Mrs Johnson (not her real name) was approach by a solicitor in her home town as they were specialising in unenforceable agreements. When asked by a friend who was working for the solicitor if she had any contracts for loans, etc. she replied that she did. She subsequently produced the paperwork and the solicitor told her it was an unfair contract and that it was unenforceable.
It actually was not an unfair contract: the solicitor just told her that so she would agree with him it was morally correct to challenge the agreement. What the solicitor had seen was the facility letter that was now over 6 years’ old, so it was out of time for the bank to take her to court if she did not pay the loan.
The solicitor advised her to stop making the payments, which she did. Two months later she received court papers for the full repayment of her debt. What had happened was the solicitor did not realise there was another facility letter that was dated 6 months after the first one and was still in time. Bear in mind before she met the solicitor she was quiet happily making her loan payment of £250 per month. Now her agreement had been terminated and she had received a court demand for £60,000 plus costs with the costs rising all the time.
She was now trapped; she did not have £60,000 or enough money to employ a solicitor, and she was now embroiled in a court case against a bank. She was on the way to losing her house. The solicitor refused to take any responsibility but did try to defend her. This went on for 2 years! One month before the trial the solicitor asked her for £10,000 to defend her in court. She had suffered 2 years of sleepless nights and stress and now her position was critical: she could not pull out or she would have had to pay the other side’s costs and she could not defend herself as she had no money.
What she actually did as last resort and against the solicitor’s advice was to call the bank and explain what the solicitor had done and that she was frightened. It’s not often we defend a bank but in this case they helped her by settling for an amount she could borrow from somewhere else. At the beginning the solicitor had signed her up on an agreement that paid him on a percentage of any saving made. Mrs Johnson had technically saved £15,000 and the solicitor wanted his fee!
She rightfully refused to pay him anything and threatened to report him to the Law Society, which she did not do as she thought the solicitor would then chase her for his fees. So all the time the solicitor was trying to get a settlement to get paid himself with no conscience or care for his client.