Purple v Lloyds TSB

[GaryH]

If you're going to pursue solely for contractual interest, be fully prepared that it may well go to court.

 

Hold out for every penny of the charges, of course, but to refuse an offer of 100% of charges + 8% + fee's would perhaps be a questionable decision.

[John72]

Hi Gary

 

I know that is sensible and pragmatic advice. My query, however, was I suppose more to do with court process and protocol.

 

If Purple holds out for the contractual interest would LTSB be allowed (by the court) to argue or defend that aspect at trial if it had not previously pleaded the issue in it's defence to the proceedings ab initio?

 

John

[purplerain]

John72 This is what they put in the letter:

 

The remaining part of your claim relates to the interest at the contractual rate of 29.8%, that you are seeking to claim against the bank. We cannot accept that the court will award this rate of interest.

The reason the bank can charge this level of interest is because you specifically agreed as part of the contract between you and the bank that this rate could be charged. The bank therefore has a contractual right to charge interest at that rate. You do not have such a right and therefore we believe that the court will only award you interest at its standard rate of 8%.

GaryH, I'm hoping they get back to me today with a new offer of the full amount of charges. If so then, I think I have taken this as far as I can.

Purple X:)

[John72]

Hi Purple

 

Thanks for the details of what SC&M have said to you. Did they plead that in their initial defence to your claim? If they did not then I believe they must seek leave of the court to amend their defence?

 

As your claim in total is less than £5000 you would be able to argue this in court, if you wished, without fear of a costs order being awarded against you. If I remember rightly, the CI aspect of your claim is not insubstantial?

 

In any event, it is likely that you have as a matter of fact been charged interest by LTSB at the rate of 29.8% on (at least part of) your overdraft and, had the bank not debited your account with their unlawful charges, the interest suffered by you overall would have been reduced by that element.

 

John

[purplerain]

John

Just had another look at their defence, and it says nothing about CI

 

Still waiting on that call

 

Purple X

[John72]

Purple

 

The next move is really yours and not theirs, so I wouldn't be unduly worried about them not returning your call.

 

I think you should immediately (by fax if you can, and post) reply to their letters confirming that you have received the cheque and point out that it does not cover the full amount of your claim, with which you are continuing, but that you will accept the cheque as a payment towards overall settlement.

 

The hearing is on Wednesday 25 April so it would be interesting to see what their next move would be. It's probably going to be a game of brinkmanship for both sides - it just depends how much you want to pursue this at this stage?

 

John

[purplerain]

Hi John,

Well they just called back, (which I find a little funny as I rang them last week on the 17th April and was told someone would get back to me, and it never happened) their a bit more on the ball today.

The call went something like this:

I told her I could not accept the amount as settlement as it was not the full amount of my claim.

she said that they have been instructed to proceed with the hearing over the CI.

to which I pointed out I would still be going to court as they have not paid the full amount of charges.

She did ask if they paid the rest of the charges would I be prepared to settle. So I said at this point that is a question I can not answer.

So she's going to ring her client LTSB and get back to me,

Purple X

[John72]

Hi Purple

 

The fact that they returned your call today shows, I think, how they want to try and persuade you to accept their offer and avoid the issue going to court.

 

I am sure others will have some input, but I think the points in your favour at trial would be:

1. That LTSB have not hitherto mentioned in correspondence or any documents submitted to court that they are defending your claim for contractual interest. Their defence has been solely against the charges - which they are now apparently prepared to pay in full.

2. As your case is in the small claims arena there will be no costs awarded against you if your claim to CI fails - unless the defence tried to persuade the judge that your actions in the case have been unreasonable. I doubt very much if they have.

 

The major point against you proceeding with the matter in court will be having the "nerve", if you like, to argue your case through to a conclusion in front of a judge. If you only end up walking away with your charges + 8% interest + court fees (and no CI interest) you will be no worse off - other than losing half a day at Court.

 

But if you agree to LTSB's terms now and don't pursue your claim, what might you be losing....? I'm afraid, on balance, only you can make that decision.

 

I'd be interested to see what others think.

 

John

[GaryH]

Hi Purple

 

The fact that they returned your call today shows, I think, how they want to try and persuade you to accept their offer and avoid the issue going to court.

 

I am sure others will have some input, but I think the points in your favour at trial would be:

1. That LTSB have not hitherto mentioned in correspondence or any documents submitted to court that they are defending your claim for contractual interest. Their defence has been solely against the charges - which they are now apparently prepared to pay in full.

I know where your coming from John - CPR 16.5 says where an allegation of the POC is not responded to its taken to be admitted, but realisticly I don't think it works like that unfortunately, particularly not in the SCT. There have been a couple of instances now where Lloyds have turned up to defend the contractual having not mentioned it in their defence and this has been allowed.

 

Besides, interest is at the courts discretion - even statutory interest strictly speaking - so notwithstanding the defence, you'd have to pursuade the judge why you should be awarded a rate of interest which there are no provisions in law that allow or entitle you to claim.

2. As your case is in the small claims arena there will be no costs awarded against you if your claim to CI fails - unless the defence tried to persuade the judge that your actions in the case have been unreasonable. I doubt very much if they have.

Agreed - to a point. Granted the risk is much reduced in the SCT, but there is undeniably still a risk. Refusing a settlement of 100% of the charges imposed as a result of your breach of contract + the rate of interest laid down by parliament as adequate "compensation" for your money not being avalable to you for x amount of time, is likely to register quite highly on the unreasonablness test IMO.

The major point against you proceeding with the matter in court will be having the "nerve", if you like, to argue your case through to a conclusion in front of a judge. If you only end up walking away with your charges + 8% interest + court fees (and no CI interest) you will be no worse off - other than losing half a day at Court.

If you have a compelling and well thought out arguement for CI, this may be the case and I agree the costs risk would be fairly small, but if you turn up without a credible argument I'd say you could in fact quite easily be worse off.

 

Which leads me to the "essential" questions for anyone thinking about pursuing CI all the way;

 

Have you fully researched the arguments in respect of the basis of your contractual interest claim?

Do you fully understand the principles argument?

Do you believe in these arguements and are you confident that you could put them in front of a judge in court?

Do you know what you'd rely on in court to substantiate your CI claim?

And do you know the flaws in the CI arguements, and how you would counter them?

[John72]

Gary

 

As ever, your wise counsel puts matters into perspective. I agree that any litigant commencing court action should be very clear about the prospect of it going "all the way" and understand fully the preparation that is required.

 

Part of my point on the CI aspect was to reflect, I suppose, that inevitably the claim is not based solely on the "mutuality and reciprocity" angle, but also on the basis that, de facto, interest at that higher rate would often have been charged and therefore validly forms part of the claim to repayment?

 

John

[purplerain]

Just a quick update, SC&M rang back and offered the full amount of charges and asked if I would accept this as settlement, I told her that I would get back to her later today, however I did not, this gives me time to hear back from the court as I've sent the non-compliance.

Purple X

[GaryH]

Ok keep us informed. Don't hold your hopes up about the court acting on the non-compliance letter though, around half I would say don't act on them, particularly in the case of a breach of the standard SCT directions.

[purplerain]

Good afternoon all,

Like you said GaryH nothing back from the court and I rang just to make sure.But the postman did bring me a witness statement.

Well it's crunch time, spent a lot of time reading and rereading lots of threads last night and this morning. I've been swinging from going to court to not going to court.

and at this moment in time I don't think I can argue the case well enough, my nerves have got the better of me. Just one thing keeps nagging me

Do you think they will turn up in court?

Well going to ring SC&M around 3ish to say I will accept their offer.

Purple X

[John72]

Hi Purple

 

I agree with you. If you are anxious about arguing the case in court then it will be best to accept what you have been given. But I think you may still be best advised to attend the hearing to be able to tell the court that terms for settlement have been agreed which can then be encapsulated into a court order - just in case there is a delay in you receiving the remainder of your money?

[GaryH]

Like you said GaryH nothing back from the court and I rang just to make sure.But the postman did bring me a witness statement.

What, from Lloyds?

 

I'll PM you my e-mail address, can you send it to me please?

[purplerain]

Yep will send it later, once i've fed the kids and OH

 

Purple X:)

[GaryH]

Great, thank you muchly:)