Defeat in County Ct. for Cashback companies that think they are above the law

[Unfair Terms Regs Rule OK]

District Judge Christopher Lethem ruled today in Tunbridge Wells County Court that part of Phones 2U Direct's Terms And Conditions are in breach of The Unfair Terms In Consumer Contracts Regulations 1999. I would have considered this to be a hugely significant victory for the consumer even without the bonus of Phones 2U's representative telling the court that it could have an effect on many hundreds of other claims and that he wanted permission to appeal. This was refused of course by the formidable and impressive District Judge Lethem whose ruling took 42 minutes to deliver and contained a thorough analysis of the law in this area. Congratulations also to the brave claimant who took on the big boys at Phones2U Direct and won- She had no legal training and relied on her honesty and integrity. The District Judge described her evidence as "highly impressive" and he had no reason to doubt her contention that the appropriate documentation had been sent to Phones2U Direct.
District Judge Lethem relied on UTICCR '99 Regulation 5:

Unfair Terms
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.

and Schedule 2 (n)

INDICATIVE AND NON-EXHAUSTIVE LIST OF TERMS WHICH MAY BE REGARDED AS UNFAIR

1. Terms which have the object or effect of-


(n) limiting the seller's or supplier's obligation to respect commitments undertaken by his agents or making his commitments subject to compliance with a particular formality;

During oral argument he told the Phones2U Direct representative:
" You created a scheme whereby the consumer cannot retrieve the situation and cannot even check within the designated period whether you have received the documentation. I am not comfortable with that"

and in his judgment, the District Judge ruled:

"The difficulty I have with this clause [in Phones 2U Direct's T + Cs regarding the onus being placed on the consumer to post it but without the means to verify whether it has been done] is the rigour and the inflexibility of the requirements...There is no opportunity for a customer to provide duplicated authenticated documentation from the provider. If the letter is lost or destroyed, the consumer has lost any chance of rectifying the situation"

The clause was struck down and declared unlawful and the consumer obtained her whole 12 months' Cashback plus costs.

One final word on this matter-The District Judge refused to hear any evidence regarding postings on this or other sites. Imagine how damning his judgment would have been if he knew just how unprincipled and devious Phones2U Direct are when dealing with complaints. I shall be contacting the OFT to provide them with copies of the judgment and my transcript of the hearing.

[buzby]

A shame it doesn't set a precedent - as this would have been far more useful for those who are in a similar situation.

[jonni2bad]

Great news for mobile customers on cashback, and long overdue.

[buzby]

Originally Posted by jonni2bad

Great news for mobile customers on cashback, and long overdue.

Since this is a one-off decision, and cannot be used in other similar cases, could you expand how this would assist anyone else in a similar situation?

[Unfair Terms Regs Rule OK]

Why do you say it creates no precedent? I am a lawyer and well versed in stare decisis and all matters relating to what can bind another court. When a District Judge of Christopher Lethem's experience declares a contract to be unlawful, any defendant ignoring that ruling is on notice that he can expect to be defeated every time someone challenges the Terms And Conditions.
Halsbury's makes it clear in Par 1244 that in this sort of case, another District Judge would need very strong grounds to depart from District Judge Lethem's decision. Any contract lawyer would tell you that the Terms & Conditions are unfair and the Phones2U Direct representative admitted during oral argument that if unsuccessful in the proceedings yesterday, they would have to change them.
It ill behoves Phones2U Direct to rely on the non binding status of County court authorities when they attempted to pray in aid two completely irrelevant decisions which were cited in their woeful defence- Lotfi v Phones2U Direct in Willesden County Court and Chanan v Phones2U Direct in Dartford County Court.

[buzby]

Put simply, NO District Judge / Court has the ability to set any precedent. From the information given, this is a Small Claims action, and it is well established that these do not a precedent make - irrespective of the judge hearing the case.

The impression given in posting #1 is that Mobile Phone Cashback schemes are now somehow running foul of UTCC, yet the reality is that only P4U's contract is the problem. So, whilst this retailer may be forced screaming to change its arrangement, all the other firms who are similarly trying it on can continue to do so with impunity, and each case having to be heard on its merits - assuming the consumer is prepared o take the risk their retailer will still be in business to fight them.

Don;t get me wrong - I'm delighted they lost, but I'd really prefer if it was the OFT who took this on and managed to provide UK-wide ground rules for the operation of these often unsatisfactory schemes. How many district judges will it take to make a real difference - and only in England. This needs to be kicked upstairs and dealt with properly, 3UK initially threatened to clawback commissions from dealers playing fast and loose with cashback schemes, but so large was the outcry they've backpedaled significantly from that original stance.

[Unfair Terms Regs Rule OK]

You are wrong. Read Halsbury's. It would also be absurd if Chitty On Contracts had greater weight than a decision given by an experienced judge and based on the '99 regulations which apply throughout England and Wales, not just in Kent.

[buzby]

My experience is limited to the Scottish Court system, but nonetheless are you asserting that every minuscule action in the E&W court system (including SC) creates a precedent to be used in subsequent litigation as case law? I'll be interested in Halsbury's if this case appear in it, but notwithstanding this, I've pursued 4 actions and tried to bring in SC judgements and each time the Sheriff has stopped me in my tracks citing relevance, and before I explain I'm told in a condescending manner that decisions of other Sheriffs are irrelevant.

Incidentally, you are also wrong, the '99 Act also applies to Scotland (not just E&W) but until it reaches the High Court or the OFT rules, I really doubt this case alone is going to set the world of fire, as you appear to believe.

Do I take it you feel that's the battle over for consumers, and the OFT don;t need to waste their time policing Cashback schemes?

[Unfair Terms Regs Rule OK]

Indeed I am. In an area where ALL cases go to the SCC, yet the issues are clearly defined, it is obvious to anyone with a legal brain that a decision made by a District Judge is of extremely strong persuasive value. Your bizarre logic reminds me of the irrational attitude people take to PTA decisions and the Practice Direction. Yes-They are not binding but anything said must be considered if it relates to a specific question that has raised a point of principle that justified a full court hearing.
What price stare decisis in any event, cf their Lordships' recent discussion in Gibson v. United States of America (The Bahamas) [2007] UKPC 52?

[buzby]

The logic is only bizarre if it doesn't represent actual experience. Let's keep a watching brief and see what happens in the real world My money is on it not making one whit of a difference to real-world consumer actions, I know this is the glass-half-empty viewpoint but having won 2 actions with a Sheriff fully supporting all my contentions, no precedents were set, and I wasn't disappointed!

[jonni2bad]

Originally Posted by buzby

Since this is a one-off decision, and cannot be used in other similar cases, could you expand how this would assist anyone else in a similar situation?

A pleasure.

This assists other people fighting these ridiculous T&Cs which are clearly unfair because it gives them HOPE.

They can see from this case that their battle is not simply about feeling that the terms are unfair, but now they know an esteemed Judge agrees too. This is precisely the sort of trickle that led to a mass of bank charge claims - many people want to know that they are not doing something that has never been achieved before, after all.

It is also of use because this claim CAN be discussed in someone else's case, even though it is not a precedent (which, by the way, I was never implying was the case). I know from these forums that people have quoted my own case v Halifax in relation to non-acceptance of funds without the removal of a default. Not once have they been told it cannot be discussed.

Clearly, Judges throughout the country will vary in their approach to such claims and it is far to say that some will not wish to be bound by such previous comments/incidents, but many others will take a good look, at least.

I hope that clarifies my response for you.

[buzby]

Originally Posted by Thermometer

Buzby thinks that all precedents are binding. Given his assumption, it is surprising that the can ever think that precedents even exist in the pluralistic Scottish legal system!

Not at all - a precedent is simply that. There will be another one along in awhile the will run contrary to the previous. My beef (as it were) is that Small Claims actions do very little. and I'm sure I'll be corrected - do not end up providing valuable case law.

In an action I took against Consignia Plc, it was going swimmingly well, and there was a good possibility the company would be held liable for the dishonest actions of their employees. I has tons of case law to prove and employer owed a duty of care to his customers, even if the nefarious activities of the staff member was subsequently dismissed and jailed for a similar action. I also expected, if successful, that the Sheriff would rule that Consignia could not hide under this exemption. I was told that (a) Small Claims would not result in the precedent I had hoped, as this would not happen whether I succeeded in the original action. I did not succeed, this was because Consignia were operating under an Act of Parliament that took precedence - it did not matter I had the moral victory, the could continue as before until the Act was rescinded and their operating licence revised.

Asking around brought forth the consensus that a District Judge/Sheriff can be highly thought of by their peers, but it most certainly does not form useful case law for future battles. As for it being 'obvious' to someone with a legal brain - I'll mention that next time I see Lord Irvine in court - he'll really crack up at that.

[Unfair Terms Regs Rule OK]

You sound like a very bitter failed lawyer who blames everyone but himself.

[buzby]

Flattery will get you everywhere, but you couldn't be more wrong.

When you get as old as I have, you realise that nothing really changes - the Govt will always win, followed by Corporates/Corporations, Business and then way way back at the end of the the line is the Consumer.

In fact, the pecking order is identical to that of trying to get your money back after someone goes bust... the folk who can ill-afford to lose it, are the last in line.

I call it realism

[buzby]

So the 0.005% that win make it a fair system? As for a 'damning indictment' in a District Court, it most probably disappeared without trace the following week, much as the same situation I found myself with Consignia. They still have immunity, the Sheriff thought it unreasonable and unfair, but they still continue with a new name and the same rules. Sure, I lost, but this didn't prevent the Sheriff from showing extreme displeasure at their ability to hide under an Act of Parliament and former Crown Immunity. Those views too were eventually buried within the case paperwork, just as the action you refer to will go...