Neil Heaney, CEO of Judicare
Neil Heaney, CEO of Judicare

Trials are due to commence in Cyprus on behalf of UK buyers who bought property in the country. It is alleged they were miss-sold Swiss Franc mortgages. It is also alleged that they were misled by their solicitors and are now facing demands for mortgage payments and threats of UK litigation .

Actions were submitted to the courts against the Cypriot banks in 2011 and provisional hearings were originally scheduled for October 2014. Cypriot banks have continued to launch their own Actions in Cyprus courts against clients for failing to make payments towards their loans.

Judicare Group, the international legal services company, is currently acting on behalf of over 250 buyers and pursuing litigation in Cyprus where the purchase took place, and not in the UK where the need first to establish jurisdiction adds an unnecessary timely, risky and costly step in the process. If litigation is successful in the UK Courts it would still require the Cyprus Courts to enforce the ruling. It believes that its approach will void the loan agreements and free UK buyers from untenable agreements.

The barristers from the Cyprus law firm Triantafyllides & Christoforou (TCA Law), appointed by Judicare, claim that in many of the buyers’ cases the Power of Attorneys used to sign the loan agreements were not valid as they were not signed in strict accordance with the legal process.

In some cases, paperwork was validated without a certifying officer present, potentially making the loan agreement and any other documentation void through the use of this instrument.

In addition, when purchasing a loan in a foreign currency, Cypriot legislation stipulates that the client is fully briefed about the potential risks and is provided with a specific official declaration confirming they (the clients) understood such risks. They should also have been provided with financial examples highlighting potential movements in currency. Many of the clients did not receive these declarations when taking out the loans.

A case by case basis

Neil Heaney, CEO of Judicare, says: “Each trial is being dealt with on a case by case basis due to the different circumstances surrounding each client so any individual victory may not have implications for others. However, if a claimant is successful, there is more of a chance of the banks discussing ways of not going to court for others.”

Last year, Cypriot banks stepped up their activity against UK buyers serving Writs of Summons at their UK residences for defaulting on their obligations against Swiss Franc loan agreements.

Many were also offered an early settlement agreement to find a ‘middle way’ solution acceptable to both sides. The Court(s) were not involved and neither side can draw any inferences regarding their respective rights and obligations. Neither was it a ruling on the issue of jurisdiction. Judicare advised clients not to accept this, as the agreement(s) would still leave them in negative equity.

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