Milestone decision determines that courts are required to assess mortgage contracts for unfair terms and determine if it is proportional to enter a possession order in each case.
In a recent milestone decision, the Irish High Court has confirmed that EU Law protects people at risk of losing their home in Ireland.
Pursuant to the decision, it is clear that Circuit Court Registrars, along with judges, are obliged to assess mortgage documents for unfair mortgage terms on their own initiative, without being asked to do so by the borrowers. They will then have to delete any terms they find unfair before entering a possession order, in accordance with the EU Unfair Terms Contract Directive (UTCD).
In addition, when asked to do so by borrowers, Irish courts must consider the impact of the loss of the family home under Article 7 of the EU Charter for Fundamental Rights (Respect for private and family life). According to legal and advocacy experts, working together as the Abusive Lending Practices Project (ALPP), this is the first time an Irish court has acknowledged that borrowers have these Charter rights in possession cases. Up to now, ALPP said, state supports and institutions have largely dismissed the role of EU law in possession cases.
The decision on the requirement for own motion assessments was handed down on March 7th in Grant v County Laois Registrar by Mr Justice McDermott.
Significantly, the High Court decision means that State supports like the Abhaile Scheme, duty solicitors and others advising people in mortgage distress should be providing information and instruction on how EU laws can be used in possession cases. According to solicitor Julie Sadlier, who has worked with families at risk of losing their homes for over 10 years, this has immediate implications for current practice and training for the Abhaile panel of duty solicitors and legal aid lawyers.
“This important decision illustrates that there are defences under EU law in mortgage arrears cases,” said Julie Sadlier, who also works as part of ALPP. “This has huge implications for the protection of thousands of people in danger of losing their homes whose mortgages contain unfair contract terms.”
“Indeed, the tracker scandal involving almost 40,000 mortgages might have been avoided if mortgages had been checked for compliance with the EU unfair contract terms law,” she continued.
“Most significantly, it raises the debate about the importance of human rights and consumer rights within possession cases, and suggests that home mortgages are not solely a commercial issue, as they have been regarded by our courts, our state financial institutions and our mortgage arrears support services to date.”
Abusive Lending Practices Project (ALPP) is a joint project of Community Action Network, NUI Galway Centre for Housing Rights Law and Policy, the Open Society Justice Initiative, the Open Society Foundation for Europe along with a number of legal practitioners working on possession cases.
The ALPP seeks to raise awareness of two EU laws relevant to possession cases – the Unfair Terms Directive and the EU Charter of Fundamental Rights. The ALPP will also continue to help people understand and enforce their rights using EU Law by updating its Guide to EU Law and template pleadings available at http://abusivelending.org/page/legal-resources. It will also be initiating a new round of information sessions throughout Ireland.
