Sinclair said: “I am happy to be able to tell people the last four cases that went through to ruling were either struck out due to time bar or found in favour of the advice firm, so had no case to answer.”
He said “We are now suing for costs for those adviser firms. This is a significant shift.”
At the Mortgage Administrators Online Event today, hosted by Mortgage Solutions, attendees heard mortgage brokers have lived with the threat of claims for years or been forced to battle threats of legal action over pre-credit crunch ‘mis-sold’ interest-only mortgages across the market.
It’s not over as the legal firms involved continue to probe Financial Ombudsman cases to try to get a foothold, said Sinclair. But he added: “I’m hopeful lawyers involved will lose their funding from venture capital firms and therefore this will begin to fall away over the next 6-12 months.”
He said in turn, this will impact the PII market, which has seen price increases that should ‘settle down’ as the pressure begins to evaporate.
One of the judgments involves a case brought against SPF Private Clients involving a 20-year interest only mortgage from Birmingham Midshires. In May this year, the judge ruled the limitation period had expired and the claimants had sufficient understanding of the advice given.
Meanwhile, Sinclair also outlined the industry’s success to date in getting FSCS fees reduced from a proposed £1bn down to £120m for the mortgage advice sector – but added that the ‘sword of Damocles continues to hang over our shoulder’ with the final decision yet to come in October.
He also saluted the government’s efforts to stave off the worst financial effects of Covid-19.
“What we’ve seen from government is a willingness to put the housing and mortgage market at the heart of the economy.”
However, Sinclair’s report card for the government was not all positive, calling the cladding issue four years post-Grenfell and the government’s treatment of its victims a ‘governmental and a national disgrace’.
“The money is not yet available to make the changes to these properties – and making the changes, the money only covers the cladding and not the other defects that might emerge once that cladding has been removed,” added Sinclair.
All the MAOE presentations will be available on demand on Mortgage Solutions’ YouTube channel.