Ulster Bank intends to appeal against a High Court ruling that upheld the entitlement of two borrowers to tracker mortgage refunds and compensation.
The High Court decision could have implications for other tracker mortgage customers.
The Bank’s senior counsel, Marcus Dowling told the High Court on Tuesday an application will be made seeking to appeal directly to the Supreme Court in a leapfrog appeal bypassing the Court of Appeal.
However, he also asked the High Court to hear his application for leave to appeal to the Court of Appeal against the ruling in the event the Supreme Court does not opt to hear a “leapfrog” appeal.
Mr Dowling said his client and the opposing party– the Financial Services and Pensions Ombudsman (FSPO)– might be able to agree questions of law that meet the threshold of appeal.
Francis Kiernan, for the FSPO, said the parties will communicate on the matter. He clarified that the ombudsman will not be agreeing that there was any error in its decisions.
Ms Justice Marguerite Bolger scheduled the short hearing for later this month.
Last month she dismissed Ulster Bank’s appeals against the ombudsman’s findings that two borrowers were entitled to tracker mortgage refunds and compensation.
The bank failed to persuade her that the FSPO had fallen into “serious and significant” error in his decisions.
The ombudsman’s binding decisions could be upheld on the basis that the bank’s conduct was contrary to its contractual and consumer-protection obligations.
Ulster Bank, which is part of the NatWest Group and is exiting the Irish market, said in its latest annual report that the outcome of the cases “may have a materially adverse impact” on the firm.
Counsel for the bank told the court in October that the cases may affect “thousands” of customers and trigger “enormous financial” consequences for the lender.
The two borrowers who took their cases to the FSPO had been excluded from redress in an industry-wide examination overseen by the Central Bank between late 2015 and mid-2019. More than 40,000 cases of overcharging were identified across Irish lenders during this.
In one of the cases, two borrowers who took out a mortgage in April 2004 that initially had a one-year reduced interest rate, before reverting to Ulster Bank’s so-called home loan rate, its standard variable product.
They signed a so-called flexible mortgage transfer form in 2006, entitling them to move on to a tracker loan. They subsequently applied in May 2007, as European Central Bank rates were rising, to fix their interest rates until August 2010.
Their loan documents said the bank may offer to extend the fixed period or offer “alternative available products”. If these were not accepted the borrowers would revert to the bank’s home loan rate.
After the fixed-rate period, the borrowers sought to revert to their previous rate but the bank refused as it stopped offering this rate to new customers in 2008.
The bank never explained that the tracker rate might not be available when the fixed-rate period ended, the judge said in her ruling. The FSPO was entitled to decide that the borrowers’ contractual entitlement to the tracker rate continued at their election, she found.
Ulster Bank initially appealed a third decision but the court was told during the hearing of the appeals last October that the parties had agreed this one would be set aside.
On Tuesday, Ms Justice Bolger made orders setting aside this decision and remitting the case back to the ombudsman for fresh consideration.
