CSE legal aid approved

The House of Parliament approved the bill for the establishment of the Legal Aid Fund which will help small to medium sized investors taking legal action to regain losses incurred during the 1999-2001 stock market bubble.

The main provisions of the legal aid bill is to help private investors, whose income does not exceed CYP 20.000 annually to sue for damages sustained during the stock market fiasco 1999 until end of 2001.

Another restriction of the bill is that investors may only sue for losses sustained in the range of CYP 2000 to a maximum of CYP 50.000 during the period from January 1999 until June 30, 2001.

Applications should be made to a three-member scrutiny committee, made up of one representative each from the auditors, lawyers and the Finance Ministry.

The investor first needs to prove that his/her annual income does not exceed CYP 20.000 by presenting past income tax filings, after which the committee will decide if the case meets the criteria of the bill.

The provision of legal aid was one of the preelection pledges by President Papadopoulos.

The Cyprus Investors Association PASEXA however had previously described the move as failing to meet expectations, explaining that the legal aid amount offered by the government would not meet the minimum cost of legal cases that investors were called to take.

For example, the maximum aid of CYP 500 offered by the government for a legal claim ranging from CYP 2000 to 5000 was seen as inadequate.

For claims between CYP 5000 to 25.000, the amount of aid offered is CYP 1000 while for claims between CYP 25.000 to 50.000, the amount of aid offered is only CYP 2.000.

The State will contribute CYP 500.000 to the Legal Aid Fund. The law will come into force after it is published in the Government Gazette.