10:25 AM, 3rd March 2014, About 11 years ago
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Since publishing this article our campaign has raised over £450,000 and legal action has now commenced. The official closing date for borrowers to be represented in this action was 28th March 2014. However, it may still be possible to be included in the representative action by paying additional fees to cover administration and Court fees to be added to the list of represented claimants. For further details please Contact Carla Morris-Papps at Cotswold Barristers – telephone 01242 639 454 or email carla@cotswoldbarristers.co.uk
Borrowers representing 84 mortgage accounts affected by the West Bromwich Mortgage Company 1.9% rake hike to their tracker rate mortgage margins attended a secret meeting of paid up campaign members on 27th February 2014. At that meeting it was confirmed that 420 affected mortgages are currently represented by the campaign group.
Property118 had previously created a secure forum for paid up members of the group to discuss various legal strategies, one of which was a proposal to West Brom to consider arbitration as an alternative to Court action. Each member had paid £240 for each affected mortgage plus a contribution to a campaign marketing campaign.
Arbitration was proposed for tactical legal reasons which were explained by the groups advisers, some details of which must remain confidential for legal reasons.
This would have been significantly quicker and cheaper for all concerned and had massive upsides to West Brom in that the outcome would be confidential. In other words, if West Brom had lost the case, nobody would have “officially” known about it other than those who had already paid to be a member of the campaign group. This would have meant the worst case scenario for West Brom would be losing no more than 10% of their reported £19 million of additional annual profits from this rate hike.
West Brom refused!
This refusal now plays very nicely into our hands for litigation purposes as it will be frowned upon by the Courts, especially if we lose our case and end up having to pay costs associated with the David and Goliath battle. 😉
The attendees of the meeting voted unanimously to proceed immediately with litigation on the basis proposed by (Mark Smith – Barrister-At-Law) as explained below. Thanks were offered to Justin Selig and his team at The Law Department for his sterling work to date in helping us get to this position. Without their help our campaign may never have got this far.
Litigation will commence during the week of 31st March 2014 with the service of Court Papers. This provides a final opportunity for any remaining affected borrowers to commit to the action by Friday 28th March.
We already have more than double the necessary funds on account to pay our own legal team. Mark Smith has agreed to represent borrowers for a fixed fee of £120 + VAT per affected mortgage subject to there being at least 250 borrowers committed. Further details in his Terms of Business and Instruction letter which can be downloaded by completing the form at the bottom of this page.
Existing campaign members are also reminded that they MUST complete and return the instruction form to Mark Smith to act for them and the required additional funds by 28th March 2014.
The deadline for submission of instructions has now expired, sorry.
The primary concern of existing members that had to be overcome was their potentially unlimited liability to the West Brom’s legal costs in the event of losing the case and the “open cheque book” often associated with legal cases. It was agreed that all fears could be overcome by creating a fund to be held in a BARCO escrow account (BARCO is the Bar Council – the regulators of Barristers). This account will provide evidence to the Courts that we have sufficient funds on account to settle the other sides costs in the event of losing the case and having an adverse costs order awarded against the group.
The first step of the legal action will be a costs hearing, as part of a “Case Management Conference”. This is where both sides must submit their costs budgets for the case to the judge and where the judge decides upon reasonableness. If either side fails to do this then the maximum they can claim for costs against the other side is the Court fee, i.e. £175! It is extremely rare for judges to award costs in excess of the agreed costs budget.
Our estimate is that based on the number of affected mortgages being represented, and the possibility of more people now wishing to be represented at this stage, the BARCO account could contain as much as double the other sides costs budget. This is why we are so confident about costs not exceeding the amount of funds that will be held in escrow. In the extremely unlikely event of the groups funds being insufficient to meet a potential costs order the group would have an opportunity to withdraw their case and settle the other sides costs to date.
If/when we win, the contents of the BARCO account will be rolled over to deal with all of the costs associated with the inevitable appeal case and if/when that is won the funds will be returned to members. If we lose, the contents of the escrow account will be used to pay costs awarded to West Brom and the balance of funds will be returned pro-rata to members.
The case will be fought on the basis of a representative action. This means that the ruling of the Courts will only apply to those borrowers who have paid to be represented in the case. There will be no free rides!
We fully appreciate that some affected borrowers will not be able to raise the necessary funds in time to be part of this action so there is a Plan B. Affected borrowers who are not represented may have another opportunity to make claims in a few years time. In the meantime they will continue to pay the higher rate and will probably be expected to forfeit any refund of overpayments in return for a no-win-no-fee arrangement. This could be a far more expensive option, hence the reason why so many affected borrowers are so keen to be part of the imminent legal action.
The legal strategy and process we are undertaking will be a very simple one. There will be no witnesses called so there will be no surprise twists such as those often seen on TV where a new witness or new evidence appears at the last minute. On this basis, we anticipate the case, including any appeal, to be concluded before Christmas.
We will only be asking the Courts to rule on two things:-
1) Based on the documentation produced by West Brom, do they have the right to increase the tracker margin?
2) Based on the documentation produced by West Brom, do they have the right to call in loans within 28 days without the borrower being in default?
There has been lots of discussion about whether West Brom did or did not provide all of the documentation they are now relying upon. This is not relevant to our case.
There has also been much discussion about Unfair Terms in Consumer Contract Regulations; again this is not relevant to our case.
It has been questioned whether in fact the mortgages issued by West Brom were indeed trackers, this cannot be denied by West Brom as this is the basis they report them to the rating standards agencies – see this link
The agreed level of funds to be deposited into the BARCO account is £1,144 per affected mortgage being represented. For example, somebody wishing to have 10 affected mortgages represented will need to deposit a further £11,440 into the BARCO account. Existing members will receive a refund of unused funds which they paid into the client account of The Law Department. New members will need to pay an additional premium of £356 per mortgage to the Property118 marketing fund to equalise the financial contributions and efforts of the forerunners of the group.
Therefore, the net payment per affected mortgage for members will be:
We have created a simple set of instructions explaining how much you need to pay and who you need to pay it to here >>> http://www.property118.com/simplified-payment-instructions-join-west-brom-action/
Remember, if/when we win you will get more than this amount back when you also factor in 100% of the extra 1.9% interest you have been paying which will also be refunded. The worst case scenario is that you will get none of this money back if we lose. If you can live with that you should proceed.
The reason we have chosen this strategy as opposed to buying ATE insurance is that it costs us much less if we win. We are in this to win this. The above strategy means that we all know what we stand to lose and can proceed with our eyes wide open, confident that our liabilities are limited.
If the balance of the BARCO account associated with this action is less than £250,000 by close of business on Friday 28th March 2014 the legal action case will be aborted, funds will be returned to members within 14 days and that will be the end of the line for this campaign for myself and Property118 – at least for 12 months or more anyway. If necessary we will then take another look at Plan B.
Since publishing this article our campaign has raised over £450,000 and legal action has now commenced. The official closing date for borrowers to be represented in this action was 28th March 2014. However, it may still be possible to be included in the representative action by paying additional fees to cover administration and Court fees to be added to the list of represented claimants. For further details please Contact Carla Morris-Papps at Cotswold Barristers – telephone 01242 639 454 or email carla@cotswoldbarristers.co.uk
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Craig Holmes
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Sign Up15:38 PM, 18th March 2014, About 11 years ago
Good afternoon,
I have sent off my paperwork along with my cheque for my one affected mortgage.
Great to see so many supporting the action and signing up. Anyone with splinters, please jump the fence and come in.. More the merrier..
I wonder is WBBS are now reflecting on the decision to decline arbitration so quickly, given our STRONG position. IMHO, I don't consider its a good use of its members funds..
Never mind, we shall let the powers that be decide..
Chris Novice Shark Bait
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Sign Up15:48 PM, 18th March 2014, About 11 years ago
3 mortgage payments as promised by us will arrive before the deadline. Yet to be counted. Come on folks, now is the time to make your pledge.
Anthony Wilson
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Sign Up15:52 PM, 18th March 2014, About 11 years ago
Reply to the comment left by "Paul Machin" at "18/03/2014 - 15:19":
Paul
If it is any consolation my wife and I have ten ...and we became members of Property 118 at the same time... even though I am a solicitor and could easily have run litigation through my firm .. it makes so much more sense to be part of a co- ordinated group of borrowers who have all been affected in the same way and we stand or fall together.. the court is going to be much more conscious of the sense of real injustice being felt by us all this way.....
Paul Machin
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Sign Up16:20 PM, 18th March 2014, About 11 years ago
Reply to the comment left by "Anthony Wilson" at "18/03/2014 - 15:52":
Yes Anthony, the momentum is with us.
It's over to our barrister Mark Smith now. And having seen him perform at the 118 meeting in London, he strikes me as a man who is relishing the battles ahead with a steely determination to win for us and set this injustice right.
George Top
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Sign Up16:26 PM, 18th March 2014, About 11 years ago
Great Job everyone. Haven't logged in for a few days and great to see the total above £200k! Looks like we should easily hit the target.
My cheque has been held up with my business partner while he sorted docs and will be arriving with Mark Smith in the next day or so.
Richard Adams
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Sign Up16:37 PM, 18th March 2014, About 11 years ago
Reply to the comment left by "Paul Machin" at "18/03/2014 - 15:19":
Heartening words and oh so true Paul. Good to have you with us.
May I boringly repeat something I posted way back on the theme of urging those still agonising about joining us to do so before it is too late.
Us older fogies will remember Horace Bachelor on Radio Luxembourg many years ago (from Keynsham spelt K-E-Y-N-S-H-A-M!!!!) talking about the football pools. The WB fight is nothing to do with getting 8 draws in a line but what Horace said then applies to the undecided now. IF YOU ARE NOT IN YOU CAN'T WIN. Well said Horace.
Ken S
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Sign Up17:04 PM, 18th March 2014, About 11 years ago
I have just sent instructions to Mark Smith with cheque to cover 5 affected mortgages.
We need to stand up to the bullies at WBBS and if we stick together we can win this, so I urge all of you out there who have not yet committed to do so as soon as possible.
Lawrence Squid
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Sign Up18:42 PM, 18th March 2014, About 11 years ago
I hope that, when we win, West Brom don't consider Crystal Meth production as an alternative business strategy. After all, that's also illegal and lucrative (apparently).
Justin Selig - solicitor
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Sign Up19:13 PM, 18th March 2014, About 11 years ago
THIS IS A COPY OF AN EMAIL WE HAVE SENT TO OUR WEST BROMWICH CLIENT DATABASE THIS EVENING:
Dear Client
Further to our email of 3rd March, we are writing to you to update you on the status of our proposed action against West Bromwich Building Society.
Following on from the meeting on 27th February, we wrote to all our clients giving them three options - either to stay with us, instruct Cotswold Barristers or to withdraw altogether from the action. At the meeting, we gave a commitment that should we fail to retain the support of at least 50% of the clients who had originally instructed us, we would not proceed with any action against WBBS.
As of close of business today, 52% of our clients who originally instructed us have decided not to proceed with us. We are therefore writing to inform you that we will not be proceeding with any action against WBBS.
We will be refunding everyone the balance of money we are holding on account after deduction of our costs, counsel's fees and commission to Property118. You will receive £150 per mortgage, on the basis you sent us £240 per mortgage when you originally instructed us.
In order for us to process your application for a refund, if you have not yet already received a refund, please email: ana@lawdepartment.co.uk with your name and address and the amount you originally paid us. We will aim to have processed all the requests for a refund within 14 days of receipt of the request - which will be sent to you by cheque in the post along with your papers you sent in.
Whatever you decide to do in your fight against WBBS, we wish you the best of luck and we are sorry we are not able to assist you in that fight.
Yours sincerely
Justin Selig
Onslow Clough
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Sign Up19:31 PM, 18th March 2014, About 11 years ago
Thank you for that update Justin and thanks also for all the work you put into this case.
To the 48% of those customers who will be receiving refunds from the law department it is vital you make your minds up quickly.
If you still want to proceed against the West Brom then your funds now have to be re-allocated to Mark Smith and this has to be done quickly
there is a 28th March cut off date so you must act now