Maria ŁuszpińskaOn January 10, 2024, the Financial Ombudsman announced on the official website https://rf.gov.pl/ that he had filed his first class action lawsuit — exercising the powers granted to him by the legislator under Article 17(3) of the Act of August 5, 2015 on the handling of complaints by financial market entities, the Financial Ombudsman, and the Financial Education Fund (Journal of Laws of 2023, item 1809; hereinafter: the “Financial Ombudsman Act”), and Article 4(2a) of the Act of December 17, 2009 on pursuing claims in group proceedings (Journal of Laws of 2023, item 1212). Both of the aforementioned provisions entered into force on March 16, 2023.
The class action lawsuit was filed with the Regional Court in Warsaw on January 3, 2024, and was brought against TF Bank AB S.A. Branch in Poland, located in Gdańsk. Acting as the representative of a group of thirteen individuals, the Financial Ombudsman sought a declaration of invalidity of consumer credit agreements granted by the Bank to the group members for the purchase of heat pumps offered by two companies – one based in Toruń (currently in bankruptcy) and the other in Kościan. As stated in the Financial Ombudsman’s press release, according to the allegations in the class action, the Bank is claimed to have engaged in unfair market practices between 2001 and 2022, misleading borrower-group members about the timing and method of disbursement of credit funds, and subsequently disbursing the credit funds to sellers without verifying whether the heat pumps had been delivered and installed for the customer-borrowers. As a result – according to the lawsuit – consumer group members were left with loans to repay, despite not receiving the ordered heat pumps, since the sellers had either declared bankruptcy or ceased business operations in the meantime.
The class action brought by the Financial Ombudsman was registered under case number I C 31/24 by the 1st Civil Division of the Regional Court in Warsaw. As it turned out, the Ombudsman’s first lawsuit was dismissed by a court order dated January 16, 2024, based on Article 199 § 1(3) of the Polish Code of Civil Procedure (k.p.c.). According to the reasoning behind the decision, the grounds for dismissal were the designation of the defendant in the statement of claim as a branch of a foreign (Swedish) company. Under Article 64 §§ 1 and 2 of the Code of Civil Procedure, such a branch does not possess legal personality separate from the foreign company, and therefore lacks legal capacity to be a party to court proceedings.
The first class action initiated by the Financial Ombudsman did not even enter the initial phase of group proceedings, i.e., the so-called certification stage (you can read more about the subsequent phases of group proceedings here). Since the statement of claim was dismissed, it produces no legal effects.
As explained by the Regional Court in Warsaw:
It should be emphasized that in the content of the statement of claim, the group representative repeatedly refers to the independent actions of the Bank’s Branch in Poland in the present case; the relief sought in the claim was also formulated in such a way as to directly refer to the invalidation of agreements concluded by the plaintiffs with the (…) Branch in Poland, located in Gdańsk. Likewise, in the section of the justification concerning the defendant’s standing (p. 37), the Financial Ombudsman clearly indicated the intention to sue the Branch in Poland, and not the company registered in Sweden operating through its Polish Branch – therefore, it cannot be accepted that this was a mistake or an obvious inaccuracy on the part of the claimant that could be rectified by way of correction or under the procedure provided for in Article 130 § 1 of the Code of Civil Procedure – especially considering that the claim was filed by a professional entity authorized to act as a group representative in collective proceedings, where the assistance of an attorney or legal counsel is generally required.
The history of the discussed (admittedly quite brief) first class action brought by the Financial Ombudsman can be found [here]—we encourage you to read both the case summary and the decision of the Regional Court in Warsaw, Civil Division I, dated January 16, 2024, case ref. no. I C 31/24, along with its reasoning. The decision is final.
In the upcoming posts, we will take a closer look at the role of the Financial Ombudsman as a group representative in class action proceedings.
