Engagement letter - Mortgage Prisoners Litigation
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Strictly confidentialSubject to legal professional and litigation privilege
Engagement letter –Mortgage Prisoners Litigation
1. Thank you for instructing Harcus Parker to act for you in a claim against one or more of the following lenders: NRAM Limited, Landmark Mortgages Limited and Topaz Finance Limited (each a Defendant, together the Defendants). The proposed claim arises out of the interest rate charged by the Defendants on your domestic ‘Northern Rock’ mortgage. (the ‘Mortgage Prisoners Litigation’). We are writing to confirm your instructions, the basis and terms on which we will act for you, and the way in which the litigation will be managed.
3. The following documents are enclosed with this letter:
Schedule 1 – Harcus Parker’s Privacy Notice
Schedule 2 – the DBA, made between you and Harcus Parker
Schedule 3 – the LMA, made between you and Harcus Parker and every other Claimant
4. In addition, at Schedule 4, there is a glossary of defined terms, which are used in and incorporated into this letter and in the LMA, the DBA, and the Privacy Notice. You should read these documents alongside the glossary.
5. Finally, Schedule 5 contains a form that you may use to cancel this agreement within the next 14 days.
Overview of the litigation
6. The claims we are proposing to bring will allege that the standard variable rate charged by your lender to its customers is in breach of: i) a term which we say should be implied into your mortgage contract; iii) your lender’s regulatory duties to treat its customers fairly; and iv) if you have a ‘together mortgage’, section 140A of the Consumer Credit Act 1974.
7. Claims fall into a number of different categories, depending on the circumstances of the claimant. The way your claim will be expressed will depend on factors including: the value of your mortgage; whether and when you have ‘redeemed’ your mortgage; and whether your mortgage was a ‘together mortgage’. In addition, your claim may be pursued against one or more of the defendants depending on which defendant most recently administered your mortgage.
8. The documents enclosed with this letter deal with the way in which your claim and the claims of other claimants will be run. This includes: i) how we will be paid for the work we do on your behalf; ii) how decisions are taken about the way in which the claims will be run; iii) how offers of settlement will be made, negotiated and ultimately accepted on your behalf; iv) and also how any ‘global’ settlement will be distributed amongst the claimant group as a whole.
9. We intend to apply for a group litigation order (or ‘GLO’), so that the claims can be managed efficiently by the court, and so that we can achieve ‘economies of scale’. It is this efficiency that allows us to act on the no-win, no-fee basis described in this letter and its enclosures.
10. By agreeing to the terms of this letter and its enclosures you are:
10.1 instructing Harcus Parker to investigate whether a claim of the kind described in this letter can be brought on your behalf;
10.2 giving Harcus Parker the discretion to decide whether or not such a claim is viable – if our decision is that it is, then you authorise us to bring it; if it is not, then we will inform you of that decision; and
10.3 acknowledging that you have a duty to the Court to provide information in relation to the claim which is accurate and true to the best of your knowledge and honest belief, and that one of the ways you do that is through Harcus Parker’s online sign-up questionnaire; you are also acknowledging that, on the basis of the information you provide in the sign-up questionnaire, I am, or another partner at Harcus Parker is, authorised to sign a statement of truth on your behalf; and that proceedings for contempt of court may be brought against you if you make, or cause to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth.
Our team, and the way we will be paid
11. I am a partner at Harcus Parker, and I will be responsible for the overall management of the case. The wider team will also include Matthew Patching, a Senior Associate at the firm, and Olivia Selley and Edward Argles, who are Associates. We will involve other lawyers where that is appropriate, so that work is done at the right level of seniority and experience (and, therefore, cost).
12. We are proposing to act on the basis of a damages-based agreement (or ‘DBA’), which is a kind of ‘no-win, no-fee’ arrangement whereby you will pay a percentage of any compensation you receive to Harcus Parker. The DBA is enclosed at Schedule 2. It is important that you read it in full.
13. Although the effect of the DBA is that (unless it is terminated) we will only charge you a fee if your claim succeeds, we also record our time spent on the case because:
13.1 we will want to report to you, from time to time, on the value of the work that we are doing for you;
13.2 we may be able to claim back a proportion of the cost of that work from the Defendant in the event that you win the claim, or are successful at an interim hearing. These costs would be calculated on the basis of the time we have spent on the claims, and would reduce the amount of the fee you pay under the DBA; and
13.3 the value of our time is potentially relevant in the event that our DBA is terminated.
14. The relevant rates per hour are:
14.1 for solicitors and legal executives with over eight years of post-qualification experience (this includes partners), £725 plus VAT;
14.2 for solicitors and legal executives with over four years of post-qualification experience, £425 plus VAT;
14.3 for other solicitors, legal executives or fee earners of equivalent experience, £325 plus VAT; and
14.4 for trainee solicitors, paralegals and other fee earners, £180 plus VAT.
15. We have agreed to pay a proportion of Harcus Parker’s fee to a third-party litigation funder in return for finance provided to Harcus Parker to enable us to financially support and pursue the claims. This does not affect the amount you will pay to us, or the overall amount of money that you will receive.
16. In addition, we intend to pay a proportion of our fee to Support Through Court, a charity whose aims include the provision of practical support to individuals facing court without the benefit of legal representation. In addition we will also pay a proportion of our fee to a charity who work to support people facing homelessness. The charities have been selected on the basis that their work includes the support of individuals adversely affected by unstable homes or housing, an underlying motivation behind the Mortgage Prisoner Litigation.
17. We will incur Disbursements on your behalf. They will be charged and paid in the first instance on your behalf by Harcus Parker. You will be liable to pay your Proportionate Share of Disbursements if your claim succeeds.
18. We will incur smaller Disbursements, such as courier fees, travel expenses or photocopying costs without first seeking your permission. Larger costs will be agreed with the Committee as appropriate.
Litigation Management Agreement
19. Yours is one of a large number of similar claims. By sharing information and costs between the claims, we can achieve economies of scale and bring your claim less expensively than would otherwise be possible. This is achieved through the provisions of the LMA which is enclosed at schedule 3. Amongst other things, you and the other Claimants agree with us and with each other that you are willing to share information (within your claim against the Defendant and with regard to other similar claims being conducting by Harcus Parker against other defendants) for your common benefit and to assign certain management powers to the Committee, which will instruct us day-to-day and will make decisions about the running of the case on your behalf.
After the event insurance, and the risk of ‘adverse costs’
20. If a claimant in High Court litigation sues a defendant and loses, or if a claimant brings a claim but later withdraws it, the claimant is usually ordered to pay the defendant’s costs (these are often known as ‘adverse costs’).
21. We will seek to mitigate that risk by arranging after the event (‘ATE’) insurance for the claims, which will pay out if the claims fail and the claimants are ordered to pay adverse costs. We have secured £7m of cover. Through the LMA you delegate to the Committee the authority to approve and enter into this or another ATE policy on your behalf. If you would like more information about the terms of the insurance, please let us know.
22. We will not issue a High Court claim form, or a pre-action High Court application, unless a policy of ATE insurance is in place to protect you and us from the risk of adverse costs as per the above. You agree that, so far as possible, we should source ATE insurance on terms that at least some of the premium is deferred, so that it is paid only if the claim succeeds. If it is necessary to pay any upfront premiums, we or the funders will bear that cost in the first instance, and will only be repaid if the claims succeed.
23. Your Proportionate Share of any deferred premiums will be paid by you from your Claim Proceeds in addition to the Solicitors’ Fee.
24. It is important that you act now to preserve copies of all of your paper and electronic documents. That is because a Judge may, in due course, order you to provide the other side with all of the documents in your possession or control which are relevant to the case, regardless of whether or not they help your case or damage it. At this early stage, it will not always be obvious what documents are and are not relevant, so the prudent thing is to make sure that you keep everything relating to your mortgage, whether in paper or electronic form.
25. We may also make a data subject access request on your behalf to your lender. By signing this engagement letter you are expressly authorising us to do so on your behalf.
Limitation and the period for which you can claim
26. ‘Limitation’ is shorthand for the time limits within which a claimant must bring a claim. In your case, the period for which you can claim begins six years before the day on which you bring a claim, and ends:
26.1 if you have redeemed your mortgage, on the date you did so; and
26.2 if you have not redeemed your mortgage, on the day you bring a claim.
27. By ‘bring a claim’, we mean issue proceedings at court. We will only do this on your behalf once you have provided all the information necessary for us to do so through our online questionnaire, and once we are satisfied that you have a valid and viable claim.
28. We want to give you the best possible service. If at any point you become unhappy or concerned about the services we have provided to you or any bill that we have issued to you then you should inform us so that we can do our best to resolve the problem for you.
29. In the first instance, it may be helpful to contact me directly.
30. If we are unable to resolve your complaint then you can have the complaint independently looked at by the Legal Ombudsman, which is an independent body which investigates complaints about service issues with lawyers. If you wish to refer your complaint to the Legal Ombudsman, this must be done within six months of receiving a final written response from us about the complaint. The Legal Ombudsman’s website is at www.legalombudsman.org.uk. You can contact the Legal Ombudsman by sending an email to email@example.com or by telephone on 0300 555 0333 between 9am and 5pm.
31. You have the right to challenge or complain about our bills. You may also be entitled to have our charges reviewed by the Court under the Solicitors Act 1974. This procedure is known as assessment. Save in special circumstances, the Court will not allow a bill to be assessed more than 12 months after delivery and there is a complete bar to assessment where 12 months has expired after payment of a bill.
32. You have a right to cancel this agreement within 14 days of you entering into it. If you wish to cancel, then you must notify us by email to firstname.lastname@example.org.
Professional indemnity insurance and limitation of liability
33. Harcus Parker Limited’s compulsory layer of professional indemnity insurance is with (i) Travelers Insurance Co Ltd and (ii) Allianz Global Corporate & Specialty SE (50% each). We will provide details of the cover on request. The maximum liability for loss or damage for a breach of your instructions, breach of contract, breach of trust, negligence or otherwise (other than for fraud) is £5 million for any one transaction/matter or series of connected transactions. For the avoidance of doubt, a ‘transaction’ for the purposes of the Mortgage Prisoners Litigation is the claim of one claimant and a ‘series of connected transactions’ is all claims of all claimants for whom we act when aggregated together. In other words, our maximum liability is £5 million even if the sum of all claims against us, when added together, exceeds this figure.
Client due diligence
34. To confirm your identity, our normal practice is to run an online check against your name, address and date of birth. If that is unsuccessful, we may ask for further information to enable us to conduct another online check or we may ask you to produce documentation of your identity, such as a certified copy of your driving licence and a utility bill (or some other similar document which shows proof of address).
35. By signing this engagement letter (either by printing a copy and physically signing it, or by providing an electronic signature, or by replying to the email to which it was attached to confirm your acceptance of its terms), you are deemed to accept its terms and agree to be bound by it. You are also deemed to have executed the DBA and the LMA, and agree that the effect of these documents is that if your claim succeeds, or if you cancel your retainer after fourteen days, or if you do not comply with the terms of this engagement letter or its enclosures, you will incur an obligation to pay Harcus Parker.
If you have any questions or comments about this letter, or about our services or during the period for which we act for you, then please let us know.
Damon ParkerPartner and Director, Harcus Parker
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