He mightn’t have earned credit amongst the developer community when he claimed NAMA was trying to put all of its developers into three bed-semis and Ford Cortinas, but developer and businessman David Agar this week demonstrated his finer qualities when he won €30m in a court settlement following a case he had taken against Ulster Bank, part of the RBS group.
Harry Wilson at the Daily Telegraph yesterday evening reported that David has settled a High Court case which was initiated in December 2010 (High Court reference 2010/11057 P) . The case involved the misselling of interest rate swaps – insurance policies sold to borrowers to protect them against future interest rate rises on their loans – and according to the Telegraph, the win means that Ulster Bank will “write-off swaps and loans worth €30m as well as covering Mr Agar’s legal costs, which are believed to total about €1m.” Given the win seems to correspond with an Ulster Bank loss, there is unlikely to be any benefit to NAMA. As the case was settled, there won’t be a judgment.
Misselling these swaps, or insurance policies, involved the banks selling these policies where it was inappropriate to do so or where the cost exceeded potential benefits – the banks have been held to have had a professional duty in advising their borrowers in relation to these insurance policies which boosted bank profits and bonuses.
The win is believed to be the tip of an iceberg of potential losses faced by British (and Irish) banks for misselling these insurances to their borrowers, and comes in the wake of other malfeasance by banks including the overcharging – alleged by some to be deliberately orchestrated with knowledge and consent going all the way to bank boards – of interest on lending by Irish banks. Yesterday, the Evening Herald revisited the old story of Anglo’s overcharging, which the present CEO has said might cost the bank up to €100m. The Herald reminds us that Anglo will waive its rights under the Statute of Limitations of six years, in meeting claims of overcharging of customers.
UPDATE: 29th July, 2012. A couple of people have privately asked who David Agar’s solicitors were in this case. According to the Court Service, the solicitors on record is Downes, presumably Downes in Dublin 2, telephone 01-676-2546. Also to access case details at the High Court, you have firstly to accept the Court Service terms and conditions here, and then enter the case reference or other search information to get the case details. For what it is worth, Ulster Bank was represented by A&L Goodbody.