Blog - The Verdict
MSB Solicitors Liverpool
Friday, 13 February 2015 00:00

41,000 Northern Rock mortgage customers may be entitled to compensation totalling £258million

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If you had a “Together” mortgage/loan from Northern Rock between 1999 and March 2008, you may be entitled to be repaid or re-credited the interest which you paid.
 
Northern Rock themselves estimate that 41,000 of their customers may be entitled to compensation at a likely cost of £258 million if their appeal against a High Court judgment fails.
Northern Rock has already paid out about £270m in refunded interest payments to customers who borrowed less than £25,000 in personal loans in this way before April 2008, after it was found that the loan documents did not comply with the Consumer Credit Act.
“Together” mortgages enabled borrowers to combine a mortgage with a personal loan of up to £30,000 that in total could be worth more than the property itself.
The High Court handed down judgment in NRAM plc v McAdam and Hartley[2014] EWHC 4174 in December.The proceedings were brought by Northern Rock itself to determine the status of its “Together” mortgage agreements.  The agreements in question were made between 1999 and March 2008.
Northern Rock sought a declaratory judgment concerning its obligations under the Consumer Credit Act 1974 (CCA) and in particular whether it was required to compensate borrowers for failure to comply with the requirements of section 77A of the CCA (the requirement to provide periodic statements).
 
Northern Rock argued that the agreements in question were not regulated by the CCA on the basis that the financial value exceeded the relevant financial limit provided for by the CCA.  However, the agreements were processed and documented as if they were CCA regulated.
 
Mr Justice Burton concluded that the rights and remedies in relation to section 77A were imported into the agreement.  As such, the Defendant borrowers were entitled to be repaid or re-credited with the interest they had paid during NRAM’s period of non compliance.
 
You can read the judgment here http://www.judiciary.gov.uk/wp-content/uploads/2014/12/nram-plc-v-mcadam-hartley.pdf
 
Northern Rock have now appealed the judgment and it is likely to be some months before we know whether leave to appeal will be granted by the Court of Appeal.
 
If you had a Northern Rock mortgage or personal loan between 1999 and March 2008, please call our John McCreanney on 0151 281 9040 for free initial advice.
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