A judge at the Ljubljana Higher Court is in the spotlight after an investigative news portal has revealed that she has pressed charges against a bank over a loan she took out in Swiss francs, after having been involved in at least nine cases related to Swiss franc loans that were resolved in favour of plaintiffs.

Dozens of cases have been ongoing at courts for years, brought by borrowers who took out loans in Swiss francs and then saw their outstanding liabilities to banks surge when the Swiss central bank allowed the franc to appreciate in 2015.

While courts initially sided with banks in a few cases, they have ruled in favour of borrowers in several cases since, including in a ruling handed down by the Supreme Court in 2023 on the grounds that the bank failed to explain the currency risk to the two borrowers concerned.

The investigative portal Necenzurirano has reported that judge Katarina Marolt Kuret has been involved in at least nine such cases, in five of them as the rapporteur, and in some as the head of the panel delivering judgements; in all nine cases the Higher Court decided in favour of the plaintiffs and against the banks.

Judge took out loan in 2008

The report says the judge did not recuse herself from these cases, even though she has long had a mortgage loan in Swiss francs that she took out from UniCredit Banka Slovenija in 2008. Now, she is demanding that the bank return excessive loan payments together with interest.

While the judge would not respond to requests for comment, Radio Slovenija cited Ljubljana Higher Court president Anton Pajan as saying that she should have recused herself. He also pointed out that the court had no way of knowing she had a Swiss franc loan since she did not notify them about that.

According to Radio Slovenija, the judge did later recuse herself from nine cases, but not because of her lawsuit: she requested the recusal because case law had changed.

Court informed of loan in 2024

The Ljubljana Higher Court told the Slovenian Press Agency that the judge recused herself for the first time in February 2024 and had since been excluded from all Franc loan cases. She did not inform the court that she was herself a party to procedure until November 2024.

Under the law, a judge must not perform their function in circumstances which call their impartiality into question. In such a case they need to notify the court president, who decides on their recusal.

The Judicial Council, which plays a key role in judicial staffing and has the power to sanction judges, is planning to debate the Necenzurirano report at a session scheduled for 6 March, when they will also decide whether any action is necessary.

Bank official appalled

Bank Association president Stanislava Zadravec Caprirolo described the judge's conduct as unacceptable. "Anyone with a shred of professional ethics should feel it appropriate to recuse themselves for a conflict of interest," she told TV Slovenija on 17 February.

Some 32,000 borrowers in Slovenia saw the value of their debt in euros increase as a result of a surge in the value of the Franc loan in 2015. According to the central bank, the volume of loans to households denominated in Swiss francs peaked at the end of 2008 and the beginning of 2009, when it exceeded €1.4 billion.

The Frank Association of Slovenia, representing the borrowers with the claim that they had not been properly informed of the loan risk by their banks, has been pushing for a systemic solution, while banks have been arguing for a case-by-case approach.

In February 2002, the National Assembly passed a bill sponsored by the Frank Association that would distribute the cost of the surge in the franc's value between banks and the affected borrowers, but the Constitutional Court annulled the act in December that year on a petition by banks.

Apart from judge Marolt Kuret, another case made headlines recently after a Maribor court ordered a bank to pay €54,000 to a corporate law professor, specialising in banking and finance, who managed to prove that he did not understand the risk entailed when he took out a franc loan, which he has repaid in the meantime. Caprirolo described the situation as a "disgrace".