I need help to Serve a writ to recover a loan

[burmafriday]

Hi

 

I have been seeking advice for my situation because I have no choice but to serve a writ to try and recover a loan I made to a friend. I did contact my local CAB but they were really not helpful. I did not think there may be any listings on CAG for issues like mine, so I was so glad I searched through CAG. I found the thread http://www.consumeractiongroup.co.uk/forum/showthread.php?356814-The-Process-of-Litigation..-Court-Claims-Defences by Andyorch very helpful and am grateful for this.

 

I have been quite ill over the past few years and thankfully now recovering and getting my life together. when I was healthy and well off, I helped a desperate friend repay his credit cards over the period 2005 to 2008. What a mistake. ! whilst i have been really ill and desperate over the last few years the guy was no where to be found.

 

I do not have a signed agreement, but i do have substantial paperwork to prove the loan and a documented admittance from him that I made the payments on his behalf. I have more than enough paperwork to prove the loan and that none has been repaid.

 

After many, many phone calls and getting no where I finally wrote to him a couple of months ago and asked for my money back. To my surprise I received a 'Without Prejudice' letter from his solicitors basically stating that

 

a. some parts of the loan is too old and therefore no longer applicable

b. if it goes to court they will defend

c. they will ask the court for indemnity from me for their fees.

 

I did not take the comments from his solicitors too seriously other than just a threat to put me off. How ever it was clear that i have to sue.

 

Some parts of the loan is old as the initial payment dates back to 2005 - however, they are part of the same loan spanning over three years and that can be proven quite categorically.

 

My first question is on the subject of pre-action protocol; I asked for my money back and his solicitors pretty much told me to get lost. So what more can I do? As its a Without prejudice letter, I cannot include this in my documents, but I can summarise

their comments as I have done above.

 

My second question is can they apply to the court for an indemnity from me? I guess my credit history is not great but I am not a registered bankrupt. However, I am on ESA and I understand that as a result, I am exempt from having to pay the court fees. I understand from the county court that I have to prove I am on ESA when I serve my writ and the court will waiver the fees.

 

My third question is how do I go about trying to get legal aid. I cannot afford a solicitor. I asked this to CAB and I am sorry to say but they said they cannot help. The amount of loan is quite substantial as its over 5K.

 

Will some one help please?

 

Thank you

Burmafriday.

[renegadeimp]

If there is a clear period of 6 years ( 5 in scotland) where they have not made a payment or admitted the debt to you in writing, then unfortunately it would be Statute barred and unrecoverable. However, if he made a slip up and acknowledged it in writing, or made a small payment, then he just restarted the 6 year clock.

[burmafriday]

Hi Renegade

 

Thanks. That is actually a very useful piece of info. He did acknowledge a few of the payments I made back in 2005 and 2006 in December 2012.

 

warm regards

BF

[renegadeimp]

If he has acknowledged it in writing (thats the important part) then you can issue him with a LBA stating what he must do to rectify the situation, or you will not hesistate to take him to court for the full amount plus interest and costs.

 

One thing you must do though before issuing a claim, is to find out if he has any assets. No assets means the only real outcome of the claim would be that he gets a CCJ. There would be no point trying to collect on it as he doesnt have anything to sieze or sell.

[fletch70]

Hang on.

The payments made in 2005/6 and then no acknowledgement until Dec 2012. Doesn't this leave a clear 6 years in which case once SB forever SB.

[renegadeimp]

True fletch good catch. However, it all depends on that payment or preceeding acknowledgement.

 

As you say, once that 6 year period is up, theres no chance at getting that money back. A SB defence is an absolute defence. Not even a judge can un SB a debt.

[burmafriday]

Hi Renegade and Fletch,

 

The payments of 2005/2006 were not one off ad-hoc payments as i was making regular monthly payments. Therefore, they were all part of the same "loan".

 

I hope this makes it clearer.

 

Thanks

BF

[steampowered]

The six year time limit starts running from the date on which the Defendant was obliged to pay back the money, not from the original date of payment.

 

I have seen an argument used which runs like this. The Defendant was not obliged to pay back the money the same moment it was paid, since there would be no point paying the money only to demand it back 10 seconds later. The obligation to repay only arose once the Claimant demanded repayment. Therefore, the six year time limit only began to run from the date of the Claimant's demand, even if that demand was only made several years later. There is case law to support this kind of reasoning.

 

Of course, payments made less than six years ago will not be SB on any interpretation.

 

Let me explain the Defendant's reference to an indemnity. Unless you are in small claims track, the general rule is that the winner of legal proceedings is ordered to pay the loser's legal costs. Most of the time costs are awarded on the "standard basis" which means the winning party must show the costs were reasonable. On average this results in recovery of around 60-70% of legal costs. However, if the court disapproves of the paying party's conduct, it can order costs to be paid on the "indemnity" basis. This switches the burden of proof and it will be assumed that costs were reasonable unless the paying party can prove otherwise. On average this results in recovery of around 90% of legal costs.

 

However .... a claim for less than 10k will be small claims track. It is very rare for costs to be awarded on this track. They only get awarded if one party has behaved very badly.

 

Regarding legal aid, there is information here: http://www.adviceguide.org.uk/england/law_e/law_legal_system_e/law_taking_legal_action_e/help_with_legal_costs.htm. You can also approach solicitors who accept legal aid and they can apply for it on your behalf. However bear in mind that the legal aid budget is extremely limited ... my instinct is that you will find it very difficult to get legal aid for this kind of case. It sounds like you are capable of making the claim yourself in small claims track if necessary.

[Ganymede]

Unfortunately you can forget legal aid. You will not get it for this type of money claim.

[burmafriday]

Hi

 

Thank you Steam and Ganymede.

 

Regarding legal aid - I mention this as I am on DLA and ESA. I cannot afford a solicitor so I will check out the link Steam sent and see if I can get anywhere with it but I have accepted the fact that I am going to have to bite the bullet and will have to see it through on my own.

 

Steam - you said "...the six year time limit only began to run from the date of the Claimant's demand, even if that demand was only made several years later. There is case law to support this kind of reasoning..."

 

Will you please send me a link to this case law as that will be really, really useful. If not then how can I check this - pl give me any clues.

 

Regarding Indemnity... in the past, I have won a couple of cases where I represented myself and the loser always pay all the costs.

So i am confused by your comments Steam. The value of the claim is over 10K I am afraid.

 

Many thanks

BF

[fletch70]

Does the person who owes the money have any assets?

If not it may be futile to make a claim.

 

Is this a relationship gone sour?

[Ganymede]

The six year time limit starts running from the date on which the Defendant was obliged to pay back the money, not from the original date of payment.

 

I have seen an argument used which runs like this. The Defendant was not obliged to pay back the money the same moment it was paid, since there would be no point paying the money only to demand it back 10 seconds later. The obligation to repay only arose once the Claimant demanded repayment. Therefore, the six year time limit only began to run from the date of the Claimant's demand, even if that demand was only made several years later. There is case law to support this kind of reasoning.

 

Of course, payments made less than six years ago will not be SB on any interpretation.

 

Let me explain the Defendant's reference to an indemnity. Unless you are in small claims track, the general rule is that the winner of legal proceedings is ordered to pay the loser's legal costs. Most of the time costs are awarded on the "standard basis" which means the winning party must show the costs were reasonable. On average this results in recovery of around 60-70% of legal costs. However, if the court disapproves of the paying party's conduct, it can order costs to be paid on the "indemnity" basis. This switches the burden of proof and it will be assumed that costs were reasonable unless the paying party can prove otherwise. On average this results in recovery of around 90% of legal costs.

 

However .... a claim for less than 10k will be small claims track. It is very rare for costs to be awarded on this track. They only get awarded if one party has behaved very badly.

 

Regarding legal aid, there is information here: http://www.adviceguide.org.uk/england/law_e/law_legal_system_e/law_taking_legal_action_e/help_with_legal_costs.htm. You can also approach solicitors who accept legal aid and they can apply for it on your behalf. However bear in mind that the legal aid budget is extremely limited ... my instinct is that you will find it very difficult to get legal aid for this kind of case. It sounds like you are capable of making the claim yourself in small claims track if necessary.

 

 

 

Hi steam. I get the impression that the defendant's solicitors are referring to security for costs under CPR 25. What do you think?

[steampowered]

Hi steam. I get the impression that the defendant's solicitors are referring to security for costs under CPR 25. What do you think?

 

Hi Ganymede,

 

Yes I think you are right. Their threat of asking for an indemnity is a bit ambiguous but this is certainly one way of understanding it.

 

However the provisions of Part 25 concerning security for costs do not apply to the small claims track ... so as long as the Op is claiming less than 10k they won't be able to get security for costs.

[fletch70]

The OP says the claim is over 10k. If it is not significantly over would it be possible or even wise to reduce the sum claimed to below that limit or could that be abuse of process.

[steampowered]

Steam - you said "...the six year time limit only began to run from the date of the Claimant's demand, even if that demand was only made several years later. There is case law to support this kind of reasoning..."

 

Will you please send me a link to this case law as that will be really, really useful. If not then how can I check this - pl give me any clues.

 

Sure. Have a read of section 6 Limitation Act 1980: http://www.legislation.gov.uk/ukpga/1980/58. This seems to say that, where you have a 'contract of loan' without a fixed repayment date, the limitation period only begins to run when a written repayment demand is made.

 

A transcript of a leasing case on this is available here: http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/1996/1352.html. The facts are pretty simple: a loan was made in January 1984, a repayment demand was issued more than six years later in September 1990 and proceedings were started in 1993. The Court of Appeal held time began to run in September 1990 thus the loan was not statute barred.

 

Do remember that an email or text message asking him to repay the money could count as a written repayment demand. If he can find an email you sent him in 2005/06 asking about the money that will cause a problem.

 

Regarding Indemnity... in the past, I have won a couple of cases where I represented myself and the loser always pay all the costs.

So i am confused by your comments Steam.

 

The normal procedure is that the judge will award costs to be paid without specifying the amount. If the parties cannot agree the amount, then the paying party will need to have the court decide what he can recover at an assessment hearing.

 

The classic rule of thumb is that 60-70% recovery for standard basis and 90% for indemnity basis is typically awarded at an assessment. Of course this is very fact specific ... if the costs claimed are very reasonable you might get 100% recovery on standard basis.

 

Sometimes the judge will set an amount for the costs at the hearing. This is known as summary assessment. Judges normally do this where the amounts are quite small and thus an assessment would be disproportionate. If you are a litigant in person claiming costs at £18 an hour the judge will probably set the amount there and then without too much scrutiny ... but if you are a solicitor claiming £400 an hour then the amount is going to attract a lot more scrutiny.

 

The value of the claim is over 10K I am afraid.

 

As you are claiming more than 10k they could, in theory, apply for security for costs. As Ganymede pointed out this might be what the solicitors were threatening.

 

Realistically, I think this is unlikely. The grounds for getting security for costs are quite limited and doubtful whether you fall into any of the categories ... see CPR 25.13 http://www.justice.gov.uk/courts/procedure-rules/civil/rules/part25.

 

The OP says the claim is over 10k. If it is not significantly over would it be possible or even wise to reduce the sum claimed to below that limit or could that be abuse of process.

Oops, missed that post!

 

It would be perfectly in order for Op to claim only part of what he feels he is entitled to. This would be a sensible move if it is only just over 10k.

 

It would only become an abuse of process if the Op tried to split the claim. For example, the Op could not claim 9k now and another 9k in two years time.

[burmafriday]

Hi

 

Thanks Steam thats really really helpful.

 

Regarding indemnity - I found CPR 25.13 and went through it. I do not fall into any of the categories listed therein, other than 25.13 ©

which states:

 

"...© the claimant is a company or other body (whether incorporated inside or outside Great Britain) and there is reason to believe that it will be unable to pay the defendant’s costs if ordered to do so; ..."

 

If they have a reason to think that i will not be able to pay the defendants costs, they would need to substantiate that. Their costs would also need to be reasonable.

 

Thanks for your help.

 

BF

[steampowered]

That is the most common ground ... but only applicable for companies so not relevant to individuals such as yourself.

[burmafriday]

Hi Steam

 

Thanks very much for your input. I am very grateful to you. Its unbelievable that we achieved so much in such a short space of time. I feel quite elated you have answered all my questions. Its also clear his Solicitors were just trying to blind me with science and scare me off.

 

Thank you also to Ganeymede and Fletch. I will start the process and will keep you abreast.

 

BF

[burmafriday]

Hi All

 

Sorry I have been away for a couple of months but things have now moved forward and I think it is now the right time for me to bring you all up to speed.

 

Firstly, I want to thank every one again for all the help and advice to date. I really helped me. It took some time for me to get things moving as you can imagine but I got all my evidence and proof together,… did my due diligence and progressed the matter further.

 

It was a bit of a process as I had to apply for a waiver on the court fees (as I am on ESA) which was granted to me. I then listed out every payment I made to his credit cards, substantiated by my bank statements and served the guy a writ.

 

I have now heard from Northampton CCMCC that he has now submitted his defense. The court also sent an order that I am to complete a Directions Questionnaire (form N181)

 

He submitted a hand written defense. He denied that he borrowed money from me and so did not promise to repay any such money nor did he fail to do so. He did not borrow the money as alleged or pleaded. He does not therefore consequently owe the Claimant any interest as pleaded.

 

He then stated that he worked for me and all payments I made to his credit cards were part of the salary due to him. (Who pays wages/fees to a credit card??) He said the claimant is put to proof of all aspects of his claim.

 

For clarification, he did do work for me. However, he was not employed by me. He was self-employed and I paid him for the work he carried out. I have proof of all my payments to him regarding the work he carried out.

 

I do not have a written agreement of my loan but of course, there was a verbal agreement.

 

I sent a detailed list of payments made to his credit cards in my writ and so it is clear and undeniable that I made the payments as I had claimed.

 

My problem is that there is no written agreement regarding the loan but I have ample and significant evidence of the existence of some kind of loan as I was making these payments to his credit cards. Can you give me any advice on how I can proceed or suggestions or cases similar that I can refer to? This will really help me. I am very concerned because I am certain that he is getting help from a solicitor friend. Some one else wrote his defense. And this is a worry to me.

 

Regarding the form Direction Questionnaire form N181 for mediation, I do not think I will achieve anything by going through mediation. It will help him as it will delay the matter even longer. I am tempted to say “No” to mediation citing his full denial of the loan. What do you think? any suggestions.

 

Many thanks/BF

[burmafriday]

Hi

Can anyone give me some guidance please?

I know this is not normal CAG business but I really do need some advice.

I don't think mediation is the way to proceed as he has flatly denied the loan so there is nothing to mediate.

He also has a solicitor working for him and so if anyone is aware of similar cases and where I can access their details, please let me know.

I really need help in getting myself sorted out to deal with the next steps of this case.

 

Thank you

BF

[AndyOrch]

Thread moved to General Legal Issues.

 

Regards

 

Andy

[Alloyz1]

Hi

 

I cannot comment on the legal arguement, but I would definitely tick yes to mediation.

 

It is frowned upon by the courts/ DJ to not at least 'try' to resolve the matter before using courts time and resource.

 

I am confident you will be asked at trial 'what measures have you taken to resolve the matter out of court?' You really don't want to have to say 'none because he refused to admit the loan!'. Thats the point of mediation, you start at your respective positions and negotiate your way to a mutually agreeable position.

 

Just my opinion but may keep you off the back foot if you end up in court.

 

A

[JOHNINYORK]

As I am not conversant with these matters,could anyone please answer 2 questions relating to this thread.

 

1).If there was criminal intent to defraud and it was proven,would it still be SB.

2).If the loan is spread out over a number of years,does it become SB on,

a).6 years from day one of the loan.

b).6 years from the day of the last payment.

 

Regards,John

[renegadeimp]

1. It becomes a criminal act and SB doesnt matter. 2. It becomes sb 6 years from last date of payment and written acknowledgement. ( 5 in scotland).

[JOHNINYORK]

Renegadeimp.

Thanks for the reply.There was nothing in the thread relating to criminal intent to defraud,so I just wondered if it was applicable.

 

Regards,John.