Dissecting the Manchester Test Case....

[seriously fed up]

A demonstrably wrong decision should be easier to appeal - though its always possible to screw up. I think its fair to say - though others might want to disagree - that the more senior the court the more likely it is that the decision will be based on the quality of the evidence, what the law actually says, and without (too much) prejudice entering in.

The downside is that in a higher court you would need to hire representation as you wouldnt have rights of audience (and they moan about trade unions! they could learn a lot from the legal profession).

How costs would be apportioned is difficult to say. If the other side were REALLY at it, having no case worth mentioning, then you would be more likelyl to get your costs. But each side to bear their own is the norm.

[seriously fed up]

That is a most interesting observation MOT22 about whether or not the creditor has to state whether their agreement is enforceable.

I dont think this side of hell they will ever admit that its not. Rev Ian has got them pretty close to this, but sadly no cigar!

However, if you read Ms Edwards' views, you will see they are an interesting example of Civil Servicese. For instance she says

"Telling a consumer that he signed such an agreement is also a misleading statement about his rights and the risks he might face as covered by Regulation 5(4)(k) of the CPRs."

Now, were I a creditor, the way I would see through this would be by saying "he must have signed or he wouldnt have got the money". So much of what she says poses a problem of evidence. We would say "ok, show's the form then - lets see the agreement that I have signed". They, the creditors, will take a "more creative" view of evidence - "they must have signed a compliant agreement otherwise we wouldnt have handed over the money. Its just that we arent able to produce this."

What I would have liked Ms Edwards to come up with would have been something like

""Telling a consumer that he signed such an agreement without being able to produce a signed copy (or original) of this agreement is also a misleading statement about his rights and the risks he might face as covered by Regulation 5(4)(k) of the CPRs."

That would give them significantly less in the way of "wriggle room" which they will use.

In much the same way this is the problem with your statement that "the OC does not have to specifically state that a s77-79 request is not enfoceable, but rather it falls foul of OFT if it states that it is." Creditors will insist that any old pap that they send out in response to a s77/8 request is enforceable - they really cant do much else as the alternative is to walk away from the debt.

Lastly, and going back to my firsts point - Rev Ian got very close, but he's not getting a cigar. You should notice they send everything but "you are right this is not enforceable" - but they didnt. If you read it closely they actually say that "While we try to locate the full origonal agreement we will not be seeking to enforce the agreement. However, even if an agreement is unenforceable, the contract still has legal effect and is not void, the lender is merely prevented from seeking an enforcement order from the court." so they are reserving to themselves the right to use other enforcement procedures (eg default notice on his credit file which will last for 6 years, making it more difficult for him to get credit elsewhere - for instance a new mortgage). They cannot enforce in law, but they might still seek enforcement in other ways.

[mot22]

If you read it closely they actually say that "While we try to locate the full origonal agreement we will not be seeking to enforce the agreement. However, even if an agreement is unenforceable, the contract still has legal effect and is not void, the lender is merely prevented from seeking an enforcement order from the court."

 

SFU..thx, you are correct here, I have edited my post to avoid incorrect info..hope to comment further in a bit..

PS: I think the link GH2008 (thx) so helpfully referred to in his post# 2621 may be relevant on all this too..

Edited June 17, 2010 by mot22

[Lord_Alcohol]

It's quite difficult to see how non-existence of a lawful agreement can cause a contract to be legally effective, because any dispute that refers to regulating law will require a sight of the original agreement rather than the OC's say-so!

 

I would imagine that any action that the OC takes must be provided for within the agreement, but without the agreement how do you know it's provided for? If adverse data is recorded where there is no lawful agreement, then how can anyone know whether such recording is allowable? It may be, or it may not be. No-one can be sure. Isn't this part of the reasoning behind the DPA, that data processing can only occur lawfully where there is provision to do so?

 

So I suppose the thing to do is to formally dispute the account until the lawful agreement is found, and require the OC to refrain from processing data until that time when the agreement is found.

 

Also, I would think that there would be a lot of objections from attempting to enforce an agreement that may not in fact exist!

 

LA

;-)

[seriously fed up]

there is much in what you say, but two problems (and I am being devil's advocate here)

 

1. it might not be possible for lenders to come up with the evidence that they need to enforce at court with the CCA, BUT it will often be easy to show that lending has taken place
   
2. the banks are basically in the **** with this. They have made THE most horrendous horlicks of these agreements, partly to keep costs down, but basically (and it is bankers we are dealing with here) just pure greed (dont bother with the niceties get them signed up because my bonus depends on this) and now it has come back to bite them on the bum big time. Their problem now, though, is that they just cant afford to walk away as the money involved is just too great. I think I read somewhere that Citi are trying to flog £50 million of bad debts, but cant find a buyer, partly at least because any buyer knows just how many lemons they would be buying. It can be argued that they are going to lose some, but they need to keep this to a minimum. The press releases post Manchester/ Waksman is one illustration of this as it allowed them to **** on the Claims Management Companies from a great height (not entirely undeserverd imo)
   

[IainHL]

That is a most interesting observation MOT22 about whether or not the creditor has to state whether their agreement is enforceable.

I dont think this side of hell they will ever admit that its not. Rev Ian has got them pretty close to this, but sadly no cigar!

.

.

SFU, this is where OFT1175con might well become your (and all our) friend: http://www.oft.gov.uk/shared_oft/consultations/OFT1175con.pdf.

 

I realise at the moment it is just a consultation document, but I presume it will move to the status of actual guidance sometime soon. Sections 2.20, 2.26 and 5.4 through to 5.6 are relevant to the matter under discussion at the moment.

[bustthematrix]

SFU

 

Not sure how far Rev. Ian got BUT I have seen correspondence from lenders agreeing that a specific agreement, whatever the form it was in, was unenforceable. They have clearly stated this in a number of cases so it is not unachievable.

 

However, in all cases where this was achieved (that I am aware of), the 'agreement document' was taken apart and the letter of the law was used to show each breach, each one being iredeemable (i.e.unfixable).

 

They will only admit it, in writing, if made to do so.

[bustthematrix]

there is much in what you say, but two problems (and I am being devil's advocate here)

 

1. it might not be possible for lenders to come up with the evidence that they need to enforce at court with the CCA, BUT it will often be easy to show that lending has taken place

Evidence of lending ALONE is not enough to warrant records on a CRA file.

 

The Data Protection Act mandates that any such records MUST be accurate. If the lender is unable to verify the contract and therefore the terms of the contract, how can they verify the accuracy of the records relationg to that contractual agreement?

 

The right thing for them to do is therefore to retain their own internal records BUT remove the public records in the CRA UNTIL they can properly verify the contract and it's terms - upon which any records would be vased!

 

This is why people have successfully had Default Notices and CRA records removed where they took action to do so and pleaded correctly.

[rev.ian]

bustthematrix, I have been at this for two years and a file full of letters to get this far.

[seriously fed up]

Evidence of lending ALONE is not enough to warrant records on a CRA file.

 

The Data Protection Act mandates that any such records MUST be accurate. If the lender is unable to verify the contract and therefore the terms of the contract, how can they verify the accuracy of the records relationg to that contractual agreement?

 

The right thing for them to do is therefore to retain their own internal records BUT remove the public records in the CRA UNTIL they can properly verify the contract and it's terms - upon which any records would be vased!

 

This is why people have successfully had Default Notices and CRA records removed where they took action to do so and pleaded correctly.

 

this is true Matrix, but wasnt exactly what I had in mind. If all lenders had to do was to show up in court with the record of statements in their hand, then we would be royally stuffed. But the CCA does not require only a record of the lending that has taken place (this would be crucial in how much was owed) but also that due process has been followed in entering into the agreement and its this latter part of lending that they have fallen down on.

[seriously fed up]

SFU

 

Not sure how far Rev. Ian got BUT I have seen correspondence from lenders agreeing that a specific agreement, whatever the form it was in, was unenforceable. They have clearly stated this in a number of cases so it is not unachievable.

 

However, in all cases where this was achieved (that I am aware of), the 'agreement document' was taken apart and the letter of the law was used to show each breach, each one being iredeemable (i.e.unfixable).

 

They will only admit it, in writing, if made to do so.

 

Maybe I have just been unlucky - or maybe I dont try hard enough - but I have been sent (and I know I am not nearly alone) all manner of rubbish (glossy current t&cs for instance) and told here is your agreement and its enforceable.

In any event, as Rev Ian points out in his original post what they have recognised is that they cant enforce in court, but they do seem to reserve the right to enforce in other ways. So, just a wee bit short of full surrender (though a significant achievement and one that I wouldnt mind at all)

[RobinWayRobinme]

Sorry sfu, I disagree on acouple of points. The CPR,s are clear what you can or cannt appeal but basically if the dj was wrong and the error changed the outcome of the hearing,then appeal. However, permission is reuired first and not always given.

 

When you are in front of a Circuit Judge, you case must be presented properly otherwise you wi lose the appeal. Just as it is with a DJ. On costs, if you succeed, you should generally get costs for hearing being appealed. Don't forget, the other side opposed you at the original hearing and probably at the appeal. This is also in CPR,s. The ony way that each party bears their own costs is if it is by consent and other party consents to the original judgment being varied to correct the dj error.

 

Finally, if you appeal generaly it woud be before a Circuit Judge and you do have a right of audiance as a LiP.

R

 

A demonstrably wrong decision should be easier to appeal - though its always possible to screw up. I think its fair to say - though others might want to disagree - that the more senior the court the more likely it is that the decision will be based on the quality of the evidence, what the law actually says, and without (too much) prejudice entering in.

The downside is that in a higher court you would need to hire representation as you wouldnt have rights of audience (and they moan about trade unions! they could learn a lot from the legal profession).

How costs would be apportioned is difficult to say. If the other side were REALLY at it, having no case worth mentioning, then you would be more likelyl to get your costs. But each side to bear their own is the norm.

[seriously fed up]

Re presenting your case properly, I completely agree. You should do this - as well as you can - at any stage of the process. My thinking there was what do you do when you have had to face a dodgy Judge.

Re the appeal to the Circuit Judge, I was coming at this from a Scottish perspective, and up here an appeal would be to the High Court and you would need an Advocate for that. I wasnt so clear about the English system and if I mislead anyone on that I am sorry. However, from what I recall of Humbleman and Mydogsawestie's appeal they did seem to have to employ a Barrister?

Re costs, again corrected.

[seriously fed up]

Iain, this is very interesting, and I would like to have a longer time to look at this, but a couple of points for now

First this is only a consultation. We - in Scotland - had a proposal in the Act of Sederunt (rules governing the administration of courts up here - so our equivalent of CPR would be part of this) that a creditor would have to put a copy of the agreement in with the POC. In the couple of weeks before it was due to come into effect, somehow it got watered down to there having to be an averment that the agreement exists. This means that creditors who dont actually have a copy of the agreement can kid on that they do, try to scare the other side, but just withdraw their case if the other side dont scare so easily and/or know their rights. Another example of "its not over till the fat lady sings"

My other point concerned your apparent enthusiasm for sections 5.4-5.6, which could be taken to suggest dire warnings to lenders who kid us on about the enforceability of their agreements. Now there are some agreements which will be enforced (probably the more recent ones). There are others which are just a joke - sets of T and Cs with a name and address typed on the top, lacking even a sig box never mind a signature. If this is taken on from consultation to a code of practice then it might make a difference there. My concern is the "grey area" - where there is what is basically an application form with a set of terms and conditions stapled to the back. Have documents like that been enforced? Yes sometimes, sadly they have, but happily not always. Would a lender go to court and seek to enforce that kind of thing - well yes they have, even if a court looked at it closely it would not be enforceable. My point here is that lenders have a predisposition in cases of doubt to take the view that "this is enforceable". To some extent they have to take this view - if they dont they are going to lose a whole lot more money than they will probably lose anyway. So, I wouldnt be quite as optimistic about this section as you seemed to be.

Section 2.20 - yep take your point. Its good that if they dont have the original then they should fess up to this. But look at the preceding section (2.19), it says (and its probably better just to quote)

"Often consumers and their advisors assume that if a signed copy is not provided by the creditor or owner, this necessarily means that the agreement cannot be enforced: either on the basis that section 77(1), 78(1) or 79(1) (as the case may be) has not been complied with, or in reliance on section 127(3) (in the case of agreements to which that subsection still applies). This overlooks the fact that there is no obligation on an information request to provide a copy which includes a copy of the signature. It also overlooks the fact that section 127(3) does not apply merely because a signed document is not available at the court hearing; the section requires that a document containing the prescribed terms 'was' signed by the debtor or hirer. The creditor or owner may be able to provide evidence that its practice was always to require a signature to its agreements and that its agreements always complied with section 61(1)(a) of the Act and the debtor or hirer may be unable to satisfy the court that he or she did not sign an agreement."

Now there are all kinds of reasons that may make it impossible for a lender to do this - where do you get a witness statement for an account say 15 years old? Even if they can show that the debtor signed the agreement they still need to show it was compliant. It is said - I would not like to go further than this that most banks only have the application form with the signed page and destroyed everything else much more than 6 years old. What really worries me is when lenders start using this argument to "frighten" debtors. Point is simply that this is not just a one-way street.

What does please me though is this (its section 1.15)

"At the same time, it is important to remember that the purpose of these sections is to provide information to the consumer, not to provide a method for consumers to avoid paying their debts. Unenforceability is merely the sanction where there is a failure to provide the information. The OFT takes the view that the sections should be read in a way that allows the consumer to obtain the information he or she needs in order to be properly informed without imposing unnecessary burden on business. The OFT’s view is confirmed by the recent decision in Carey v HSBC Bank plc [2009] EWHC 3417 (QB) that the requirement to provide information under section 78 is not to establish whether or not there was a properly executed agreement in the first place and that, given the small fee and short timescale, the copy should be relatively straightforward and cheap to create."

In other words, satisfying a s78 request means that the account is no longer unenforceable - not so good - but it does make clear that satisfying a s78 request does not of and by itself make the account enforceable. Lenders and DCAs now seem to be trying to spin this out to mean that "here's your recon, what are you going to do about paying up?" - I have had a letter about this myself. It should be possible to quote this directly at them that their duty was (to quote from 1.15 again) "to provide information under section 78" but that this is "not to establish whether or not there was a properly executed agreement in the first place".

[bustthematrix]

Maybe I have just been unlucky - or maybe I dont try hard enough - but I have been sent (and I know I am not nearly alone) all manner of rubbish (glossy current t&cs for instance) and told here is your agreement and its enforceable.

In any event, as Rev Ian points out in his original post what they have recognised is that they cant enforce in court, but they do seem to reserve the right to enforce in other ways. So, just a wee bit short of full surrender (though a significant achievement and one that I wouldnt mind at all)

SFU

See the CRA issue is seperate from the 'non-court enforcement' issue. The CRA, thankfully comes under the DPA and is also related to CCA. In the same way that CCA breaches stop them from enforcing via the court, so also DPA breaches can enforce CRA removals and corrections.

 

Have a search through this site and you will find examples of people who have successfully had CRA records amended, cleaned or removed entirely. The main point is, the DPA mandates that those records have to be accurate. If the OC can't confirm the accuracy of it's data with a valid agreement etc, it has to remove them - even if it's own internal records are 100% accurate. As long as a legal dispute exists which is unresolved, lenders are supposed to abide by this.

 

Of course, they don't do this easily or nicely. They will try and strongarm people into thinking they have every right to. Even an ignorant judge may say they have a right to record adverse information etc BUT the DPA does not support that. As long as questions and ambiguity exist as to accuracy of the reported data, that data becomes a matter of personal damage to the individual concerned. It therefore has to be corrected or removed until it can be. A wise lender will chose not to take that risk until it can properly verify the contractual terms of a debt.

 

If the lender later digs out an agreement, then it can repost the credit records for that account etc.

 

But please review the site in relation to this. You will find there are Caggers who have had Default Notices, entire accout records etc removed on the basis that the lender had their figures wrong due to overcharged PPI, false charges, incorrect interest calculations etc.

[bustthematrix]

Lenders and DCAs now seem to be trying to spin this out to mean that "here's your recon, what are you going to do about paying up?" - I have had a letter about this myself. It should be possible to quote this directly at them that their duty was (to quote from 1.15 again) "to provide information under section 78" but that this is "not to establish whether or not there was a properly executed agreement in the first place".

Couldn't agree more. In fact, I believe I've said this several times on these boards, possibly even earlier today!

[basa48]

Evidence of lending ALONE is not enough to warrant records on a CRA file.

 

The Data Protection Act mandates that any such records MUST be accurate. If the lender is unable to verify the contract and therefore the terms of the contract, how can they verify the accuracy of the records relationg to that contractual agreement?

 

The right thing for them to do is therefore to retain their own internal records BUT remove the public records in the CRA UNTIL they can properly verify the contract and it's terms - upon which any records would be vased!

 

This is why people have successfully had Default Notices and CRA records removed where they took action to do so and pleaded correctly.

 

Unfortunately the following is the ICOs response to my arguments along similar lines. Contrary to what the n*bhead says in his response I did explain the creditor had not supplied any valid document that even comes near to an agreement.

 

Edited June 18, 2010 by supasnooper
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[Lord_Alcohol]

Well, this makes a complete mockery of UK law.

 

I am amazed that the ICO feels able to comment on legal issues outside of the DPA.

 

The fact is that, if an agreement is unenforceable, that is what it means. All the provisions within the agreement are unenforceable, not just recovery of sums unpaid.

 

The 1974 Act does not differentiate different parts of an agreement when it comes to unenforceability, therefore if an agreement is unenforecable, all of it's provisions are void. These provisions, of course, include data processing.

 

s61, s65 and s127 (which cover enforceability) do not separate out other provisions within an agreement to the 'debt'. It is the entire agreement which becomes unenforceable, not just any sum unpaid.

 

Going back to DPA, Principle 1 states that data "must be processed fairly and lawfully" and it is the ICO's remit to ensure this is done. Where an agreement is unenforceable, that means it has not been lawfully executed (it does not comply with the 1974 Act). Therefore any data processing undertaken under an unlawfully executed agreement must therefore be...unlawful, and is a breach of Principle 1 of the DPA.

 

It is worth noting that a debtor only agrees to allow data processing when the agreement is signed. Receipt of money from the creditor is irrelevant. The only relevant issue is acceptance of the provision within the agreement that allows this to happen. With no agreement, or an agreement that is unlawfully executed, then any such acceptance must be fundamentally mistaken and data processing should cease.

 

Well, just my view, but logic suggests that the ICO is wrong and Principle 1 of the DPA is breached where data is processed under an unenforceable agreement.

 

LA

[paulwlton]

Well, this makes a complete mockery of UK law.

 

I am amazed that the ICO feels able to comment on legal issues outside of the DPA.

 

The fact is that, if an agreement is unenforceable, that is what it means. All the provisions within the agreement are unenforceable, not just recovery of sums unpaid.

 

The 1974 Act does not differentiate different parts of an agreement when it comes to unenforceability, therefore if an agreement is unenforecable, all of it's provisions are void. These provisions, of course, include data processing.

 

s61, s65 and s127 (which cover enforceability) do not separate out other provisions within an agreement to the 'debt'. It is the entire agreement which becomes unenforceable, not just any sum unpaid.

 

Going back to DPA, Principle 1 states that data "must be processed fairly and lawfully" and it is the ICO's remit to ensure this is done. Where an agreement is unenforceable, that means it has not been lawfully executed (it does not comply with the 1974 Act). Therefore any data processing undertaken under an unlawfully executed agreement must therefore be...unlawful, and is a breach of Principle 1 of the DPA.

 

It is worth noting that a debtor only agrees to allow data processing when the agreement is signed. Receipt of money from the creditor is irrelevant. The only relevant issue is acceptance of the provision within the agreement that allows this to happen. With no agreement, or an agreement that is unlawfully executed, then any such acceptance must be fundamentally mistaken and data processing should cease.

 

Well, just my view, but logic suggests that the ICO is wrong and Principle 1 of the DPA is breached where data is processed under an unenforceable agreement.

 

LA

 

Can't argue with the Lords.

 

He loses ALL his rights under the agreement

 

72. Undoubtedly, as illustrated by the facts of the present case, section 127(3) may be drastic, even harsh, in its adverse consequences for a lender. He loses all his rights under the agreement, including his rights to any security which has been lodged. Conversely, the borrower acquires what can only be described as a windfall. He keeps the money and recovers his security. These consequences apply just as much where the lender was acting in good faith throughout and the error was due to a mistaken reading of the complex statutory requirements as in cases of deliberate non-compliance. These consequences also apply where, as in the present case, the borrower suffered no prejudice as a result of the non-compliance as they do where the borrower was misled. Parliament was painting here with a broad brush.

[seriously fed up]

Yes but the problem is what is meant by enforcement. There is a (understandable) tendency on here to considere incessant phone calls, threatograms, doorstep collection etc as enforcement. But this hasnt been the view of the courts - for instance this was central in McGuffick and also merits a mention in Carey. OFT take this up in their consultation document at 5.2 where they say "In a recent judgment,(they mean McGuffick), the Commercial Court held, in a case under section 77 of the Act, that passing details of a debt to a credit reference agency and related activities do not constitute enforcement. It also held that steps taken with a view to enforcement, including demanding payment from a claimant, issuing a default notice, threatening legal action and the actual bringing of proceedings, are not themselves 'enforcement'. On the other hand it confirmed that obtaining judgmentagainst the debtor was enforcement, as were the actions listed under sections 76(1) and 87(1),26 notwithstanding that some of the actions 'less obviously' amounted to enforcement." It compounds things when one realises that "less obvious" are "demanding earlier payment, recovering possession of goods or land, treating any right conferred on the debtor by the agreement as terminated, restricted or deferred, enforcing any security and terminating the agreement." According to OFt there is a distinction between actions based on "the exercise of contractual rights (which would be enforcement) and other actions intended to obtain payment which did not involve the exercise of a contractual right."

Its also the case - and this too is referred to in McGuffick - that even though an account is not enforceable by a court (eg falls foul of 127 -3) this does not bring it to an end, and the rights and duties of both sides continue - its just that the court cannot issue an enforcement order.

Therefore given the current legal position I cant say I am surprised at ICO's response.

Thus when you say "Going back to DPA, Principle 1 states that data "must be processed fairly and lawfully" and it is the ICO's remit to ensure this is done. Where an agreement is unenforceable, that means it has not been lawfully executed" you are right, but the legal view is that this doesnt mean that the agreement does not exist and did not exist. Its usually quite easy for a lender to show that lending took place, and the view of the courts is very much not that "Receipt of money from the creditor is irrelevant". To repeat, the view in courts is that with an unenforceable agreement its not that the agreement did not or does not exist - its just that a court cannot issue an order.

 

Edited to add, Paul you and I must have been typing at the same time. I take your point about the Lords - I assume you mean Wilson - but there is a question of which rights. There is the right to enforce at court - completely agree and this is without question that they lose that. Thus there is no course of action through the legal system that the lender can hope to secure payment etc. However, and I think McGuffick (lower court I know, but this focused on a slightly different issue on what a lender can do to secure compliance when excluded from legal remedy) is quite clear, the lender can employ other tactics - see the list above from OFT of actions that do not constitute enforcement - to achieve their ends, and I would say (following this kind of thinking - not that I agree with it) that registering defaults on accounts that cannot be enforced (because they fall foul of 127 for instance) is one such.

Edited June 18, 2010 by seriously fed up

[bustthematrix]

Wow, the ICO affirm they have no remit with regard to the lawfulness of the CCA, yet go on to argue extensively about the fact that a debt does exist, you have benefited from it etc. Interestingly, these are never the points we dispute.

 

We simply dispute the lawfulness of recording accurate or inaccurate Data. We also never say the OC can't keep their own records but simply that it should not be passed to a third party!!! The CRAs are 3rd parties!!!

The ICO link below Personal information rights - Data Protection Act (DPA) - ICO lists the following rights of the Data Subject (we the people)

 

How to access information

 

This allows you to find out what information is held about you on a computer and within some manual records, such as medical records, files held by public bodies and financial information held by credit reference agencies.

Correcting information

 

This allows you to apply to a court to order a data controller to correct, block, remove or destroy personal details if they are inaccurate or contain expressions of opinion based on inaccurate information.

Preventing processing of information

 

This means you can ask a data controller not to process information about you that causes substantial unwarranted damage or distress. The data controller is not always bound to act on the request.

Preventing unsolicited marketing

 

This means a data controller is required not to process information about you for direct marketing purposes if you ask them not to. For example, you have the right to stop unsolicited mail.

Preventing automated decision making

 

This means you can object to decisions made only by automatic means. For example, where there is no human involvement.

Claiming compensation

 

This allows you to claim compensation through the courts from a data controller for damage, and in some cases distress, caused by any breach of the act.

Exempt information

 

This allows you to ask the ICO to investigate and assess whether the data controller has breached the act. Please read our how to complain section, which explains how to do this.

[Hadituptohere]

Can't argue with the Lords.

 

He loses ALL his rights under the agreement

 

72. Undoubtedly, as illustrated by the facts of the present case, section 127(3) may be drastic, even harsh, in its adverse consequences for a lender. He loses all his rights under the agreement, including his rights to any security which has been lodged. Conversely, the borrower acquires what can only be described as a windfall. He keeps the money and recovers his security. These consequences apply just as much where the lender was acting in good faith throughout and the error was due to a mistaken reading of the complex statutory requirements as in cases of deliberate non-compliance. These consequences also apply where, as in the present case, the borrower suffered no prejudice as a result of the non-compliance as they do where the borrower was misled. Parliament was painting here with a broad brush.

 

Where can this be found, sorry if its a daft question I have just seen it and havent read all the updates to this thread

[bustthematrix]

I am amazed that the ICO feels able to comment on legal issues outside of the DPA.

 

Well, just my view, but logic suggests that the ICO is wrong and Principle 1 of the DPA is breached where data is processed under an unenforceable agreement.

 

LA

 

Couldn't agree more sir! The comments in that ICO letter in Basa48's #2642 post are way beyond the ICO remit - way beyond.

 

On top of that they make it clear that they don't have the power to compel compliance in some areas!

[seriously fed up]

All true matrix, but what we need to take on board - and find a way through if we can - is the distinction that has been drawn between the existence of an account and whether it can be the subject of legal enforcement. Some accounts cannot be legally enforced, but the view of the courts - McGuffick and to some extent in Carey - is that this does not mean the agreement does not/ did not exist. It only means that there is no point for the lender going to court as the court is specifically forbidden to issue an order for enforcement.

I take Paul's point very much about decisions at the Lords - Wilson for instance - and that failure to fulfil s61 or 77 means that the lender loses all rights. Ths issue, as sketched out above, is which rights? Only the legal ones or the whole lot? On reflection, bearing in mind the discussion of windfalls etc, it may be that the Lords intended all rights (certainly more than just the immediate legal rights), but at the same time, they are less than clear on this point.

[bustthematrix]

Can't argue with the Lords.

 

He loses ALL his rights under the agreement

 

72. Undoubtedly, as illustrated by the facts of the present case, section 127(3) may be drastic, even harsh, in its adverse consequences for a lender. He loses all his rights under the agreement, including his rights to any security which has been lodged. Conversely, the borrower acquires what can only be described as a windfall. He keeps the money and recovers his security. These consequences apply just as much where the lender was acting in good faith throughout and the error was due to a mistaken reading of the complex statutory requirements as in cases of deliberate non-compliance. These consequences also apply where, as in the present case, the borrower suffered no prejudice as a result of the non-compliance as they do where the borrower was misled. Parliament was painting here with a broad brush.

Hi Paul

 

Are you quoting from Wilson here or another source? I take it you mean the creditor in breach of s127 loses all his rights not the borrower?

 

Please clarify, thanks.;-)