Court gives investors glimmer of hope
The Local · 12 Jul 2012, 11:00
Published: 12 Jul 2012 11:00 GMT+02:00
The five complainants had put hundreds of thousands of euros into the “Wealthmaster Nobel” insurance scheme – on the promise of eight percent return on their money, the German Supreme Court heard.
The idea was for the money to earn enough to pay out dividends every quarter year – and then for their initial investment to be repaid in full at the end of the agreed period. The interest earned was planned to generate funds for the investors as they aged.
But the scheme failed to work, and the quarterly payments ended up being taken from the invested capital, which shrank accordingly.
The court said on Wednesday that the contracts had been too optimistic and that had spoken of 8.5 percent returns – even though the firm itself had only felt six percent was realistic. This was not made clear enough for the customers, the court said. And there was no information that the invested capital was forming a reserve from which payments could be made to other investors.
But although the ruling is positive for the complainants, they cannot expect to get a payout immediately – the five test cases ruled on this week will have to be sent back to a lower court in Stuttgart for checks – and a decision must be made about the level of compensation.
Clerical Medical has also made an application to produce more evidence, saying those signing the contracts must have understood that the promised payments were not guaranteed, but that they depended on the performance of the money fund.
Wednesday’s ruling relates to five test cases – the Supreme Court has another 40 cases to hear, while there are more than 1,000 cases waiting to be heard across Germany.