British 'pensioners and orphans' to challenge Bank of Ireland in court

British pensioners are taking legal action against the Bank of Ireland at the High Court this week as anger and resentment grows over attempts to plunder their savings.

The US-based law firm Brown Rudnick will represent around 2,000 British pensioners and investors, who face losing between 80 per cent and all but the very tiniest of fractions of their investments in bonds issued by the old Bristol & West Building Society. The Bank of Ireland took over Bristol & West in 1997 and it has been one of the major strugglers during the country's acute financial crisis.

A 2.6bn euro (£2.33bn) liability management exercise (LME) – essentially a financial restructuring – was demanded by the Irish government, which has a 36 per cent stake in the bank. Part of the LME involves owners of the Bristol & West permanent interest bearing shares, or Pibs, worth £75m. These were typically used to supplement pensions, as they offered generous annual payouts of 13.375 per cent of whatever had been invested.

However, under the terms of the offer, investors have been offered just 20p in the pound of whatever savings they ploughed into the bonds, barely covering even one year's payout. If a Pibs-holder voted "no" and the LME is voted through, as is expected, they will receive just one penny for every £1,000 of savings that is tied up in the bonds.

Pibs-holders argue that this potentially punishes the "no" minority and that the correct legal jurisdiction to decide the legality of the move is England rather than Ireland, which is why they are taking the bank to the High Court.

Waseem Shakoor, who has a significant Pibs holding and is one of the leaders of the action, said: "This makes people who vote 'yes' oppress the minority and pretty much punish those who say 'no'. I would urge people to reach out to the lawyers."

He also warned that such a coercive scheme defies standard practice among Western economies. He argued: "I'm more likely to lend money to [The X-Factor act] Jedward than I am to lend to Ireland. People will vote with their feet and Ireland will become a pariah state in the European Union."

Mr Shakoor is one of only a handful of Pibs-owners who holds enough to benefit from the offer of a debt-for-equity swap, which would value their holdings at 40 per cent of their value. The overwhelming majority do not have significant enough money to even get this amount.

To make matters worse, many of the pensioners and any family that have inherited the bonds, have only until 22 June to accept. The 20 per cent offer decreases if the initial deadline is missed.

Many of the pensioners are unlikely to have a broker to help them and might not even know where the original certificates are located, so there are fears that the elderly and infirm could miss the deadline.

Liz Cameron discovered on Friday that her £3,000 of Pibs, bequeathed to her by her late parents, was under threat. She said that she relied on the £400 annual payment to pay her heating bills, and are even more vital now as she has recently been made redundant.

"My parents left us these to help us through," she fumed. "They would be absolutely devastated to find their legacy has been stolen by the Irish."

Louise Verrill, a partner at Brown Rudnick's London office, said: "The firm recognises the special circumstances of the widows, orphans and pensioners which relate to this coercive scheme, which is oppressive."

John Hemming, the Liberal Democrat MP who used parliamentary privilege to reveal that Ryan Giggs was the footballer behind the recent superinjunction, is a leading Pibs-holder and part of the campaign. The group intends to write to the Irish government to condemn its "lack of common decency and fair play".

However, the Prime Minister, Enda Kenny, was elected earlier this year on a platform to make sure difficult economic decisions were taken in order to end the country's financial crisis, which saw Ireland bailed out by the EU and the International Monetary Fund.

A spokesman for the Bank of Ireland said: "In the context of the €2.6bn liability management exercise, the treatment of the Bank of Ireland 13.375 per cent Perpetual Undated Bond is consistent with that of other subordinated debt instruments:

"A) an offer is made to exchange into equity at 40 per cent plus accrued interest, while an offer is made to exchange into cash at 20 per cent excluding accrued interest.

"B) while – for European Prospectus Directive reasons – the equity exchange at 40 per cent is not open to bond investors with holdings converting to less than ¤50,000, should they choose to do so, such investors are free to sell those bonds to larger investors who can participate in the equity exchange.

"C) all bonds under the offer are covered by English law which is standard for most capital bonds."

The campaigners have launched a website to gather support for their cause at

Case Study

Albert Kempster, Glasgow

Mr Kempster cobbled together £24,000 towards the end of what he describes as "an up-and-down career", which included spells in teaching and farming.

He invested the money in the Bristol & West Pibs. It seemed a wise move: his £230-a-month pension would be bolstered by £1,800 of interest payouts a year. He describes the Bank of Ireland's proposal as "an absolute scandal" and wants to make a stand by voting against the deal, even if that risks losing almost every penny.

Louis van Gaal would have been impressed with Darren Fletcher’s performance against LA Galaxy during Manchester United’s 7-0 victory
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
The new dawn heralded by George Osborne has yet to rise
voicesJames Moore: As the Tories rub their hands together, the average voter will be asking why they're not getting a piece of the action
Arts and Entertainment
Jo Brand says she's mellowed a lot
tvJo Brand says shows encourage people to laugh at the vulnerable
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Rhys Williams
commonwealth games
Life and Style
People may feel that they're procrastinating by watching TV in the evening
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Isis fighters travel in a vehicle as they take part in a military parade along the streets of Syria's northern Raqqa province
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
fashionLatex dresses hit the catwalk to raise awareness for HIV and Aids
Life and Style
The veteran poverty campaigner Sir Bob Geldof issues a stark challenge to emerging economies at the Melbourne HIV/Aids conference
Arts and Entertainment
Benedict Cumberbatch and John Malkovich talk Penguins of Madagascar at Comic-Con
comic-con 2014Cumberbatch fans banned from asking about Sherlock at Comic-Con
Arts and Entertainment
Chris Pratt stars in Guardians of the Galaxy
filmGuardians Of The Galaxy should have taken itself a bit more seriously, writes Geoffrey Macnab
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Test Analyst - UAT - Credit Risk

£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Graduate Recruitment Resourcers - Banking Technologies

£18000 - £25000 per annum + OTE £40,000: SThree: Huxley Associates are looking...

Graduate C# Developer (.NET, ASP.NET, HTML, SQL, RDBMS, Windows

Negotiable: Harrington Starr: Graduate C# Developer (.NET, ASP.NET, HTML, SQL,...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform