By Staff Reporter
Numerous claims brought by UK victims of alleged property and mortgage mis-selling in Cyprus against Cyprus banks, developers and lawyers have been settled, lawyers for the plaintiffs said on Tuesday.
Cases have been brought by hundreds of Britons against Alpha Bank Cyprus and more than 20 Cypriot property developers, agents and lawyers.
The issue that was due to be heard this week in the High Court in London had been whether the English Courts had jurisdiction to determine such claims. It was being brought by Alpha Bank Cyprus, one of the banks accused of mis-selling mortgages.
Binding heads of agreement for the settlement were reached late on Friday June 6, the lawyers said As a knock-on effect the many claims also brought by victims against a major Cypriot property developer, Alpha Panaretti, and its director have also been stayed, and the week’s hearing has been vacated by the court.
Duncan McNair, a prominent lawyer practising at Cubism Law in London, who was instructed by around 100 UK victims of mortgage and property mis-selling in Cyprus said the development was “encouraging”.
“This may significantly alter the landscape for all victims. 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 and helps us build on the position we have achieved to date for our clients,” he said.
“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, emphasised that it was essential to issue proceedings in England promptly to protect victims from being sued first in Cyprus by the banks, which would hand the banks a considerable strategic advantage under EU law in the jurisdiction battle.
“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,” McNair added.
He suggested it was helpful to build groups of claimants, to pool information, to present a united stand and to operate at a fraction of the cost
The law firm said that in recent years almost 15,000 UK residents had succumbed to glossy advertising and sales talk, buying Cypriot properties off-plan. Large loans had been eagerly provided by Cypriot banks, frequently in Swiss Francs for their low and supposedly stable interest rates, against overvalued properties, often never adequately built out.
Since the Swiss Franc’s strengthened value and relentless interest rate hikes, investors have paid a heavy price: unsaleable and unlettable apartments, enormous loan obligations and huge negative equity, all aggravated by the Cyprus property crash.
It said commonplace features of such cases were a failure to advise on the risks of foreign currency mortgages, serious misrepresentations as to the property itself and dubious powers of attorney held by Cypriot lawyers, as were unhealthily close relationships between the banks, developers and selling agents.