Agents’ Mutual has been ordered to make further payments into court as the legal battle with Gascoigne Halman continues.
Agents’ Mutual has already paid £1m into court regarding the case, due to be heard in February.
Gascoigne Halman was an early supporter of Agents’ Mutual and remains a Gold member, still listing on OnTheMarket. However, after its acquisition by Connells last year, it briefly listed on Zoopla before returning to OTM, as OTM sought to enforce its contract, including the ‘one other portal’ clause. Connells has a shareholding in Zoopla. We reported it here
At the weekend, Gascoigne Halman issued this statement: “Gascoigne Halman notes that the Competition Appeal Tribunal last week ordered Agents’ Mutual to make a further payment into court of £830k to cover its legal costs in the event that Gascoigne Halman succeeds in the legal action being taken against it by Agents’ Mutual.
“This, together with an additional £450k 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.
“Gascoigne Halman is committed to defending its position and is confident that the Competition Appeal Tribunal will uphold its right to advertise on portals of its choice.
“As a Gold member of OnTheMarket, Gascoigne Halman is extremely disappointed that Agents’ Mutual has chosen to divert over £4m of its members’ loan notes and subscriptions away from its marketing activities when they would surely be better employed for the benefit of its members.”
It is thought that the other action referred to in the statement relates to Cardiff-based independent Moginie James, which also continues to list at OnTheMarket.
Last night, a spokesperson for Agents’ Mutual 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.”
Comments (68)
Just re-read this story.
Got it so wrong. So it may actually cost OTM members £4 million pounds if they lose this action!
Apparently £2 million in their own legal fees alone!
For the members sake, please consider my posting above.
Why can’t OTM just simply now change the ‘rules’ and not risk £4 million of our members money!
Please consider something outside this massively expensive legal box?
In my mind, you can only have a competition problem if you insist that a purchaser buying a former member agents business demand that they continue with the one other portal rule as everyone else has voluntarily agreed to this membership rule by subscribing?
Who has been given the authority to take this legal action and spend the £4m? Was there any sort of vote from the member agents?
Thank you AgentV
Although a panel of agents in the front line, who actually know where the breach is focused is admirable, a ‘name’ would help rally the troops and help draw investment and support from those that count, particularly if it helps them to consolidate their own offering.
Someone once described rallying independent agents as trying to herd cats, That has been my experience.
What I do know is that to rally the independent sector a plan that helps them draw in more new instructions whilst defending their position is the only way forward.
This same argument, 2 years later just sounds even more hopeless now.
Just look at what hasn’t happened over the last few years
Sorry Harry to burst your anti OTM bubble but zero to 7,000 doesn’t sound hopeless. It is only a few anti-OTM on here that are so vocal that makes it sounds your way. Just think of all the dislikes you would get if all those OTM agents subscribed to EYE. I’m still at a loss why you support others that wish to put agents out of business!
Some battles are worth losing to win a war. This was one of them …….and over so few branches!
It appears to me and many others looking at the comments that this battle gave Z ‘backers’ the opportunity to tear OTM apart both financially, strategically and from within.
This was always going to be their atom bomb.
As an OTM member myself, I am sorry to say, the leadership have failed us, probably because they do not appear to want to talk to, listen to, or even respond to, their members concerns.
A good leader communicates well with his troops and takes advice from commanders ‘in the field’.
Is Ian Springett still in charge as I have not seen any press releases from him for a while?
Our industry is under attack on many fronts whilst our troops (AM) and others wait, forever patiently, to be rallied, to answer the call to action. AM and others are the power base that has been ignored.
Winston Churchill once said ‘ Want of foresight, unwillingness to act when action would be simple and effective, lack of clear thinking, confusion of council until the emergency comes, until self-preservation strikes its jarring gong – these are the features which constitute the endless repetition of history’,
Interesting time for Z to relaunch Prime Location as this requires many more prime agents?
I have a plan to cheaply and simply draw all truly independent, full service agents together whilst allowing them the choice of what portals they wish to use but require the support of other mutually concerned agents.
Do OTM have a plan?
If not, a well known and trusted industry leader who has shown they are prepared to put their job on the line to back full service agents is needed now to draw these troops and strategic plans together, whether OTM or NOT
If you agree, please post the name of any suggestions?
It appears to me and many others looking at the comments that this battle gave Z ‘backers’ the opportunity to tear OTM apart both financially.
That just about sums up what this all about. Nothing to do with contracts etc. Its all about a Z backer seeing the risk of OTM and finding a way to have a go, as they have done from the day OTM was born.
It will be interesting to see what happens in court, for they entered into a contractual agreement in full knowledge with no loaded gun being pointed at them and as someone commented above, when they took over the agent, they new fully well what the position was. The baggage comes with you when you buy a company! As to the other portal rule, you argue that as much as you like from both sides of the fence, but being a mutual membership you are entitled to have rules within your organisation. There are millions of organisations that do it. This case is turning out to be nothing more than brinkmanship …. who can afford to stay the distance. The plantiff has a lot to loose unless someone’s backing them? Answers on a postage stamp.
I agree in that this was an opportunity for a “Z backer to have a go”.
But personally I don’t think that Connells expect to win this case, instead, I suspect it’s more of an attempt to try and halt/crush Onthemarket.com before the 7500 number is achieved.
Exactly.
But what was the other option? To let it go and allow them to stop listing with OTM, if so then it would surely make a mockery of the “one other portal” rule and the whole business model.
I don’t think OTM had a choice.
I believe Thomas Flowers has hit the nail squarely on the head. I have long thought there is more to this case than meets the eye. And yes, OTM does need visible, strong, leadership. With a revised Plan. With a capital ‘P’.
Afternoon Paul H
How about still defusing this atom bomb with something along the lines of a new rule change ‘ Any acquisition of any of our members businesses by a non member business shall be looked at on an individual basis in connection to the one other portal rule.’
How many Corporate acquisitions are there each year, 50 or so?
After all, this is apparently a mutual organisation presumably for the benefit of their members.
Is the OTM board seriously suggesting that they may enforce a membership ‘rule’ that may spoil a sale of a members business to a non member who does not wish to retain OTM?
Things change, what if a member owner died or fell ill?
If not, reconsider dropping this extremely expensive case quickly on the basis of the above
The OTM board has a duty of care to act in the best interest of their members at all times.Given the above suggestion, is it really in their member agents best interest to risk around £2 million plus of their money pursuing this action?
Thomas, I agree totally OTM needs a new plan…..but I don’t think we necessarily need an ‘industry leader’ (who are they anyway?). What I think we need is somebody (or better a panel of people) who totally and utterly believes in the value of a full service good independent agent as opposed to a robotic online system built purely to make profits for owners.
I think we could make a good start looking at people who regularly comment and fight for the cause on PIE. Put yourself forward as a good start friend.
It is at this point one asks if the directors of AM were walking in the street, would you recognise them?
They groundwork has been done and they need to step up the game on three fronts. 1: Put on the running shoes and get out there and speak to those that have not joined. You are noticeable by your absence ….. or so it would seem . If you are, the message has been lost….. communication, communication, communication. 2: Need to be more high profile within the industry. The public are not bothered who is who at AM. Your customers are the estate agents and that is where you need to be focused and with more relevance as to why it is so important to join. When I last went to one of their meetings all I heard was they are cheaper than RM, as if no-one in the room didn’t already know that (all still using RM) and as we were already signed up really was a waste of time. Your roadshows should be more focused on those that haven’t joined. Having said that over 7,000 is a good start but the ones you haven’t got are always going to be the hardest to get. You have so much ammunition to use ……. use it. 3: Your marketing should be more about blowing the trumpet of your members ….. no holds barred, give the likes of PB, HouseSimple etc a bashing … they are doing it to your members and winning business ….. fight fire with fire, expose them for what they are and stop ***** footing around, dog eat dog.
*another word for a cat!
There is a hell of a lot of due diligence involved when buying a business.
Surely Connells would have known prior to purchase that they would be buying a company tied into a 5 year agreement and would have gone through the Agents Mutual contract with a fine tooth Combe.
They would also have taken advice from their lawyer on the matter and having read the contract must have advised that buying this company would mean that all of their existing branches would also need to advertise with Onthemarket.com.
I’m not saying that either stance is right or wrong.
Hello Paul H welcome back!
Hi Robert. Once an agent always an agent 😉
When otm came to me, I asked what if I go bankrupt,close or sell my business? what then happens to our agreement?
They said,the contract becomes void! so why are we here!!
Although there has not been a change of name to these indipendants there is a change of owner, one that didn’t sign the contract but did buy the business knowing of the signed contract so maybe the answer is to change the name of those bought/sold agencies thus then endeth the action, surely?
Agents mutual have also failed by not allowing the ‘online only’ agents join. At the end of the day, the public have no loyalty to a website or an agent. They are only interested in where the properties are. To overtake RM, you need to have the full portfolio of all properties available – surely that is common sense.
This notion of defending position and quality of service against the onliners is an outdated line of thought. The public want choice and they will slowly learn what is the best agent for their needs from reading reviews and friends recommendations.
Some online agents probably provide quite a good service and will grow and succeed. It reminds me of the Uber v Black Cabs war going on in various cities. Uber is far cheaper and simpler and that is what it comes down to. The majority of the public are not blindly loyal, they just want to save money.
There are too many dinosaurs in this industry who can’t embrace change and evolve their business accordingly. The internet has changed the way we do business. Go with it or fail – simple!
Agents mutual reminded me of the black cabs going slow in London to protest about Uber. Change is good and necessary and we have to get used to it. Dinosaurs will become extinct.
Hilarious yet your comment gets 5 likes. Looks like the hybrids/portal reps are back on today.
Or maybe that you are one of these deluded dinosaurs without realising? FYI, I am a high street agent, but we have just evolved to offer different packages for different vendor needs. Pride comes before a fall.
Methinks not hilarious – Naysayer is talking sense – You have to adopt the ‘Shark syndrome’ – Keep moving or you’re dead!
Sorry…..
Are Gascoigne Halman defending their choice to advertise on portals of their choice or are Connells defending their choice to push one of the acquired businesses to make this case?
Has the take over deal between these two companies even completed?
I can’t see any mention of their parent company on their website, so which is it? Independent or Corporate?
Winny…….couldn’t agree more. Also only high street agents as a rule……goodbye PB and alike.
** The board and management team of Agents’ Mutual have at every stage of the company’s inception and development taken appropriate legal advice.
SOUNDS LIKE OTHERS HAVE TAKEN LEGAL ADVICE ON ANTI-COMPETITIVE PRACTICES and found quite the opposite.
Are you surprised? Quite simply you described why lawyers always grow rich. At their clients’ expense.
Just goes to show why many roll over and settle out of court. The only dishonesty here is the cost of lawyers! Its the oldest legal trick in the book, keep hitting your opponent with costs. If one was to work out the hourly rate …. you think estate agents are expensive!
So true Woodentop. If you want to go to Law over a principle you’d better make jolly sure you have very deep pockets.
The reason for using the law has nothing to do with ‘points of principle’. Lawyers rub their hands when they are instructed either on ‘a point of principle’ or ‘money doesn’t matter’.
Both sides seem to have taken legal advice and clearly the lawyers have given different opinions, the matter will be settled in due course and is going to be expensive to both parties.
To quote my Barrister:
“Don’t expect justice from a Court case… the reality is all you get is a verdict.”
Will this be having a big impact on the value or the ability of the mutual to pay back the bond debentures of the Gold members? Would be interesting if someone researched on if they considered these bonds impaired now.
It was clear from the start that AM would polarise opinion and lead to arguments between those for and against OTM.
What nobody foresaw was that the biggest argument would actually be between fellow AM members themselves.
The one other portal rule was a fatally flawed bad business decision based on the emotive will of AM supporters to take a swipe at RM. That decision back fired into an own goal when 90% of AM members dropped Z. That spurred Z into buying USwitch and the profits and cross marketing opportunities have more than replaced lost member income.
Result; both RM and Z are stronger than pre AM.
AM will never succeed with a one portal rule and all concerned need to swallow their pride and accept that.
Drop the one portal rule, let everyone come on board for £50 to make it a ‘no-brainer’ for every agent (but with a lower level membership that will be upgraded to full at a later date), major on the ‘portal for full service agents who must give a no sale no fee locally based offering’, and introduce a ‘full member’ rate card based on the average number of properties marketed (for smaller agents).
Done correctly (so that existing members realise the benefits of rapidly growing the membership and don’t feel as though they are being shafted), AM could nearly double in size over a year or so. They could go from a faltering proposition in danger of stalling and failing miserably to a progressive number two.
“What nobody foresaw was that the biggest argument would actually be between fellow AM members themselves.”
Oh, contraire. From a post by me here on EYE in 2014 here – http://www.propertyindustryeye.com/agents-mutual-threat-zoopla-tells-investors/:
‘I VERY much doubt that “the Estate Agents up and down the country… will undoubtably move as one.”
Never have: never will, I’m afraid.
But, hey – prove me wrong.’
And that certainly wasn’t the first time I’d said it. Nor will it be the last.
It’s just such a shame for the industry and its’ customers that this debacle will be the proof of the pudding from now on.
How on earth could anyone join or even be associated with this liability now?
I loved the idea and principles of AM when it first launched……but why oh why did they have to bring in the drop Rightmove or Zoopla rule.
Where I am that would have meant dropping 40% of buyer interest and enquiries. I just couldn’t do it as it wasn’t best for my vendors…..simple as that.
How many other agents did they put in the same dilemma who then decided to sit tight and make the decision at a later date.
In my opinion, it was a catastrophic mistake by AM …one that very unfortunately might cost them the ultimate prize they were after.
‘I loved the idea and principles of AM when it first launched……but why oh why did they have to bring in the drop Rightmove or Zoopla rule.’
That WAS the “idea and principles of AM”.
“Where I am that would have meant dropping 40% of buyer interest and enquiries.”
Really? Dropping them?
Or just getting them from somewhere else?
Problem is – you’ll never know the answer to that one.
We do know the answer…
Less potential business that was never going to be even nearly replaced by AM.
The only idea they had was trying to reduce the agents membership fees by dropping one of the two key players in the portal world.
Two businesses that have become household brands and very difficult to even come close to competing with.
99% of consumers don’t know who OTM even are. No consumer no business… Simple
“99% of consumers don’t know who OTM even are.”
Prove it.
Oh – you can’t.
So it’s basically ********. Complete, unadulterated ******** at that.
WOW! A ‘hybrid Agent’ talking utter b011ocks – who would have ever thought it?
What ‘did’ you for me by the way (one of your first posts) was the second you used ‘consumers’ in your Christmas-paper argument.
At least it can’t be said again that you’ve lost the plot – You’ve made it clear as crystal you never had a Scooby where it was in the first place.
All things being equal AM members have about 32% of consumers on their registers as vendors and I would guess the very large % of serious applicants are registered with them. If agents are doing their job properly there is no need to be sat around waiting for some portaljuggled listing to generate an inquiry from the internet.
Even someone really stupid or with no understanding of key stage 3 maths would hesitate to claim 99% as a credible statistic.
Loosen your 3 piece pinstripe for a few minutes and have a little think…
Their strategy was all wrong. They lured agents in with cheap membership fees. Advising that you could use a new portal in your marketing against competitors. Using high street agent windows as advertisement. Keeping up with the cost of huge TV campaigns was never going to happen. Because they couldn’t get the memberships they
Because they couldn’t get the memberships they needed to keep up with funding.
The little that they have is now being spent to prove a point.
How did they expect to win any form of audience without marketing.
Agents now realise they would have been better off sticking to consumer habits.
‘Agents now realise they would have been better off sticking to consumer habits.’
If you’d said that 20something years ago, then the worldwide web (look it up – completely acceptable to use this terminology regardless of age…) would never have been the place where buyers or tenants (you refer to them as ‘consumers’) had a chance to search for properties.
Not that you’d have a Scooby what those times were like, of course.
Wouldn’t have expected such a backward-thinking and narrow-minded opinion from one whose middle names seems to be ‘Embrace’ and ‘Change’…
“They lured agents in with cheap membership fees.”
No, they didn’t. In the main, they were a more expensive option to Agents than Zoopla was,
Do you actually know anything about the subject you want to appear to be knowledgeable enough to comment on?
Or are you sticking to unadulterated ******** and falsifications to make a point of sorts – as is common within your sector of the industry?
Err according to PB there are only 300 towns in the UK. OTM has over 7,000 offices promoting them …. where do you live if you think 99% of consumers haven’t heard of OTM? You do talk some nonsense. I thought you were tech savvy or does that actually mean you don’t go outside into the real world, but play on your PlayStation all day?
How many of the 7000 offices are multi branch independants?
PeeBee….I respect your opinion , but I did my homework whilst considering. I am a small agent working pretty much exclusively in one postcode. In this postcode at the moment there are listed for sale (including SSTC);
Rightmove – 297 Properties
Zoopla – 313 Properties (yes seriously….more than rightmove)
On The Market – 35 Properties
Of the properties on ‘On The Market’ every single one is listed by an agent from outside the area.
All the agents local to the area either use zoopla, rightmove or both. The local population use zoopla as much as rightmove and our leads are probably fairly evenly split between the two. This is why it was a real dilema for me.
I desperately want OTM to succeed, but as a small agent in a decreasing listings scenario , I can’t take the risk of swopping to them at the moment. One of my local competitors went on OTM for nearly a year and has now dropped them.
Maybe my scenario is really unusual, but I wonder how many other agents are in the same position as me. If OTM dropped the one other portal rule and offered me a good rate until I had more listings again….I would sign up tomorrow. I still want them to succeed…badly….but I have to put what is best for my vendors (rather than what is best for me) first. That’s just the way I am.
OTM should think carefully about where they go from here. They need people like me to join them, whilst not feeling I am doing it at the expense of what is best for my customers.
AgentV
Without giving too much away – roughly how many properties do you currently have instructions on? For the purposes of this exercise let’s say to the nearest multiplier of 20.
Same question – but this time what about the Agent which is the Independent ‘market leader’ in your postcode? (apologies if this is already you – but your post didn’t give that impression…)
Seems to me that if AM lose this case it is ‘Goodnight OTM’.
However, if they win…
They can’t win, this a Stag rut sacrificing cash and the future of the project simply to win a point of principle that was created by a do anything, say anything, sign em up sales team.
Gold membership worked out to about £24,000 for the 5 years of the contract per branch, discounted by 25% for the larger groups.
Spending the equivalent of 83 branch subscriptions to make nothing more than example of 50 branches isn’t economic, it is not and never was anything other than a lose, lose situation that should have been resolved before it ever came to handing wads of cash to the legal system
The best thing now is to make AM so strong the 50 agents involved want to come back and are allowed back.
Just for the maths , if another 3,333 sign up for a year at £50 you’ve covered your legal bill …… Nice move Springers
I reckon you need to double that sign up number Danny, just to cover the cost of administrating all those new agents (margins must be tiny at £50). Chuck in the cost of funds and opportunity costs and this is one massive headache for OTM that they could solve very easily by removing the one other portal rule.
Talk about cutting off your nose to spite your face.
Allow me to correct your last paragraph:
“Talk about sticking to your side of a Contract.”
Thank you PeeBee for making the only relevant observation on this entire comments section so far!
It’s about a contract and absolutely nothing else. It should however serve to demonstrate to any other to the remaining reasonable size agents that might be on Connells shopping list, about how they view contracts. I had them sending to my inbox just the other month….delete.
You do know that contracts usually have obligations on both sides Peewee, right?
Peewee! Oh – someone award this guy/gal/whatever 10 out of 10 million for originality!
Show me what breaches of CONTRACT that AM are supposedly to have made.
That’s the beauty of Internet forums my angry friend – I don’t need to show you anything!
Someone is prepared to bet £2m a contract has been breached though!
“That’s the beauty of Internet forums my angry friend – I don’t need to show you anything!”
Oh – don’t worry – most people are well aware that smoke; mirrors and damn lies such as yours litter the internet.
Angry? Me?
You’ve got me confused with someone else. I’m laughing my rocks off at your efforts to ‘disrupt’.
So you see a beautiful off plan 3 bed semi and sign a contract off plan for it . You turn up and the walls are made from cheese and the south facing garden is in fact a bog … because they have delivered your cheese house and the type of walls used was not specified in the contract you have legal repeal ?
Buyer would have had a survey and also being new build covered under NHBC.
Its called due-diligence, same as any member of OTM should have performed.
I am a member, am i happy on how it is being run at the moment? No.
Am i going to break my contract? No.
If anything needs to be sorted its direction and leadership not the cancelling of contracts.
You DO know what information has to be supplied, by Law, to the purchaser of a new home by the builder or their Agent, don’t you, danny?
Actually, scrub that. Clearly you don’t.
Do yourself a favour – ask someone who knows; ask someone else who knows (for confirmation) – THEN risk comment… instead of making an uber-prat out of yourself straightaway.
Eh? This case isn’t about breach of contract it’s about OTM’s one other portal rule being against the law. That means you shouldn’t have the clause in the contract in the first place. You can put it in if you like but it will be ignored by any judge it if you ever go to court on that contract making it legally pointless.
First the court needs to establish that it is against the law, that’s what this case is about. If it’s found against AM the one other portal rule is dead for everyone.
If you’re wondering why the law sticks its nose into contracts between two parties in a free country its to stop clauses that the law considers unhealthy to the country (in this case I understand its the Competition Act 1998).
You can properly sign, seal and witness a legally drawn up contract for ownership of a tenants first born as rent if you like. Just don’t expect the courts to uphold it (and expect to go to jail) even if there’s no breach.
Anyway, that’s enough lawyering for one day. I’m off to the Whitehall boozer with the other beaks.
There is a lot of, it suits me to read it this way or that, depending on what side of the fence you sit, however it is in the wording and the use of that wording of the contract that is being contested and not just keeping to a signed contract but if it suits you to believe that then play on.
I understand both sides of the argument but please lets not kid ourselves, one side wants to grow and because there are less fish in the water otm have to use more attractive bait whereas the other side wants to leave (pure and simple and not only because of failure to deliver the service promised) so they are looking for loopholes such as bad faith,misuse of wording or an actual breach of the contract like allowing agents a cheaper fee than the founders and those that followed shortly thereafter but please don’t throw into opponents faces “sticking to your side of the contract” as clearly otm can be accused of the same.
So which one of the non core group AM member has got enough fortitude and confidence to say enough is enough? The affinity group of agents is suffering because of the desire to force a weak product into success. That should not be allowed to happen
Propertylive 1, 2 and 3 ought to be enough hindsight to show that going down the portal route is doomed to failure and something different is needed.
Agent’s Mutual is a one agent one vote affinity group, blowing so much cash defending a low tide, sand spit, breachhead is headed for the inevitable and it is likely to take AM with it.
Lol to all those that thought they were starting a revolution for no reason, by joining onthemarket. What a flop!
Not only does this post portray you as a pre-pubescent – but as a severely dysfunctional one at that.
We now all picture you with your thumbs in your ears, wiggling your fingers and sticking your tongue out.
The only thing that is missing (due probably to not knowing how to spell it…) is your finishing the post with “Nurrr nurr ne nurr nurrrrr”
Technically ONtheMarket did what it set out to do,,,lauch and survive.
Its the kill Rightmove bit i dont understand which has totally failed.
Even the staff of onthemarekt were all X Rightmove employees.
Onthemarket is a success…its the spineless agents using it that are the problem.
And while your all arguing, Rightmove are making Purplebricks stronger by letting the list ‘upfront’ business model.
Pull your selves together and as a UNION strick against RIGHMOVE – Go on just do it till December 2016 and see what happens.
We need someone who all agents will listen to though……
any ideas?