Cyprus Mail

Lawyers to gauge interest in class-action suit against troika

By Stefanos Evripidou

THE UK-based Anglo-Hellenic and Cypriot Law Association is organising a conference in Nicosia next month to gauge the level of interest in a class action suit against the troika’s decision to ‘bail-in’ the island’s biggest banks.

In a statement released yesterday, the association said the troika’s “unprecedented” decision to impose a haircut on deposits in Laiki Bank and Bank of Cyprus (BoC) last March “caused unbearable problems” for many citizens who saw their life savings vanish.

The association argued that no explanation for the haircut was given beyond vague references to Cyprus’ serious financial problems and near bankruptcy. In particular, no explanation was given on why this measure was implemented “for the first time in Cyprus on unsuspecting and innocent depositors”.

The Anglo-Greek association of Cypriot and Greek lawyers described the troika’s measure on Cyprus as arbitrary and lacking respect for the individual and their property.

The association acknowledged that many depositors have already applied to the Supreme Court of Cyprus seeking justice, noting that this effort has yet to yield any result beyond the referral of these cases to the district courts.

As a result, many depositors are seeking advice on whether can claim compensation against the troika in international courts for the losses suffered as a result of the decision to wind down Laiki, wiping out uninsured deposits, and impose a 47.5 per cent haircut on BoC’s large depositors.

According to its announcement, the association has decided to file actions challenging the troika measures at the European Court of Justice (ECJ) in Luxembourg.

The cases have been assigned to Sir Francis Jacobs (Professor of European Law at King’s College London and former rapporteur at the ECJ), and London-based barrister Takis Tridimas (Counsellor to the European Commission and European Central Bank).

The two will be assisted by Highgate Hills Solicitors based in London.

The association hopes to use next month’s conference to inform the public on the prospect of group action against the troika. The location and date will be determined depending on the size of interest among the public.

Those interested in taking part are requested to contact Highgate Hill Solicitors or the Anglo-Hellenic and Cypriot Law Association at +44-207-2636445 or via email at [email protected]

Meanwhile, another London-based lawyer has already filed six cases at the ECJ against the European Commission and European Central Bank (ECB).

The nature of the claims, however, dictated a two-month time limitation from the signing of the memorandum between Cyprus and its foreign lenders on March 26, 2013, meaning the window of opportunity closed on May 27, 2013.

Christakis Pascalides filed the cases against the two European institutions on behalf of three Cyprus-based companies (two foreign interest, one local) and three individuals (Cyprus residents).

Speaking to the Cyprus Mail, he argued that most Cypriot lawyers adopted the view that the statute of limitations to file a claim against the EU institutions at the ECJ was five years. This is correct, but only if one is applying for damages on the basis of strict liability, where the only thing to be decided is the size of damages to be awarded following losses incurred by depositors.

Pascalides argued the ECJ might not view the matter as one of strict liability, and may wish to hear evidence on causation as to how the haircut came about and what the basis of it was.
With that in mind, Pascalides’ firm filed six claims against the Commission and ECB at the EU’s Court of Justice, within the two-month time period, challenging the memorandum signed between the two EU institutions and the Cyprus Republic.

The essence of the claims is that the preconditions imposed on the Cyprus government in the memorandum which led to the haircut of Laiki and BoC deposits were “unacceptable and irregular and should not have been imposed”.

“Quite a few lawyers in Cyprus did not comprehend the fact that if you are challenging the memorandum, you had to file within two months,” he said.

“We decided to get six cases running in the ECJ on a technical basis. The Commission and ECB have been served and we are waiting for their reply.”

Pascalides said many depositors had approached the firm to seek redress at the ECJ, but that he recommends waiting to see how the ECB and Commission respond to the six test cases filed within the two-month time limit before filing new claims under the five-year time limitation.

“If there is a decision in favour of persons and companies for the loss suffered as a result of the haircut, this will open the floodgates for all the others,” he said.

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