The human rights of thousands of people are being abused by banks and mortgage providers, according to a new alliance of barristers and solicitors.
Supported by the US-based Open Society Justice Initiative, the alliance – including academics at NUI Galway and the Irish Centre for European Law (ICEL) – is urging legal practitioners to apply EU and Spanish case law, to fight home repossessions.
They say Irish lenders are in many cases guilty of “abusive lending”, that mortgage contracts between lenders and borrowers are frequently “unfair” and that often the “devastating impact” of a home repossession on the family or individual who lived there should be balanced against the impact on a lender of not repossessing it.
A series of seminars is taking place across the State to brief legal practitioners on the applicability of EU law in Irish repossessions cases.
Landmark cases
This follows two landmark cases. In the most recent, before the
High Court
earlier this month,
AIB
was refused a summary judgment against a farming couple who had run up more than €1 million in debt and arrears.
Mr Justice Max Barrett accepted the arguments made by the couple's counsel that EU consumer rights law and provisions of the EU Charter on Fundamental Rights, should apply in the case. The case will now go to a full hearing.
In October, a Co Laois couple were given leave to challenge the repossession of their home because, they said, their rights under EU law had been breached
Madeleine Thornton, solicitor and founding member of the alliance, says there has been "widespread" abuses of borrowers' rights by banks and lenders.
“I have many clients who have experienced incredible trauma, hardship and injustice because of blatant unfair contract terms . . . This has affected home owners’ ability to repay their mortgage . I have clients with young children who have been overcharged by lenders and have lost their family home or who have had to fire-sell their home below its value. They have experienced marital break-up and severe ill-health where these families’ human rights were not respected at all.”
The seminars, some of which have already taken place, refer to the 2013 Aziz case which the Spanish courts referred to the EU Court of Justice to assess whether the country’s laws complied with EU consumer law and the Charter of Fundamental Rights.
The ECJ found Spanish law did not protect borrowers’ rights as set out in the 1993 EU directive on unfair contract terms in consumer contracts.
The court found the terms of the contract applied “all the more strongly where, as in the main proceedings, the mortgaged property is the family home of the consumer whose rights have been infringed, since that means of consumer protection is limited to payment of damages and interest and does not make it possible to prevent the definitive and irreversible loss of that dwelling”.
The court ruled it was the member state’s obligation to examine all credit contracts for compliance with this directive.
“The end result of all this,” said Ms Thornton, is that many people have now lost their homes “unnecessarily”.
Recent data indicated there were almost 30,000 repossession cases before the courts and up to four homes were being repossessed per day, she added.
Further seminars will take place in Cavan and Kilkenny.
