of such a duty, deciding that the banker, supplier of credit, is “debtor of no obligation to advise his client”.
Since 2002, the chambers of the Court of Cassation have spoken with one voice. They agree, in several judgments (1 and 2) that when a banker has definitive information with regard to the financial situation of the borrower, the latter must, when concluding the contract , to warn of the dangers of the envisaged credit operation (in particular on the risks of indebtedness and the financial capacities of the borrower).
The Commercial Chamber of the Court of Cassation will however put the kibosh, by a judgment of 2019 (3), on the limits of the banker’s duty to warn. This one cannot, indeed, be condemned for the absence of warning of a risk which did not materialize.
- 1) Court of Cassation, Civil Chamber 1, of July 12, 2005, 03-10.921: https://www.legifrance.gouv.fr/juri/id/JURITEXT000007050453/
- 2) Court of Cassation, Commercial Chamber, of March 26, 2002, 99-13.810: https://www.legifrance.gouv.fr/juri/id/JURITEXT000007044441
- 3) Judgment n°199 of February 13, 2019 (17-14.785) – Court of Cassation – Commercial, Financial and Economic Chamber – ECLI:FR:CCASS:2019:CO00199: https://www.courdecassation.fr/jurisprudence_2/arrets_publies_2986/chambre_commerciale_financiere_economique_3172/2019_9124/fevrier_9168/199_13_41391.html
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