Claiming on a Business account? Lets join forces?

[PeterAnderson]

PM Many thanks and will do, but cannot start until Monday

 

Pen - Do you have the 4 para's as per GaryH ?

 

When I have put this together I will pass it by my lawyer friend first before passing it on

[lancasterchelsea]

thanks very much PM for your advice.......... I only use MCOL because of the ease of use. I have another 4 business claims to start soon value £11,000.... all over 6 years ago. I get the point about poc brevity and will use the court paperwork next time

I will make sure that my witness statement etc is comprehensive and detailed. Cobbellieres have sent a defence which I have replied to with Hedgey's help. He also is saying my poc is a bit thin

[elsinore]

Lancasterchelsea; I do not trust Cobbets. They obviousley think they have some chance of defending against your POC, which is why they are prepared to allow it to proceed, in some vain hope of gaining a victory. Your POC is very brief, and although it makes no obvious mistakes, it perhaps gave them the impression that you were not well prepared. I think (Elsinore, please let me know if you agree), that the way forward is to expand your arguments and reasonings with a comprehensive Witness statement and/or court bundle. Have you recieved a defence? Haveyou responded to it yet?

Once again all, I would really advise (especially for Business claims), that you file full POC's at court rather than MCOL.

 

 

Yes PM, I absolutely agree. MCOL is too restrictive. Trying to condense one’s POC to fit into a limited space is not the way to do it, especially if it is for a business claim.

 

Now that we may have to argue against a stay, brought about by that unjustifiable waiver, it is even more important that we present a solid, bomb-proof claim. Defendant’s lawyers (and some judges?) will be looking for an easy way to refuse an appeal against the stay. A sloppy/too brief POC will give them the opportunity.

 

I can’t make my mind up about Cobbett’s motives. It’s either an honest admission that they cannot invoke a stay on the basis of the FSA waiver (as it seems to be), or an extremely devious attempt to lull the claimant into a false sense of security. It would be interesting to see the wording of their defence in both lancs/ches and barneybubble’s cases. Perhaps Hedgey would give us his opinion.

 

I just hope that I get the same response when I file my claim!

 

Els

[frenchconnection]

Business account claim V -Lloyds

 

Hi after sending a reply to the court with why i objected to a stay (the court wrote to me asking if i would object to a stay, two weeks ago) using all the info off this site, stay removal template letters etc. it has not made any difference.

 

Im totally gutted

 

Today i have received this letter

 

upon the courts own motion. The court has made this order of its own initiative without hearing. If you object to the order, you must make an application to have it set aside, varied or stayed within 7 days of receiving it.

 

IT IS ORDERED THAT

 

1. Claim be stayed until one month after the outcome of the test case to be heard in the Commercial Court (including appeal) is known or 31 October 2008 whichever is sooner.

 

2. either party may make application for further directions before the expiry of the stay

 

3. If no application is made within the timescales provided by paragraph 1 the claim shall be, and is herby, struck out.

 

Can anyone give me some advice? As I have already used the arguements why a stay should not be applied also stating that my case doesnt rely on utccr plus all the other brill stuff on here and it has made no difference at all. I really thought my case for not applying a stay was excellent but obviously not. Is there any point in trying to have it lifted.? I dont know ? because the judge has already listened to my arguments, but still ordered a stay!!!

[TUTTSI]

WON .........

Hi everyone, GREAT NEWS, D & G Solicitors for HSBC on Hubby's Business claim have sent an offer of payment for the full amount today. The court made a stay last week, the court hearing was due to be heard in October, my hubby wrote on Thursday to the court requesting the stay to be lifted as the courts had made blanket stayed all Bank Charge Claims.

 

What a surprise this morning D & G wrote with a full offer they obviously had not tied up the stay given by the court. So now he does not have to do his bundle, or go to court. GREAT NEWS

 

I never thought this was going to happen, so keep up the good work here and don't accept stays by the court and it is definately worth at court stage contacting the litigation department in your own case and asking them to settle as in your case as a buisiness claimant is not governed by the OFT case.

 

ds

[photoman]

Great news DS !! :) :)

 

I've also just noticed on barneyrubbles thread ( http://www.consumeractiongroup.co.uk/forum/royal-bank-scotland/102725-barneybubble-rbos-2-12430-a.html#post1119690 ) that the bank have OF THEIR OWN ACCORD (??????) applied to the court to have the stay lifted, stating that that THEY have noticed that the claim is a business claim, and INVITING the claimant to apply to the court to have the stay removed ???

 

This is very peculiar behaviour ? And, my initial suspicions were that perhaps the bank had noticed some error or something that gave them an inkling that they could perhaps win the case, so wished to see it proceed ?

However, the claimant is in VERY good hands (Hedgey06), and so this should not be the case.

 

After some further contemplation, I am now wondering (and invite anyone else to commen on this view), that perhaps the Banks are in a bit of a panic about the effects of having masses of cases delayed pending the OFT case? i.e that if the case goes against them (and it most likely will), this would then mean that they would be liable for a whole load more additional interest on masses of claims that would have accrued throughout the stay period (especially if the OFT case drags on through appeal after appeal etc) ?

So perhaps this is their reasoning for trying to get some of the backlog sorted? This would also explain your offer DS?

 

PM

[TUTTSI]

Hi PM,

I wish this was the case that you are thinking.... today apart from having Hubby's Business claim offer he also received a letter from the very same Solicitors on his Personal bank Charge Claim with HSBC advising him that they are requesting a stay from the courts. They are a little late as the courts had already stayed both of his cases. Business claims do not come under the auspice of the OFT test case therefore, I believe that is the only reason that they have agreed to settle. I also, think that they have not matched up the orders for the stays from the courts with the files as miracuously this particular file was probably in the typing bay and the letters crossed in the post.

 

I did read however that someone in the LLoyds forum has had an inkling that Lloyds may be about to pull out from the OFT test case and are setting up a new department to deal with the barrage of claims that have to be paid out. Now if this were the case and the other banks pull out as well this could be a really good for all of us. But sadly, I do not think that this is the case. We can all live in hope! so near yet so far from completing our current claims.

DS

[Pen]

Here you are Peter, the 4 additional paras supplied to me by Gary. once you have amalgamated them all could I then also have a copy of the completed POC please

 

Limitations Act 1980

 

XX. In so far as the charges relate to the period before xx/xx/xxxx, the Claimant seeks to rely upon s.32(1)© of the Limitation Act 1980. The Claimant paid the charges in the belief that they reflected the true cost of administering the contractual breaches. The Claimant has now discovered, following revelations relating to a similar organisation, that the true costs are much lower and that the belief held by Claimant was in fact mistaken.

 

XX. It is thus submitted that in accordance with s32(1)© and s.32(2) that the time period for the purposes of the Limitation Act does not begin to run until the Claimant’s reasonable discovery. This was the 21st March 2007 when the revelations were made public.

 

 

Compound Interest

 

XX. The Claimant seeks restitution of the time value of the wrongfully debited sums by way of an award of compound interest calculated at the banks standard overdraft borrowing rate of 15.87%.

 

 

XX. The Claimant contends that the Defendant would be unjustly enriched if the Claimant’s entitlement was limited to recovery of the wrongfully debited and fees and a compensatory award of simple interest at the statutory rate. The bank has been in wrongful possession of the Claimant’s funds for a considerable period of time and as a lending institution has earned profit by way of interest by re-lending those funds at its commercially compounded rates. Conversely, the Claimant having been denied use of its funds in the banks wrongful possession was forced to replace those funds by lending from the bank by way of overdraft at its commercially compounded rates. Thus an award of compound interest is necessary to provide full restitution and a just remedy.

 

XX. The Claimant in its submissions will rely on the recent case of Sempra Metals v Inland Revenue Anor [2007] UKHL 34 where the House of Lords held that compound interest is available at common law where the Claimant seeks a restitutionary remedy for the time value of money paid under a mistake.

 

Sorry guys, I have still not found a copy of the letter to get a stay lifted, could one of you nice chaps PM it to me please.

again

Thank you

 

[PeterAnderson]

Pen - Many thanks for that; will start working on this after yet another cup of coffee to clear the hangover. I will examine only the first two paras as I am not concerned about CI and I am sure that between you, GaryH & photoman this will be fine.

 

When done I will post the draft revised POC up here for others to comment, pm you and photoman; and get it off to my lawyer friend to look at the changes.

 

Also there was this post by tifo that caused quite a stir and I think it should be added to photomans letter on here to remove a stay; and modified to go with the POC so that with luck the DJ will not grant a stay in the first place

 

The FSA has clearly stated that 'small' business accounts are included in the waiver, as their turnover is under £1 million.

 

This is what they said :

 

"The waiver applies to all consumers that are eligible to ask the Financial Ombudsman Service (the Ombudsman) to look at a complaint for them. This includes:

 

* a private individual;

* a business, whose group annual turnover is less than £1 million;

*a charity, whose annual income is less than £1 million; and

*trustees of a trust, whose net asset value is less than £1 million;

 

Therefore if a business falls into the above categories, then any complaint it makes about bank charges may be affected by the waiver".

[PeterAnderson]

tifo - Re your post 685 - where did you find this info, as I cannot find it on the FSA website ?

 

Need this info URGENTLY - many thanks

[tifo]

tifo - Re your post 685 - where did you find this info, as I cannot find it on the FSA website?

 

They replied to my email with this info. Email is below.

 

Your attention is drawn to the warning notice at the end of this message.

Our Ref: ISS00571xxx

 

In order that we can deal with this matter as quickly as possible please do not delete the Subject line of this email when you reply. You can add further wording to it but please do not Remove "ISS00571xxx".

 

Dear Sir/Madam

 

Thank you for your email dated 17 August 2007.

 

Your enquiry

 

Further to the recent announcement about the Office of Fair Trading's test case about bank charges, you have two issues that you would like to raise with the Financial Services Authority (FSA). These are:

 

* Banks are sending holding letters to consumers without checking to see if they fall under the 'hardship' clause.

 

* Business account holders are also receiving the same letters. Is this correct as you believe that the waiver only applies to personal current accounts and not business accounts.

 

Assessing hardship

 

It is the banks' responsibility to assess financial hardship and to decide whether a case falls under this clause. Guidance on how to determine financial hardship is given to banks by the Banking Code Standards Board (BCSB), which is the organisation responsible for issuing the banking code, a code of conduct which most banks and building societies have signed up to, and which covers the day to day business activities of the bank. I attach a link to the full code, which shows the guidance issued and how hardship is determined. You will need to go to page 44 and scroll down to chapter 14:

 

http://www.bankingcode.org.uk/pdfdocs/Banking%20Code%20Guidance%20March%202005%20FINAL.pdf

 

Please be aware that if you have already received a letter from the bank then your case will not have been assessed as a hardship case. if you dispute this or believe that the bank has wrongly assessed your case, then you should speak to your bank directly and ask them to reconsider the matter.

 

Business account holders

 

The waiver applies to all consumers that are eligible to ask the Financial Ombudsman Service (the Ombudsman) to look at a complaint for them. This includes:

 

* a private individual;

* a business, whose group annual turnover is less than £1 million;

*a charity, whose annual income is less than £1 million; and

*trustees of a trust, whose net asset value is less than £1 million;

 

Therefore if a business falls into the above categories, then any complaint it makes about bank charges may be affected by the waiver.

 

I hope the information provided is helpful to you. For further information about the waiver and the test case, please visit our consumer website at:

 

Unauthorised overdraft charges go to High Court : FSA Money made clear – News

 

This page also contains helpful links to other sections of the FSA website and external organisations that have information about the waiver.

 

We are interested in finding out about people's views and experiences of the services offered by the Consumer Contact Centre. As a result, we employ a research agency to help us, and they may contact you, via the telephone, to see if you would be prepared to take part in a short telephone interview. If you do receive a phone call you are under no obligation to complete the survey. Please rest assured that your details will remain confidential and will not be used for any other purposes; we are not trying to sell you any financial products or service, and no sales call will result from this.

 

If you do not wish to take part in any of our surveys, please call the Consumer Contact Centre on 0845 602 2185 (call rates may vary), or complete the contact us form using the following link FSA: Contact Us, and we will ensure that your details are not passed on to the research agency.

 

 

 

Yours sincerely

 

xxxx xxxxx

Consumer Contact Centre

Financial Services Authority

Home page : FSA Money made clear

 

Also, in another email :

 

ASKED : Can you advise whether the application of the Unfair Terms in Consumer Contracts Regulations (UTCCR) should apply to personal current accounts only or widen its scope to include all bank charges including business and credit card accounts.

 

REPLY : As explained above the reason that business accounts have been included in the test case is because issues have been raised about possible breaches of common law.

[PeterAnderson]

This is a long post with a revised court letter to go with these revised DRAFT DRAFT POC.

 

Firstly a précis of what this is all about to save you looking through the 36 pages here.

 

This thread was started by photoman, although not a legal bod he is highly regarded here and has done loads of research and as a result has produced an excellent POC for business claimants and various other brilliant dox .

 

I was unhappy to use the CAG POC as it made numerous references to credit cards and just referred to Common Law without listing the stated cases (and in any case photomans came along just in the nick of time); also I did not like the POC on Wiki as although it refers to Common Law it only lists two stated cases, whereas PM's has SIX listed

 

My claim is quite large and as a precaution I passed it by a lawyer friend of mine who not only teaches commercial law but marks the final exam papers for new lawyers coming out of the London Uni, she made some tiny adjustments and suggestions - which are included here.

 

Also PM posted here an excellent letter to apply for the removal of a Stay; I thought it may be a good idea to alter this slightly so that it would go along with your N1 & POC so that the DJ may not grant one in the first place.

 

I am not a legal bod either and all I have basically done to these two dox is cut & paste, any additions etc I have highlighted in BOLD

 

It is important that if you are Limited or Public Limited Company that you remove Para 5.c as you cannot rely on SGS Act.

 

I have NOT put these dox past my lawyer friend yet as I thought that putting it on the open forum may result in someone finding a fault, spelling, grammar, or other error; once we have the green-light from PM I will pass this by her to get final approval and repost it. Also I know that on the Business Limited thread they are awaiting these dox as well.

 

So here goes the revised 'Please DJ do not grant a Stay Ltr:-

 

Dear Sir/Madam

 

You -v- XXXXX Bank Plc

 

I write in relation to the matters as detailed on my N1 and my Particulars of Claim.

 

I am aware of the recent directions given by Lord Justice Moore-Bick to Designated Civil Judges on the issue of how to manage live Bank Charges cases. It is understood that he considers that in most cases it would be appropriate to stay proceedings pending a decision of the OFT action."

 

I respectfully request that should the court of it’s own initiative or the defendant apply for a stay that in this case it should not be granted. This is upon the contention, that as the central focus and grounds for the Office of Fair Trading and various banks under folio number 2007 Folio 1186 ( “ the case OFT’s case is to determine whether or not the charges are subject to the test of reasonableness, as required under the Unfair Terms in Consumer Contracts Regulations (UTCCR 99), then it is not of any consequence to the basis of my claim in this case.

 

As a Business account claimant my claim does not include any reference to nor make any reliance upon the UTCCR. As such, it would serve no purpose to delay proceedings in order to await the outcome of a case that would have no bearing or relevance upon this case.

[Not sure if this next Para is relevant]

Also the Financial Services Authority has stated "The waiver applies to all consumers that are eligible to ask the Financial Ombudsman Service (the Ombudsman) to look at a complaint for them. This includes a business, whose group annual turnover is less than £1 million.

 

As such I respectfully request that any application for a stay be declined so that this case may proceed without further delay.

 

 

Yours faithfully

 

And the revised POC: -

 

Particulars of Claim:

 

1. The Claimant had a Business bank account xxxxx (branch sort code xx-xx-xx) with the Defendant, between the periods of xx/xx/xx and xx/xx/xx governed by the Defendant’s Banking Terms and Conditions (the contract).

 

2. The Claimant admits to breaches of the terms of the contract that required the Claimant to stay within any agreed overdraft limit.

 

3. The Claimant’s breaches of contract have led to the Defendant debiting the account with numerous default charges, and interest on the default charges, between xx/xx/xx and xx/xx/xx. A list of the charges and interest on the charges is annexed to the Particulars of Claim at pages 4 to 7.

 

4. The Claimant seeks the refund of said charges along with the additional interest levied by Defendant on said charges. In addition the Claimant claims interest on the full amounts as detailed in paragraphs xx & xx.

 

5. In support of his basis of claim the Claimant contends that the charges are:

i. Excessive in that they are not truly reflective of any actual or genuine pre estimated loss incurred by the Defendant in respect of any alleged breaches of contract on the part of the Claimant. If the Defendant avers that its charges are fair, reasonable and therefore enforceable, its remedy will be to defend the claim by providing evidence of its actual losses, or pre-estimate of costs in relation to the Claimant’s accounts breaches. Since the Defendant has been invited to do so prior to the issue of court proceedings, and has failed to do so, the Claimant thus contends the Defendant’s charges to be indefensible, unenforceable at law, and unauthorised.

ii. Excessive in that the Defendant is being at minimum fairly and amply compensated otherwise for unauthorised lending by the imposition of unauthorised overdraft interest rates.

iii. Devised and enforced by the Defendant with a view to profit in that they do not truly represent any alleged actual loss in respect of any alleged breaches of contract on the part of the Claimant, but instead unduly enrich the Defendant which conducts its regime of charging with a view to profit.

iv. Punitive in nature in that they are used in "in terrorem" to discourage the Claimant from presenting items on the account for payment where there are insufficient funds to cover such payment of said item, thus can be deemed as penalties, which are unenforceable under common and/or statutory law.

 

Accordingly the Defendant’s default charges are:

a. A penalty and therefore unenforceable as they are an unreasonable pre-estimate of the probable loss to the Defendant and therefore contrary to common law.

b. Unfair and unreasonable under section.4 of the Unfair Contract Terms Act 1977.

c. In the event that the court finds that the charges are not a penalty they are unreasonable within the meaning of section 15 of the Supply of Goods and Services Act 1982.

 

6. The Defendant has declined to answer the Claimant’s written requests for information about any manual intervention necessitated by, and/or any actual administrative costs incurred as a result of, the said breaches.

 

7. The Claimant contends that the Defendant failed to conduct itself in a manner befitting such a position of great trust. The Defendant had a Common Law and Statutory duty to care for all money entrusted to it by the Claimant, yet it repeatedly took sums that despite several requests has still failed to lawfully justify. This amounts to a failure of the Defendants fundamental duties of trustworthiness, transparency, diligence and care.

 

8. The Claimant draws attention to inter alia the following cases, in relation to the notion of stare decisis, to support his case:

 

a. Dunlop Pneumatic Tyre Co. v. New Garages and Motor Co. [AC 79];

b. Lordsvale Finance PLC v. Bank o/Zambia [QB 752];

c. Murray v. Leisureplay [EWCA Civ 963 ]

d. Nurdin & Peacock v D B Ramsden [1999] 1 W.L.R. 1249)

e. Lord Elphinstone v. Monkland Iron and Coal (1886)

f. Clydebank Engineering and Shipbuilding co v. Ramos Yzquierdo y Casteneda (1905)[AC6]

 

9. The claimant draws attention to a report from the Competition Commission entitled “Northern Irish Personal Banking,” published on 20/10/2006. The Claimant contends that it is not unreasonable to draw close comparisons between the functions and practices of Northern Irish and mainland UK Banks. This is thus reasonable evidence that the defendant is aware that the income derived from its default charges are; excessive, do not truly reflect the actual costs incurred in dealing with such breaches, and unduly enrich the Defendant.

 

10. The Claimant further draws attention to the following statement by the Office of Fair Trading (OFT) entitled:

 

Implications for Other Standard Default Charges to Consumers; published on 5/4/2006, Page 1. 5.14; concerning default charges in credit card contracts, to demonstrate that:

1. 5.14 The broad principles set out in this statement are likely to be relevant to other default charges in standard agreements with consumers, such as those for mortgages, store cards and bank accounts. We expect the banks and other finance businesses to consider the wider implications of these principles, and to bring any similar charges they impose for breach of contract into line with them, where and as appropriate bearing in mind the different legal and practical contexts in which they operate. If appropriate steps are not taken within a reasonable timescale, further regulatory investigation of the position can be expected.[/b]

11. a. In a contract, where the parties are not of equal bargaining power, any estimate that included costs which could not legitimately be claimed as damages from an individual in a case brought at common law, and which made a material difference to the overall charge, is likely to constitute a penalty at law.

b. The interest ordinarily charged on an overdrawn balance of account would of itself be deemed sufficient compensation to the defendant in a claim for damages arising from account breaches of the said nature.

 

12. The Claimant seeks permission to proceed with the claim under section.32 (1)(b) of The Limitation Act 1980. This is on the grounds that the Claimant could not reasonably have discovered the Defendant’s deliberate concealment of the facts relevant to the Claimants right of action, before the report of the OFT was published on 5/4/2006. Section 32(1)(b) of the 1980 Act postpones the commencement of the limitation period where;

b). "any fact relevant to the plaintiff's [now claimant] right of action has been deliberately concealed from him by the defendant".

The facts relevant to the Claimant’s right of action under s.32 (1)(b) are that the Defendant has continually presented its charges as if they were in respect of a legitimate loss or cost, whilst it is in actual fact profiting in a material sense from the charges. Thus the Defendant can be seen to have been operating without accountability to its customers, and so to have consciously concealed the facts.

 

13. Alternatively, the Claimant seeks permission to proceed with the claim under section.32 (1)© of The Limitation Act 1980. This is on the grounds that payments (and interest thereon), were conceded under the mistaken presumption that they did not amount to penalties. The Claimant would not reasonably have discovered the said mistakes before the report of the OFT was published on 5/4/2006.

Section 32(1)© of the 1980 Act postpones the commencement of the limitation period where;

c). "the action is for relief from the consequences of a mistake"

The claimant cites inter alia Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349 as a precedent in this matter.

 

14. In respect of paragraphs 11 and 12 section 32 of the Statute of Limitations act (1980) stipulates that:

"the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it".

 

15. In regards to paragraphs 11 & 12 the Claimant draws attention to inter alia the following cases, in relation to the notion of stare decisis, to support his case:

i. Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349

ii. Deutsche Morgan Grenfell V Inland Revenue (2003) EWHC 1779 (ch)

iii. Cave v Robinson Jarvis (House Of Lords) [2002] UKHL 18

 

16. Accordingly, the Claimant claims:

 

a). The return of £xxxx.xx taken by the Defendant in charges and interest of £xxx.xx applied on the charges between the period xx/xx/xxxx and xx/xx/xxxx.

 

b). All court fees and expenses.

 

c/ Statutory interest at 8% as prescribed by s.69 of the County Courts Act 1984 at the rate of 8% a year, from xx/xx/xxxx to xx/xx/xxxx of £xxx.xx and also interest at the same rate up to the date of judgement or earlier payment at a daily rate of xx.

 

 

 

I believe that the contents of these particulars of claim are true.

 

Signed:

[photoman]

Here is the link to the Particulars of Claim regards the OFT case as published:

 

http://www.oft.gov.uk/shared_oft/business_leaflets/general/PCA-particulars-of-claim.pdf

 

and here it actually is:

 

 

 

Claim No. 2007 Folio 1186

IN THE HIGH COURT OF JUSTICE

QUEENS BENCH DIVISION

COMMERCIAL COURT

 

 

BETWEEN:

 

 

THE OFFICE OF FAIR TRADING

Claimant

 

-and-

 

 

(1) ABBEY NATIONAL PLC

(2) BARCLAYS BANK PLC

(3) CLYDESDALE BANK PLC

(4) HBOS PLC

(5) HSBC BANK PLC

(6) LLOYDS TSB BANK PLC

(7) NATIONWIDE BUILDING SOCIETY

(8) ROYAL BANK OF SCOTLAND GROUP PLC

Defendants

 

_____________________________________

PARTICULARS OF CLAIM

______________________________________

Introduction

1 The Claimant is the Office of Fair Trading (“the OFT”):

1.1 The OFT is a general enforcer under section 213 of the Enterprise

Act 2002 (“the Act”).

1.2 As such, the OFT has the function under the provisions of Part 8 of

the Act of seeking an enforcement order from the court where it

thinks that a person has engaged, is engaging, or is likely to engage in

conduct which constitutes a Community infringement under section

212 of the Act.

 

1.3 A Community infringement is an act or omission which harms the

collective interests of consumers and which inter alia contravenes a

listed Directive as given effect by the laws, regulations or

administrative provisions of an EEA State (section 212 of the Act).

1.4 The Unfair Terms in Consumer Contracts Regulations 1999 (“the

1999 Regulations”) give effect to Council Directive 93/13/EEC of 5

April 1993 on Unfair Terms in Consumer Contracts (“the Directive”).

In the premises, an act or omission which harms the collective

interests of consumers and which contravenes the provisions of the

1999 Regulations is a Community infringement within the meaning

of Part 8 of the Act and the OFT is empowered to apply for an

enforcement order in respect thereof.

1.5 Under section 224 of the Act, the OFT has power to require any

person to provide it with information for the purpose, inter alia, of

enabling the OFT to exercise or consider whether to exercise any

function it has under Part 8 of the Act.

1.6 Under Regulation 12 of the 1999 Regulations, the OFT also has

power to apply for an injunction (including an interim injunction)

against any person appearing to the OFT to be using, or

recommending use of, an unfair term drawn up for general use in

contracts concluded with “consumers”. A “consumer” for these

purposes is defined in Regulation 3 of the 1999 Regulations. In the

present context, and throughout these Particulars, "the word refers to

natural persons acting, in relation to the contracts containing the

Relevant Terms and Charges (referred to in paragraph 10 below), for

purposes which are outside that person’s trade, business or

profession.

1.7 Under Regulation 12(4) of the 1999 Regulations, an injunction may

relate not only to the use of a particular contract term drawn up for

2

general use but to any similar term, or a term having like effect, used

or recommended for use by any person.

1.8 Under Regulation 13 of the 1999 Regulations, the OFT has power to

demand copies of documents used as a standard form contract and

require persons to supply information about the use of such

documents.

2 Each of the Defendants is or operates a bank or building society or is the

holding company of one or more subsidiaries each of which is or

operates a bank. These banks provide current account facilities to their

customers who are consumers (and others). The two schedules hereto

contain, inter alia, the name of each such bank. All of these banks,

whether or not possessing separate corporate identity and whether or not

part of a greater business, will hereafter collectively be referred to as

“the Banks”, and each individual bank as “the Bank”.

The 1999 Regulations and their application

3 The 1999 Regulations, implementing the Directive, revoked and

replaced the Unfair Terms in Consumer Contract Regulations 1994.

4 The 1999 Regulations apply in relation to terms in contracts concluded

between a seller or a supplier and a consumer (Regulation 4(1)).

5 Regulation 5(1) provides: “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.” Regulation 5(5) provides that Schedule 2 to

the 1999 Regulations contains an indicative and non-exhaustive list of

the terms which may be regarded as unfair.

6 Regulation 8(1) provides that an unfair term in a contract concluded with

a consumer by a seller or supplier shall not be binding on the consumer.

3

Regulation 8(2) provides that the contract shall continue to bind the

parties if it is capable of continuing in existence without the unfair term.

7 The only material exception to the applicability of the test of fairness set

out in 1999 Regulations is contained in Regulation 6(2) relating to what

are called, for short, “core terms”:

“In so far as it is in plain intelligible language, the assessment of

fairness of a term shall not relate-

(a) to the definition of the main subject matter of the contract, or

(b) to the adequacy of the price or remuneration, as against the

goods or services supplied in exchange”.

 

Terms and conditions of the Banks

8 Each of the Banks has personal current account agreements between

themselves and their customers who are consumers, containing the terms

and conditions relating to the operation of those current accounts by such

customers.

9 In so far as any of these terms and charges are contained in documents

which are described as notices to, guides to, or communications with,

customers, they are nevertheless to be considered as terms of a contract

between the Bank and its customers for the purposes of the 1999

Regulations, whether or not they are described as terms or as “policies of

the bank” or as anything else.

10 The Banks’ current account agreements typically provide or provided for

three types of payments to be demanded from customers in connection

with unauthorised overdrafts:

10.1 A fee charged by Banks:

(a) when a customer seeks to operate his current account in a way

that will result in the account being debited despite there being

insufficient available funds to support the debit but the Bank

nevertheless agrees to effect payment, causing the account to go

4

into overdraft or further overdraft, or to exceed, or further

exceed, an already agreed overdraft limit;

(b) when a customer moves into or is in an unauthorised overdrawn

position within a specified period.

10.2 A returned item fee, e.g. as in the previous case, a cheque is presented

but in this case the Bank declines to authorise payment because there

are insufficient funds, and the cheque has to be returned to the payee

marked “R/D” or “RDPR” or “Effects uncleared”.

10.3 An increased rate of interest charged on unauthorised overdrafts

granted in the circumstances set out in paragraph 10.1 above.

The provisions in the current account agreements which entitle or

historically entitled the Banks to demand the charges referred to in

paragraphs 10.1 and 10.2 above are referred to herein as “the Relevant

Terms and Charges”, and are more particularly described in the two

schedules hereto.

11 Pursuant to an agreement entered into between the OFT, each of the

Defendants, and the Financial Services Authority, dated 25 July 2007 (as

amended by an agreement dated 29 August 2007) each Bank has

provided the OFT with a copy of relevant personal current account

agreements and tariffs that are currently in force or are to be in force as

at 1 October 2007 (“the Current Agreements”) and a representative

selection of previous terms, conditions and tariffs contained in earlier

agreements (”the Historic Agreements”) that are in dispute in the county

courts between individual customers and the Banks.

12 The two schedules hereto, prepared on the basis of the information

provided by the Defendants, set out particulars of the Relevant Terms

and Charges, and, in column (f), the relevant increased rate of interest

referred to in paragraph 10.3 above. The first schedule (Schedule A) sets

out the Relevant Terms and Charges contained within the Current

5

Agreements (“the Current Terms Schedule”) for each Bank; the second

schedule (Schedule B) sets out Relevant Terms and Charges contained

within the Historical Agreements (“the Historical Terms Schedule”)

(Schedule B) for each Bank. The Historical Terms Schedule also

contains terms currently in force. This is pursuant to certain Banks’

indications that, in respect of certain current account agreements,

relevant terms currently in force do not differ materially from those used

previously, and on the basis of which indications those Banks did not

provide the OFT with the previous terms.

Current terms and tariffs

13 The Current Terms Schedule refers to:

13.1 (column B) clauses entitling the relevant Bank to payment by a

customer of an amount, whenever the customer’s current account

goes into, or remains in, unauthorised or unarranged overdraft

(charging clause);

13.2 (column C) clauses setting out the amount of the charge, i.e. the

precise amount payable pursuant to the provisions referred to in

paragraph 13.1;

13.3 (column D) clauses providing for charges whenever a customer issues

a guaranteed cheque without sufficient funds to meet it, and the

amount of such charges;

13.4 (column E) clauses setting out the relevant Bank’s entitlement to

charges whenever a customer issues a payment instruction without

sufficient funds to meet it and that instruction is returned unpaid, and

the amount of such charges;

13.5 (column F): the applicable increased rate of interest on unauthorised

overdrafts as described in paragraph 10.3 above.

 

6

Historical terms, conditions and tariffs

14 The Historical Terms Schedule contains details of the following:

14.1 (column B) clauses entitling the relevant Bank to payment by a

customer of an amount, whenever the customer’s current account

goes into, or remains in, unauthorised or unarranged overdraft

(charging clause);

14.2 (column C) clauses setting out the amount of the charge, i.e. the

precise amount payable pursuant to the provisions referred to in

paragraph 14.1;

14.3 (column D) clauses providing for charges whenever a customer issues

a guaranteed cheque without sufficient funds to meet it, and the

amount of such charges;

14.4 (column E) clauses setting out the relevant Bank’s entitlement to

charges whenever a customer issues a payment instruction without

sufficient funds to meet it and that instruction is returned unpaid, and

the amount of such charges;

14.5 (column F): the applicable increased rate of interest on unauthorised

overdrafts as described in paragraph 10.3 above.

Application of a test of unfairness

15 Each of the Relevant Terms and Charges:

15.1 is not in plain intelligible language; and/or

15.2 does not relate to the definition of the main subject matter of the

contract; and

15.3 does not relate to the adequacy of the price or remuneration, as

against the goods or services supplied in exchange.

16 Accordingly, in so far as these terms form part of the contract between

the Banks and their respective customers who are consumers, such terms

fall to be assessed for fairness under the 1999 Regulations.

7

17 If any of the Banks’ respective Relevant Terms and Charges are “unfair”

within the meaning of the 1999 Regulation, the continued use by the

Bank in question of such terms and charges in relation to its customers

who are consumers could constitute a Community infringement under

section 212 of the Act.

The OFT’s investigation

18 The OFT is considering complaints that the Relevant Terms and Charges

are unfair under Regulation 10(1) of the 1999 Regulations. In March

2007, the OFT commenced a formal investigation into the fairness of

Relevant Terms and Charges in Current Agreements. The OFT is

considering whether to exercise the function it has under Part 8 of the

Act to seek an enforcement order if it thinks that a Community

infringement has taken or is taking place.

19 As part of this investigation, on 15 June 2007, the OFT gave notice to

the Defendants under section 224 of the Act requiring them to provide

the OFT with information and documents relevant to the fairness of the

Relevant Terms and Charges in Current Agreements . The OFT has

received information and documents pursuant to that request which

include the management profit and loss accounts of each of the Banks.

20 The OFT’s current investigation into bank overdraft charges seeks to

determine whether such terms in Current Agreements are “unfair” and

contravene the 1999 Regulations, and if they harm the collective

interests of consumers. It is anticipated that the investigation will report

by the end of the year. If it is found that they are unfair and do harm the

collective interests of consumers, the OFT would be entitled, after

consultation and if suitable undertakings are not forthcoming, to seek an

enforcement order under section 217 of the Act. If the terms are unfair,

the OFT would also be entitled to seek an injunction under Regulation

12 of the 1999 Regulations.

8

21 In the course of the current investigation, the Banks have raised the

preliminary objection that the Relevant Terms and Charges in Current

Agreements and also in Historic Agreements are core terms within the

meaning of Regulation 6(2) of the 1999 Regulations because they are a

charge for a service, and are therefore not subject to an assessment of

fairness at all.

22 The issue of whether the Relevant Terms and Charges in Current

Agreements fall within Regulation 6(2) of the 1999 Regulations is

fundamental to the question whether the OFT’s investigation should

continue, and, if the investigation should conclude that any of the

Relevant Terms and Charges are “unfair”, whether that conclusion is

soundly based, and whether the OFT would be entitled to take

enforcement action or seek an injunction in reliance on such decision.

In the premises, the OFT therefore seeks a declaration against each of the

defendants that the Relevant Terms and Charges in Current Agreements (and to

the extent relied on by the Banks, in Historic Agreements) are not excluded

from an assessment for fairness under the 1999 Regulations by reason of

Regulation 6(2)(a) and/or (b) thereof.

 

BRIAN DOCTOR QC

JEMIMA STRATFORD

31 August 2007

 

 

 

 

 

 

9

The Claimant believes that the facts and matters stated in these Particulars of Claim

are true.

 

SIGNED: ....................................................

 

OMAR YAQUB

 

POSITION: ...................................................

 

DATED: ...................................................

 

 

 

10

Claim No. 2007 Folio 1186

 

IN THE HIGH COURT OF JUSTICE

 

QUEENS BENCH DIVISION

COMMERCIAL COURT

 

 

BETWEEN:

 

 

THE OFFICE OF FAIR TRADING

Claimant

 

-and-

 

 

(1) ABBEY NATIONAL PLC

(2) BARCLAYS BANK PLC

(3) CLYDESDALE BANK PLC

(4) HBOS PLC

(5) HSBC BANK PLC

(6) LLOYDS TSB BANK PLC

(7) NATIONWIDE BUILDING SOCIETY

(8) ROYAL BANK OF SCOTLAND GROUP PLC

Defendants

 

_____________________________________

PARTICULARS OF CLAIM

______________________________________

 

 

Omar Yaqub

Office of Fair Trading

Fleetbank House

2-6 Salisbury Square

London EC4Y 8JX

 

11

 

 

 

 

PHOTOMANS NOTES:

 

Note the OFT's own determination within the POC to clearly define the term "consumer" as is defined under section 3 of UTCCR.

I have highlighted it in red in the above POC, and here is the actual section from the UTCCR.

 

3. - (1) {t2} In these Regulations-

 

"consumer" means any natural person who, in contracts covered by these Regulations, is acting for purposes which are outside his trade, business or profession;

 

Note also, that this case is only concerned with the fairness of the terms as covered by the UTCCR regulations, there is NO refernce to ANY common law or other precedents regards the lawfullness of the charges per se.

 

 

Thus as Business claimants ;

 

1/ As clearly defined by section 3 of the UTCCR, if the account was a Business account, set up and used for purposes of a trade, business or profession, then its' terms and conditions were not covered by the UTCCR.

 

2/ In no part of your claims is any reliance, reference or acknowledgement made to the UTCCR as a basis of claim.

 

3/ Therefore, as Business claimants, there should be no just reason to delay or stay your cases if being done so upon the grounds of awaiting the outcome of the OFT case; as the case is obviousley purely concerned with the applicability of a statute that consists no part of our claims; and so the outcome ultimately will have no bearing or influence upon your case.

I would suggest that any Business claimants recieving a notice of a stay, and considering appealing, should perhaps include the OFT's POC as part of their appeal, or at least cite the relevant definitions from the UTCCR.

 

PM

 

[PeterAnderson]

WOW - I cannot believe these two POC posts were done just 7 minutes apart.

 

That is GREAT NEWS - Pm; well done; well done indeed.

 

NOW I can pick the colour of my brand new Harley Davidson Ultra Electroglide

[GuidoT]

PM I see you are around here.

 

I have been back over this thread and I am about to file a claim using the particulars as here as a basis.

 

Are they any further developments that I should be aware of that would directly impact on the POC?

[elsinore]

Well done PM.

Just to further reinforce your excellent summary, I’ve highlighted a bit more of the OFT POC:-

 

8 Each of the Banks has personal current account agreements between themselves and their customers who are consumers*, containing the terms and conditions relating to the operation of those current accounts by such customers.

*as defined above

That’s pretty conclusive to me. Business accounts ain’t included!

Els

[elsinore]

 

ASKED : Can you advise whether the application of the Unfair Terms in Consumer Contracts Regulations (UTCCR) should apply to personal current accounts only or widen its scope to include all bank charges including business and credit card accounts.

 

REPLY : As explained above the reason that business accounts have been included in the test case is because issues have been raised about possible breaches of common law.

 

The person who replied should read the OFT's POC.

 

It might well have been FSA's intention that business account claims be included in the waiver for whatever soppy reason, but they are specifically excluded from the test case.

 

Els

[PeterAnderson]

GuidoT - Hi,

 

The POC in post 713 is PM's original but with a tweak from my lawyer friend.

 

The main changes were to Para 1 - adding the word Business to make it clear from the start that this is a business claim, Para 7 as she thought that pm's original seemed to suggest that the bank had actually 'lost' your money and that by changing the words to Common Law & Statuary Duty would also emphasis the fact that we were relying on Common Law; and at Para 10a she thought it would look more professional if we actually quoted the OFT statement as stated and included the relevant page numbers of their statement.

 

Other than that it is untouched, and my lawyer says this POC is "not unsound"

[photoman]

Peter,

I think you may have misunderstood the meaning of the term "waiver" as used by the FSA.

 

It does not mean that there is a waiver on stays being granted.

It actually refers to the fact that the FSA have granted it's member banks the freedoom to waiver dealing with any cases whilst the OFT case is underway.

ie;

1/ the FSA will not take their own action against any banks that do not deal with cases promptly.

2/ The FSA will shelve any complaints it recieves itself until after the case.

 

Here is the statement on their current attitude from their website:

 

So we have granted a number of banks and building societies a 'waiver' to help progress this test case. This means that firms who apply for this waiver do not have to follow the FSA's rules on time limits for dealing with complaints about unauthorised overdraft charges. In effect, from 27 July 2007, banks and building societies will put customer complaints on this issue 'on hold' until the test case is resolved.

 

The FSA was always a waste of time anyway.

It is a non-governmental independent body financed and run by it's membership.

 

The current chairman is Sir Callum McCarthy, who amongst other previous jobs has held senior positions at Barclays Bank !!!

 

From the FSA website in their own words:

It is operationally independent of Government and is funded entirely by the firms it regulates

 

 

.... so a bit like letting the lunatics run the asylum !!!

[photoman]

In any case it is NOT upto the FSA... it is for the courts to decide !!

 

It smacks of utter arrogance and contempt that the FSA and the Banks think they can tell the judiciary how to handle matters !!!

 

 

grrrrrrrrrrrr !!!!!!!

[tifo]

the FOS have stayed my business account complaints citing the test case.

 

should i push them to look at it as normal and use the OFT POC reference for a 'consumer', which clearly does not apply to a business?

 

or should i start proceedings against the bank(s) in court as the FOS will be no use?

 

i have 3 business accounts stayed, 1 by the FOS (Barclays), 1 by the bank (NatWest) and actually the 3rd one was stayed by bank but has now received an offer (HSBC).

[PeterAnderson]

General Hi to one and all.

 

This CAG is just truly amazing; I have been lurking here and on LTSB for far too long.

 

Now I have just found something very interesting - one person starts a thread, it gets bigger and bigger (like this one) and produces all by itself some amazing info. Then another does the same BUT in the process gather other bits of really interesting stuff - even just one cleaver letter maybe.

 

To prove my point please visit

http://www.consumeractiongroup.co.uk/forum/hsbc-bank/85633-castelbest-ii-return-claims-13.html

and read posts 197/213 & 5

 

There is some really innovative letter writing going on over there

[PeterAnderson]

PM - Hi,

 

Re your post 720 - You are right, of course, silly me.

 

I did point out in my post 713 that I was unsure whether this was relevant and you and I hope others will spot any other errors.

 

Do you think I should go back and edit out that para ??

[PeterAnderson]

tifo - Hi,

 

I cannot see for life of me having read all the stuff posted (especially today) that the court can uphold a Stay, I really can't.

 

The OFT POC makes NO mention of Common Law, the CL stated cases are clear, I have had only one of the early draft stated cases removed because after it had been to the High Court it was not overturned but altered by the House of Lords (not in our favour) so I removed it.

 

If I were you I would look closely to PM's posts and the OFT POC is VERY interesting and I think the last few dox may sway your DJ.

 

Please remember I am NOT a legal bod, well read on this subject, I would like to think so - but !!

[tifo]

The OFT POC makes NO mention of Common Law, the CL stated cases are clear.

 

The FSA and FOS seem to be screwing us all then for business claims!