Guido T v Lloyds TSB ***DEFENCE STRUCK OUT - WON****

[Heropanda]

ah yes i see... looks like its just about to get interesting!!!

[photoman]

That this is so can be unpinned by the orders that I have seen from the judiciary relating to Lloyds’ conduct. I attach the wording of two such orders, that unequivocally evidence your abuse of the litigation process.'

 

Guido,

Could you please post or lead us to these judiciary orders ?

 

Thanks

[GaryH]

See Kazzaw's thread - the Lincoln 'abuse' orders.

[GuidoT]

At least someone reads my (well part mine) letters Photoman, as I know SCM will not bother:

http://www.consumeractiongroup.co.uk/forum/lloyds-bank/32952-sean-lloyds-2.html?highlight=sean#post512565

http://www.consumeractiongroup.co.uk/forum/lloyds-bank/20752-kazzaw-lloyds-asset-card.html#post467620

[GuidoT]

As Lloyds did not send me their AQ, I thought I would phone the court to see if Lloyds requested the one month stay on the AQ.

 

Lloyds requested it, this may explain why they have stopped sending a copy of the AQ to the claimant, that is to prevent the claimant stopping the stay.

 

I thought Lloyds stopped this stay business when the courts told them off for this naughty activity, i.e. requesting a stay for settlement and making no contract with the claimant.

 

At the stay is just about to end, I now feel more comfortable drafting a much stronger letter advising that Lloyds have been bad cats. I will post it up later.

[photoman]

As Lloyds did not send me their AQ, I thought I would phone the court to see if Lloyds requested the one month stay on the AQ.

 

Lloyds requested it, this may explain why they have stopped sending a copy of the AQ to the claimant, that is to prevent the claimant stopping the stay.

 

I thought Lloyds stopped this stay business when the courts told them off for this naughty activity, i.e. requesting a stay for settlement and making no contract with the claimant.

 

At the stay is just about to end, I now feel more comfortable drafting a much stronger letter advising that Lloyds have been bad cats. I will post it up later.

 

Looking forward to seeing your letter.

............talk about abuse of the CPR !!

[innocent]

How devious and unusual of Lloyds

 

Looking forward again to your letter writing skills too

 

 

 

Innocent

[GuidoT]

All a bit boring really, thought I better keep it calm given it is going to be addressed to the court:

 

'Pursuant to the order made by District Judge x on 15 February 2007, I advise that no settlement has been reached with regard to the above matter.

 

This is particularly disappointing, given the Defendant requested the stay in their allocation questionnaire and then made no contact whatsoever during the stay period.

 

In anticipation of this, I contacted the Defendant by way of a letter dated 26 February 2007 (copy enclosed) in an attempt to initiate the dialogue for which the stay that the Defendant requested was intended. That letter was not even afforded the courtesy of a response.

 

In the circumstances, the Claimant respectfully requests that directions are made as per the attached draft order, with document exchange taking place 28 days after the issuing of the order.

 

It is submitted that an early date for exchange of documents may facilitate a prompt resolution to this litigation and negate the time wasted by the Defendant during the stay.'

 

 

This not entirely my own letter, I stole bits from a few places, sure it has got some Gary H in it.

 

Any comments are welcome.

[GaryH]

I've PM'd you.

[GuidoT]

I will use it - thank you, very helpful.

 

Can you let me have the attachment links please.

[GuidoT]

Sent a letter to the court saying:

 

'Pursuant to the order made by District Judge x on x 2007, I advise that no settlement has been reached with regard to the above matter.

This is particularly disappointing, given the Defendant requested the stay in their allocation questionnaire and then made no contact whatsoever during the stay period.

In anticipation of this, I contacted the Defendant by way of a letter dated x 2007 (copy enclosed) in an attempt to initiate the dialogue for which the stay that the Defendant requested was intended. That letter was not even afforded the courtesy of a response.

In line with the said order, a further Allocation Questionnaire is enclosed, attached to which are proposed directions that I respectfully request are considered by the court.'

 

I cannot reveal for now the proposed directions, save to state that one alternative includes the New Strategy Order.

 

It all sounds a bit mystical, but it is not and no doubt the outcome will be dull.

[flower19]

Received a letter from Lloyds today advising that they would be crediting £500 to my account, no mention of any terms

 

I will take that for now. They should receive the sealed claim form in the next few days.

 

Will donate to CAG in the next few days.

 

___________________________________________________

 

Hi Guido T

 

Can i ask you...did you reply to their letter offering the £500 credit?

 

I have received a letter from them as well offering £750 with no mention of any terms. Just curious as to the way you proceded.

 

flower19

[GuidoT]

Flower, I was going to respond on your thread but you have so many, you must stick to one thread per claim.

 

I did not bother to respond to the letter as I did not consider the £500 letter constituted an offer that was capable of being accepted.

 

If you want to respond, see the link below:

http://www.consumeractiongroup.co.uk/forum/bank-templates-library/25716-rejecting-offers.html#post607312

[flower19]

Hi

 

Thanks for the link, I've already had the chance to read it.

 

I apologise, was not aware I had many threads...I find a bit confusing sometimes. :)

[upton11]

Guido Hi

 

I can't quite work out what stage you are at. If I have understood you properly you are currently complaining about an unproductive stay. You became a touch cloak and dagger around post 86 - I am intrigued

 

Regards

 

paula

[GuidoT]

The proposed directions that I refer to in post 86 are (based on GaryH's template):

 

'Allocation Questionnaire - Section G Other Information

The Claimant respectfully requests that an order may be made as follows:

1.

On the basis that the Defendant has filed the same Defence and then subsequently settled all claims of this nature, it is submitted that the Defence should be struck out pursuant to 3.4(2)(b) of the Civil Procedure Rules and judgement entered for the amount claimed, as it is an abuse of process.

Since March 2006, the Claimant is aware of many claims of this nature in which the Defendant has filed an Acknowledgement of Service, a Defence and Allocation Questionnaire and finally settled in advance of the hearing. In support of this, a sample list of claims, including their claim numbers is attached (attachment 1A).

The abuse is underpinned by the orders made (attachment 1B) in at least three cases similar to the Claimant’s, where Lloyds TSB Bank Plc were the Defendant. The court considered the authority of Mullen-v-Hackney London Borough Council (1997)2 A11ER 906 to be relevant, and accordingly the Claimant respectfully requests that the court gives consideration to its relevance in respect of this Claim.

That authority is attached (attachment 1C) and in summary it was held that when conducting proceedings a judge could take judicial notice of matters which were notorious, or clearly established, or susceptible of demonstration by reference to a readily obtainable and authoritative source. He could also rely on his own local knowledge, provided he did so properly and within reasonable limits. It followed, in the instant case, that the judge had been entitled to take judicial notice of how the council had conducted itself in relation to undertakings given in similar cases.

The Claimant believes that the Defendant is using litigation as a mechanism to intimidate Claimant’s and to dissuade them from pursuing legitimate claims. It is clear from the pattern of the hundreds of settled cases that the prospects of the Defendant actually contesting this claim at trial are minute.

It is submitted that this litigation strategy is abusive and to the detriment and financial cost of both the publicly funded court resource as well as Claimants. It is respectfully submitted that the Defendant will continue to conduct its litigation in this manner for as long as it is allowed to do so with impunity.

2.

In the alternative, should the honourable court not be minded to strike out the Defence, the Claimant respectfully requests that directions are made as per the attached draft order (attachment 2A).

The Claimant believes the said directions will further the Overriding Objectives in that they identify the most fundamental issues in dispute and allow proper consideration of the matter in advance of the hearing, to enable this claim to proceed justly and expeditiously and negate the time wasted by the Defendant during the stay.

The crux upon which this claim rests is the true cost incurred by the Defendant as a result of the contractual breach from which its charges arise. If the Defendant cannot substantiate the cost of each charge as proportionate to its loss incurred, it has charged contractual penalties contrary to the Unfair Terms in Consumer Contracts Regulations 1999 and common law principles established since the early 1900's.

In the event that the Defendant's charges are accepted as being a fee for a service (which is denied) the order will facilitate examination of its true costs to determine whether the price is reasonable pursuant to the Supply of Goods and Services Act 1982.

The Claimant submits that if the Defendant has a serious intention of defending this claim at trial as predicated in its Defence that it is incumbent upon it to disclose such information. Further, the proposed directions are already routinely ordered in claims of this nature in the Mercantile Court in London, as well as in small claims track cases in Leicester, Derby, Chesterfield, Northampton and Mansfield County Courts.

3.

As the law relating to contractual penalties is long established, the Claimant believes the outstanding issues to be of fact. Accordingly, the Claimant respectfully requests that the claim be allocated to the small claims track and estimates that the hearing of the claim should last no longer than one hour.

The Claimant gives notice that at the trial she will be represented by x or counsel. The trial should last no longer than one hour.'

[GuidoT]

At last some positive news.

 

Received an order from the court today which is verbatim the New Strategy Order.

 

I have until end of April to file my documents, SCM have 14 days from that date to file their documents. If either party fails to comply then the claim or defence is struck out without further order.

 

Hearing date is mid July 2007.

 

Invariably Lloyds will not comply and I will seek a strike out and get judgement entered.

 

Thank you GaryH for you words here, it seems to have done the job.

 

As my claim includes 10 years of charges and CI, I am a bit sceptical about my prospects of succeeding on both these points, this way I should effectively succeed by default.

[GaryH]

Fantastic! Well done mate!!!

 

Which court is it BTW?

[GuidoT]

Watford.

[mr k frog]

Hi Guido,

 

Congratulations on the result of your 2nd AQ.

 

Just wondering is it necessary to complete a 2nd AQ after a stay has expired? We rung the court today (as ours has now expired) and they just said 'pop a note' in the post to Judge to explain we had sent Lloyds a letter during the stay period and received no response.

 

Mr Frog.

[GuidoT]

Frog - I sent a 2nd AQ as the judge ordered this, see my post 58 above.

 

You need to send a letter similar to my post 86 above and depending on what your stay order says send an AQ with additional information as my post 91. If you need the attachments to my post 91, PM me you email address and I will send them to you.

 

In your order does not request the AQ then you should thread in parts of my post 91 in a letter to the court.

 

All this worked me for me.

[innocent]

Hi all,

 

Nice to see things are warming up nicely Guido... towards a judgement probably

 

Thanks for your help and support within my 'innocent vs lloyds current contractual' thread so far......

 

....Obviously (look at the time ) BEGUN or RE-BEGUN my knowledge of aq's etc.....

 

Half way thru' the 'New Strategy for Allocation Questionnaires' thread (a good achievement I think so far); and I understand the points; and a huge well done to Gary here again eh!!!

 

Also re-read your thread; becoming ever more relevant to mine and now particularly helpful; "thankyou" ; and have to say particularly "loving" your second aq!

 

My question is this? And I will read much more tomorrow and the next day etc (so forgive if its there somewhere and I have so far missed it)...

 

Has anyone included the very interesting points you make in "aq2" within "aq1" (the new strategy) aswell?? Would it be worth considering??

 

Cheers and time for bed

 

 

Innocent

[GuidoT]

Hi all,

 

My question is this? And I will read much more tomorrow and the next day etc (so forgive if its there somewhere and I have so far missed it)...

 

Has anyone included the very interesting points you make in "aq2" within "aq1" (the new strategy) aswell?? Would it be worth considering??

 

Innocent

 

Hi Innocent

 

I have seen the 2nd AQ Other Information in other posts by GaryH. I think GaryH is best placed to answer that question, I am sure he will pick up on this post.

 

But anyway here are my views, I suppose you could use it in the first AQ, but it maybe a bit too heavy handed. I would have thought if the Mods/Helpers on this site considered it appropriate then we would have a New New Strategy for AQ as the 2nd AQ Other Information above.

 

If you need all the attachments (to my post 91) just PM me your email address, I have them all together in a Word file.

 

As in my case, I see that it is most effectively used after Lloyds have ignored the stay. I have no reason to think that you claim will be different to mine in that they will ask for a stay, I see you are claiming contractual interest therefore it would be good for you to have there defence struck out by effectively default without having to argue that rather grey point in court.

[GaryH]

Has anyone included the very interesting points you make in "aq2" within "aq1" (the new strategy) aswell?? Would it be worth considering??

Yes, no reason why not, although as GT said it is especially effective after they've requested a stay, had it granted, then ignored all contact - becouse the judge has a clear example of an abuse of process in the present case as well as his knowledge of other cases.

 

Theres more information on it up in the "AQ info" sticky.

 

I haven't put it on the "new strategy for AQ" thread mainly becouse I don't want to complicate matters, and, becouse it is quite aggressive - however if its used a few times with a good success rate then I'll certainly reconsider.

[GuidoT]

Sent documents off to comply with New Strategy Order yesterday and included this Statement of Evidence (based on GaryH's, but amended):

 

 

'I, [NAME] of [ADDRESS] will say as follows:

 

Background

 

1. When I opened the current account with the Defendant it was not my intention or expectation to exceed my authorised overdraft limit. I recognise it as being bad practice to commit to expenditure via cheques or otherwise when there are insufficient cleared funds in the account or an authorised overdraft sufficient to honour that commitment.

 

2. Indeed, I would go far as to say that if there is not an express term stating that I will not draft cheques or otherwise commit to expenditure that exceeds cleared funds and the authorised overdraft limit, that there is at least an implied term to that effect.

 

3. Nevertheless mistakes do happen from time to time and I recognise that when I make a commitment which exceeds cleared funds and my authorised overdraft limit the Defendant is put to some additional work for which I acknowledge a liability.

 

4. Clearly it would be unduly burdensome for every customer to expect the Defendant to justify its actual cost on every such occasion. Therefore I acknowledged and accepted that the Defendant would charge me a fixed sum for the additional work according to a scale published by the Defendant and revised from time to time by the Defendant.

 

5. I assumed that this scale of charges was calculated according to the typical additional expenditure incurred by the Defendant by reason of my mistake and therefore approximated to the loss suffered by the Defendant. In other words I had assumed that the scale of charges published by the Defendant and revised from time to time by the Defendant was a genuine pre-estimate of the Defendant’s losses arising from my occasional mistakes. This has been the accepted definition of liquidated damages in English Law for over 100 years, even before the widely quoted passage of Lord Dunedin in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] A.C. 79 (MS/1).

 

6. This also reflects the venerable principle in Robinson v Harman [1848] 1 Exch 850 (MS/2 – extract from Keating on Building on Contracts London Sweet & Maxwell 2001) which states that a contractual party cannot profit from a breach and that the charge for a loss suffered from a breach of contract should be the amount necessary to put both parties in the same position before the breach occurred.

 

7. If this point is contested I will further rely on numerous recorded authorities dating throughout the 20th century up to the most recent case of Murray v Leisureplay [2005] EWCA Civ 963 (MS/3) all of which have approved and reinforced the principles set down by Lord Dunedin defining contractual penalty clauses and the unenforceability thereof.

 

Penalty Charges

 

8. In or about 2006 it came to my attention for the first time that the charges imposed by the Defendant were not at all representative of the additional costs incurred by the Defendant but were, to use Lord Dunedin’s words “extravagant and unconscionable in amount in comparison with the greater loss that could conceivably be proved to have followed from the breach”.

 

9. This point was made at paragraph 4(a) of my Particulars of Claim and I note that the Defendant has failed to deal with this allegation in its defence. Therefore, pursuant to CPR 16.5(5) the Defendant shall be taken to have admitted this allegation.

 

10. In consequence of my concerns I have, on numerous occasions, requested that the Defendant justify its charges by providing details of the costs incurred as a result of the contractual breaches. Each time those requests were rebutted or ignored.

 

11. I note that In a recent study undertaken in Australia by Nicole Rich entitled “Unfair fees: A report into penalty fees charged by Australian banks” (MS4) it was estimated that the cost to an Australian Bank of a customers direct debit refusal was estimated to be in the region of 54 cents (as page 32 of the study). By reviewing the charges against the above figure, the study estimated that banks could be charging between 64 to 92 times what it costs them to process a direct debit refusal (as page 32 of the study). The study’s key findings stated that in its opinion the Australian Bank’s cheque and direct debit refusal fees were penalties at law (for example at page 21 of the study).

 

12. Neither the Defendant, or indeed any of the UK banks, has never published any information to support how their charges are calculated, or what their actual costs associated with such breaches are, or what revenue they derive from such charges.

 

13. For their recent BBC2 documentary “The Money Programme” (MS/5), the BBC appointed a commission of former senior banking industry figures and business academics to attempt to ascertain the actual costs to the UK banks of processing a customer’s breach of contract. They concluded that the absolute maximum conceivable cost that could be incurred by a direct debit refusal or overdraft excess is £2.50, and of a returned cheque £4.50. They did state however, that the actual cost is likely to be much less than this. The commission also estimated that the UK banks collectively derive as much as £4.5billion in profit a year from their charging regimes.

 

14. I understand the Defendant’s processes are automated and computer driven. I understand that this process consists of a computer system ‘bouncing’ the direct debit, and occasionally sending out a computer generated letter notifying that a charge has been incurred. It is therefore impossible to envisage how the Defendant can incur costs of the level set out in the schedule attached to the Claim Form. It should be noted that the letters sent notifying of a charge are usually identical.

 

15. The Defendant has not provided any evidence of any manual intervention that may have occurred in relation to the account.

 

16. On 22nd May 2006 (MS/6), the House of Commons passed an early day motion which welcomed the OFT's statement that default charges should be proportionate to the actual loss incurred. The house described such default charges as "exorbitant" and "excessive".

 

17. I also rely on a BBC radio interview in 2004 with Lloyds TSB’s former head of personal banking, Peter McNamara (MS/7), in which he states bank charges are used to fund free banking for all personal customers as a whole.

 

18. For the reasons stated above I therefore submit that the charges levied to my bank account, as listed in the schedule attached to the Claim Form, are penalty charges arising from and relating directly to breaches of contract, both explicit and implied, on my part. Therefore the charges are unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999 No. 2083) (MS/8), the Unfair Contract (Terms) Act 1977 (MS/9) and the common law.

 

19. The Defendant contends in paragraphs 2 and 4 of its Defence that the charges levied are not intended to be liquidated damages but are instead fees chargeable for contractual services. The Defendant has clearly had to adopt this overly semantic interpretation of its own terms and conditions in order to avoid the necessary conclusion that the charges are penalties and thus unenforceable.

 

20 The Defendant’s interpretation of the purpose of the charges can however by readily discredited by an acknowledgement of the following facts:

• I did not want the Defendant to perform any services, I did not ask the Defendant to perform any services and I was not given any option as to whether the Defendant performed services on my account or not. I recognise that as a result of my exceeding cleared funds and my authorised overdraft limit that the Defendant was put to some additional work and expense and I recognise a liability for that. But that is a claim for liquidated damages, that is not an agreement to pay a fee for services.

• I had no alternative but to agree to the Defendant’s charges if I wanted to open the account. I could not opt out of the services or charges.

• If the Defendant’s interpretation were to prevail, all suppliers in the future would be able to avoid the protection afforded by the law governing liquidated damages simply by describing the consequences of the relevant event as a payment for services rather than damages for breach. Such a result would seriously damage the interests of the consumer and destroy the body of common law on liquidated damages which has been built up over the last 100 years.

21. Further, I note that the Defendant’s contention that the charges are a service charge represents a contradiction to materials published by the bank previously. In correspondence with Lloyds TSB’s ‘Customer Service Recovery Centre’ in July 2006 (MS/10), Martin Orton, who is manager of the department, stated this in a letter:

“As you are aware, I am afraid that it is the case that any items that are returned incur a fee in order that we can recoup our costs”.

This was in response to a direct and plain request to justify Lloyds TSB’s charges. Throughout the letter, no mention was ever made of the charges as being the cost of any sort of ‘service’.

 

22. As set out above, I submit that the Defendant’s charges cannot be considered to be a service charge. The Defendant seemingly contends that their charges are not subject to any assessment of fairness whatsoever. This implies they can set these fees at whatever level they like without limit or regulation. Similarly, as set out above, the charges cannot be considered to be liquidated damages. They, by the Defendant's own admission, are not a pre-estimate of loss incurred as a result of the breach of contract. The charges are punitive, held “in-terrorem" and unduly and extravagantly enrich the Defendant. As such, they are a contractual penalties and unenforceable at law.

 

23. I do not accept the Defendant’s contention that the charges are enforceable as a service charge. I do not dispute that the Defendant is entitled to recover its actual damages following my breaches and it is entitled to include in the contract a liquidated sum in that respect provided that that liquidated sum is a genuine pre-estimate of the Defendant’s actual costs or losses. I accept the Defendant’s right to recover its actual losses or a genuine pre-estimate thereof. However the charges as levied are a penalty and are therefore unenforceable.

 

Unfair Terms

 

24. With regard to the contentions at paragraph 4(b) of my Particulars of Claim I refer to the statement from the Office of Fair Trading (‘OFT’) dated April 2006 (MS/11), who conducted an investigation into default charges levied by the British financial industry. While the report primarily focused on credit card issuers, the OFT stated that the principle of their findings would also apply to Bank account charges. They ruled that default charges at the current level were unfair within their interpretation of the Unfair Terms in Consumer Contracts Regulations 1999 (MS/9). With regard to the ‘cloaking’ or disguising of penalties, the OFT said this (at page 24):

 

“4.21 The analysis in this statement is in terms of explicit, transparent default fees. Attempts to restructure accounts in order to present events of default spuriously as additional services for which a charge may be made should be viewed as disguised penalties and equally open to challenge where grounds of unfairness exist. (For example, a charge for ‘agreeing’ or ‘allowing’ a customer to exceed a credit limit is no different from a customers default in exceeding a credit limit.) The UTCCRs are concerned with the intentions and effects of terms, not just their mechanism.”

 

25. As submitted above, I believe the charges levied to my account to be disproportionate contractual penalties, arising from clear and demonstrable breaches of express terms of the contract between the parties to this action. I emphatically deny the Defendant’s contention that the charges as levied are legitimate and valid service charges.

 

26. Alternatively, and without prejudice to the above, in the event the charges were accepted by this honourable court as being a fee for a contractual service, I submit that the charges are unreasonable under section 15 of the Supply of Goods and Services Act 1982 (MS/8 – Schedule 4).

 

27. Further, pursuant to the UTCCR (MS/9):

"5. - (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

 

(2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.

 

(3) Notwithstanding that a specific term or certain aspects of it in a contract has been individually negotiated, these Regulations shall apply to the rest of a contract if an overall assessment of it indicates that it is a pre-formulated standard contract.

 

(4) It shall be for any seller or supplier who claims that a term was individually negotiated to show that it was."

 

Schedule 2 of the UTCCR (MS/9) also includes indicative list of terms which may be regarded us unfair as inter alia:

 

"(i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract;

 

(j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract;

 

(m) giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract."

 

The Defendant is a multi-national corporation. The term regarding charges was inserted unilaterally in contract. The contract was pre and mass produced and that Claimant had no opportunity to negotiate the specific clauses in question, or indeed any of the contract.

 

Further the cost of the Defendant’s charges has increased during the period in which my account was held. I was not given the opportunity to negotiate, or even notified of this increase. This means the Defendant has unilaterally altered the terms of my account contract to the my detriment and to Defendant’s advantage.

 

28. Further, under the Unfair Terms in Consumer Contracts Regulations 1999 (MS/), schedule 2 (1) includes an example of an unfair clause as (e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation;’

 

 

I, the Claimant, believe all facts stated in this Statement of Evidence to be true.

 

 

Signed …………………………………………

 

 

Dated ………………………………………….'