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

by Neil Patterson

6:26 AM, 23rd March 2014, About 8 years ago

And emailed to you when you Download the Instruction Letter 🙂

by David Lawrenson

8:04 AM, 23rd March 2014, About 8 years ago

http://www.moneysavingexpert.com/news/mortgages/2013/03/fight-bank-of-irelands-unfair-mortgage-hike
Finally, as you will see from the link, MoneySavingExpert have come to the party and covered the West Brom story.

However, their coverage is rather misleading and misses most of the key points, plus no mention of the campaign.
I do not have time this week to put the writer straight, I am afraid. (My piece in LandlordZone however, got a lot of activity).

Perhaps someone can take this up with MoneysavingExpert and email either the journalist (emails normally available via search engines) and try Martin Lewis direct.

Finally, well done on meeting the target.

David Lawrenson
LettingFocus

by Lucy McKenna

8:47 AM, 23rd March 2014, About 8 years ago

Reply to the comment left by "David Lawrenson" at "23/03/2014 - 08:04":

Oops David, the link you gave is a year old...

by David Lawrenson

11:09 AM, 23rd March 2014, About 8 years ago

You are right - my apologies.

Probably too late now for getting Martin Lewis to write about this again, though once the legal action starts, I hope they and others in the media will give it more coverage.

Well done to the Telegraph for their coverage.

by Lucy McKenna

11:47 AM, 23rd March 2014, About 8 years ago

Reply to the comment left by "David Lawrenson" at "23/03/2014 - 11:09":

The guardian last year wrote quite a few very good articles too. They can be seen by searching on the guardian paper site. I was really surprised when I looked around how much press coverage there had been. The telegraph was definitely the best not because I am biased, it is my paper of choice.

by Mark Smith (Barrister-At-Law)

17:53 PM, 23rd March 2014, About 8 years ago

I have responded on the secure forum to various comments made over the weekend here and elsewhere

by Andy Boothman

8:19 AM, 24th March 2014, About 8 years ago

Just transferred £1144 through for my single mortgage. Have been out of the country (and still am) so had been trying to gather papers and cheques to post etc so glad I've been able to just pay it online. Seems the required number has been exceeded which is very encouraging.
If anybody else has been leaving it till last minute, now would be a good time and especially easier now you can just transfer it through.
Now all we have to do is win the case!

by Mark Smith (Barrister-At-Law)

8:39 AM, 24th March 2014, About 8 years ago

If you are making the increased payments, and you have not written to WB already, I advise that you write to say;

"With reference to your demands for increased payments on account(s) xxx, please note that any payments I make are without prejudice to my legal right to challenge these demands in court"

by Onslow Clough

11:33 AM, 24th March 2014, About 8 years ago

As stated on the secure forum, I requested all my mortgage information from the West Bromwich when we decided to take this action further. On looking it over in the past couple of weeks, I realised that they had sent me a five page mortgage application for a third party (let's call him Mr C.)
Mark Smith advised that this was against the Data Protection Act 1986, and that the West Brom and the ICO should be informed. I have therefore spent this morning writing to them both. I also phoned the ICO and talked it over with them, and they suggested that I tell Mr C. I called him and we spoke for some time. He is very angry, and is also a victim of the tracker mortgage hike, but had no idea that we were taking them to court as he is out of the country. He is now very keen to follow up on both the data protection issue and the legal issue. (if you are reading this Mr C. "hello and welcome").
So, one more reason why the West Brom are not the place to go to for a mortgage...

by Anthony Wilson

12:23 PM, 24th March 2014, About 8 years ago

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

Stephen

There are so many inaccuracies in your post they need to be rectified to give everyone else who reads this forum the knowledge that your post is completely misleading;-

1 It is WBMC we need to be addressing.. they are the party to the agreement.
2 it is irrelevant whether some other company behind them is influencing the rate setting.
3 the dating of the document is irrelevant to securitisation. The mortgage documents are dated on the day you complete the purchase.
4 In most cases the solicitor acting for buyer and lender has a dual duty to act for both and if a conflict of interest arises cannot act for either.
5 The legal and equitable title comments are simply wrong.. the lender does not own the property.. there may a separate contract between the lender and the lender it has securitised with but this is irrelevant to ownership or enforceability against WBMC.
6 The court is exactly the right place for borrowers to secure a remedy.
7 The mortgage deeds are not void.. otherwise WBMC would not be in a position to enforce the recovery of the debt in a default situation.
8 No one has signed a blanket power of attorney authorising WBMC to do whatever it likes when it likes in my view... but no doubt this will be decided by the judge at the hearing.

I am afraid Stephen .. that there is no legal basis for your comments whatsoever ...and as a solicitor since 1984 I can assure everyone that i would not have committed £15,000.00 to this cause if it did not have merit.


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