Justice has finally been secured for farmers who agreed 'fast farming finance', only to discover that in fact their machinery and livestock had been sold to a third party.

Hundred of thousands of pounds in pay outs have been secured for 17 farmers caught out in mis-sold finance deals which lead to them having to buy back their own machinery.

The farmers said they became aware of Nationwide Corporate Finance Ltd (‘NCF’) - which has no association with Nationwide Building Society - through direct mail and adverts in the agricultural press which offered “fast farming finance” including “loans” at favourable rates.

This appealed to many of them, who were looking to finance their businesses – and say they believed they were offered short term loans. 

Most of the farmers recalled speaking to sales representatives of NCF who promised them a loan at an attractive interest rate, typically between three per cent and six per cent.

They said that a sales representative of NCF visited the home of each of the claimants very shortly after this call, sometimes within 24 hours, with paperwork to sign.  

The claimants argued that they were not provided with sufficient time to review the paperwork, nor were the terms properly explained to them, and that NCF’s representatives placed “considerable pressure” on them to sign without reading or fully understanding the documents.  

Sometime afterwards, the claimants were told that they had, in fact, signed away their tractors, machinery, vehicles or livestock to NCF and companies associated with NCF.

NCF asserted that the claimants had actually entered into ‘sale and leaseback agreements’ for farming equipment on disadvantageous terms – and not loans, as they say they previously agreed. 

The claimants also learned that Bluerock had, in turn, sold their equipment onward to a third party for profit who would lease it back to them.

After the expiry of the lease, the third party would sell the equipment to NCF – which would demand that they pay significant sums to buy their own equipment back.  

From the farmers’ perspective, instead of receiving a secured loan, they had inadvertently sold their farming equipment to a third party at a price that was significantly below market value, whilst being required to pay expensive payments without ownership.

They claim that this situation was “oppressive” and “financially ruinous”, resulting in the loss of some of their equipment and many tens or hundreds of thousands of pounds in expense. 

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The National Farmers’ Union (NFU) and Clarke Willmott LLP, supported by Ted Loveday of Maitland Chambers, won the group legal claim for the 17 claimants against NCF and its sister company, Bluerock Secured Finance Limited, formerly known as Alfandari Private Equities Ltd (‘Bluerock’) claiming to be victims of misrepresentation, negligence and breaches of consumer credit law.  

As a member of the NFU’s legal panel, Clarke Willmott was instructed to bring proceedings against NCF and Bluerock for damages and cancellation of the transactions.

It argued that these transactions were worse than any legitimate finance on the market, and indeed worse in many ways than simply selling their equipment outright, and the farmers would never have agreed to them if they had known the full terms.  

The proceedings are believed to be one of the largest group claims in history relating to financial mis-selling in the agricultural sector.

The case was issued in 2019 in the High Court in Bristol. After pandemic-related delays, a case management hearing took place in February 2022 before His Honour Judge Jonathan Russen KC. 

The claimants finally reached settlement agreements with NCF and Bluerock between May and October 2022.

The final three claimants obtained their settlements on October 18, 2022, receiving substantial sums by way of damages together with contributions towards their costs, and bringing the case to an end.

Although NCF and Bluerock did not admit liability, they waived any further claims to the farmers’ equipment.  

The claimants were grateful for the work from the NFU and Laura Mackain-Bremner and Lara Williamson of Clarke Willmott, as well as Counsel Ted Loveday, commenting: “Laura and Lara worked systematically and thoroughly to obtain the result everyone was hoping for in this case. It was difficult and at times very awkward but practical thoughts and not being deterred bought the conclusion all wanted. The NFU have remained supportive and participated in a practical and logical manner to assist in the successful result.” 

Clarke Willmott warns farmers to always seek independent professional advice before signing any finance contracts or documents, as there may be important details in the small print.