Four judges will be recruited by the government with a supplementary budget in order to deal with 5,000 pending lawsuits in relation to bank bonds, while two more will be transferred from the Labour and District Courts to assist with the deluge.
In addition, four judges’ positions, two senior judges’ positions and two district court chairman positions will be unfrozen in order to allow the orderly operation of the judiciary.
Justice Minister Ionas Nicolaou yesterday told the House Finance Committee that a total of six judges, two in Nicosia and Limassol and one in Paphos and Larnaca will exclusively handle lawsuits filed by bank bondholders, in order to speed up the process.
He said the creation of new positions is necessary in order respond to the demands of Cypriots who were victims of bank bond fraud.
Bank bondholders lost their savings when bonds worth €1.4 billion - €600 million at Bank of Cyprus and €800m at Laiki bank – were converted into penny bank shares following the bail-in at the island’s two largest banks.
Holders claim to have been tricked into investing in the high-yield bonds which offered up to 7% return but were not properly informed of the risks.
The minister pointed out that the government had considered the possibility of resolving the issue out of court by arbitration, via a mediator, but the banks would have questioned the process in court.
Nicolaou also said that the appointment of the judges and the change in procedures on cases involving under €10,000 will help reduce the timeframe as judges are hoping to complete all first instance cases within a year.
Supreme Court judge Charalambos Hadjihambis suggested the formation of a commercial affairs court and special training for judges who will be called to handle billion euro cases.
He also said that it is difficult to predict whether all the bad bond cases will get a hearing.
Chairman of the House Finance Committee Nicolas Papadopoulos said that in addition to the 5,000 pending cases on bank bonds there are also other cases pending before the Supreme Court in relation to the haircut on deposits and non-performing loans.
Papadopoulos stressed that if all the cases are added up there may be a paralysis of the justice system and called on the government to take necessary steps.
According to Papadopoulos, the committee is in favour of the request to unfreeze positions, pointing out that the reinforcement of the judiciary must not be restricted to bank bond cases as there will be millions of lawsuits related to the haircut on deposits.