First judgment in favour of a customer who lost money on currency hedging


The court held that the bank misled the customer by failing to warn of the risk associated with currency forward contracts. But each claim must be considered on a case-by-case basis.

The Rybnik Regional Court ordered Kredyt Bank to return PLN 700,000 to a former customer—a portion of the losses incurred by the customer on currency forward contracts. The plaintiff, an individual, demonstrated that he was not informed by the bank of the risk associated with transactions of this type.

In its justification, the court held that in this case, the bank’s customer was misled and as a result was not aware of the nature of the financial product or the risk when he entered into the contract with the bank. The judgment is not final yet, and a spokesman for Kredyt Bank said the bank would appeal.

It should be pointed out that this ruling was made in a case brought by an individual customer, and will not necessarily be relevant for business customers seeking to make up losses incurred on currency hedging. Moreover, cases involving financial products of this type are generally not considered in light of the decisions made in other cases. Proof by the customer that it was misled and did not receive adequate information about the contracts from the bank must be based on a separate analysis of the facts in each individual case.

Thanks to implementation into Polish law of the EU’s Markets in Financial Instruments Directive, which requires banks and brokerages to provide clear information to their retail clients concerning the risks associated with investment products, the odds that financial institutions will lose similar cases in the future is significantly reduced—so long as the institutions comply with informational requirements.