Dissecting the Manchester Test Case....

[paulwlton]

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.;-)

 

Wilson v First County Trust. HOL

[bustthematrix]

Perhaps someone needs to pick Wilson v First County Trust apart for the ICO then!!!

[Lord_Alcohol]

Agree with what you say SFU but...

 

Just taking a step back, to the conditions that allow for "unenforceability". I think we are agreed that it is unlawful execution, ie the agreement is void because it does not comply with CCA74. Alternatively, there is no agreement, so neither side can really state with any certainty that there exists a lawful agreement that does comply.

 

Which is I guess the reason for FB proposing loss of all rights to creditor and his obtaining the full support of Parliament for his proposal for inclusion into s127.

 

I agree - data processing is not enforcement, but as CCA was formed before data processing took off (Experian - the first CRA - was founded in 1980) it is understandable why it would only refer to "enforceability" as the concept of "data processing" may have been too much like Jerry Anderson at the time. However, if "unenforceability" is a product of an unlawfully-executed agreement, or an agreement that cannot be found, then it remains that all provisions within the agreement are void (as far as I can see).

 

You're right, there are still these annoying judges who look at the process of providing credit, but that credit was only received (and a contract entered into) on the basis of a lawful agreement and lawfully-applied interest and charges. Where the agreement is running credit, then there may have been far more paid in than taken out, all on the basis of "lawfullness".

 

If the creditor is subsequently unable to prove that the agreement is/was lawful, then it is reasonable to view all provisions as void. This was the view of FB and s127, so seems odd if courts are selective about this.

 

LA

[Lord_Alcohol]

http://www.francisbennion.com/pdfs/fb/2003/2003-061-consumer-credit-1974-s127-3.pdf

 

[bustthematrix]

Very well said LA

 

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.

Basa48

Having got this far, it's worth pressing on. You may want to write back to the ICO reminding them of

 

- your rights as a Data Subject

- you are not disputing the debt

- you are not disputing the lender's right to keep information

- the importance of Wilson vs First County and anything similiar

- whilst an unresolved dispute exists, data should not be passed to 3rd parties

- your rght for any data held to be accurate

- appraise them of the areas in their response where they are straying outside their remit by not addressing issues of accuracy of data and lawfulness of processing. By getting involved in the dispute between you and arguing the lender's rights and the fact you owe a debt and benefitted from it (none of their business), they've strayed!

 

In fact, if you know a good solicitor/barrister, show them that letter and ask for their opinion on whether the ICO is acting outside its powers. I think it's fairly clear they've strayed into territory they are not supposed to nor are equipped to advise on.

[Hadituptohere]

The ICO's responce does sound very similar almost word for word to the responce received from Experian when I disputed the information being processed....

 

Hadituptohere

[RobinWayRobinme]

Hi SFU, Didn't realiseyou were disgussing Scottish system. I didn/t realise it was so different. So if you lose by a wrong decision in County Court, you are straight to high court and can't represent yourself.Will get very costly in that case. As far as I am aware, even in the high court in England you still have a right to represent yourself (stand corrected if I'm wrong on this as I've not needed to do it).

 

From what I have read on MDAW and Humbleman threads, they instructed a barrister as a matter of choice.

R

 

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.

[bustthematrix]

It's something of a conspiracy. Third parties arguing a lender's rights because both are controlled by the one. It doesn't matter really.

 

As Lord Alcohol and PaulWilton's posts clearly state, where the lawful condition of unenforceability exists, the Lender loses many rights they thought they had on the basis that they 'lent' money.

 

Well the argument is not whether or not they lent money or whether or not money was received or enjoyed etc. The point is that money was lent (credit facility provided) under the CCA 1974. This is the major point which the Lord's focused on in Wilson and it is on this basis that breaches within the Act deny lenders certain rights.

[seriously fed up]

I think the main thing in your post LA is when you suggest that "If the creditor is subsequently unable to prove that the agreement is/was lawful, then it is reasonable to view all provisions as void". I think this really is the nub of the issue. I understand your pov, but some of the courts at least (eg McGuffick) dont agree, and argue that only the right to legal enforceability is extinguished. So the issue is really are all rights extinguished and if not all, then which ones are not. Paul's observations from Wilson suggests all - McGuffick suggests otherwise. On the side of Paul's argument is that Wilson was House of Lords, but the problem is that it wasnt as clear as it might be (big letters in bold, with underline) left wriggle room

The other thing from your post LA is that you find it odd that the courts should be selective. Law in the UK is not by any means blind to class. It is there to protect property, even over the individual should that be necessary. Judge "I hate debtors" is one manifestation of this. I am not defending any implication that this is how things should be, but its how it is imo and its best we recognise what we are up against.

Secondly Bennion's pov is obviously important, as the architect of the Act, but that's all he was - he drew the Act up. Parliament passed it and the Courts enforce it. I am not sure how significant his view would be in court - in contrast say to Goode.

Also an agreement can be unenforceable or it can be void. Its fair to say too that if its void (eg s59) it cannot be enforced, but the reverse does not apply - ie unenforceabilty means it cannot be enforced, not that its void. Unlawful execution does indeed make an agreement not enforceable, but not void. I dont know if s59 has been tested, but I have tried this one on others and the view coming back is that if a court agreed with this then what they would do would be to try to put the parties back to where they had been had the (void) agreement not existed. So the creditor would get any money loaned back, but the debtor would get all their payments back - for an agreement (credit card) that had existed for some time with the account maxed out and payments made when due, this could cost a lender a bucket load of money!

[Lord_Alcohol]

Very well said LA

 

 

Basa48

Having got this far, it's worth pressing on. You may want to write back to the ICO reminding them of

 

- your rights as a Data Subject

- you are not disputing the debt

- you are not disputing the lender's right to keep information

- the importance of Wilson vs First County and anything similiar

- whilst an unresolved dispute exists, data should not be passed to 3rd parties

- your rght for any data held to be accurate

- appraise them of the areas in their response where they are straying outside their remit by not addressing issues of accuracy of data and lawfulness of processing. By getting involved in the dispute between you and arguing the lender's rights and the fact you owe a debt and benefitted from it (none of their business), they've strayed!

 

In fact, if you know a good solicitor/barrister, show them that letter and ask for their opinion on whether the ICO is acting outside its powers. I think it's fairly clear they've strayed into territory they are not supposed to nor are equipped to advise on.

 

Yes, that's what I'd do too. Easy for us to comment of course...

 

Anyway, AFAIK, the ICO was established to police the data collection/processing industry and to ensure that DPA was complied with by its data controllers. Principle 1 simply cannot be complied with where there is no lawful agreement, or no agreement at all, because it is only through a lawful agreement that data can be lawfully processed.

 

I cannot currently think of any other way for a creditor/DCA to process your personal financial data, unless the OC argues that acceptance of T&Cs is separate to agreement of the contract - but how likely is that? As T&Cs are part of the agreement, but as the agreement is unlawful (or non-existent), then the T&Cs are similarly voided.

 

If the ICO is happy to comment on CCA, then they should also be happy to review the lawfullness of requests from OCs to record adverse data. If there is any doubt then I would imagine that they would favour the debtor, at least until the issue is resolved, due to the damage that adverse data can cause and also due to the legal requirements of the DPA and the ICO's obligations under it.

 

LA

[seriously fed up]

It's something of a conspiracy. Third parties arguing a lender's rights because both are controlled by the one. It doesn't matter really.

 

As Lord Alcohol and PaulWilton's posts clearly state, where the lawful condition of unenforceability exists, the Lender loses many rights they thought they had on the basis that they 'lent' money.

 

Well the argument is not whether or not they lent money or whether or not money was received or enjoyed etc. The point is that money was lent (credit facility provided) under the CCA 1974. This is the major point which the Lord's focused on in Wilson and it is on this basis that breaches within the Act deny lenders certain rights.

 

Another example of what I mean - which ones? There is a lack of clarity caused by lower courts and which lenders will exploit. Perhaps there is a need to find a way through McGuffick (its being appealed, is it not?) via Wilson?

[seriously fed up]

Principle 1 simply cannot be complied with where there is no lawful agreement, or no agreement at all, because it is only through a lawful agreement that data can be lawfully processed.

LA

the problem is that where an agreement is not enforceable in law does not make it unlawful - only unenforceable. I agree there is a certain amount of overlap here, but they are not the same. What would be needed imo would be a clear ruling that if the lender doesnt have the appropriate paperwork to enforce then the agreement is toast in all its aspects. Wilson came close, but I fear lacks the necessary detail.

[Lord_Alcohol]

the problem is that where an agreement is not enforceable in law does not make it unlawful - only unenforceable. I agree there is a certain amount of overlap here, but they are not the same. What would be needed imo would be a clear ruling that if the lender doesnt have the appropriate paperwork to enforce then the agreement is toast in all its aspects. Wilson came close, but I fear lacks the necessary detail.

 

Ah, yes see what you mean.

 

OK, "unlawful" is not the right term. So if an agreement is "unenforceable" it is only unlawfully executed and therefore has been found to be non-compliant with the CCA.

 

But in these cases the entire agreement remains unenforceable, not just s87(1) which provides for recovery of money/property. Could it be argued that, where the entire agreement is unenforceable, there is no provision anywhere that provides for execution of any other part of the agreement?

 

For example, CCA doesn't say that some parts of an unenforceable agreement may be executed, which is what the OCs and ICO are saying. They claim that they are entitled to process data under a provision within an unenforceable or non-existent agreement! The CCA doesn't offer this facility, as far as I can see.

 

LA

[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.

Was this not a higher level ruling than McGuffick...which, to my knowledge was never appealed?

 

Wider in scope it may be SFU but it seems clear what the Lords' intended here. Their language may not be explicit but it is NOT ambiguous.

 

"adverse consequences for a lender"

"loses all his rights under the agreement"

"including ... rights to ANY security which has been lodged"

"borrower ACQUIRES ... a windfall"

 

It's pretty clear that they meant ALL rights IMO.

Edited June 18, 2010 by bustthematrix
Clarity

[bustthematrix]

I also think we need to be wary of placing too much weight on the outcomes of some unsuccessful CAG cases. Sadly, not everyone is as informed as they should be and cases are not always well pleaded from beginning to end. So called losses in court should be taken with a pinch of salt unless you personally know the full facts from beginning to end.

 

It is a fact that after people have 'lost' a case, they invested time in more study, asked for help and later won on appeal after seeing where mistakes were made.

 

That's not to say the legal system is perfect, of course it isn't but to focus on those imperfections will lead to apathy and inaction.

[seriously fed up]

Was this not a higher level ruling than McGuffick...which, to my knowledge was never appealed?

 

Wider in scope it may be SFU but it seems clear what the Lords' intended here. Their language may not be explicit but it is NOT ambiguous.

 

"adverse consequences for a lender" in law

"loses all his rights of legal enforement under the agreement"

"including ... rights to ANY security which has been lodged"

"borrower ACQUIRES ... a windfall"

 

It's pretty clear that they meant ALL rights IMO.

 

My own view would be that you are right Matrix. I am just expressing concern that's its not as clear as it might be, as i have tried to show in my "amendments" to your quote.

Is there an analogy here (and I know its not perfect)? You buy holiday insurance, your plane gets held up and you end up sitting in an airport for 48 hours. Down there in the fine print there is a clause saying you must notify the insurers within 2 hours of the event you wish to claim for. Not having read this, or not properly, you dont do this and so when you make your claim they knock it back. In terms of the contract they are within their rights to do so - and you have no legal recourse. However, you can complain, tell your friends, write to the media, go on Watchdog etc. Do you see where I am going with this? You cant do anything within the legal system, but that doesnt mean there is nothing you can do.

[Lord_Alcohol]

Completely agree BTM. You've hit the nail on the head.

 

What really appears to be missing is the argument from the OC/DCA/ICO that enables them to continue processing data when the agreement is either missing or unenforceable.

 

IMHO, all that is happening is that data is being processed by the OC and recorded by the CRAs because the CCA does not explicity prevent it. The ICO seem to take the view (according to Basa's letter) that they allow this to happen where an agreement exists, whether enforceable or not.

 

Conversely, there is no provision within the CCA that explicitly allows it.

 

However, it is (in IMO) quite clear that the creditor was originally intended to lose all rights if he cannot be bothered to ensure compliance with CCA, as BTM and others have pointed out.

 

But, if the OC continues to process data which is recorded by the CRAs but the contract is unenforceable because the OC has screwed up, it might seem unfair to the debtor that adverse data continues to collect when he has discovered that he's been enticed into a non-compliant contract. In this case he has s140A(1)© available - part of the unfair relationship test.

 

The court may make an order under section 140B in connection with a credit agreement if it determines that the relationship between the creditor and the debtor arising out of the agreement (or the agreement taken with any related agreement) is unfair to the debtor because of one or more of the following—

 

(a) any of the terms of the agreement or of any related agreement;

 

(b) the way in which the creditor has exercised or enforced any of his rights under the agreement or any related agreement;

 

© any other thing done (or not done) by, or on behalf of, the creditor (either before or after the making of the agreement or any related agreement).

 

I would suggest that it is grossly unfair to the debtor to get him to sign up to a non-compliant contract and risk all the protections under CCA that should be available to him, and then stiff him further by recording adverse data when it's clear that the intent of unenforceability was to remove all rights from the creditor.

 

Just a thought...

 

LA

[bustthematrix]

Do you see where I am going with this? You cant do anything within the legal system, but that doesnt mean there is nothing you can do.

Totally agree m8!

 

There are some things the lenders can do that wouldn't be illegal and ongoing CRA reporting where an unresolved dispute stands isn't one of them, imo.

 

They can 'blackmark' you internally for further future credit etc and if they are a large enough lender, that could close a few credit doors for you. But even whether that's lawful is suspect due to the requirements of the DPA 1998 should a s10 request be served.

 

Internal prohibitions within their group is about all they can legally do, in my view. Illegally (or unlawfully if you like), they can sell it, chase for it, write nasty threatening letters, keep updating CRA records, tell all their fellow lenders etc but they shouldn't be doing that under the CCA.

 

If they are able to remedy their breach, under the CCA, then their rights return to them. Otherwise they have to accept the consequences of their breach under the agreement under the CCA.

 

To be honest, where an agreement does not exist, a borrower could, should they so choose, be open to claim various damages against the lender as well - without substantiation.

 

The agreement is there to regulate the relationship from both sides for the protection of both parties, not just the borrower. When lenders' lose or destroy them for whatever reason, it's their burden and risk.

[diddydicky]

Well you wouldn't quote just Waksman only would you? You'd mention it simply to buttress your point that he agreed recons for information purposes only under S77-9 but NOT for proof.

 

The otherside will argue what they wish and of course will try to twist Waksman. They are already doing it in many of their letters. But it does not stack up under greater scrutiny. To me it is clear Waksman did not say a recon is the same as an original nor that it satisfies s61 violation. Even where he ok'd a recon, there were caveats added.

 

 

correct

[bustthematrix]

"adverse consequences for a lender"

"loses all his rights under the agreement"

"including ... rights to ANY security which has been lodged"

"borrower ACQUIRES ... a windfall"

 

It's pretty clear that they meant ALL rights IMO.

SFU, I stand corrected. I meant ALL rights under the agreement within the scope of the CCA.

 

I guess they can do whatever they like outside of the CCA as long as it's lawful...so it mustn't violate all the other body of Statute Law . All of which exist for a reason.

 

The problem is that they act like outlaws until somebody makes them obey the letter of the law.

[diddydicky]

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.

 

are you sure? i am not aware that a defendant cannot represent themselves in an appeal!

 

i could be wrong

[seriously fed up]

are you sure? i am not aware that a defendant cannot represent themselves in an appeal!

 

i could be wrong

my point about "need to hire representation" was directed more at the fact that senior courts are more formal, the issues more technical, but yes it would be possible to represent yourself. Whether it would be wise..... another story! I think that is what was the issue for Humbleman and MDAW.

But yes you are right, its perfectly possible to represent yourself. Sorry if what I said was misleading.

[bustthematrix]

Focussing on the Data Protection Act 1998 for just a mo, in relation to Lender's (Data Controller DC) rights vs those of the borrower (Data Subject DS), some basic rights of a DS (not a comprehensive list) are:-

 

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.

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

 

A DC's legal obligations include:-

 

• Do I really need this information about an individual? Do I know what I'm going to use it for?
  
• Do the people whose information I hold know that I've got it, and are they likely to understand what it will be used for?
  
• If I'm asked to pass on personal information, would the people about whom I hold information expect me to do this?
  
• Am I satisfied the information is being held securely, whether it's on paper or on computer? And what about my website? Is it secure?
  
• Is access to personal information limited to those with a strict need to know?
  
• Am I sure the personal information is accurate and up to date?
  
• Do I delete or destroy personal information as soon as I have no more need for it?
  
• Have I trained my staff in their duties and responsibilities under the Data Protection Act, and are they putting them into practice?
  
• Do I need to notify the Information Commissioner and if so is my notification up to date?
  

DS Rights Contd.

Preventing processing of information

 

You have a limited right under the Data Protection Act to tell an individual or organisation to stop processing information about you if it is causing you unwarranted and substantial damage or distress. You should make this clear and must be done in writing:

• Who you are
  
• What the processing is that you object to. This could relate to the use that is being made of the information or it could be the information itself. You may object to who the information is being released to and how it is being processed
  
• Why this processing is causing you unwarranted and substantial damage or distress. Or, if the processing has not yet begun why it will be likely to do this
  
• It would be advisable to send this by recorded delivery.
  

Exemptions

 

This right does not apply to any processing done

• with your consent
  
• that is necessary to carry out a contract
  
• that is necessary to prepare, with your agreement, to enter a contract
  
• that is necessary to carry out any legal obligation that applies to the organisation except those relating to contracts
  
• that is necessary to protect your vital interests
  

What can you expect in response?

 

The organisation should reply in 21 days and explain what, if anything, they are going to do in response. They should also give their reasons if they think your demand is not justified in any way.

If you are not satisfied with the response you can then apply to a court and the court will decide whether, or how far, your demands should be met.

You should keep a copies of all the correspondence relating to the matter. Also record the dates of any communications. This will be important evidence for the court to consider.

 

Better stop here before diluting this thread further. However you can see that accuracy of data and care to avoid doing damage are important and central reasons for why the DPA was enacted in the first place.

[diddydicky]

my point about "need to hire representation" was directed more at the fact that senior courts are more formal, the issues more technical, but yes it would be possible to represent yourself. Whether it would be wise..... another story! I think that is what was the issue for Humbleman and MDAW.

But yes you are right, its perfectly possible to represent yourself. Sorry if what I said was misleading.

 

thats ok - i genuinely was unsure!!

[Lord_Alcohol]

Good work BTM!

 

If I were asked, I would suggest that the OC + ICO were processing and recording adverse data for reasons that have nothing to do with CCA or the DPA and more to do with protection of interests.

 

Unfortunately, the CRAs provide services not just for lenders. They also offer credit scoring of prospective tenants, for employers and those individuals looking to work in the defence sector via DVA background checks. This is IMO why the ICO needs to ensure that there is a sound basis for adverse data, and I don't think that a non-compliant agreement counts (well, it does, but it shouldn't).

 

LA