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 ashley nissim

10:26 AM, 6th March 2014, About 8 years ago

A friend of mine that is a financial adviser received a mass email from one of his subscriptions. The headline and first link was to the FT article.

There are over 6000 people effected by this so let's hope the newspapers start to do more reporting about this so we can reach those people that still dont know.

The financial journalists must surely have a good enough story to tell now!

by Neil Patterson

10:28 AM, 6th March 2014, About 8 years ago

Good news is I am getting a LOT of enquiries from potential brand new members to the legal action.

Comments have been around the cost, but when I put it into context they have all said they will be joining.

It really is peanuts to join when you realise as a new member it is only £1,500 upfront of which £1000 you will get back if/when we win not including over payments of interest to date. Plus on a £100,000 mortgage you would be saving £1,900 a year in interest alone.

by Mark Alexander

11:31 AM, 6th March 2014, About 8 years ago

Funds today amount to £34,320 representing 30 mortgages - well done folks, we're making good progress for day two 🙂
.

by ashley nissim

12:11 PM, 6th March 2014, About 8 years ago

As this is a new thread it may be worth putting up the two template letters that were on the old thread:

1. Letter of Complaint to West Brom
2. Letter to Ombudsman (to send once West Brom reject the complaint)

There will be new members looking at this as well as many existing members that have still not done the follow up letter to the Ombudsman.

This follow up letter MUST be sent within 6 months of the rejection of the initial complaint.

by Annette Stone

12:51 PM, 6th March 2014, About 8 years ago

As someone who has been involved in this from the beginning although I am not a wbbs borrower can I just say how proud I am of everyone who is fighting this. Onslow's comments about this potentially affecting every borrower in the country is spot on. That is something I realised very early on when Mark started all of this and why I remain totally committed to the cause.

Everyone wondering whether to join or not should read the comments from everyone here and realise that this is a one off opportunity to do something incredible and sign up to the campaign NOW!!!

I wonder how many of you remember the thread on Property 118 relating to the OFT discussing leasehold property and its management. I am trying to get myself and my 20 plus years of experience on the consultation committee and I have just sent Mark's article above to the person in charge because if we don't stop banks and building societies following what wbbs and boi did there won't be a viable private rental sector in the UK.

by Alexander Law

13:49 PM, 6th March 2014, About 8 years ago

Reply to the comment left by "Neil Patterson" at "06/03/2014 - 10:28":

Hi Neil,
I can totally understand why new members might be put off by the cost of our representative action. My wife and I have sat up into the wee small hours on several occasions considering the pros and cons, but I’ve never doubted that we can’t afford NOT to challenge the West Bromwich. We’ve come to the conclusion that the FOS, FCA and other government bodies aren’t really motivated to right the wrong that’s been perpetrated, so direct action is our best chance of success.

I had to draw money out of a small savings account to fund our share of the campaign, and we only have 2 affected mortgages. Even so, between funding the Law Department, Cotswold Barristers and a couple of very small contributions to the marketing fund, we’ve chucked in a round of drinks short of £3,000 so far. Many others to whom we are immensely grateful have contributed far more.

But by the time we close the book on this fundraising, we will have “overpaid” over £1,200 to the robber barons at the West Bromwich. All the contributions we have made so far to the war chest will be offset against this year’s tax, and when we win we will get £2,000 back from the fighting fund. So I look at this as an investment in our financial security.

But most of all (despite my anger and indignation at the way we have been treated as customers of the West Bromwich), I believe that with Mark Smith we have a very good chance of winning this fight, of recovering our overpayments (with interest?!), and preventing other lenders from seeing us as soft targets and ripping us all off!

by The Man From Nowhere

14:02 PM, 6th March 2014, About 8 years ago

You can transfer funds directly to BARCO Escrow account, but it is essential that you send either a copy of the transfer advice or the account number you are sending it from to carla@cotswoldbarristers.co.uk so that Cotswold Barristers can keep track of who has paid what.

Important, please quote this 16 digit number : 5190C13520B00013

Barclays Bank:

Sort code : 206563

Account : 03221407

Please also complete the details required in the attached letter of instruction and return the same by email or post. They cannot accept any monies or your instructions without your signature on the form below, or, e.mail confirmation that you accept the terms and conditions.

https://www.property118.com/wp-content/uploads/2014/03/PDF-Property118-Members-vs-West-Bromwich-Mortgage-Company-1.pdf

Mark, can we put the BARCO escrow account details on the Property118 website so they feature more prominently? With the amount of people that use internet banking these days and the convenience it offers, it would really help with reaching our target.

by The Man From Nowhere

14:23 PM, 6th March 2014, About 8 years ago

This weekend, for anyone who hasn't already done so, put everything else on hold until you've sent a cheque to Cotswold Barristers for £1144 per affected mortgage (or £1500 per affected mortgage for new members who didn't initially instruct The Law Department).

Alternatively, you can make an electronic payment to Cotswold Barristers BARCO escrow account of £1144 per affected mortgage (or £1500 per affected mortgage for new members who didn't initially instruct The Law Department). It is essential that you send either a copy of the transfer advice or the account number you are sending it from to carla@cotswoldbarristers.co.uk so that Cotswold Barristers can keep track of who has paid what.

The BARCO escrow account details are:

Barclays Bank:

Sort code : 206563

Account : 03221407

Important, please quote this 16 digit number : 5190C13520B00013

Please also complete the details required in the attached letter of instruction and return the same by email or post. Cotswold Barristers cannot accept any monies or your instructions without your signature on the form below, or, e.mail confirmation that you accept the terms and conditions.

https://www.property118.com/wp-content/uploads/2014/03/PDF-Property118-Members-vs-West-Bromwich-Mortgage-Company-1.pdf

by Mark Alexander

14:40 PM, 6th March 2014, About 8 years ago

Reply to the comment left by "The Man From Nowhere" at "06/03/2014 - 14:02":

You said ...

"Please also complete the details required in the attached letter of instruction and return the same by email or post. Cotswold Barristers cannot accept any monies or your instructions without your signature on the form below, or, e.mail confirmation that you accept the terms and conditions."

The answer to that is no, however, what I can do is add it to the email which gets sent to everybody who downloads the instructions so that is what I have done.
.

by The Man From Nowhere

14:44 PM, 6th March 2014, About 8 years ago

Reply to the comment left by "Mark Alexander" at "06/03/2014 - 14:40":

Great! Thank you.

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