AIB Belfry Review, updated Sept 2023

AIB Belfry Review, updated Sept 2023

With some foresight, many Irish Investors are sorry they didn’t ponder a little longer over the word ‘Belfry’. This is a bell-tower, or part of a tower or steeple in which bells are hung. It may obliquely have represented a warning bell. The AIB Belfry Review (of 2nd to 6th Funds, in particular) is now a major financial debacle that initially involved over 2,500 negatively impacted investors (who invested more than €120M, between 2002 and 2006). This long festering fiasco predates the Tracker Mortgage-related compensation scheme. The Bank tried to evade responsibility through defending legal proceedings, (that commenced in 2014) though the time-barring of fraud claims against it under the Statute of Limitations. However, in 2020 the Supreme Court disarmed this, in place of ‘a sensible and pragmatic approach’. “On consent, the allegations of fraudulent concealment made against the defendants were withdrawn as part of the settlement last year, the High Court heard at the time.” https://www.irishtimes.com/business/financial-services/aib-sets-aside-100m-for-belfry-funds-compensation-1.4638661 Some of these highly geared (i.e., involving back-to-back Borrowings by an intermediary investment vehicle) Investment Transactions anecdotally involved negligent mis-selling, wrongful disclosure in Prospectuses, conflict of interests, fraudulently manipulated file documents on appetite-for-risk inter alia. Although designated ‘Medium-risk’, they were ‘High-risk’. It is already clear that the Belfry Scheme is similar, in part to the Bank’s Tracker Redress Scheme, in so far as processing cases is like ‘pulling teeth, in slow motion’ with negligible account taken of the dimensions of (a) the Time-Value-of-money, (b) Opportunity Costs and(c) Consequential losses, inter alia. There is an apparent reluctance for the Financial Regulator to oversee this Scheme, (unlike its establishment & oversight of the Tracker Mortgage...

Tracker Redress – Update April 2019

Tracker Redress Cases’ Update 2019 Aggregate Tracker Redress & Compensation is hurtling towards 1 billion Euro. The Central Bank of Ireland  generated this artful Infographic  Central Bank Tracker Redress Feb 2019 update . The highlights of which are: 39,800 borrowers have been impacted  under Tracker Redress since 2015. Tracker  Redress  to Dec 2018 is Euro649 million. 15 Irish Banks or banking groups implicated culminating in setting in place of a formal scheme for Tracker Redress. There is a Regulatory scheme in place whereby the culpable banks must pay, inter alia (a) Compensation, (b) redress, and (c) recognition of the Time Value of Money, (d) demonstrable consequential losses, (e) medical costs with respect to distress . Sums offered by way of redress to date can be accepted without compromising future pursuit options. Therefore affected Borrowers may continue actions through (i) Appeals to allegedly Independent Appeals’ panels, (ii) Financial Services & Pensions Ombudsman and/or (iii) the Courts.                                                                                                                               In addition to (A) returning the Present Value of their own money back to Borrowers, all offending Banks must (B) recognize valid entitlements to incremental evidenced Consequential Losses (indirect but attributable costs) and financial estimations of negative qualitative consequences. Allegedly independent overseers of the various Tracker Redress schemes are EY., Grant Thornton, KPMG, Mazars, PWC & Deloitte. Central Bank Operations: A number of Irish lenders under investigation by the Central Bank in relation to the State’s €1 billion tracker mortgage scandal will be sanctioned with multi-million euro fines later this year. There is uncertainty on how many of the cases involving the six mortgage lenders, (including AIB and its EBS subsidiary, Bank of Ireland, Permanent...

Interest Offset Mechanisms – Lifting the Veil

Interest Offset Mechanisms are a facility where two or more bank accounts are grouped for the purposes of charging interest. On a daily basis, the Bank’s computer combines the cleared balances of these accounts, and accrues interest (at a pre-agreed lending rate) to this net balance. Interest Offset Mechanisms are typically available to two or more current accounts, which are either in the same business name or in the names of related companies. Certain company law requirements must be complied with, before an offset can be implemented between two limited companies. Interest Offset Mechanisms must not be assumed to be in place. In many instances, Irish banks will not unilaterally volunteer to set one up unless instructed by the client. A typical Standard Lending Term involves offsetting between two or more current accounts, at a standard rate of 1 per cent. It is less common for offsetting to take place between a current account and a loan account. Some banks claim not to provide Interest Offset  Mechanisms to client facilities in any circumstances, while others allow only a limited offset – for example, up to a certain debit balance threshold. Some banks can, in the right circumstances, implement  Interest Offset Mechanisms between current accounts held in different branches of the same group. Interest Offset Mechanisms are a major driver of bank profitability, and can be an integral part of the lending facility structures of: public limited companies; large private companies; professional practices; not-for-profit sectors, including the public sector and charities. For example a  motor dealership might require an interest offset mechanism between: the motor dealership and the related computer...

GDPR silver lining

If Data is the new Gold, then GDPR [the Regulation] is the Great Equaliser, for European citizens at least. Many government bodies, businesses of various sizes and large corporates are already bemoaning the bureaucracy & potential sanctions accompanying the introduction of GDPR as mandatory in May 2018. Data is knowledge and knowledge is power. That is why data protection is central to our democracy here in Europe, and is a Fundamental Right of all European Citizens under the European Charter of Fundamental Human Rights (Treaty of Lisbon, Article-8 December 2009). GDPR silver lining strand-1 – is that it not only seeks to affirm this fundamental right but goes much further in specifying a set of Regulations (or fully fledged European regulations – laws) to deliver-on this Fundamental Right to Data Protection. The personal data of any particular customer  is intrinsically worth very little to anyone else, but the ‘mining’ or ‘harvesting’ of such data gives it a very significant value to the likes of FANG, (Facebook, Amazon, Netflix, Google). From 25th May 2018 any European citizen has the right to know what data is held on them, and in some cases to demand its deletion. Citizens of Europe can invoke the Right to be Forgotten, by requiring Search Engine Corporates to remove facts about them, not from the web itself, but from results of Searches. GDPR silver lining strand-2 Another strand of the GDPR silver lining, which is less obvious but much more critical is a right of appeal to a human being against decisions which have been taken by an Algorithm (or mathematical model). Computers and Servers are...

Expert Witness in Ireland

The primary function of an Expert Witness in Ireland is to assist the Irish courts in matters within his/her sphere of specialist expertise. The retention of an Expert Witness in Ireland is a common feature of litigation. As in most cases [where they are former-Legal Practitioners], Judges are typically well-qualified to adjudicate on allegations of legal negligence without additional aid from an expert. Where an Expert Witness is being retained, there is an obligation on Instructing Solicitors to ensure that the costs of litigation are proportionate. Expert Witness in Ireland – liability There is now a possibility that Expert witnesses can be subject to claims in negligence arising from failure to exercise reasonable skill and care in providing their Expert Evidence. The courts in Ireland have held that an Expert in Ireland will have discharged his/her duty to their client if they provide an independent and unbiased opinion, which is within the range of ‘reasonable expert opinions’. Therefore, experts who have proactively and mindfully engaged in the process of presenting expert evidence are likely to satisfy these criteria vis-à-vis their liability. Expert Witness in Ireland –  Immunity Expert Witness in Ireland immunity has been upheld in a number of recent Irish precedent cases. One of the leading cases – Looney v the Governor and the Company of Bank of Ireland & Morey – provided that a Court could suspend an Expert Witness’s immunity if the witness was found to have made defamatory (or malicious) statements. In a UK case in 2015, one reason cited for abolishing expert witness immunity was the public policy argument that Experts should be accountable...