By Constantinos Psillides
BANKS may file mass lawsuits against debtors if the House enacts a statute of limitations bill, AKEL MP Aristos Damianou said after discussion at the House Legal Affairs committee.
The legislation was passed ten years ago but was never enacted, since it has been strongly contested by commercial banks. It provides that once a set period of time passes a claim can no longer be validly filed and is scheduled to take effect on January 1, 2015.
Damianou said that bank representatives told MPs that if the law is enacted then the banks will have no other option than to move swiftly to ensure that they don’t lose any money.
The committee met with representatives of the commercial banks yesterday to try and sort out the problem, but the discussion came at a dead end.
“Unfortunately, we are still in disagreement. We are faced with the threat that, in case the law is enacted, the banks will flood the courts with mass lawsuits,” said Damianou, adding that this behaviour is unacceptable, but that the matter will probably be resolved by the end of the year.
“We will try to find a solution since this is a problem that concerns many individuals and businesses. A positive outcome will also contribute to maintaining the fragile social balance,” he said.
The Justice Ministry tabled a proposal saying that the statute of limitations should only affect future cases. The proposal was shot down by MPs.
“An unofficial proposal by the Justice Ministry finds us in disagreement, since it primarily aims at serving the banks’ interests. The time has come to secure what little rights the people are left with,” said the AKEL MP.
Financial news portal Stockwatch reported that the Association of Cyprus Banks and the Co-op bank requested that the legislation go into effect on June 30, 2015, so the banks have enough time to settle outstanding debts with debtors.