Halifax Endowment misselling - court action

DaveGB

After 5 years of dispute with the Halifax I have commenced small claims court actions to recover the shortfalls on my Mortgage Endowment policies (Approximately £2k on the £7.5k and a £8k on the £32.5k endowments).

The Halifax have upheld my complaint, accepted that the policies were missold and acknowledged the Endowment Mortgage was not the best way to repay my mortgage. Their redress calculation however shows I have suffered no loss and as such they are not willing to contribute anything to the shortfall.

My court claims relate to being given a warranty by the Halifax salesman that the endowment would pay off the mortgage and not being told the risk that the endowments may not pay off the mortgage.

The Halifax are defending my claim with their defences being 1) for me to provide proof of the above, and 2) that my claim is statute barred.

I would appreciate advice on the following:

With regards to 1) proof of what the Halifax Salesman said - is there anything more I can provide other than witness statements from my wife and I about the meeting. Also does anyone have details of any relevant legal cases?

With regards to 2) the Halifax are saying I was advised of the potential shortfall 2 years before I actually was and as such I am statute time barred - does anyone have advice regarding defeating this argument including any relevant legal cases.

Halifax have employed Wragges as their solicitors who have put together the defence and who I understand will be representing them at the Hearing.

Thanks

opinions4u

I think this is an important point for you to consider:

The rules on small claims costs give the judge a power to make a punitive costs order if he thinks that a party has behaved unreasonably. If the judge is minded to make such an order he may take into account all the costs that a party has incurred in either bringing or defending the claim before deciding how much the other side should pay in respect of these.

Why, if you weren't out of pocket, would you bring court action?

If Halifax can show that at the point in time they did their sums you were indeed not out of pocket, then I'd say there is a high risk of you losing the case and having a ruling against you making you liable for their reasonable legal costs. On what basis have they claimed that you have suffered no loss?

Is there any reason why you haven't gone to the FOS? While the FOS is not a legal body, courts tend to react negatively if you have bypassed the FOS.

As for your questions:

1) Have Halifax provided you with a copy of the salesman's documentation? A court could easily rule that your wife's testimony is meaningless as she has a slight bias.

2) I believe a legal definition is along the lines of "the claimant has three years from when he or she discovered the damage, or should with reasonable diligence have discovered it. But that does not extend the limitation period indefinitely, there is an overriding time limit of 15 years from the date of the wrongful act or omission after which no claim may be brought."

dunstonh

The Halifax have upheld my complaint, accepted that the policies were missold and acknowledged the Endowment Mortgage was not the best way to repay my mortgage. Their redress calculation however shows I have suffered no loss and as such they are not willing to contribute anything to the shortfall.

Having an endowment doesnt mean you are worse off. Upholding a complaint doesnt mean you are worse off. It is very possible (and quite common) that a review of your case shows the incorrect advice was given (or more common with endowments is a lack of information to support it either way) yet still find you are better off.

The Halifax are defending my claim with their defences being 1) for me to provide proof of the above, and 2) that my claim is statute barred.

With the courts you have to provide evidence to support your accusations. Courts also operate a timebar so it may be pointless anyway.

With regards to 1) proof of what the Halifax Salesman said - is there anything more I can provide other than witness statements from my wife and I about the meeting. Also does anyone have details of any relevant legal cases?

There are no known cases in relation to what you are claiming as very few take endowment cases to court and you are not financially worse off. What is your documentary evidence to support your claims? Documentation is king in things like this. Verbal is easily trumped by documents.

Break your complaint down and look at the outcome. You complained that you would not have taken out an endowment had you known the risks. That means you wanted a repayment mortgage. Halifax have agreed with you and the FSA defined calculation shows that if you pay the surrender value of the endowment off the current mortgage balance you will be in the same position or better than you would have been had you taken out a repayment mortgage from the start. Hence no redress payment is required.

So, on the basis that you are actually better off because of their incorrect advice, who do you propose to persuade the court that you are financially worse off?

Halifax have employed Wragges as their solicitors who have put together the defence and who I understand will be representing them at the Hearing.

you can see them fighting this one as its a pretty easy case for them. Indeed, the courts may even throw it out as you are you trying to claim money despite there being no money being owed. Indeed, you coudl find costs awarded against you for wasting the courts time.

You won your case but you are not worse off. Be happy about that. You have managed to pay less per month than a repayment mortgage for x number of years and can now take the surrender value, pay it off the mortgage and still be better off than had you been on repayment from the start.

Trollfever

Wragge & Co:

Acting for a major financial institution defending claims by private individuals alleging misselling of investments.

http://www.wragge.com/financial_services.asp

Gorgeous_George

Our banking system could not afford for you to win the case as it would open the floodgates for similar claims. The chance of winning is close to 0% for all the reasons outlined above.

I wish you luck but I'd walk away.

GG

DaveGB

Thanks for your help, I tried to reply yesterday, did anyone get that reply?

Dave GB

silvercar

The Halifax have upheld my complaint, accepted that the policies were missold and acknowledged the Endowment Mortgage was not the best way to repay my mortgage. Their redress calculation however shows I have suffered no loss and as such they are not willing to contribute anything to the shortfall.

You are confusing being given wrong information and the requirement to correct it.

Many people assume that, having the endowment seller (or their rep) proved to be giving wrong advice means that the redress will be that you will be put into the position as if the advice was true. So in your case, having been told that the endowment would clear the mortgage, you think the redress should mean that the endowment be topped up to the mortgage level. What actually happens is that you are put in the position as if you had never taken out the endowment in the first place (as they are accepting that it shouldn't have been sold to you). Given that you bought the property and no-one can or wants to undo that, the alternative to endowments was repayment mortgages. Using FOS rules they have calculated the costs if you had had a repayment mortgage from the start compared to if you now took the endowment payout value and reduced your mortgage by that amount. Their calculation has shown that you are better off having had the endowment and used that to now reduce the mortgage. ie even though the endowment wasn't suitable for you, using its payout value to lower the mortgage would have cost you less than a repayment mortgage from the start.

Therefore they don't have to pay you anything. Basically the compensation is designed to put you in the correct position from the start rather than to give you the unrealistic dreams that endowment salesmen promised when selling you the product.

dunstonh

DaveGB wrote: »

Thanks for your help, I tried to reply yesterday, did anyone get that reply?

Dave GB

no. as you can see from this thread, you have posted just twice so far. The Original Post and the one saying that you tried to reply.

gunge

DaveGB wrote: »

After 5 years of dispute with the Halifax I have commenced small claims court actions to recover the shortfalls on my Mortgage Endowment policies (Approximately £2k on the £7.5k and a £8k on the £32.5k endowments).

Doesn't small claims have a £5000 limit anyway?

magpiecottage

You will not be able to go to the Financial Ombudsman Service if it has given you a deadline to do so which has expired. If you have been arguing the toss with them for over five years I would hazard a guess that it ran out at least 4 years ago.

Even if it did not, now you have started legal action you cannot go to FOS unless HBOS agrees to which, since the courts will look at the strict letter of the law rather than what it considers fair and reasonable, ii is unlikely to do.

Unless you can prove a contractual commitment by Halifax to pay a particular amount, you will not get it. From what you say, it seems to be only your word against theirs and the contract will be deemed to be the policy document, no more and no less.

You can therefore only claim for negligence. If it is more than 15 years from when the advice was given until the date the court claim started they will be able to timebar using the long stop in Section 14B of the Limitation Act 1980.

So I am afraid you have probably wasted your money on court fees.

As gunge has noted, a claim of £8K is over the small claims limit and you are at risk of costs being awarded against you too.

Noselfdiscipline

Your wasting your time. No financial loss is a good thing, arent you lucky you werent worse off. I assume you surrendered your endowment at that point and converted to repayment? Job done. Give up this court thing and let it go.