Interest on improperly executed agreements

[ncf355]

Hi all,

I appreciate unenforceable agreements have been covered at length, but I'd like to address improperly executed agreements (i.e: those that can be enforce only by a court order)

Section 65 states the consequence of improper execution as being the creditor may not enforce the agreement without a court order

Now, do we take that to include the charging of interest and if so, is their case law to support this?


Thanks

NcF

[reallymadwoman]

I've never come across any case law on that particular subject, but then I only have access to stuff on the internet.

I would guess that it depends upon how 'enforce' is interpreted. Does enforce mean take any action at all - if so how can the creditor even apply for an order? Or does enforce mean default, take court action for recovery, write to you and ask politely?

I think that it would be down to the judge to decide and anyone who is going into court to fight that particular battle would need to have arguments prepared to cover any number of different possible scenarios - order granted and creditor can behave as if there was never a problem, order granted but interest only starts accruing from that date, and every possible variation in between.

Very interesting discussion though, particularly on the interpretation of 'enforce'. I wonder if the original author of the CCA (brain dead - can't remember name) ever gave any opinion.

[reallymadwoman]

(6) Where this subsection applies in relation to a failure to give a statement
under this section to the debtor—
(a) the creditor shall not be entitled to enforce the agreement
during the period of non-compliance;
(b) the debtor shall have no liability to pay any sum of interest to
the extent calculated by reference to the period of noncompliance
or to any part of it; and
(c) the debtor shall have no liability to pay any default sum which
(apart from this paragraph)—
(i) would have become payable during the period of noncompliance;
or
(ii) would have become payable after the end of that period
in connection with a breach of the agreement which
occurs during that period (whether or not the breach
continues after the end of that period).

Taken from CCA 2006 and may clarify matters so far as what 'enforce' means. Payment of interest seems to be separate from enforce.

[ncf355]

Nice work there RMW

Didnt realise that was in there!

[reallymadwoman]

I imagine that as the CCA 2006 was intended to amend and clarify the CCA74, then that section could be used to expand upon exactly what Parliament intended when they said a creditor could not enforce. I'm pretty sure that bit came in to force last Summer and is retrospective.

[ncf355]

This is all good stuff and exactly what I was looking for in starting this thread

Would any of our legal eagles care to add?

[BLADES65]

I would be very interested to get to the bottom of this as EGG are in default of my CCA request by not having supplied Terms & Conditions or a Statement of Account.

Since putting the account in dispute over a year ago and sending numerous letters asking for the above I have received no correspondence at all.

However the original disputed balance of £4000 has increased in 12 months to just over £6000 according to my creditexpert report. Thjis is I am assuming due to them starting to charge interest even though interest was frozen prior to my CCA request.

[reallymadwoman]

I would consider that as the CCA 2006 specifically mentions not having provided a statement, and therefore not being able to charge interest, that you can definitely challenge this. I would be very interested to hear any progress, as I don't think many people (if any) have made use of this section yet.

[ncf355]

Well,

I'll find out when I enter court in approx 5 weeks over the exact issue!

[miss muppet]

Thanks both for this really interesting thread, this was one of the things the judge brought up at my daughter's horrific set-aside hearing, when we pointed out how much had been added to the account, the judge said "well, they're entitled to do that aren't they, that's how they make their money!" so at least if this adjournment leads to another hearing we can quote that.