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Author: Don Obrien

Funds Held In Lebanon: UK Consumer Laws May Help Release Them – Finance and Banking



European Union:

Funds Held In Lebanon: UK Consumer Laws May Help Release Them


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Summary

The financial and humanitarian crisis in Lebanon continues to
hit the headlines. Our commercial disputes team has been assisting
English domiciled families with funds held in Lebanese banks to
take expedited legal steps in the English courts to allow them to
access them outside Lebanon.

Whilst all cases are dependent on their own facts, there is
still time to engage with the English courts for similar
relief.

EU consumers with a foreign bank account held a trump card

EU rules within the Brussels (Recast) Regulation, gave a trump
card to EU-based consumers who had entered into contracts with
foreign organisations for goods or services (such as banking
services), as long as the foreign organisation had directed its
business activities or marketed to potential customers in that
consumer’s member state domicile, which, prior to Brexit,
included the UK.

That trump card enabled consumers to upset the usual rules on
where any legal disputes should be heard – effectively consumers
were able to choose whether to sue in their own home court,
despite, for example, what the terms of the contract might say. For
English domiciled consumers with bank accounts in Lebanon, being
able to deploy these EU rules and use the English courts rather
than the Lebanese to retrieve their funds has proven vital given
the ongoing problems with removing currency from the country.

A case in point is the claim we are currently pursuing in the
English courts, Manoukian v Societe Generale De Banque au Liban
SAL
and another. We moved swiftly last year to start the claim
in the English courts while the consumer rules set out in Brussels
(Recast) still applied to English domiciled consumers. Since then
we have persuaded the court to work on an expedited basis so that
the final hearing of our claim can be heard as quickly as possible.
The trial is scheduled for early 2022 which is crucial, given the
deteriorating situation in Lebanon and the ongoing risk to our
clients’ funds.

Has the trump card been dealt for the last time?

One key development which may have gone unnoticed in the Brexit
headlines does, however, provide a saving grace for English-based
consumers who have yet to take any legal steps to initiate claims
to retrieve funds held in Lebanon. The jurisdictional rules set out
in Brussels (Recast) can no longer be deployed by the English
courts on behalf of consumers here, but the consumer sections of
that instrument were in fact lifted almost wholesale and added as
“retained EU law” into UK legislation, as s15A-E of the
Civil Jurisdiction and Judgments Act 1982 (CJJA).

So what next for English-based consumers with claims?

Significantly, now as a matter of English law, the English court
can take jurisdiction of a consumer claim against a Lebanese bank,
such that, if the claim succeeds, an award to the consumer can be
made in jurisdiction outside of the Lebanon and, if the deposits
are held in non-Lebanese foreign currency, may enable international
enforcement and recovery.

Whilst many claims of this nature were, sensibly, issued prior
to the end of the Brexit transition period to take advantage of the
Brussels Recast consumer rules, we are now seeing the first cases
in court where the claims have been issued in England post-Brexit
pursuant to the new sections of the CJJA. Whilst every case is
dependent on the facts, and a key question to establish
jurisdiction will be whether the bank in question did indeed
“direct” its marketing activities to potential customers
in the UK so as to trigger the consumer rules, it is clear that
English-based consumers still have the trump card and can choose to
pursue their case here rather than in the Lebanese courts.

The message is clear – despite Brexit, all is not lost for
consumer claims against foreign entities. Since moving quickly will
be vital because of the ongoing issues in Lebanon, the ability to
pursue claims in “home” courts keeps open a vital route
to recovery of funds held there.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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