A U.S. jury on Monday found Arab Bank Plc liable for providing material support to Hamas and said it must compensate victims of two dozen attacks attributed to the Islamic militant group in Israel and the Palestinian territories.

Jurors needed less than two days of deliberations to reach their verdict after a six-week trial in Brooklyn federal court, which lawyers described as the first terrorism financing civil case to reach trial in the United States.

A trial on damages will be held later. Similar lawsuits are pending in New York against Bank of China Ltd, which is accused of providing services to Palestine Islamic Jihad, and Credit Lyonnais SA, which is accused of aiding Hamas. Those banks have denied the respective allegations.

Nearly 300 Americans who were either victims or related to victims of attacks linked to Hamas had sued Arab Bank in 2004.

They accused the Jordanian bank of violating the Anti-Terrorism Act, a law that lets victims of U.S.-designated foreign terrorist organizations such as Hamas seek damages.

"It has been a long haul," said plaintiff Maida Averbach, 76, who said her son was paralyzed from the neck down in a 2003 suicide bombing and died in 2010 from complications. "Unfortunately my Steve isn't here." Averbach spoke to reporters by phone.

Arab Bank said it would appeal. In a statement, the bank said the verdict "comes as no surprise" after a series of what it considered legally incorrect court rulings that kept it from mounting a proper defense, and effectively "put Hamas on trial."

The bank also said the verdict exposes banks such as itself to "enormous liability" for providing routine banking services.

Shand Stephens, a lawyer for Arab Bank, predicted that the 2nd U.S. Circuit Court of Appeals "is going to reverse this."

Mark Werbner, a lawyer for some of the plaintiffs, said the verdict sends a message that "when a bank opens its doors to terrorists, they're going to be held accountable."

In a separate case, the 2nd Circuit ruled on Monday that Royal Bank of Scotland Group Plc's National Westminster Bank unit must face claims by terrorism victims over banking services it gave a charity linked to Hamas.

"Great deal of knowledge"

Arab Bank had been accused of knowingly maintaining accounts for Hamas operatives, and financing millions of dollars in payments for families of suicide bombers and those imprisoned or injured during a Palestinian uprising that began in 2000.

"That is how we stop terrorism," Tab Turner, a lawyer for the plaintiffs, said in his closing argument last week. "You take the money away."

Lawyers for Arab Bank countered that most of the people and organizations alleged to have received improper banking services had not been designated by the U.S. government as terrorists.

But one juror, 24-year-old speech therapist Jill Rath, said the evidence showed "a great deal of knowledge within the bank" that its activity supported Hamas.

"Everyone was very confident in the end," she said, referring to jurors.

To find liability, jurors had to conclude that Arab Bank knowingly supported Hamas, that its support was a "substantial factor" in the attacks, and that the attacks were a "reasonably foreseeable" result, according to the judge's instructions.

"Knowing your customer is essential," said Will Schwartz, senior vice president overseeing the U.S. financial sector at the DBRS credit rating service. "You are at least partially responsible if it's discovered you are, inadvertently or not, financing nefarious activity."

Lee Wolosky, a lawyer representing plaintiffs against Bank of China, said Monday's verdict shows "it is insufficient to simply say it is the job of governments to identify terrorists."

He also said the Arab Bank plaintiffs should be able to enforce any damages awarded. "Arab Bank does business in many countries throughout the world, including in Europe, that will enforce a judgment from the United States," he said.

Stephen Landes, a lawyer who won the first lawsuit on behalf of U.S. citizens under the ATA against U.S.-based charities accused of funding Hamas, said it was difficult to say if the ruling would impact the cases against Bank of China and Credit Lyonnais. But he said, "the takeaway is that any bank that was banking a terrorist organization has to be concerned now."

"The jury clearly responded to the conduct of the bank in providing financial support to a terrorist organization," said Landes, who informally exchanged ideas with plaintiffs' lawyers in the Arab Bank case but was not paid. "That's what needs to be shown, that the bank knew who they were dealing with."

The case is Linde et al. v. Arab Bank, U.S. District Court for the Eastern District of New York, No. 04-2799.

