Swiss franc borrowers are expected to continue suing banks intensively for the next 3-4 years. The number of court cases will keep growing, albeit at a slower pace compared to one or two years ago. Borrowers have little reason to give up on asserting their rights. The settlements offered to them—while better than in previous years—are still largely unattractive. In some cases, these offers can be up to 30 times worse than the compensation achievable through litigation. Consumers learn this when consulting with lawyers and are aware that a pro-consumer line of court rulings has now been firmly established. In 4-6 years, currency loan cases will no longer burden the courts significantly, though some lawsuits may still linger, with individual cases potentially being filed for decades to come.
Banks Are Struggling
The market consensus is that frankowicz cases will continue for years. Currently, there are nearly 200,000 such cases in courts. In addition, about 100,000 settlements have been reached, covering roughly 45-50% of all foreign currency loans issued. Given that these cases have been ongoing for 6-7 years, new lawsuits are expected to flow into courts for another 3-4 years, after which this trend should gradually decline. However, the number of cases involving Polish złoty loans is likely to rise, especially if initial court rulings favor borrowers. One early indication is the decision of the Court of Appeals in Warsaw, which suspended the obligation to repay a PLN loan with WIBOR-based interest rates as part of protective measures.
Banks are trying to discourage frankowicz borrowers from going to court. Even borrowers who were not considering litigation and are regularly repaying their loans are receiving settlement offers. In some cases, these offers are as much as 30 times lower than the amounts recoverable in court after 3-4 years of litigation. For instance, one consumer was offered just PLN 15,000 in a settlement, while a court ruling could yield over PLN 450,000.
Although banks began offering slightly better settlements in the first half of 2024, following the Supreme Court’s resolution on April 25, 2024, these offers still fall short of borrowers’ expectations. If a loan has already been repaid or the court has suspended repayments, clients are willing to wait several years to recover the full amount owed. Some settlement terms may be relatively attractive when a case is already in court, particularly from one specific bank. However, offers from other banks remain unattractive.
The problem lies in banks’ assumption that clients will not verify settlement offers. This is why offers are often sent directly to borrowers, even when a legal representative has been appointed. Banks aim to prevent clients from consulting lawyers who can explain the real benefits of litigation. However, informed consumers are not deterred. They know the courts consistently favor consumers, with exceptions from a few judges whose rulings are often overturned by appellate courts.
Ironically, for some clients, a settlement offer from the bank prompts them to sue. If the bank is seeking a settlement, it indicates that the contract is likely flawed, making legal action worthwhile.
Cases Will Decline in 5-7 Years
After years of difficulty and costly mistakes by public institutions (e.g., the bankruptcies of Idea Bank and Getin Noble Bank), mechanisms have been established to annul these flawed loan agreements. Administrative responses to financial market irregularities (Amber Gold, investment-linked insurance policies, GetBack, and currency loans) have historically been delayed by several years. The currency loan problem is now largely resolved legally, although cases still take years to conclude.
Considering the influx of tens of thousands of new cases annually and an average case duration of up to 4 years, it is predicted that within 4-6 years, the number of currency loan cases will decline significantly, reducing the burden on courts. However, individual lawsuits may continue for years, especially given that some contracts were issued for 40 or 50 years. Therefore, the frankowicz issue will not disappear entirely but will become less visible.
In time, the specialized frankowicz division of the Regional Court in Warsaw may be converted into a general civil or financial division handling disputes with banks, investment funds, or brokerage firms. It is essential to leverage the experience of judges currently handling these cases.
Growing Problems with PLN Loans and Investment Funds
Currently, the growing problems with złoty loans and investment funds are being ignored. Instead of preventing these issues, authorities and banks insist that their actions are correct. Without a change in this approach, court inefficiency will once again be a topic of discussion, this time due to a surge in złoty loan cases.
Incentives to Sue
Currency rate increases are a significant motivator for borrowers to file lawsuits. If the Swiss franc appreciates or loan repayments become difficult, more people will seek legal action to counter rising obligations. The tolerance for higher repayment rates has its limits. When these rates exceed acceptable levels, clients are more likely to sue. This is reasonable since courts frequently grant protective measures and suspend repayments, reducing monthly expenses by thousands of złotys—a significant relief during financial hardships.
A dramatic increase in new cases is unlikely. Instead, a gradual decline in lawsuits is expected unless the exchange rates for the Swiss franc, euro, or dollar rise to PLN 6-7 or higher. This could prompt borrowers who are currently repaying loans to act. Another incentive would be a significant reduction in case duration—from 3-4 years to around 1.5 years. However, this scenario is unlikely in the near future.
A major motivator for lawsuits could also be banks losing cases concerning the return of loan principal. Although being sued by a bank is unpleasant, with proper legal representation, the risks are minimized. Banks often act too late, initiating separate proceedings instead of engaging in ongoing cases.
Mass dismissals of bank lawsuits could further encourage borrowers to sue. If banks’ threats prove empty, clients may feel more confident about asserting their claims. The conditions of settlements proposed by banks will ultimately play a significant role in reducing new cases. If settlements become attractive enough to make litigation unprofitable, clients will willingly accept them. Rising exchange rates—and consequently higher repayments—always motivate borrowers to seek comprehensive solutions to their loan problems.
Author: Jakub Bartosiak, Attorney, MBM Legal Law Firm
Source: https://ceo.com.pl/banki-wciaz-proponuja-slabe-ugody-frankowiczom-opinia-eksperta-23148
