The OnTheMarket Action Group of rebel agents in a legal process against the portal has issued a set of questions following the release of new details of payments into court.
The questions include asking who is funding the legal costs, whyy there has been no vote amongst mutual members on spending millions on legal action instead of marketing, and the repayment of loan notes to early members of the portal.
Earlier this month EAT reported that Agents' Mutual - parent company of OTM - was ordered to make a further payment into court as part of a legal case against Gascoigne Halman and Moginie James.
In addition to £1m already paid during August the further payment was some £830,000 - all the payments are to cover legal costs in the event that Gascoigne Halman succeeds in contesting the legal action being taken against it by Agents’ Mutual.
Gascoigne Halman, originally an early gold member of OTM, was acquired by Connells Group in October last year and then wanted to sever links with the new portal. Agents’ Mutual says it is taking action to ensure members meet their contractual obligations, and insists it is standard procedure to pay such costs into court.
Now the OnTheMarket Action Group has released details of how the £830,000 payment is to be made by Agents’ Mutual into the Courts Funds Office.
It says the judge in the case stated that because of Agents' Mutual's limited working capital and its status as a start-up, with limited resources and cash flow, it should pay the £830,000 in three stages. This should be £280,000 by today - September 30 - with £250,000 by October 31 and finally £300,000 by December 30.
Earlier this month Gascoigne Halman issed a statement saying that the £1.8m-plus paid in by Agents’ Mutual in relation to its own case “together with an additional £450,000 also ordered to be paid into Court in respect of a separate but related action” means that “Agents’ Mutual will have paid into Court over £2m by year end. Agents’ Mutual also stated to the Court that their own legal costs will exceed £2m.”
In the light of these payments and costs the OTM Action Group - whose members are in dispute with Agents’ Mutual about membership fees - has issued a series of questions about the portal’s legal costs.
The questions are:
- “Why weren’t members consulted ‘Should we spend this money on litigating or should we settle and spend it on marketing?’
- “If there is no consultation on such an enormous issue, what will they ever consult on?
- “If there are no consultations, what is the point of being a mutual?
- “Assuming that the organisation has to divert this money from other sources, or bring in new capital, how does this affect the likelihood of founding members ever being repaid their loan notes?
- “How are they funding the litigation given the relatively small size of the company?
- “Why don’t the people steering the ship consider being pragmatic and (consulting on or) making changes to strategy which may give them and their members a different option?”
A spokeswoman for OnTheMarket said: "It is standard procedure to provide such security for costs in such cases and to ‘fortify’ financially such undertakings. The funds would only be payable in the event that we were unsuccessful in the legal cases.
"The board and management team of Agents’ Mutual have at every stage of the company’s inception and development taken appropriate legal advice. We remain satisfied that the company has operated within the law and are committed to defending our position in the interests of the broad membership by taking appropriate action to ensure that agents meet their contractual obligations and by challenging the allegation of misrepresentation in relation to pricing policy.
"Agents' Mutual considers it inappropriate under the current circumstances to communicate directly with the 'OTM Action Group' through the media."
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Ummmmmmm: AGENTS' MUTUALs website reads:. http://www.agentsmutual.co.uk
3. 100% agent-owned and agent-controlled (REALLY)
4. Each firm has an equal interest and voting right, irrespective of firm size (OR NOT)
** A company limited by guarantee does not usually have a share capital or shareholders, but instead has members who act as guarantors. The guarantors give an undertaking to contribute in the event of the winding up of the company.
£2,000,000 divided 7000 = £285.71
And so it should be.
Would Rightmove let an agent simple walk out of a contract? Given Connells bought these agents, they should honour the existing contracts in place.
I think any company would do the same.
It's a mutual not a company? Members should have been consulted if their money was best spent on building the portal as apposed to pursuing its own members. One company one vote. If they don't get to vote on issues of this magnitude what do they get to vote on.
Thats fine James when contracts dont break anti-trust or UK competition law.
Have you noticed taxi's dont drive on paths in rush hours even though the boss would like it to achive faster fares.
Just because a company makes a contract. The deal has to be that its lawful.
Equally Highways and the police would stop taxis driving on paths regardless of what the company boss said
I think OTM would accept they have acted pragmatically in regard to their pricing policy, even if, which remains to be seen, not illegally. Clearly some lawyers believe the other side have a case and are equally prepared to back their belief at present. The question is, why does that pragmatism not extend to ending this public dispute now.? A dispute which by the way, will not end up in court anyway, in my opinion at least.
Simon stop tip towing.
A group of otherwise competitors cant cartel together in order to take out another. And any agent now wise that top dogs establishing competition issues would be wise to abort and run for the hills
It is amazing how people read these stories differently. I see it that you and your very small action group Ian (how many agents do you have again?) are worried about your case. You want OTM to put a hold on legal action, this is a desperate attempt to strengthen your weak position and some ill judged PR!
As a member of OTM I for one do not want my company to let anyone walk out of a contract they signed in good faith with all the information to hand. We do not run by committee we have a board that make the day to day decisions end of..
Rose tinted glasses. The contract is worthless if it goes against UK law
Thats all well and good SR but you have convieniently avoided the fact that they promised early members preferable rates to those coming in later, in desperation to get the numbers up they sold themselves short with £50.00 deals, now when they should be bulking up there marketing to increase trafic from pathetic to not quite as pathetic they are throwing money away on chasing a handfull of unhappy ex members, either RS you are delusional or you work for OTM. what company in there right mind would now join OTM I have spoken to a few members in my area, some small some mid sized, all are concerned at the damage it had done to their company, and none would join if they were to look at it again. enough said.
It is amazing how people read these stories differently. I see it that you and your very small action group Ian (how many agents do you have again?) are worried about your case. You want OTM to put a hold on legal action, this is a desperate attempt to strengthen your weak position and some ill judged PR!
As a member of OTM I for one do not want my company to let anyone walk out of a contract they signed in good faith with all the information to hand. We do not run by committee we have a board that make the day to day decisions end of..
Living up to your name Scratched Record!
Unless you did it deliberately. In which case I take my hat off to you.
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