The Bank of Slovenia, due to non-compliance with European capital adequacy
requirements, wrote off a large number of financial instruments from six banks through
decisions on extraordinary measures. The Constitutional Court of the Republic of
Slovenia has twice struck down the regulation governing the method of compensation for
the writen-off securities.
The currently applicable Act on Judicial Protection of Former Holders of Qualified Bank
Liabilities (ZPSVIKOB-1) introduces a concept of damage tailored to the specific situation
of the write-off, which takes into account the “no creditor worse off” (NCWO) principle and
largely deviates from the general rules of tort law and the rules on state liability for
damages.
The primary form of judicial protection provided for is a collective damages action. Certain
procedural provisions deviate from the Class Action Act (ZKolT), for example, the
summons to file a complaint, the response to the complaint, the approval of the complaint,
and the obligation to issue a judgment on the merits; however, certain provision of the
ZKolT must be applied mutatis mutandis.
In the absence of a class action for damages, the court is obligated to consolidate
individual lawsuits and establish a model procedure. The Act introduces a special form of
compulsory joinder, even though the former holders are formal co-plaintiffs.
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