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PLEASE HELP!!! s 75 claim - Costs on bank's application to strike out

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Can someone, anyone, please help me?

 

I have started a small claim against Barclays for £4,700 under section 75 CCA (equal liability). I thought (still do) that my claim was quite strong but it is really complex and rests on a technical point of law.

 

The bank made an application to strike out the claim (before the allocation stage). Based on their argument, I amended my Particuars of Claim before the strike out hearing. At the hearing the amendments were allowed and the bank was given a further 21 days to amend their application to strike out based on the new particulars.

 

They have done this and have written to me today saying they do not consider their position has changed, that my claim is misconstrued and they will be applying to recover all of their costs at the hearing.

 

I am now panicking because if I lose at the hearing to strike out, then I understand I will be liable for all of their costs and because it is pre-allocation, the small claims limit does not apply! Is this true. I'm really worried......

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Hello and Welcome,

 

I'll move this thread to the Legal Issues Forum.

 

Regards.

 

Scott.


 
 

Any advice I give is honest and in good faith.:)

If in doubt, you should seek the opinion of a Qualified Professional.

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Help keep it up and active, helping people like you.

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RIP: Rooster-UK - MARTIN3030 - cerberusalert

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Ok, relax first and look at the grounds for the SO of a case:

 

(2) The court may strike out a statement of case if it appears to the court

 

(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim;

 

(b) that the statement of case is an abuse of the court's process or is otherwise likely to obstruct the just disposal of the proceedings; or

 

© that there has been a failure to comply with a rule, practice direction or court order.

 

Now, consider the merits of your case objectively and whether the Court is likely to SO your application, either in part or all of it. You need to read the application and find out under which section they are asking for the Court to strike out the case.

 

We are not privy to your statement of case so if it is poorly pleaded, I would amend it but you have already stated that you have amended it. We are also not informed of the application details so it would be hard to advise further.

 

The general rule is that the unsuccessful party will pay the costs of the successful party but the Court may make a different order (CPR 44.3(2)).

 

You will need to file evidence, therefore a witness statement to oppose the application no later than 4 pm 2 days before the hearing.

 

Check the evidence in the hearing bundle you may have received and make sure it contains evidence that you know should be included and excluding any privileged information between you and them, but which is to your detriment. If there is anything missing, let them know.

 

If you are relying on complex technical points of law, I would file a skeleton argument at least a day before the hearing. Google skeleton argument to get a few examples which you can use as templates, or alternatively, search these forums for an example.

 

If you are unsuccessful in your defence of the SO, make sure you seek leave at the hearing for appeal if you want to pursue this claim later. Also, if the transcript of the hearing is unlikely to be ready in time, ask the DJ if in the County Court, would he/she be willing to review and endorse an agreed note of the hearing prepared by yourself and opposing counsel for purposes of the appeal.

  • Haha 1

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Thank you so much for taking the time to respond. You have been a great help.

I have done a whole more heap of research on this and actually managed to get a barrister to give me some off the record advice. Unfortunately, this point of law is untested in Court but the leading authority on the subject (which the bank would rely on) is not in my favour.

 

I have, reluctantly, decided to withdraw and put it down to experience. Bummer :(

 

You're a star though, coming to my aid. Thank you!

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can i ask what the basis of the claim was?

 

There is House of Lords authority on the application of s75 CCA and we deal with these claims alot, while a Barrister may well be very knowledgable, the CCA is a real tricky area of law to play with

 

can you post an outline of the matters you were pursuing

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Yes with pleasure, I'd love your help!

 

In brief, I paid £4,500.00 to a company who failed to perform the service I paid for. I took them to small claims and obtained Judgement in Default (they did not bother to defend as they were busy dissolving the company and setting up a new one to avoid liability, trading under an almost identical name, same premises, same people, etc. etc - I have explored 'phoenix companies', suing the directors personally, and all sorts, but there is nothing I can do there, much to my sheer frustration).

 

I paid the company using my Visa Debit card and the payment took me overdrawn, so £4165 was of my own funds and £335 was from my overdraft facility (the limit on my overdraft was £1500).

 

As you will know, debit card payments are not covered under section 75(1) CCA, except (I believed) when the transaction creates or increases an overdraft. According to the Financial Ombudsman Service, it then becomes a 'credit token' for the purposes of the CCA. I had also heard this on the Money Programme and had read it elsewhere that you can claim under s75 when the debit card payment takes you overdrawn.

 

I submitted a claim to Barclays, they denied liability, so I commenced proceedings. My Particulars of Claim were along the following lines:

 

1. By reason of Section 75(1) of the Consumer Credit Act 1974 (‘the Act’), the Defendant is jointly and severally liable with the Supplier for the Supplier’s said misrepresentation and/or breach of contract. Section 75(1) of the Act states:

75 Liability of creditor for breaches by supplier

(1) If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or © has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.

2. Liability under Section 75(1) arises even if the credit only relates to part of the price and it is potentially unlimited (I referred here to Office of Fair Trading v Lloyds TSB Bank Plc and Others [2008] 1 All ER 205 paragraph 31).

3. Section 12 of the Act is, as follows:

12 Debtor-creditor-supplier agreements

A debtor-creditor-supplier agreement is a regulated consumer credit agreement being--

(a) a restricted-use credit agreement which falls within section 11(1)(a), or

(b) a restricted-use credit agreement which falls within section 11(1)(b) and is made by the creditor under pre-existing arrangements, or in contemplation of future arrangements, between himself and the supplier, or

4. Section 11 of the Act is, as follows:

11 Restricted-use credit and unrestricted-use credit

(1) A restricted-use credit agreement is a regulated consumer credit agreement--

(a) to finance a transaction between the debtor and the creditor, whether forming part of that agreement or not, or

(b) to finance a transaction between the debtor and a person (the "supplier") other than the creditor, or

5. Where a transaction is funded in whole or in part by credit token payment (as defined by Section 14(1)(b) the Act), the agreement is a restricted use credit agreement under section 11(1)(b) of the Act – see Example 3 Schedule 2 Part 1 Consumer Credit Act 1974. It is also a debtor-creditor-supplier agreement made by the creditor under pre-existing arrangements, or in contemplation of future arrangements, under Section 12(b) of the Act - see Office of Fair Trading v Lloyds TSB Bank Plc and Others [2008] 1 All ER 205 paragraph 18.

6. Pre-existing arrangements’ exist where suppliers are signed up by a merchant acquirer to accept credit or debit cards belonging to the two main international networks, Visa and Mastercard. The arrangement involves both the supplier and the creditor who issues credit and debit cards to the debtor through that network. The merchant acquirer contracts with the supplier to process all the supplier’s supply transactions made with cards of the relevant network. The network then operates as a clearing system, through which the merchant acquirer is reimbursed by the creditor, less an “Interchange Fee”. This is a fee less than the Merchant Service Charge, so that both the merchant acquirer and the creditor receive a commission on the transaction - see Office of Fair Trading v Lloyds TSB Bank Plc and Others [2008] 1 All ER 205 paragraph 23.

7. Section 14 of the Act is as follows:

14 Credit-token agreements

(1) A credit-token is a card, check, voucher, coupon, stamp, form, booklet or other document or thing given to an individual by a person carrying on a consumer credit business, who undertakes--

(a) that on the production of it (whether or not some other action is also required) he will supply cash, goods and services (or any of them) on credit, or

(b) that where, on the production of it to a third party (whether or not any other action is also required), the third party supplies cash, goods and services (or any of them), he will pay the third party for them (whether or not deducting any discount or commission), in return for payment to him by the individual.

(2) A credit-token agreement is a regulated agreement for the provision of credit in connection with the use of a credit-token.

8. Under Section 14(1)(b) of the Act, a ‘credit token’ includes a credit card, or a debit card on an account which is overdrawn or which is taken overdrawn by a transaction, and is a regulated consumer credit agreement for running account credit falling within the Act – see Example 16 Schedule 2 Part 1 Consumer Credit Act 1974, and extract from the Financial Ombudsman Publication Issue 46 and 3.

9. The use of the Claimant’s Visa Debit Card, which was used to finance the transaction with the Supplier, created an overdraft under the Overdraft Agreement (a regulated agreement under Section 8(1) of the Act), making the Visa Debit Card a credit token for the purposes of Section 14(1)(b) of the Act and the regulated agreement under which it was issued, the Visa Debit Card Agreement, is a credit token agreement as defined in Section 14(2) of the Act. It is therefore a restricted use agreement falling under section 11(1)(b) of the Act in exactly the same way as a credit card. It is also a debtor-creditor-supplier agreement made by the Defendant under pre-existing arrangements being part of the Visa debit and credit network of arrangements between the Defendant, the merchant acquirer and the Supplier.

10. If the Claimant had drawn cash with the Visa Debit Card, or used only the available funds in her bank account without going overdrawn, then Section 75(1) would not apply as the funds can be made payable to anyone, not just to a supplier appointed to accept Visa credit or debit cards under the network. Payment to the supplier would be payment of the money and not payment for the goods - see Example 21 Schedule 2 Part 1 Consumer Credit Act 1974.

 

The bank have made an application to strike out the claim because they say it is misconstrued. They say that even if the debit card (used on an overdraft) is a 'credit token' I have still not shown that a debtor-creditor-supplier agreement existed.

 

I have since done a load more research and managed to get access to Goode's Consumer Credit Law & Practice, and the Banking Practice book, and I'm stuffed I think. There is no case law on this area and so there is no authority upon which I can rely. However, I now understand that the banking industry lobbied successfully to change the law (effected by the Banking Act 1987) to insert a new s187(3A) in the CCA along the lines of 'all transactions shall be disregarded if they are arrangements for the electronic transfer of funds from a current account' (ie: all debit card payaments). Thus, the texts argue, a debit card arrangement will be a debtor-creditor agreement and not a debtor-creditor-supplier agreement. It doesn't specifically state that this applies to all transactions, including where the debit card takes the account into overdraft, but it would be very hard to argue against it.

 

They do go on to say that there is some strength in the argument that there may still be a case where the card is a credit token (ie: a debit card used on an overdraft), but it is very, very sketchy and whimsical and I don't feel I can base the strength of my claim on it when there is so much opposing conjecture preceding it. Unless I can find some proper authority to back it up, there is no way the Court would find in my favour.

 

What do you think? Any suggestions? Or did you fall asleep reading it. Lol.

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Sorry, that's come out a bit gobbledegook where I copied and pasted. Let me try again:

 

1. By reason of Section 75(1) of the Consumer Credit Act 1974 (‘the Act’), the Defendant is jointly and severally liable with the Supplier for the Supplier’s said misrepresentation and/or breach of contract. Section 75(1) of the Act states:

75 Liability of creditor for breaches by supplier

(1) If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or © has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.

2. Liability under Section 75(1) arises even if the credit only relates to part of the price and it is potentially unlimited (I referred here to Office of Fair Trading v Lloyds TSB Bank Plc and Others [2008] 1 All ER 205 paragraph 31).

3. Section 12 of the Act is, as follows:

12 Debtor-creditor-supplier agreements

A debtor-creditor-supplier agreement is a regulated consumer credit agreement being--

(a) a restricted-use credit agreement which falls within section 11(1)(a), or

(b) a restricted-use credit agreement which falls within section 11(1)(b) and is made by the creditor under pre-existing arrangements, or in contemplation of future arrangements, between himself and the supplier, or

4. Section 11 of the Act is, as follows:

11 Restricted-use credit and unrestricted-use credit

(1) A restricted-use credit agreement is a regulated consumer credit agreement--

(a) to finance a transaction between the debtor and the creditor, whether forming part of that agreement or not, or

(b) to finance a transaction between the debtor and a person (the "supplier") other than the creditor, or

5. Where a transaction is funded in whole or in part by credit token payment (as defined by Section 14(1)(b) the Act), the agreement is a restricted use credit agreement under section 11(1)(b) of the Act – see Example 3 Schedule 2 Part 1 Consumer Credit Act 1974. It is also a debtor-creditor-supplier agreement made by the creditor under pre-existing arrangements, or in contemplation of future arrangements, under Section 12(b) of the Act - see Office of Fair Trading v Lloyds TSB Bank Plc and Others [2008] 1 All ER 205 paragraph 18.

6. Pre-existing arrangements’ exist where suppliers are signed up by a merchant acquirer to accept credit or debit cards belonging to the two main international networks, Visa and Mastercard. The arrangement involves both the supplier and the creditor who issues credit and debit cards to the debtor through that network. The merchant acquirer contracts with the supplier to process all the supplier’s supply transactions made with cards of the relevant network. The network then operates as a clearing system, through which the merchant acquirer is reimbursed by the creditor, less an “Interchange Fee”. This is a fee less than the Merchant Service Charge, so that both the merchant acquirer and the creditor receive a commission on the transaction - see Office of Fair Trading v Lloyds TSB Bank Plc and Others [2008] 1 All ER 205 paragraph 23.

7. Section 14 of the Act is as follows:

14 Credit-token agreements

(1) A credit-token is a card, check, voucher, coupon, stamp, form, booklet or other document or thing given to an individual by a person carrying on a consumer credit business, who undertakes--

(a) that on the production of it (whether or not some other action is also required) he will supply cash, goods and services (or any of them) on credit, or

(b) that where, on the production of it to a third party (whether or not any other action is also required), the third party supplies cash, goods and services (or any of them), he will pay the third party for them (whether or not deducting any discount or commission), in return for payment to him by the individual.

(2) A credit-token agreement is a regulated agreement for the provision of credit in connection with the use of a credit-token.

8. Under Section 14(1)(b) of the Act, a ‘credit token’ includes a credit card, or a debit card on an account which is overdrawn or which is taken overdrawn by a transaction, and is a regulated consumer credit agreement for running account credit falling within the Act – see Example 16 Schedule 2 Part 1 Consumer Credit Act 1974, and extract from the Financial Ombudsman Publication Issue 46 and 3.

9. The use of the Claimant’s Visa Debit Card, which was used to finance the transaction with the Supplier, created an overdraft under the Overdraft Agreement (a regulated agreement under Section 8(1) of the Act), making the Visa Debit Card a credit token for the purposes of Section 14(1)(b) of the Act and the regulated agreement under which it was issued, the Visa Debit Card Agreement, is a credit token agreement as defined in Section 14(2) of the Act. It is therefore a restricted use agreement falling under section 11(1)(b) of the Act in exactly the same way as a credit card. It is also a debtor-creditor-supplier agreement made by the Defendant under pre-existing arrangements being part of the Visa debit and credit network of arrangements between the Defendant, the merchant acquirer and the Supplier.

10. If the Claimant had drawn cash with the Visa Debit Card, or used only the available funds in her bank account without going overdrawn, then Section 75(1) would not apply as the funds can be made payable to anyone, not just to a supplier appointed to accept Visa credit or debit cards under the network. Payment to the supplier would be payment of the money and not payment for the goods - see Example 21 Schedule 2 Part 1 Consumer Credit Act 1974.

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Nope, still rubbish. Sorry!

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