Property118 Members vs West Bromwich Mortgage Company

Property118 Members vs West Bromwich Mortgage Company

10:25 AM, 3rd March 2014, About 8 years ago

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UPDATE – 31st March 2014

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

West Brom Tracker Mortgages

Property118 Members vs West Bromwich Mortgage Company

Property118 Members vs West Bromwich Mortgage Company

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.

Costs Funding

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:

  • For existing members who have already instructed The Law Department £994 (assuming a refund of £150 per affected mortgage from The Law Department)
  • For new members the total cost per mortgage to be represented will be £1,500

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.

UPDATE – 31st March 2014

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



Comments

Neil Patterson View Profile

14:20 PM, 22nd March 2014, About 8 years ago

Reply to the comment left by "Stephen King" at "22/03/2014 - 13:36":

Please no one panic.

I have forwarded your comment Stephen to Mark Smith who will I am sure respond in due course, but please do remember it is the weekend 🙂

Denise G

14:26 PM, 22nd March 2014, About 8 years ago

Thanks Neil - have to admit I was just about to start panicing if I'm honest as I do recall several things we have signed when we were required to leave dates blank (and had always assumed that was just to address uncertainty about completion dates)

All BankersAreBarstewards Smith

14:53 PM, 22nd March 2014, About 8 years ago

so would WB be legally bound to provide a copy of the signed and dated Deed of mortgage if members of this forum were to ask for one ?

Mark Smith (Barrister-At-Law)

14:59 PM, 22nd March 2014, About 8 years ago

As Neil says it is the weekend, I am standing on the platform at fulham broadway tube. Pleas everyone be assured that Mr King has some incomplete understanding of the case, but his post is horror fiction.

I and another barrister in conjunction with a Professor at Cambridge spent a long time researching these matters. They are superficially attractive but ultimately are a fallacy.

We are on the right track. I will post a root and branch analysis of this on the secure forum so those who have paid me a fee for legal advice and support will see the correct situation.

Stephen King

15:05 PM, 22nd March 2014, About 8 years ago

Reply to the comment left by "All BankersAreBarstewards Smith" at "22/03/2014 - 14:53":

You can ask your solicitor for a copy, they should retain them on file. In my case, the Bank recalled all the files from the Solicitor under the guise of an audit in an attempt to prevent me finding out information. The Solicitor complied because they were acting for the Bank, and not myself, as I was led to believe as I was paying the fee.

A Subject Data Access Request can be submitted for £10 and the entity holding information on you are Legally bound yes to supply those details.

Onslow Clough

15:06 PM, 22nd March 2014, About 8 years ago

Reply to the comment left by "Stephen King" at "22/03/2014 - 13:36":

I do love a conspiracy theory. What I find highly suspicious is the timing of your comment SK. Not only has it been posted just as we are about to go to court but also at a weekend when it is very difficult to get a definitive response.

Our case has been in front of a top financial QC. who at no point highlighted these issues.

I am sorry but none of this makes any sense.

May i also add, even if you are correct, it merely means we focus our attentions in a different direction. Nothing you say alters the fact that what we signed for is not what we got.

Mark Smith (Barrister-At-Law)

15:15 PM, 22nd March 2014, About 8 years ago

I firmly advise all paid up members and those about to join to take legal advice only from me, and not enter into any correspondence with anyone else at this sensitive time.

Stephen King

15:17 PM, 22nd March 2014, About 8 years ago

Reply to the comment left by "Onslow Clough" at "22/03/2014 - 15:06":

@ Onslow

I paid top Barristers too Onslow, tens of thousands and I sympathise.

Timing - to be frank, this conduct has been going on for many years with the Banks, it is nothing new.

All I am offering is a different perspective, most people will not understand how money is created, let alone securitisation, and through no fault of their own. This information is deliberately concealed by the Banks.

Each and every situation will have it's own merits, but when you trace the money back, it always goes to the note holder, and somewhere behind the scenes, they are calling the shots.

Have you seen an SPV Prospectus in relation to any tranche of securitised mortgages within this action?

Richard Adams

15:25 PM, 22nd March 2014, About 8 years ago

Reply to the comment left by "Stephen King" at "22/03/2014 - 15:17":

What you seem to be opining Stephen, at the weekend when we can't find a repsonse as Onslow mentioned, and just when we are rejoicing in having reached the target needed to proceed against WB is that we are basically wasting our time and money.

Thanks for the dose of cold water but you've offered to help. What alternative course of action do you have in mind?

Onslow Clough

15:31 PM, 22nd March 2014, About 8 years ago

Reply to the comment left by "Stephen King" at "22/03/2014 - 15:17":

Your view is very interesting, however to be fair it makes absolutely no difference to us - as a group the funds are in place. If we go down the ATE insurance route then because of our strength of numbers it would cost approx £150 per mortgage each so what have we got to lose?

We are going to get these contracts in front of a judge...like it or not....and we'll see whether the court feels intimidated by the size of the company it's dealing with...I don't think so.
For what it's worth we believe that the West Brom are acting on their own here and are feeling a little bit scared right now.

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