RedDeath v LloydsTSB

[RedDeath]

Well, still no response from LTSB, and I would like to keep it that way. One week to go before I can raise court proceedings. My poc is getting on nicely and it is finally starting to look like a well thought of legal document. Even if I say so myself this does look quite good, so a big thank you to this site.

 

A couple of questions at this stage:

 

I have incurred aprox £300/400 in charges since early January when I sent in my prelim letter. What is the best way to add these? Do i just put them in the poc or do they need to be identical to the prelim and lba letters?

 

Also, should i add in a separate paragraph down the lines of "seeking £xxx for period of claim and £xxx since claim. Additional interest on it at £xxx for a total o £xxxx?

 

Finally, daily interest gets calcualted from which day forward? Can i base all of my calculations from the date I submit my poc or should it be from the date of my prelim?

[RedDeath]

Also, anyone with any information as to what kind of costs I can claim back?

 

I believe there is a time calculation per letter for this, and also time to prepare for the actual case?

[elsinore]

Glenn has just posted some info on his thread RD http://www.consumeractiongroup.co.uk/forum/abbey-bank/20095-glenn-abbey-19.html

 

Also Mindzai & Lucid were successful with LTSB.

 

Els

[elsinore]

 

I have incurred aprox £300/400 in charges since early January when I sent in my prelim letter. What is the best way to add these? Do i just put them in the poc or do they need to be identical to the prelim and lba letters?

 

Also, should i add in a separate paragraph down the lines of "seeking £xxx for period of claim and £xxx since claim. Additional interest on it at £xxx for a total o £xxxx?

 

Finally, daily interest gets calcualted from which day forward? Can i base all of my calculations from the date I submit my poc or should it be from the date of my prelim?

 

You can send an amended LBA to include the extra charges and give LTSB a little more time (a week?) to respond. Then you POC will remain straightforward.

 

The daily interest accrues from the date you enter your claim. If you print off your spreadsheet on that day, it will have updated itself.

 

HTH:)

 

Els

[RedDeath]

Thanks Els,

You put my mind at ease on that one. That was the exaxt thread I had seen and should've bookmarked. I'm going to read in detail in the coming days as I think I need a break from all this. I have bank charges in my head 24/7.

How much could i possible charge and get away with? I was wondering if I could charge for time spent preparing the case, research and producing what is quickly becoming a quite impressive poc.

Maybe 20 hours preparation, plus maybe 5 hours in total for other odd jobs? I'll try and price it up and see what happens.

 

You can send an amended LBA to include the extra charges and give LTSB a little more time (a week?) to respond. Then you POC will remain straightforward.

 

Yes, I agree, that is probably the best approach to take. All the arguements remain valid I am simply "re-pricing" the product! I'll pop a letter out to them, another signed for letter, and more paperwork to go! Just as I am getting everything ready to fire through to the courts.

 

Any thoughts on adding the possibiliy of damages to the claim? I have analysed my charges and it made some interesting reading. Graphing them over time to see how the money they made from me has increased at nearly an exponential rate.

 

Looking at the patterns on a montly scale was interesting as well. £60 one month meant that certain dd's would bounce the next, that would cause more to bounce the following month,so the next month the charges were £240 and £340 or so in the following. Once they hit, they really did hit hard and seeing it in a graph was quite litreally an eye-opener.

 

At times those charges amounted to 30% of my take home pay. Quite impressive huh? They always refused to stop the charges for a month, or extend my overdraft or even offer me a loan (breach of the banking code?) so I had to go to the sub-prime market to stop halt theendless pattern of charges,and that invovled some long term costs. Mortgages? Only now after a lot of hard work I am getting at the point that i can finally get on the property market and those bank charges were the main part of it.

 

Anyway, that was quite a rambling. I know it is a far step to go, but why not? My arguement revolves around the fact that the charges are unlawful, and my poc is simply stating "prove that your charges are lawful, if not pay the full (legal and well balanced) brunt of it" (compounded interest, costs, exemplary fee) and why not damages as well. Any thoughts? Oh and it's good to see people are stopping by. Thanks

[elsinore]

How much could i possible charge and get away with? I was wondering if I could charge for time spent preparing the case, research and producing what is quickly becoming a quite impressive poc.

Maybe 20 hours preparation, plus maybe 5 hours in total for other odd jobs? I'll try and price it up and see what happens.

 

Read this http://www.consumeractiongroup.co.uk/forum/abbey-cahoot-successes/19778-teebum-abbey.html post 461 onwards!

 

Any thoughts on adding the possibiliy of damages to the claim?

 

It's generally been felt that it was dangerous to cloud the issue. Mixing something that contentious with a straightforward monetary claim could cause the whole claim to fail. But that was when one fully expected to enter court. People are now adding CI, pre-six year charges and costs and are being paid out, so why not damages? Quantifying it and proving the loss would be difficult, though.

 

Others more legally minded than me might have a different view!

 

Els

[RedDeath]

Hi Els,

Once again thanks for the links. Intersting, 49 hours of prep work at £9 an hour that makes a nice little earner. Even though I have put the time in. I'll give it a proper read and see if the guy (or gal) breaks down the schedule of charges.

 

Adding damages is an intersting possibility, although they do need to be quantified and that could be the hard part. Supposing though that a bank will not actually go to court to defend their case, then really anything that is added in and is remotly justifiable could end up getting paid out.

 

One month the bank took 30% of my wages in claims, maybe i could claim 30% in damages, to go with the 30% interest rates. Ha ha, that would be £4000. Woohoo!!!

[RedDeath]

Just a thought on how I will go about claiming damages back.

I ordered my credit report from equifax last night, and I am planning on highlighting the months were I missed payments with my lenders and cross reference this to the months where I got hammered with bank charges.

 

Still unsure how i will go about quantifying the damages, but this is a step forward.

 

Just to make matters more complicated I need to claim through a scottish court, via an ordinary action and this should end up in a session court for which I will need to have a solicitor to "front" it all.

 

At this point I really need to consider the possibilities of claiming through the English Judiciary system. It has however brought up a few interesting points.

 

Should i claim as it stands and then claim again under Statue of Limitations for charges prior to the 5/6 year mark, or, bite the bullet, order more statements and then charge them for the whole whack.

 

At the moment I am thinking that as I am claiming contractual interest that I am better off claiming as it is and then starting another claim for the years prior to this. If not, the 29.8% interest on charges that are 10 years old may end up overshadowing the bulk of my current claim.

 

Ok, as usual, good luck to all who are dealing with this fantastic bank.

They really are a law to their own!

[caro]

I calculate that you have taken £6216 plus £5222 which you have charged me in overdraft interest for the sum which you have taken. The interest rate that I have used in these calculations is 29.8%. You will note this is the equivalent interest rate that you apply to my account in the event of an unauthorised overdraft.

 

I'm a little confused by this part. Have you actually paid this amount of interest on your charges, taken from the interest paid out on your ovstatement, or is it some kind of calculation for contractual interest.

 

Please bear in mind that you can't claim back all of the overdraft interest, only that part of it that has been charged as a result of unlawful penalty charges. Granted as time goes on it is likely to be most of the OD interest charged, but earlier on it will only be part of it.

 

Also, I would not personally advise that you take a contractual interest claim into the fast track with costs exposure. Its undeniably risky. However, I trust you are fully aware of the risks and have already carefully considered them.

 

I wholeheartedly agree with this posted by GaryH, particularly if you intend to add damages to the claim.

[RedDeath]

Hi Caro,

Thanks for stopping by my thread.

The charges are £6216 (rejected DD, standing orders, etc...)

Whereas the interest figure is calculated at 29.8%. As the bulk of my charges are from 2002 it does add up to this figure. But you are right, that was a major oversight on my part. I should have detailed that better. I am planning on sending LTSB an ammended list of charges as I am now including charges for Jan-Apr 2007. Wow, reading that paragraph again it does look atrocious. I really could have detailed that better. Still, this is what this site is about, so thank you very much for pointing that out.

 

Yes, I am also planning on asking for damages. I appreciate I am going into unchartered territory but the fortune favours the brave (or insane).

If I look at the charging pattern it seems to go in quarters. 3 months in a row of charges of around £200-300, when I cross reference it with my credit record those are the months that made the most damages. I would argue that if it had not been for such charges then I would have been able to limit the damage on my credit file. The banks are after all in a position that they can just take the money out of my account. The end result is that I am today a sub-prime customer. I can also reference periods in the charge pattern to taking up loans with sub-prime companies (welcome finance) and the criminal interest rates that they charge.

 

Anyway, I am at work and I guess I should be doing some work. Still, got the weekend to smooth everything out. Thanks again for popping by.

[RedDeath]

Update:

Caro, thanks again for pointing that out. I have sent a revised list of charges to LTSB including charges up until 1/4/07. Also detailed the interest I am claiming in better detail.

 

I am very disappointed that you have failed to respond to any of my communications with regards to the regime of bank charges that you have been debiting me.

As you have failed to respond to any of my letters I can only but assume that this must be your final response in view of my complaint. I am shocked and astounded that despite writing to you on 3 separate occasions and giving you ample time to respond, that you have made no attempt at acknowledging any of my letters and, in view of this, I will be forwarding my complaint to the Financial Services Authority as you have a duty to respond and investigate my complaints.

In the time that has elapsed, I have reconsidered my position in relation to the extent of my claim for unlawful charges, and I would ask you to note that I am adjusting my claim to cover the extended period of 1st December 2000 to the present date, and to include compound interest at Lloyds TSB’s unauthorised overdraft rate of 29.8% EAR. I am applying this rate of interest to the monies that Lloyds TSB has unlawfully deducted from my account over the years, on the principles of implied mutuality and reciprocity, and unjust enrichment.

The revised total of the charges, and interest debited as a result of the charges, stands at £6,281 at today’s date, on which I have calculated interest due (to date) of £5,463.49, bringing my total claim to £11,744.49. I have enclosed an updated schedule of the figures for your information. I am also seeking interest on the above sum of £9.59 per everyday that this balance remains outstanding.

I wish to draw your attention to the fact that I have previously asked you to demonstrate that the bank’s charges are lawful, by providing evidence of the costs to which the bank has been put as a result of my account breaches. I have also previously requested details of any manual intervention on my account. Neither has been forthcoming.

Consequently I am of the view that Lloyds TSB is unable to demonstrate that its charges are lawful or that there has been manual intervention in relation to the breaches that have occurred and the charges that have resulted.

It is my considered view that Lloyds TSB, as a multinational corporation of very high standing and repute in the business and banking world, with the benefits of accounting expertise, in-house lawyers and/or access to top legal experts, owes a duty of care to its customers, in relation to ensuring that it is trading lawfully; and has therefore always had the resources to know that its charges were and are unreasonable, punitive in nature and therefore unlawful.

The level of the charges can be seen to be unrelated to the costs of the services provided; to exceed actual individual instances of loss to the bank, and to unjustly enrich the bank.

Based on the above, I believe that if Lloyds TSB is unwilling to settle my claim in full out of court, I will have no alternative but to attempt to persuade a court that by electing not to reveal its costs and the profit element of the charges, Lloyds TSB has always concealed the fact that its charges are unjustifiable and unlawful.

 

Further, I will aver that I mistook the charges to be lawful when I paid them, because prior to becoming aware of the OFT’s report this year I had trusted Lloyds TSB to operate lawfully.

Please note that I require unconditional repayment in full of £11,744.49, by cheque, within the next seven days in order to conclude this matter, failing which I will be proceeding with a court claim for the above sum together with damages without further notice to you. In view of the costs involved for both parties I hope that Lloyds TSB will decide to settle my claim before that stage becomes necessary.

Yours sincerely,

 

So here goes again, this time everything seems to be in order. I am surprised (ish) that they have not answered to any of my letters. Maybe they had spotted the error and were hoping i would proceed to court before highlighting it. And this is why this site is FAB!!!

 

Ok, I guess its now time to complete my poc and come up with a figure for damages. Will be comparing my charge list and see if anything interesting pops up once I compare it to my credit record.

 

On a different note, could I also push for stauatory interest at 8%? I will chase this one up as well. I don't see why not thought. I figure the interest they owe me on the account is for their unauthorised borrowing from me, anyway this one was just a thought.

 

As I live in Scotland I think I will be going for this through the English court systems, seems to be a bit better.

 

Happy weekend guys n gals!

[caro]

I would advise you to go for statutory interest only and forget the contractual interest altogether. Also forget about damages. Most certainly do NOT add statutory interest to CI.

 

I have done my best to warn you that your claim is extremely risky as you are proposing to do it, so I don't really think I can advise you further. You must understand that not only is there a strong possibility that your claim will be struck out, and also that you might have to pay the banks costs.

 

If you have the money spare to risk that gamble then that is up to you, but costs can run into thousands of pounds, so not only might your claim fail, but you could have to pay thousands out too.

 

I'm sure that there are people who would encourage you to give it a go, but if they do just remember that it won't be their own money they're risking, but yours.

[RedDeath]

Hi Caro and thanks again for taking the time to warn me about my case. I really do appreciate your concern.

 

I understand that I am liable to cover their costs, should I lose. However the amount of money that I stand to win would literally change my life. I would be able to clear all of my debts, re-establish my credit rating (i am disputing some defaults as I type) but most importantly it would also give me the money to put down a deposit on a house. What I stand to win is the chance of a better life, with no more sub-prime credit lenders and so on, and for it I am willing to fight to the death. However, you are very right in saying that I need to consider the possibility of the case being struck out, and for it all I can do is read as much as i can and put forward the best particulars of claim that I could possibly come up with. Regardless of other people's advice, it is my money on the line.

 

Assuming that I do all of my research and fill out my claim properly, then it is fair to say that the bank will not disclose their true costs with regards to the charges. So claiming those back is a relatively straight forward process.

 

Now I agreed with my bank in my contract/terms and conditions that I would cover their costs incurred by any bad money management on my behalf. However, at no point did I agree that they could charge me more for it, as that would have been unlawful. In claiming the charges, the banks have abused their position as my fiduciary as they took more money from me than I ever allowed for them to take. Let's not forget that the bank is in a very priviledged position and can take money out of people's accounts as they please (as honory's situation in the LTSB thread clearly exemplifies).

 

There is a principle of mutuality in the agreement so what is fair for them should also be fair for me. Now the banks have given me the tools to go over my authorised credit limit (cheque guarantee cards and so on), and when i did go over those limits they charged me 29.8% interest as I had not agreed to borrow money from them. So far so good.

 

Now, in the instances that the banks took money from me through the charges they were guilty of the same process that I was when I went over my overdraft limit. They charged me 29.8& on that debt and as such it is only fair that I can charge them just as much for it.

 

The Law on reciprocity is clear. If a contract term applies to one party in detriment to the other, then it also applies in opposite circumstances.

 

So why not? Ok, sorry if this is sounding like a rant, it is not meant that way, I am trying to convince myself while at the same time raising some issues.

 

They could argue that a contract does not exist, merely terms and conditions, but then my counter arguement is why include a signature space on the documents? In all effect the terms and conditions are the contract.

 

If I plead my case properly and explain about reciprocity and mutuality then on what grounds could it be struck out? What is it about my claim that is so wrong?

 

My arguement is simple. Prove that those charges are a legittimate estimate of your costs, if not then pay me back my money, and the interest on it, not just at statuatory rate but at the same rate that I have paid them for the same unauthorised borrowing.

 

As for damages, yes this is a very tricky situation and one that I am considering carefully. I appreciate I am treading water with the compound interest rate so this may not be the viable as it may alienate the courts and deminish what I think is a well constructed case.

 

I do feel however that I have a case for damages. If you look at the fact that some months those charges amounted to 30% of my wages, then it has forced me to borrow money from sub-prime lenders as if they had behaved lawfully throught out, then I would only have paid the true cost of those charges, it would have left me with more money and I would not have had to resort to sub-prime lenders. Could I possibly claim back charges and then should I win, claim back damages at a different date or rather the claim would be deemed as settled and that would be it?

 

Lastly, stauatory interest. Is this an interest based on an oustanding debt with them. I.e they owe me 12k so far (assuming contractual interest), would I not be asking for interest on the debt? I'll research this fully however it is not at the top of my priority list, but if it meant i had a chance then well, why not?

 

Ok, I feel better now that i got all that off my chest. I really do wish I had a crystal ball to see what I should do.

 

Any comments by anyone I would be really grateful, as I will consider every option there is in order to create a better case.

 

Thanks again to all those who offer advice.

[caro]

There is no basis in law for CI. Also please note this. Not about CI, but about the level costs can be if things don't go as you hope. If you understand all the implications then I've done my job and will let you get on in peace.

 

http://www.consumeractiongroup.co.uk/forum/post-531942.html

[RedDeath]

Thanks Caro, job well done! I really have appreciated the concern.

I read that thread and have to admit that I am gutted for the guy. Yes, there are risks invovled and that is a perfect example of it.£7500 is an incredible amount. I would argue that I am claiming bank charges as opposed to mortgage exit fees, but that's not the point. The point is the risk involved.

 

I am planning on phrasing my poc down the lines of: pay me at contractual rate, if not pay me at authorised rate, if not pay me at statutory rate so that covers my back a little.

 

Still got time to think about it. I will post my particulars of claim once I get round to completing them. I would appreciate a quick glance through them at that point if possible.

 

Anyway, thanks for the sound advice, you may now rest. Thanks again!

[GaryH]

I was'nt going to get involved in the CI debate again, but there are some issues here which I find quite disturbing so I'm going put my 2p's worth in.

 

I understand that I am liable to cover their costs, should I lose. However the amount of money that I stand to win would literally change my life. I would be able to clear all of my debts, re-establish my credit rating (i am disputing some defaults as I type) but most importantly it would also give me the money to put down a deposit on a house. What I stand to win is the chance of a better life, with no more sub-prime credit lenders and so on, and for it I am willing to fight to the death. However, you are very right in saying that I need to consider the possibility of the case being struck out, and for it all I can do is read as much as i can and put forward the best particulars of claim that I could possibly come up with. Regardless of other people's advice, it is my money on the line.

 

Assuming that I do all of my research and fill out my claim properly, then it is fair to say that the bank will not disclose their true costs with regards to the charges. So claiming those back is a relatively straight forward process.

 

Now I agreed with my bank in my contract/terms and conditions that I would cover their costs incurred by any bad money management on my behalf. However, at no point did I agree that they could charge me more for it, as that would have been unlawful. In claiming the charges, the banks have abused their position as my fiduciary as they took more money from me than I ever allowed for them to take. Let's not forget that the bank is in a very priviledged position and can take money out of people's accounts as they please (as honory's situation in the LTSB thread clearly exemplifies).

 

There is a principle of mutuality in the agreement so what is fair for them should also be fair for me. Now the banks have given me the tools to go over my authorised credit limit (cheque guarantee cards and so on), and when i did go over those limits they charged me 29.8% interest as I had not agreed to borrow money from them. So far so good.

 

Now, in the instances that the banks took money from me through the charges they were guilty of the same process that I was when I went over my overdraft limit. They charged me 29.8& on that debt and as such it is only fair that I can charge them just as much for it.

 

So why not? Ok, sorry if this is sounding like a rant, it is not meant that way, I am trying to convince myself while at the same time raising some issues.

 

They could argue that a contract does not exist, merely terms and conditions, but then my counter arguement is why include a signature space on the documents? In all effect the terms and conditions are the contract.

 

If I plead my case properly and explain about reciprocity and mutuality then on what grounds could it be struck out? What is it about my claim that is so wrong?

 

My arguement is simple. Prove that those charges are a legittimate estimate of your costs, if not then pay me back my money, and the interest on it, not just at statuatory rate but at the same rate that I have paid them for the same unauthorised borrowing.

 

As for damages, yes this is a very tricky situation and one that I am considering carefully. I appreciate I am treading water with the compound interest rate so this may not be the viable as it may alienate the courts and deminish what I think is a well constructed case.

 

I do feel however that I have a case for damages. If you look at the fact that some months those charges amounted to 30% of my wages, then it has forced me to borrow money from sub-prime lenders as if they had behaved lawfully throught out, then I would only have paid the true cost of those charges, it would have left me with more money and I would not have had to resort to sub-prime lenders. Could I possibly claim back charges and then should I win, claim back damages at a different date or rather the claim would be deemed as settled and that would be it?

 

Lastly, stauatory interest. Is this an interest based on an oustanding debt with them. I.e they owe me 12k so far (assuming contractual interest), would I not be asking for interest on the debt? I'll research this fully however it is not at the top of my priority list, but if it meant i had a chance then well, why not?

 

Ok, I feel better now that i got all that off my chest. I really do wish I had a crystal ball to see what I should do.

 

Any comments by anyone I would be really grateful, as I will consider every option there is in order to create a better case.

 

Thanks again to all those who offer advice.

 

Firstly, I can fully understand that you're passionate that you should be entitled to more than just the recovery of the charges for what the bank have done to you, and the consequences - probably not only financially, but also on your life in general - of their unlawful actions.

 

Unfortunately, such emotional issues do not come into it in a court. The judge is interested only in the law - and how that law applies to the facts of your case.

 

Now I've heard alot said about contractual mutuality, but unfortunately I've yet to see ANYONE substantiate the talk with any sort of basis in law whatsoever.

There is a principle of mutuality in the agreement so what is fair for them should also be fair for me.

Perhaps it does seem fair - in fact, yes, it does I agree. Unfortunately though, unless there is a legal basis its totally irrelevant. That quote you've pasted from another thread is actually a perfect example of this - the poster of that comment strongly argued that "case law establishing contractual mutuality is clear....blah, blah, blah" but in the next post I asked for a link or reference to the case being refered to - and surprise, surprise it all went deathly quiet!

 

In fact, while we're on the subject of case law, have a research of this case - Westdeutsche v Islington BC [1996] A.C. 669, [1996] 2 All E.R. 961. This is a clear House of Lords authority against the awarding of compounded interest upon the basis of unjust enrichment.

 

So all this begs the question - upon what basis are you claiming contractual interest? What authorities or legislation will you rely on in court to substantiate it? Upon what do you base your assersion that contractual reciprocity exists in the context you profess that it does? I know there are some excellent arguements for it, and you seem very well versed in them, but when your in the multi track up against professional solicitors your going to need a hell of a lot more than that I'm afraid.

 

I'm sure I'll get shot down for this, but frankly I don't care - untill somebody shows me some case law or other such basis in law for contractual mutuality or CI in general, I'll make no apologies whatsoever.

 

Something else I should say, is don't think for a minute that you'll be able to chuck whatever you like on top of your claim and sneak it in on the back of the fact that they won't defend the charges so they'll pay everything else as well - its not going to happen. They'll more than likely pay the charges + 8% + costs then apply for summary judgement on the grounds that there is no basis for your claim to continue.

 

I think your taking far too much on without giving proper thought to the consequences. Charges + pre 6 year charges + CI + "damages" + default removal is putting you straight into the multi track almost without doubt, and I'm sure I don't need to tell you the consequenses if you were to lose in the Multi-track. It would certainly change your life alright - it could quite easily mean financial ruin. Adding 8% stat on top of everything else is just plain foolish. Its duplicated benefit - I.e. unjust enrichment, and the court would not tolerate it for one minute.

 

Sorry if this seems harsh, but it seems to me that your attitute is somewhat Blasé - particularly given your comment on Honory's thread earlier on.

 

IMHO if you want to pursue more than the charges + stat, choose one or the other - CI or consequential losses. Even then I would strongly advise against a CI claim in anything other than the small claims track. Consequential losses, with the right advise and a great deal of research might be viable, but you would have to directly and unequivically quantify how their unlawful charges caused you direct loss.

[GaryH]

One other thing, have you considered going down the Financial Ombudsman route for consequential loss, and/or distress and inconveniance? It certainly might be worth looking into. Its a damnsight less risky anyway.

[RedDeath]

Gary, thanks a million for your points. Yes, I agree, there is no room in a court for emotion.

 

I will research this thoroughly, and I have to admit that I am no longer so confident in pursuing this. Could I pursue interest at the authorised borrowing rate (as per Mindzi and Lucid) or scrap it all together and simply go for statutory?

 

Westdeutsche v Islington BC [1996] A.C. 669, [1996] 2 All E.R. 961

Westdeutsche v Islington BC

 

In equity compound interest can be awarded where there is a breach of fiduciary duty, because it is assumed that the fiduciary will have made compound interest on any profits made, but this equitable jurisdiction does not extend beyond fiduciaries. Therefore the bank had to argue the existence of a trust or other fiduciary relationship, and none could be found in the case.

This was the essential difference between the majority and minority opinions. The minority view was that compound interest could be awarded anyway, even in the absence of a trust or other fiduciary relationship. All their Lordships were agreed, however, that there was no fiduciary relationship in the case.

 

Is there a fiduciary relationship between a consumer and their bank?

Based on the following link that does seem viable. Could this be referenced against the banking code?

 

Cork Online Law Review - 2003 - 6 Is There a Need For a Statute-Based Code of Practice to Govern All FI's? - Ross Philips

 

It is suggested that the banker and customer relationship cannot be fully reflected in the legal context of a statute-based Code. A reason for this goes back to the fundamental principal at the heart of the banker-customer relationship – Trust. Following on from this the relationship therefore can be described as a fiduciary relationship and I submit that following on from that itself, legislative intervention would undermine the meaning of fiduciary in such a relationship. A fiduciary is a person who is entrusted to act in the best interests of another. Fiduciary duties in a banking context are the duty of a banker to act in the best interest of a customer without gaining any material benefit except with the knowledge and prior consent of the customer. Such persons are generally held to conduct their operations in the highest standards of good faith or best practice. The law, I suggest, will be a rather crude instrument for regulating all aspects of financial activities especially one regarding setting of banking standards of practice.

 

If there is a fiduciary relationship between myself (the consumer) and the bank then that link you posted could be the key I have been looking for.

 

Any thoughts?

[caro]

If there is a fiduciary relationship between myself (the consumer) and the bank then that link you posted could be the key I have been looking for.

 

Any thoughts?

 

I don't think there can be any doubt that there is a fiduciary relationship, or at least there shouldn't be as this link should demonstrate.

 

Fiduciary - Wikipedia, the free encyclopedia

[RedDeath]

Just another thought on the matter....

 

In justifying his respones, the judge in the Westdeutsche case argued

Reductio ad absurdum as part of his decision in the case.

 

http://en.wikipedia.org/wiki/Reductio_ad_absurdum

 

Reductio ad absurdum is also often used to describe an argument where a conclusion is derived in the belief that everyone (or at least those being argued against) will accept that it is false or absurd.

 

So....

 

All the banks quote the banking code and that they adhere to it. Basically that sets out a list of "voluntary" codes that it adheres to in order to safeguard the customer. I.e. their charges are clearly defined, they will write to us to inform us of any changes to interest rates for example and so on. They are in effect portraying themselves as our fiduciaries. They have gained our trust with regards to our money. Now if the bank does not accept the relationship of them as our fiduciaries, then they are in effect contradicting the banking code and all of the information that they are printing in their documentations. As such based on reductio ad abusrdem that relationship has to exist.

 

Once that relationship is in place then the legal precedent for contractual interest is in place.

 

Have I over simplified things? I think I have an arguement here.

[RedDeath]

ha ha caro, i am lagging behind you on this one.

 

So if that relationship does exist, then do I have a case?

[GaryH]

I will research this thoroughly, and I have to admit that I am no longer so confident in pursuing this. Could I pursue interest at the authorised borrowing rate (as per Mindzi and Lucid) or scrap it all together and simply go for statutory?

As I said, personally I would not claim contractual interest unless I was confidant the claim would be heard in the small claims track - and I would not advise anyone else to either.

 

The more I reseach CI the more I doubt its validity. IMHO mutuality and reciprocity is in legal terms a non-starter, unjust enrichment is perfectly logical, but unfortunately there's the small matter of a House of Lords precident against! There are other arguements such as fairness and balance, and disgorgement, etc - all great arguements, but also all untested arguements. It would be a good experimental project - but IMO the fast or multi-track aren't the places to experiment!

 

Of course, ultimately its your claim and your risk - nobody can tell you what to do. I'm just trying to get you to see the dangers.

Westdeutsche v Islington BC [1996] A.C. 669, [1996] 2 All E.R. 961

Westdeutsche v Islington BC

 

 

Is there a fiduciary relationship between a consumer and their bank?

Now there's a question!! You could argue one, sure, but I'm not sure you could prove one.

[caro]

Well I think there is meant to be a fiduciary relationship, but whether the bank is working in our interests is more than debateable. I'm afraid all this is getting way over my head. My legal knowledge would fit on the back of a postage stamp, so I'll stick to what I know works and will watch with interest. (No pun intended).

[RedDeath]

Gary,

 

Thanks, I understand the risks, what I would like to do is research this to its extreme before making an informed decision, and thanks to yourself and Caro I really do understand the implications of this. So please, no more scaring the **** out of me for costs. £7500 is enough for financial ruin. However, if i do have case (a properly researched case) then I may just go for it. So please, no more costs talk, let's see if we can build a case for CI. Maybe with this we could finally get the banks to change their regime at last.

 

At this stage, thanks to you, I feel like I have stumbled onto something. So can you think of any other arguement that could be thrown my way to deny CI?

 

The verdict in the westdeutsche was 3-2, the minority ruling in favour of CI, the majority not finding the fiduciary relationship.

 

I feel that I can argue a fiduciary relationship then I am half way there. My own letters and templates from the CAG site all state "As my fiduciary...". The bank is my fiduciary, this seems a given to me.

 

Based on reductio ad abusrdum I can argue the existance (or non-existance) of the relationship. Thus, quoting the westdeutshce case, i'm there. Could we now argue a legal situation where CI could be awarded?

 

I could cover my back and ask that if CI is not awarded that I am then awarded statutory interest rate. But if I can competently argue CI then....

[RedDeath]

he he Caro, watch with interest!!! That was funny.

 

No, please post as many questions as you can think of. The more is thrown at me the better prepared I am.