Diamond Resorts Europe attempt to avoid obligations via controversial European Court of Justice (ECJ) ruling dealt a severe blow
ECJ ruling September 2023
In September 2023, the European Court of Justice issued what some observers regarded as a confusing ruling about the uncertainty over which jurisdiction which certain holiday ownership contract disputes and claims could be adjudicated in.
The ruling only referred to points contracts (including Pure Points) and only affected Diamond Resorts Europe and Club La Costa claims.
This apparent lack of direction was quickly exploited by these resorts who were keen to use the ruling to lodge appeals and pleas aimed at avoiding paying compensation to people they had issued illegal contracts to under Spanish law.
Effect of the ECJ ruling
The ruling might not have been definitive in terms of jurisdiction, but what it absolutely did not do is absolve timeshare companies of responsibility for the previous 25 years of consumer abuse. The judge merely confirmed that in some cases UK law may be applied rather than Spanish law. And in some cases that UK law may be applied by courts in Spain.
The resorts seemed to be hoping to either achieve further delays, or complexity in the claims process. This has been, broadly speaking, their core goals ever since their clients began suing them successfully back in 2016.
Nobody was going to get away with anything. The law always finds a way to penalise companies who take advantage of their customers. Especially when dedicated consumer lawyers like the teams at M1 Legal, M1 Law and Pinder Reaux are fighting on those customers’ behalf.
Spanish Supreme Court ruling October 2024
European Consumer Claims (ECC) clients Mr and Mrs Gillies filed a claim against Diamond in 2019. Diamond subsequently submitted a plea based on the ECJ ruling, arguing that Spain had no jurisdiction over the case. This plea was rejected. Diamond then requested the application of English law to the contract. This was also rejected and the case was upheld, with all contacts declared null and void.
Diamond’s next appeal (consistent with the ‘any delay possible‘ approach favoured by timeshare resort lawyers) with the Provincial Court of Malaga was dismissed. Diamond appealed yet again, this time with the Spanish Supreme Court on two grounds:
- Breach of procedure: Diamond maintained that English courts have jurisdiction
- Breach of Article 6.2 (Regulation 593/2008). Diamond held that the applicable law was English consumer law
The Supreme Court dismissed the breach of procedure (jurisdiction) grounds.
However the court upheld that English Consumer Law was applicable.
English law has to be applied, but by Spanish judges in Spain.
Effect of the Spanish Supreme Court ruling
So how does this ruling impact holiday ownership claims that were potentially affected by the ECJ ruling from 2023?
The experts at ECC view this ruling as positive for the following reasons:
- Claims against Spanish companies (or Spanish branches of foreign companies) can still go ahead
- English (consumer) law can be applied in a Spanish court, by a Spanish judge when both parties have agreed to English law governing the contract, usually by a ‘submission clause.’ English law, whilst having many differences from Spanish law, also provides its own consumer protection which claimants should now benefit from
- This ruling facilitates routes to claim by clarifying ‘grey areas’ which the timeshare resorts previously took advantage of in order to appeal (and thereby further delay the final outcome)
- Claimants now have more options to pursue legal actions in multiple jurisdictions, depending on the contract type
Want to know more?
Are you deciding whether to claim against your holiday ownership resort?
Get in touch with our team today, to talk through you options.
