NEW YORK Arab Bank Plc has agreed to settle litigation brought by hundreds of Americans who accused it of facilitating militant attacks in Israel, nearly a year after a U.S. jury found the bank liable.
The settlement was confirmed on Friday by Michael Elsner, a lawyer for the plaintiffs, and a spokesman for Arab Bank. The terms were not disclosed.
Elsner said the framework of the deal would be finalised over the next few months.
A trial had been scheduled to start Monday to begin determining how much the bank would have to pay the victims and their families.
Approximately 500 U.S. citizens had sued Arab Bank under the U.S Anti-Terrorism Act, which permits U.S. citizens to pursue claims arising from international terrorism. The plaintiffs included both victims of attacks carried out by Hamas and other groups, as well as family members of the victims.
In September 2014, a U.S. jury in Brooklyn, New York, found the Jordan-based bank liable for two dozen Hamas attacks that took place more than a decade ago in and around Israel, the first time a bank was held liable in U.S. court for violating the act.
Several other banks are facing similar claims in U.S. courts under the Anti-Terrorism Act, including Bank of China, Credit Lyonnais SA, HSBC Holdings Plc and Royal Bank of Scotland Group Plc, among others.
Last year's verdict covered 310 plaintiffs, but a source familiar with the litigation said the settlement would include all 500 plaintiffs who brought claims under the Anti-Terrorism Act.
At trial, lawyers for the plaintiffs said Arab Bank knowingly maintained accounts for Hamas operatives and facilitated payments to families of suicide bombers and those imprisoned or injured during a Palestinian uprising beginning in 2000.
Arab Bank argued that it had followed proper screening procedures to checked accounts and transactions against lists of designated terrorist organizations.
The bank had vowed to appeal, saying U.S. District Judge Brian Cogan issued flawed rulings that prevented it from mounting a full defence.
Arab Bank said after last year's trial that the verdict could expose financial institutions to "enormous liability" for providing routine banking services.
Monday's trial, which was to include 17 plaintiffs, had been akin to so-called bellwether trials that are common in mass tort cases. The trial was expected to allow both sides to assess the damages for a few plaintiffs in order to gauge the potential overall amount of money at stake for the bank.
It was not clear how much in potential damages Arab Bank had faced.
Elsner, the plaintiffs' lawyer, had previously said that a verdict could have been for millions of dollars.
The case is Linde et al. v. Arab Bank, U.S. District Court for the Eastern District of New York, No. 04-2799.
(Reporting by Nate Raymond and Joseph Ax, additional reporting by Alison Frankel; editing by Andrew Hay, Noeleen Walder and Leslie Adler)