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 Richard Adams

14:40 PM, 26th March 2014, About 8 years ago

Reply to the comment left by "Mark Alexander" at "26/03/2014 - 13:06":

You have re assured me greatly Mark! I am with Dean 100% regarding not wishing our win to ultimately benefit the current fence sitters and freeloaders virtually FOC. Like Dean I acknowledge that may not be a majority view and indeed perceived by some as a slightly un Christian stance but I cannot rid my mind of the anger I would feel if they got what would be effectively a free ride at same cost as us..

So I hope you will indeed earn nicely from them and Mark S as well, unless they go the no win no fee route. Sufficient for them to bitterly regret not joining us now at least. An upfront donation to Property118 should perhaps be part of the deal also?

You deserve to make shedloads of money off them and I hope you do. . .

by Mark Alexander

15:33 PM, 26th March 2014, About 8 years ago

Reply to the comment left by "Richard Adams" at "26/03/2014 - 14:40":

Hi Richard

Off the back of our win (assuming we do win of course!) I'm hoping to structure a no-win-no-fee deal with Mark Smith for all those who didn't join our representative action.

The point is this; if we win once then we will win again so the no-win-no-fee clients WILL end up paying. We will get them to assign their refunds to us in the event of winning for them and getting their terms put back to what we all know they should be. The refund money will be quite a substantial sum in a year or so from now. Plus, the longer they leave it, the more it will cost them and the more we will earn 🙂

The beauty of this is that WBMC will continue to pay the price of their misjudgements for many years to come 😉
.

by Mike L

15:35 PM, 26th March 2014, About 8 years ago

The only people I'd like to see hurt financially at the end of all this is the WB directors responsible for dreaming up this con! So the more people sue them after our win the better for all. Remember that each individual NWNF case will cost WB more. If Property118 and Cotswold Barristers make loads of money in the process, well, that's just the cherry on top of the cake!

by Richard Adams

16:20 PM, 26th March 2014, About 8 years ago

Reply to the comment left by "Mark Alexander" at "26/03/2014 - 15:33":

Understood Mark, WB get a further massive financial pasting after our win and backsliders also get a win eventually but in a reduced way as you describe that will make them wish they had had the character, drive and determination to be in at the beginning. Latter assuages my vindictive streak.

Plus you and Mark S earn nicely and hopefully Property118 as well. What with massive bad publicity for WB and other would be unscrupulous lenders being deterred from trying it on in future who could hope for a happier ending?

by Mark Alexander

16:31 PM, 26th March 2014, About 8 years ago

Reply to the comment left by "Richard Adams" at "26/03/2014 - 16:20":

Yep, I think that just about sums it all up.

Hopefully, OUR actions will be a lesson to the British public that it makes sense to fight for your rights.

Far too many people hope that somebody else will take up the fight for their rights and that they will take a free ride.

My strategy is to show people that they will not always get a free ride if they choose not to fight for their rights in the first place.

West Brom could, of course, scupper that and reverse their decision for all affected borrowers. However, based on past performance I can't see that happening and I fully expect them to fight for every last penny they can screw out of the customers who they see as soft targets. Can you imagine West Brom slashing millions off their bottom line just to annoy and prove me wrong? If they do I'll be rolling on the floor laughing for weeks!
.

by Richard Kent

17:49 PM, 26th March 2014, About 8 years ago

Reply to the comment left by "Mark Smith (Barrister-At-Law)" at "26/03/2014 - 10:23":

Mark,

Thanks for your post.

I was not aware of any comments made about Mark elsewhere and which might have skewed the meaning of my joke.

I am sure no one took my comments seriously.

Thanks again for the post.

by Sara Westenborg

17:53 PM, 26th March 2014, About 8 years ago

Afternoon All,
I have transferred £8008.00 today for my 7 mortgages and all the paperwork is in the post. I have not been sitting on the fence but getting the money together- I am sure there must be plenty of people in the same situation so I can't wait till tomorrow to get the latest total from Carla.
Thanks again to all that are so involved in this fight especially Mark A for making it happen!!

by Richard Kent

18:04 PM, 26th March 2014, About 8 years ago

Reply to the comment left by "Richard Adams" at "26/03/2014 - 10:47":

Richard,

Sure, as you say, that's what this forum is about.

Dean and you could be right.

I was offering an alternative and less judgmental opinion.

The reason why I try to avoid making negative sweeping statements about those who have not joined the campaign is that not making such statements might encourage them to change their mind.

But we all have a right to hold and express our own opinions.

by Denise G

18:05 PM, 26th March 2014, About 8 years ago

glad you replied thus Mark A as that was my immediate thought but thought it might seem a tad churlish to say so

by Richard Kent

18:27 PM, 26th March 2014, About 8 years ago

Reply to the comment left by "Mark Alexander" at "26/03/2014 - 16:31":

Mark,

You might have created a self fulfilling prophecy by saying "West Brom could, of course, scupper that and reverse their decision for all affected borrowers?"

You never know 🙂


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