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No obligation of the bank to cover attorney’s fees after a suspicious money laundering report
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In connection with a suspicious money laundering report, the bank is not obligated to pay the attorney’s fees of the affected customer. This was clarified by the Higher Regional Court (OLG) Frankfurt am Main in its judgment of 5 January 2024 (Case No.: 10 U 18/24). In the underlying proceedings, no legal basis for the customer’s claim for reimbursement was apparent.
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Facts and initial situation
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The legal dispute concerned the filing of a money-laundering-related suspicious activity report by a credit institution after, according to its own statements, anomalous incoming payments had been recorded on the claimant’s account. The bank then blocked the relevant payment amount and submitted a report pursuant to Section 43(1) GwG to the competent authority. The affected customer engaged legal counsel and asserted the resulting attorney’s fees against the credit institution.
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Legal assessment by the OLG Frankfurt am Main
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The OLG Frankfurt am Main held that there is no statutory or contractual obligation for the bank to assume the attorney’s fees. Neither the German Civil Code nor special statutory provisions, such as the Money Laundering Act, reveal any corresponding basis for a claim.
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No claim for damages under customary law
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In particular, no bases for claims under tort law or for breach of contractual duties were apparent. Submitting the suspicious activity report is a measure required by law, implemented in the public interest. It is not an unlawful act by the bank, but rather compliance with statutory obligations.
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Balancing of interests and purpose of the suspicious activity report
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In the court’s view, the reporting system under the Money Laundering Act serves to protect legal transactions and the integrity of the financial system. An individual claim for compensation by the affected customer relating to the costs of engaging legal counsel would run counter to the legislative guiding principle of these provisions. Recourse to general civil-law provisions is therefore excluded.
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Costs ruling and note on proper consideration
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The OLG Frankfurt am Main ultimately confirmed that there are no reimbursement claims whatsoever for the incurred legal representation costs, provided the bank properly complies with its statutory reporting obligations. With its clear reference to existing constellations of duties and protective purposes, the decision is significant for practice. However, the customer remains free to have the lawfulness of blocking measures or reports reviewed in the individual case. It should be noted, however, that the decision makes no statement as to the substantive validity of the original suspicion. These principles apply on the premise that the statutory requirements were observed.
\nSource: OLG Frankfurt am Main, judgment of 5 January 2024, Case No.: 10 U 18/24.
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Conclusion
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The decision of the OLG Frankfurt am Main highlights the precedence of credit institutions’ statutory reporting obligations over the individual cost interests of account holders in connection with the Money Laundering Act. Nevertheless, complex issues may arise for companies and high-net-worth private individuals in connection with account freezes, suspicious activity reports, and possible responses. For an in-depth legal analysis of these and similar issues, the team at MTR Legal Rechtsanwälte, with many years of experience in banking and finance, is available to assist you. Further information can be found under the heading legal advice in banking law.
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