Claim Stayed – Due to Unenforceable CCA Test Cases.

[Blondie40]

The Manchester cases relate mainly to s.77 & 78 True Copy issues and are to determine what documentation the creditor needs to produce to satisfy the statutory requirements. They are not Test Cases - they are "Lead Cases" . They are unconnected to the Chester cases.

 

Thanks Josie - that makes it a bit clearer.

 

 

Are they also dealing with cases in which there is no agreement too? I can see the banks deciding they don't have it in a lot of cases now...

 

I think people only do the s77/s78 request to find if there is an original agreement still in existance with the signature on. It's all very well getting just a photocopy of what the terms etc. would have been.

 

You need to get something with the signature on and the dodgy terms. But then the banks are going to pretend they don't have that if they see it is unenforceable aren't they?

 

I noticed someone say it was a "Directions Hearing" in October so I am guessing nothing is likely to be decided for a while yet, maybe next year.... The old drag it out forever method the banks so enjoy using.

 

I have had a company who have had 100 days to find it saying they are still looking for it, bare with us... I bet they have it and are waiting for the legal dept to decide if they should shred it or not.

 

Does anyone know if they would have to supply a copy of an agreement under a Data Protection Act request if it was on microfiche or paper? Then force them to say if they have it or not as per the subject access request?

 

I spent all day reading stuff on the Information Commissioners website about manual filing etc. didn't make much sense.

 

Might be a cheaper way to get them to admit if they have it than CPR 31.16 route.

 

 

So, if in claimant's disclosure statement and their Witness Statement they state that the original agreement would have been transfered to microfiche at the time the agreement was made and subsequently destroyed, and in their Skeleton Argument say "…due to the length of time elapsed since the agreement was entered into the original is no longer available, for these reasons the copy documents relied on by C can be proved to be the relevant signature documents and be relied on as proof of the contents of the agreement without the need to produce the long-destroyed original".

 

Where would that leave them?

Edited September 4, 2009 by Blondie40

[middenmess]

So, if in claimant's disclosure statement and their Witness Statement they says the original agreement would have been transfered to microfiche at the time the agreement was made and subsequently destroyed, and in their Skeleton Argument say "…due to the length of time elapsed since the agreement was entered into the original is no longer available, for these reasons the copy documents relied on by C can be proved to be the relevant signature documents and be relied on as proof of the contents of the agreement without the need to produce the long-destroyed original".

 

Where would that leave them

 

At the mercy of the Judge who may or may not be ultra conversant with Consumer Law.

[Docman]

The following is taken from the Code on Legal Admissibility

 

The issue of Legal Admissibility is at the core of records management principles. An organisation needs to be able to prove (to a court of law or some other statutory body) that the contents of a particular document or data file created or existing within an Electronic Document Management System have not changed since the time of storage. If the data file is an electronically stored image of an original paper document, an organisation must be able to prove that the electronic image is a true representation of the original. Proving the authenticity of electronically stored documents is crucial to their admissibility in a court.

[middenmess]

I presume then that something that is impossible to prove or disprove would then be decided on the balance of probabilities, with the odds stacked somewhat in the ''respectable'' banks favour.

[Tricky Dickie]

I presume then that something that is impossible to prove or disprove would then be decided on the balance of probabilities, with the odds stacked somewhat in the ''respectable'' banks favour.

 

I stand to be corrected but as far as I am aware the only thing the lender can produce to prove in court that he has en enforceable agreement is the original agreement with an original signature and containing all the prescribed terms in one document.

I think this electronic 'balance of probabilities'is irrelevant

[Tricky Dickie]

But if it's the original document that they have to bring to court, and not a copy,then no matter what they supply in pre court disclosure,you will not know if they still have the original until you actually go to court-or have I got it wrong?

 

I understand what you are saying and the real point is that under disclosure they will have to send you a copy of exactly what they will produce in court so you can check that the document contains your signature on it and that they actually have it in the first place.

A section 77/78 request can be satisfied without having to send the borrower a copy with a signature on it.

Some of the stuff that they send in response to a section 77/78 request is a joke for example they send copies of terms and conditions which are clearly dated after the agreement was signed

[Blondie40]

One further point from claimants Witness Statement that I was not certain of the relevance is the following:

 

"Upon the acceptance of the application the new account was processed onto the computer system used by the Bank to operate credit card accounts. First Data International is the provider of the computer system the bank uses to store customer records and to create new accounts of both new customers and existing customers".

 

I have had a look at First Data International's website, not clear on the relevance as seems more to be about processing and payment collection. This is from their website:

First Data is a leader in the European payments industry. As a major independent third party processor, we provide a comprehensive range of services with speed and security through an unrivalled network of regional hubs and local operations.

 

Does this suggest that First Data have responsibility for the handling and maintaining of all records relevant to the account and that the agreement having been transfered to microfiche would be their responsibility.

[Tricky Dickie]

One further point from claimants Witness Statement that I was not certain of the relevance is the following:

 

"Upon the acceptance of the application the new account was processed onto the computer system used by the Bank to operate credit card accounts. First Data International is the provider of the computer system the bank uses to store customer records and to create new accounts of both new customers and existing customers".

 

I have had a look at First Data International's website, not clear on the relevance as seems more to be about processing and payment collection. This is from their website:

First Data is a leader in the European payments industry. As a major independent third party processor, we provide a comprehensive range of services with speed and security through an unrivalled network of regional hubs and local operations.

 

 

Does this suggest that First Data have responsibility for the handling and maintaining of all records relevant to the account and that the agreement having been transfered to microfiche would be their responsibility.

 

AS far as I am aware all this witness statement rubbish the lenders churn out is completely irrelevant.

If they do not have the actual piece of paper with your signature on it and all the prescribed terms on it they can quote witnesses and systems all day but they can not enforce the debt

[middenmess]

TD quote..

 

If they do not have the actual piece of paper with your signature on it and all the prescribed terms on it they can quote witnesses and systems all day but they can not enforce the debt

 

They can have the above 'piece of paper' with prescribed terms for the credit card but if you have PPI with no separate terms then it is unenforceable as it becomes a multiple agreement- but will the Judge's always be clued up on that?

[letitbeme]

Hi middenmess,

So am I correct in stating that if PPI was included on my account without my authorisation and no seperate terms - this may add further grounds to have the claim dismissed

TD quote..

 

If they do not have the actual piece of paper with your signature on it and all the prescribed terms on it they can quote witnesses and systems all day but they can not enforce the debt

 

They can have the above 'piece of paper' with prescribed terms for the credit card but if you have PPI with no separate terms then it is unenforceable as it becomes a multiple agreement- but will the Judge's always be clued up on that?

[middenmess]

So am I correct in stating that if PPI was included on my account without my authorisation and no seperate terms - this may add further grounds to have the claim dismissed

 

 

Yes.

 

 

Read some of the threads by noomill060 and pompeyfaith about PPI reclaiming.

[supasta1]

Just to update this thread a little. I am from the North East near Durham and i have just received an order from the judge dealing with my unenforceable CCA case stating that on her own motive she has stayed the case and if we want to lift the stay the case will be transferred to manchester County Court and be heard on the 8th October?? What is that all about???

 

Could this mean that there is a stay on unenfoceable cases and that they will be holding test cases at Manchester county court on the 8th October??

Edited September 11, 2009 by supasta1

[Blondie40]

Originally Posted by Josie8

The Manchester cases relate mainly to s.77 & 78 True Copy issues and are to determine what documentation the creditor needs to produce to satisfy the statutory requirements. They are not Test Cases - they are "Lead Cases" . They are unconnected to the Chester cases.

 

 

Are they also dealing with cases in which there is no agreement too? I can see the banks deciding they don't have it in a lot of cases now...

 

I think people only do the s77/s78 request to find if there is an original agreement still in existance with the signature on. It's all very well getting just a photocopy of what the terms etc. would have been.

 

You need to get something with the signature on and the dodgy terms. But then the banks are going to pretend they don't have that if they see it is unenforceable aren't they?

 

I noticed someone say it was a "Directions Hearing" in October so I am guessing nothing is likely to be decided for a while yet, maybe next year.... The old drag it out forever method the banks so enjoy using.

 

I have had a company who have had 100 days to find it saying they are still looking for it, bare with us... I bet they have it and are waiting for the legal dept to decide if they should shred it or not.

 

Does anyone know if they would have to supply a copy of an agreement under a Data Protection Act request if it was on microfiche or paper? Then force them to say if they have it or not as per the subject access request?

 

I spent all day reading stuff on the Information Commissioners website about manual filing etc. didn't make much sense.

 

Might be a cheaper way to get them to admit if they have it than CPR 31.16 route.

 

 

Don't know if this helps you in anyway.

 

I have heard of a few more claims being stayed in the last couple of weeks due to the Manchester cases.

[letitbeme]

Hi , A little update re my case being Stayed till after the Manchester case. Just got of the phone with Liverpool CC ( case management team ) , informed me that they have a three week backlog of court orders to process and that my court order will be issued next week.

[kel123]

Just a sub

[exasperated]

subbing

[Josie8]

Don't know if this helps you in anyway.

 

I have heard of a few more claims being stayed in the last couple of weeks due to the Manchester cases.

 

 

Yes they are being stayed until the CMC before HHJ Waksman in the Manchester Mercantile court on 8 October 2009. The court will hear argument on which ones need to be stayed re s.77/78/79 and which ones don't need to be stayed. The cases that are going to be "lead cases" are likely to be multi track regardless of amount outstanding on agreement as HHJ Halbert indicated this was her preferred option. Multi track is good becuase it imposes higher standards on disclosure etc.

 

There will probably be applications for injunctive relief while stays are in force.

 

The test case on Defaults is due to be heard before HHJ Smith on 23rd September which is why the CMC was put off till 8 October 2009.

[Blondie40]

 

There will probably be applications for injunctive relief while stays are in force.

 

 

Josie

 

I'm not to clear on what this would mean. Can you clarify?

 

Many thanks

 

B40

[lilly white]

somthing might be of interest

 

 

Date: 17 July 2009

Authors: Daniella Lipszyc

Issue: Vol 159, Issue 7378

Categories: Features, Legal services, Profession

 

 

Daniella Lipszyc says loopholes in law can tie the legal profession in knots

 

 

Legal professionals have always looked for new sectors to expand their business. More than 10 years ago solicitors looked to personal injury to increase revenue streams, now it seems the focus has shifted to financial irregularity (FI).

Upward rise in FI

In the past 12 months there has been a marked increase in the number of FI cases being pursued in courts across the country. The Financial Ombudsman Service’s (FOS) annual report shows a dramatic rise in the number of payment protection insurance (PPI) claims that have been successfully resolved. Complaints about PPI nearly tripled in 2008/09, with 89% of claims resolved in favour of the consumer.

This trend is set to continue, with the FOS predicting a rise in all areas of FI claims. The FOS anticipates that in the next financial year it will process 150,000 new cases. It estimates that 16,000 will relate to credit card agreements; 18,000 will concern current accounts and 25,000 on PPI.

Having dipped a toe in the water, solicitors who were initially wary of the FI sector are now more inclined to take on cases relating to areas other than PPI, including the unenforceability of loan agreements.

However, successfully tackling FI claims in this area requires in-depth and specialist knowledge of the Consumer Credit Act (CCA 1974).

CCA 1974

The CCA 1974 was introduced in 1974 and extended in 2006 to create a Financial Ombudsman Service (FOS) and to increase the powers of the Office of Fair Trading (OFT) in relation to consumer credit.

This Act of Parliament is a significant and complex piece of legislation which needs to be approached with caution as judges are becoming increasingly hard on solicitors who fail to do their homework.

There is also a substantial amount of subsidiary legislation, creating a minefield of information to trip up and discredit inexperienced professionals.

An increasing number of solicitors are venturing into the financial irregularity claims sector with little, if any, experience in how to deal with specialist claims. Ill-conceived and unprepared attempts at resolving FI claims are not only damaging for consumers but also to the sector as a whole.

Litigation experience is simply not enough when it comes to dealing with cases in the FI sector. In addition to complexities entwined in the legislation, you also have to battle against heavyweight financial institutions with deep pockets that will fight you every step of the way.

Solicitors embarking on FI claims will face a series of challenges, from understanding complex legislation and judicial decisions to managing their own business practices.

In terms of legislation, there are specific sections of CCA 1974 that seem to be causing a real headache for solicitors and consumers alike. For example, there is a great deal of confusion surrounding ss 77 and 78 of CCA 1974. These sections refer to applying for and receiving a copy of the executed agreement.

Many people misunderstand ss 77 & 78. There’s real confusion about what the provision allows you to receive, which in turn is causing many legal professionals to miss the relevance of this section and therefore the valuable information it can offer, if used correctly.

Legal minefields

The FI claims sector is still in its infancy and many legal professionals require guidance to enable them to not only understand the complexities of the law but also to venture into this sector with appropriate business practices.

The vast majority of cases that we deal with are financial minefields that stretch far beyond a simple “unfair” or mis-sold policy. In the current economic climate, claimants are often under extreme financial pressure; many have defaults against them with credit reference agencies; and a significant number are riddled with debt.

As solicitors, we have a professional obligation to deal with a consumer’s case as a whole. Therefore, it’s essential that any solicitor intending to practise in this area must be armed with sufficient knowledge—not only of the relevant legislation and regulation, but also the nuts and bolts of running an efficient and cost-effective department.

Our own industry watchdog, the Solicitors Regulation Authority, has warned solicitors to approach claims management companies with caution. The authority believes that many are making false claims that most credit agreements issued before April 2007 are unenforceable; and offer an unrealistic timescale for the resolution of financial claims.

Large financial institutions have specific and deep-seated procedures for dealing with any financial mis-selling claims. This often means the route to a resolution is long and arduous. The complexity of CCA 1974 also makes life incredibly difficult for legal professionals when they present a case in court. In addition, there have been a number of recent examples where FI cases have been thrown out of court.

Judge Halbert at Chester County Court considered imposing a stay on enforceability claims due to the volume of cases currently under consideration. Proposals were put forward for a “few carefully selected” test cases to be heard in the Commercial court in order to reassess the validity of credit agreements for non-compliance with the CCA 1974. Although the stay was ultimately not imposed, it indicates that solicitors could face similar problems in future and it’s essential that legal professionals don’t bank on credit card claims alone.

The enforceability of credit agreements is a difficult area to move into and one that solicitors should treat with extreme caution. However, there are other—often more successful—ways to approach an FI claim, including cases based on “unfair relationships”, which have been branded as the “new way forward”.

Unfair relationships offer solicitors a wider remit than unenforceability. This piece of legislation allows courts to deal with agreements that were written both before and after 5 April 2007 (the cut-off period that applies to unenforceability claims); in respect of loans over £25,000; and even where the original lender is no longer in business.

The courts can deem a contractual agreement and relationship with a lender as “unfair”. In such cases, the courts can order that: no further payments are made under the agreement; and/or that previous payments are refunded to consumers; or the terms of the agreement are modified to make them “fair”.

Unlike declarations of unenforceability, unfair relationships can provide solicitors with significant scope in which to achieve success. If a relationship is deemed “unfair” —and depending on a client’s specific circumstances—solicitors can help remove unfair and adverse credit references; reclaim any charges incurred unfairly; renegotiate any unfair contract terms or costs; put a stop to any further payments being made on unfair agreements; reclaim any mis-sold PPI—plus interest; and recoup any excessive payments.

As the scope for unenforceability cases is restricted, solicitors will no doubt be looking for alternative routes to seek recompense for their clients in FI cases. Unfair relationships offer an alternative option when dealing with financial irregularity claims and actually provide solicitors with a greater chance of success. This only applies if they’re well prepared; have researched the relevant legislation thoroughly; and implement effective and sustainable business practices.

CPD-accredited financial irregularity courses, such as that offered by Ultimate Law, provide practical business support and advice on how to set up an effective FI division; and offer solicitors straightforward guidance on how to deal with, and successfully process, consumer credit agreement claims.

The courses aim to help ensure that legal practices handle all FI cases in an effective manner, maximising the potential for costs. By taking part in specialist training programmes such as these, solicitors can enhance their businesses.

This is also good news for consumers, who run the risk of being exposed due to a lack of knowledge and expertise on the part of their legal advisors. Consumers rely on legal professionals to deal with complex issues surrounding their personal finances. Due to the sensitive nature of the information, there is a danger to consumer protection if their solicitor is not properly trained in handling FI claims. For example, failure by a solicitor to overturn a default notice issued by the Credit Reference Agency can have far-reaching consequences for the client involved. It’s vital that solicitors handle these cases effectively or they risk making the situation worse.

A guide to specific terms within the CCA 1974:

Pre-contract information

The creditor is required to provide specific information to the borrower in a prescribed format before any contract is entered into. This includes, but is not limited to: lender details, extra credit charges or credit fees, hidden prices, late fees, what happens if a debtor fails to meet payments, early settlement penalty, information regarding the APR and all other costs/charges and information on cancellation rights. Failure to provide this information will result in the credit agreement being invalid.

Post-contract information

The post-contract information requirements of CCA 2006 came into force on 1 October 2008. They were designed to assist consumers in the management of their borrowing and identify potential problems before it’s too late. This places the onus on lenders to ensure customers are kept informed of the state of their accounts, especially in relation to arrears and defaults. Among other things, lenders are required to issue annual statements for all fixed-sum credit accounts (such as loans); include information relating to the impact of only making minimum payments in annual statements for running-account credit agreements (such as credit and store cards); and issue arrears notices 14 days after the account goes into arrears (and six-monthly thereafter), along with further information on the fees and charges that will be applied.

Credit charges and APR

The annual percentage rate of charge (APR) must be set out in the pre-contract information and in credit agreements. The APR is based on the total charge for credit, which includes interest and other charges which affect the cost of borrowing—even if they aren’t payable under the credit agreement itself.

Early settlement

Under CCA 1974, the borrower can settle a regulated consumer credit agreement early by giving notice to the lender and paying the amount due less a rebate. The rebate is calculated under the terms of the Consumer Credit (Early Settlement) Regulations 2004. This is intended to ensure that the borrower repays the outstanding capital, but not any future interest or charges.

Exempt agreements

The Consumer Credit Act 2006 introduced two new exemptions from regulation under CCA 1974: First an exemption for lending which is wholly or predominantly for business purposes and which exceeds £25,000. Such agreement must include a declaration by the debtor about the purpose of the loan. Second an exemption for high net worth individuals which allows them to opt out of CCA 1974 regulation. Such individuals must have received a net income of not less than £150,000 in the previous financial year and have net assets of not less than £500,000.

Equal liability

This refers to the liability a credit provider has in the case of any fraud or misrepresentation on the part of a supplier of the goods or services which have been financed (even partially) by the credit. The relationship between the supplier and credit provider determines whether liability is shared.

Irresponsible lending.

CCA 2006 made irresponsible lending an unfair business practice having a bearing on fitness to hold a consumer credit licence. While CCA 2006 does not specifically define “‘irresponsible lending”, the OFT has issued guidance. This includes the stipulation that lenders should always take reasonable care in making loans or advancing lines of credit and should take full account of the interests of consumers. Lenders are also expected to perform proper and appropriate checks on a potential borrower’s creditworthiness, ability to repay the loan and meet the terms of the agreement.

[saddler68]

Isn't this article written by the same solicitor who reported to the press that there was a stay on 100,000 credit agreement claims? I recall her saying that her own firm would no longer be taking on claims of this nature as the 'stay' had effectively killed the industry:eek:!! I wonder how many practising solicitors will pay for her CPD day?

[saddler68]

Date: 21 May 2009

Issue: Online only

Categories: News, Commercial, Public

 

 

Consumer credit

 

 

Up to 100,000 claims for the cancellation of credit card and other debt have been stayed pending a test case.

Many of the claims have been generated through adverts by claims-handling firms, who argue debts can be written off where credit agreements are not compliant with the Consumer Credit Act 1974.

However, Judge Derek Halbert indicated last week that a few claims would be selected as test cases for consideration of the commercial court, and all other claims stayed.

Daniella Lipszyc, a solicitor who specialises in financial irregularity cases at Ultimate Law, says it was “inappropriate and misleading for any company to promise to write off balances in light of this judicial move”. She urges lawyers to steer clear of credit enforceability claims, saying they would be unlikely to win or receive costs: “While many claims management companies believe this area is lucrative and ‘sexy’, I’ve always had extremely grave reservations about entering into this sector and have always advised any solicitor who is considering a move into this market to do so with extreme caution.”

 

Could you just run through that 'judicial move' again pls Daniella?

[letitbeme]

Just a bit of Background info..

 

"Chester consumers act

So what’s going on at Chester county court then? Fifty-two claims for declarations over enforceability of agreements where non-compliance with the Consumer Credit Acts 1974 and 2006 is alleged are going on. Media reports have been misleading. Talk is of the 52 spreading into thousands but we shall see. Judge Derek Halbert, the designated civil judge for Cheshire, gave case management directions in the present proceedings on 19 May 2000. They involve a variety of issues including whether creditors are paralysed from enforcement whilst unable to comply with a statutory request for a copy of the original agreement. How many of those original documents have been eaten by the office vulture or shredded on assignment of the benefit? Also in issue is whether referral to a credit reference agency constitutes enforcement of a non-enforceable agreement. Several cases could be transferred to the Commercial Court but as yet no claims have been stayed.

Judge Halbert has already decided one point in Southern Pacific Personal Loans Ltd v Walker and another (Chester county court March 2009). He ruled that charging interest on a charge for credit is fatal to the enforceability of a credit agreement. The ruling is subject to appeal to the Court of Appeal."

[Fossell]

Ive only just caught up on this stuff.

Egg are taking me to court. No date yet.

My defence wasnt based on CCA stuff as I thought it was pointless and originally defended based on them not sending me statements for me to mount any defence. (they did send them in the end)

 

Im about to admit there claim and get a CCJ unless anyone 'really' thinks I shouldnt.

 

Can anyone suggest solicitors who could advise me further.

 

If I did admit and get a CCJ, could I then take them back to court after this test case based on CCA stuff?

[middenmess]

Ive only just caught up on this stuff.

Egg are taking me to court. No date yet.

My defence wasnt based on CCA stuff as I thought it was pointless and originally defended based on them not sending me statements for me to mount any defence. (they did send them in the end)

 

Im about to admit there claim and get a CCJ unless anyone 'really' thinks I shouldnt.

 

Can anyone suggest solicitors who could advise me further.

 

If I did admit and get a CCJ, could I then take them back to court after this test case based on CCA stuff?

 

Start your own thread and then why not post up your CCA and your default notice for others to give their views and advice before admitting anything.

 

Getting good advice now would be a sensible move before you are bulldozed by egg.

[tifo]

looks like another mess like the charges test case ....