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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Lucy McKenna
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Sign Up11:42 AM, 3rd April 2014, About 10 years ago
Reply to the comment left by "Richard Adams" at "02/04/2014 - 21:56":
Hi Richard, I really hope that this is just your view.
Why bother to mention the BOI in the EDM if MP's only had interest in the WBBS. You will note that many of the MP's that signed the EDM were Irish and I don't think it is just coincidence.
Had I thought the only interest was for the WBBS I would still have lobbied Frank Dobson and Geoffrey Clifton Brown because I really want the WBBS case to succeed and have taken great interest in it all along.
I do not believe that the BOI case was only used for the WBBS gain (homeowners too etc) although it must have helped at times.
I believe in the beginning the BOI customers received a lot of help from 118 and Mark in particular for which we were always grateful, and I understand that his energies have to go into one thing at a time.. It still, however, makes me sad that we feel abandoned at every stage,( even by our MP's) although I am assured we are not.
I do not have to tell anyone on this forum how exceptionally lucky you are to have Mark, you really are.
Lucy McKenna
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Sign Up11:47 AM, 3rd April 2014, About 10 years ago
Reply to the comment left by "Onslow Clough" at "02/04/2014 - 21:27":
Onslow, we did go to our MP's and they did sign the EDM on our behalf. The EDM includes the BOI customers.
The Man From Nowhere
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Sign Up11:51 AM, 3rd April 2014, About 10 years ago
Reply to the comment left by "Richard Kent " at "03/04/2014 - 11:21":
Richard,
It was these very acts of "enthusiasm, ‘spin’ and acts of ingratiation generated on this website" that generated the over £450,000 necessary to take this case to court. Without this ""enthusiasm, ‘spin’ and acts of ingratiation generated on this website" as you put it, the media and borrowers wouldn't be waiting for a win at court. In fact, they woudn't be waiting on anything and you wouldn't have a platform upon which to spout your cynicism.
If you wanted to play Devil's Advocate so much, you should have taken it up with Keanu Reeves at the time.
Onslow Clough
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Sign Up12:16 PM, 3rd April 2014, About 10 years ago
Reply to the comment left by "LS " at "03/04/2014 - 11:47":
I don't pretend to understand parliamentary procedure, but if the EDM refers to both WB and BOI then presumably if one of those lenders is involved in a legal dispute then the whole EDM becomes void. Would it be worth your while contacting you MP again urging them to keep on pursuing the existing EDM or even propose another one in the name of BOI solely.
Believe me i appreciate your frustration, it's just a shame WB and BOI can't join together in one action.
Mike L
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Sign Up12:18 PM, 3rd April 2014, About 10 years ago
Richard Kent,
I don't think anyone, least of all me, would have ever chosen to be in this fight with WB. However, now that we've been forced into it, there is a part of me that's actually ENJOYING the proceedings. There is big bully out there that's taking money out of my personal account without my agreement. There is no way I'm going to sit back and watch 'him' do it over and over again, especially when there is so many of us in the same position. It feels good to be part of a group that's standing up to the bully.
It's therefore no use telling us all to sit back and not do the things that are making us all feel better. It's not going to happen. It's too late for that. There is too much momentum that 's been built through others' hard work
On that note, if there is anyone out there still unsure weather to join the party please be assured it feels really good to be involved, so please join in. There's still time. It's not too late for that!
Mark Alexander - Founder of Property118
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Sign Up12:24 PM, 3rd April 2014, About 10 years ago
Reply to the comment left by "Onslow Clough" at "03/04/2014 - 12:16":
The EDM is still very much alive and kicking and three new names have been added very recently 🙂
.
Onslow Clough
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Sign Up13:05 PM, 3rd April 2014, About 10 years ago
Reply to the comment left by "Mark Alexander" at "03/04/2014 - 12:24":
Thanks Mark, hopefully that answers LS's query as well.
Lucy McKenna
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Sign Up14:20 PM, 3rd April 2014, About 10 years ago
Reply to the comment left by "Mark Alexander" at "03/04/2014 - 12:24":
Thanks Mark, even if the debate in parliament doesn't go ahead because of WB court case, hopefully, the EDM that so many MP's have signed won't go un noticed by the FOS, FCA, press etc, everything helps to keep both cases in the public domain. Although I cannot see that the WB customers need this outside help now as the court case will decide. It would be great if the FOS could make a decision before the court case, do they have the power to make a court case un necessary? They are going to look pretty ineffectual if you win and they did nothing.
Mark Alexander - Founder of Property118
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Sign Up14:32 PM, 3rd April 2014, About 10 years ago
Reply to the comment left by "LS " at "03/04/2014 - 14:20":
The FCA have the power to take over the Court case. The FOS can only deal with individual complaints which compel lenders to accept their rulings. However, they cannot compel a lender to do anything universally, e.g. reverse their decision for all borrowers, although just one upheld case would go very much in our favour.
I'm not holding out any hope of either of them coming up trumps before a Court case.
EDM976 was very much part and parcel of our media campaign and it served its purpose. I don't think anybody should pin their hopes on the EDM leading to a debate leading to an investigation leading to the Treasury forcing the FCA to take over the funding of the litigation.
My conclusion a long time ago was that raising the funds and asking the judiciary to make a ruling was the only way forward.
It will be interesting to see whether Justin manages to pull a rabbit out of the hat in terms of organising litigation funding and ATE insurance. Rest assurred, if/when he does I will do all I can to help him promote it.
.
Richard Kent
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Sign Up19:43 PM, 3rd April 2014, About 10 years ago
Reply to the comment left by "Mike L" at "03/04/2014 - 12:18":
Mike,
I’ll reply to your comment because you read my post in context and gave what I thought was the most sensible reply.
I did read posts from Onslow’s and Man From Nowhere and I will take them as comments rather than well thought out arguments.
Let me pick up on the points you have raised………
1. I don’t think anyone, least of all me, would have ever chosen to be in this fight with WB. However, now that we’ve been forced into it, there is a part of me that’s actually ENJOYING the proceedings.
I understand why you would feel like this but from an outsiders point of view it seems a waste of time to take relish poking fun at WBBS as the only thing that will matter is a win. Poking fun at them does not ensure a more victorious win and can often make a case seem weaker.
2 There is big bully out there that’s taking money out of my personal account without my agreement. There is no way I’m going to sit back and watch ‘him’ do it over and over again, especially when there is so many of us in the same position. It feels good to be part of a group that’s standing up to the bully.
There is a big bully out there. I agree with the rest of your point but only to the point of its overall effectiveness. You have not sat back and neither has this campaign. But there comes a point where you should sit back, unburden yourselves, relinquish control and let the legal process take its course. That’s why you each paid your £1000. You are each paying to have Mark Smith, an expert in his field deal with this for you.
3. It’s therefore no use telling us all to sit back and not do the things that are making us all feel better.
I appreciate that you feel that my words are suggesting you do nothing but I refer to Point 2 above and the fact that you have contributed to a legal fund. That's why you have the privilege to relinquish control and hand over to the legal process.
4. It’s not going to happen. It’s too late for that. There is too much momentum that ‘s been built through others’ hard work.
Nothing has sped up beyond control and handing over the reigns to the legal process does not mean anyone is giving up.
5. On that note, if there is anyone out there still unsure weather to join the party please be assured it feels really good to be involved, so please join in. There’s still time. It’s not too late for that!
I agree that you should encourage as many people as possible to join in.