Cyprus demands legal cost payments from 2013 bank bailout depositors withdrawing lawsuits
Depositors affected by Cyprus’s 2013 bank bailout face demands to pay the state’s legal costs after withdrawing lawsuits challenging the controversial 'haircut' on their savings, according to their association. Thousands of depositors filed lawsuits and then withdrew them; most now confront legal costs between €1,500 and €20,000 each. The haircut had nearly collapsed the Cypriot economy, wiping out family savings and shuttering businesses.
The Solidarity Fund, established to refund affected depositors, has paid out €72 million so far in 2025, with €28 million withheld due to application issues. Total anticipated claims from depositors amount to €2 billion and disbursements are expected to take years. The Central Bank of Cyprus offers reduced legal costs schemes until the end of 2026, but depositors seek a full waiver of legal fees, arguing the state should bear responsibility for the haircut.
The association's president has stated the issue will be discussed in Parliament, opposing the state's pursuit of legal cost recovery. No evidence was found of lawyers exploiting depositors’ legal claims. Updates on the next disbursement schedule or funding for further losses in 2026 remain unavailable.
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