Disputes in the Financial Sector – Trends and Risk Mitigation in 2025

The new Financial Contracts Act entered into force on 1 January 2023 and is now the key piece of legislation governing contracts in the financial sector. The Act affects all financial services to varying degrees and introduces both new requirements and changes to existing rules. Services that were previously lightly or not regulated are now subject to a more comprehensive and detailed regulatory framework. Several relevant topics will likely arise in upcoming disputes:

• Allocation of responsibility in fraud and misuse cases, both at contract conclusion and during payment transactions, as outlined above
• Interest rate changes, where banking practices are being challenged following EFTA Court rulings in 2024. Other cost elements in financial agreements are also likely dispute topics – both nationally and in the EU
• Agreements involving multiple parties, where recent rulings from the Complaints Board have provided useful clarifications on rights and responsibilities
• The duty to contract for account agreements and payment services, cf. § 4-1 of the Act
• Claims related to gambling and betting, especially in circumvention cases, cf. § 2-15
• The consumer’s right to assert defences against the creditor in credit purchases, cf. § 2-7 – a topic that has gained renewed relevance with the purchase of digital assets, such as cryptocurrency
• Fees for using specific payment instruments and means, especially where cash is rejected or subject to extra charges
• Creditworthiness assessments, involving both the principal debtor and guarantors. This is not a new topic, but practice shows that new legal issues continue to emerge.

The core documentation has, for the most part, been adapted to the Act. The challenge now lies in borderline cases – where matters fall outside established routines or raise questions not fully addressed by the documentation. In these areas, we are well prepared to assist.

The anti-money laundering (AML) regulations aim to prevent and detect money laundering and terrorist financing. The financial sector is well acquainted with the regulations and generally has good routines for managing AML risks, but the regulatory framework is constantly evolving, and practical compliance is often challenging. Inspections involving AML have become common in recent years, and the obligations for reporting entities have been tightened – something we have addressed in our 2025 Regulatory Guide.

However, strict requirements for customer due diligence and ongoing monitoring are not always well received by customers. In some cases, satisfactory responses are not obtained, and the financial institution may wish to terminate the relationship. Here, we have received useful clarifications in recent case law and from the Complaints Board, but each case must of course be assessed based on its specific circumstances. Regardless, it is important that the process complies with the regulations and that the reporting entity has documented the basis for its actions.

Naturally, the industry is characterized by extensive documentation related to loans, guarantees, and general service terms. Such documentation is typically aligned with industry practice and often developed under the auspices of trade associations. More customized documentation reflects significant influence from international practice – primarily Anglo-American legal traditions.

In recent years, we have seen a trend of disputes arising over the interpretation of such documentation, particularly in connection with defaults and debt recovery. This can concern complex, tailored documentation, but also disputes relating to the use of standard terms and conditions. Courts review the documentation without being influenced by industry jargon or internal logic, which can often lead to outcomes different from what market participants anticipated. From the Court of Justice of the EU and the EFTA Court, we also see an emphasis on the need for an ordinarily informed and reasonably attentive consumer to understand their legal position based on the documentation.

It goes without saying that banks and other financial institutions can avoid disputes and strengthen their position by using clear and carefully developed documentation. But it is also essential to understand the context of typical dispute topics related to documentation, and how the courts are likely to approach such disputes.

The financial sector has long been thoroughly regulated, but the EU’s regulatory push in recent decades has taken the scope of regulation to a whole new level. EU legal instruments in the form of regulations, directives, decisions, recommendations, and opinions are largely implemented in Norwegian law. In addition, a tightening domestic regulatory regime – such as the new Financial Contracts Act and the revised Insurance Contracts Act – contributes to the complexity. We cover this continuously in our weekly regulatory updates.

We do not believe future financial disputes can be adequately addressed without in-depth knowledge of the extensive underlying regulatory framework, as interpreted and applied both nationally and internationally. This will apply even to simple default and enforcement cases, as all matters are affected in some way by the regulatory regime.

We also believe this will influence the expectations placed on lawyers handling litigation assignments for banks and financial institutions. There will be a shift from generalists to increasingly specialized advisers – simply because the law demands it.

At LexOslo, we work purposefully to prevent and resolve disputes in the financial industry. Our strength lies in our deep understanding of the industry, the products, and the applicable regulatory requirements.

Often, we can help prevent disagreements from escalating into disputes. And when a dispute does arise, we are quick to identify the legal issues, assess the positions, and develop a focused strategy for further handling.

Feel free to contact us if you would like to learn more about how we can assist: