Brendan Burgess
Founder
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The original plan
We would raise €200k to take a case to the High Court
Our objective was to get a tracker at 1.5% for the remaining term of the mortgage
We would not settle it with a non- disclosure agreement
We would win the case
AIB would roll out the decision to the rest of the cohort
Why we have decided not to proceed with this
The informal committee explored this at length and we discovered a few problems with the plan
1) Avant has now introduced a mortgage rate of 1.95% which dramatically reduces the value of a tracker at 1.5%. It's quite likely that there will be further reductions, so the benefit of winning a case would diminish further.
2) I had a figure for costs of €100k on our side and €100k for AIB if we lost. But the costs would be uncertain. A contested case could last a few days in the High Court and if we did not win, AIB could get an order for costs of around €350k. Seems unlikely, but we couldn't ask someone to take that risk. That would be life destroying for most people.
3) We thought it might be very difficult to raise €200k up front especially as we would be telling the funders, that they would be getting limited feedback and would have no say in the case.
4) Roll on three years and we face a court case with potential costs of €350k and mortgage rates of 1.5% are freely available in the market anyway. We would have to break the undertaking given to the original funders not to settle.
5) Another scenario is that we could win the case but AIB refuses to roll it out to the rest of the cohort and the Central Bank doesn't force them to.
So, all things considered, the potential gain simply does not justify the work and risks involved.
We would raise €200k to take a case to the High Court
Our objective was to get a tracker at 1.5% for the remaining term of the mortgage
We would not settle it with a non- disclosure agreement
We would win the case
AIB would roll out the decision to the rest of the cohort
Why we have decided not to proceed with this
The informal committee explored this at length and we discovered a few problems with the plan
1) Avant has now introduced a mortgage rate of 1.95% which dramatically reduces the value of a tracker at 1.5%. It's quite likely that there will be further reductions, so the benefit of winning a case would diminish further.
2) I had a figure for costs of €100k on our side and €100k for AIB if we lost. But the costs would be uncertain. A contested case could last a few days in the High Court and if we did not win, AIB could get an order for costs of around €350k. Seems unlikely, but we couldn't ask someone to take that risk. That would be life destroying for most people.
3) We thought it might be very difficult to raise €200k up front especially as we would be telling the funders, that they would be getting limited feedback and would have no say in the case.
4) Roll on three years and we face a court case with potential costs of €350k and mortgage rates of 1.5% are freely available in the market anyway. We would have to break the undertaking given to the original funders not to settle.
5) Another scenario is that we could win the case but AIB refuses to roll it out to the rest of the cohort and the Central Bank doesn't force them to.
So, all things considered, the potential gain simply does not justify the work and risks involved.
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