Legal firm to bring court actions against banks over rate changes
Firm plans to bring first test cases to High Court in October
Fahy Law plans to bring the first of up to 20 ‘lead cases’, which will determine the outcome of other cases, to the High Court in October.
A legal firm has said it will bring a raft of High Court actions against banks and so-called vulture funds over the failure to inform borrowers of ECB interest rate changes over a decade ago.
Siobhán Fahy, managing partner of Fahy Law in Dublin, said that the cases turn on the failure of financial institutions to inform their customers of a change in the ECB’s refinancing rate in 2008.
This led to their customers paying “increased interest charges when they should not have been paying them”. Asked for more detail, Ms Fahy said that it would be “improper to try and litigate this in the media and wouldn’t be in the best interests of clients”.
She said that she plans to bring the first of up to 20 “lead cases”, which will determine the outcome of the other cases, to the High Court in October. Those wishing to move forward with their case after meeting their solicitor will pay a fee of €399.
Ms Fahy defended the level of the fee, saying that €195 was for court fees, and the remainder was for solicitors’ fees inclusive of VAT. Successful actions brought by individuals will also be required to pay 25 per cent of the recovered sum.
Fahy Law has calculated that the average rebate could be worth between €20,000 and €30,000, which would net the legal team involved between €5,000 and €7,500 per case, plus VAT. Ms Fahy said that comparable firms in the UK charge up to 35 per cent of a rebate for similar work.
“It’s a serious undertaking, there’s a lot of work involved, and we feel the fee is justified. It is rare that any person can get access to the High Court for €400,” she said. “It’s a very small fee we are charging in view of what is involved.”
Ms Fahy said she had assembled 25 solicitor firms to work through potential cases around the country, with about 500 individuals already having come forward. Cases must have obtained their mortgage between the January 1st, 2000, and December 31st, 2003, for a family home. Potential litigants must also have the same mortgage as was originally drawn down and must not have switched mortgage providers.
Tracker mortgage holders are not eligible, but those who have had their loans sold to another bank or investment fund are. She said she anticipates all lenders to be involved as defendants, “but more particularly vulture funds, because quite a lot of these loans have been sold”.
“Once you take the benefit of these loans, you also have the liabilities of that loan. Whatever defect occurred would be with the vulture fund now,” she said.
This copy was edited on April 5th