Antonio Flores’ Blog

Losses sustained on a financial investment that has not performed cannot always be attributed to the consumer. There are many instances where risks were not properly disclosed,where the consumer’s profile and an understanding of the complexities were incompatible, perhaps there was been misrepresentation or even fraud..

Of special importance are the timescales within which an action may be taken as, where there was mistake or misrepresentation, the contract can be rescinded within a period of 4 years since it was consummated but if, for instance, the contract is null and void because it violates public policy, or goes against moral or ethics, the contract is deemed to have never existed and so, there are no timescales to bring such an action.

The type of financial contract entered into may also determine when the 4-year rule elapses: as an example, claimants that sue for having been mis-sold “swaps” have 4 years since the contract was consummated (end of the term of the contract for both parties) whereas, those who wish to set aside a contract on a Unit-Linked Life Assurance product, pursuant to a recent ruling by the Appeal Court in Vizcaya (30-9-2011), can only bring an action within 4 years since the contract was signed.

It is worth noting that the 4-year term is for mistake or misrepresentation (viodability), but not for contractual default (15 years) or total voidness (no term).

Antonio Flores Litigation Banco Valencia, CAM Bank, Complex bank deposits, Equity Release Spain, Financial Mis-selling, Preferential Shares Spain, Suing Financial Failed Investments, Swaps