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Tuesday, June 2, 2020
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British consumers seek UK justice

A LARGE group of victims of the Southern Cyprus property crisis will take to the High Court in London on Wednesday 13th June in order for a hearing to take place regarding the jurisdiction for their case.

Stemming back to as long ago as 2005, they claim that they were approached by (often their own) financial advisors with a view to a good and safe financial investment. At the time of the pre-crash European boom years, Southern Cyprus was said to be a burgeoning destination for holidaymakers, investment and growth – having learnt the lessons from Spain, or so the consumers were told. A fresh entrant into the EU, infrastructure was being upgraded and added across the island and the benefits of adopting the single currency were starting to show.

Here in the UK a proposal was formulated to attract investors, through the purchase of off-plan apartments and villas on a number of successive developments in and around the town of Paphos. Designed with the investment buyer in mind, the proposal was marketed to consumers as taking the hassle away from the transaction, combining an apparently good local developer with local solicitors who could conduct the necessary transactions on their behalf. High returns were quoted, and with the growing popularity of Cyprus as a destination time was said to be of the essence – namely this was the time to buy, and returns would be seen within a short period.

It is estimated that up to 2000 people were persuaded, in their own homes, often by their own financial advisors, that the opportunity was too good to miss. Acting as agents, but (unbeknownst to the consumers) without the protection of FSA regulation, these advisors used their trust to persuade innocent Brits to walk into sales. The Brits were told where to sign, how much in deposits to pay, then fed updates detailing how well the builds were supposedly going.

However, over the last two years the truth has started to become clear. The consumers had put their faith in advisors but a wealth of evidence began to emerge which painted a very different picture, one instead laced with deception and debt.

Consumers on their own feel powerless. Together they are strong.

As the last two years have progressed several groups of victims have formed to both reveal the whole situation and fight it. All were embroiled with the same Cypriot bank, all with one of three Cypriot solicitors, all with the same group of UK-based agents, and with huge commonality in the illegal, irresponsible and deceitful ways in which the consumers were treated.

Opinions by prominent Cypriot barristers point out the irregularities, for instance, in the powers of attorney – used by the solicitors and bank to have documents signed without the presence of the consumer. On account of these irregularities these powers of attorney are now considered to be invalid, which may lead to the contracts of sale and loan agreements also being declared invalid.

Virtually all were given foreign currency housing loans, a very risky financial tool normally only recommended to industry professionals. Considering that virtually all victims were consumers and not becoming involved for any business purpose, these were inappropriate and dangerous loans which have – following the financial crises of the last four years – meant that the actual value of most loans has gone up considerably (with the Swiss Franc loans the values have appreciated by up to 54%, for instance).

Yet more and more people are finding that in reality they should not have been granted a loan at all. The bank, suffering along with all other Cypriot banks for its close ties with Greek banking institutions and loans, has recently begun to call in loans from these people and in some cases has started litigation proceedings – for properties in the majority of cases that are still unfinished.

Facebook as a powerful force for good

Through the media of Facebook more and more victims were able to find each other, share stories, gain support and not feel so alone in such a frightening situation. Once again, huge commonality appeared, and over the last two years the group has gained support from Ministers, the Foreign Office, and many MPs & MEPs across the country, questions have been raised in the European Parliament, and a number of UK authorities have provided support and advice.

One group of victims in particular sought the advice of the UK’s oldest bi-lateral of the Law Society of England and Wales – the Anglo-Hellenic and Cypriot Law Association, represented in London by Highgate Hill Solicitors. Their Chair, Katherine Alexander-Theodotou, offered advice and assistance, and began to find not only more and more evidence, but also countless more victims. Working together, and following attempts to negotiate agreeable solutions, a group litigation formed to seek justice for the huge financial, emotional and physical losses that have ensued from these consumers’ involvement.

That action, believes the group, belongs in the place of domicile of the consumers involved – namely, the Royal Courts of Justice in London.

Using experts in jurisdiction and the benefits of both EU consumer and jurisdictional law, they appeal for a full trial in the English courts so that as many of the claimants can be present as possible, so that the full extent of the situation and wrongdoings can be presented, and a fair outcome be determined as timely as possible.

All involved agree that had the full extent of the risks and the true details of the investment revealed prior to signing, they would never have become involved.

It is important that the details of the case are heard in the UK so that other British consumers can become aware of the pitfalls and dangers of this type of investment, and no one else can be lured into such a situation.

Already there are some victims with personal losses in excess of £100,000 and assumed foreign debt levels in excess of £1m. The overall losses are hard to determine, but are estimated to be in the region of £80m in personal losses and in excess of €300m in debt.

This is one big problem, affecting a huge amount of innocent British consumers, causing a great deal of stress, worry and health issues. It involves a huge amount of common misrepresentation, and a wealth of evidence has been uncovered.

It is now time for justice to be brought.


  1. Breaking News

    Reports coming from the High Court in London is that jurisdiction has been accepted in the case between Highgate and Andreas & Alpha Panareti.

    The Master has made a brief statement and will publish a full ruling in time.

    More details to follow as they become available.

  2. “Designed with the investment buyer in mind”

    “Considering that virtually all victims were consumers and not becoming involved for any business purpose”

    Which statement statement is correct?

  3. @C Woodward

    If this jurisdiction is given you will be able to follow the same path.

  4. We got ourselves involved in exactly the same ploy used by MRI Overseas Property and are now suffering the consequences, not knowing what to do other than employ a new lawyer incurring even more expense. A POA was used by our original lawyer to seek a loan of which we were never informed of the risks involved in using a Swiss Franc home loan!

    Bought off plan; our property has never been completed with stage payments used inappropriately by the developer involved. Even the Cypriot builder involved has been unable to get his money back despite taking court action. The whole system is corrupt!


    Very sorry that they (you?) too have been conned but do you believe that they were exempt from undertaking all due diligence & all responsibilities when presumably earning commissions for their sales?

  6. Jurisdiction for interpretation purposes, as usually stated towards the end of a contract, is one issue. However, as I understand it, this present action is not primarily (or at all?) against the developer they finally signed up with. It seems to be against the various persons acting as sales agents in the UK and lawyers (presumably the latter are implicated as failing to declare a conflict of interest etc etc).

    All parties acting on behalf of anyone selling immovable property within the EU are subject to the ‘misleading statements’ clauses of the EU Unfair Commercial Practices Directive. Moreover, I suspect that if a UK financial adviser is one of those parties, they will be regulated by the IFA, even if working abroad.

    On balance, if the plaintiffs are going after the ‘supporting cast’ rather than the developers, I think they may have a good chance of succeeding with a UK action. Not sure what happens to Cypriot lawyers though; presumably if they are registered UK barristers or Law Society members they could be roped in. Perhaps the plaintiffs are not enjoing these lawyers but merely naming them in evidence.

  7. Just a little note to say that 90% of the people selling properties in Cyprus also bought these same properties themselves, do you think that if they had known of the corruption and deceit in Cyprus that they would have bought and sold these? They are in the same situation as everybody else.

  8. As I understand it, Geo is on the right track here. The contracts that were signed will contain a clause specifying where any disputes will be heard and where any default by either party will be remedied. I am pretty certain this will be Cyprus.

    The only way I can envisage around that is for a court to declare the contracts null and void. Whether a UK court can declare a Cyprus contract drawn up under Cyprus law as null and void remains to be seen.

    Unless and until that happens, the dispute will be heard in Cyprus and any enforcement orders will be enforced by UK courts without delving into the detail, just as a UK court order has to be enforced by courts in Cyprus. However, there just might be a big difference in the amount of time the latter takes, compared to the former.

  9. It’s not so much that a case may be heard in the UK, it’s that it may be heard “outside Cyprus”. The various antics employed in delaying justice here are only too well known and who’s to say that when a case finally comes before a court that an impartial verdict is handed down?

    That’s one of the unfortunate downsides to village mentality and the fact that everyone knows everyone else.

  10. If Geo is correct then the outcome of todays hearing in London is already known. Have the lawyers involved got it that wrong. Is this just another pay day for lawyers. I don’t think so. If the EU law is the same throughout Europe then the outcome will be the same wherever the case is heard as the law will have to be applied the same throughout Europe. I assume that Cyprus will not recognise the outcome of the UK court and it will be off the the EU court. Can’t hide forever Cyprus!

  11. I see no reason why anyone would not wish the action to be heard in a British Court as it has been quoted, ad nauseam, that Cypriot law is the same as and based on British law. Therefore, if that is true, then any judgement will be the same whether made by a Cypriot or UK Court.

    I think there are those amongst us who would view things a little differently and I await the first statement, in defence, from a developer / Banker / Lawyer stating that Cypriot property buying law is nothing like British law.

    I hope the applicants are successful as although it does not affect me, justice per se, affects us all. If the judicial system cannot protect the people it should be designed to protect then only anarchy is left as an option.

    There are perceived to be too many examples of laws in Cyprus having been formulated to protect lawyers and their ability to charge extraordinary fees for work for which they carry very little responsibility. A cynic would be forgiven for thinking it may be as a result of the lawmakers being lawyers themselves and ensuring self interest rather than the interests of the people they are elected to represent.

  12. My Cyprus solicitor told me that UK law applied to the sale of property in Cyprus. I later saw several articles where she had put this in print that the law regarding the sale of a house in Cyprus and the UK were the same.

    Clearly they are not. The law covering the purchase of property in Cyprus is based on Ottoman Law.

    So who was fooling who?

  13. Sauce for the goose is sauce for the gander! Ruin the lives of Cyprus establishment leaders in return for their own lies and deceit, and its effects on thousands of people.

  14. Yes you may be right Geo, and presumably Cyprus is part of the EU, so therefore enforcement orders made in the UK can and will be enforced in Cyprus?

    I don’t think this group of consumers is looking for help from either the UK Government or the EU which is why they have gone to court.

    Like I said before, medicine can be administered both ways.

  15. Contracts drawn up under Cyprus law will be heard under Cyprus law in Cyprus.

    UK is part of the EU therefore enforcement orders made in Cyprus can and will be enforced in UK.

    Don’t expect any help from the UK government or the EU on this and certainly not from Cyprus.

  16. I understand that the value of property can go up and down. That I accept. The fundamental issue here is the deceit involved on a huge scale. Purchasers had no reason to think that these vital details (such as developer debt etc) were being hidden from them. When you instruct a lawyer to act on your behalf you assume that they will act correctly.

    The main issue is that you can pay the full amount for your property (no mortgage) and still have it taken from you due to developer debt. This cannot be allowed within the EU.

    These cases should be heard in the UK where a fair hearing will take place, in a timely fashion and justice will be done. I have said before that the UK government should protect Brits by saying that they will not recognize enforcement orders from Cyprus due to their crooked ways!

  17. One notch nearer for the Guano and the Fan.

    Perhaps then the conmen will finally recognise real justice when it smacks them in the face?

    Wouldn’t it be great if the British Courts went after the assets of those who perpetrated these cons instead of it being the other way around?

  18. This is another example of the corruption and deceit that surrounds the Cyprus property market. Many thousands of buyers are still awaiting their Title Deeds for properties they purchased in good faith. These people were not informed of Developer mortgages and they now face the threat of losing everything. Cypriot lawyers, real estate agents, developers, banks and land registry are all involved in this wholesale deception.

    What will the final cost be, to all these unfortunate people and to the ordinary people of Cyprus? How many lives have been ruined?

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