Fair warning

Liechtenstein trust company LGT Treuhand must pay a former client 7.3 million euros ($10 million) in damages because bankers failed to notify him about stolen data in time, the high court in the capital Vaduz said.

The plaintiff is a property developer from Bad Homburg, Germany, who claimed that he could have declared himself to German authorities had he known, and avoided a more costly fine for tax fraud.

Details in the case, which was brought against LGT in 2008, were just released to the parties last week. But the decision came down in early January. The property developer had asked for 13 million euros but the court awarded it 7.3 million.

Suit becomes test case

The lawsuit came after it emerged that a former employee of Liechtenstein's biggest bank had stolen data on client accounts in the secretive Alpine banking haven and sold them to the German secret service.

The affair of the stolen CD-ROM triggered a crackdown on tax evasion in Germany, which led to widespread investigations of business executives, sports stars and entertainers and resulted in the conviction of former Deutsche Post head Klaus Zumwinkel.

The ruling is seen as a test case for other tax evaders whose identities German authorities got from the CD-ROM.

The businessman had been convicted of tax evasion in 2008 by a German court. He was sentenced to a suspended prison term of two years and a fine of 7.3 million euros.

Paying back taxes

The Vaduz High Court ruled that LGT had "been too late in informing the plaintiff of the theft of data," and that he would have been able to avoid the 7.3 million euro fine had he been able to present himself to German authorities earlier.

However, it ruled that the bank could not be liable for the 6.3 million euros in German back tax the former client had to pay as well.

jen/AP/AFP/Reuters
Editor: Rob Turner