West Bromwich Building Society Tracker Margins Legal Action

For all those still sitting on the sidelines, this current class action may be part of a dying breed. You may not get another shot at it. Worrying developments across the pond suggest that class action waivers are being included in all sorts of agreements e.g.contracts of employment, Paypal, game consoles terms of service e.g. Sony Playstation, Xbox One etc...

http://www.lexology.com/library/detail.aspx?g=d580bbd2-6db6-4701-9504-acad08af6ca0

Below is an idea of how Corporate legal teams defending against class actions will be going about removing the ability to be involved in a class action.

"Some lessons are clear from the American Express Co. decision.

* Beneficiaries of arbitration agreements that include a clear class action arbitration waiver can breathe a sigh of relief, because such waivers will be enforced under the FAA. Respondents should use American Express Co. to oppose motions seeking class-wide relief or, if class-wide arbitration has already been ordered, to request a reconsideration of the issue. In many cases, favorable resolution of the class issue will resolve the case. The economics of the arbitration process will force claimants to abandon their claims, since, absent aggregation, they cannot afford to litigate the issue.
* It is more important than ever for those who may be faced with arbitration claims from a large group of people to draft arbitration agreements that expressly preclude class or joint arbitration. Consideration should also be given to other constraints, such as prohibiting the claimants' use of the same expert in multiple arbitrations."

Although this relates to US law, you can pretty much bet this trend is going to be exported across the pond to ye olde England. It's not just the US either. Canadian courts will also continue to give effect to parties agreements to arbitrate individually and not by class action. (Oh, and an "agreement" can be a simple click of a mouse)

http://www.nortonrosefulbright.com/knowledge/publications/77437/private-arbitration-clauses-class-action-waivers-and-canadas-competition-act

So the next time you sign a contract, be it a contract of employment, personal loan, credit card application, mortgage, games or games consoles terms of service, Ebay or Paypal agreement (usually "signed" by clicking "click to accept"), be sure to read the small print religiously. You may just be signing away your right to take part in a class action.

You may say that the above isn't relevant because it pertains to US and Canadian law. Don't think that similar developments will happen here? Keep telling yourself that.

Reply to the comment left by "The Man From Nowhere" at "29/11/2013 - 22:47":

Someone posted not long ago how new and refreshing it is that class actions have only fairly recently reared their heads on the scene in the UK. Looks like their life will be a short one. Are you also saying that in our WB situation once class actions are knocked for six in the small print then the likes of us will be stuffed in future?

Reply to the comment left by "Richard Adams" at "29/11/2013 - 22:56":

Hard to say (without a crystal ball) what the future legal landscape would look like if class actions were severely curtailed by class action wavier clauses being upheld in the UK but given that Group Litigation Orders are still pretty rare here in the UK (only 65 GLO's between 1999 and 2008 despite GLO's being introduced in 1999), there's going to be continuing pressure to resolve cases by mediation/arbitration i.e. keeping cases out of court. Chances are unless you're a wealthy litigant, you won't be able to afford to have your day in court.

Reply to the comment left by "The Man From Nowhere" at "29/11/2013 - 22:47":

If you check the terms and conditions that west brom have already sent us I think you'll find a clause in there that already prohibits class actions.

I'm not sure which one it is yet. West brom are currently taking external legal advice to find it !!

as landlords we are always told that we cannot put any clause in our ASTs if that clause takes away a tenant's rights under any other legislation - so just because it is in an agreement and signed by both parties, does not necessarily make it legally enforceable......

Our man in contact with the NLA Liverpool Branch has secured their approval to leave fliers at their next Meeting, its Thursday 5th December, 5.30pm for 6pm start to 8.30pm. Sadly our man can’t go so if anyone local could print some off and take them along it would help the greater cause. (See ‘this flyer’ in blue bold within the ‘To Do List’ near the top of this page).

The NLA meeting is at the Devonshire House Hotel, Cavendish Suite, 293-297 Edge Lane, Liverpool, L7 9LD

All this leaves a tactics question: are we better off cornering the chair of the local meeting just before it starts and quickly reporting what we want to say? If any affected WB customers are present then just a 30 secs chat at the end of the meeting is sufficient for letting them know of the P118 Class Action. This method means the NLA can't refuse.

The alternative method is requesting an item on the agenda well in advance. The advantages of this approach is (a) that all local members get the invitation email and so at least see the agenda item, and (b) that there is time in the meeting for those with trackers from other banks to realise fully their potential peril as well. The disadvantage is that the NLA powers-that-be might block it.

I cornered the chair at my last branch meeting (its Reading: thanks David if you are here). Please could someone try the Agenda method and report back here?

Hi All, thinking about how we could get more landlords to know about the class action, a lot of landlords go to house auctions, if someone is friendly with those estate agents could we leave flyers there or hand them out in the foyer, these landlords talk so word gets around

Currently overseas, hence posting in the middle of the night.

An interesting response from West Brom to Nicole @ Telegraph about discriminating which customers to target with Rate Hike:

Does anyone have evidence (and are willing to share/confirm with Nicole) that Lifetime Tracker Mortgage Accounts that were taken out directly with West Brom ARE NOT affected with the Rate Hike ?

This is the response I have had from West Brom:

“No mortgages have been excluded from the rate change on the basis of which broker or channel they came through. Borrowers have been notified of a change to their rate based on the number of properties they own and rent out.”
Do you have any proof that mortgages sold direct or through Mortgage Force were excluded from the rate hike? That's probably the next step otherwise I don't have anything to stand up the claims.
Let me know if there's anything I can look into this end.

Kind regards,
Nicole

I suggest that now would be a good time for you all to send the following letter to your mortgage broker

"Dear [name]

West Brom Mortgage Company Account Number [here]

When you arranged the above mortgage for me I was very impressed with the efficient service you provided. You advised me to take a fixed rate mortgage reverting to a variable rate which tracked the Bank of England base rate. However, West Brom are now telling me they can increase the margin over and above the Bank of England base rate. My questions are:-

1) At the time you sold me this mortgage did you believe that West Brom had the right to change the tracker margin?

2) In view of the current circumstances do you believe the advice you provided was correct?

I am part of a group which is taking legal action against the West Brom and claiming they do not have the right to increase their tracker margin. Our legal counsel believe the group has a very strong case. However, if the Courts rule that West Brom do have this right then it is quite clear that as my professional adviser you should have warned me about this risk. I have been advised that if the Court action against West Brom fails I would have the right to make a negligence claim against your company for my considerable losses. A barrister called Mark Smith has agreed to fight such cases on a "no win no fee basis". Please note this is the last thing I want to do to your business and my priority is to prove the West Brom wrong in order to prevent other lenders pulling the same stunt but in any event I am sure you will understand that my first priority is to protect my own financial position.

I am lead to believe that if West Brom get away with this increase the impact on their profits will be circa £19 million a year. This would then become the value of the claims against brokers. I can only begin to imagine what this would do to professional indemnity insurance premiums for mortgage advisers, especially as this would be the tip of the iceberg in that it would inspire other lenders to increase their tracker rate margins too.

I do not wish to be a scaremonger but I do think you should be aware of how serious this matter is. I am a member of a Class Action group being organised by Property118.com and I would recommend you to join too. It is in the interests of all brokers to join this fight at this stage and I hope you will also know other brokers with whom you can share this message. We must not allow West Brom mortgage company to ruin our businesses. Therefore, we should unite against our common enemy.

I'm not sure you are aware but West Brom are only targeting borrowers whose mortgages were arranged via brokers, this is said to be 41% of their loan book. The Class action Group cannot understand why the FCA has refused to step in as this cannot possibly be compliant with their principles of "Treating Customers Fairly". The FOS and the OFT claim they have no remit to deal with complaint and refer back to the OFT. Following numerous complaints to MP's which have been passed on to the treasury Andrew Tyrie, Chairman of the Treasury Select Committee has put pressure on the FCA but this has achieved very little. It is now quite clear the dispute needs to be settled in the Courts.

With regret I must advise you to put your PI insurers on alert of a potential claim. I sincerely hope it will not come to this and I also hope that you will do everything in your power to help us defeat the West Brom in Court as that would be the best possible outcome for me, your firm, your PI insurers, mortgage advisers in general and the 2.5 million other UK borrowers with tracker rate mortgages.

Yours sincerely"

Reply to Anon: personally I need more than a suggestion from someone hiding behind the pseudonym 'Anon' before I would follow your advice! I firmly believe we are now at a critical point in our campaign and we should only be taking such a confrontational and important step when advised to do so by either one of the 2 Marks or by our lawyer or their advisors. I would strongly suggest that we all act upon your advise only when advised to do so by one of the above.