Calvsta V Barclays WON

Penny.forum · March 15, 2007

I'm certainly losing my bottle now, having just read all this thread (admittedly, it fast became a skim-read, through the small spaces between my fingers!). Just sat down to prepare my own court bundle, read this thread for suggestions and pointers - gone from :cool: to :eek: in 10 minutes!!!

Penny.forum · March 16, 2007

A good night's sleep and another read through - it's all much clearer now!

Steve, are you going to send copies of the relevant case law to Barclays with your bundle (but not to the court because the court doesn't want them 'til the hearing?) or forward them to Barclays later? I have to file and serve the schedule, statements and Statement by the 22nd, but not serve 'decided cases and other legal material' until 5th April.

Did you manage to find a copy of Robinson Vs Harman 1848?

How are you sending the bundle? In an A4 ring binder? I'm not sure what it's supposed to physically look like!

scalvey · March 18, 2007

Hi Penny

Sorry for late reply, computers been playing up!

I'm sending the whole finished bundle to both the bank and court.

Don't send/bring anything else to the court you have'nt sent to the bank or visa verse.

A4 ring binder is fine. Use a few dividers to seperate sections.

Run the bundle in an tidy order to help your statement of evidence. The more prepared and organised it looks the more likely a faster settlement I guess!

I'm going to give barclays a call tomo or tues as Leech has advised!

Take care

scalvey · March 19, 2007

It seems that Barclays are sending out letters 2-3 weeks before court hearing with settlements.

I've had to prepare my court bundle as it is needed by 23 March(fri).

I think I should make copies and post them tomo as I have doubts that Barclays will settle before early May (court hearing 22 May).

Penny.forum · March 19, 2007

That sounds good. Fingers crossed then. My court date is 13th of April (so I should expect a letter anyday now!).

Going to post my bundles off recorded delivery first thing tomorrow. I'm not going to send the same to each - I'm just sending the court exactly what it asked for and no more, and Barclays will get the bulky file:-

"Please find enclosed documents to be filed in accordance with the directions I received in my ‘N157 Notice of Allocations to the Small Claims Track’ letter dated 22 February 2007.

“2. The Claimant shall by 22nd March file and serve:-

(a) a schedule setting out each charge repayment of which is sought, showing the date, amount and the alleged reason (if any) for that charge being made;

(b) copies of any statement or other document relied upon as showing that each and every charge has been made;

With reference to the instruction,

“4. Decided cases and other legal materials should not be filed but served by 5 April 2007 and brought to the hearing for the court.”

The Defendant has been served with the following decided cases and legal materials –

Summary of relevant Case Law To Penalty Charges
- Lord Elpinstone v. Monkland Iron and Coal Co (1886)
- Wilson v. Love (1896)
- Castaneda and Others v. Clydebank Engineering and Shipbuilding Co., Ltd (1904)
- Commissioner of Public Works v Hills (1906)
- Campbell Discount Co Ltd v. Bridge (1962)
- Philips v. The Attorney General of Hong Kong (1993)
- Murray v. Leisureplay (2004)
- First Commercial Bank and Others v. the Owners of “Mandarin Container”, “Kingdon Container” and “Liberty Container” (2004)
- Alfred McAlpine Capital Projects Limited v Tilebox Limited (2005
[*]The Unfair Terms in Consumer Contracts Regulations 1999

[*]Unfair Contract Terms Act 1977

[*]Dunlop Pneumatic Tyre Co. Ltd v New Garage and Motor Co Ltd. (1915)

[*]Office of Fair Trading Statement Summary

[*]Early Day Motion 2227 - Default Banking Charges

Copies of these shall be brought to the hearing for the court as instructed. I was apprehensive in my omission of these papers to the court; I am told that it is customary to provide both the Defendant and the Court with identical documentation. However, I did not wish to burden the court with bulky literature against your expressed wishes. If I am wrong in my interpretation of order No 4, I apologise and will furnish you with a duplicate set of these papers a.s.a.p. upon request.

Yours truly,"

I don't want to upset the Judge by ignoring his request, just in case.

LEECHTHEBREACH · March 19, 2007

Scalvey, penny

make sure you have read and submitted either one of these,

can,t remember where I got them from Garyh i think so cannot give you the shortcut, here goes

text in black - template

text in red - guide notes

text in blue - examples. Replace with your own information.

'SERVICE CHARGE' STATEMENT -

Quote:

Between:

Your name'SERVICE CHARGE' STATEMENT -

(Claimant)

and

Bank Plc

(Defendant)

STATEMENT OF EVIDENCE

1. The Claimant submits that the charges levied to his bank account, as set out in the enclosed schedule, are, notwithstanding the defence of the defendant, default penalty charges arising out of and relating directly to breaches of contract, both explicit and implied, on the part of the claimant. As a contractual penalty, the charges are unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations 1999, the Unfair Contracts (Terms) Act 1977, and the common law.

2. It is admitted that the Defendants charges were levied in accordance with the terms and conditions of the account in question. However, it is submitted that the Defendants charges are not related to or intended to represent any actual loss arising from a breach of contract, but instead unduly enrich the Defendant which exercises the contractual term in respect of such charges with a view to profit.

3. The Defendant avers that the charges levied are legitimate fixed price contractual services, which are therefore not required to be a pre-estimate of loss incurred on the part of the defendant. The Claimant further submits that this contention is merely an attempt to ‘cloak’, or disguise, their penalties in order to circumvent the common law and statutory prohibition of default penalty charges with view to a profit.

4. The Claimant believes a 'service' to be a provision of knowledge, skill or other transferable facility that benefits the consumer, and one that the consumer agrees is at a reasonable market rate commensurable with the service provided. The Claimant believes it to be inconceivable that the charges levied to his account by the defendant could be any form of ‘service’, rather than a penalty.

5. In the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co [1915], Lord Dunedin stated that a clause is a penalty if it provides for “a payment of money stipulated as in-terrorum of the offending party”, i.e. if it is designed to scare or coerce or is used as a threat.

6. The breaches of contract in this case relate to exceeding contractually agreed overdraft limits, and having insufficient funds available to pay a direct debit or a standing order. Add an example of a charge incurred due to going over by a small amount, for example -On one occasion in June 2006, a direct debit payment was returned due to insufficient funds in my account. The shortfall was only one pound and nineteen pence.I was then penalised for this breach of the terms and conditions of my account of by way of a charge of £**. The claimant holds this charge and indeed every other charge in question, to be punitive in nature, and wholly disproportionate.

7. The Claimant further submits that the Defendant’s contention that the charges are now a legitimate service charge represents a contradiction to materials published by the bank previously. Here, add in details of any correspondence in which the bank referred to the charges as ‘penalties’, ‘defaults’ or ‘exist to cover costs’, etc. For example -In correspondence with Lloyds TSB’s ‘Customer Service Recovery’ department in July 2006, 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’.(If anyone wants a copy of this letter, drop me a PM with your address and I'll post it to you.)

8. Additionally, the [claimant believes there to be a high possibility that the] terms and conditions of [his / the claimants] account contract explicitly describe the charges as to be levied in instances of breaching those terms. This is true of the contracts of other customers of the defendant that the claimant is aware. However, the bank has failed to provide me with a copy of the account contract, despite repeated requests to do so, so unfortunately this cannot be proved. A right of subject access request for this document was submitted to the defendant under the Data Protection Act 1998, on 8th September 2006. The defendant has failed to comply. Here, if your account contract states the charges as ‘breaches’ use the text in black. The blue bit was true in my case and I’ve left it there as an example. If it applies to you, keep it in, if not, take it out.

9. The Claimant refers to the statement from the Office of Fair Trading (April 2006), who conducted a thorough 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 UTCCR’s. With regard to the ‘cloaking’ or disguising of penalties, the OFT said this;

“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 UTCCR’s are concerned with the intentions and effects of terms, not just their mechanism”.

10. As pleaded above, the Claimant believes the charges levied to his account to be disproportionate contractual penalties. The Claimant vehemently refutes the Defences contention that they are legitimate contractual service charges.

11. However, and without prejudice to the above, in the event that the charges were accepted as being a fee for a service, the claimant submits that they are unreasonable under section 15 of the Supply of Goods and Services Act 1982.

12. Further, under the UTCCR:

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 also includes such clauses (to define examples of unfair clauses) as:

(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 I had no opportunity to negotiate the clause, or indeed any of the contract.

The cost of Lloyds charges have increased twice during the period in which my account was held, neither time was I given the opportunity to negotiate, or even notified of this increase. This means the bank has unilaterally altered the terms of my account contract to my detriment, and to their advantage.

13. Following on from the above, the claimant does not accept The Defendants contention that the charges are enforceable as a service charge. It is not disputed that the Defendant is entitled to recover its damages following the claimant’s breach of contract, and it is entitled to include a liquidated damages clause. A penalty however, is unenforceable.

14. The Claimant cites the case of Robinson v Harman 1848 which states that a contractual party cannot profit from a breach and 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.

15. Lord Dunedin stated in the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co 1915 -

“the sum is a penalty if it is greater than the greatest loss which could have been suffered from the breach”

16. Further, under the Unfair Terms in Consumer Contracts Regulations 1999, schedule 2 (1) includes to define 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;

17. On numerous occasions, the Claimant has requested that the Defendant justify its charges by providing details of the costs incurred as a result of my contractual breaches. Each time those requests were rebutted or ignored.

18. In a recent study undertaken in Australia, (Nicole Rich, “Unfair fees: a report into penalty fees charged by Australian Banks”) 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. 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. The study’s key findings stated that in its opinion the Australian Bank’s cheque and direct debit refusal fees were likely to be penalties at law.

19. Further, in an American study (Consumer Federation of America “Bounced Cheques: Billion Dollar profits II”) it was estimated that the American banks’ cost to process a returned direct debit payment was between US$0.48 and US$0.65.

20. 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.

21. For their recent BBC2 documentary “The Money Programme”, 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.

22. It is submitted that the Defendants charges are applied by an automated and computer driven process. This process consists of a computer system ‘bouncing’ the direct debit, and sending out a computer generated letter. It is therefore impossible to envisage how the Defendant can incur costs of £** by carrying out this completely automated process. Note that the letter received notifying of a charge is identical in every instance, and if multiple breaches occurred on the same day, a separate letter will be sent in each instance.

23.In a telephone conversation with the personal banking department of Lloyds TSB on May 24th 2006, a member of staff told me directly that the charges were imposed automatically. A transcript of this conversation is provided. I made a Data Protection Act 1998 right of subject access request to the Defendant for a recording of this conversation. Unfortunately it “could not be located”.

24. Additionally, I asked the Defendant to provide evidence of any manual intervention that may have occurred in relation to my account, under a Data Protection Act 1998 right of subject access request. No such information was forthcoming.

25. On 22nd May 2006, 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 discribed such default charges as "exorbitant" and "excessive".

26. The Claimant also cites a radio interview in 2004 with Lloyds TSB’s former head of personal banking, Peter McNamara, in which he states bank charges are used to fund free banking for all personal customers as a whole.

27. As set out previously, it is submitted that The Defendant’s charges can not be considered to be a service charge. In arguing that they are, they also effectively admit that they make profits from these fees. The Defendant seemingly contends that their charges are not subject to an assessment of fairness. This implies they can set these fees at whatever level they like without 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, and unduly and extravagantly enrich the Defendant. As such, they are a contractual penalties and unenforceable at law.

I, the Claimant, beleive all facts stated to be true.

Signed, dated.

Documents attached in support of this statement

Letter from Martin Orton, Lloyds TSB Customer Recovery Centre - or any letter or material in which the charges are described as 'defaults', 'penalties', 'covers costs', etc.
Account Contract - if applicable. See para 8
Office of Fair Trading report, April 2006
House of commons early day motion, May 2006
Automated charge notification letter/s. Include a couple of examples. Preferably use ones where charges have been incurred over ridiculously small shortfalls and if possible, include 2 letters notifying of charges incurred on the same day
BBC commission conclusion - BBC NEWS | Business | The Money Programme bank commission
Australian Default charges report, Nicole Rich - http://www.clcv.net.au/downloads/Med...20Report .pdf
Transcript of telephone communication with Lloyds TSB 'personal banking' department.
DPA Subject Access Request for evidence of manual intervention
Transcript of radio interview with Peter McNamara, former head of personal banking, Lloyds TSB.
All pre-litigation correspondance between the parties

This next statement is suitable for claims in which the defence contends that the charges are proportionate to or a pre-estimate of their actual loss.

Again, think carefully about what applies to your claim and amend to suit if necessary.

Text in black - template

Text in red - guide notes

Text in blue - examples, replace with your own.

'GENUINE PRE-ESTIMATE' STATEMENT -

Quote:

Between:

Your name

(Claimant)

and

Bank Plc

(Defendant)

STATEMENT OF EVIDENCE

1. The claimant submits that the charges levied to his bank account, as set out in the enclosed schedule, are, notwithstanding the defence of the defendant, default penalty charges imposed because of and relating directly to breaches of contract, both explicit and implied, on the part of the claimant. As a contractual penalty, the charges are unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations 1999, the Unfair Contracts (Terms) Act 1977, and the common law.

2. It is admitted that the Defendants charges were levied in accordance with the terms and conditions of the account in question. However, it is submitted that the Defendants charges are not related to or intended to represent any actual loss arising from a breach of contract, but instead unduly and extravagantly enrich the Defendant which exercises the contractual term in respect of such charges with a view to profit.

3. The breaches of contract in this case relate to exceeding the contractual limits of overdraft facility, and having insufficient funds available to pay a direct debit or a standing order. Add an example of a charge incurred due to going over by a small amount, for example -On one occasion in June 2006, a direct debit payment was returned due to insufficient funds in my account. The shortfall was only one pound and nineteen pence.I was then penalised for this breach by way of a charge of £**. The claimant holds this charge and indeed every other charge in question, to be punitive in nature, and wholly disproportionate.

4. The Claimant cites the case of Robinson v Harman 1848 which states that a contractual party cannot profit from a breach and 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.

5. Lord Dunedin stated in the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co 1915 -

“the sum is a penalty if it is greater than the greatest loss which could have been suffered from the breach” and;

“The essence of a penalty is a payment of money stipulated as in terrorem of the offending part; the essence of liquidated damages is a genuine covenanted pre-estimate of damage”

6. Further, under the Unfair Terms in Consumer Contracts Regulations 1999, schedule 2 (1) includes to define 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;

7. It is not disputed that the Defendant is entitled to recover its damages following the claimant’s breach of contract, and it is entitled to include a liquidated damages clause. The Claimant contends that the charges made by the defendant are disproportionate, excessive, exorbitant and extravagant and believes it to be inconscionable that they represent, are a pre-estimate of, or are in any way related to, its actual loss suffered as a result of the Claimants breaches of contract.

8. The defendant has declined to answer the Claimant’s written requests for information regarding its administrative costs, or other such costs, incurred as a result of the contractual breaches from which its charges arise. Further, the Defendant has declined to offer any explanation whatsoever in regard of how its charges are calculated, or any other such justification thereof, despite repeated requests to do so.

9. In a recent study undertaken in Australia, (Nicole Rich, “Unfair fees: a report into penalty fees charged by Australian Banks”) 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. By reviewing the banks’ 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. The study’s key findings stated that in its opinion the Australian Bank’s cheque and direct debit return charges were likely to be penalties at law.

10. Further, in an American study (Consumer Federation of America “Bounced Cheques: Billion Dollar profits II”) it was estimated that the American banks’ cost to process a returned direct debit payment was between US$0.48 and US$0.65.

11. 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.

12. For their recent BBC2 documentary “The Money Programme”, 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.

13. It is submitted that the Defendants charges are applied by an automated and computer driven process. It is therefore impossible to envisage how the Defendant can incur costs of £** by carrying out a completely automated and computer driven process. This process consists of a computer system ‘bouncing’ the direct debit, and sending out a computer generated letter. Note that the letter received notifying of a charge is identical in every instance, and if multiple breaches occurred on the same day, a separate letter will be sent in each instance.

14.In a telephone conversation with the personal banking department of Lloyds TSB on May 24th 2006, a member of staff actually told me directly that the charges were imposed automatically. A transcript of this conversation is provided. I made a Data Protection Act 1998 right of subject access request to the Defendant for a recording of this conversation. Unfortunately it “could not be located”.

15. Additionally, I asked the Defendant to provide me evidence of any manual intervention that may have occurred in relation to my account, under a Data Protection Act 1998 right of subject access request. No such information was forthcoming.

16. The claimant also cites a radio interview in 2004 with Lloyds TSB’s former head of personal banking, Peter McNamara, in which he states the charges are used to fund free banking for all personal customers as a whole.

17. The claimant cites the statement from the Office of Fair Trading (April 2006), who conducted a thorough 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 UTCCR’s.

18. On 22nd May 2006, 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 discribed such default charges as "exorbitant" and "excessive".

19. Further, under the UTCCR: