Inside a Class Action: The Holo­caust and the Swiss Banks

Jane Schapiro
  • Review
By – February 2, 2015

In this absorb­ing and sus­pense­ful his­tor­i­cal nar­ra­tive, Jane Schapiro meets a dou­ble chal­lenge. First, she explores the legal and social com­plex­i­ties of a class action.” She also clar­i­fies the diverse facets of a very notable Holo­caust relat­ed class action suit. Extend­ing from Octo­ber 1996 through August 1998, a team of ded­i­cat­ed lawyers effec­tively sus­tained a bold class action against Switzerland’s largest and most promi­nent banks. These mam­moth insti­tu­tions Includ­ed Cred­it Suisse, The Union Bank of Switzer­land, and the Swiss Bank Cor­po­ra­tion. Schapiro, a free­lance writer and poet, draws on exten­sive research, court tran­scripts, and inter­views with politi­cians, attor­neys, his­to­ri­ans, and sur­vivors. Many chap­ters of her account begin with excerpts from the pro­found­ly affect­ing let­ters of actu­al sur­vivors rep­re­sent­ed in the legal action, each one appeal­ing to the deep­er con­science” of cod­i­fied, writ­ten law. In his plea to the Swiss banks Fair­ness Hear­ing, one let­ter writer describes the phys­i­cal mess in our bod­ies, in our souls,” that all sur­vivors” have been forced to endure. His own father, a Holo­caust fatal­i­ty, was a mas­ter mechan­ic and a machin­ist in motors and equip­ment. He was send­ing the checks to Ger­many and to Italy and Switzer­land for machine parts and motors. I don’t have papers. I can­not show. I just know that he sent it.” 

Son of Jew­ish-Pol­ish immi­grants, Michael Haus­feld was the Wash­ing­ton-based attor­ney who led the legal team seek­ing eco­nom­ic jus­tice for such sur­vivors. Their case had to trans­form the vague entreaty of I just know” into a com­pelling legal argu­ment. While Hausfeld’s father had escaped Poland in 1939, many of his close rel­a­tives had tar­ried and were sub­se­quent­ly mur­dered by the Nazis. Haus­feld acute­ly felt that the major Swiss banks had failed in their spe­cial inter­na­tion­al oblig­a­tion to pro­tect the assets of Holo­caust vic­tims.” With a sol­id pro­fes­sion­al reputa­tion that could mer­it a fee of $435 per hour, Haus­feld still insist­ed that he and his entire team work pro bono” with­out imme­di­ate com­pen­sa­tion. As Schapiro explains, con­gressional leg­is­la­tion enact­ed in 1966 had expand­ed the pow­er of class action claims; in fact, such suits could lev­el the com­plex, liti­gious play­ing field. Attor­ney Mel Weiss, one of Hausfeld’s team of lawyers, had suc­cess­ful­ly tak­en on one cor­po­ra­tion after anoth­er as he extend­ed class action suits to per­son­al injury and prod­uct lia­bil­i­ty cas­es. For Haus­feld, the suit would join tech­ni­cal legal proof with the charge of heinous crimes against human­i­ty. In his argu­ment, the Swiss banks had been part­ners in a Faus­t­ian pact” by cloak­ing assets derived from slave labor, and by receiv­ing and con­vert­ing loot­ed goods into usable cur­ren­cy for the Nazis.” 

As it devel­oped, the suit drew on a forty-five page report from a Com­mit­tee of Experts.” The report deter­mined that six­ty per­cent of assets loot­ed from Euro­pean Jew­ry had moved through Switzer­land which start­ing in 1941 had the only cur­ren­cy that could be freely con­vert­ed to oth­er nation­al cur­ren­cies. The result­ing charge of the Holo­caust Vic­tims Assets Lit­i­ga­tion was for a ten bil­lion dol­lar pay­ment from the accused Swiss banks. While Hausfeld’s legal team was expe­ri­enced and well pre­pared to con­duct the class action in an Amer­i­can court, the Swiss bankers, in the author’s view, were naive­ly com­pla­cent.” Such col­lec­tivized claims do not exist in the Swiss legal sys­tem, and the bank exec­u­tives were unaware that the noise” cre­at­ed by such a suit can often be enough to bring about a set­tle­ment. Schapiro deft­ly cre­ates sus­pense as she moves toward the deci­sive details of the out-of-court set­tle­ment. After consider­able wran­gling, Hausfeld’s team gained a 1.25 bil­lion dol­lar judg­ment, but the res­o­lu­tion also divid­ed the class of vic­tims into five dis­tinct cat­e­gories. These were The Deposit­ed Assets Class, The Loot­ed Assets Class, Slave Labor Class I and II, and the Refugee Class, com­posed of those denied entry, expelled, or abu­sive­ly mis­treat­ed by the Swiss authorities. 

Such an out­come, in one attorney’s view, was an amaz­ing mir­a­cle.” How­ev­er, the settle­ment’s very wide range of vic­tim cat­e­gories could inevitably dis­ap­point and anger some of the poten­tial recip­i­ents. A class action,” Schapiro observes, can include hun­dreds of thou­sands of indi­vid­u­als who are dis­persed across the globe.” In this case, 1.4 mil­lion notice pack­ages were sent out to class mem­bers in at least 48 coun­tries. Nev­er­the­less, the author stress­es that the accused Swiss banks were required to pay out 1.25 bil­lion dol­lars. Such a num­ber can serve as an impor­tant sym­bol. It is a state­ment that pro­claims to the world that a great wrong was com­mit­ted.” Bib­li­og­ra­phy, index, notes.

Relat­ed content:

Peter E. Korn­blum holds a Ph.D. in Eng­lish from the Uni­ver­si­ty of Cal­i­for­nia at Berkeley.He taught Eng­lish in the High School Divi­sion of the New York City Depart­ment ofE­d­u­ca­tion from 1981 through 2007.

Discussion Questions