Be Careful with IRHP Basic Redress Offers

An offer of basic redress has been made and the door may be left open for a consequential loss claim. Why not accept it ?

We have seen increasingly that offers of basic redress have been calculated on the assumed basis that whilst the IRHP in question was mis-sold, the borrower would nevertheless have purchased a different but less 'expensive' IRHP. Whilst this does give rise to compensation it results in an offer of basic redress that is far lower than an offer that acknowledges the likely true position, which is that no IRHP would have been purchased.

Again a note for those having given a personal guarantee : If you have guaranteed the debts of a business that has been mis-sold an IRHP you may well have defences on liability. Incorrect compensation awards will also directly affect the extent your supposed personal guarantee liability.

Call me for in initial view at Keystone Law on 0207 152 6550

Email: Patrick.selley@keystonelaw.co.uk

Www.patrickselley.com

Ghostwriter signatures on Personal Guarantee - Beware

The use of ghostwriters by celebrities to pen autobiographies is widely known of and generally accepted. However using a ghostwriter to sign a personal guarantee thereby creating a legal obligation to pay over £600,000 is precisely what happened to celebrity chef Gordon Ramsay. The High Court delivered its Judgement on 20th January 2015 in the case of Ramsay v Love - [2015] All ER (D) 130.

The ghostwriter in question was a Ghostwriter Manual Feed Signature Machine. In this case it was found by the Court that Gordon Ramsay gave a wide general authority to his father in law Christopher Hutcheson to conduct the business of Mr Ramsay's companies and indeed Mr Ramsay's own business affairs It was also held that it was expressly understood that Mr Ramsay would provide personal guarantees of leases of premises where this was a business requirement. It was also found that Mr Ramsay was not always aware of the detail of specific business transactions.

Mr Hutcheson, pursuant to this particular general authority used the machine to place Mr Ramsay's 'signature' on a lease and on a personal guarantee contained within it. Mr Ramsay contested the validity of the guarantee and lost after a trial that lasted over a week. The fact that Mr Ramsay was not holding the pen and was not even there when it was signed mattered not. It was signed on his behalf and pursuant to his authority.

For those who are interested the premises in question were The York and Albany pub near Regent's Park and the Landlord to whom the rent was owed was the film director Gary Love.

Www.patrickselley.com

Email me for advice at :

Patrick.selley@keystonelaw.co.uk

EFG Loans and Personal Guarantees

RBS has recently admitted mis sales of EFG Loans. What exactly constitutes mis-selling will vary in each case but it is likely that the borrowers believed they may ultimately be liable only for 25% of the original loan amount. This is of course incorrect. Here is an extract from the Government's published guidance"

"The guarantee provides protection to the lender in the event of default by the borrower – it is not insurance for the borrower in the event of their inability to repay the loan. The borrower is responsible for repayment of 100% of the facility, not just the 25% outside the coverage of the government guarantee. Where defaults occur, the lender is obliged to follow their standard commercial recovery procedure, including the realisation of security, before they can make a claim against the government guarantee."

It is difficult to see how, with such clear guidance, Banks could have mis-represented the position However if it is the case that the Bank 'mis-sold' the loan in this way then the borrower may have a defence to some or all of any claim for repayment under the original loan.

If in addition the business owner was required to give a personal guarantee of the borrower's liability and the representations made by the bank were also made to the prospective guarantor then there are certainly arguments that the guarantee liability is either substantially reduced or on some cases eliminated entirely.

Www.patrickselley.com

Email: Patrick.selley@keystonelaw.co.uk