Particulars of Claim
On or around the 21st of June the claimant opened an account xxxxxxxx Card Number: xxxxxxxxxxxxxxxx with the Defendants, the claimant believes this was on the defendant’s standard term and conditions. There was no negotiation on these terms it was either a take it or leave it policy. In fact the claimant had no option but to agree to the terms, as he would have met the same reply at any other Bank.
After reading about these types of charges in the Media, the Claimant decided to send the defendant a subject access request letter dated 21st April 2008 (attachment A) asking the defendant to supply him with a fully comprehensive list of all default charges that have been paid on the account over tha past six years.
The Defendant had applied the charges to his account since the 27/09/2004 to 05/02/2007 totalling £ xxxxxxxx
An itemised breakdown of these charges are entered as attachments (B1 - 2 etc)
On the 8th of July the Claimant sent the Defendants a letter (recorded delivery) informing them that he believed the charges were a penalty charge (attachment C1 to 2 etc) the Claimant then asked the defendant to refund the said charges as he believed they were not a true reflection of the defendants administrate cost.
The defendent has not replied to any correspondence despite ample opportunity to justify the true costs involved in applying an over limit penalty or a late payment penalty.
Because the defendant has continually refused to prove that they have any legal right or contractual right to apply the said charges furthermore they have refused to offer any evidence that the said charges are a true estimate of the administrative cost involved. The claimant has been left with no option but to issue a claim.
It’s the claimant’s contention that the defendants charges are a disproportionate penalty and therefore are unenforceable, the claimant relies on the following
Common law Principles (Penalty charges are irrecoverable at common law).
The precedent for this was:
Dunlop Pneumatic v New Garage  AC 79.
Lord Dunedin set out some tests that are considered even in modern cases when the court is asked to rule on penalty charges.
1) If it is "extravagant and unconscionable" i.e. that the cost incurred by the business because of the breach is lower than what the consumer is being expected to pay because of the breach.
2) It is also a penalty where the consumer is to pay a larger sum due to failure to pay a smaller sum.
It was held that a contractual party can only recover damages for an actual loss or liquidated losses.
Murray v. Leisure play  EWCA Civ 963
"English contract law recognises that, if the parties agree that a party in breach of contract shall pay an unjustifiable amount in the event of a breach of contract, their agreement is to that extent unenforceable"
CMC Group Plc And Others V Zhang  EWCA Civ 408.
"'Whether a provision is to be treated as a penalty as a matter of construction to be resolved by asking whether at the time that the contract was entered into the predominant contractual function of the provision was to deter a party from breaking the contract or to compensate the innocent party for breach. That the contractual function is deterrent rather than compensatory can be deduced by comparing the amount that would be payable on breach with the loss that might be sustained if breach occurred."
Furthermore or in the alternative penalty charges are also contrary to:
The Unfair Terms in Consumer Contracts Regulation 1999 No 2083
SCHEDULE 2 Indicative and Non-Exhaustive List of terms which may be regarded as unfair
(e) Requiring any consumer who fails to fulfill his obligation to pay a dis-proportionately high sum in compensation
Further or in the alternative if the defendants state that there was no breach of contract and that the charges are for a service, then it is the Claimants belief that the defendants have attempted to restructure accounts in order to present events of default spuriously as additional services.
However The Unfair Terms in Consumer Contracts Regulations 1999, are concerned with the intention and effects of terms, not just their mechanism. For example, a charge for 'agreeing to' or 'allowing' a customer to exceed his credit limit is no different from a charge for the customer's 'default' in exceeding his credit limit.
The claimant claims from the defendant a sum equivalent to the total amount unlawfully debited from the claimant’s account being £ xxxxxxxx
The claimant further claims interest pursuant to s69 of the County Courts Act 1984 at the rate of 8% per annum, being the sum of £ and also interest at the same rate up to the date of judgment or earlier payment at a daily rate of 0.022%
The claimant further claims the court fee of £
The claimant respectfully requests that the court makes an order for standard disclosure, when issuing this claim, as the defendants have continually refused to supply any requested information.