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Is defendant liable for costs if DN does not comply?


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Have read a number of threads which have suggested that if a default notice issued by a claimant does not comply with the required regulations (in form and content) then the amount the defendant is liable for is the arrears only and not the full outstanding balance.

 

If a Judge decideds that this is the case would this still be a Judgement in favour of the claimant and leave the defendant liable for costs.

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In theory, by the letter of the act and regulations, if it is deemed the DN is invalid the claiment does not have the right of action against you.

 

Thats the whole point of a DN to give them the right of further action, the following clearly states the creditor must get it right before commenceing to the next step, although the situation may be differant, the principle is the same

 

1. judgment of Kennedy LJ in the case of Woodchester Lease Management Services Ltd v Swain & Co - [1998] All ER (D) 339 (Exhibit BH07) in the Court of Appeal, in this judgment Kennedy LJ states inter alia

‘This statute was plainly enacted to protect consumers, most of whom are likely to be individuals. When contracting with a large financial organization 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 hirer is said to have broken its terms, the hirer 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 the resources to give that information with precision. If he does not do so accurately then he cannot take what Mr Gruffydd conveniently referred to as 'the next step'.’

 

Therefore they have commenced an action they had no right to take if the DN is invalid, so it stands to reasons when it comes to the question of cost, the defendent could claim wasted costs against the claiment, again at least in theory

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Many thanks for response.

 

Claimant have indicated they will accept full and final which is 48% of outstanding balance, do not have funds to cover this but can afford approx 25% of outstanding balance.

 

25% of outstanding balance is approx same amount as amount of arrears + costs (if claimant claims full cost of £1000 under Small Claims Track).

 

Was going to make a full and final offer which is 10% of amount claimant has indicated they would accept (just to see what response I got) which is £50 above that arrears amount on DN.

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Something else that has occurred to me.

 

I requested from claimant (who is original creditor) a copy of the original agreement under S78 in Autumn 2007.

 

Only response from them was to return my postal order for £1.

 

Claimant then passed matter onto their in-house DCA who's only response was demand to payment and threaten legal action.

 

Then contacted by claimants in-house legal team, again only response was threats of legal action.

 

Heard nothing for rest of year then contacted by Fredrickson International in Jan 08, again threats of legal action if I did not pay up. Told them their client in default of CCA request, they return account straight to original creditor and sent a letter saying "sorry for contacting you".

 

Heard nothing until received Claim Form from Northampton, submitted defence and contacted claimants solictor requesting info. No response.

 

Transfered to my local court, allocation questionnaire return and claim then sat on judges desk for 4 months.

 

Judge issued an unless order and claimant solicitor wrote with offer of settlement including some docs (no CCA as waiting for their client to forward it to them).

 

Question is (after all that) as original creditor has not supplied anything in response to my CCA request and are in default of my request can they start legal process to enforce agreement?

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Question is (after all that) as original creditor has not supplied anything in response to my CCA request and are in default of my request can they start legal process to enforce agreement?

 

Again by the letter of the act no IMO, failure to comply with a sec77/78 request prohibits enforcemant under 77(4)/78(6), so if they where in default AT THE TIME legal action started, that should be a full defence in law.

 

Now if you read the CCA act, i cant actually see how a court is given power to ignore this as it is seperate from section 65(1), but if the OC produces a valid responce the default ceases, and the courts seem to accept that, and ignore the fact a default was there when action commenced, but to my mind that would have the same implications as the answer to your DN question, that is if they had no right to start legal action, that should be considered when it comes to costs.

 

So in answer to your question no they do not, but they do and get away with it.

 

As for costs, i am trying that argument now, will have to see if the judge takes any notice, in my case i have an iffy DN AND commencement of action while in default, among other things, but they have produced a document with prescribed terms, so could be intresting

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Will be interesting to see if creditor can produce CCA, this makes me think it could be why they have indicated they will accept full and final settlement of 49% of outstanding balance.

 

Letter from solicitor included half a page about the default notice which their client cannot produce as is done by an automated system and copies are not retained, was sent by First Class post and no proof of postage available. They also quote the Interpretation Act 1978 that postage alone constitutes service by reason of section 7, and in the absence of proof to the contrary the DN is deemed to have been delivered. No record of DN being returned by the Post Office.

 

If they quote the Interpretation Act does that mean they also accept that service by first class post must allow 2 working days and working days are Monday to Friday (except Bank Holidays) and if they post on a Friday before holiday weekend they need to ensure to allow an extra day for delivery (which they did'nt) as well as ensuring their DN's comply with the regulations.

 

I suppose if I produce the DN in court they'll claim it wasn't from them and will then produce a template showing how it would have appeared.

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Will be interesting to see if creditor can produce CCA.....

 

If they want to issue a summons against you for collection of the debt, they have to prove that an agreement to pay existed i.e. the CCA & it must be attached to the POC (except in the case of Northampton & then you would CPR them to get the info) No CCA, no debt, court can't enforce payment. You win, all costs to you!

Letter from solicitor included half a page about the default notice which their client cannot produce as is done by an automated system and copies are not retained, was sent by First Class post and no proof of postage available. They also quote the Interpretation Act 1978 that postage alone constitutes service by reason of section 7, and in the absence of proof to the contrary the DN is deemed to have been delivered. No record of DN being returned by the Post Office.

 

They would have to supply POP, though not necesarily POD to prove they had issued the DN. Just to say so is not sufficient. Otherwise you could claim you'd sent them a big fat cheque, not my fault m'lud that they didn't get it!

 

If they quote the Interpretation Act does that mean they also accept that service by first class post must allow 2 working days and working days are Monday to Friday (except Bank Holidays) and if they post on a Friday before holiday weekend they need to ensure to allow an extra day for delivery (which they did'nt) as well as ensuring their DN's comply with the regulations.

 

Timing & dates are crucial. Always keep the envelope if you receive a DN

 

I suppose if I produce the DN in court they'll claim it wasn't from them and will then produce a template showing how it would have appeared.

 

Don't understand :?

FG

Any knowledge I possess or advice I proffer is based solely on my experiences in the University of Life. Please make your own assessment of legality, risks & costs before taking any action.

 

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7 References to service by post

Where an Act authorises or requires any document to be served by post (whether the expression “serve” or the expression “give” or “send” or any other expression is used) then, unless the contrary intention appears, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.

 

 

If they quote the Interpretation Act does that mean they also accept that service by first class post must allow 2 working days and working days are Monday to Friday (except Bank Holidays) and if they post on a Friday before holiday weekend they need to ensure to allow an extra day for delivery (which they did'nt) as well as ensuring their DN's comply with the regulations.

 

Actually they have to prove method of postage to state how long it should take as defined by the Interpretation Act to be accurate

 

 

But they have to prove that one was sent, and it's content if they wish to rely on it, in an ideal world of course:rolleyes:

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I suppose if I produce the DN in court they'll claim it wasn't from them and will then produce a template showing how it would have appeared.

 

Foolishgirl, sorry probably not explained that clearly.

 

The DN received from claimant does not comply with required regs., I think the claimant knows this, in my original defence neither admitted nor denied receiving DN but put claimant to proof that DN was sent and received and it complied in full with regs.

 

Therefore it suits claimant to say as DN is produced by automated system copies are not kept. However this is a template of "how it would have looked" and then produce a DN that would comply.

 

With regard to POC, claim was issued from Northampton, CPR request has produced nothing (so far) in the way of a CCA - I think this may be why claimant has offered to accept full and final of only 49% of outstanding balance. Getting 49% of outstanding balance is better from their point than getting nothing and paying defendant costs.

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The DN received from claimant does not comply with required regs., I think the claimant knows this, in my original defence neither admitted nor denied receiving DN but put claimant to proof that DN was sent and received and it complied in full with regs....

 

OK, now i get it

 

With regard to POC, claim was issued from Northampton, CPR request has produced nothing (so far) in the way of a CCA - I think this may be why claimant has offered to accept full and final of only 49% of outstanding balance. Getting 49% of outstanding balance is better from their point than getting nothing and paying defendant costs.

 

Are you pretty sure that a CCA doesn't exist?

 

If so, IMO if you want to offer a F&F, I would point out they have not sent proof of a DN being issued & that they remain in breach of S78 re. the CCA & offer in the region of 10-20% of the debt, making it clear that if this sum this is not accepted you expect to see them in court where you will defend any action absolutely, seeking an order from the court that they produce both DN & original CCA at any hearing, all of which will also be accompanied by a claim for costs.

 

Your other options are;

1. defend absolutely - hope you've sent the Acknowledgement in?

2. issue a CPR 31 request & then seek an order from a court under S142 that the agreement is unenforceable due to it not existing as part of a counterclaim

see this thread for more details on this:

http://www.consumeractiongroup.co.uk/forum/legal-issues/173201-why-you-shouldnt-use.html

 

Looks like you have them anyway you play it, just a matter of time & patience :-)

Edited by foolishgirl
addition & typos

Any knowledge I possess or advice I proffer is based solely on my experiences in the University of Life. Please make your own assessment of legality, risks & costs before taking any action.

 

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Acknowledgement was sent in 8 months ago, defence submitted, allocation questionnaire submitted, file sat on DJ desk for about four months, contacted court number of times to find out what was happening, eventually DJ looked at it and issued Unless Order to the effect claim would be struck out if claimant did not indicate if they wanted to proceed by 4pm on 19 Dec 08.

 

On 16 Dec 08 received letter from claimant's solicitor indicating they had requested a stay so parties could agree settlement.

 

Contacted court who said they had not received anything and if they did would not be dealt with until after Xmas. Contacted court again on 09 Jan to be told DJ had granted claimant's request for stay, asked person I spoke to if a Defendant had a right to object to the stay been granted. Got the feeling from what they said that the court would take a dim view if I choose not to attempt to settle this matter. Claim is stayed for 2 months to allow parties to agree a settlement.

 

Have written letter with my offer of settlement but posted it yet (signed for so I'll know they have received it.

 

Will look into CPR31 request. As you say looks like I have them anyway.

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It's funny how when defendant contacts court nothing moves, yet when claimant contacts them the DJ appears to jump. Tells you a lot that.

 

I know, one law for one etc..sometimes looks that way. DJ should have asked you if you agreed to the stay but you're right, it would have looked bad at a hearing if you'd refused, no matter how dicky the claimant's case.

 

Anyway looks as though you have everything under control MD. :-)

Any knowledge I possess or advice I proffer is based solely on my experiences in the University of Life. Please make your own assessment of legality, risks & costs before taking any action.

 

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Just had a look a quick look at CPR31, don't think that applies as amount is under £5000 so will probably be small claims:

 

31.1 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.

 

However thanks for your input, always helps to get opinion from others.

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Subbing,

Youve already tried to resolve this by your offer, Theyre trying to be clever, but if they want to proceed, you still need to insist on sight of the agreement signed and DN, They cant hide behind an 'Automated' letter.

For instance, how does this automated letter get produced? what fields are used to add your name and address and account and amount????

Who or What decided this was the time to send this 'Automated' DN.

Was it purely 'Automated' or was there some manual intervention?

Was the paper this DN get printed on 'automatically' loaded, or was ir 'Virtual' paper.

Oh The list of questions is endless:lol:

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As it is their application for a stay, I would be tempted to wait until they contact you with an offer of settlement. They probably won't contact you in which case you can go back to court next time when they apply for anothr stay 'to settle' (they will), you can state they haven't contacted you.

Arrow Global/MBNA - Discontinued and paid costs

HFO/Morgan Stanley (Barclays) - Discontinued and paid costs

HSBC - Discontinued and paid costs

Nationwide - Ran for cover of stay pending OFT case 3 yrs ago

RBS/Mint - Nothing for 4 yrs after S78 request

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Solicitor has already written saying their client will accept 49% of outstanding balance as full and final settlement.

 

Have written letter with my offer of settlement but NOT posted it yet, still thinking about it - my offer is 10% of amount they have indicated claimant will accept.

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Solicitor has already written saying their client will accept 49% of outstanding balance as full and final settlement.

 

Cheeky beggars - they have no case & know it

Have written letter with my offer of settlement but NOT posted it yet, still thinking about it - my offer is 10% of amount they have indicated claimant will accept.

 

More like it for the first letter. They prob. won't accept but it gives you the opportunity to increase if you want to. Suggest you mark it 'Without Prejudice' otherwise they may try to produce it in court as your admission of debt.

 

FG

Any knowledge I possess or advice I proffer is based solely on my experiences in the University of Life. Please make your own assessment of legality, risks & costs before taking any action.

 

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Maybe thinking a few steps ahead at this stage but have been giving some thought to the following:

 

CPR Practice Direction 16. Paragraph 7.3 requires the original documents be available at the hearing.

 

It is unlikely any claimant will still have the original (ink on paper) agreement and is more likely to produce a copy of the scan of the agreement in court.

 

Now IF the claimant either by way of disclosure or in their Witness Statement DOES NOT state that they do not have the original you would therefore expect (would the court also expect) that they would produce the original at a hearing.

 

If they had not disclosed prior to any hearing that they did not have the original and the document they would produced is a scanned copy, a defendant would not then have the opportunity to serve an Application to Prove Notice (usually done with their Witness Statement).

 

If they turn up at a hearing without the original and produce a document which they then identify as a scanned copy from their computer system, how would this affect the outcome?

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I'm not too sure on this, but I would have thought that they must declare what they want to bring as evidence, a copy would in my view be deemed as just that a copy and they should state that this is what they will rely on.

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Have you sent them a CPR18 request MD? Or submitted draft directions with your AQ?

Any knowledge I possess or advice I proffer is based solely on my experiences in the University of Life. Please make your own assessment of legality, risks & costs before taking any action.

 

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Did not send CPR18 request, as amount claimed is under £5000 so would probably be Small Claims Track and had read in one of threads that CPR18 request does not apply with Small Claims Track (its that long ago AQ returned in Aug 08). However did request info from them when claim form received, they replied when they received "Unless Order" from Judge.

 

Sent following Daft Order for Directions with AQ:

 

Draft Order for Directions

 

The Claimant shall within 14 days of service of this order send to the Defendant and to the Court:

 

• Copies of the Credit Agreement and any documents referred to within it which complies with

the consumer Credit Act 1974 and all subsequent regulations, which the claimant seeks to rely

upon

 

• Default Notice compliant with S87 (1) Consumer Credit Act 1974 and Consumer Credit

(Enforcement, Default and Termination Notices) Regulations 1983 (SI 1983/1561) as amended,

 

• if applicable the document, contract or deed of assignment

 

• if applicable the Notice of assignment, with proof of service of the same compliant with S196

of the Law of Property Act 1925.

 

• Copies of any statement or other document relied upon

 

If the Claimant fails to comply with this order, the claim will be struck out without further order.

 

 

 

The Defendant shall within 14 days thereafter file and serve the following:

 

• an amended defence sufficiently particularised in response to the documents supplied by

the claimant

 

If the Defendant fails to comply with this order, the Defence will be struck out without further order.

 

But don't think judge paid much attention to what I had to say. God help me if it's same judge at any hearing.

Edited by Moral Dilemma
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