Last week we published Why Wyndham and Other Timeshare Developers Force Arbitration – 11th Circuit Oral Arguments, it was not our usual fare as it consisted of a transcribed recording of legal proceedings, and for those of you who did manage to read it all, well done, it was hard going.
The title of the posts placed on our Fb page was “Is there an interpreter in the house?” This was no joke, I was reminded of some of the greatest British comedies and dramas about politicians, civil servants, and the legal profession. All use words to great effect, semantics I believe it is called, the best of all time was Sir Humphrey, in the sitcom Yes Minister and Yes Prime Minister. His play on words & interpretations are legendary but were all designed to get the result he wanted, and this is the same with the developers. They want the court to force arbitration, yet they don’t appear to have a reason why, well not one that we read in the transcripts, so from that we are none the wiser.
AIT has not yet come across any European contract where the terms & conditions force arbitration, not in timeshare or any other industry. Arbitration is voluntary, it is a course of action designed to avoid costly court costs, it is also known as mediation.
The difference is very subtle, a formality if you like, an Arbitrator is an older word and lends an air of authority, whereas a Mediator is less formal. Historically, Arbitrators would be appointed by the “Crown” (Government) and would often be magistrates or judges carrying the full weight of the “King”. Mediators tended to be “neutral parties” not representing the authorities or either party.
Wyndham do however come up with an excuse as to why they have not gone to arbitration, apparently, the American Arbitration Association (AAA) had refused to arbitrate Wyndham cases saying that Wyndham “did not follow their rules or policies.” One would have thought it was a prerequisite to follow the rules or policies of the arbitrator, but you would be very wrong in that assumption.
The same problem arises in the UK, over the years AIT has followed many cases regarding loan agreements brokered by the timeshare sales agents. A huge number of these timeshares were subject to legal proceedings in the Spanish Courts, but that did not include the loan agreement. That had to be dealt with by UK authorities. Enter the Financial Conduct Authority (FCA) and the Financial Ombudsman Service (FOS), these are the mediators and the arbiters, they have their systems, rules and policies. It should be pointed out, that in the information provided about the loan agreement, always includes that the “consumer” has the right to take any complaint to the FCA or to the FOS.
You would expect the business in this case Barclays Partner Finance, to comply with these, but again you would be wrong. Recently I came across this paragraph in a letter to a client from BPF regarding their claim:
“If you do not refer your complaint in time, the Ombudsman will not have our permission to consider your complaint and so will only be able to do so in very limited circumstances.”
Now, the original claim itself has been settled and we believe has been paid, this is the “associated loss” payment where the offer made by BPF is, to say the least derisory (case still ongoing), especially when you consider the number of years it has taken and all the hurdles they have had to face.
In other words, you accept or file yet another complaint to the Financial Ombudsman, you have a time limit to decide, if you complain then you will wait goodness knows how long for the matter to be resolved.
To add to the pressure to accept is their wonderful statement that they won’t play ball.
Even if you do file yet another complaint, there is no guarantee that the business will accept the finding if not in their favour. This leaves you the consumer with the last option, spend thousands and take them to court.
Arbitrators work on trust, they have no authority, in the case against the finance company, the only option left open to them is to spend thousands on a High Court case for a judicial review and judgement. Can’t see that happening too often, so you the consumer, to coin a typical Brit phrase, “They have you by the short and curlies”.
To these people it is all a game, just like Monopoly, the winner is the one with all the money, they have thousands, probably all tax deductible, paying for lawyers to delay proceedings with B.S.
The “authorities” “appointed” to arbitrate, mediate or whatever word you want to use, actually have no power or authority, and to be honest, can you actually see an agency such as the FCA removing any accreditation for BPF for not following procedure? Most definitely not with how much BPF must contribute to FCA coffers.
There is an underlying battle that is going on here, it is called Laissez Faire.
What does laissez faire mean?
The driving principle behind laissez-faire, a French term that translates to “leave alone” (literally, “let you do“), is that the less the government is involved in the economy, the better off business will be, and by extension, society as a whole.
In full, the sentence is: Laissez faire et laissez passer, le monde va de lui même
In English: “Let it go and let it go, the world goes by itself”
In Spanish: ” Déjalo ir y déjalo ir, el mundo va solo ”
It has a long history going as far back as 1681, it is believed to have been used in a meeting between French Controller-General of Finances Jean-Baptiste Colbert and a group of French businessmen headed by M. Le Gendre.
Over the centuries, it has had many proponents and detractors, it is a subject which is far too long for these pages, but one of the basic principles of laissez-faire holds that markets should naturally be competitive.
Can’t argue with that.
Its aims are maximizing freedom by allowing markets to self-regulate.
That does not seem to work, well not in timeshare.
It was also proposed at one point by early advocates of laissez-faire, that a “impôt unique”, be introduced. It was similar to Georgism (Single Tax Movement), it proposed a tax on land rent, this was to replace all taxes that they saw as damaging welfare by penalizing production.
One example which could describe laissez-faire is the history of the East India Company, a colonial operation which controlled its own army, it was basically the first ruler of Britain’s “Jewel of the Empire”. They had the freedom to do what they wanted, until the ruling power at home, the Government on behalf of the “Crown”, decided they wanted control, and “regulated” what the company could do. The East India Company lost its control, including its “mercenary army”, they got too big for their boots.
This simplified example from history is the battle we have today, on the one hand, we have the industry, self-regulated, operating as it wishes pushing the boundaries of existing law and using its wealth to run roughshod over consumers and the law. On the other we have the consumer, supposedly represented by Government, well you do vote for them, they are your servants.
Businesses want “Laissez Faire”, consumers want regulation. We may not call it Laissez Faire today, but its principles are still with us, this is what we see in the Wyndham case, this is what we see in the BPF case, current regulation means nothing. It has no teeth.
That is all for today, we hope you all had a good weekend.