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."