British victims of Cyprus mortgage misselling compensated
Thousands of British investors, who purchased flats and villas in Cyprus before the financial crash, have brought mis-selling cases against Alpha Bank Cyprus and more than 20 Cypriot property developers, agents and lawyers.
They say they were advised to buy property with Swiss franc mortgages because of their low and supposedly stable interest rates. However, following the collapse of the Cypriot property market, property values plummeted and repayments rocketed when the franc soared, leaving investors with “unsaleable and unlettable” properties, large loan obligations and huge negative equity, their lawyers claim.
Victims say they were also subject to heavy sales tactics and received no advice about the risk of interest rates increasing. The case was due to be heard this week in the High Court in London but early settlement was reached on 6 June.
Duncan McNair, a lawyer at Cubism Law in London, who is instructed by around 100 UK victims, said the settlement could”significantly alter the landscape for all victims”. He said:
“We have been battling hard to ensure justice for victims of unconscionable conduct by Cypriot banks, developers, their sales agents and lawyers. This settlement of an early batch of claims on terms acceptable to victims helps us build on the position we have achieved to date for our clients.
“The Cypriot banks are concerned to avoid adverse findings (for them) that the English courts should have jurisdiction to hear claims of mis-selling of properties and loans. They have argued that the claims should be heard in Cyprus, where regrettably the Court system is characterised by delay, uncertainty and a good deal of unreliability.”
McNair, whose firm has been able to engage various Cypriot banks in settlement negotiations, said it is essential victims issue proceedings in England promptly to prevent them from being sued first in Cyprus by the banks.
Offering advice to other potential mis-selling victims, McNair said:
“Act fast to instruct specialist solicitors familiar with both the English and Cypriot legal systems, who have experience of formulating the correct claims and of dealing with these defendants and who will be taken seriously by them. “Beware unqualified claims handlers whose terms of engagement are obscure and whose interests in the matter can be unclear. Beware also ‘offers’ from banks which never in fact materialise. Above all, don’t delay: numerous victims of non-performing loans are being sued in Cyprus, and judgments obtained there can be, and are, vigorously enforced by banks against victims’ UK assets.
“It can often be helpful to build groups of claimants, to pool information, to present a united stand and to operate at a fraction of the cost. But cases differ and thought must always be given to this approach: occasionally victims may best be advised that their claims should be issued individually”.