Estate cases are characterised by customers having undergone probate/bankruptcy court proceedings, which makes these cases particularly complex and challenging to remediate accurately. In the remediation process, the bank aims to address the societal impact of its debt collection errors while ensuring relatively swift compensation to the customers directly affected.
In estate cases, Danske Bank has implemented thresholds and time-barring to prevent overburdening probate/bankruptcy courts with cases involving small amounts or historical debts. This approach ensures that beneficiaries and creditors receive fair compensation without overwhelming the legal system. The bank’s decisions reflect a commitment to remediating cases as fairly and efficiently as possible, acknowledging the complexity and lack of legal precedent in many instances. At the same time, the bank’s proposed solution will, in some cases, benefit persons with derivative rights who have not themselves been customers of the bank.
The impartial reviewers’ report on estate cases
Appointed by the Danish Financial Supervisory Authority to oversee Danske Bank’s remediation of debt collection issues, the impartial reviewers have completed their latest report, which focuses on Danske Bank’s approach to estate cases.
As of November 2024, Danske Bank commenced the remediation of debt relief cases, which are part of the estate cases. The remediation of estate cases is conducted either directly or through the probate/bankruptcy courts in Denmark. Danske Bank has discussed the process with the Danish Court Administration, and the processes have been tested in four courts.
The bank expects to have remediated the vast majority of all estate cases by the end of 2025, although more complex estate cases will extend into 2026. In total, the bank expects to pay compensation in approximately 28,000 estate cases.
The bank notes that the impartial reviewers recognise that the bank, when setting the principles for remediation, had to take legal positions and make decisions where almost no legal precedent exists to guide the approach. The bank also notes that, although the impartial reviewers are inclined not to support certain of these decisions fully, they agree with most of the bank’s decisions.
The bank is satisfied that the impartial reviewers acknowledge the bank’s progress and that only the final quality assurances of the process remain before implementation. The impartial reviewers make the following conclusion:
“Thus, in most areas, we agree with the choices made by the bank, and in most respects, we believe that the bank has, as far as possible, adjusted its plans in accordance with the regulation applicable in the area and on the basis of the indications obtained from the probate/bankruptcy courts, for instance as to how the cases could be handled in practice.”
Danske Bank also notes that the impartial reviewers recognise the complexity involved in remediating estate cases, particularly that Danske Bank appears to be the first among several financial institutions with similar issues to address the calculation and compensation related to a large number of potentially flawed cases in which customers have been subject to estate administration. This is achieved with support from the probate/bankruptcy courts and other parties.
Finally, the bank is pleased that the impartial reviewers recognise the efforts made to ensure that potential issues are addressed simultaneously as this significantly reduces the burden on the courts and minimises the risk of the probate/bankruptcy courts having to reopen the same cases multiple times.
Key principles for compensation in estate cases
Danske Bank’s remediation approach in the estate cases is based on the compensation model presented in 2022.
Due to the complexity of the estate cases, as recognised by the impartial reviewers, and to avoid overburdening the probate/bankruptcy courts in cases involving relatively small amounts, Danske Bank has made the following key decisions:
- To pay compensation to the estate or beneficiaries in cases where the person entitled to compensation has passed away. This approach will apply to approximately 10,000 cases in which persons whose debts have not been processed in the bank’s debt collection system may be offered compensation.
- In debt relief cases, compensation will be paid directly to the affected customers rather than other potential creditors. Furthermore, the bank will recalculate and reduce the initial debt to ensure that the debt relief is applied in accordance with the original ruling of the probate/bankruptcy court.
The bank notes that the impartial reviewers agree with this approach to managing debt relief cases. - A threshold of DKK 500 is implemented, which reduces the number of cases that will be submitted to the probate/bankruptcy courts by approximately 13,000 cases in which the average compensation amount is DKK 65. Of these almost 12,000 cases specifically relate to the separate issue of interest on reminder fees.
The bank notes that the impartial reviewers recognise that this decision represents a balancing act: ensuring that beneficiaries and/or creditors are compensated while not overburdening the probate/bankruptcy courts in cases involving relatively small amounts even though there is no direct legal precedent for using a threshold.
In cases regarding claims below the DKK 500 threshold beneficiaries can contact the bank. - To pay compensation in cases involving estates of deceased persons entitled to compensation, corporate bankruptcies and liquidations in which the last payment on the debt was on or after 1 June 2010. This applies to approximately 16,500 cases.
Applying time-barring to cases involving estates of deceased persons, corporate bankruptcies and liquidations in which the last payment on the debt was before 1 June 2010, and the estate was closed before 1 June 2020. This reduces the number of cases that will be submitted to the probate/bankruptcy courts after the above-mentioned threshold is applied by approximately 17,500 cases, of which almost 14,500 cases specifically relate to the separate issue of interest on reminder fees. The time-barring will not be applied to cases related to personal bankruptcies or debt reliefs.
The bank notes that the impartial reviewers generally find this decision well-founded and in accordance with general legal and resource considerations. - To pay reopening costs in closed cases involving solvent estates of deceased persons with a maximum contribution of DKK 15,000, handled by an estate handler if the estate was closed after June 2020 and the compensation amount exceeds DKK 5,000. The bank will not offer to pay reopening costs up front in other estate cases as these are typically paid by the estates themselves. This will lead to a complete or partial coverage of reopening costs in approximately 400 estate cases entitled to compensation.
This position is in line with the standard precedent where the estate bears the costs of reopening an estate case. The bank recognises that the impartial reviewers are not inclined to agree with this decision. - To pay time compensation until three months after the relevant probate/bankruptcy court has been notified. This applies to estates of deceased persons, corporate bankruptcies and liquidations, allowing the court time to process the case. If in practice the probate/bankruptcy courts are not able to process the case within three months, the bank will adjust the period for which time compensation is paid to reflect the actual processing time at the probate/bankruptcy courts. The bank considers this to be a balanced solution.
The bank recognises that the impartial reviewers are critical of this approach and believe that time compensation should be extended until compensation is paid out in all cases.
Download the impartial reviewers’ report. (In danish)
