CPUTR 2008 questions and advice....

[minmoo]

Nice work P1.

[basa48]

P1 in post 194 you got links to 'dissecting the...' and 'fighting back with...' but nothing saying 'challenging reconstituted Agreements'

 

rgds

m2ae

 

I wrote the following as an argument against the popular DCA notion the 'recons' are good for enforcement. It's rather long and unfortunately (or more likely fortunately!!) I have not yet had to use it. (I think it's way too long winded for a judge to read all the way through anyway). It does I think pick out the relevant arguments.

 

 

 

 

Using ‘reconstituted’ agreements for s61

 

The claimant in his statement refers to standard procedures and expresses his belief that a copy of a further document comprising terms and conditions would have been provided to the Defendant at the time of signing and that there was a reference to the Conditions in the application so that presumably it is said that those Conditions were incorporated into the credit agreement.

 

The claimant cites a recent ‘test case’ [Carey v HSBC: [2009] EWHC 3417 (QB)] to persuade the use of ‘reconstituted’ credit agreements as proof of validity of agreements pursuant to the Act.

 

It will be the defendants assertion that such reliance is misplaced in that the judgment given was in respect of compliance with s78 of the Act only, to wit: ‘Duty to give information to debtor under running-account credit agreement’ and not for compliance with s61 ‘Signing of Agreements’.

 

In the defendants opinion it is vital that this issue is not relied on in error and argues as follows:

 

1. HHJ Waksman in the High Court clarified the purpose of documentary evidence pursuant to s78 with reference to so called ‘reconstituted’ copies of agreements in Carey v HSBC (supra) where he said:

 

[1]. This judgment deals with two matters concerning requests for copies of credit card agreements pursuant to section 78 of the Consumer Credit Act 1974 (“the Act”) and the consequences of non-compliance with that provision.

 

[2]. The purpose of this judgment is to give general guidance, in the context of the cases before me, in the hope that this will narrow or eliminate the issues arising in the hundreds of other similar claims issued in County Courts around the country, many of which have been stayed pending the outcome here.

 

[43]. The issue here is this:

 

(1) When providing a copy of an executed agreement in response to a request under s78(1) of the Consumer Credit Act 1974:

 

(a) Must a creditor

(i) provide a photocopy (or other form of complete copy) of the original agreement that was signed by the debtor or at least provide a copy which is derived directly from the original agreement or complete copy thereof, or

(ii) can a creditor provide a document which is a reconstitution of the original agreement which may be from sources other than the actual signed agreement itself?

(b) Must a creditor provide a document which would comply (if signed) with the requirements of the Consumer Credit (Agreements) Regulations 1983 as to form, as at the date the agreement was made in order to comply with s78?

 

2. Judge Waksman then defines the different ‘purposes’ in relation to copy documents supplied under s78, that is: ‘the Current Information Purpose’ as distinct from ‘the Proof Purpose’.

 

[44]. It is common ground that the purpose of s78 is (at least) to provide the debtor with information as to the terms of the agreement with the creditor, as well as a present statement of his account and future obligations insofar as they are known. Beyond that common ground, however, the parties have adopted very different positions. The Claimants (debtors) say that the information is both as to the present and the original position under the agreement, and the reason for having the information about the original agreement is so that the debtor may be satisfied that he did indeed enter the agreement by signing a document which was a properly executed agreement (“the Proof Purpose”). On the other hand, the Defendants (creditors) say that it is a question only of providing current information, that is, information about the current terms of the agreement along with current financial details (“the Current Information Purpose”).

 

3. He then confirms he considers the s78 document as “the Current Information Purpose” but not “the Proof Purpose” by saying:

 

[53] (3) Once it is accepted that provision of a photocopy to the debtor is not required and that the signature may be omitted, it is not clear why the purpose is not simply information as to what the agreement contained as opposed to proof of its making;

 

(8) Moreover, the Proof Purpose contention requires that the creditor retain not only the front of the application form – where the signature would be – but also the reverse, assuming that not all the terms were on the front and the reverse was not simply blank. It would not be enough for the creditor to produce a copy of what it said were the prevailing terms at the time for that card. Mr Uff said that this additional burden might be avoided if the front of the form had some sort of code on it, perhaps at the bottom, to indicate the precise set of terms which would apply and which could in turn be ascertained by reference to that code. But absent that both sides would be needed;

 

(9) (narrative omitted for clarity) ….. In Light the original executed agreement had been lost. So the bank could not provide the source for the copy as the Proof Purpose required…. (narrative omitted for clarity)…..But if that were right it undermines the Proof Purpose advanced which depends on the creditor at least seeing for itself the executed agreement at the time of the request for the copy.

 

(11). It is said that if the debtor cannot have a copy in the sense required (for the most part) by Mr Uff and Mrs Thompson then he is at a disadvantage should he wish to challenge whether he made a properly executed agreement at all. I do not agree. First, this point only has real force if the Proof Purpose underlays s78 and I do not think that it does. Second, it assumes that there is no obligation on the debtor to make out at least some sort of positive case as to improper (or non-) execution of the original agreement. If he does and for example asserts positively that although he has been using a credit card agreement for years he never actually signed an agreement, or one that complied with s61, the creditor may well have to try and find the original in order to deal with that allegation. (I deal further with the absence of such positive allegations in relation to s61 when I consider below the Applications.) But that tells one nothing about the scope of s78;

 

(13) I have already adverted to the overarching purpose of the Act being consumer protection within the ambit of a new and consistent framework which has benefits for lenders, too. But that does not impel a conclusion that the purpose of s78 must be the Proof Purpose.

 

(14) Mrs Thompson submitted that the approach she advocated with Mr Uff was not merely dependent on the Proof Purpose but also followed from the language of s78. But I do not accept that the language here impels that result and all the factors already mentioned point away from it.

 

[54]. Accordingly, the copy need not be as contended for by Mr Uff and Mrs Thompson and instead, a creditor can satisfy its duty under s78 by providing a reconstituted version of the executed agreement which may be from sources other than the actual signed agreement itself.

 

[62]. Mr Uff in particular contended that this was not s78 compliant because the name and the address did not come from the executed agreement. He said that the copy had to be of that document which on its face tied itself to the debtor. Only in that way could the debtor be assured that agreement was indeed to be attributed to him because the name and address on it was reproduced directly on to the copy. But this argument depends on the correctness of the Proof Purpose being the driver behind s78 and the Copies Regulations, which I have rejected. On the other hand, it is not as if the provision by the creditor of the name and address from its records is not of some value to the debtor. It at least indicates that the creditor has a record of the fact of this person at an identified address making an agreement at some point in the past.

 

[63]. The question is “Must a creditor provide a document which would comply (if signed) with the requirements of the Consumer Credit (Agreements) Regulations 1983 as to form, as at the date the agreement was made?” and the answer to be given is “No”.

 

[105]. I see no difficulty in saying that the framers of the Act saw it as important in the interests of debtors that they should able to obtain a copy of the agreement they made for whatever purpose they want, it being assumed that they ask for a copy because they have mislaid their own, and then, if in fact the agreement has been varied, they are given the up to date terms as well. This is what Options A and B are designed to do, more or less elegantly. The fact that the purpose of s78 falls short of the supply of proof or the best evidence possible of the executed agreement does not undermine this.

 

[132]. A further element of the dilemma prayed in aid by Mr Gun Cuninghame is that without a s78 copy the debtor will also not know whether the agreement is irredeemably unenforceable under s127(3) which it might be. But that is entirely speculative and the point is undermined by (a) the fact that it is not the purpose of s78 to provide proof of a properly executed agreement,

 

[199]. ………(narrative omitted for clarity)……. I have already held that the purpose of the s78 copy is not to provide proof. ……..(narrative omitted for clarity)…..

 

4. It is clear that Judge Waksman concluded that ‘reconstituted documents’, whilst they may be acceptable in response to s78 requests for ‘Current Information’ purposes only, they cannot be considered ‘Proof Purpose’ of an executed agreement, i.e. ‘reconstituted’ agreements are not for the purpose of providing proof of compliance with s61.

 

5. Judge Waksman then describes what documents he determined do constitute an executed agreement for the purposes of s61 with reference to ‘Assumed Facts’:

 

[171]. This arises solely in connection with s61(1)(a) and the requirement thereunder that the document signed by the debtor “contains” all the Prescribed Terms. The question is as follows:

“Does the document signed by the debtor contain the Prescribed Terms for the purposes of section 61 and/or section 127(3) if:

 

(a) they are on a sheet which is referred to on the piece of paper that was signed by the debtor; or

(b) where that sheet is attached to the piece of paper signed by the debtor; or

© where that sheet is separate from but was supplied with the piece of paper signed by the debtor?”

 

[173]. The parties in Carey have helpfully agreed the following principles. The fourth one was added by Mr Uff, with their agreement. No other party takes issue with them. The OFT has formulated the matter in a slightly different way but accepts these principles are close to its position.

 

(a) It is not sufficient for the piece of paper signed by the debtor merely to cross-refer to the Prescribed Terms without a copy of those terms being supplied to the debtor at the point of signature;

(b) A document need not be a single piece of paper;

© Whether several pieces of paper constitute one document is a question of substance not form. In particular a physical connection between several pieces of paper is not necessary in order for them to constitute one document;

(d) Additionally, a physical connection (or one or more physical connections) between several pieces of paper does not necessarily constitute them as one document;

(e) Accordingly, where the debtor’s signature and the Prescribed Terms appear on separate pieces of paper, the questions of whether those pieces of paper together constitute one document is a question of substance and not form.

 

 

[174]. As a matter of law, those principles appear to me to be correct, in the context of s61.

 

 

 

Judge Waksman then identifies the documents supplied as The Assumed Facts.

 

[177]. According to HSBC, p197 is a reconstituted application form. I referred to it above in the context of Issues 1 and 2. The assumed facts here are as follows:

 

(1) Ms Carey signed a form which contained, among other things, the entries at p197 including the specific reference to being bound by “the terms and conditions attached”; that form did not itself have the Prescribed Terms stated on the front or the reverse;

 

(2) The form (referred to as “a signature page” in the WS from Alan Burden dated 3 December 2009) would have been produced with Ms Carey’s details already on, for her to sign once her application, already made, had been approved;

 

(3) At the same time as the form was produced electronically, the relevant terms and conditions (including the Prescribed Terms and information) would have been printed off and physically attached to the form by a staple;

 

(4) Ms Carey would then have been invited to read the agreement, consisting of the signature page and attached terms and would then have signed and dated the signature page. It would then have been countersigned by the bank;

 

(5) The relevant terms and conditions would not have been precisely in the form of pages 198-201 simply because that is a s63 copy with the different cancellation clause. But they would have been the full terms with the Prescribed Terms included either in landscape form (as shown at pp198-201) or portrait form.

 

6. As can be seen from the above narration, the document supplied as the reconstituted application form did not have the prescribed terms on the front or reverse.

 

7. A further document ‘a signature page’ forming the agreement was then produced with Ms Carey’s details already on, for her to sign and this form was in addition to an ‘application, already made’.

 

8. Neither of these situations is present in this case in that the application form refers to ‘general conditions’ supplied separately and no other document other than the application form was supplied to the defendant for signing.

 

9. Subsequently no other document was signed by the defendant nor has one been produced by the claimant as an executed agreement.

 

10. These observations as to ‘substance and not form’ as contended for by Judge Waksman are that the signature page and its terms and conditions do not have to take the ‘form’ of one piece of paper (the so called ‘four corners rule’), but that in ‘substance’ should be one homogenous document. I would refine that further by observing that a document that is signed as an agreement that refers to terms on the ‘reverse’ or ‘attached’ or display contiguous page numbering or in any way implying the terms were unarguably present at the point of signature would be regarded as one document containing those terms. On the other hand, a signed document that states the terms were ‘supplied separately’ or contains phrases such as ‘I have received…’ and ‘I have read …’ would suggest the terms were in another document separate from and not contained within the signed document at the time of signing.

 

 

11. Also Reg. 7 of Consumer Credit (Cancellation Notices and Copies of Documents) Regulations 1983 makes further provision in respect of copies where the agreement has been varied under the heading “Copies of agreements or security instruments where the agreement or security instrument has been varied”“

 

Where an agreement has been varied in accordance with section 82(1) of the Act, every copy of the executed agreement given to a debtor, hirer or surety under any provision of the Act other than section 85(1) shall include either—

 

(i). an easily legible copy of the latest notice of variation given in accordance with section 82(1) of the Act relating to each discrete term of the agreement which has been varied; or

 

(ii). an easily legible statement of the terms of the agreement as varied in accordance with section 82(1) of the Act”.

 

 

12. Judge Waksman discusses this as Issue 2:

 

[69]. “If an agreement has been varied by the creditor under a unilateral power of variation, is a copy of the executed agreement as varied, a sufficient copy for the purposes of section 78(1), or must the creditor provide a copy of the original agreement as well?”

 

and after lengthy argument, he concludes:

 

[108]. Accordingly, I conclude that Reg. 7 requires a copy of the executed agreement in its original form as well as a statement of the terms as they are at the time of the request.

 

 

13. Clearly the creditor has varied this agreement in that credit limits and interest rates have been varied and therefore a copy of the executed agreement in its original form is required to comply with the Regulation. The reconstituted documents provided are not copies of the executed agreement in their original form, and it follows the original document cannot be shown to contain the prescribed terms and to have been properly executed.

 

14. Whilst there would appear to be a factual issue to be determined in this case and one in which we invite the Court to believe the defendant, it is submitted, irrespective of the submissions made by the Claimant, that as a matter of objective reality the Credit Agreement failed to comply with section 61(1)(a) of the 1974 Act since it does not contain the prescribed terms.

 

15. It is respectfully submitted that the court should adopt the same reasoning as Judge Waksman in his High Court ruling in determining this issue, that is that documents supplied as proof of an executed agreement must be copies of the original documents in their original form as signed by the debtor, irrespective of whether or not it finds that the creditor has supplied reconstituted or copy documents it may claim were supplied at the time of signing.

[PriorityOne]

P1 in post 194 you got links to 'dissecting the...' and 'fighting back with...' but nothing saying 'challenging reconstituted Agreements'

 

rgds

m2ae

 

Yeah I know.... I've run out of characters apparently. Hard to know what to include sometimes!!

 

Great post above there Basa.... gives people a much clearer view through muddy waters.

 

[PriorityOne]

I've changed my signature..... they still don't look like links though....

 

 

 

Edit: ** Done it! **

Edited July 27, 2011 by PriorityOne
show links

[Undercover-Elsa]

 

PS: Excellent post basa - just the sort of thing we need. Could you post it on the recon thread?

 

Elsa x

[stripper]

Excellent post Basa

Many thanks

[means2anend]

yup

 

All the relevant stuff is thier Basa...trying to pick the meat from the bones is hard work when reading the whole case but you have done it...nice work

 

rgds

m2ae

[basa48]

 

PS: Excellent post basa - just the sort of thing we need. Could you post it on the recon thread?

 

Elsa x

 

I thought I had and went looking for it, but with no success. I copied my missive from my own notes.

 

Which thread should I post it on?

[PriorityOne]

I thought I had and went looking for it, but with no success. I copied my missive from my own notes.

 

Which thread should I post it on?

 

This one:

 

http://www.consumeractiongroup.co.uk...ted-Agreements...

 

[payback68]

Well m2ae it seems you and others were correct, heard absolutely zip from RBS regarding the CPUTR letter i sent which speaks volumes to me!.

 

Looks like they were going to supply a "Recon Agreement" to satisfy my s78 request for the actual Agreement.

 

However their PPI Department have been in touch twice regarding me claiming on the PPI to cover the outstanding debt, they seem very keen for me to submit my claim form which i will do once i have the relevant information.

 

Regards

 

PB68.

[means2anend]

 

You say they 'were' going to send you a 'recon' s78 what happened???

 

Mind you with what has been happening in th CA and other County courts lately the tide seems to be turning against them.

 

check out this link

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?291945-Phoenix-Recoveries-vs-D-Kotecha-Court-of-Appeal

 

and...this one if you have not already subscribed..another one of P1's genius...

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?314597-Challenging-Reconstituted-Agreements...

 

rgds

m2ae

Edited August 14, 2011 by means2anend

[means2anend]

When you claim your ppi make sure that you claim all the compounded interest TOO...and if as a result they did not pay your repayments monthly if you were ill...unemployed etc...and as result you defaulted and received a default on your Credit File..They must remove that too....'but for' they not paying your repayments when they should have you would not have been defaulted and got marked on your file.

 

Lowells did it for me on Cap one!!!..but then they have to ..consequential losses as result of misinformation on your file can lead to suing them for an indeterminate amount.

 

rgds

m2ae

[means2anend]

Well m2ae it seems you and others were correct, heard absolutely zip from RBS regarding the CPUTR letter i sent which speaks volumes to me!.

 

Looks like they were going to supply a "Recon Agreement" to satisfy my s78 request for the actual Agreement.

 

However their PPI Department have been in touch twice regarding me claiming on the PPI to cover the outstanding debt, they seem very keen for me to submit my claim form which i will do once i have the relevant information.

 

Regards

 

PB68.

 

They are keen because they are under a legal duty to repay WITHOUT you having to remind them... since their failed Court Case

[payback68]

 

You say they 'were' going to send you a 'recon' s78 what happened???

 

Hi, sorry for the late reply, i basically sent them a snotty letter when i found out the Account had PPI and also threatened possible legal action as the debt should have been paid years ago. They replied asking me to submit another s78 request and they would send the Agreement, that was when i sent P1's CPUTR letter!.

 

Anyway i have an update which arrived today and in summary they state that the debt collectors (I.J, AIC, APEX) all acted in a lawful manner, they were correct in stating that the request should have been made to the OC as the DCA's do not hold any information regarding Agreements!.

 

They have also stated that under the circumstances they do not declare the Account being " in dispute" any longer and sent a copy of the original Application Form dated 1996. They are also under the circumstances prepared to satisfy my s78 request free of charge this time and have forwarded all details to their appropriate department.

 

So in summary it looks like they have ignored the CPUTR letter but will possibly supply a recon to satisfy the s78 request!. They have also stated that they want me to contact their insolvency and client support team to arrange payment ( they have more chance of knitting fog than me phoning them).

 

Nothing mentioned whatsoever about the fact i am submitting a PPI claim which should pay the lot off.

 

Regards,

 

PB68.

[payback68]

Oh and thanks for supplying them links m2ae, i have already subbed to the " recon" one as i subscribe to most of P1's threads.

 

Both threads make interesting reading.

 

Regards

 

PB68.

[means2anend]

s78 is not proof that you signed an agreement...it only goes far enough to show that these were the terms that existed at the time you 'would have signed'...but judging from those cases that I posted on 'challenging ....agreements' it looks as if they cannot construct an 'accurate honest copy' either:shock:.....anyhow it would insane for a debtor to even contemplate bringing a claim as Claimant.

 

m2ae

[babybear39]

...Which was why the Rankin and Carey cases failed so spectacularly.

[car2403]

s78 is not proof that you signed an agreement...it only goes far enough to show that these were the terms that existed at the time you 'would have signed'...but judging from those cases that I posted on 'challenging ....agreements' it looks as if they cannot construct an 'accurate honest copy' either:shock:.....anyhow it would insane for a debtor to even contemplate bringing a claim as Claimant.

 

m2ae

 

It was very successful for those - including me - that did so in the past, but as has been pointed out, things have changed and the worm has turned these days...

[Guest]

.....anyhow it would insane for a debtor to even contemplate bringing a claim as Claimant.

 

m2ae

 

see also brookes v hsbc bank plc [2011] EWCA Civ 354, re costs for eg

Edited August 18, 2011 by Ford
typo

[means2anend]

I'll look it up

 

thanks:-)

[payback68]

I insinuated in my letter that possible legal action was an option for me as opposed to involving FOS, basically to see what kind of response i would get as in my opinion with the evidence i have regarding them involving 2 DCA's on a disputed account and the account included PPI was in my favour after speaking to FOS in detail about them!.

 

The thing that really gets my goat is that even though they know they're in the wrong they still try and defend their actions and their acting DCA's also.

 

Unfortunately for them i will have the last laugh when i submit my PPI claim as in my opinion i am owed 9 years of payments which should cover the outstanding debt easily and their PPI department (UK Insurance LTD) which is part of RBS have already stated the claim will be back dated, so in effect they will be paying my debt for me or do they think i should pay the Insurers and the outstanding balance too?.

 

Regards

 

PB68.

[payback68]

i would never instigate legal action being the claimant especially after reading some of the judicial rulings and other experiences of CAG members.

 

Regards

 

PB68.

[basa48]

........these were the terms that existed at the time you 'would have signed'...m2ae

 

Ahem....."MAY have signed" !!!

 

Sorry to be so pedantic, but judges are highly pedantic and will pick up any weakness in a defence.

[means2anend]

Dont be...

 

in fact 'MAY' has less certainty about it...anyhow the principles for costs in terms of BINGING a CLAIM and then discontinuing are well stated in this...

 

Brookes V HSBC 2011

 

http://www.bailii.org/ew/cases/EWCA/Civ/2011/354.html

 

The judge's starting point was rule 38.6(1) which provides as follows:

 

"Unless the court orders otherwise, a claimant who discontinues is liable for the costs which a defendant against whom the claimant discontinues incurred on or before the date on which notice of discontinuance was served on the defendant."

 

Having referred to the rule and a number of authorities dealing with orders for costs on discontinuance, including RTZ Pension Property Trust v ARC Property Developments [1999] 1 All ER 532, RBG Resources plc v Rastogi [2005] EWHC 994 (Ch) http://www.bailii.org/ew/cases/EWHC/Ch/2005/994.html, In re Walker Wingsail Systems Plc [2006] 1 W.L.R. 2194, http://www.bailii.org/ew/cases/EWCA/Civ/2005/247.html Official Receiver v Doshi [2007] BPIR 1135, Maini v Maini [2009] EWHC 3036 (Ch), and Far Out Productions v Unilever [2009] EWHC 3484, http://www.bailii.org/ew/cases/EWHC/Ch/2009/3484.html the judge formulated a number of principles which can be conveniently summarised as follows:

 

(1) when a claimant discontinues the proceedings, there is a presumption by reason of CPR 38.6 that the defendant should recover his costs; the burden is on the claimant to show a good reason for departing from that position;

 

(2) the fact that the claimant would or might well have succeeded at trial is not itself a sufficient reason for doing so;

 

(3) however, if it is plain that the claim would have failed, that is an additional factor in favour of applying the presumption;

 

(4) the mere fact that the claimant's decision to discontinue may have been motivated by practical, pragmatic or financial reasons as opposed to a lack of confidence in the merits of the case will not suffice to displace the presumption;

 

(5) if the claimant is to succeed in displacing the presumption he will usually need to show a change of circumstances to which he has not himself contributed;

 

(6) however, no change in circumstances is likely to suffice unless it has been brought about by some form of unreasonable conduct on the part of the defendant which in all the circumstances provides a good reason for departing from the rule.

 

Applying those principles the judge came to the conclusion that in both of the cases now before us the claimant should pay the bank's costs of the proceedings, less a small reduction in the case of Mr. Jemitus

 

At the end the Lord Justice says this...

 

If Mr. Jemitus had asked for no more than a copy of the agreement and had not sought, both in correspondence and in the proceedings themselves, to obtain much more extensive relief, it is unlikely that proceedings would have been issued at all. In my view the judge was right to have regard to the real nature of the dispute between the parties and to hold that insufficient grounds had been shown for departing from the position set out in rule 38.6(1).

 

 

We therefore will do better asking for agreements under CPUTR 2008 Pre-Court...UNLESS a strong prima facie case can be brought on the grounds enunciated in Kneale when the judge explained CPR 31:16(2) if one wishes to initiate proceedings.

 

m2ae

[means2anend]

It is obvious that the Creditors are 'backing off' and waiting to 'draw us in'when requesting for a confirmation/denial of the existence of an originally signed executed agreement from which to satisfy paras 108 and 234

 

m2ae