Lawyer confident in winning appeals against Laiki haircut case

Andreas Theofilou, the lawyer who won the first case on Laiki Bank deposit haircuts for his client, said on Friday that he is confident that his office will be able to win two appeals against the Limassol court ruling two days before.

On Wednesday, the court decision awarded over €780,000 to a depositor who lost his Laiki Bank savings due to the 2013 ‘haircut’ igniting a wave of reactions, with the attorney-general’s office immediately appealing the decision, while others slammed the “golden boys” at the banks for prioritising their bonuses over due diligence.

The decision, made at Limassol district court, marked the first time since Cyprus’ bail-in that a plaintiff had won a case over their deposits. All previous court cases have failed.

The court ruled the Central Bank (CBC) – and consequently the Republic of Cyprus, had been negligent in their handling of the financial crisis in 2009 and the lead up to the haircut.

As a result, the Russian depositor was awarded €780,833 in his lawsuit against Laiki Bank, its administrator, the Central Bank of Cyprus (CBC) and the government itself.

Commenting on the matter on Friday, Theofilou told a podcast that he is confident his office will be able to win the now two appeals filed against the ruling, one from the attorney-general and one from the central bank.

Theofilou said that he has handled similar cases before, and still has another 20 that involve much bigger sums. He added that the defence focused on the fact that the state and the central bank had responsibilities in warning cabout the haircut, and not taking the appropriate measures to avoid it.

The court found the government negligent because it did not turn to European mechanisms in time for a loan and then “without seriousness and planning” opted for a loan without knowing the bank’s needs, which were greater than those of the state.

The court also slammed former President Nicos Anastasiades himself, whose statements that he would never allow a haircut on deposits, led the plaintiff not to withdraw their savings from the bank. As a result, the depositor was found to have suffered real damage through their loss from the haircut.

Theofilou said: “There is hope for all those that have not filed cases,” adding that he recommends they keep insisting on having these cases tried.

He added that the way they handled the case for his Russian client, was based on a decision issued back in 2013 by the Supreme Court, when the haircut happened, and dozens of depositors filed complaints with the supreme court to reject the decision for a haircut.

Theofilou said that at the time, the court denied their complaints, but in the decision issued, the court said that the depositors should seek justice from those that caused the haircut, in this case the state and the central bank.