Hi, here is an extract of my letter to Egg on this subject, citing a helpful authority, which I have also added to Yasmin's thread. Typically, Egg has not replied and frustratingly, I got bounced away from Egg's Mr Murphy to the hopeless customer team in Derby. Do let me know whether anyone else has come across this Swayne decision: Thank you for your letter dated xx 2007, received on xx. I note that you merely repeat the offer previously put to me by Mr Murphy of your Legal Team and you reject my counter-offer. Removal of Default Entries The reason given for refusing to remove the relevant default entries on my credit file is your purported obligation “to provide credit reference agencies with a consistent reflection of our customers’ credit standing.” What is the source of this claimed obligation? With respect, I dealt at some length with that point in my letter to Mr Murphy dated xx 2007 (copy attached) and you have not specifically replied. Your primary statutory obligations are to the consumer, not to credit reference agencies. The Impact of the Woodchester Case My position is supported by Court of Appeal authority, namely, Woodchester Lease Management Services –v- Swayne & Co (1999 1 WLR 263.) This case is clearly against you. I refer you to the following passages from Lord Justice Kennedy’s judgment: “This statute [i.e. the Consumer Credit Act] was plainly enacted to protect consumers, most of whom are likely to be individuals. When contracting with a large financial organisation they are at a disadvantage. The contract is likely to be in standard form and relatively complex with a number of detailed provisions. If [the consumer] is said to have broken its terms, [the consumer] needs to know precisely what he or she is said to have done wrong and what he or she needs to do to put matters right. The lender has the ability and resources to give that information with precision. If he does not do so accurately then he cannot take … ‘the next step’. That, as it seems to me, is the scheme of the legislation. It would be frustrated if the [default] notice could claim that in order to put matters right [the consumer] must pay a sum far in excess of the amount in fact owing and yet constitute a valid [default] notice. It is all very well to say that [a consumer] can seek advice on receipt of a [default] notice but [a consumer] has very little time in which to do so. It may be as little as seven days. He may not appreciate that the large sum set out in the [default] notice is inaccurately calculated and plain wrong. It may be, perhaps because of earlier defaults on his part or the incidence of interest, not at all easy to calculate what in fact is owing and [the consumer] may, thus, be misled into believing that the sum set out in the [default] notice is right. He may even be frightened by that belief.” The default notice in the Woodchester case was found by the Court to be invalid. These same principles apply to my case because: 1. The sums set out in the default notices served upon me by Egg were inaccurate. Those amounts were made up, in part, of course, by your charges; 2. If the Court in our case rules that the charges were indeed unlawful, the ‘true’ amount of the debt owing – as at the date of issue of the default notices – was, in fact, considerably less than the figures shown on the face of your notices, as served; 3. Accordingly, as the consumer, I was misled in exactly the way described by the Judge in Woodchester. Your default notices (leading ultimately to the default entries on my credit file) are invalid and if this matter has to be litigated, I shall seek a declaration to that effect. I appreciate that these are legalistic arguments and in the circumstances, it is perhaps better that the issues be litigated out and that I deal with your lawyers going forward. Issuing Proceedings What I propose to do is to issue proceedings within 14 days, unless you can tell me that you are prepared to re-consider my proposals. In my view, my offer represented a very fair and reasonable compromise. After all, the effect will still have been that my credit standing is adversely affected for a period of 3 years. This ought to give you assurance that this position has been conveyed to other lenders. Also, I repeat the comments from my xx letter about confidentiality and ‘precedent-setting.’ In all the circumstances, it seems to me that this is a good settlement for Egg to enter into and I am at a loss to understand your reluctance. I look forward to hearing from you. I reserve the right to refer a copy of this letter to the Court when considering any issue of costs and conduct that arises pursuant to CPR 44.3 or CPR 27.14 (2)(d). Yours sincerely

Yasmin, I wondered whether the following might yet be helpful in your dealings with Egg. I recall that, in your case, the Judge recognised that he did not have jurisdiction to compel the lender to remove the default entry (and this seems to be a common obstacle in these sorts of actions.) I had picked up on the following authority, which I think could be used effectively against Egg's lawyers and perhaps attract the eye of the Judge. Here is an extract of my letter to Egg's Ema Clayton, which, typically, has drawn no reply. Hope you find it useful! Thank you for your letter dated xx 2007, received on xx. I note that you merely repeat the offer previously put to me by Mr Murphy of your Legal Team and you reject my counter-offer. Removal of Default Entries The reason given for refusing to remove the relevant default entries on my credit file is your purported obligation “to provide credit reference agencies with a consistent reflection of our customers’ credit standing.” What is the source of this claimed obligation? With respect, I dealt at some length with that point in my letter to Mr Murphy dated xx (copy attached) and you have not specifically replied. Your primary statutory obligations are to the consumer, not to credit reference agencies. The Impact of the Woodchester Case My position is supported by Court of Appeal authority, namely, Woodchester Lease Management Services –v- Swayne & Co (1999 1 WLR 263.) This case is clearly against you. I refer you to the following passages from Lord Justice Kennedy’s judgment: “This statute [i.e. the Consumer Credit Act] was plainly enacted to protect consumers, most of whom are likely to be individuals. When contracting with a large financial organisation they are at a disadvantage. The contract is likely to be in standard form and relatively complex with a number of detailed provisions. If [the consumer] is said to have broken its terms, [the consumer] needs to know precisely what he or she is said to have done wrong and what he or she needs to do to put matters right. The lender has the ability and resources to give that information with precision. If he does not do so accurately then he cannot take … ‘the next step’. That, as it seems to me, is the scheme of the legislation. It would be frustrated if the [default] notice could claim that in order to put matters right [the consumer] must pay a sum far in excess of the amount in fact owing and yet constitute a valid [default] notice. It is all very well to say that [a consumer] can seek advice on receipt of a [default] notice but [a consumer] has very little time in which to do so. It may be as little as seven days. He may not appreciate that the large sum set out in the [default] notice is inaccurately calculated and plain wrong. It may be, perhaps because of earlier defaults on his part or the incidence of interest, not at all easy to calculate what in fact is owing and [the consumer] may, thus, be misled into believing that the sum set out in the [default] notice is right. He may even be frightened by that belief.” The default notice in the Woodchester case was found by the Court to be invalid. These same principles apply to my case because: 1. The sums set out in the default notices served upon me by Egg were inaccurate. Those amounts were made up, in part, of course, by your charges; 2. If the Court in our case rules that the charges were indeed unlawful, the ‘true’ amount of the debt owing – as at the date of issue of the default notices – was, in fact, considerably less than the figures shown on the face of your notices, as served; 3. Accordingly, as the consumer, I was misled in exactly the way described by the Judge in Woodchester. Your default notices (leading ultimately to the default entries on my credit file) are invalid and if this matter has to be litigated, I shall seek a declaration to that effect. I appreciate that these are legalistic arguments and in the circumstances, it is perhaps better that the issues be litigated out and that I deal with your lawyers going forward. Issuing Proceedings What I propose to do is to issue proceedings within 14 days, unless you can tell me that you are prepared to re-consider my proposals. In my view, my offer represented a very fair and reasonable compromise. After all, the effect will still have been that my credit standing is adversely affected for a period of 3 years. This ought to give you assurance that this position has been conveyed to other lenders. Also, I repeat the comments from my xx letter about confidentiality and ‘precedent-setting.’ In all the circumstances, it seems to me that this is a good settlement for Egg to enter into and I am at a loss to understand your reluctance. I look forward to hearing from you. I reserve the right to refer a copy of this letter to the Court when considering any issue of costs and conduct that arises pursuant to CPR 44.3 or CPR 27.14 (2)(d). Yours sincerely

Yep, I think this element should feature in our argument. The monthly fee is expressly described as a service charge and that rather informs how we should interpret the remaining suite of charges, which are not so described!

Agreed, Gladstanes, these are exactly the lines we need to be thinking along and developing now.

I agree with all that rbrears says but the attack on the service / 'no breach' defence needs to be more pointed, in my view. The Judge's 'no prohibition' analysis seems quite well reasoned: quite difficult to dent, I think, where a borrower's notional or automatic requests to extend borrowing are considered by the Bank and then approved. It is certainly arguable that - as the Judge ruled - this sequence of events can take place without either party breaking the contract, strictly speaking. So, if these events do not amount to a breach of contract, they must amount to charges for services rendered? Erm no ... For me, the reasoning falls down in relation to unpaid item charges. Where, say, a DD request is presented for payment, but declined, there can be no element of 'service' to the customer in that. The essence of 'service' (and the justification for a charge) is that the customer derives some benefit from the work undertaken by the Bank. Presumably, the Bank and this District Judge take the view that there is an element of service merely in the Bank being asked and in considering (albeit ultimately declining) such a request! Pah! I do wonder if, on legal authorities, there can be any middle ground between an out and out breach of contract on the one hand and a provision of service (to the customer) on the other? Any thoughts? I also find it remarkable that this District Judge took it upon himself to undertake an 'examining magistrate' role to the extent he did. What's more: 1. Judges 'hunting on the internet' for evidence must be unprecedented; 2. The underlying legal principles aside, I am at a loss as to why the Bank's failure to appear was treated so casually. Most District Judges would regard such high-handedness as a hanging offence.

yep, sounds like stalling tactic to me. Have you already filed your AQ? I don't see why allocation needs to be held up by a Pt 18 request. The reality of the matter, of course, is that Cobbetts and RBS very well understand the nature of the claim that you are making by virtue of the raft of cases of this sort that they are receiving. Accordingly, I doubt that any District Judge (on allocation or otherwise) would be impressed by this tactic!

The unlawful charges plus contractual interest combines to amount to your essential damages claim ("your Claim Total".) After issuing proceedings, you are entitled to statutory s.69 interest applied to your Claim Total, from date of issue until date of judgment or settlement.

Be poised to file your request for judgment in default of acknowledgment of service (but only after the expiry of the 14 days.) I don't think Cobbetts are quite as efficient where Claimants are using their local courts rather than MCOL.

A bit of brinkmanship is called for here. Cobbetts will not want to go to the cost of preparing for the hearing. I suggest that you take some steps to raise the profile of the forthcoming hearing, just as a reminder (to them) that it's fairly soon! I'd try writing to Cobbets with an index of the documents that you intend to refer to or rely upon at the hearing and asking for their agreement. You should also give them the opportunity to add in any items that they want to refer to. The Courts tend to like this kind of co-operative approach: it is much easier to refer to one centralised, agreed, paginated bundle. Of course, tactically, your aim is to show that you're up for the hearing and that you have some conviction in your case. Push your case up their agenda. That's your best shot at squeezing out an improved offer. Weren't any directions re filing of docs specified on the Court Notice of Hearing? That's definitely your final hearing date, is it, rather than an Allocation Hearing or Notice of a CMC??

Yep, me too. I got the same letter today from Sandy Watt, re my LBA dated 6 Dec 06. Am concerned that this is part of the RBS' senior management directive to 'hold' all these cases, pending their taking a global policy view about what to do!

I'm on the same kind of time track as you. Getting concerned now as I've had no acknowledgment at all to my LBA (sent on 6 Dec 06, stipulating a 14 day reply period.) Does anyone have a fax number or valid email address for the RBS Customer Relations Unit in Edinburgh?

Empire, could I ask what particular County Court you are in? It sounds to me like the District Judge "bottled it" -- also, the reference to some kind of test case scheme being co-ordinated sounds more hopeful than definite. If there are no specific plans afoot, then that might be grounds for you to apply to set aside this Order and press on with the matter individually. Alternatively, you could apply to transfer the action to another County Court where you know they are prepared to list matters for final hearing. NK

Hmmm, I don't think that the business / consumer relationship precludes their entitlement, in principle, to damages for breach of contract. A charge of, say, 50p would not be a penalty if it equates to the Bank's actual costs consequent upon the consumer's breach.

Glenn, I like your thinking on this. It cannot be reasonable to quantify charging levels for Customer A's breach by reference to what Customers B to Z are expected to do. We could do with some case law to support this. I'll have a hunt. I hear what you say about the penalty nature of the clause. However, if Egg can show that the pre-estimate was genuine and reasonable and consistent in some way with actual cost incurred, then it will not be a penalty in law and will be enforceable.

I think it's sensible for us to start trying to counter this defence from Egg. They are the only institution, as far as I know, to present some kind of 'science' behind their formulation of the charges. To my mind, we need to be attacking the global nature of this formulation. Why is it appropriate to look at the pattern of all Egg's customers when making the pre-estimate. On the legal authorities, it should only be the actual cost of the individual Claimant-customer's breach that matters. My fear is that a District Judge on the small claims track might well be persuaded that there is some merit to this defence, superficially. By reference to decided cases, is there anything we can say about the validity of global pre-estimating?