Act on Judicial Relief Granted to Holders of Qualified Bank Credit – proposals of the group of independent legal experts
This week the Constitutional Court of the Republic of Slovenia abrogated in its entirety the Act on Judicial Relief Granted to Holders of Qualified Bank Credit. The Constitutional Court’s decision confirmed the Banka Slovenije position, and in particular it contains pointers as to how to appropriately arrange judicial protection. The ruling thus enables the government to continue its actions towards the comprehensive and legislatively aligned regulation of the issues covered by the abrogated law.
With the aim of settling these issues at the earliest opportunity, Banka Slovenije invited the cooperation of a group of independent legal experts so as to draw up proposals for comprehensively settling the issues. Today this group presented its proposed legal solutions, which will be available to the competent authorities for use at their discretion in legislative and other procedures, and they will also be available to the general public.
The Constitutional Court ruling enables Banka Slovenije to continue its actions towards the comprehensive and legislatively aligned regulation of the issues covered by the abrogated law.
Steps were taken in this direction when the taskforce of independent, reputable experts from Slovenia and abroad was engaged. On the basis of their in-depth understanding not only of the situation in narrow technical terms, but also from the perspective of the functioning of the entire national system, they drew up a set of proposals for the comprehensive settlement of the unresolved issues. The taskforce, which consists of Prof Miha Juhart, Dr Miro Prek, Prof André Prüm and Franc Testen, conducted its work in two parts.
The first part was concluded in May last year, when it presented its report to political circles and the general public.
In the second phase of its work the group drafted a proposal of legislative solutions that accord with the European acquis and the Slovenian constitutional order.
The key highlights of the legislative solutions are as follows:
- The Republic of Slovenia sets up a fund to act as the defendant in compensation procedures.
- The founding assets for operation of the fund are provided by the founder.
- The supervisory board appoints the fund director.
PUBLICATION OF DOCUMENTS
Banka Slovenije publishes summaries of decisions and other important documents on its website for each bank on which an extraordinary measure has been imposed.
VIRTUAL DATA ROOM
The ministry responsible for finance sets up a virtual data room for each bank on which an extraordinary measure has been imposed, and publishes the relevant documents. Access is recorded. It is managed by the Securities Market Agency (ATVP).
- The plaintiff brings an action, whereby it seeks the payment of compensation, against the Fund.
- At the same time as the action, a motion may be brought against the ATVP for the court to determine that the plaintiff is the former holder.
- An action must be brought within seven months of publication of the notice of setting up a virtual data room.
- The Fund must respond to the action within six months of delivery of the court ruling.
MANDATORY CONSOLIDATION OF ACTIONS
- After receiving a reply to an action, the court by decision consolidates (with the aim of joint treatment) all actions in which plaintiffs are claiming compensation protection under this Act and that relate to the same Banka Slovenije decision. The court issues a joint ruling for all consolidated actions.
- After consolidation of the actions the court has the option of conducting a sample procedure. The court selects one or more actions each from former holders and consolidates them for treatment in the sample procedure.
- The Republic of Slovenia and Banka Slovenije act in the action as intervenors on the side of the Fund.
- Banka Slovenije provides all the material for conducting the procedure and successful litigation of the Fund.
- The court may appoint a group of expert witnesses.
- The court first issues a judgment whereby it determines the existence of a duty to reimburse damages by individual class of eligible liability (ruling on the basis).
- Each former holder may submit a request regarding the amount of damages within six months of the judgment becoming enforceable. The locally competent administrative unit decides on the request.
- The former holder is entitled to reimbursement of damages up to a maximum amount of the value at which the specific eligible bank liability was obtained.
- Interest is accrued on the compensation.
REDRESS AGAINST BANKA SLOVENIJE
Banka Slovenije returns amounts to the Fund if it has itself seriously breached its duty of due diligence or such was committed by persons that Banka Slovenije authorised to act on its behalf.
In view of today’s presentation of the work of the independent expert taskforce, Banka Slovenije would further explain that the key purpose of the proposed legislative solutions is for them to be available to the competent authorities for use at their discretion in legislative and other procedures. In this way Banka Slovenije has sought to play its part in settling the salient, long-present unresolved issues causing disruptions in the functioning of the financial system, and regarding which to date stakeholders (including principally former holders) have not been able to make successful use of the means of effective judicial protection.