Unenforceability Cases on hold until further notice

[angry cat]

An interesting view:

 

http://www.hammonds.com/FileServer.aspx?oID=22700

[haggis1984]

as i understand it 99% of the information on the credit agreement is their (intellectual) property

 

the only information about YOU would be your details Name address phone numbers work details etc so this would be the information imparted to you that they have recorded on this agreement

 

further you KNOW that an agreement (or application form of some sort) exists (or should do) what you are seeking is whether it is enforceable.

 

I am not sure whether they would be forced by the SAR to make any admissions as to the legality of any agreement ( grey area i think)

 

In my situation It appears MBNA dont actually hold a signed agreement - so could I use SAR to establish whether or not they have my signature on record, or specifically ask if any agreement they do hold is signed?

[enoughisenough]

Any chance on exanding on points 3 & 4 please ? They sound attractive for a defence.

 

 

Hi.

 

Let's break this down and look at the sections identified as relevant by Lord Nicholls in Wilson.

 

sections 65, 106, 113 and 127 of the Consumer Credit Act is that where a court dismisses an application for an enforcement order under section 65 the lender is intended by Parliament to be left without recourse against the borrower in respect of the loan.

 

For our purposes sections 106 and 113 deal with securities and as such are probably not relevant to most of us. Remember also that in Wilson the common law use of unjust enrichment cannot be applied as statute law overrides common law. As Nicholls says, parliament's intention is clear.

 

65 Consequences of improper execution

 

(1) An improperly-executed regulated agreement is enforceable against the debtor or hirer on an order of the court only.

 

(2) A retaking of goods or land to which a regulated agreement relates is an enforcement of the agreement.

 

Now unfortunately for us there appears to be a lacuna here. Enforcement is given a rather limited defintion, of land and goods. However goods is given wide meaning in law to include money. So any attempt for example to get a charging order is enforcement and any undue pressure to pay must also count as enforcement of goods. The intention of such activities is to extract payment which is ultimately what enforcement means. Further there is no distinction made between enforcement and preparatory to enforcement activities. In other words Flaux has inserted into the Act a construction which does not exist. He has effectively rewritten the section, which is the prerogative of parliament not the courts.

 

In respect of registering information with CRAs that is slightly more tricky. Is the object once again to enforce payment, or is it a retaliatory action for questioning the agreements proper execution? A right they have under a 'properly executed' agreement is to do so and you must give your consent under the agreement.

 

However because (again parliament is clear) the entire agreement is void and Consumer Protection is the name of the game (a purposive approach to construction in which courts look to answer the question what was parliament trying to remedy in passing the Act) then your consent is no longer operable. The intention of the Act is to protect the consumer and make sure that lenders operate in accordance with the law. Further remedies may be available under other consumer protection legislation which we'll look at in a minute.

 

127 Enforcement orders in cases of infringement

 

(1) In the case of an application for an enforcement order under—

 

(a) section 65(1) (improperly executed agreements), or

 

 

(b) section 105(7)(a) or (b) (improperly executed security instruments), or

 

 

© section 111(2) (failure to serve copy of notice on surety), or

 

 

(d) section 124(1) or (2) (taking of negotiable instrument in contravention of section 123),

 

 

the court shall dismiss the application if, but (subject to subsections (3) and (4)) only if, it considers it just to do so having regard to—

 

(i) prejudice caused to any person by the contravention in question, and the degree of culpability for it; and

 

 

(ii) the powers conferred on the court by subsection (2) and sections 135 and 136.

 

 

(2) If it appears to the court just to do so, it may in an enforcement order reduce or discharge any sum payable by the debtor or hirer, or any surety, so as to compensate him for prejudice suffered as a result of the contravention in question.

 

Even enforcement is designed to protect the debtor, notice the use of the word prejudice.

 

(3) The court shall not make an enforcement order under section 65(1) if section 61(1)(a) (signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner).

 

(4) The court shall not make an enforcement order under section 65(1) in the case of a cancellable agreement if—

 

(a) a provision of section 62 or 63 was not complied with, and the creditor or owner did not give a copy of the executed agreement, and of any other document referred to in it, to the debtor or hirer before the commencement of the proceedings in which the order is sought, or

 

I think this is what did for Mcguff...they came up with the agreement. I don't think with unenforceable agreements they would even dare try but they will try and scare people into thinking they can go around stiffing your credit reference if you challenge them

 

 

(b) section 64(1) was not complied with.

 

 

(5) Where an enforcement order is made in a case to which subsection (3) applies, the order may direct that the regulated agreement is to have effect as if it did not include a term omitted from the document signed by the debtor or hirer.

 

Again the section places great responsibility on the credit provider. An agreement must be properly executed or it runs the risk of being unenforceable in its entirety. Since there is no distinction between activities preparatory to enforcement and enforcement in the Act. Enforcement simply means acts aimed at attempting recovery of monies deemed due. The principle the courts should follow is the following.

 

Expressio unius est exclusio alterius (the express mention of one member of a class excludes other members of the same class by implication] Since there is no express mention of any category of enforcement Flaux has inserted a construction into the act that is simply not present, and which must therefore on any balanced reading be an error of law.

 

The Interpretation of Statutes (Law Com. no. 21, 1969)

 

The Law Commission described the golden rule as "a less explicit form of the mischief rule", because it requires that words be interpreted in the light of their effect. However, it is based on the literal rule and should only be used if the literal rule would lead to absurdity or ambiguity - the question is how absurd or ambiguous must the meaning be before the golden rule is adopted? The answer to that question is that it depends upon the judge concerned, which means that the application of the golden rule is erratic and it is very hard to predict what meaning will be assigned to any given word.

 

Does anyone see any absurdity or ambiguity in defining enforcement as demands for payment, registering failure to pay with CRAs or securing the highly pressurised services of DCAs as anything other than clear and unambiguous. Rather the absurdity results from making the artificial distinction between different categories or types of enforcement when the act does not. In other words the golden rule of statutory interpretation was favoured (surprise surprise) when the literal should have been adopted. Enforcement means recovery action howsoever performed.

Further:

 

SOS for the Environment ex parte Spath Holme, R v (2000) HL

 

Lord Nicholls

“Citizens, with the assistance of their advisers, are intended to be able to understand parliamentary enactments, so that they can regulate their conduct accordingly. They should be able to rely upon what they read in an Act of Parliament. "

 

River Wear Commissioners v Adamson [1877] HL[/quote]

 

"It is to be borne in mind that the office of the judge is not to legislate, but to declare the expressed intention of the legislature even if that expressed intention appeared to the court to be injudicious.

 

 

 

Tindal CJ;

"… the only rule for the construction of Acts of Parliament is, that they should be construed according to the intent of the Parliament which passed the Act. If the words of the statute are in themselves precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense. The words themselves alone do, in such case, best declare the intention of the lawgiver."

 

In my humble opinion there has been an error of law. Flaux has rewritten the relevant sections to impose a rule of interpretation that was by any stretch of the imagination unnecessary. All the categories mentioned as being candidates for pre-enforcement are clearly enforcement under any normal construction of the meaning of the term. Literal construction would have avoided ambiguity and absurdity rather than created either and clarity and certainty would prevail. Flaux's decision does nothing to aid clarity, avoid ambiguity or absurdity and it will only be a matter of time before this rather novel and creative application of the rules is revisited in a court of law, or clarified by parliament.

 

I am all out of thinking space now. I will address the practical question of whether we can argue that this decision does not need to be considered in the County Courts at another point. However one thing stands out like a sore thumb. IN turns out after all that McGUFF did have an agreement!

 

I haven't yet been able to check on the use of redeemable and irredeemable! Are these in the CCA?

It is also worth moving on from here to explore the Unfair Consumer Practices Directive (2008), properly called:

 

http://www.oft.gov.uk/shared_oft/business_leaflets/cpregs/oft1008.pdf

 

Happy reading smiley missing

Edited October 10, 2009 by enoughisenough

[enoughisenough]

Found Smiley

 

[paulwlton]

IMO, The LBA, default notice and subsequent judgment are all prerequisite requirements before the lender is legally entitled to make an application for an enforcement order. In summary enforcement being: charging order, order for sale, garnishee proceedings, warrant of execution, bankruptcy.

 

In fact there are cases on appeal where suspended repossession orders have been quashed because the CCA was unenforceable.

 

In most cases a borrower who is up to his/her neck in debt won't care about a default.

[enoughisenough]

In most cases a borrower who is up to his/her neck in debt won't care about a default.

 

Concurred. The only credit you can get isn't worth having. My CR was actively destroyed over six months while I applied for a second charge loan over 25K when in fact I'd asked for 20K and they kept finding more and adding on brokerage fees until it went well over the 25 Limit. One of the 'things they 'found' was an existing charging order against my house for 7k which now turns out to have been statute barred by about six years over the 6 and which was largely constituted of outrageous charges. I was naive back in those days and didn't challenge it and estimate I must have been stiffed for a small fortune over the years now that I know what I know. Since the big banks have their fingerprints all over a lot of this sub prime stuff I figure I know what has happened but we are deviating here into the general unscrupulousness of the financial industry at large so I'll stop before the hijack is complete.

 

In fact it's rather cleansing to be treated like this. Pay those things that are properly and lawfully due and fight the rest. Fight those causes you can, win those you are able and to hell with the rest. They are being brought slowly to book and they know it. The recent test case is a joke. How desperate was that one?

 

They gorged themselves so much they forgot they were only supposed to bleed us dry and started eating us instead. Now they are eating themselves. Where is the business rationale in that?

 

I honestly think that they are the mugs. It's disappointing though that when other courts are applying the law the High Court of all places in full public glare can make this decision. I blaim these write off companies for gatecrashing our carefully constructed and worthy work for a 'slice of the action'. What a pity these barstewards are probably a shoot off from the law firms that have been screwing us for years.

[pt2537]

Guys

 

McGuffick is distinguishable on the facts,

 

firstly, the junior counsel in the McGuffick case is a colleague in the same chambers as the counsel i use. so i have had some information and insite into this case behind the scenes.

 

Secondly, McGuffick concerns redeemably unenforcability NOT ireedeemably unenforceable, there is a clear difference. if you never signed an agreement for example then you have different facts to McGuffick and can easily distinguish it.

 

Try not to get too hung up on it, breach of s78 can be remedied which we have always known,

 

 

Breach of s61(1) (A) cannot be remedied if the prescribed terms or debtors signature is missing

[enoughisenough]

Originally posted by PT as above

 

Guys

 

McGuffick is distinguishable on the facts,

 

firstly, the junior counsel in the McGuffick case is a colleague in the same chambers as the counsel i use. so i have had some information and insite into this case behind the scenes.

 

Secondly, McGuffick concerns redeemably unenforcability NOT ireedeemably unenforceable, there is a clear difference. if you never signed an agreement for example then you have different facts to McGuffick and can easily distinguish it.

 

Try not to get too hung up on it, breach of s78 can be remedied which we have always known,

 

 

Breach of s61(1) (A) cannot be remedied if the prescribed terms or debtors signature is missing

 

Agreed. Sorry if I gave the impression that the decision in McGuffick needed to be treated with massive importance.

 

I agree that it doesn't. However I want to make sure that caggers of a less certain state of mind think that this means any pursuit of questioning their agreements is doomed to fail are mistaken in such an assumption.

 

I had intended to deal with the distinguishing features but got lost in the Flaux stretched credibility aspect and was in any case only responding to a previous caggers request to flesh out what I had posted previously.

 

100% Agreed. It is clearly distinguishable and therefore does not bear on most cases. However be certain that before initiating an action your case is as near fire proof as it can be

Edited October 10, 2009 by enoughisenough
typo

[Tricky Dickie]

Can someone please help me out with a question.

Lets say a lender takes action to enforce a debt and under pre action disclosure they send a copy of the agreement which contains breaches of the CCA 1974.

They then turn up in court with an agreement with no breaches,can they use this as evidence?

Can you argue that the document is inadmissable as it was not disclosed?

[Docman]

Caggers may not be too worried becasue they can appreciate that the judgement oy applies to S78. But the problem is the mis information and propaganda now being published, for example in Times Online - High Court decision on debt loophole dashes write-off hopes for thousands - Times Online

[Tricky Dickie]

Caggers may not be too worried becasue they can appreciate that the judgement oy applies to S78. But the problem is the mis information and propaganda now being published, for example in Times Online - High Court decision on debt loophole dashes write-off hopes for thousands - Times Online

 

 

Times are quoting Ultimate Law again- Daniella Lipsynch- what is her agenda I just can't figure it out.

She runs a company which allegedly trains lawyers in consumer law so they can act for clients to write off debts and then keeps rubbishing the process.wtf is that all about

[enoughisenough]

Ok so here it is in full:

 

Let's isolate the spin from the facts, and then maybe invite the esteemed Times for correction (small print bottom of page 76 below the Court circular no doubt) i

 

 

About 100,000 people trying to have their credit card and loan debts written off by exploiting a legal loophole will have to pay the full amounts they owe after a landmark court ruling this week.

 

The High Court decision will mean defeat for tens of thousands of similar county court cases, which have been put on hold until the test case involving Royal Bank of Scotland (RBS) was resolved.

 

Notice the judicious use of the word 'the'. Are there no others?

 

The ruling will also suffocate the multimillion-pound industry in debt avoidance

 

very pejorative vocabulary. What about the debt avoidance of the bank industry?that has expanded rapidly in the past 18 months as consumers struggling to keep up repayments are seduced by attractive claims.

 

No we are not seduced by attractive claims. We are enlightened and empowered by the facts

 

Many of the UK’s 3,000 Claims Management Companies (CMCs) attract (insert exploit the vulnerable and desperate)clients with promises that they can exploit (insert apply the law. Since when was anything in Bennion a loophole. Since we discovered our rights under the act that's when! legal loopholes to write off certain unsecured debts, most commonly personal loans and credit cards.

 

No problems with this. These slice of the pie merchants are every bit as bad as the ambulance chasers

 

RELATED LINKS

Judge to freeze credit claims

Lenders repossess homes for credit card debt

Glasgow is Scotland’s bankruptcy capital

The industry depends on the CMCs establishing that the customer’s original loan agreement is “unenforceable” because it is in contravention of one or more requirements of the Consumer Credit Act 1974.

 

The simplest tactic that CMCs use is to demand to see a copy of the client’s original loan agreement. Under the Consumer Credit Act, if the lender cannot provide a copy within 12 days, which many banks struggle to do with older loans arranged by predecessors, the debt becomes “unenforceable”.

 

Love the inverted commas

 

Where the bank can provide the documents, lawyers will advance other arguments, such as that the terms and conditions page was not signed or that certain information required by law was missing.

 

Information required by law was missing. oops. Guess it can happen to anybody. Defence of honest mistake anyone?Some CMCs have built their businesses on the promise that unenforceability means that the borrower is no longer obliged to repay the loan and lawyers say that many thousands of people have already stopped payments. Others have continued with repayments, hoping that their loans would be be cancelled.

 

What the hell is this hoping that their loans would be cancelled. That's the legal equivalent of hoping you catch LAura from accounts under the mistletoe at the christmas party.

 

The tens of thousands of county court claims on hold are from borrowers asking the court to cancel the debt on the basis that it is unenforceable. Ultimate Law, a Manchester-based law firm, estimates that 100,000 claims are in progress.

 

Given the amounts at stake, the county court referred the matter to the High Court, which considered the case of Phillip McGuffick, who was seeking to have his £17,034 personal loan from RBS declared unenforceable. The case was heard on the basis that both sides agreed that the loan was unenforceable and the judge was asked to decide what this meant.

 

[b]The case was heard on the basis that both sides agreed that the loan was unenforceable and the judge was asked to decide what this meant. Eh?[/b]

 

Mr Justice Flaux ruled: “Although the [Consumer Credit Act] may render the agreement unenforceable, the agreement remains a valid and subsisting contract and rights and obligations under it continue to exist”.

 

Chris Busby, a partner at Eversheds, said: “The judgment said that claimants seeking to prove their credit agreements are unenforceable are still liable for monies owed. It’s a major blow to CMCs who have been suggesting otherwise.”

 

RBS said: “We welcome the clarity this judgment has provided. The outcome confirms the position that we have consistently adopted with customers who seek to challenge the validity of their agreements.”

 

Andrew Wigmore, of the Claims Standards Council, a trade body for CMCs, said that those promising guaranteed debt write-offs were operating a “[problem]”. He declined to comment on the RBS case but said that there were legitimate challenges to be made against loan agreements.

 

The Ministry of Justice, which regulates the UK’s 3,000 CMCs, has recently stepped up its campaign against unscrupulous practices in the industry. Last year it banned 116 CMCs for offences including exorbitant fees and misleading advertising. The ministry had no comment on the RBS case.

 

Mr Straw? Can you hear me Mr Straw? Your boys are going to take one helluva beating. No comment on individual cases? You've never done that within earshot of a journalist have you?

 

Edited October 10, 2009 by enoughisenough

[enoughisenough]

Times are quoting Ultimate Law again- Daniella Lipsynch- what is her agenda I just can't figure it out.

She runs a company which allegedly trains lawyers in consumer law so they can act for clients to write off debts and then keeps rubbishing the process.wtf is that all about

 

I beleive it's called keeping your options open and seeing which way the prevailing wind is blowing? To be expected.

Edited October 10, 2009 by enoughisenough
typo

[car2403]

Can someone please help me out with a question.

Lets say a lender takes action to enforce a debt and under pre action disclosure they send a copy of the agreement which contains breaches of the CCA 1974.

They then turn up in court with an agreement with no breaches,can they use this as evidence?

Can you argue that the document is inadmissable as it was not disclosed?

 

See s.172 CCA 1974.

 

Of course, if the Court deems it just to allow them to change previous statements, such as discovery of previously missing documentation that was incorrectly submitted to the Court, they would probably allow that to happen

[angry cat]

Presumably, you have all seen this:

High Court decision on debt loophole dashes write-off hopes for thousands - Times Online

[Undercover-Elsa]

Thankfully we know better

[paulwlton]

The High court decision will have no effect whatsoever concerning irredeemable breaches of schedule 6 1983 regs....status quo remains.

[letitbeme]

Presumably, you have all seen this:

High Court decision on debt loophole dashes write-off hopes for thousands - Times Online

 

Having read the original Court transcript (http://www.bailii.org/ew/cases/EWHC/Comm/2009/2386.html) and the above news report my conclusion is that the Journalist that wrote the news report didn’t read the Court Transcript or the facts of the case where not within his/her scope for interpretation. I suggest that he/she should request the assistance of legal council to assist with the interpretation of the Court Ruling.

LIBM

[angry cat]

Totally agree,

Don't believe everything that you read in the newspapers!

A shocking case of misreporting...

 

Some of the comments at the end of the article make for interesting reading:)

 

AC

[letitbeme]

I think most of the comments where made by RBS shareholders....

LIBM

[Tricky Dickie]

Totally agree,

Don't believe everything that you read in the newspapers!

A shocking case of misreporting...

 

Some of the comments at the end of the article make for interesting reading:)

 

AC

 

The Times article mentions Ultimate Law and its my guess the Times journo just wrote what they told him.

It was Ultimate Law who started all the 'false stay' reports back in May after Judge Halbert called the case management conference in Chester.They really do have a knack for getting everything wrong

[steven45]

It seems that RBS were looking for just such a case as this – any little victory, no matter how shallow or how irrelevant – so that they could spin and distort it to their advantage and then feed it as a press release to tame journalists who either cannot or will not do their own research.

[Baggio]

It seems that RBS were looking for just such a case as this – any little victory, no matter how shallow or how irrelevant – so that they could spin and distort it to their advantage and then feed it as a press release to tame journalists who either cannot or will not do their own research.

 

precisely, con and hoodwink the uneducated public again, i say good on CMC's for getting it across to joe public.

[angry cat]

I think most of the comments where made by RBS shareholders....

LIBM

 

:

 

Marc Gander wrote:

This article completely misstates the effect of the judgment.

The effect of the judgment is that the agreement is unenforceable so that the money is not recoverable at law. However the legal unenforceablity does not prejudice the rights of the lender to continue non-judical methods of attempting the recover the money, of entering defaults onto the credit register etc. Furthermore, the customer would not normally be entitled to complain of harassment in respect of normal debt collection practices or make complaints under the Consumer (Protection from Unfair Trading) Regs 2008 etc.

In other words, the lender can still pile on the pressure but can't take any formal action to get their money back.

To say that customers will now be obliged to repay is entirely wrong."

 

AC

[pt2537]

:

 

Marc Gander wrote:

This article completely misstates the effect of the judgment.

The effect of the judgment is that the agreement is unenforceable so that the money is not recoverable at law. However the legal unenforceablity does not prejudice the rights of the lender to continue non-judical methods of attempting the recover the money, of entering defaults onto the credit register etc. Furthermore, the customer would not normally be entitled to complain of harassment in respect of normal debt collection practices or make complaints under the Consumer (Protection from Unfair Trading) Regs 2008 etc.

In other words, the lender can still pile on the pressure but can't take any formal action to get their money back.

To say that customers will now be obliged to repay is entirely wrong."

 

AC

 

AC where did you get this article please?