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Bank of Scotland settles shared appreciation mortgage trial

Bank of Scotland settles shared appreciation mortgage trial


The anticipated six-week trial involving the Bank of Scotland and homeowners entangled in shared appreciation mortgages (SAMs) has been settled on confidential terms

The agreement, reached with a law firm representing 160 customers, prevents the trial from proceeding, leaving the judgment's potential precedential value undisclosed.

The case focused on the alleged 'unfair relationship' between the bank and SAM borrowers. A ruling in favour of such claims could have triggered a wave of litigation, involving around 15,000 individuals or their estates who hold SAMs issued by various banks, including Barclays.

SAMs, widely taken out in the 1990s, have left some homeowners owing more than 10 to 12 times their initial borrowed sum, with debts exceeding £1 million. While Barclays also sold SAMs, legal claims involving them haven't reached the courts.

Laura Robinson, a partner at Clarke Willmott's financial services litigation team, is assisting individuals affected by Barclays' SAMs. She criticized the terms as outrageous and highlighted their heart-breaking impact on elderly individuals and their families. Robinson emphasized the urgency for those with shared appreciation mortgages to seek legal advice promptly, suggesting that the true reality and potential extent of these agreements often become apparent only when borrowers enter care homes or pass away. Robinson questioned the appropriateness of offering SAMs, particularly targeting retired individuals who may lack market knowledge. She urged affected parties or estate representatives to seek legal counsel promptly given the time-sensitive nature of such cases.

Photo By Gary Campbell-Hall from Edinburgh, UK - Museum on the mound, Edinburgh, CC BY 2.0,