# Could AIB have saved themselves a fortune



## blue_steel (15 Aug 2020)

I'm just curious whether AIB could have restored everyone who appealed through BDO to a tracker and saved themselves a lot of money. If we say approximately 200 from a total of 5900 appealed what was to stop AIB paying out to those customers and ignoring everyone else. If the customers aware of the issue never went to the FSPO then could AIB not simply say each case they paid out on had some special circumstances to justify it. Was it simply hubris on their part?

And is AIB likely to apply this thinking to any case brought through the courts? As in, if a group here were to bring a high court action against AIB (for tracker restoration and compensation) the bank might pay up just to get rid of it before they end up having to pay out to all 5900.


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## tnegun (15 Aug 2020)

In the end they were their own worst enemy, If it weren't for Brendan I think they possibly would of settled some cases out of court and it would of fizzled out. I'm thankful that they annoyed Mr B enough that he didn't let it go. I know that I fell for and accepted their excuses time and time again and had given up before it even started!


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## Brendan Burgess (15 Aug 2020)

tnegun said:


> I'm thankful that they annoyed Mr B enough that he didn't let it go.



That describes it brilliantly. 

I don't get annoyed by a difference of reasonable opinion. But 

1) Their arguments were so ridiculous that they annoyed me "These people never had a tracker" "The rate would have been 14%"  "The Central Bank agrees with us" 
2) Their hypocrisy annoyed me : "We always put the customer first". "We are changing our culture."
3)Their dismissive attitude at the AGMs annoyed me
4) Their complete failure to engage annoyed me. "We are right, you are wrong" 
5)And then when the Ombudsman issued a preliminary decision against them in January, they made Karen and us wait a further 3 months before agreeing to roll it out.  That really annoyed me. 

It's almost as if they sat around the board table and said "What can we do to provoke these guys so much that they won't let go?" 

Brendan


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## Brendan Burgess (15 Aug 2020)

blue_steel said:


> I'm just curious whether AIB could have restored everyone who appealed through BDO to a tracker and saved themselves a lot of money.



An interesting idea, but it wouldn't have worked.  The only special circumstances would be that they had complained to the Independent Appeals Panel.

And if they settled 200, we would have made sure that many others complained. 

I also think that the CB would have intervened and said - If you settle one, you settle them all. 



blue_steel said:


> And is AIB likely to apply this thinking to any case brought through the courts?



Hard to know.  They certainly do not want to risk a judge in the Circuit Court or High Court finding against them. The Central Bank would tell them to roll it out to everyone. 

On the other hand, if they settle the 20 or so cases outstanding at the moment, even with a non-disclosure agreement, it would prompt others to initiate action.  

Again, the Central Bank might get involved and ask why these 20 cases are different. 

Brendan


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## Johnno75 (15 Aug 2020)

AIB had contractual obligations to offer trackers at the prevailing rate to all those who had Clause 3.2 in their mortgage contracts and who came off a fixed rate. AIB made a commercial decision to withdraw trackers and deny the choice to these customers notwithstanding their contractual obligations. 

When ultimately challenged on this, they used sleight of hand by arguing that because the trackers were no longer available, there was no prevailing rate so they couldn’t be compelled to offer the choice of a tracker. In essence, they caused the frustration of their own contractual obligations, something which the law of contract does not permit. 

During all this time, AIB benefited from the higher rates they charged, to the detriment of the affected customers. They’re now reaping what they’ve sown. Had they withdrawn trackers to new customers and simply offered them to those they ought to have, they wouldn’t be in the pickle in which they now find themselves. Indeed, I suspect that had they offered the trackers to the relevant customers, the uptake might not have been anywhere near the number of claims they’re now likely to face (because, of course, all the 5900 customers will - legitimately - argue that they would have opted for a tracker). 

The fly in the ointment is the famous “prevailing rate”, which would have to be successfully established by a litigant in court in order to calculate the actual loss in terms of overcharging. If the High Court decides in favour of a customer, this sets a precedent. It’s a huge risk for the bank to allow a case run to full hearing and lose. I suspect the bank would settle. I think any customer would have a strong case, in particular if they can demonstrate consequential loss over and above the amount overcharged.


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## AIB STAFF 2010 (16 Aug 2020)

FSPO couldn’t decide what the prevailing rate is, yet 300 of the prevailing rate customers are getting a tracker back. Did the FSPO know about the 300 before he made his decision for Karen? Sounds like we’ll finally know when the 300 get their trackers what the prevailing rate is... and we can go from there.


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## Brendan Burgess (16 Aug 2020)

Jayom75 said:


> I suspect that had they offered the trackers to the relevant customers, the uptake might not have been anywhere near the number of claims they’re now likely to face (because, of course, all the 5900 customers will - legitimately - argue that they would have opted for a tracker).



That  is a very good point.

ptsb just offered a prevailing tracker rate set a bit above the SVR.  Most people opted for the lower SVR. 

Brendan


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## Megafan (16 Aug 2020)

Jayom75 said:


> The fly in the ointment is the famous “prevailing rate”, which would have to be successfully established by a litigant in court in order to calculate the actual loss in terms of overcharging. If the High Court decides in favour of a customer, this sets a precedent. It’s a huge risk for the bank to allow a case run to full hearing and lose. I suspect the bank would settle. I think any customer would have a strong case, in particular if they can demonstrate consequential loss over and above the amount overcharged.



@Jayom75

I suppose the letters this week will hope to define everything clearly for everyone , it would be negligent on a huge degree if AIB didn't try to put a lid on this for once and for all.

On the above, wouldn't it be relatively easy though to demonstrate the loss in that the case up front would need to be the reverse of Karen with the FSPO, someone who went through the ringer since 2008 because there certainly are a lot of people in that bracket?

I think maybe the FSPO might have been inclined to add some compensation had the successful case being more on the hard luck spectrum but completely understand it needed the clean case to prove the rule so to speak. In that way, picking Karen seems like the perfect tactic upfront.

Either way, an interesting week ahead. Again!

Just from a legal stand point, would AIB only be able to defend themselves against the charges in such a case against them  rather than act against those making the claim, there is no counter claim case available to AIB is what I am trying to get at? I imagine that would be something some might worry about when courts are mentioned.


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## Johnno75 (16 Aug 2020)

Megafan said:


> Just from a legal stand point, would AIB only be able to defend themselves against the charges in such a case against them rather than act against those making the claim, there is no counter claim case available to AIB is what I am trying to get at?


It’s hard to know. AIB could take the view that once the case goes into a litigation forum, the gloves come off and all legal issues are to be defended as if the Ombudsman matter had never been heard. At the very least, they could defend themselves on the same basis that they sought to defend the Ombudsman matter. It wouldn’t be wise, but that’s how they acted last time. In any event, as in every civil court case it’s the Plaintiff who must prove their case. In terms of issuing a counterclaim against a Plaintiff, it would be inadvisable (a judge may not be impressed) but in theory a bank could counterclaim any losses it suffered as a result of the actions of the Plaintiff eg unpaid loans, missed instalments, arrears etc. In practical terms, it would take a very belligerent bank to seek to punish a Plaintiff who was hard done by as a result of the Bank’s breach.


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## Brendan Burgess (16 Aug 2020)

Jayom75 said:


> all legal issues are to be defended as if the Ombudsman matter had never been heard.



I had never assumed anything else. 

AIB has always denied a breach of contract. 

In a court case, they would presumably do the same.

Brendan


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## Johnno75 (16 Aug 2020)

Brendan Burgess said:


> I had never assumed anything else.
> 
> AIB has always denied a breach of contract.
> 
> ...


Agreed. AIB will in all likelihood lodge a full Defence. This puts the Plaintiff on full proof of all matters he/she is pleading, right down even to the existence of the mortgage contract, dates, amounts claimed and losses incurred etc. This is how things usually start out once pleadings are issued and exchanged. However, as the matter nears the hearing date, it’s not unusual for both sides to agree certain matters (usually non contentious matters, or for example, the quantum/amount of the Plaintiff’s loss) so as not to have to call witnesses on every single matter.


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## Megafan (16 Aug 2020)

Taking account of both responses above AIB have quite the tightrope to walk in terms of the wordings of any letter this week so.

Accept responsibility without accepting blame, which probably is the same argument they had when they sent out the 1,615, just with all the superfluous nonsense cut out around mad tracker rates. It could be that the cohorts and AIBs approaches have been distilled down to what is fair and reasonable.

Being the FSPO judgement.

The CBI intervention could be an unwelcome carrot dangling in front the rest of the cohort in the end, all be it great for the 300. Time will tell.


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## Johnno75 (16 Aug 2020)

Megafan said:


> Taking account of both responses above AIB have quite the tightrope to walk in terms of the wordings of any letter this week so.
> 
> Accept responsibility without accepting blame, which probably is the same argument they had when they sent out the 1,615, just with all the superfluous nonsense cut out around mad tracker rates. It could be that the cohorts and AIBs approaches have been distilled down to what is fair and reasonable.


The letters will be worded with an eye to litigation down the road!


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## Megafan (16 Aug 2020)

Jayom75 said:


> The letters will be worded with an eye to litigation down the road!


This question is completely hypothetical but is any coordinated action then effectively to call AIBs bluff so to speak?

Say there are 10 or 12 cases out there presently whereby details are known to AIB and the plaintiff but the arguments can't be a million miles different from any potential argument any group subsequently would make. If you got 200 people here together putting €500 in each to initiate proceedings, could that be a roll of the dice more than anything? If AIB fight then for sure they must be confident in some level of success.

Sometimes here, the option of a tracker is mistaken for the valuable thing versus the margin rate which is the valuable thing. I genuinely believe AIB made a series of really bad mistakes in 2008 trying to protect themselves when the ship was sinking rather than a grand long term plan to rip people off, which may be what stayed the Ombudsmans hand in not deciding on the prevailing rate.

If the prevailing rate was a clear decision then there would be no problem but the Courts would just need to decide the prevailing rate was the last rate being the 1.5% and thats that but that shows AIB no concession and may be they are entitled to some.

Using ourselves as an example, we entered into our mortgage in early  2009 post trackers being withdrawn (like loads of people in the cohort) and we were subsequently blessed to have clause 3.2. 10 years later to have 15% off our remaining mortgage principal written off by AIB is seismic, we never felt entitled to a tracker but logically are delighted with the outcome.

The FSPO decision is like the tide lifting all boats. Sure getting full tracker redress would be amazing but it is quirk of fate for us, bad contract design more so and the hard graft of others.


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## coolaboola12 (16 Aug 2020)

People seem to think that all will be crystal clear after we get the letters 

I’m expecting a short letter saying ‘as part of the redress advised by the fsbo  here is your compensation‘


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## LetItBe (17 Aug 2020)

Exactly! Guess we just need to wait and see.


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## Johnno75 (17 Aug 2020)

coolaboola12 said:


> People seem to think that all will be crystal clear after we get the letters
> 
> I’m expecting a short letter saying ‘as part of the redress advised by the fsbo  here is your compensation‘


Expect words and phrases like "failure" (aka breach), "fell short on our obligations" (aka engaged in a unilateral and deliberate breach of contract), and "charged you a higher rate of interest than we should have" (aka overcharged you).


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## Johnno75 (17 Aug 2020)

Megafan said:


> is any coordinated action then effectively to call AIBs bluff so to speak?


The answer is simple. Whilst each and every participant has their own basis for proceeding against the bank, ultimately there is strength in numbers. Whilst it might be categorised as calling AIB's bluff, it might also be categorised as seeking to vindicate one's contractual rights and entitlements.


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## Soapopera (17 Aug 2020)

Jayom75 said:


> The answer is simple. Whilst each and every participant has their own basis for proceeding against the bank, ultimately there is strength in numbers. Whilst it might be categorised as calling AIB's bluff, it might also be categorised as seeking to vindicate one's contractual rights and entitlements.


 too right.


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