Bank of Ireland Legal Action – NO-WIN-NO-FEE

We are now ready to begin legal action on behalf of Property118 Action Group members affected by the Bank of Ireland decision in 2013 to increase the differential charged on their tracker rate mortgage products.

Many of those affected by the sudden increase in their mortgage payments, despite there being no increase in the bank base rate, will be aware that the Financial Ombudsman Service ruled in favour of the Bank of Ireland and their right to increase the differential they charge. The Financial Ombudsman Service also ruled in favour of The West Brom on a similar case which was eventually overruled by the Court of Appeal. However, whilst the principles in both cases are the same, the legal arguments are very different. This means that the case law created by case against The West Brom is of little use to us.

The legal battle against The West Brom lasted nearly three years before Property118 Action Group were triumphant – the Court of Appeal eventually overruled the Financial Ombudsman Service and found against The West Brom, who were then compelled to refund a reported £27,500,000. We believe compensation claims relating to the Bank of Ireland tracker rate differential increase could more than double this figure. There is a catch though.

The amount of money required to take Bank of Ireland to Court could run into seven figures!

Whilst we can’t afford to take the Bank of Ireland to Court at the moment we do have a legal strategy to enable affected borrowers to claim compensation

Our initial action will NOT be against the Bank of Ireland. Instead, we will be targeting the law firms involved in advising upon and completing the mortgages. Counsels opinion is that prospects for claiming damages against law firms is strong. Claims will be for negligence on the part of the law firms for not pointing out to their clients the extremely unusual potential for the “differential” charged on the tracker mortgage margin to be increased.

Every claim will be different

Whilst the basic principles of each and every claim are likely to be similar, separate claims will need to be made to law firms and any defence offered will need to be considered on its own merits. The process begins with a complaint to the law firm that acted to complete the mortgages. Lawyers are required by their Professional indemnity insurers to report cases involving a financial claim. THIS COULD BE IMPORTANT, as you will will see towards the end of this update.

Property118 Action Group has appointed Cotswold Barristers to act on behalf of its members. This is the chambers of Mark Smith (Barrister-At-Law), which successfully recovered the £27,500,000 of overpaid tracker mortgage interest from The West Brom earlier this year, PLUS 100% OF COSTS.

Unless a person had borrowed millions from Bank of Ireland it would not be economical for individual borrowers to access advice of this quality. Most people would not know where to start in terms of bringing a negligence claim for compensation against a law firm either. We believe it is incredibly important for claimants to have the best possible representation from the outset of a claim and for that reason we have gone back to Mark Smith based on the credibility he has already well and truly earned within our membership, as a result of defeating The West Brom.

The advice of Mark Smith (Cotswold Barristers) will be available to ALL Property118 Action Group Members who have paid the £600 lifetime membership fee to Property118 Action Group. It will include support relating to all compensation claims from both homeowners and buy-to-let investors who have suffered financially from the unexpected change to the tracker mortgage differential charged by Bank of Ireland.

So far, Property118 Action Group member funds have been utilised to pay for the following:-

• Counsels written opinion on the viability for claims against law firms and the associated claims strategy
• To produce complaint letter templates to be sent via Counsels chambers to law firms which acted on behalf of affected Property118 Action Group founder and lifetime members
• To produce draft correspondence to be sent via Counsels chambers to professional indemnity insurers associated with the above

This is enough to commence the process.

As Mark Smith is a Direct Access qualified Barrister with litigation rights he can act in the same way as a solicitor. In other words, he can make claims on your behalf. Very few barristers are qualified to do this. The advantage is that costs are kept to an absolute minimum as there is no requirement for a solicitor to be appointed. The other obvious advantage is that all correspondence will come from a qualified barrister with a proven track record of successful claims of this nature.

The action group budgets obviously do not stretch to paying for ongoing individual correspondence, negotiation and settlement of claims. However, Counsel is so confident of success that he will only make further charges to affected borrowers based on compensation recovered. In other words, he will invest his own time into each and every case and will only be paid if he is successful. This is known as a damages based agreement. The amount he will charge on success will be on a fixed percentage of the damages recovered in accordance with the following scale:-

• 50% of damages awarded of up to £5,000 subject to a minimum fee of £1,000.
• 40% of damages awarded of up to £10,000 subject to a minimum fee of £2,500.
• 30% of damages awarded of more than £10,000 subject to a minimum fee of £4,000.

As you will clearly see, it is in Counsels best interest to optimise the value of your claim.

The above scale is applied to each law firm you claim against. If you have claims against multiple law firms then your claim against each law firm will be treated as a separate claim in accordance with the above scale. However, if for example you used the services of the same law firm to act in the arrangement of multiple mortgages then that would constitute only one claim.

If claims cannot be settled out of Court then alternative terms may need to be agreed between claimants, Counsel and litigation insurers.

FAQ’s

Q) Will my claim still be valid if the law firm I used is no longer trading?

A) YES, claims will still be valid even if the law firm that acted is no longer trading. This is because lawyers are compelled by law to acquire “run off insurance” if they merge or cease trading.

Q) The law firm I used was paid for by Bank of Ireland (or Bristol & West) as part of a fee free deal. Will I still be able to claim on this basis?

A) YES, even though you didn’t pay the law firm yourself they still carry a duty of care to you.

Q) My mortgage was secured on my own home, it was not a buy-to-let mortgage. Can I still apply for compensation?

A) YES, providing you have lifetime membership of Property118 Action Group we will process your claim regardless of whether your mortgage was secured against your own home or a buy-to-let property.

Q) My mortgage is secured against my own home, not a buy-to-let property. Do I still have to pay the same amount to become a Property118 Action Group Member?

A) YES, all borrowers pay the same. Most affected borrowers only have one mortgage affected. in many cases, buy-to-let borrowers have smaller mortgages than homeowners. Whilst some buy-to-let borrowers have multiple mortgages the work involved is not significantly different to justify a complex charging structure

Prospects for Court Action Against Bank of Ireland

We must not rule out the prospects of Court action against the Bank of Ireland.

If Professional Indemnity Insurers are able to prove that Bank of Ireland was in the wrong to have increased the differential charged on their tracker rate mortgages there would be no case for lawyers to answer. Therefore, action against the bank itself will be highly dependent on the number and outcome of cases against law firms and the value (“quantum”) of awards/settlements and other potential cases. It may well be that it becomes more commercially viable for the Professional Indemnity insurers to fund a Court case against the bank as opposed to dealing with and settling potentially thousands of individual claims.

The Process Of Starting A Claim

When you complete the form below we will send details of the documents you will need to provide and advice of how to obtain them from if you haven’t retained copies

If you haven’t already become a lifetime member of Property118 Action Group then you will need to do so for your claim to be processed.

Form not found.