Judge rules in first round of Northern Rock mortgage holder disputes

A judge has ruled in the first round of a legal claim brought by a group of former Northern Rock customers who say they became “mortgage prisoners” after the bank collapsed in 2008. A group of 392 former Northern Rock customers are trying to get compensation, claiming that they were put on unfairly high interest rates, costing them potentially tens of thousands of pounds over the lifetime of their mortgages. Northern Rock’s mortgage book was, after a period of restructuring, transferred to TSB Bank, which it managed under its Whistletree brand. Lawyers for the group say they were put on a higher rate of interest than TSB’s other customers. To simplify the case, a trial of preliminary issues was held in July. Lawyers for both the claimants and the defendants asked Mr Justice Thompsell to rule on whether the decision to put the Whistletree claimants on separate rates was a breach of their original contract with Northern Rock. They also asked for guidance on a technical question about the operation of the Consumer Credit Act as it relates to these circumstances. In his ruling, handed down today, the judge said that the TSB did not breach the claimants’ mortgage contracts by charging them higher interest rates than other TSB customers. He also gave detailed guidance on the Consume Credit Act point. According to the ruing, there are as many as 2,000 other former Northern Rock customers who might bring a claim, depending on the final outcome of this case. Donna Breeze and others v TSB Bank PLC Business and Property Courts (Mr Justice Thompsell) 25 September 2024 Photo © Tony Larkin/Shutterstock