Property 118 reveals legal action plans against BoI lawyers and Skipton

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Landlord group Property 118 has revealed its plans to take legal action against Bank of Ireland lawyers and that private funders could help claim against Skipton Building Society.

In June, Property 118 won a Court of Appeal case against West Bromwich Building Society and said the lender had wrongly raised interest rates on tracker loans without a rise in base rate.

The group then set up an action group to challenge Skipton and BoI.

Skipton hiked its SVR on residential mortgages from 3.5 per cent to 4.95 per cent in 2010 and BoI raised rates for 13,500 base rate tracker mortgage customers in February 2013.

Property 118 initially planned to challenge the lenders in court directly.

But now the landlord group says it will pursue claims against lawyers that helped arrange residential and buy-to-let mortgages with the Bank of Ireland.

The landlord group says the cost of taking Bank of Ireland to court would run into seven figures.

Instead, Property 118 members will claim for negligence against law firms for not pointing out the potential for the lender’s tracker mortgage differential to rise, separate to a change in the base rate.

The landlord group says individual claims will need to be brought against law firms.

To help, Property 118 Action Group members that have paid £600 to join can bring a form of ‘no win, no fee’ claim via Cotswold Barristers head of chambers Mark Smith.

Property 118 founder Mark Alexander says: “The action group budgets obviously do not stretch to paying for ongoing individual correspondence, negotiation and settlement of claims. However, counsel is so confident of success that he will only make further charges to affected borrowers based on compensation recovered.

“In other words, he will invest his own time into each and every case and will only be paid if he is successful.”

Alexander says Property 118 has not ruled out future legal action against the Bank of Ireland itself.

He also says its existing funds are not enough to take Skipton to court. But Alexander says private funders are now interested in backing the action.

He says: “Property118 Action Group has already committed members funds to obtaining barristers opinion, to obtain agreement in principle from litigation funders and to devising a case strategy. That has used up all available funding to date.

“We need an absolute minimum of 240 affected borrowers to commit to legal action in order to persuade litigation funders to underwrite potential legal costs of up to one million pounds.”

Property 118 has 40 borrowers affected by the Skipton decision to raise rates on some residential mortgages.

Alexander adds: “I suspect that given our success against The West Brom, Skipton Building Society will think long and hard about going up against us in court.

“As soon as we get 240 affected borrowers signed up we will begin making ‘without prejudice’ confidential settlement proposals to Skipton for the exclusive benefit of our group.”

Skipton and Bank of Ireland spokesmen would not comment other than to repeat earlier statements that they disagree with Property 118’s claims.