This piece first appeared in The Daily Telegraph on 26 February  2000
The text here may not be identical to the published text

Court forces Halifax to pay up on windfalls

a chance of compensation overseas

Halifax has lost its first court battle in the campaign by 55,000 ex-patriate customers to get their allocation of free shares following the former building society converting to a bank in June 1997. Only customers in 26 named countries were entitled to shares under the terms of the deal set out by Halifax. Those living in other countries were excluded, including those in the United States of America.

David Gledhill, a Squadron Leader in the RAF, was stationed in Texas but his address was care of the British Forces Post Office which is located in the British Embassy in Washington and technically on British territory. But Halifax took the view that his address was in the United States of America and excluded him from the share handout.

But at the small claims court in Boston Lincolnshire on Monday (February 21) the judge decided that Halifax should have given David and his wife January the 200 shares each they would have got with a UK address. They will now get compensation for the £3000 value of the shares in 1997 and the interest to the date of payment.

The case is the first success in court for any of the excluded members living abroad who did not get shares, though some cases have been won through the Banking Ombudsman. David Gledhill said it was worth the struggle.

"It has been a long and painful process and I would rather not have been put in that situation. But yes it is good to have won. I was not an ex-patriate, I was a serving officer with the Royal Air Force. I approached Halifax for advice on what address to register and they suggested I used the BFPO address in the United States of America. But subsequently Halifax decided this was not a UK address and I was refused the shares. They failed to communicate this decision to any of its members even though they had our addresses. I tried various complaints procedures to no avail and I was finally forced to take legal action at the small claims court".

Brian Hazlehurst, who has spent two years building up a campaign among ex-patriates was pleased but said there is a long way to go.

"The difficulty is people proving what was said to them. We are hoping for a number of small claims successes like this but ultimately we hope to prove that the Halifax was simply wrong to exclude anyone through a group court action. That is what we are working on now."

Halifax is unmoved and says it will not be paying other people with BFPO addresses. It told Money Go Round

"We are disappointed with the result but we will not be appealing. The case does not set a precedent and other people with BFPO addresses will not be paid. The matter turned in court on the advice which the customer said he was given by the branch. the transfer document sets out what was a permitted territory and what was. People only had to read it."

Halifax claims it was legally prevented from giving free shares to people with registered addresses in some countries such as the United States of America. It says others were excluded because of the complex regulatory hurdles that would have to be overcome. That was why only customers in 26 countries were given shares. However, the bank has now admitted that in countries where there were less than 1000 customers it did not bother to find out what local regulations were – it just disbarred those members from shares. Members who lived in a prohibited country could register an address in the UK and be entitled to the shares. Even a relative’s or a friend’s address would do. But Brian Hazlehurst says the transfer document does not make any of this clear.

"It is absurd for Halifax to claim we were well informed it is not true. First, it was on page 66 and was not referred to in the contents pages at the front. Second, it does not say on page 66 that you can register a different address to become entitled. And third, every member was sent a letter from Mike Blackman the chief executive saying if your details are correct then you need do nothing. But if you lived abroad that was not true."

David Gledhill agrees

"I read the transfer document and I had seen the relevant clause 1.11. It was having read that I rang them up and asked which of my two addresses I should register. I could have used my UK address I still had my house here mortgaged with the Halifax. But I sought advice and on the basis of that used the BFPO address so that I could make sure that I kept up to date with the correspondence. I trusted the Halifax, you don’t expect to have to keep notes and records of everything a trusted financial institution says to you.."

Brian Hazlehurst says that the battle will go on. His organization, called UNHAV – UNited HAlifax Victims – is now challenging the arbitrary basis of the 1000 member cut-off – which he says was not consistently applied anyway. And is challenging the notion that giving the shares to people could ever contravene local laws.

"These were free shares. They would only interest the regulatory body if they were negotiable on the local exchange, but they were not, they only sell in London. So the whole argument is unfounded."

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26 February 2000

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