Particulars of Claim
The Defendant is a well-known commercial bank with branches throughout the United Kingdom.
The Claimant has/had an account, number 12345678 (“the Account”), maintained at the Defendant’s xx Branch (sort code 11-22-33) The account was opened on or around September 1994. The Account is governed by the Defendant’s Personal Banking Terms and Conditions (‘the contract’)
From September 1995 to September 2001, the Claimant’s entire income was derived from Income Support and Child Benefit paid by the Department of Work and Pensions and Child Tax Credit paid by HM Revenue and Customs. This money does not belong to the Claimant but is public money to be spent on the basic needs of the Claimant and the Claimant’s family.
During the period in which the Account has been operating the Defendant has debited numerous charges to the Account in respect of purported breaches of contract in regards to "exceeded
overdraft
limit", ‘Overdraft Usage Fee’, ‘Unpaid Items’, ‘Charges Capitalised’, etc. on the part of the Claimant and also charged overdraft interest on these charges once they were applied.
The Claimant understands that the Defendant contends that the charges were debited in accordance with the terms of the contract between itself and the Claimant.
A schedule of the charges is attached to these particulars of claim.
Action to date
The Claimant was only able to obtain complete details of the Charges by virtue of a
Subject access request, served upon the Defendant, pursuant to s7 Data Protection let 1998. The cost for said request was £10.00 and the date whereof was 1st June 2007
The Defendant subsequently denied the availability of the information on several occasions, claiming i) its deletion from computer records after
6 years of age; ii) £5 per page of information. Only upon the third written request did the defendant provide all the requested information
On 29th June 2007 the Claimant sent a letter to the Defendant asking for a refund of the Charges. In said letter the Claimant made various assertions and arguments to substantiate her request, quoting relevant sources of law and evidence. Claimant concluded therein that the Charges were unlawfully levied to the account by the Defendant.
The Claimant subsequently received a letter from the Defendant, dated 9 July 2007. Therein the Defendant, informed the Claimant that the Charges would not be refunded. Further, the Defendant averred that the Charges were ‘fair, reasonable and transparent’ and were provided for by the Defendant’s ‘published tariff’ which, it claimed, complied ‘with all applicable laws and regulations’. Unfortunately, the Defendant, was unable to provide any legal and/or factual basis for its assertions.
A
letter before action was sent on 17th July 2007 on the Defendant. The Claimant received a letter from the Defendant, dated 18 July, giving its ‘final response’ to the claim, offering a partial refund of inter alia the Charges, to the Claimant.
In a final letter before action dated 18th August, claimant highlighted said charges were taken from Social Security Benefit, namely Income Support and Child Benefit, against s187 Social Security Administration Act 1992. Defendant denies that this law applies to banking charges and fees.
Claimant notes that the Defendant, to date, has made no attempt whatsoever to present a competent defence to the Claimant’s claim.
Brief Outline of Claim
Claimant as part of her basis of claim, advances that:
the charges debited to the Account and detailed in the Schedule constitute assignment by the Defendant and to the Defendant of moneys paid to the Claimant in state benefits and are therefore unlawful by virtue of s187 Social Security Administration Act 1992 regarding Income Support and Child Benefit.
the Charges have been unlawfully applied to the Account;
no contract ever existed between the parties hereto that purports to allow the Defendant to levy the Charges to the Account.
should such a contract exist it could only exist in the form of the Terms & Conditions.
only if this court, being of competent jurisdiction, should find that such a contract existed between the parties hereto then the Charges are penalties relating to a breach of contract and hence irrecoverable as set out hereinafter.
only if this court, being of competent jurisdiction, finds that the Charges are remuneration to the Defendant for services provided then they are irrecoverable due to inter alia the fact that the terms, if any, which provide for the Charges are unfair and the Charges themselves are unreasonable.
In support of part of his basis of claim the Claimant contends, and intends to prove
a) that the Charges are:
punitive in nature;
unreasonable;
generally disproportionate;
excessive;
unfair;
unlawful;
not a genuine pre-estimate of loss incurred by the Defendant in respect of any alleged breaches of contract on the part of the Claimant;
exceed any alleged actual loss to the Defendant in respect of any alleged breaches of contract on the part of the Claimant;
not intended to represent or related to any alleged actual loss in respect of any alleged breaches of contract on the part of the Claimant, but instead unduly enrich the Defendant which conducts its regime of charging with a view to profit;
not intended to bear any relation to the Defendant’s actual losses which it can show it has incurred and would not have incurred but for any alleged breaches of contract on behalf of the Claimant; and
are held in in terrorem to discourage the Claimant from presenting items on the Account for payment where there are insufficient funds to cover such payment of said item.
b) all contractual provision(s), if any, between the parties hereto, which purport to permit the Defendant to levy the Charges to the Account, are unenforceable by virtue of:
i. the UTCCR;
ii. the Unfair Contract Terms Act /977 (hereinafter referred to as the ‘UCTA’)
iii. the Supply of Goods and Services Act 1982; and
iv. the common law; and
c). the processes involved in processing unarranged overdrafts, unpaid items, referrals, etc are entirely, or else almost entirely, automated.
UNFAIR TERMS IN CONSUMER CONTRACT REGULATIONS (S 2083/1999)
Any contract between the parties hereto falls within the ambit of Regulation 5 of the UTCCR as the Claimant could only be a consumer, within the meaning of the UTCCR, in relation to any contract between the parties hereto.
Regulation 5(l) of the UTCCR provides as follows: “A contractual term which has not been individually negotiated shall he regarded as unfair if contrary to the requirement of good faith, it causes a sign unbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.”
Paragraph 1 to Schedule 2 of the UTCCR includes all “terms which have the object or effect of requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation as being part of a indicative and non-exhaustive list of terms which maybe regarded as unfair” (Regulation 5(5) UTCCR).
Paragraph 1(k) to Schedule 2 of the UTCCR includes all “terms which have the object or effect of enabling the seller or supplier to alter unilaterally without a valid reason any characteristics of the product or service to be provided” as being part of the “indicative and non-exhaustive list of terms which may he regarded as unfair”. The Terms & Conditions allow the Defendant to unilaterally alter the charges applied for ‘Unarranged Overdrafts’, ‘Unpaid Item(s)’ and ‘Referral Charges’
Regulation 8(l) of the UTCCR provides that: ‘1n unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer.’
Accordingly, the Charges being disproportionate and punitive, any term of contract purporting to allow the Defendant to levy the Charges is deemed to be unfair and unenforceable by virtue of Regulations 5(l), 5(5) and 8(I), and paragraphs 1(e) and 1(k) of Schedule 2, all of the UTCCR.
UNFAIR CONTRACT TERMS ACT 1977
Any term of contract between the parties hereto purporting to entitle Defendant to levy the Charges to the Account is unenforceable by virtue of s4 UCTA. In this eventuality the Claimant is entitled to judgement as sought in paragraph 15 of these particulars.
Specifically, any such term would represent an indemnity clause in a contract where one of the parties deals as a consumer. Consequently such a term would be unenforceable as it would be unreasonable.
Under s 1 of the UCTA the requirement of reasonableness is that ‘the term shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made.’
THE OFT
The Claimant also relies on the Office of Fair Trading’s (‘the OFT‘) statement of 5th April 2006 concerning default charges in credit card contracts, as the OFT’s recommendations regarding standard default terms in credit card contracts have wider implications, as regards bank current Account agreements.
Further to a), the charges debited to the Account constitute contractual penalties rather than liquidated damages. A charge is held to be a penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison to the greatest loss that could conceivably be proved to have followed from the contractual breach. A penalty clause is void in its entirety and unenforceable.
If the Court finds that the charges are not a penalty, then the Claimant contends that they are unreasonable within the meaning of s.15 Supply of Goods and Services Act 1982.
The Limitation Act 1980
The Claimant seeks permission to proceed with the claim under section 32 (1)(b) Limitation Act 1980 on the grounds that the Claimant could not reasonably have discovered the Defendant’s deliberate concealment of the facts relevant to the Claimant’s right of action before the OFT’s report was published on 5th April 2006. The facts relevant to the Claimant’s right of action are that the Defendant is unjustly enriched by exercising the contractual terms in respect of default charges with a view to profit. If the Defendant has elected to present its charges as if they were a legitimate loss or cost, whilst it is in actual fact profiting in a material sense from the charges, the Defendant can be seen to have been operating without Accountability to its customers, and to have consciously concealed the facts. The Defendant is clearly in a privileged position to have a direct means of withdrawing monies from the Claimant’s bank Account. The Claimant is entitled to know whether the charges paid represent a justifiable business cost, or whether they are in fact a penalty, and to expect that the Defendant will always conduct itself with integrity. The defendant has repeatedly denied requests for a detailed breakdown on the said charges.
In the alternative to 19.a), the Claimant seeks permission to proceed with the claim under s.32 (1)(c) Limitation Act 1980 on the grounds that the payments were conceded on the mistaken presumption that the said charges and interest thereon did not amount to penalties - Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349 - and that the Claimant could not reasonably have discovered the said mistakes before the report of the OFT was published on 5th April, 2006.
Interest
The claimant contends that this aspect of his claim should not be determined until there has been a judicial ruling on the lawfulness of the defendant’s charges. The claimant acknowledges that the terms of the contract only provide for the defendant to charge and receive compound interest on monies the claimant borrows from the defendant. The claimant’s case for claiming interest at the rate applied by the defendant to the claimant’s borrowing, is based in equity and a legal requirement for fairness and balance:
When entering into the contract with the defendant, the claimant had no reason to anticipate that the defendant, having a long-established reputation in the banking industry, would make unlawful deductions from his account. Had this been a foreseeable event, the claimant might well have taken a different view about whether to agree to a contract which did not provide the claimant with a mutual right to charge the defendant interest in the event that monies were wrongly taken from his account, over a considerable number of years, thus producing a false picture of the claimant’s indebtedness to the defendant over the entire period covered by the claim, and unjustly enriching the defendant at the same time.
The claimant’s case is not that the contract should provide for the claimant to be entitled to charge interest at the rate which the defendant reserves for itself in the ordinary everyday course of dealings. The claimant is inviting the court to award interest and therefore compensate the claimant at the same rate that the defendant deems fair compensation for allowing the claimant to use its money, given that the defendant’s withdrawals from the claimant’s account were unlawful, and given that unlawful withdrawals were unforeseeable at the time of the entering into the contract.
If the defendant avers that its charges are fair, reasonable and therefore enforceable, its remedy will be to provide evidence of its actual losses or pre-estimate of costs in relation to the claimant’s account breaches. Since the defendant has been invited to do so prior to the issue of court proceedings, and has refused, and since the claimant is aware that the defendant has failed to defend any other similar claim at trial, the claimant deems the defendant’s charges to the account to be indefensible, and unenforceable at law. It was clearly not in the claimant’s contemplation when entering into the contract, that the claimant would authorise the defendant to apply penalty charges to the account, or to profit in an unlawful manner from the claimant’s account breaches.
It should also be noted that the claimant had no bargaining power to determine the terms of the contract and as all banks trade in similar terms, the claimant had no effective choice in the matter.
The claimant’s claim for compound interest should be viewed in the in the context of the claim rather than in isolation, and with full regard for the seriousness of the defendant’s misdemeanours which have led to the defendant profiting unlawfully from the claimant’s account defaults. It is entirely inequitable that the defendant should have deprived the claimant of the use of his monies for this length of time without repaying it with interest at the rate which it charges the claimant in equivalent circumstances; monies which it is in the business of re-lending at the same commercial rate of interest and which will only restore the defendant to the position where it had not received any benefit from having had use of the claimant’s money.
DETAILS OF JUDGEMENT SOUGHT BY CLAIMANT
Accordingly the Claimant seeks:
The return of the amounts debited between 16th September 1995 and 22nd September 2001 in respect of charges in the sum of £580.00
All applicable Court fees
Contractual interest at an annual 16.9% compounded daily from the date of each transaction to 29th June 2007 of £3297.87, and also interest at the same rate up to the date of judgment or earlier payment at a daily rate of £1.79
the return of the
Subject access request Fee, in the amount of £10.00, that the Claimant was required to pay in the perusal of this case
Costs allowed by court
Save payments into and/or determined by the Court, any sums paid in settlement of this claim are required to be made by cheque, which should be made payable to the Claimant.
The Claimant also respectfully asks the court to make an order requiring the Defendant to cease making charges in contravention of s187 of the Social Security Administration Act 1992 and s 45 of the Tax Credits Act 2002.
Chickenlicken v NPBS
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Originally Posted by Chickenlicken
