by Ronan Coburn | Sep 4, 2023 | Topical in Irish Banking Sector
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 “On consent, the allegations of fraudulent concealment made against the defendants were withdrawn as part of the settlement last year, the High Court heard at the time.”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...
by Ronan Coburn | Sep 25, 2017 | Topical in Irish Banking Sector
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...
by Ronan Coburn | Jul 24, 2017 | Topical in Irish Banking Sector, Tracker Mortgages' Scandal
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...
by Ronan Coburn | May 7, 2017 | Topical in Irish Banking Sector, Tracker Mortgages' Scandal
AIB Belfry cases progressing in Court Approximately 300 investors in AIB Belfry cases (out of an estimated 3000 investors in the six Funds) are pursuing damages for alleged negligence, breach of contract, breach of fiduciary duty, negligent mismanagement and misrepresentation by AIB and other parties. Last month the Irish Times reporting on AIB Belfry cases (in a preliminary ruling in April 2017) a High Court judge approved hundreds of damages actions by investors in the Belfry property funds to go to a full trial on some, but not all, of the grounds advanced. The Court found, while some elements of the claims are statue-barred, other parts of the claims can now proceed to trial. The claims involve the operation of five separate investment funds into commercial property in the UK known as “the AIB Belfry Funds”. Affidavits claim individuals invested sums of between €50,000 and €200,000 in the funds between 2002 and 2006. Some cases involved individuals’ life savings to have been designated as pension funds. Seemingly the Statute of Limitations may not protect the various classes of Defendants if fraud in the mis-selling & operation of the AIB Belfry Funds can be evidenced. Loan to Value covenants In his preliminary ruling after 11-months, Judge Haughton decided on 28th April 2017 crucially, the investors’ contentions of alleged failure to advise them about aspects of the funds known as a loan-to-value (LTV) covenant before they invested are not statue-barred. It is claimed these covenants permitted assets which the fund had invested in to be sold if their value fell below a certain amount. These asset sales, it is claimed, occurred...
by Ronan Coburn | Apr 10, 2017 | Topical in Irish Banking Sector, Tracker Mortgages' Scandal
Ulster Bank GRG seeking some type of self-redemption Late last year Ulster Bank GRG [the Bank’s – now disbanded Global Recovery Group], produced a 3-year delayed response to the Tomlinson Report into RBS & its subsidiaries (2013) lawrence Tomlinson Report into operations of RBS The Irish Times reported [ Ulster Bank GRG notice to Irish borrowers] on the establishment of a compensation Scheme whereby €450M was being made available by way of a dispute appeal reserve. Eligible individuals & businesses must first of all meet the following criteria (A) not have previously referred their Dispute to the Financial Services Ombudsman, and (B) not engaged in Litigation or pre-litigation communications with the Bank. Very recently Ulster Bank GRG made direct contact with a number of potentially qualifying Borrowers, with quite an obscure account of how the Scheme will operate. It only relates to certain ‘complex fees’ as applied by Ulster Bank GRG from 2008 to 2013. Under the very narrowly defined scheme such ‘Complex Fees’ disregard Irish Interest Rate Hedging Products’ miselling. Additionally the Scheme bypasses any recognition of the understated role of Consequential Losses (or chain-reaction/ cause & affect losses). A salient precedent case on this topic is Hadley versus Baxendale (1854), beloved by many Law Students over the previous Century-and-a-half. In an appearance of Senior Ulster Bank Executives before the Oireachtas Finance Committee in December 2016, the following was put to Andrew Blair (Head of Problem Debt Management – Ulster Bank), by Pearse Doherty (TD Sinn Fein). “Businesses believed they would be supported but, as was put to me, they were not aware that they were being put...
by Ronan Coburn | Mar 1, 2017 | Topical in Irish Banking Sector
Recently in preparations for a Data Protection post-graduate Certificate, I discovered what perhaps few EU citizens are aware of -> that modern European Privacy Rights have their roots in the operations of the STASI (the former east-German Ministry of State Security) and the NAZI party in the late 1930s. One person in seven of the then east German population were informing the STASI on the rest. GDPR & DPRIA., stand for General Data Protection Regulation and Data Protection Risk Impact Assessment, respectively. This Blog uses the term ‘Data’ in the context of ‘personal data relating to an identifiable Data Subject’ . If you are a Decision-maker in an Irish Company and your Company uses data on European Citizens then, you really do need to get familiar with the steps necessary to comply with GDPR and DPRIA. GDPR will become mandatory from 25th May 2018 onwards, and Companies that are not sufficiently geared-up for compliance will be subject to seriously substantial financial fines in tandem with potentially greater reputational damages. By way of direct preparation for the seismic impact on 25th May 2018, GDPR risk assessment has just become everyday terms in business strategy for entities that use and/or store data on citizens of the European Union and far beyond. The Regulation will put individuals in control of their personal data, empowering them to choose how (and whether at all) businesses use their data. Where an individual’s personal data is not treated in compliance with GDPR risk assessment, the affected individual will have legal recourse and a potential financial compensation claim. Additionally data protection Regulators within the EU will be adequately resourced...
