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 Annette Stone

21:42 PM, 26th March 2014, About 8 years ago

May I just sound a conciliatory note here. I appreciate that comments being made today might just be to give a final push to anyone who is still undecided but some of the language is a bit naughty. Perhaps everyone needs to remember that this is not a race and that people signing up today and tomorrow may have had trouble in raising the funds, some people may have found it impossible to raise the funds in time and I hope that they have contacted Mark in confidence in case he can help. Also, there are no prizes for having signed up to this campaign early. Once the people who have committed to the Court action have paid their money and the deadline has passed everyone is equal in this, even dare I say it Mark, who has done far far more than anyone else and I am sure he would not have it any other way. There are also a few people like me who have helped in the background since Day 1 but who are not affected borrowers. We have helped where we could and now that the campaign belongs solely to those who have signed up for the actual we have taken very much a back seat and are watching from the sidelines with pride at what has been achieved. With the Court action now a reality there should be nothing but unity amongst those taking action whenever they signed up.

by Mark Alexander

22:04 PM, 26th March 2014, About 8 years ago

Reply to the comment left by "Annette Stone" at "26/03/2014 - 21:42":

Well said Annette, many of the later contributors have had several loans and needed time to raise funds. I must point out though that everybody who is part of this arrangement must pay the full whack. There haven't been any and there can be no free rides, no deals, no favours. I have paid the same amount of funds per mortgage affected as everybody else. Thankfully I only had one.

I am very grateful to those who were quick to part with their money as that created momentum. If it wasn't for their commitment and vision I don't think we would be where we are now. There are several reasons that momentum has built, in part it's simple timing of holidays, raising funds etc. Another part of it is undoubtedly a direct result of people realising that we were going to hit our target, the relief of having exceed the target and then the realisation that so many people were involved at that point they can't all be wrong. Action cures fear 🙂
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by Annette Stone

22:44 PM, 26th March 2014, About 8 years ago

Mark. Sorry I did not mean we should have offered free rides or anything of that sort and I really meant that if there were case of absolute hardship perhaps the barristers would have taken post dated cheques. I know this is always hard to police and I hope that everyone affected has managed to raise the funds. I think the momentum surprised us all and what a result. Well done you!

by Terence Joseph

23:12 PM, 26th March 2014, About 8 years ago

Did you read about Richard Durkin winning his legal battle with PC World?
British Justice has cost him £250,000!
If he had the group support that we have in our battle with the West Brom it would have cost him less than £600!
This is why you need to join us. You will never get a better opportunity to fight for your rights - unless of course you win the Euromillions.
But time is running out so be quick!
http://www.property118.com/simplified-payment-instructions-join-west-brom-action/

by Richard Adams

0:38 AM, 27th March 2014, About 8 years ago

Reply to the comment left by "Annette Stone" at "26/03/2014 - 21:42":

No Annette some of the language being used possibly mainly by me is not "naughty" at all. Certainly not aimed at those with multiple a/c's who have had to struggle to find the moolah by the deadline. I take my hat off to them.

Yes we are all equal come the start but like Mark has stated it's a good thing some of us jumped in early to set the ball rolling. If we had all gone the "after you Claude route" waiting to see if the target was going to be met we'd likely be standing at zero today. Like Joe Stalin said of communism some people are more equal than others.

Why did anyone who had the cash delay anyway? Had the target not been reached money would have been reimbursed. Oh the fear of committing oneself!

And here's another angle dear to your heart. Property118 supporters who are unaffected borrowers have supported us with action and donations yourself being an especially fine example. You are rooting for us to win so if we had all held back trembling come the crunch I would not blame you for being disappointed as bang goes the bloody nose lined up for the WB which would have stopped other lenders trying it on which is what you are in this for. I'm not claiming to have put my hand in my pocket on day 2 or 3 just to keep you sweet but it did cross my mind. We owe you.

Anyway all this aspect is nearly history now. We are lined up at the starting gate raring to go. Any more joiners are bunce.

Here's a prophecy come the win in court to attest to my "naughty words" thrust of late. This forum will be entered into with gusto by a few or maybe a lot of current fence sitters saying "What do I do now? Help". And WB will get some letters from fence sitters also, saying " I see you lost the case . Please give my money back".

Rude awakenings beckon come that time. I'll refrain from using the rude expletives that are on the tip of my tongue! Too "naughty".

by All BankersAreBarstewards Smith

7:20 AM, 27th March 2014, About 8 years ago

Reply to the comment left by "Terence Joseph" at "26/03/2014 - 23:12":

Well done Richard Durkiin - but he didn't personally lose all that money in costs - he had support - its in the article.

nevertheless to have focussed his mind for all those years is an amazing thing...

I once knew a man who had RTZ - (one of the biggest global mining companies)... on the brink of being bankrupted ..... needless to say they paid him what they owed him before that happened - I think we all love a little guy who takes on the big guys and wins...

strength in numbers......

well done every and good luck in court

by Onslow Clough

7:23 AM, 27th March 2014, About 8 years ago

So..waking up to the penultimate day of the fund-raising campaign! Can't wait to find out the total funds raised in the last forty-eight hours.
For anyone joining now, you are still incredibly welcome, and the bigger our action group, the better for everyone involved.
I think you will find that the feeling of doing something positive about the awful situation that the West Brom has put us in will really outweigh any issues you might have about spending the money to go to court.
We have great strength in numbers and we are all united in wanting to prove that we will not be trampled over by a big company with no scruples.
Please help us to help ourselves. JOIN US !!

by Mark Alexander

7:28 AM, 27th March 2014, About 8 years ago

Reply to the comment left by "Annette Stone" at "26/03/2014 - 22:44":

Hi Annette

It is extremely unlikely that a judge would ever agree to accept post dated cheques as security for costs, hence unless a person paid has funds into the BARCO escrow account by 28th March they cannot be added to the representative action.

Even if a judge did agree to accept post dated cheques, Cotswold Barristers could not on the basis that they would be agreeing to all other members being jointly and severally liable to make good if that cheque didn't clear.

I do sympathise with those people who cannot raise the funds to be represented and I appreciate it may just be a cashflow issue. However, if we win our case there will be options for them further down the line, albeit significantly more expensive options in all probability. That's just life I'm afraid.
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by Mark Alexander

7:35 AM, 27th March 2014, About 8 years ago

Reply to the comment left by "Terence Joseph" at "26/03/2014 - 23:12":

Hi Terence

Who's to say the judge didn't award costs?

It would be a very unusual set of circumstances for costs not to have been awarded to the winner.

I don't think we have been given the full story by the media on that particular case.
.

by Terence Joseph

8:08 AM, 27th March 2014, About 8 years ago

Reply to the comment left by "Mark Alexander" at "27/03/2014 - 07:35":

Not really the point that I was making Mark!

Anyway, my guess would be 50-70% at best but as a group each share would be almost insignificant.

So if anyone is still undecided - just jump on the train - its about to leave the platform!