Court dismisses lawsuits over 2013 Laiki Bank haircut

Limassol district court dismissed on Thursday four consolidated lawsuits against the now-defunct Laiki Bank of Cyprus, the Central Bank of Cyprus, and the Republic of Cyprus concerning the 2013 haircut.

The plaintiffs, who suffered financial losses, sought compensation for alleged negligent acts and/or omissions by the defendants, resulting in the adjustment of their bank deposits held at Laiki Bank. They also alleged unconstitutionality of the 2013 restructuring of credit measures and claimed a violation of their human rights.

“It has not been proven that the Republic of Cyprus and its officials knew or could have known at the material time of the acts or omissions attributed to them that these could lead to the implementation of restructuring measures and the adjustment of the plaintiffs’ deposits. In other words, it has not been demonstrated that at the time it was reasonably foreseeable the outcome of March 2013,” a statement by the legal service said.

In its ruling, the court clarified that the implementation of the restructuring measures did not leave depositors of Laiki Bank, including the plaintiffs, in a worse situation than they would have faced if the bank had undergone liquidation. Regarding the constitutionality of the measures, the court deemed it non-essential for the case’s examination under the prevailing circumstances.

Additionally, concerning the alleged infringement of the plaintiffs’ constitutional and/or human rights, the court determined that such assertions lacked substantiation.

The court dismissed all four consolidated lawsuits in their entirety and ordered costs to be awarded in favour of the Republic and the other defendants.

Earlier this year, the attorney-general’s office appealed a ruling by Limassol district court that favoured depositors with now-defunct Laiki Bank, holding the Central Bank and the Republic responsible for negligence, dereliction of duty, and misrepresentations contributing to the bank’s collapse.