~~~**IMPORTANT** Mortgage Claimants ~ PLEASE READ ~~

[gizmo111]

I have read carefully the above advice and have a question - I have yet to hear the initial response from Halifax from my 14-day letter re ERC. As far as I can see I have nothing to lose by continuing to negotiate up to the point where I have to put a claim in. As the claim is small compared to a lot of other cases on the site (under £3k) and the claim is not against a specialist mortgage company but a bank, is it still worth issuing a claim in the small claims court? If costs cannot be awarded against me, what is the possible disadvantage? Especially considering Zoot and others have already won full compensation from Halifax for the same thing?

 

matt

 

Iwould negotiate up to the point you have to put a claim in - and then don't put the a claim in. Costs can be awared against you if you lose and there is no guarantee that it will be allocated to the SCC.

 

Hope this helps

[mattfromnotts]

I'm confused! If there is a set court for claims under a certain value, i.e. £5k, then on what grounds can the case be moved to a higher court?

[zootscoot]

Matt if you have not issued yet its best not to.

 

Halifax paid mine out but they are now defending claims. If you carry on you stand to lose your court fee, your allocation fee and Halifax's reasonable costs and disbursements for things such as travel expenses. Barry Pauls small claims costs were £500. There is also a risk that it could be fast tracked and therefore your costs could be greater.

 

Homee,

 

If your claim has not been allocated yet you are potentially liable for costs to date. You need to be careful in negotiations for withdrawing.

[zootscoot]

The track allocation value is simply a guideline. The judges may move claims out of any track if they feel the case is complex or involves a point of law of public importance.

[paulpb123]

Matt,

I think its on the grounds that the arguments are likely to be complex, and I think some mortgage companies have argued that any outcome could have an impact on their future business.

Paul

[mattfromnotts]

Matt if you have not issued yet its best not to.

 

Halifax paid mine out but they are now defending claims. If you carry on you stand to lose your court fee, your allocation fee and Halifax's reasonable costs and disbursements for things such as travel expenses. Barry Pauls small claims costs were £500. There is also a risk that it could be fast tracked and therefore your costs could be greater.

 

Homee,

 

If your claim has not been allocated yet you are potentially liable for costs to date. You need to be careful in negotiations for withdrawing.

 

 

Thanks. I will wait to see what they say, but if they have cottoned on to any of the problems other people have been having, I'm assuming they will be unwilling to negotiate.

[gizmo111]

Thanks. I will wait to see what they say, but if they have cottoned on to any of the problems other people have been having, I'm assuming they will be unwilling to negotiate.

 

More than likely - but BM paid biffa 1/2 and they are part of Halifax. Negotiate as much as you can before you throw the towel in, just don't issue court proceedings.

[Guest Zooman]

I’ve been a member of this site for 7 months, and I can assure you my expertise of the judicial system stems much further back in time.

 

My first practical experiences of the civil court system came when I was green and much younger and still had ideals. I was shocked when I realised that Judges basically, within the rules, ran their court rooms like chiefdoms, I was shocked how court deadlines could be plainly brushed aside and how orders could go non-complied with and no real consequences. Over time I matured and learnt to play the game (something that cannot be instilled in the class room), I also learnt to accept that litigation is about making money, and not justice. The majority of cases are settled outside of court, and then court used to argue over whom is going to foot the bill and how much that bill should be.

 

By personal experience of the law in insolvency and not contract law, this said I still have an understanding of contract law and it interruptions and implications, but am no expert.

 

I have felt from the first time I read of these claims being brought had they had no chance of success, I felt the arguments were greatly flawed and being driven not by legal understanding, but by a sense of misplaced justice and in more than one case greed. People have placed a lot of unfounded faith in the system, that the system will protect them, as they are litigants in person, and also a great misunderstanding of the courts attitude to litigants in person.

 

Now I will turn to these claims and give my personal opinion, I do not expect all whom read it to agree with me, but because I care about you all and do not want to see you become victims of these claims I am going to share my opinion.

 

Firstly.

 

You were free to take a mortgage where ever you chose to, and in the event that you had little choice in your decision because of your circumstances you were free to rent and wait until your circumstances improved.

 

The mortgage market is highly competitive, more so then bank accounts, tens of thousands of different deals are on the market at any one time. You chose to take this mortgage as it offered you something in return for ERC, what that was differs greatly from deal to deal, from a cash back lump sum to just the ability to take a mortgage.

 

The banks do not try to argue this point with bank accounts, as they know you have very little choice in current accounts and that they all have the same terms, and in addition having a personal account has become a fundamental part of adult life. But this is clearly not the case with mortgages, mortgages are an instrument to a goal but not essential.

 

When you entered into this bargain, your mortgage company asked you in return for the bargain to give it a minimum amount of time you would trade with them, and they also said, in the event you leave before x date you will do x, the ERC. This was not hidden and you entered freely into this agreement with your eyes open.

 

 

Secondly.

 

Small claims, it is true that you are offered cost protection on the small claims track. And I will give you my views on this.

 

I do not consider given the importance of these claims that the allocation to the small claims track is appropriate to these claims. I have the awful feeling these claims have been put on the small claims track as the Judge making the allocation has not read the claim and defence and/or has been so used this last 9 months of claims brought against the banks that they have not defended, that he believed they would not defend these claims.

 

With this in mind my concern is that as it becomes clearer that they are going to defend ERC claims, and that the claims are re-allocated to the fast track, I would not be surprised if you tuned up for a small claims hearing, and the judge on the day adjourned and re-allocated to the fast track once he was fully aware of the nature of the claim and it was evident they are defending.

 

In the event that it stayed on the small claims track there are provisions within CPR in small claims for costs, when the losing party has acted unreasonably, I believe that bringing such a flawed claim is in itself unreasonable. But this is not for me to decide, and this would be different from Judge to Judge.

 

Although I would expect the defendant to argue that they are being prejudiced by the use of the small claims track, where for obvious reasons it has no choice but to defend these claims, in order mto maintain the commercial viability of ERCs within the industry. If their customers are free to use the small claims court to recover an amount under £5,000 and it is costing them more than the sum claimed to defend the matter, it is a clear prejudice and not what the small claims track for intended for. Due to the claim being merit less in the first place the defendants, in the interests of justice and the integrity of the civil system, should be financially compensated for having to defend the claim.

 

Then for many there will also be the contractual clause that allows them to recover any and all legal costs arising from the mortgage agreement, I believe also this clause in affect waves your rights to cost protections in any track, and they will be awarded reasonable costs, and trust me what the courts will consider reasonable will be far greater then you will, in MaroonFox’s claim the court considered £7,500 to be reasonable. It is also well established that these clauses are win or lose, they get reasonable costs.

 

If and when the defendants will bring up this clause is a matter for the defendant and its lawyers, and I would not try to second-guess them, but you, as the claimant should be aware this is a possibility if your contract has such a clause.

 

It is not impossible to get a settlement offer from the defendants at this stage, but I truly believe that we will be seeing the last of the settlements within the next 2 weeks (I hope I am wrong). Up until now the industry has been at a loss how to deal with these claims, and just like the bank charges have not wanted to go into court until all considerations had been made, as can be seen by Fox’s claim Cobbett’s at least put together a strong argument to it clients, to convince them they should be allowed to defend the claim which they did.

 

Now after Fox’s hearing I firmly believe it is just a matter of time for the news to filter though out the industry of Cobbett’s success, and although it was in the county courts I expect a lot will be made of the fact they (the courts) brought in the Circuit Judge to hear the case.

[mattfromnotts]

Zooman

 

Whilst not fundamentally disagreeing with the above points raised in regard to ERCs, this still does not justify the nature of the charge being unfair to the consumer in the way it is presented, which is the basic tenet to the vast majority of these claims. The original argument, which to my mind still stands and has not been disproved in any of the cases that have been lost, is that a financial institution cannot justifiably argue that withdrawing from a mortgage on day x will cost them £2,000 for example, but 2 days later costs them nothing and that this does not represent a penalty charge to the consumer for exercising their right to seek another product. Whether this can be viewed as a breach of contract is another matter and seems to be the crux of the defence's legal argument in some of the above cases.

 

There may be some movement and retrospective compensation after the FSA's report on mortgage fees on February 28th 2007, but their investigation is focusing on extra admin fees such as deeds despatch and 'exit' fees, rather than ERCs themselves.

 

With this in mind, surely we would all be better off contributing a sum of money to a fighting fund and bringing a class action against the banks, so that we are able to mount a proper legal challenge that would settle the matter once and for all?

[Guest Zooman]

Your problem is this, you can try to counter it as much as you like, all the arguments that you have put forward have failed in court twice and my simple argument that you entered into a contract freely and benefited from the deal/agreement/contract has won twice.

 

Maybe Fox would like to post here, as all the reports from the FSA will not make the world of difference, as they have no standing in law, this was made clear to fox.

[mattfromnotts]

Your problem is this, you can try to counter it as much as you like, all the arguments that you have put forward have failed in court twice and my simple argument that you entered into a contract freely and benefited from the deal/agreement/contract has won twice.

 

Maybe Fox would like to post here, as all the reports from the FSA will not make the world of difference, as they have no standing in law, this was made clear to fox.

 

 

O.k. - when you take out a current account, you do so to avail yourself of a free ipod, better rate, overdraft facility etc. etc. You do this in the full knowledge that if you go overdrawn you will pay £25 in charges and further charges if the situation is not rectified. You are benefitting from this contract.

 

How do this situation differ from an ERC? In both cases the consumer is aware in advance of the outcome if they breach the overdraft/mortgage contract and in both cases a penalty is applied. The argument is exactly the same in both cases, yet in the case of the overdraft charges you are asserting that they are unfair, but those suffering from ERC charges deserve everything they get!

[Guest Zooman]

My views are very clear on this, I think anyone who continues with these claims is frankly mad as a hatter, I honestly believe for a lot of you to see what is staring you in the face, will be when when you see a sales order on someones home to cover the legal costs appears on this site.

 

2 claimants have lost, they do not have the money, their home is now at risk because of this, if you have one of these claims do you want this to be you, how will your wife/husband feel when you have to tell them the case you brought and believed in so much has now put your house at risk and to avoid losing your home we are going to have to take a loan out.

 

I do not want to see people being made bankrupt and/or lose their home, this is why I am posting.

 

I am not going to argue the defence with you. All of this was considered by the court, and it did not hold up. The risks are huge.

[mattfromnotts]

Zooman

 

I have never stated that I am going against the advice on here and pursuing a now obviously risky claim - I am merely stating that there is a flaw in your argument that one type of charge is unjust and another is appropriate.

 

matt

[kennyh]

Can anyone watching please give a clue on #58 [Oh and bye-the-bye; if they turn 'bloody minded' and hit us for significant costs are we allowed to ask them for full justification (is it 'taxing' or zummit like).]?

[Guest Zooman]

you can ask them to be taxed, but it will cost you around 3k if you go without a legal support, and around 5k if you appoint lawyers. Maybe you could get a legal costs draftsman to help you, but I know of none that take work from litigant in person.

 

The reality is that hearings that last less then a day should be dealt with summary costs, on the day.

 

Also think of Fox's claim, they asked for 12.5k but the judge said 7.5k was reasonable.

 

Tax hearings are not simple and the conduct of the parties throughout are taken into consideration, as is the merits of the claim.

 

So yes you can, is it worth it, not for anything less then 40k IMO.

[kennyh]

Thanks Zooman,

If we're into individual negotiation and have no judge riding 'shotgun' (as indeed we won't have if we're terminating prior to court appearance or AQ submission) is there anyway we can hope for charges to be fair and reasonable - the whole system has appeared much less than that so far; but hey - who said life was fair?

[Fullyskinted]

Ive just recieved a response to my Prelim letter (late). The LBA was due to go out this week but I let it go....

 

I think Ill let the 8 weeks run and drop it for now.

[Guest Zooman]

Ive just recieved a response to my Prelim letter (late). The LBA was due to go out this week but I let it go....

 

I think Ill let the 8 weeks run and drop it for now.

I think that is for the best.

[rbrears]

Hi Matt - the reason there is a difference in the two circumstances you set out in your conversation with zooman is that they ARE totally different and encapsulate the reason why the rules on penalties apply to bank charges and not to ERCs.

 

The bank charge arises because of a breach of the contract - the bank's t&cs will require that you keep your account within any agreed limit or in credit if you have no o/d agreed. This is a mandatory requirement of the contract and failure to adhere to it is a breach.

 

With ERCs there is no breach of contract. The borrower has a specific contractual right to terminate early. The rules on penalty charges do not apply unless there is a breach of contract - that is the basis upon which Jamorgan lost her claim.

[Guest willowb]

But aren't there circumstances whereby the customer, who has entered the contract fully intending to stay with that mortgage lender for that redemption period (why else agree to it?) but due to circumstances beyond their control were forced to breach the contract and therefore incur the ERC?

 

These circumstances range from the unreasonable increase in mortgage rates thus forcing the lender out of the contract or as in my case the necessity to remortgage but the existing lender had declined therefore forcing the lender to seek a mortgage elsewhere. Somewhere within that, the balance isn't right.

 

10% of the financial reason why we had to remortgage was due to the unlawful charges placed on our RBS joint account, RBS being the mortgage lender in question. It could be argued that if the charges weren't taken from our account in the first place we may not have been forced to remortgage and therefore would have been better placed to keeping our existing mortgage deal.

 

I'm just pointing out that there surely is scope for the many different circumstances as to why these claims are brought to Court?

 

Another thing is the actual amount of the charge which is usually an obscene amount of money and does not relate to a genuine pre-estimate of the company's losses. If you have entered a mortgage contract for a reasonable fixed rate but then interest rates fall, how can they argue that they have lost anything? they have gained more from you in the interest you have paid and have then grabbed a huge penalty off you aswell!

 

Just putting it out there, that's all.

 

Wxxx

[gizmo111]

Another thing is the actual amount of the charge which is usually an obscene amount of money and does not relate to a genuine pre-estimate of the company's losses. If you have entered a mortgage contract for a reasonable fixed rate but then interest rates fall, how can they argue that they have lost anything? they have gained more from you in the interest you have paid and have then grabbed a huge penalty off you aswell!

 

They don't have to be a genuine pre estimate of losses as they are not a penalty for breach of contract - they can charge what they like - from 10p -£100k it is an explicit term in the contract for exercising your right to redeem. They are not arguing they have lost anything - they don't have to - but as an aside they will be borrowing from the money market at fixed rates also.

 

I'm not saying I agree with the charges and some of the redemption clauses are grosly unfair and put people who are already struggling in an even worse position if they have to redeem - but we have no legal argument that will stand up in court- we won't win however much we try to justify it - the mortgage co's are used to litigation far more than the banks and as has been proven sadly to the cost of 4 members it's not worth continuing with these claims.

[Guest Zooman]

it not meant to act as a genuine pre-estimate, you are confusing the issue with penalty charges, these are not penalty charges. It is a condition of the contract and a charge is you should chose to end the contract before a certain length of time.

 

something similar, in my last employment contract when I left I was not allowed to work within 30 miles of my former employer within the same industry for 3 years, this was a pain to me when I left but I had been given the job and had agreed to this term for I could get the job.

[Deepthroat]

from what I can see both were lost for different reasons surley this can only strengthan any arguments how much time before the next one is in court if they cannot justify their losses then we might be in with a chance

Bona

 

I think the problem is that they can easily prove that they have been financially disadvantaged.

 

For example, ERC's are only payable if you have an interest rate lower then their standard rate (excluding most trackers)

 

So by agreeing to stay with them for 2, 5 or 10 years, they give you a lower interest rate.

 

Say for sake of arguement 1.5% discount. Effectively, they are losing 1.5% interest on your mortgage each year, when you could have been paying their standard rate.

 

I am no expert, but I think this will allow them to show in court that they have made a financial loss.

 

I am not saying that they are righ, just trying to put a possible argument into perspective.

[gizmo111]

I think the problem is that they can easily prove that they have been financially disadvantaged.

 

As explained above by zooman and myself they don't have to prove this.

 

For example, ERC's are only payable if you have an interest rate lower then their standard rate (excluding most trackers)

 

Not true - a sub prime lender will charge higher rates to reflect the risk they are taking by lending to someone with adverse credit and still include an ERC in the contract.

So by agreeing to stay with them for 2, 5 or 10 years, they give you a lower interest rate.

 

Say for sake of arguement 1.5% discount. Effectively, they are losing 1.5% interest on your mortgage each year, when you could have been paying their standard rate.

 

I am no expert, but I think this will allow them to show in court that they have made a financial loss.

 

As we have said they don't have to prove financial loss.

I am not saying that they are righ, just trying to put a possible argument into perspective.

[Guest willowb]

Ok then, because my brain is fryed will someone please tell me in simple terms what arguments we were using that gave us so much confidence that we thought we could win in Court? I'm not being argumentative I just want to understand in layman's terms what the basis of this fight was all about.

 

Wxxx