James vs Natwest - Offer, but no interest!

[jameshewitt2006]

Hello all - Like most thee people i am starting to doubt my resove.

 

I have put in a small claim at Glasgow Sheriff court. The court had a three month waiting list which is now up. The return date is on Friday!

 

The claim was for £350 plus almost £400 at contractual interest. I refused their first offer an explained my reasoning behind the legality of contractual interest.i.e spoke of mutuality and reciprocity, aned explained that contracts are a two way thing and also commented upon undue enrichment.

 

They have now replied with the below:

 

 

 

 

 

Dear Sir,

 

Thank you for the undernoted reply. I have now had a chance to consider the points you make in support of your claim to interest at 29.69%. With

regret, I do not agree that the information you provide supports the contention that you make.

 

I appreciate that this is not the answer you were looking for, but

regret that unless you can provide me with statutory provisions or case law to back up your argument, I simply cannot avoid this case going to court on this point. In a final attempt to avoid the time and expense that this will involve for all parties, I am in a position to increase my offer by £40 to £435, this offer is made subject to the same conditions of finality and confidentiality as stated in my previous letter and should not be taken to imply that the Bank believes it has any liability to you in respect of

this matter.

 

This increased offer will remain open until 5pm on 29 January 2007,

whereafter it will be irrevocably withdrawn. Should you refuse to

acceptthis offer, the Bank will instruct external solicitors to appear on its

behalf at Glasgow Sheriff Court on 1 February 2007, where they will

move the sheriff to require you to lodge an incidental application to properly specify in your statement of claim, the factual and legal basis upon which you rely in support of your claim to interest at 29.69%. The bank will thereafter seek to appoint the cause to a hearing on law and evidence. Should the Bank succeed, its solicitors will seek the expenses of the action against you and will found upon these communications in support of that motion.

 

 

Should I not hear from you by the date and time stated above, I will

presume that you will be attending court on 1 February.

 

Yours sincerely

 

 

> Jonny Nisbet

> Trainee Solicitor

> Group Litigation

> The Royal Bank of Scotland Group

 

 

As you can imagine i am a little concerned about the threat of the 'incidental application'

 

 

Does any one know if this is a real threat?

 

Should i just take the offer. It covers my court cost and charges - but not really any interest?

 

Any ideas or thoughts would be greatly, greatly appreciated.

[garyhay]

Why are you claiming that amount of interest?

[jameshewitt2006]

I have read of people claiming contractual interest succesfully so i thought i would give it a go.

 

The interest rate is based upon their unauthorised borrowing rate - being 29.69%.

 

It is a bit cheeky, but others have succesfull claimed and in many ways it is quite fair. They would charge me that amount of interest for taking money without interest so why can't i charge them the same?

[garyhay]

Sounds like a plan to me. I would go for it as I reckon they will still not go to court.

 

Let us know how you get on

[Advocate]

James,

 

I have discussed this issue elsewhere on this forum (can't remeber where). I appreciate the argument that is being made, but do not believe it has any legal foundation.

 

It may be possible to recover interest which was applied to each charge for the period within which the charge formed part of your unauthorised overdraft, but the minute you pay any money in, the charge will be repaid to the Bank first, which probably means that you were then back in the black, or at least the amount of the charge was taken out of your unauthorised overdraft, meaning further that the interest applied at the 29% rate was minimal (remeber, the overdraft interest is applied to all sums, charges and your withdrawals/direct debits which have been paid by the bank.

 

It will be very difficult for you or anyone to work out exactly how much interest has been applied, but as the pursuer in the action it is always for you to state what you are owed and to be able to support that with evidence if required.

 

If you are seeking payment of interest on each charge from the date it was applied to the date of service, you are asking for more back than the bank have taken from you; in effect asking the bank to pay a penalty, which is ironically what you are claiming the bank have imposed upon you.

 

Sheriffs in Scotland will be well versed on the question of interest and I think you will have an uphill struggle in trying to convince one that you are entitled to anything other than 8% interest. Indeed, were this a contractual claim, you would only be entitled to 8% interest from the date of service, although I believe these are not contractual, but unjustified enrichment claims and while the law is not certain, it may be the case that you are entitled to claim interest at 8% from the date the money was taken from you if this is what you have asked for.

 

Hope this helps.

[jameshewitt2006]

It does help. Very Much. Thanks

 

I think i will just take the offer - there is no point in being greedy. I'll sleep on it though!