A 220 page introduction to all things consumer related by our own BankFodder.
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Cagger since : Mar 2006
Posts : 809 (0.21 post per day)
Re: Draft Directions
Thanks London I will read the link you have sent and appreciate it.
Thanks Citizen I have looked at the link but bascially I dont know what I am looking for. I have sent the draft directions with my aq and part of that is the statement of evidence. I cannot find anything in the templates about this.
Cagger since : Mar 2009
Posts : 422 (0.15 post per day)
Originally Posted by Notty
Can anyone help please.
HI Notty again,
I have found this a long time on the forum and I thought is going to help you. Sorry to answer so late but my PC and my network is rubish...
Anyway here it is and I hope is usefull....If it's not please let Slick know as it does come up with the answers to everything you need.
Wish you good luck and may God Bless you!!
Here it is:
IN THE XXXXXXXX county courtIN A PROPOSED ACTION
WITNESS STATEMENT OF XXXXXXXXXXXXXXXXXXX[/font]
[NAME] of [home address of individual] make this statement in support of my application for an order for pre-action disclosure against the Defendant and will state as follows:
The facts and matters referred to in this witness statement are within my own knowledge, except where I have indicated otherwise. Where the facts are within my knowledge, they are true. Where they are not within my own knowledge, they are true to the best of my information and belief. I have stated the source of my information or belief.
There is now produced and shown to me a bundle of documents marked “ABC1”. The exhibit “ABC1” contains copies of correspondance between the claimant and defendant and identifies the documents in respect of which I seek disclosure in this Application [/font]
on xxxxx i entered into an agreement with the Defendant. the agreement was for a loan of £000000 ./ Credit card . the agreement number is 00000000000 and the loan / credit card is secured upon.../ is unsecured[FONT='Verdana','sans-serif'] [/font]
The claim against the defendant
I have reasonable rounds for a cause of action against the defendant. The grounds are as follows
a) I believe that the agreement is improperly executed and not compliant with the requirements of section 61(1)(a) consumer credit Act 1974 and therefore the claimant would be entitled to seek a declaration from the court pursuant to section 142(1) Consumer Credit Act 1974[/font]
b) The loan / Credit card has payment protection insurance which I did not request, disclosure of the agreement will show this as such a policy will be incorporated within the agreement and should be clearly particularised within the agreement as required by section 18 Consumer Credit Act 1974[/font]
c) the Defendant has been levying charges which were not set out within the original agreement and therefore are not permitted by the contract
d) .................... ( add any other relevant information
Previous requests for these documents have been made on the ........... and the ............. and in this regard I refer to exhibit “ABC1”. The Defendant has failed to respond to the requests for the documents and the only way that the Claimant can now make any progress with the claim is by making this application to the court. Unless the Defendant discloses the requested documents the Claimant cannot prepare accurate pleadings. This may lead to delay or additional expense if proceedings are issued and later need to be amended once standard disclosure is given. [/font]
Part 31.16 CPR 1998- pre-action discovery[/font]
This application complies with Part 31.16 of the CPR 1998 because: [/font]
a)It is supported by evidence in the form of this statement and the exhibits attached hereto[/font]
b)The Claimant and the Defendant are likely to be parties to subsequent proceedings[/font]
c)If proceedings are started the Defendant duty by way of standard disclosure as set out in Part 31.6 CPR 1998 would extend to the requested documents. Care has been taken to identify specific documents and to explain to the Defendant which issues that particular document relates to.
d)It will allow anticipated proceedings to be fairly disposed of because a cards on the table approach will be taken by each party. Currently the Defendants have failed to do this and have ignored the Claimants requests to do so.
e)It will assist the dispute to be resolved without proceedings being necessary because once disclosure is given each party can see the strengths of their respective cases and informed negotiations may then be undertaken with the aim being to agree settlement without the need for proceedings to be issued. The Claimant does intend to put forward settlement proposals in correspondence upon disclosure of the requested documents, which may lead to the claim being settled with having to use valuable court resources.
f)It will save costs because full proceedings may not be necessary. The Claimant will not need to continue to write unnecessary letters reminding the Defendant to disclose documents. Both parties can deal with the claim more quickly and economically.
Part 31.6 CPR 1998- standard disclosure
Standard disclosure requires a party to disclose only-a
a)The documents on which he relies
]b)The documents which [/font]i)Adversely affect his own case ii)Adversely affect another party’s case
iii)Support another party’s case; and
c)The documents which he is required to disclose by a relevant practice direction.
there is no relevant practice direction here,the claimant is seeking disclosure of documents as referred to within para 10 (a)&(b)as set out above in this statement
Part 1 CPR 1998 – the over ridding objective
The application has been made with the overriding objective in mind. The Claimant has at all times tried to ensure that the overriding objective has been complied with. Due to the failure of the Defendant to give voluntary disclosure or any good reason for failing to give such disclosure this application has become necessary. The application fulfils the requirements of the overriding objective by using as little of the courts time as possible to put the parties on an equal footing in relation to the evidence that they hold and to avoid proceedings being issued unnecessarily [/font]
The documents requested go directly to heart of the claimant’s case. In accordance with the guidance given by Lord Justice Rix in Black and others v Sumitomo and others  EWCA Civ 1819 (and in particular para. 72 of his judgment) care has been taken to ensure that the disclosure request is narrow and that the documents requested are determinative of the dispute between the parties. At paragraph 88 of his judgement Rix LJ states that when determining whether to grant an application for pre-action discovery the court will consider “the nature of the injury or loss complained of; the clarity and identification of the issues raised by the complaint; the nature of the documents requested; the relevance of any protocol or pre-action inquiries; and the opportunity which the complainant has to make his case without pre-action disclosure”. These points have been repeatedly addressed through out the claimants attempts to obtain the documents which are at the heart of this application
SES Contracting Limited and others v UK Coal Plc and others  EWCA Civ 791 addressed the issue of costs in pre-action discovery applications. Lord Justice Moore-Bick decided on that occasion that both paties should bear their own costs of the application. However, both parties where commercial organizations. In the present application the Claimant is an individual seeking disclosure against a large financial institution. In SES Contracting there was no breach of a pre-action protocol. In the present case the pre-action protocol practice direction has been broken by the Defendant in that the Defendant has failed to comply with paragraphsxxxxxxxxxxxxxx IDENTIFY WHICH PRE ACTION PROTOCOLS HAVE BEEN BREACHED BY THE L:ENDERS NON COMPLIANCE. Paragraphs 2.1; 2.3 and 3.3 of the protocol invite the court to take such breaches into account when making orders for costs. An award of costs against the defendant is likely to discourage a failure to comply with the protocol in future thereby obviating the need for an application to the court. An award of costs will also satisfy paragraph 2.4 of the pre-action protocol in placing the Claimant in no worse a position than he would have been in had the protocol been complied with. Any other order would place the Claimant in a worse position due to the Defendants non-compliance.
For the reasons which I have outlined above I ask the court to grant the relief sought as detailed within the draft order
I believe that the facts stated in this witness statement are true.
To identify which practice direction pre action protocols have been infringed as per the witness statement see this link PRACTICE DIRECTION PROTOCOLS
Right, one point which must be mentioned
there needs to be a refusal from the other side to comply with your requests for information which can be clearly identified as a breach of the Pre action Protocols Practice direction
If there is a breach then you can potentially be held liable for costs of the other side in making the application and that could be huge so please please please don't go rushing in.
I have included the pre action protocols below, if you cannot identify a situation which the lender has breached below then DO NOT make the application without getting advice.
Ideally the lender will have breached 4 or 5 paragraphs of the protocols when the application is made, this adds weight to your case[/font] General 1.1
This practice direction applies to the pre-action protocols which have been approved by the Head of Civil Justice. 1.2
The pre-action protocols which have been approved are set out in para 5.1. Other pre-action protocols may subsequently be added. 1.3
Pre-action protocols outline the steps parties should take to seek information from and to provide information to each other about a prospective legal claim. 1.4[/font]
The objectives of pre-action protocols are
(1) to encourage the exchange of early and full information about the prospective legal claim,[/font]
2) to enable parties to avoid litigation by agreeing a settlement of the claim before the commencement of proceedings,[/font]
3) to support the efficient management of proceedings where litigation cannot be avoided. Compliance with Protocols 2.1[The Civil Procedure Rules enable the court to take into account compliance or non-compliance with an applicable protocol when giving directions for the management of proceedings (see CPR rules 3.1(4) and (5) and 3.9(e)) and when making orders for costs (see CPR rule 44.3(a
2.2 The court will expect all parties to have complied in substance with the terms of an approved protocol 2.3If, in the opinion of the court, non-compliance has led to the commencement of proceedings which might otherwise not have needed to be commenced, or has led to costs being incurred in the proceedings that might otherwise not have been incurred, the orders the court may make include
1) an order that the party at fault pay the costs of the proceedings, or part of those costs, of the other party or parties;[/font]
(2) an order that the party at fault pay those costs on an indemnity basis
(3) if the party at fault is a claimant in whose favour an order for the payment of damages or some specified sum is subsequently made, an order depriving that party of interest on such sum and in respect of such period as may be specified, and/or awarding interest at a lower rate than that at which interest would otherwise have been awarded;[/font]
(4) if the party at fault is a defendant and an order for the payment of damages or some specified sum is subsequently made in favour of the claimant, an order awarding interest on such sum and in respect of such period as may be specified at a higher rate, not exceeding 10% above base rate (cf. CPR rule 36.21(2), than the rate at which interest would otherwise have been awarded 2.4The court will exercise its powers under paragraphs 2.1 and 2.3 with the object of placing the innocent party in no worse a position than he would have been in if the protocol had been complied with.[/ 3.1
A claimant may be found to have failed to comply with a protocol by, for example
(a) not having provided sufficient information to the defendant, or[
(b) not having followed the procedure required by the protocol to be followed (e.g. not having followed the medical expert instruction procedure set out in the Personal Injury Protocol 3.2
A defendant may be found to have failed to comply with a protocol by, for example
a) not making a preliminary response to the letter of claim within the time fixed for that purpose by the relevant protocol (21 days under the Personal Injury Protocol, 14 days under the Clinical Negligence Protocol
(b) not making a full response within the time fixed for that purpose by the relevant protocol (3 months of the letter of claim under the Clinical Negligence Protocol, 3 months from the date of acknowledgement of the letter of claim under the Personal Injury Protocol
(c) not disclosing documents required to be disclosed by the relevant protocol 3.3
The court is likely to treat this practice direction as indicating the normal, reasonable way of dealing with disputes. If proceedings are issued and parties have not complied with this practice direction or a specific protocol, it will be for the court to decide whether sanctions should be applied.
3.4The court is not likely to be concerned with minor infringements of the practice direction or protocols. The court is likely to look at the effect of non-compliance on the other party when deciding whether to impose sanctions 3.5This practice direction does not alter the statutory time limits for starting court proceedings. A claimant is required to start proceedings within those time limits and to adhere to subsequent time limits required by the rules or ordered by the court. If proceedings are for any reason started before the parties have followed the procedures in this practice direction, the parties are encouraged to agree to apply to the court for a stay of the proceedings while they follow the practice direction Pre-action behaviour in other cases[ 4.1In cases not covered by any approved protocol, the court will expect the parties, in accordance with the overriding objective and the matters referred to in CPR 1.1(2)(a), (b) and (c), to act reasonably in exchanging information and documents relevant to the claim and generally in trying to avoid the necessity for the start of proceedings. 4.2Parties to a potential dispute should follow a reasonable procedure, suitable to their particular circumstances, which is intended to avoid litigation. The procedure should not be regarded as a prelude to inevitable litigation. It should normally include –
(a) the claimant writing to give details of the claim;[/font]
(b) the defendant acknowledging the claim letter promptly;
(c) the defendant giving within a reasonable time a detailed written response; and
d) the parties conducting genuine and reasonable negotiations with a view to settling the claim economically and without court proceedings.[/font]
4.3The claimant's letter should –
(a) give sufficient concise details to enable the recipient to understand and investigate the claim without extensive further information;
(b) enclose copies of the essential documents which the claimant relies on;
(c) ask for a prompt acknowledgement of the letter, followed by a full written response within a reasonable stated period;[/font]
(For many claims, a normal reasonable period for a full response may be one month
(d) state whether court proceedings will be issued if the full response is not received within the stated period;
(e) identify and ask for copies of any essential documents, not in his possession, which the claimant wishes to see;
(f) state (if this is so) that the claimant wishes to enter into Mediation or another alternative method of dispute resolution; and
(g) draw attention to the court's powers to impose sanctions for failure to comply with this practice direction and, if the recipient is likely to be unrepresented, enclose a copy of this practice direction. 4.4
The defendant should acknowledge the claimant's letter in writing within 21 days of receiving it. The acknowledgement should state when the defendant will give a full written response. If the time for this is longer than the period stated by the claimant, the defendant should give reasons why a longer period is needed. 4.5The defendant's full written response should as appropriate –
(a) accept the claim in whole or in part and make proposals for settlement; or(b) state that the claim is not accepted.
If the claim is accepted in part only, the response should make clear which part is accepted and which part is not accepted. 4.6
If the defendant does not accept the claim or part of it, the response should –(a) give detailed reasons why the claim is not accepted, identifying which of the claimant's contentions are accepted and which are in dispute;
(b) enclose copies of the essential documents which the defendant relies on;
(c) enclose copies of documents asked for by the claimant, or explain why they are not enclosed;
(d) identify and ask for copies of any further essential documents, not in his possession, which the defendant wishes to see; and
(The claimant should provide these within a reasonably short time or explain in writing why he is not doing so.
e) state whether the defendant is prepared to enter into mediation or another alternative method of dispute resolution 4.7The parties should consider whether some form of alternative dispute resolution procedure would be more suitable than litigation, and if so, endeavour to agree which form to adopt. Both the Claimant and Defendant may be required by the Court to provide evidence that alternative means of resolving their dispute were considered. The Courts take the view that litigation should be a last resort, and that claims should not be issued prematurely when a settlement is still actively being explored. Parties are warned that if this paragraph is not followed then the court must have regard to such conduct when determining costs;
It is not practicable in this Practice Direction to address in detail how the parties might decide which method to adopt to resolve their particular dispute. However, summarised below are some of the options for resolving disputes without litigation:
Discussion and negotiation.
Early neutral evaluation by an independent third party (for example, a lawyer experienced in that field or an individual experienced in the subject matter of the claim). [/font]
Mediation – a form of facilitated negotiation assisted by an independent neutral party.
The Legal Services Commission has published a booklet on ‘Alternatives to Court’, CLS Direct Information Leaflet 23 (Community Legal Advice Page Not Found), which lists a number of organisations that provide alternative dispute resolution services.[/font]
It is expressly recognised that no party can or should be forced to mediate or enter into any form of ADR 4.8
Documents disclosed by either party in accordance with this practice direction may not be used for any purpose other than resolving the dispute, unless the other party agrees 4.9
The resolution of some claims, but by no means all, may need help from an expert. If an expert is needed, the parties should wherever possible and to save expense engage an agreed expert. 4.10
Parties should be aware that, if the matter proceeds to litigation, the court may not allow the use of an expert's report, and that the cost of it is not always recoverable.
Got this from another thread from 2006 here Bypass microfiche defence with CPR 31.16? which talked about the same thing and asked do the rules in section 31 of CPR even apply to small claims?
Scope of this Part
(1) This Part sets out rules about the disclosure and inspection of documents.(2) This Part applies to all claims except a claim on the small claims track.
]This is also backed up in Part 27.2 (1)(b)
27.2 (1) The following Parts of these Rules do not apply to small claims -[/font]
(b) Part 31 (disclosure and inspection);
Originally Posted by tifo Got this from another thread, but do the rules in section 31 of CPR even apply
arguably yes, to bring such an action before the small claims court would be ridiculous as the SCT is not set up for such an action due to the complexity of the case which you would be bringing if disclosure had been made, you would automatically fall into the fast track and it is a point i raise in the AQ that the claim should be allocated to fast track as a minimum due to complexity issues and the specialist knowledge of the case required DD
Im happy to help with support and my own thoughts, but if I offer any thoughts to your problems please take it as from my life experience only and not of any legal standing. Always take further advice from the legal experts in your final action.
my new motto is,,,",Taking back control of your life and home - such peace is priceless"
This is all due to truecall device , have a serious peek at this you will be thankful like I am x laters angel
Cagger since : Mar 2009
Posts : 422 (0.15 post per day)
Re: Draft Directions
Originally Posted by Notty
Can anyone help please.
I am so sorry about the "verdana...sans sherif..." as it is part of the word thing....but if you remove the whole thing you will have it ok. I have removed as much as I could by editing it but you will be ok if you copy into word and then take out the sans sherif... again it needs to be trimmed to your case accordingly...
All the best and as I have said earlier, do please ask Slick. and Vint as they are def. more advanced in this....
God bless. DD
Cagger since : Mar 2009
Posts : 422 (0.15 post per day)
Re: Draft Directions
I think I have found what you were looking for.....
STATEMENT OF EVIDENCE _______________________
1. The Claimant submits that the charges levied to his bank account, as set out in the enclosed schedule, are, notwithstanding the defence of the defendant, penalty charges arising from and relating directly to breaches of contract, both explicit and implied, on the part of the claimant. As a contractual penalty, the charges are unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations 1999, the Unfair Contracts (Terms) Act 1977, and the common law.[/font]
2. It is admitted that the Defendants charges were levied in accordance with the terms and conditions of the account in question. However, it is submitted that the Defendants charges are not related to or intended to represent any actual loss arising from a breach of contract, but instead unduly enrich the Defendant which, by virtue of the legislation cited in paragraph 10 above, exercises the contractual term in respect of such charges with a view to profit.
3. The Defendant avers that the charges levied are legitimate fixed price contractual services, unrelated to breaches of contract, which are therefore not required to be a pre-estimate of loss incurred on the part of the defendant. The Claimant further submits that this contention is merely an attempt to ‘cloak’, or disguise, their penalties in order to circumvent the common law and statutory prohibition of default penalty charges with view to a profit.[/font]
]4. The Claimant believes the definition of a 'service' to be a provision of knowledge, skill or other transferable facility that benefits the consumer, and one that the consumer agrees is at a reasonable market rate commensurable with the service provided. The Claimant believes it to be inconceivable that the charges levied to his account by the defendant could be any form of ‘service’, rather than a penalty.[/font]
[FONT='Verdana','sans-serif']5. I understand the definition of 'breach of contract' to be the failure of a party, without legal excuse, to perform a contractually agreed obligation pursuant to any or all of the terms agreed within that contract. I have an overdraft with the defendant. This overdraft has a contractually agreed limit, which is an express term of the bank account contract between myself and the Defendant. When I exceeded this agreed overdraft limit, therefore breaching an express term of the contract between myself and the Defendant, I was consequentially penalised for each such breach by way of a charge of £**.[/font]
[FONT='Verdana','sans-serif']6. In the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co  AC 79, Lord Dunedin stated that a clause is a penalty if it provides for; [/font]
[FONT='Verdana','sans-serif']"The essence of a penalty is a payment of money stipulated as in-terrorem of the offending part;”[/font]
[FONT='Verdana','sans-serif']I.e. if it is designed to scare or coerce or is used as a threat. It is submitted that the charges applied are not representative of any 'service' provided by the Defendant, but instead are punitive, and held "in-terrorem".[/font]
[FONT='Verdana','sans-serif']7. The Claimant further submits that the Defendant’s contention that the charges are now a legitimate service charge represents a contradiction to materials published by the bank previously. [/font][FONT='Verdana','sans-serif']Here, add in details of any correspondence in which the bank referred to the charges as ‘penalties’, ‘defaults’ or ‘exist to cover costs’, etc. For example -[/font][FONT='Verdana','sans-serif']In correspondence with Lloyds TSB’s ‘Customer Service Recovery’ department in July 2006, Martin Orton, who is manager of the department, stated this in a letter: “As you are aware, I am afraid that it is the case that any items that are returned incur a fee in order that we can recoup our costs”. This was in response to a direct and plain request to justify Lloyds TSB’s charges. Throughout the letter, no mention was ever made of the charges as being the cost of any sort of ‘service’.[/font][FONT='Verdana','sans-serif'](If anyone wants a copy of this letter, drop me a PM with your address and I'll post it to you.)[/font][FONT='Verdana','sans-serif'][/font]
[FONT='Verdana','sans-serif']8. Additionally, the [[/font][FONT='Verdana','sans-serif']claimant believes there to be a high possibility that the[/font][FONT='Verdana','sans-serif']] terms and conditions of [[/font][FONT='Verdana','sans-serif']his[/font][FONT='Verdana','sans-serif'] / the claimants] account contract explicitly describe the charges as to be levied in instances of breaching those terms. [/font][FONT='Verdana','sans-serif']This is true of the contracts of other customers of the defendant that the claimant is aware. However, the bank has failed to provide me with a copy of the account contract, despite repeated requests to do so, so unfortunately this cannot be proved. A right of Subject access request for this document was submitted to the defendant under the Data Protection Act 1998, on 8th September 2006. The defendant has failed to comply. [/font][FONT='Verdana','sans-serif']Here, if your account contract states the charges as ‘breaches’ use the text in black. The blue bit was true in my case and I’ve left it there as an example. If it applies to you, keep it in, if not, just take it out.[/font][FONT='Verdana','sans-serif'][/font]
[FONT='Verdana','sans-serif']9. The Claimant refers to the statement from the Office of Fair Trading (April 2006), who conducted a thorough investigation into default charges levied by the British financial industry. While the report primarily focused on Credit card issuers, the OFT stated that the principle of their findings would also apply to Bank account charges. They ruled that default charges at the current level were unfair within their interpretation of the Unfair Terms in Consumer Contracts Regulations 1999. With regard to the ‘cloaking’ or disguising of penalties, the OFT said this; [/font]
[FONT='Verdana','sans-serif']“4.21 The analysis in this statement is in terms of explicit, transparent default fees. Attempts to restructure accounts in order to present events of default spuriously as additional services for which a charge may be made should be viewed as disguised penalties and equally open to challenge where grounds of unfairness exist. (For example, a charge for ‘agreeing’ or ‘allowing’ a customer to exceed a credit limit is no different from a customers default in exceeding a credit limit.) The UTCCR’s are concerned with the intentions and effects of terms, not just their mechanism”.[/font]
[FONT='Verdana','sans-serif']10. As submitted above, the Claimant believes the charges levied to his account to be disproportionate contractual penalties, arising from clear and demonstrable breaches of express terms of the account contract between itself and the Defendant. The Claimant vehemently refutes the Defences contention that they are legitimate contractual service charges.[/font]
[FONT='Verdana','sans-serif']11. However, and without prejudice to the above, in the event the charges were accepted by this honourable court as being a fee for a contractual service, the claimant submits that they are unreasonable under section 15 of the Supply of Goods and Services Act 1982.[/font]
[FONT='Verdana','sans-serif']12. Further, under the UTCCR:[/font]
[FONT='Verdana','sans-serif']"5. - (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.[/font]
[FONT='Verdana','sans-serif'](2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.[/font]
[FONT='Verdana','sans-serif'](3) Notwithstanding that a specific term or certain aspects of it in a contract has been individually negotiated, these Regulations shall apply to the rest of a contract if an overall assessment of it indicates that it is a pre-formulated standard contract.[/font]
[FONT='Verdana','sans-serif'](4) It shall be for any seller or supplier who claims that a term was individually negotiated to show that it was."[/font]
[FONT='Verdana','sans-serif']Schedule 2 also includes such clauses (to define examples of unfair clauses) as:[/font]
[FONT='Verdana','sans-serif']"(i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract;[/font]
[FONT='Verdana','sans-serif'](j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract;[/font]
[FONT='Verdana','sans-serif'](m) giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract."[/font]
[FONT='Verdana','sans-serif']The defendant is a multi-national corporation. The term regarding charges was inserted unilaterally in contract. The contract was pre and mass produced and I had no opportunity to negotiate the clause, or indeed any of the contract. [/font]
[FONT='Verdana','sans-serif'][/font][FONT='Verdana','sans-serif']The cost of Lloyds charges have increased twice during the period in which my account was held, neither time was I given the opportunity to negotiate, or even notified of this increase. This means the bank has unilaterally altered the terms of my account contract to my detriment, and to their advantage. [/font][FONT='Verdana','sans-serif'][/font]
[FONT='Verdana','sans-serif']13. Following on from the above, the claimant does not accept The Defendants contention that the charges are enforceable as a service charge. It is not disputed that the Defendant is entitled to recover its damages following my breaches of contract, and it is entitled to include a liquidated damages clause. I accept without reservation the banks right to recover its actual losses or a genuine pre-estimate thereof. A penalty however, is unenforceable.[/font]
[FONT='Verdana','sans-serif']14. The Claimant cites the case of Robinson v Harman  1 Exch 850 which states that a contractual party cannot profit from a breach and that the charge for a loss suffered from a breach of contract should be the amount necessary to put both parties in the same position before the breach occurred.[/font]
[FONT='Verdana','sans-serif']15. Lord Dunedin in the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co  AC 79 set down a number of principles in definition of a penalty clause and how such clause may be ascertained from a liquidated damages clause. One of these principles being -[/font]
[FONT='Verdana','sans-serif']"The sum is a penalty if it is greater than the greatest loss which could have been suffered from the breach"[/font]
[FONT='Verdana','sans-serif']16. The Claimant will further rely on numerous recorded authorities dating throughout the 20th century up to the most recent case of Murray v Leisureplay  EWCA Civ 963, all of which have upheld and reinforced the principles set down by Lord Dunedin defining contractual penalty clauses and the unenforceability thereof.[/font]
[FONT='Verdana','sans-serif']17. Further, under the Unfair Terms in Consumer Contracts Regulations 1999, schedule 2 (1) includes to define an example of an unfair clause as -[/font]
[FONT='Verdana','sans-serif']"(e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation;"[/font]
[FONT='Verdana','sans-serif']18. On numerous occasions, the Claimant has requested that the Defendant justify its charges by providing details of the costs incurred as a result of my contractual breaches. Each time those requests were rebutted or ignored. [/font]
[FONT='Verdana','sans-serif']19. In a recent study undertaken in Australia, (Nicole Rich, “Unfair fees: a report into penalty fees charged by Australian Banks”) it was estimated that the cost to an Australian Bank of a customers direct debit refusal was estimated to be in the region of 54 cents. By reviewing the charges against the above figure, the study estimated that banks could be charging between 64 to 92 times what it costs them to process a direct debit refusal. The study’s key findings stated that in its opinion the Australian Bank’s cheque and direct debit refusal fees were likely to be penalties at law.[/font]
[FONT='Verdana','sans-serif']20. The Defendant, or indeed any of the UK banks, has never published any information to support how their charges are calculated, or what their actual costs associated with such breaches are, or what revenue they derive from such charges.[/font]
[FONT='Verdana','sans-serif']21. For their recent BBC2 documentary “The Money Programme”, the BBC appointed a commission of former senior banking industry figures and business academics to attempt to ascertain the actual costs to the UK banks of processing a customer’s breach of contract. They concluded that the absolute maximum conceivable cost that could be incurred by a direct debit refusal or overdraft excess is £2.50, and of a returned cheque £4.50. They did state however, that the actual cost is likely to be much less than this. The commission also estimated that the UK banks collectively derive as much as £4.5billion in profit a year from their charging regimes.[/font]
[FONT='Verdana','sans-serif']22. It is submitted that the Defendants charges are applied by an automated and computer driven process. This process consists of a computer system ‘bouncing’ the direct debit, and sending out a computer generated letter. It is therefore impossible to envisage how the Defendant can incur costs of £** by carrying out this completely automated process. Note that the letter received notifying of a charge is identical in every instance, and if multiple breaches occurred on the same day, a separate letter will be sent in each instance. [/font]
[FONT='Verdana','sans-serif']23. Additionally, I asked the Defendant to provide evidence of any manual intervention that may have occurred in relation to my account, under a Data Protection Act 1998 right of subject access request. No such information was forthcoming. [/font]
[FONT='Verdana','sans-serif']24. On 22nd May 2006, the House of Commons passed an early day motion which welcomed the OFT's statement that default charges should be proportionate to the actual loss incurred. The house described such default charges as "exorbitant" and "excessive".[/font]
[FONT='Verdana','sans-serif']25. The Claimant also cites a radio interview in 2004 with Lloyds TSB’s former head of personal banking, Peter McNamara, in which he states bank charges are used to fund Free Banking for all personal customers as a whole.[/font]
[FONT='Verdana','sans-serif']26. As set out previously, it is submitted that The Defendant’s charges can not be considered to be a service charge. In arguing that they are, they also effectively admit that their charges make profits. The Defendant seemingly contends that their charges are not subject to any assessment of fairness whatsoever. This implies they can set these fees at whatever level they like without limit or regulation. Similarly, as set out above, the charges cannot be considered to be liquidated damages. They, by The Defendant's own admission, are not a pre-estimate of loss incurred as a result of the breach of contract. The charges are punitive, held “in-terrorem", and unduly and extravagantly enrich the Defendant. As such, they are a contractual penalties and unenforceable at law.[/font]
[FONT='Verdana','sans-serif']I, the Claimant, believe all facts stated to be true.[/font]
[FONT='Verdana','sans-serif'][/font] [FONT='Verdana','sans-serif']Documents attached in support of this statement[/font]