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.