Does my O/H's POC need amending??

[millymollymoo]

Hi I posted this under general and probably best here:)

 

I noticed on the front page of Consumer Forums that there is an article saying some POC's in court may need amending due to the penalty charges being invalid.

 

Could someone please check the ones below that are in court and were stayed in august 2007. We had reached AQ stage (not submitted due to stay)

. I have a bit in there also about the UTCCR. Is it enough or should I do the N144 amendent??? Do not want it thrown out this far down the line:rolleyes:

 

 

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Particulars of Claim

 

1. The Claimant holds a Barclays Current Account number: xxxxx Sort Code xxxxxx (“the Account”), with the Defendant which was opened on or around xxxx .

 

2. Of the part statements provided by the Defendant from the Claimants Data Subject access request 26th February 2007, during the period between 12 June 2001 and 21 January 2004 in which the account had been operating the Defendant debited numerous charges to the account inthe form of referral fees, unpaid out fees and unauthorised overdraft fees, in respect of purported breaches of contract on the part of the Claimant and also charged interest on the charges once 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.

 

3. On the 8th May 2007, the Claimant sent the Defendant a letter (recorded delivery) informing them that he believed the charges were a penalty charge. The Claimant then asked the defendant to confirm or prove that the said charges were a true reflection of the defendants administrate cost, or refund the said charges. The defendant asked for an extension to my deadline of which I allowed graciously a further 21 days to the original deadlineRegrettably, the Defendant did not reply. The claimant sent a further letter [recorded delivery] on 13th June 2007 of which the deadline has passed and no reply has been received by the Defendant. The claimant has been left with no option but to issue a claim.

 

4.The Claimant contends that on the 9th August 2001, the Defendant clearly breached their own terms and conditions by way of debiting two charges being ‘Unpaid Out Fees’ on the same day. The Defendants bank charge leaflet states that the maximum is one charge per account per day. The Claimant further contends that the defendants leaflet also states that the Claimant would incur no more than three fees within any monthly charging period, yet throughout some of the Claimants account statements this was clearly breached by way of four charges per month one example period being 10th December 2001– 13th December 2001

5. The Claimant will rely on the Competition Commission’s report entitled “Northern Irish Personal Banking,” published on 20th October, 2006, as evidence that the Defendant is aware that the income derived from its default charges is calculated to generate material profits and is not merely a means of recouping losses incurred in relation to Account defaults.

 

6 The Claimant will further rely 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.

 

7. The Claimant contends that:

 

a) The charges debited to the account, as outlined in the attached schedule are punitive in nature; are not a genuine pre-estimate of cost incurred by the Defendant; exceed any alleged loss to the Defendant in respect of any breaches of contract on the part of the Claimant and are not intended to represent or relate to any alleged actual loss but, instead unduly enrich the Defendant which exercises the contractual term in respect of such charges with a view to profit.

 

b) The Claimant believes these charges to be a disproportionate penalty and are therefore unenforceable. Penalty charges are irrecoverable at Common Law.

The precedent for this was:

 

Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] 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.They are;

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.

along with:

Murray v. Leisure play [2005] 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 [2006] 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.”

 

 

c) The contractual provision which permits the Defendant to levy such charges is unenforceable by virtue of The Unfair Terms in Consumer Contracts Regulations (1999) paragraph 8 and schedule 2(1)(e), The Unfair Contracts Terms Act 1977 section 4 and the common law.

 

 

The Unfair Terms in Consumer Contracts Regulation 1999 No 2083SCHEDULE 2 Indicative and Non-Exhaustive List of terms which may be regarded as unfair (e) Requiring any consumer who fails to fulfil his obligation to pay a dis-proportionately high sum in compensationFurther 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.

 

d) In the event that the charges are not a penalty, they are unreasonable under The Supply of Goods and Services Act 1982 section 15.It is clear that these charges do not reflect any actual and or genuine loss .

The Defendant has declined to justify the charges despite repeated requests

 

8. The Claimant will further rely upon the Office of Fair Trading’s (“the OFT”) publication Unfair Standard Terms and also Annexe B of this guidance leaflet, regarding terms in a contract excluding or limiting liability and referring to paragraph 1(b) and 1(e) of Schedule 2Unfair Terms in Consumer Contracts Regulations 1999concerning fairness and balance in a contract.

 

Fairness and balance require that both parties to a contract are equally bound by it, and equally liable to seek compensation for failure to abide by it.

A term that could be used – even if it is not the intention – to prevent or hinder customers from seeking redress when the supplier is in default, tends to upset the balance of the contract to the consumers disadvantage

 

 

9. Furthermore the Claimant will rely upon the Financial Services Authority (“the FSA”) Fairness of Terms in Consumer Contracts Statement of Good Practice section 1.6 and 1.7.

 

10. Accordingly, the Claimant claims:

 

a) The return of the amounts debited in respect of charges in the sum of £xxxxx and any interest charged thereon

 

b) Court Costs

 

c) The additional costs incurred by the Claimant in the writing and sending of letters to the Defendant pursuant to this claim in the sum of £xx, as set out in the attached list of costs. Total £xx

 

d) Interest claimed

 

e) The Claimant claims interest at the Defendants’ contractual rateof 27.50% per annum compounded daily from the date of each transaction up to 29th June 2007, which is £xxxx The Claimant further claims interest on the resulting total of £xxxx, at the same rate up to the date of settlement.

 

The Claimant’s case for claiming this rate is based in equity, and a legal requirement for fairness and balance. The Defendant has levied this rate on the charges debited to the Claimants account and accordingly claims this in addition to the charges, as shown in the schedule of charges, (Appendix 2). The Claimant also claims that this rate is justified under the principle of mutuality and reciprocity, and is based on the Defendant’s current unauthorised rate of interest published, which would have been applied under the terms of the above mentioned account.

 

The Claimant deems the Defendant’s charging regime to be unlawful, since the charges are unconscionable, remain unsubstantiated, and amount to unenforceable penalties at law. If the Defendant avers that its charges are fair, reasonable and therefore enforceable, its remedy will be to defend the claim by providing 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, choosing to settle before the trial dates, 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.

 

The Claimant states that for the contract to confer advantageous terms (i.e. entitlement to compensation) on one party (the Defendant) where there is no comparable term in favour of the other party (the Claimant) is to create an imbalance in the parties’ rights and is contrary to the requirements of Regulation 5 (1) of the Unfair Terms In Consumer Contracts Regulations 1999 (“UTCCR”) and is therefore justified in claiming the compensation of interest.

 

 

Regulation 5 (1) of the UTCCR’s states as follows:

 

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.”

 

Therefore, to satisfy the requirement of fairness and balance within the definition given by the UTCCR, the contract would have to provide a mutual or reciprocal term permitting the customer to apply the same rate of interest on any unauthorised withdrawals from the customer’s account by the bank (the Defendant). The interest claimed is therefore deemed to provide an equitable remedy

 

f) In the alternative to 10.e), should the taking of unlawful penalties from the Claimant’s Account not be deemed to be unauthorised borrowing by the Defendant, then, under the principle of mutuality and reciprocity and fairness and balance in the contract between the Claimant and the Defendant, the Claimant has calculated interest at the Defendant’s authorized contractual borrowing rate, being 15.6% per annum compounded daily from the date of each transaction up to 29th June 2007, which is £xxxxxx. The Claimant further claims interest on the resulting total of £xxxxxx, at the same rate up to the date of settlement

 

g) Should the court find that this interest rate is not applicable under the principle of mutuality and reciprocity and fairness and balance, then in the alternative to 10.e) and 10.f) the Claimant claims interest pursuant to Section 69 of the County Court Act 1984 at the simple rate of 8% per annum from the date of each transaction to 29th June 2007 which is £xx as shown on listed in the schedule of charges, (Appendix 3). The Claimant further claims interest on the resulting total of £xxx, at the same rate up to the date of settlement thereafter at a daily rate of 0.xx.

 

11) Details of interest calculated & rates used are attached to these Particulars of Claim as follows:

Appendix 2 – Contractual interest at an annual rate of 27.50% compounded daily

Appendix 3 – Contractual interest at an annual rate of 15.6%. compounded daily

Appendix 4 - Statutory Interest under s.69 of the County Courts Act 1984 at a simple annual rate of 8.00%

 

Appendix 5 - Additional costs in writing and sending letters to the Defendant.

 

12. Furthermore, the Claimant requests that the remaining balance of settlement be made by cheque payable to the Claimant.

 

 

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milly XX

[GaryH]

Hi Milly.

 

Not sure what the CAG line on this is, and I'm sure someone'll correct me if I'm wrong, but I think the best bet is to leave it for now. Most of it is now no longer relevant such as the penalty and SoGA arguments, and you would probably need to plead specifically that the actual charges are a) within the ambit of, and b) unfair under, the UTCCR; but you can't do anything until the stay is lifted. I suspect that the stay never will be lifted, as once its all eventially sorted out they'll probably make an offer in accordance with what the court decides is recoverable.

 

If the stay is lifted and the claim is to proceed, the best time to file an application to amend the claim form would be with alongside the AQ anyway.

[millymollymoo]

Hiya Gary:D long time no see!!!

 

You were a great help to me a couple of years ago and i really appreciated that. Perhaps if it ever gets lifted and i am at AQ stage you will not mind me calling on you.

 

I was a bit naughty and had posted this thread in a different location originally.

 

In here BF seemed to think I did not need to amend as I had covered that angle as well on UTCCR's fairness and balance. If it still needs a different angle I would like to do that when the time comes.

 

http://www.consumeractiongroup.co.uk/forum/cases-stayed-pending-oft/197539-hi-does-my-o.html

 

Milly XXX

[GaryH]

Hiya Gary:D long time no see!!!

 

Indeed! Haven't been around much lately, still lurking now and again though!

 

I'm sure it won't get to that stage anyway, but the only thing that would concern me would be that the UTCCR provision you rely on is sch 2(1)(e), which renders a term unfair if it provides for a disproportionately high sum in compensation. As the charges do not arise from a breach of contract, this part does not apply.

 

Regulation 5 is what we now need to rely on, which you have pleaded, but only in relation to interest as far as I can see, not the charges themselves.

Edited May 14, 2009 by GaryH

[Fred_Funk]

d) Interest claimed

 

e) The Claimant claims interest at the Defendants’ contractual rate of 27.50% per annum compounded daily from the date of each transaction up to 29th June 2007, which is £xxxx The Claimant further claims interest on the resulting total of £xxxx, at the same rate up to the date of settlement.

 

The Claimant’s case for claiming this rate is based in equity, and a legal requirement for fairness and balance. The Defendant has levied this rate on the charges debited to the Claimants account and accordingly claims this in addition to the charges, as shown in the schedule of charges, (Appendix 2). The Claimant also claims that this rate is justified under the principle of mutuality and reciprocity, and is based on the Defendant’s current unauthorised rate of interest published, which would have been applied under the terms of the above mentioned account.

 

GaryH et al

 

Hello, it's been a while and, that being the case, my memory is a bit rusty... very rusty in fact.

 

In anycase, I thought asking for interest on the basis of mutuality and reciprocity had been blown out the water and that any such claims should cite unjust enrichment and Sempra.

 

But, like I said, I've forgotten an awful lot in the last 18 months and what was once clear in my mind is now anything but. That being the case, can you tell me whether I'm right or wrong? Thanks.

 

Fred_Funk

Edited May 19, 2009 by Fred_Funk

[steven4064]

Fred is absolutely right - compound contractual interest on the grounds of fairness and balance (same as mutuality and reciprocity) was ruled out in Halliday v HBOS in the High Court in 2007 (QUEEN'S BENCH DIVISION [2007] All ER (D) 66 (Jun)) (Nothing wrong with the old memory, then, Fred )

 

You can claim compound contractual interest but you have to do it on the basis of restitution (or unjust enrichment) as in Sempra v Inland Revenue (HOUSE OF LORDS [2007] UKHL 34)

 

You can find the approprate form of words in my Goldfish thread - I claimed compound interest on that basis (and got it)