DO NOT GO CRAZY .NOT EVERYONE CAN SUE THE BANKS TO GET THEIR STAGE PAYMENTS BACK.
If you have paid money to a builder, he has not delivered, you have won a court case against him and now find you have a fantastic sentence but he has no money to pay you back. If all this happens your next step is to cash in your bank guarantees or insurance policies that your builder had the obligation to request and pay for on your behalf. (using a bank or insurance company)
If your solicitor requested bank guarantees/insurance policies on the stage payments then you have a ver clear case against the insurer or the bank that issued them.
Now, what happens when the builder (who is the person/company that has this obligation )did not do what he should which is to pay a bank or an insurance company to issue a policy and hand it to you on each stage payment.
The courts under certain circumstances may hold the bank that you sent the money responsable on the basis that they should have known (or had reasons to suspect) that the money being received where stage payments and that perhaps the builder was not paying for insurance to cover the amounts. Of course the bank will argue that either they did not know they where stage payment or that they thought a different bank or insurer was indeed issuing the policies. It will be up to your barrister to prove this
Lately it would seem that every barrister in town is suing the Spanish banks in relation to stage payments on construction projects that have not worked out and that they are all winning the cases.
These legal proceedings can be won, but be aware that not everyone that has lost money on the purchase of property under construction can sue “a bank “ for their money.
Suddenly you are receiving e-mails , publicity , cold calls etc offering to handle any of these cases for you very often on a “no win /no fee” basis.
Be very cautious. Loosing a court case can be very expensive even if you have a no win/no fee deal with your barrister because the judge can make you pay for the other parties expenses. (barrister and court runner).
If you have purchased a property under construction, you paid out you’re hardly earned cash , you have litigated relentlessly against a builder only to find out that after winning he has gone bankrupt or he simply has no assets in his name it can be very tempting when you receive a call or an e-mail telling you that there is no problem:
They say ”All you need to do is sue the bank for not having issued bank guarantees and there will be no problem in getting your money back”
Be very careful . In many cases talking legal action against the bank is a good idea but there quite a few factors that have to be taken into consideration to determine is this is a viable option in your particular case. We have handled many cases successfully but not all are viable and you need a decent solicitor to tell you if this is an option or not after careful consideration to the chances of success.
The problem is that these legal actions are being grossly oversold, sometimes by marketing companies (mostly in the U.K.)that have been set up literally to assemble cases which they will later funnel to firms of solicitors.
Even though in principle you may consider that there is nothing to loose because they are offering a no win /no fee there is in fact a lot to loose and my guess is that there will be a lot of tears shed due to these cases in two or three years time. The risks:
• Very often they are not informing that if you loose the judge could make you pay the banks court fees. Many of the legal actions presently being presented have a high chance of this happening. This risk is real. If you have paid a builder and he has not delivered the risk of loosing with court costs is small. The problem of course is if they have not got any money to respond. In the case of the banks the advantage is that if you win they are solvent and have funds to respond. The downside is that their responsibility in you loosing your money is normally much more difficult to prove even though if your case has certain ingredients the case can be worthwhile.
• Many do not say what will happen after the case is won in the first instance and the bank appeals (the banks presently appeal almost every sentence).Sometimes the no win /no fee does not contemplate fighting the appeal which happens in almost every case that the bank looses in the first instance.
• Also and even though not as importan as the above in many cases there are hidden expenses, like court runner fees etc.
I am in no way saying do not claim. I am simply saying that you should sit in front of a solicitor with all your paperwork and ask them to explain why they consider you have or have not got a case. Also ask them for proof that they have actually won one of these cases.
Normally a client that has won one of these cases is so happy with his solicitor that he will be more than happy to authorise his lawyer to show the resulting sentence .Most of us that have indeed won a case or two (for real) will be happy to show you the sentences in favour of our clients and even put you in contact with one of the clients that has actually got his money back and with the sentence to back this up). Endless “testimonials “on webpages with nothing to prove they are for real do not mean anything.
The trouble is that this overselling is happening now (on the back of the results obtained by many of us who have handled these cases successfully but of course we where successful because we where very careful with which ones we presented) and the problems will not surface for at least a couple of years and by then it will be too late as hundreds if not thousands of people will have claimed and some of them are going to be burnt (as if loosing their money the first tima around to a rogue or unlucky builder was not sufficient).
Remember: I am not saying to not take legal action against banks. Do take action but only after careful consideration as you do not want to be burned twice.
Be wary of companies that contact you by unsolicited e-mails or cold calls.
It is not the first time that solicitors get carried away:
If you have had to sue a builder who has no money instead of cashing in on bang guarantees it is very likely that the solicitor that handled your conveyance did not do a very good job. It is also likely that he/she was in this case one of the many firms that suddenly went from 0 to 100 during the property boom handling hundreds of conveyances until the market fell and we all realised they had not been insisting on bank guarantees on the stage payments.
Now we suddenly have hundreds of solicitors who have become overnight experts at suing the banks and nobody will know if they are any good until the sentences start to be issued.
I know this e-mail sounds a bit sour.
Like many other serious solicitors along the coast there are three things that are bugging me lately in relation to these cases:
- Client for whom we have got their money back after four or five years of litigation who now consider that what we have achieved is actually really easy and find our fees difficult to understand .
- Clients who we have told that suing the bank in their particular case is too risky because they run a serious risk of loosing with costs, calling us to tell us how wrong we are and that they will sue using one of these solicitors.(of course only time will help prove who is wrong)
- Many ex-pats are suing without having a full understanding of the best and worst case scenario of their cases.
