Finance company settles High Court claims for “financially ruinous” transactions with 17 farmers

Members of our Commercial litigation team and The National Farmers’ Union (NFU), supported by Ted Loveday of Maitland Chambers, have helped members of the NFU to obtain hundreds of thousands of pounds in pay-outs following a group legal claim against firms accused of mis-selling them finance deals and seizing their property.

The seventeen claimants, who were supported by the NFU’s Legal Assistance Scheme, brought a class action against Nationwide Corporate Finance Ltd (‘NCF’) and its sister company, Bluerock Secured Finance Limited, formerly known as Alfandari Private Equities Ltd (‘Bluerock’) claiming to be victims of misrepresentation, negligence and breaches of consumer credit law.

Background

NCF – which has no association with Nationwide Building Society – has previously been accused by the Sunday Times of rushing people into “high-pressure loans” that placed their homes at risk, leaving some feeling “suicidal”.

The farmers said they became aware of NCF through direct mail and adverts in the agricultural press which offered “fast farming finance” including “loans” at favourable rates. This appealed to many of them, who were looking to finance their businesses – and say they believed they were offered short term loans.

Most of the farmers recalled speaking to sales representatives of NCF who promised them a loan at an attractive interest rate, typically between 3% and 6%. They said that a sales representative of NCF attended the home of each of the claimants very shortly after this call, sometimes within 24 hours, with paperwork to sign. The claimants argued that they were not provided with sufficient time to review the paperwork, nor were the terms properly explained to them, and that NCF’s representatives placed “considerable pressure” on them to sign without reading or fully understanding the documents.

Sometime afterwards, the claimants were told that they had, in fact, signed away their tractors, machinery, vehicles or livestock to NCF and companies associated with NCF. NCF asserted that the claimants had actually entered into ‘sale and leaseback agreements’ for farming equipment on disadvantageous terms – and not loans, as they say they previously agreed.

The claimants also learned that Bluerock had, in turn, sold their equipment onward to a third party for profit who would lease it back to them. After the expiry of the lease, the third party would sell the equipment to NCF – which would demand that they pay significant sums to buy their own equipment back. From the farmers’ perspective, instead of receiving a secured loan, they had inadvertently sold their farming equipment to a third party at a price that was significantly below market value, whilst being required to pay expensive payments without ownership. They claim that this situation was “oppressive” and “financially ruinous”, resulting in the loss of some of their equipment and many tens or hundreds of thousands of pounds in expense.

High Court case

As a member of the NFU’s Legal Panel, Clarke Willmott was instructed to bring proceedings against NCF and Bluerock for damages and cancellation of the transactions. It argued that these transactions were worse than any legitimate finance on the market, and indeed worse in many ways than simply selling their equipment outright, and the farmers would never have agreed to them if they had known the full terms.

The proceedings are believed to be one of the largest group claims in history relating to financial mis-selling in the agricultural sector. The case was issued in 2019 in the High Court in Bristol. After pandemic-related delays, a case management hearing took place in February 2022 before His Honour Judge Jonathan Russen KC.

The claimants finally reached settlement agreements with NCF and Bluerock between May and October 2022. The final three claimants obtained their settlements on 18 October 2022, receiving substantial sums by way of damages together with contributions towards their costs, and bringing the case to an end. Although NCF and Bluerock did not admit liability, they waived any further claims to the farmers’ equipment. The claimants were extremely grateful for the hard work and commitment from the NFU and the Clarke Willmott team (Laura Mackain-Bremner and Lara Williamson), as well as Counsel Ted Loveday, commenting as follows:

“Laura and Lara worked systematically and thoroughly to obtain the result everyone was hoping for in this case. It was difficult and at times very awkward but practical thoughts and not being deterred bought the conclusion all wanted”

“The NFU have remained supportive and participated in a practical and logical manner to assist in the successful result.”

Comments

We understand that there are a number of unrelated companies engaging in aggressive practices relating to the sale of finance in the agricultural sector. The methods of mis-selling are becoming more sophisticated, making claims more difficult to bring. In some cases, individuals are asked to guarantee finance using their home which could result in having to keep up with extortionate monthly payments or being in a position where they may lose their homes.

Clarke Willmott always advise farmers to seek independent professional advice before signing any finance contracts or documents, as there may be important details in the small-print. If you are a member of the NFU, you can access this advice via the NFU Contract Checking Service delivered by its Legal Panel Firms.

Any NFU members with concerns regarding unusual or suspicious financial products, or believe they are being placed under pressure to enter into a finance agreement, are encouraged to seek legal assistance immediately by contacting NFU Callfirst on 0370 8458458. Alternatively, Clarke Willmott are available to assist and can be contacted on 0345 209 1657.