new developement letter from court - Martineau/Heather - NOTA BENE

[CRED]

MY CASE WITH LLOYDSTSB ORDER BY JUDGE

I have received a letter from the county court, when I sort my scanner out I will try and post it, but here it is

general order of judgement or order

before District Judge...... upon the courts own motiion. The court has amde this order on it's own iniative without a hearing. If you object to the order, you must apply to have it set aside, varied or stayed within 7 days of receiving it.

It is ordered that

 

1 The action be stayed untill 15th june 2006 for settlement by mediation/negotiation or for narrowing the issues

 

2 Within 7 days of the end of the periodof stay the parties shall jointly notify the court in writng of the outcome of negotiations and what if any directions are required. Failure to comply with this direction or properly engae in negotiations may result in the applications of sanctions. On receipt of such notification the court file sahll be referred to District Judge/ a full time Judge for further directions

 

I hope that this is the judge trying to force the hand of the banks who so often drag things out untill the 11th hour then settle, having taken up court time. Will keep the group posted re any develpoments hopefully will set a precedent

[Dappa44]

Thats certainly what it looks like to me m8, if this is correct its fantastic news for us.

[dave]

If/when you phone the bank - make sure you record the calls (if you can).

 

The banks wont have a clue what's going on and it will be very difficult to actually get to speak to someone who has half a brain. If it's recorded, it cannot be seen that you haven't attempted (even more than you have already) to settle amiacably and out-of-court.

[HD]

Sounds v.encouraging.

 

BTW which court was it? PM me if you don't want to post. I have just sent my AQ in and it might be to a court not a million miles from you.

[HONESTKNOB]

This could start an avalanche if a court actually forces them to play a hand!

I can't wait to hear what happens next

[lookinforinfo]

Errr..........does this ruling not seem a bit contradictory. On the one hand, it says

that within 7 days both parties must either agree, disagree, or vary the ruling .

Fair enough. "Properly engage" in negotiations-how does the Court interpret that?

If Cred turns down a 50% offer has he/she properly engaged or not. In which case,

could he be liable to sanctions. Equally as the bank only offered 50% could they be said not to have engaged..etc.. double edged sword I suppose.

And what does "narrowing the issues" mean. If you don't narrow them could you face snctions? And does the Court have the power to do this? This is all very new

is it not? Is it aimed at the banks who are wasting Court time by saying they will defend, and then not turn up? Or aimed at us for taking the banks to Court regardless of the fact that they have offered to repay some of the charges? Or

both of us?

No one has yet suggested that Cred speaks to the Court to see if they can clarify

their actions and the undertakings expected by Cred and the bank. Also what happens if Cred

agrees and the Bank disagrees with the order, will the case carry on as it would have done anyway? And in what way can the order be varied, and does the

variation have to be agreed by both parties?

They have not given much time to come to a conclusion of how to treat the order.

As a matter of urgency do you think Cred should have a list of questions he can

ask the Court so that he can come to a reasoned response to the ruling? After all,

if it goes pear shaped for Cred it may put the banks on a stronger footing.

Don't imagine that the banks have not been applying pressure. They perhaps were

behind the OFT handing over to the FSA. If they went to the Bank of England say,

claiming that if the floodgates opened on repaying bank charges, some of them

could go bankrupt, or would effect their AAA rating, this government might try and

pressurise the Judiciary.

 

[Just because you're not paranoid doesn't mean they aren't out to get you.]

[sharemaster2]

The BANKS will have to work HARD to convince any one that they may go BANKRUPT with all those BILLION pond in profit they make every year!! Lets see what happens.

[CRED]

This is a double edged sword so to spaek,on the one hand it may force to banks to stop dragging their feet, however It is myself against a multi million pound corporate lawyer, LLoyds will have the money to defend and risk costs,however as there is case law on penaties I don't see how the amount owing to me is questionable, if say it was a personal injury claim then the affects of the injury are variable from person to person and I can see how the judge would encourage mediation, I hope that this sets a positive trend for all claims and stops the banks from usuing the courts to delay everything untillthe last minute and paying up, howevr as this case seems to be a first I do feel disadvantaged when facing the courts, Lloyds tsb and their lawyers.

[cathrionas]

Just want to say Good Luck and thank you. I am some way behind you in terms of making my claims so I am really grateful to hear your story and how you are getting on.

C

[lookinforinfo]

Cred-don't worry about coming up against their lawyers etc. The court is on

your side re the levying of unlawful charges.

 

What I was trying to convey was that you should contact the Court on Monday

to ascertain the reason for the stay of execution.

If as you think, it is to circumvent the banks wasting their time, then fine.

But it may be directed at you or directed at you as well..

I don't know how much your claim is for, but if it is not that big, then perhaps the Court feels that you should accept a lesser amount, rather than coming to Court

and costing the Court more to run their side of the affair than you are owed by the

bank after they have offered a settlement figure. I imagine that the Courts, that

were already pretty hard pressed to keep abreast of all the litigation, have become

snowed under with the increase in claims agaainst the banks and may be trying to

cut down the allocation of time for your kind of case by getting more out of Court

settlements.

And much more worrying, have the Courts been leaned on from above to deter

litigants from having their day in Court by settling for less or face sanctions.

Until you know the reason for the Court instigating the stay of execution, it is

hard to decide on the merits of the stay. And your wishes may be different to those of the bank. In which case, who if either has precedence? You could argue that it should be you as it is your case. And if you don't get the outcome you want re the stay, then ask if you can have the stay set aside so that you are in the same position as you were before the stay was suggested.

And it is not until you know why the Court has acted in this way, that you should contact the bank. I was hoping that others would have added to the questions

you should ask the Court in my previous post.Perhaps other questions will come to

you as the Court responds to your initial questionsl.

One of the things you will have to clarify is if you turn down say a 50% offer from

the bank, will you face financial penalties from the Court if you refuse the offer and go to Court.

And whether you are being targetted by the Court because the issues in your claim are too wide. If so, what does it mean, and how can you narrow them, yet ensure

your claim is successful?

[Dappa44]

I honestly think the courts are pee'd off with these claims going in then nobody turning up at court to fight the case. Surely these people are getting a timetable of events daily, then nothing happening because lloyds are settling out of court.

 

My opinion is this is to force lloyds to settle before getting to scc to save wasting the scc time.

[MondeoST24]

In a way its good for the court from a revenue point of view, all those court fees coming in and very few actually needing the district judges time.

[breadline]

I think its a quiet way to get help for the banks..

I knwo that sounds strange but if you are in court you have already tried to talk to your banks.

 

And i agree with the person who wrote what happens if claimer rejects 50% i mean all teh money is ours and theres no question about that.

 

i would if i had to offer the bank to make 2 paymenst but both in 1 month the start and teh end.

 

I have always thought eventaully the government would step in and help teh banks as the ripples of all these claims could cause damage to the banks.

 

I belive its a quiet government involvement, and eventually other things will be written into it, something that states a maximum claim off £1000 or £100. direct from the bank with no court hearing atall.

 

I mean we are just people, they are not going to let us run around much longer doing what we want

 

just my 2 pence worth.

 

BL

[alanfromderby]

The bottom line to all this is that the law is the law. A District Judge can try and get parties to settle outside court, but if the wronged party does not get full redress, then that party has the right to take the case to court.

 

Never forget that the one ground that can be used for an appeal against a County Court judgement is a mistake in law. I am sure the court would rather not get snowed under with legitimate appeals as well!

[HD]

I find the narrowing of the issues interesting.

 

Does that mean that the judge only wants to rule on one aspect of the law?

 

eg. Is the charge a service or is it being defended on a true pre-estimate of losses?

 

This could work in your favour as if you know that you are only proving (on a balance of probabillities) one of those and the bank won't be able to bring up any alternative defence it will make preparation easier.

 

Who did you serve on, was it the local branch or head office. Would they then be the defendants? If it was local branch I would be tempted to make a recorded opening to negotiations ASAP by telephone to see what their reaction was. Make sure you know your stuff and are careful what you say before you do this though.

[BankFodder]

Cred and I have already discussed this matter.

I am already thoroughly convinced that here we have a judge who understands very well what the bank's game is. He understands that the bank is not really entering into dialogue. He realises that the bank is simply using the justice system in order to browbeat and bluff ordinary client. Of course to do so is to abuse the court process.

Lloyds bank in particular has been using the court process in this way again and again. We have seen a great deal of evidence of it on this forum. They are not serious litigants. The only reason they file defence and then go through the allocation questionnaire is to test the resolve of the claimant: to see if maybe he will back down before the end and also to see whether he will balk at paying the fee for the allocation questionnaire. When the bank realises that in fact claimant is prepared to go all the way they then finally backed down themselves and pay the money out. What the bank doesn't reckon with is the fact that the claimant is thoroughly supported by this forum and also that the claimant is seeking the return of money which he had given up a long time ago. The money back from the bank is really just a windfall and it is no loss not to get it back.

The fact that the bank doesn't realise this and the fact that their solicitors don't appreciate this is a great weakness. I realise that Lloyds and their solicitors-especially Heather reads this forum and so this is a message to them and to her as well.

As everybody knows there is a program going out on Granada television on the fifth of June. I don't know whether they will have time to include the following point in it that here is a message for the Lloyds solicitors and it is that I have brought the matter of the abuse of the court process and a waste of public money by the banks as part of their route team debt collecting process to the notice of the programme's producer. Here it is the text of an e-mail which I sent him last week:

 

Tim, I have always thought that there was another aspect of the way that banks deal with challenges to their penalty charges.

So far all of the banks have played a game of bluff. None of the them prepared to go the court. The reasons that this is that they do not want to have a formal judgment against them as a result of a hearing and also because they do not want to be forced to disclose material which would destroy the penalty charge system – and also maybe they do not want to be in a position where they are lying to a judge in court (my speculation).

Anyway as I say they all play bluff. They do it by relying on the fact that the ordinary people who are trying to recover their charges do not know much about the court process and are frightened. (This is where The Consumer Action Group comes in because we tell people how to do it and help them to deal with their fear).

This means that the banks use the court process and the fear of a court hearing to browbeat their customers into accepting their charges or if necessary into accepting very reduced settlements.

Some of the banks – NatWest, Abbey, Nationwide, Barclays – and very especially Lloyd’s – commonly take it as far as allowing the claim to be started and even issuing the defence. Lloyds especially plays it "down to the wire", filling in allocation questionnaire’s and eventually only settling at the last moment, and even then making it a condition of the settlement that the customer attains an interview at their bank for an "account review". (A euphemism for account closure or downgrading the account possibly with closure of overdraft.)

An aspect of this approach which has so far gone unremarked is that the banks, who are not at all interested in going to court, are using the court process as part of their mechanism for intimidating customers into giving up or accepting reduced settlements. However, this is an abuse of the court system. It is pay for out of public funds. It uses public resources which are already fully occupied try to provide an overstretched justice system for thousands of other entirely legitimate claims. Yet the banks routinely use the justice system not as a vehicle to obtain justice that as a vehicle by attempting to deny justice – and not at their own expense, but at the expense of public funds.

This really is a corrupt practice by the banks – and, I have to say, by their solicitors because it is the solicitors who make these kinds of decisions involving the strategy to use to attempt to defeat claimants against the banks; it is not an idea which comes from the banks themselves. However the banks clearly subscribe to the idea. It is a kind of "debt enforcement" on the cheap. Anybody else wanting to enforce a debt would have to employ a debt collector and pay the full rate. By using the justice system in this abusive way the banks are able to do it at a price. Very nice.

I have been hoping some time that the courts would start to realise what was happening and was not to take objection to it. The Consumer Action Group is certainly producing enough litigants for this pattern of bank abuse to be recognised but it has not been clear that the judges had yet appreciated what is going on.

However this morning, one of our users contacted me and informed me that they had received a very strange order from the court. It was in an action against Lloyds bank after the allocation questionnaires had been returned to the court.

The judge, who seemed to express himself rather angrily, had ordered that the proceedings be stayed for one month to give the parties to enter into a real dialogue in an attempt either to settle the matter or to narrow the issues. On its own, this is slightly unusual but not exceptional. What makes the judges order highly interesting is that the order also said that the parties must provide real evidence that a serious attempt had been made to negotiate the matter in default of which the parties would risk the imposition of sanctions. (Sanctions in this context normally means a costs penalty).

This order is really very novel and I wonder whether it is not some judge who has finally realised the game that is being played out by the banks and the fact that the courts are being used as one of the pieces on the board. I hope it is this because it then sends a serious warning shot to the banks. Lloyds has been a particular offender.

Maybe it is all rather too technical and of course maybe your "storyboard???" for your programme is already settled. However I think that the abuse by the banks of the justice system merely for the purposes of brinkmanship and the consequent exploitation of public funds and the resource of the justice system are an important element which nobody has yet considered and yet at least once should be brought to the notice of the General Public.

As you can see the problems and the issues raised by these unlawful charges are Legion.

Even if the Granada programme is not able deal with this aspect, The Consumer Action Group intends to make it public knowledge and to stir up public awareness that this is the way the banks and their solicitors use the justice system -- not as a means to obtain justice but as a means to deny justice and at the taxpayers expense. Doing it on the cheap.

The banks and their solicitors should realise that they all are already less popular than traffic wardens in this country and that their continued behaviour will alienate the more from the general population as people come to realise them for the pariah which they currently are.

[Guest Lueeze]

Well said BF.

 

Take heed Banks!

[HD]

Well said BF. Whenever I hear of these abusive tactics from the bank it only strengthens my resolve to get justice. I'm sure that is the same for many others as well. When will they face up to reallity and see that burrying their head in the sand and using our justice system as a tool in their mind games is futile and a waste of our taxes.

 

As soon as a case finally comes to court I hope a judge is going to make their displeasure known by making the banks pay up an equivalent to the amount of court time they have wasted. With this order could the judge force Lloyds to come to court even if they attempt to settle at the last minute again?

[lookinforinfo]

Bankfodder, I enjoyed reading your post and I hope for Cred' sake at the very least that your argument is the correct one.

 

And yet, and yet....

 

No one seems to have made the following point yet. There is obviously a cost to the banks when cheques are returned unpaid and when they have to chase up and

advise customers who have breached their T&C's, not to mention placing debtors

into legal hands, writing off debts etc.

Because they do not charge the actual costs involved, they are in the position of

therefore returning ALL the charges levied. And while that invokes sympathy with

no one here, it does mean that they lose money on each transaction they pay out

on, rather than even breaking even. [That's the point I am making].

 

In addition, credit card companies are expected by the OFT to reduce their charges

to a maximum of £11.99 from the end of this month. [This will reduce the profits from their charges by more than 3 times].

 

All this coming together at the same time [not to mention Barclaycard suffering

a 17% increase in bad debts this year] must be putting the banks under pressure

financially. The Bank of England would not like one of its banks to flounder [and

certainly not founder]. It would not be the first time that the financial industry

flexed its muscles and forced the goverment to quietly act behind the scenes.

 

Is it a coincidence that this judge has requested a stay of execution one day, and

another poster says that the Abbey have applied for a stay of execution also [still

don't know on what grounds]'

 

Probably Cred will get some idea of where the judges action was aimed when he speaks to the bank. If they offer to pay up straight away then we will know you were right.

 

Please accept my apologies Cred if you feel I have hijacked your thread-I did think

of starting a new one, but felt it was related.

[rbrears]

Wow - the conspiracy theories multiply apace!!

 

I suspect that all tht's happened is that the bank have ticked the box on the allocation questionnaire asking for a month's stay to try and settle the proceedings. The judge will usually order a stay of the proceedings to allow settlement negotiations to take place if one party indicates that they want a stay for that purpose.

 

There's verylikely nothing more to it than that.

[BankFodder]

In Cred's case, the judge has ordered a Stay to allow the parties either to negotiate in order either to try and reach a settlement or else to narrow the issues.

 

Lloyds cannot comply with this. They are unable and unwilling to do so.

 

What does "negotiate" mean in this situation?

 

It does not mean that the judge requires that a reduced payment be agreed upon regardless of the justice of the case.

 

The judge does not mean that the claimant or that the defendant must give up their right to a just settlement.

 

The judge means that that the parties should enter into a real dialogue in order to try and achieve the just settlement which the judge would have to implement of the case cam to court.

 

So it is very important for both parties to understand that the judge is not just basically telling the both of you merely to do a "hatchet job" on the amount claimed - that Cred must reduce the demand and that lloyds must agree at least to pay something.

 

The negotiation required is more interesting and more meaningful than that.

In order to negotiate, there must - as the judge has suggested, be a narrowing of the issues.

 

The issues at the moment is that Cred wants his/her charges back on the basis either that they are penalties and therefore unlawful - or alternatively if the charges are not penalties then Cred is prepared to pay for the bank's services but at a reasonable prices.

 

On the other hand, Lloyds has now abandoned any defence that their charges really do reflect their administrative costs. They realise that no one believes it and to give them their due, they are not prepared to come into court and say this to a judge as they know that it would be untrue.

 

So Lloyds have fallen back to the service argument. They say that when a customer exceeds his overdraft beyond what has been agreed or is in danger of doing so, then the bank will levy a service charge for bouncing a direct debit or for tolerating the excess overdraft and that because the charge is a contractual charge for services, they are allowed to make profits. (Which is true, they are allowed.)

 

Do we accept the service argument?

Well, if you look back at all the penalty charge cases since about 1894, you will find that it has been common practice to try and get around the penalty charge rule by saying that the penalty charge or penalty clause is really a contractual charge for services.

 

The companies which do this have always been the stronger party (because it has been they who have governed the terms of contract) -- and they have always attempted to do this by describing the "penalty clause" as something else.

 

However it is long established that the courts will not take contractual wording at face value in these circumstances and that they will try to look at the true intention of the clause. The practice of trying to hide penalty clauses behind different wording has been so common that the judges have developed a phrase to describe it: "cloaking the penalty clause".

 

This is what Lloyds is doing here.

 

Nobody begrudges the banks the right to recover their administrative costs. And even if it were true that the penalty is a service charge, most people would not begrudge the right of the bank to make a profit out of it. But I think that most people would say that it would have to be a reasonable profit. The problem is that Lloyds and the other banks do not want a reasonable profit. They want whatever they can get away with.

 

So what you have here to negotiate with? Well you can say that you are happy to pay a penalty if that penalty is calculated within the meaning of the law. In other words if Lloyds bank will either disclose their costs or if they will swear an affidavit that a certain figure does actually represent their true administrative costs, then you will be happy to pay that figure. Alternatively you can say to Lloyds that you may (only a possibility) be prepared to concede their argument that the charges are really a charge for a contractual service. However in that case you have to say to Lloyds that you are only prepared to agree to a reasonable markup.

 

What is reasonable? Well I think that you have to look at the circumstances in order to find an acceptable guideline. Lloyds bank and the other banks are high street businesses. Presumably their overheads are broadly in line with those of are the high street businesses. Most high street businesses make their profits by marking up 100%. In other words if a widget shop buys widgets for five pounds each it expects to sell them for £10. This is the normal high-street markup. Some businesses such as book shops for instance make far less. A bookshop may by in Patricia Pearl's book on small claims for instance for £13 and it will resell it for about 18. In other words the markup is about one third. It seems to me in that case that if we use the high Street normal markup as a test of what is reasonable then we can say to Lloyds that we might be prepared to accept their contractual service argument but only on the basis that they make a reasonable markup.

 

We all expect that the cost of bouncing a direct debit and sending a letter or the cost of exceeding an overdraft and sending a letter will come to less than £1. Therefore a reasonable markup would bring the cost to £2.

Therefore a reasonable offer to Lloyds at this opening juncture would be to say to them that we stand by our position that your charges are a penalty. We do not need to see a detailed breakdown of your costs if you will simply swear an affidavit that your £35 charge covers your administrative costs and no more. On the other hand -- and in the interests of reaching a compromise settlement in order to achieve a businesslike solution and to avoid litigation and in this way to spare the public purse, -- we are prepared to accept for the purposes of this settlement only, your argument that the charges are levied for a contractual service and we are prepared to pay you a profit margin. However we are only prepared to pay you a reasonable profit margin calculated on the normal level for other high street businesses. We appreciate that you do not want to reveal sensitive data, so we are prepared to take you at your word if you will simply supply the court with an affidavit which states that you're £35 charge represents your true administrative costs plus a markup at the normal high-street rate.

 

It seems to me that this offers Lloyds a way out, to stop all this attack and litigation but more importantly this offer will demonstrate to the court a complete willingness to settle on sound legal and businesslike pragmatic grounds.

 

If you use this argument in your letter and make it to the bank repeatedly and if the bank refuses to deal with you in the same spirit then I think that you can show all your correspondence to the judge and he will very quickly form his own conclusions. It is very clear that the offer I suggest made in this way overcomes for the bank a very serious obstacle and that is that they do not want to disclose certain information. It also shows that to a certain level you are prepared to trust their word -- although it must be in a sworn statement.

 

 

As I have already said the judge does not expect you to throw your legal rights away. He only expects you to try and have an honest dialogue with your defendant in order to identify very closely, exactly what the legal rights are, exactly what the arguments are and how they can be settled in a way which anticipates the line which would be taken by the court.

[CRED]

Lloyds didn't tick the box! the letter clearly staes that the stay was ordered by the court on it's own initiative, and that failure to comply with the diecetion or properley engage in negotiations may result in sanctions, and that on th receipt of such notifiaction the file will be reffered to a district judge for directions

[whizzkid001]

I agree with BF, this seems to be a new, pragmatic approach by a judge and 1 which if used in my own case I'm sure would have produced a result long before now!

[rbrears]

Well the court is able to make the order of its own initiative. One of the items for discsussion of course wil be that the "service" argument only ever arises when the papers reach the bank's lawyers. In all the correspondence from banks to people here in reply to their prelim letters or LBAs the banks say clearly that the charges are for their adminstration costs. Some even go so far as to say that they arise because of breaches of the agreement and are applied automatically.

 

The lie about service is so easily seen through. The banks write to us stating that they are charges for default and do represent costs to the bank. Their lawyers say that the charges are nothing to do with defaults but for the provision of a service. The T&Cs (certainly in the case of NW) do not specifically describe any services and the leaflets on charges make it clear that if you do x you will be charged x - NOT if you do x we will have to provide a service in dealing with your account and we will charge you a service charge of x.

 

The liability to pay arises immediately that the circumstances of default arise and are often appied at that time too.

 

BF is right - their lawyers are attempting to "cloak the penalty clause". Look at the OFT report again - para 4.21 - "Attempts to restructure accounts in order to present events of default spuriously as additional services should be viewed as disguised penalties and equally open to challenge where grounds of unfairness exist. (For example a charge for "agreeing to" or "allowing" a customer to exceed his credit limit is no different from a charge for the custimer's "default" in exceeding his credit limit). The UTCCRs are concerned with the intention and effects of terms not just their mechanism."

 

By all means have negotiations but don't accept less than you are claiming and if the bank actually respond to the above in the course of those negotiaions we will all be interested in what they have to say.

[Mal]

I would put money (if I had any) on Lloyds setting next week

 

Good Luck

 

Mal