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    • Yes she went back to them and asked them to remove the cancellation however the girl on the phone went to ask someone and came back and said she couldn’t.   Thing is they then tried to charge her £1000 to reinsure, I contacted a broker and got it down to £760, she went back to them and they miraculously could do it for £690!!  It feels like they are using this to fleece her, her previous ins was £300.   I will get her to write a complaint to them...do you know if there’s an insurance ombudsman she could contact?    I just feel it would have been fair fair to suspend the ins pending the court outcome!    Thankyou.
    • Hi,    Yes my daughter drove through a red light.   Yes her DVLA was still registered to her previous address at Uni hence them not being able to contact her hence the MS90.   This is her 1st car and she simply didn’t think to re register her car to our address she genuinely forgot!  However we left our forwarding address with the letting agent but the house was subsequently sold and the new owner used a different letting agency so communication was lost.   The courts enlisted the bailiffs and when the current tenant found her via Facebook she was genuinely mortified as she had no idea that she had broken this light.   She immediately rang the bailiffs and court who advised her to make The Statuary Declaration, whilst waiting for that date to arrive she thought she better ring the insurance company to explain what was happening thinking they may have to suspend her policy however they cancelled it on the spot she asked them not to but they just went ahead charging her £50 to do so.   At court after she explained what had happened the court dropped the MS90, and reduced the points and fine to what it would have been originally.   Going back to the insurance company they said they couldn’t remove the cancelled policy and it would show on her record for life and tried to charge her £1000 to reinsure!!  Previously it had been £300 as she had built up 2 years no claims.   I contacted a broker who said he could insure her for £760, she went back to her original insurance company, Admiral who then said they could now do it for £690!!  How can they suddenly do that sounds unscrupulous to me and that they are using this cancellation to now fleece her!!   She is a medical student and needs the car to get to the different places she is working on placement but can’t afford to pay this extortionate amount of money.  I would expect her policy to go up a bit but would say max £500 is proportionate?    I will I’ll get her to contact them Regards making a complaint in writing as you have suggested.   Thank you.    
    • I’m not sure who you mean by the OD and do you want me to see if the PDL is enforceable or not pay it at all?   And what should I do about the NatWest? Surly there’s a case getting it wiped if the charges came from them charging me for a PBA that I had told them to close and they said they had. Also am I paying the credit cards back in full or trying to get a reduced settlement?   Thanks Andrew 
    • Initial payments have already come in - we wouldn't have started otherwise. There's about £3,500 outstanding. The £800 was verbally agreed initially, but later correspondence from the customer shows that he's accepted the £800 for the extra work.
    • Each should send a cpr 31:14? Cant produce signed documents = no liability??
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Draft Order for Allocation Questionnaires

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I think that the order which has been pointed out at

http://www.consumeractiongroup.co.uk/forum/post-409327.html

 

Would form a very good basis for a standard attachment to all AQs and could help to turn the heat up a bit.

 

I think that we could modify it and use it as a template and encourage anyone who returns an AQ to ask for the atrtached draft direction to be made into an order.

 

I suspect that quite a few judges would agree.


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In the XXXXXX County Court

Claim number XXXXXX

 

 

 

 

 

Between

 

XXXXXXXX - Claimant

 

and

 

 

XXXXX - Defendant

 

 

 

 

Draft Order for Directions

 

The Claimant shall within 14 days of service of this order send to the Defendant and to the Court:

 

  • a) A schedule setting out each charge repayment of which is sought, showing the date, amount, and reason given (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;

 

  • c) A statement of evidence of all matters relied upon as tending to show that the charges are unfair;

 

  • d) Copies of decided cases and other legal materials to be relied upon.

If the Claimant fails to comply with this order, the claim will be struck out without further order.

 

 

 

2. The Defendant shall within 14 days thereafter file and serve a response to the Claimant's schedule, stating in respect of each item claimed;

  • a) Pursuant to what contractual provision such charge was made, producing a copy of the contractual document relied upon;

 

  • b) Whether such charge is accepted to be unfair, and if not why not;

 

  • c) If such charge is alleged to be fair then facts and matters intended to be relied upon showing the basis upon which the charge was calculated and all evidence to be adduced at trial as to show that the charge was fair and reasonable.

 

  • d) Any witness statements.

 

  • e) Copies of decided cases and other legal materials to be relied upon.

If the Defendant fails to comply with this order, the Defence will be struck out without further order.

Comments? Edited by steven4064
changed in light of OFT case judgement

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Guide to using the new draft order

 

In section G (H if N150) of the AQ, you get the opportunity to add any other information you think may help the judge manage the claim, or make a request for specific orders that you want the judge to consider making.

 

Untill now, we have always requested an order of standard disclosure in this section, as per the AQ guide notes in the templates library.

 

A standard disclosure order, if it were ordered by the judge, would oblige the bank to fully substantiate exactly how its charges are made up and provide costings and documentary evidence, etc.

 

Trouble is, standard disclosure is not routinely availible in small claims cases - it is only usually ordered in the fast and multi-track. Judges do have the power to order it in small claims cases if they wish, but up untill now they have been very reluctant to do so. In fact I'm only aware of a handful of cases in which it has been ordered dispite it being requested in hundreds of AQ's.

 

So now, instead of requesting an order of standard disclosure in the AQ, there is the option of requesting the directions as per the draft order on the previous page.

 

If ordered, this would still oblige the bank to produce all the important documentation that a standard disclosure order would - but, in a form that is far more likely to be agreed by the judge.

 

These directions are already being routinely ordered by some courts in small claims track cases, and it is fairly likely that if proposed most judges would agree to them. There is certainly no obvious reason why they would'nt, as is the case with standard disclosure.

 

So, if you want to request the directions on the previous page rather than standard disclosure, you need to attach the draft order (as per BF's post #2) to the AQ. See below for what to put in 'other information'. If you have a N150, put "see attached draft order for directions" in the 'proposed directions' section, then the passage below in 'other info'.

 

The AQ will then go off to be looked at by the judge to consider the AQ's and allocate your claim - set the date, issue directions, etc.

 

You will then in a couple of weeks receive your notice of allocation from the court, which will contain the track, the date and the directions the judge has ordered.

 

If the judge has acceded to your request and ordered the directions as proposed, you will THEN have to submit the claimants documents as per a), b), c) and d) of the order.

 

It is VERY IMPORTANT that you then know exactly what you need to provide and submit it to the court and the other side within the date specified on the order.

 

If you don't submit it, or don't submit it on time, your claim will then be struck out!!!

 

Once you've filed and served your documents, the bank will then have to submit theirs within their specified timescale. Going on past evidance, it is highly unlikely (although not inconcevable) that the bank will comply. They will probably either settle before the deadline, or default and have their defence struck out.

 

As discussed previously on this thread, the other big advantage of these directions is that the defendants documents have to be submitted within 28 days of the order. Therefore, the claims timescale would be considerably shortened as opposed to the standard small claims track directions, which don't require document exchange to take place untill 14 days before the hearing - which obviously in some cases could be months!

 

 

Passage for section G/H - you may need a seperate sheet:

You -v- Bank Plc

Claim No:*******

 

 

N149/N150 Allocation Questionnaire

 

 

Section G/H - other information

 

If the court is in agreement, it is respectfully suggested that special directions may be given as per the attached draft order.

 

I believe the proposed directions will further the Overriding Objectives in that they identify the most fundamental issues in dispute, and will allow them to be assessed in advance of the hearing so that this claim may proceed justly and expeditiously.

 

If the Defendant has the serious intention of defending this claim at trial as is indicated by its defence, I would contend that it is incumbent upon it to disclose such information. Further, the proposed directions are now 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.

 

As the law relating to contractual penalties is long established, I believe the outstanding issues to be of fact. Accordingly, I would respectfully request that this claim is allocated to the small claims track, and estimate that the hearing of the claim should last no longer than one hour.


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Any advice or opinion is offered informally & without liability. Use your own judgment and if in doubt seek advice of a qualified and insured professional.

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A few weeks after the AQ's have gone back you will receive a notice of allocation which tells you the date and time of your hearing, the track upon which it will be heard, and the directions you need to comply with.

 

if the judge has agreed to the directions as per the draft order you will then need to provide;

 

a) Your schedule;

 

b) Your statements showing the charges. Alternatively the list of charges which the bank provided under your S.A.R - (Subject Access Request);

 

c) A statement of evidence - see post #5 below.

 

d) All the statutues and case law on which your claim relies. Ie, UTCCR's, UCTA's, SOGA, case law, etc. You'll find all of this in the http://www.consumeractiongroup.co.uk/forum/bank-templates-library/33060-basic-court-bundle.html.


Please remember to DONATE! Help CAG keep up the fight!

 

 

Any advice or opinion is offered informally & without liability. Use your own judgment and if in doubt seek advice of a qualified and insured professional.

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Heres the 'Statement of evidence' which can be used for direction c).

 

Remember this is only to be submitted if/when the judge orders the directions as proposed.

 

The first statement is to be used if your bank has defended the claim on the basis that the charges are a legitimate contractual service charge - I.e. Lloyds TSB

 

Please think carefully about what does or does'nt apply to your own particular claim and amend as necessary. Similarly, if you can think of any more evidence relevant to your claim, add that in too.

 

Usual disclaimer applies - Im not a lawyer (far from it!) and the following is just my interpretation which I prepared for my claim and that I have amended to be relevant to others. Its offered without liability.

 

text in black - template

text in red - guide notes

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

 

'SERVICE CHARGE' STATEMENT -

Claim Number:*******

In the ******* County Court

 

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, penalty charges arising from 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, by virtue of the legislation cited in paragraph 10 above, 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, unrelated to breaches of contract, 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 the definition of 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. I understand the definition of 'breach of contract' to be the failure of a party, without legal excuse, to perform a contractually agreed obligation pursuant to any or all of the terms agreed within that contract. I have an overdraft with the defendant. This overdraft has a contractually agreed limit, which is an express term of the bank account contract between myself and the Defendant. When I exceeded this agreed overdraft limit, therefore breaching an express term of the contract between myself and the Defendant, I was consequentially penalised for each such breach by way of a charge of £**.

 

6. In the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co [1915] AC 79, Lord Dunedin stated that a clause is a penalty if it provides for;

 

"The essence of a penalty is a payment of money stipulated as in-terrorem of the offending part;”

I.e. if it is designed to scare or coerce or is used as a threat. It is submitted that the charges applied are not representative of any 'service' provided by the Defendant, but instead are punitive, and held "in-terrorem".

 

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, just 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 Unfair Terms in Consumer Contracts Regulations 1999. 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 submitted above, the Claimant believes the charges levied to his account to be disproportionate contractual penalties, arising from clear and demonstrable breaches of express terms of the account contract between itself and the Defendant. 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 the charges were accepted by this honourable court as being a fee for a contractual 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 my breaches of contract, and it is entitled to include a liquidated damages clause. I accept without reservation the banks right to recover its actual losses or a genuine pre-estimate thereof. A penalty however, is unenforceable.

 

14. The Claimant cites the case of Robinson v Harman [1848] 1 Exch 850 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.

 

15. Lord Dunedin in the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co [1915] AC 79 set down a number of principles in definition of a penalty clause and how such clause may be ascertained from a liquidated damages clause. One of these principles being -

 

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

 

 

16. The Claimant 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, all of which have upheld and reinforced the principles set down by Lord Dunedin defining contractual penalty clauses and the unenforceability thereof.

 

17. 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;"

 

18. 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.

 

19. 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.

 

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. 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.

 

24. 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 described such default charges as "exorbitant" and "excessive".

 

25. 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.

 

26. 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 their charges make profits. 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.

 

I, the Claimant, believe 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.

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 - I.e. Abbey

 

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 -

Claim Number:*******

In the ******* County Court

 

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 arising from 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 penalty charges with a view to profit.

 

3. The Claimant cites the case of Robinson v Harman [1848] 1 Exch 850, which states that a contractual party cannot profit from a breach of contract and that the charge for a loss suffered from the breach should be the amount necessary to put both parties in the same position before the breach occurred.

 

4. Lord Dunedin in the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co [1915] AC 79 set down a number of principles in definition of a penalty clause and how such clause may be ascertained from a liquidated damages clause. These principles include -

 

"It will be held to be a penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison with the greater loss that could conceivably be proved to have followed 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"

 

5. The Claimant 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, all of which have upheld and reinforced the principles set down by Lord Dunedin defining contractual penalty clauses and the unenforceability thereof.

 

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. The breaches of contract in this case relate to exceeding the contractually agreed limits of an 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.

 

 

8. 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 unconscionable 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.

 

9. 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.

 

10. 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.

 

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. 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.

 

15. 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.

 

16. 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 and unlawful within their interpretation of the UTCCR’s.

 

17. 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 described such default charges as "exorbitant" and "excessive".

 

18. 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.

 

19. As set out above, the Defendant’s charges can in no way be considered to be liquidated damages. They are not a pre-estimate of, or in any way related to, the Defendant’s loss incurred as a result of the breach of contract. The charges are punitive, held "in-terrorem", and unduly, substantially and extravagantly enrich the Defendant. As such, they are disproportionate contractual penalties and unenforceable at law.

 

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

 

Signed, dated.

 

 

Documents attached in support of this statement

  • 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.
  • Data Protection Act 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 correspondence between the parties

Remember that all settled cases and statutes are to be submitted for direction d)

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Any advice or opinion is offered informally & without liability. Use your own judgment and if in doubt seek advice of a qualified and insured professional.

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When you send your documents in within 14 days, the bank have to submit theirs in response within another 14 days. They could then either -

settle, in which case you should write to the court and withdraw the claim;

 

submit documents (unlikely), in which case you would need to inspect them thoroughly. Seek advice straight away if this is the case;

 

default, in which case you need to inform the court straight away to request the defence is struck out. Don't give the bank any warning, just send a letter such as this to the court on the day of their deadline -

[you]

 

District Judge ******

C/O The Court Manager

****** County Court

Court Address

Postcode

 

[date]

 

Dear Sir/Madam,

 

[You] -v- The Bank Plc

Claim No:********

 

I, the Claimant, refer to the claim as detailed above and specifically the order made by district judge ***** dated [date]. Please find enclosed a copy of the order to which I refer.

 

I wish to inform the court that the Defendant has not complied with the order in that it has not served upon me its evidence, or any such documents, as was specifically directed.

 

I can confirm that my documents were both filed and served pursuant to the terms of the order on [date].

 

It is submitted that the Defendants non-compliance creates a significant imbalance between the parties in light of the forthcoming hearing, which I believe to be contrary to the Overriding Objective's. This imbalance is particularly exacerbated by the fact that the Defendant is represented by specialist solicitors, whereas I am a litigant in person.

 

Accordingly, and in view of the terms of the honourable courts previous order, it is respectfully suggested that the court may be minded strike out the defence of the Defendant and grant judgement in favour of the claimant for the sum claimed.

 

Yours faithfully


Please remember to DONATE! Help CAG keep up the fight!

 

 

Any advice or opinion is offered informally & without liability. Use your own judgment and if in doubt seek advice of a qualified and insured professional.

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If you have any questions relating to the draft order or new AQ strategy, please post them on this thread -

 

http://www.consumeractiongroup.co.uk/forum/general/53570-new-strategy-allocation-questionnaires.html

 

Cheers:)

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Please remember to DONATE! Help CAG keep up the fight!

 

 

Any advice or opinion is offered informally & without liability. Use your own judgment and if in doubt seek advice of a qualified and insured professional.

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