Reclaiming Abbey mortgage early redemption fees.

[zootscoot]

Hi annalh

 

It looks like they could do with a rocket up their proverbials!

 

Try something on the lines of this:

 

Claim no xxxxx

Account no xxxxx

 

Dear xxx

 

Thank you for your letter dated xxxxx regarding my claim for the return of fees levied on my mortgage account. The basis of my claim is indeed the fact that the fees levied represent a penalty. In the case of Castaneda and Others v. Clydebank Engineering and Shipbuilding Co., Ltd. (1904) 12 SLT 498 the House of Lords held that a contractual party can only recover damages for actual or liquidated losses incurred from a breach of contract as oppose to a charge which represents a penalty. This law was confirmed and upheld in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79. A charge will be held to be a penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison to the greatest loss that could conceivably be proved to have followed from the breach. A penalty clause is void in its entirety and unenforceable. In the absence of your disclosing a full breakdown of your charges and how you arrived at your 'genuine pre-estimate', I can only assume that no genuine pre-estimate was actually undertaken. Your repeated refusal in this matter is what has lead me to bring my claim.

 

In addition your charges appear to represent an unfair term of contract which is contrary to the Unfair Terms in Consumer Contracts Regulations 1999 (SI. 1999/2083). My account falls within the ambit of Regulation 5 of the Unfair Terms in Consumer Contracts Regulations 1999 as I am a consumer. Your charges constitute an unfair penalty under Schedule 2 of the said Regulations which provide an indicative and non-exhaustive list of terms which may be regarded as unfair. Under paragraph 1(e) of schedule 2 this specifically includes terms which have the object of requiring any consumer who fails his obligation to pay a disproportionately high sum in compensation. We would vigorously contend that this is the position regarding the fee of XXXX which you deemed fit to apply to our account.

 

 

Furthermore a fee levied requiring us to indemnify you against any commercial risk to yourself in offering us a reduced interest rate in order to attract our cutom, or to fund the product and redeploying the funds on redemption is also contrary to s.4 Unfair Contract Terms Act 1977 which provides that a term requiring a consumer to indemnify costs incurred as a result of a breach are unfair unless the institution relying on them can show that they are reasonable. I am confident that a court is likely to consider this clause to be unreasonable within s.11 of the said Act as a large commercial institution such as yourselves is in a far better placed position than myself as a consumer to bear the burden of the vicissitudes of business.

 

I would also like to bring your attention to the following statement by The Office of Fair Trading:

 

"A term in a mortgage agreement which requires the borrower to pay more for breaching the contract terms than actual costs and losses caused to the lender by the breach (or a genuine pre-estimate of that) is likely to be regarded as an unfair penalty and to be unenforceable both at common law and (in a consumer mortgage) under the Unfair Terms in Consumer Contracts Regulations. A redemption charge may be regarded as a penalty even if it is expressed as the price for exercising a right rather than a consequence of breaking the agreement."

 

The fact that I agreed to this term contained in the terms and conditions can not prevent a court finding that it is in fact a penalty. In all reported cases on penalty clauses there is no dispute that the term was in fact agreed to.

 

I am rather shocked at your continued intention to defend this claim where your chances of success are remote in the extreme, however, I recognise this is the right of the Abbey to do so and eagerly await your full explanation of how you calculated the fees in the court. However, in accordance with my duty to under the overriding objectives of the CPR, I am offering you the chance to settle my full claim with out the need to take the further time of the courts and save you the expense and inconvenience of pursuing further.

 

I look forward to hearing from you.

 

 

Yours faithfully

 

 

xxxxx

 

Hope this helps

 

Zoot

[ANNALH]

Wow thanks Zoot thats a great letter!

 

I will get it in the post this weekend. Can't wait to see how they reply to that!

[ANNALH]

Well I sent the letter.

 

Now I have had a letter back, well actually a copy of the documents they sent to the court to request reallocating the claim to the multitrack. Basically their reasoning behind this is that any decision made by the court has a huge financial impact for them because they realise lots of other customers will reclaim their ERC's too. I'm not sure if this is good news or bad news for me but at least they are taking us seriously and are scared about what decision the courts will make - meaning they are unsure of their defence??

[zootscoot]

request reallocating the claim to the multitrack.

 

You need to get in touch with the court and contest this. How much is your claim for?

[ANNALH]

£4800 + INT = TOTAL £6500. Why do i need to contest it?

[zootscoot]

If it gets allocated to the multi-track you could end up in the High courtas oppose to the county court. There are no fixed costs and generally barristers will be used. This means that the bank will be paying barristers fees on top of solicitors fees and costs can escalate considerably.

 

This is likely to be a scare tactic but you need to be aware of the implications of this. Write to the court and state your reasons for not wanting to go to the High court and ask if you can in fact be allocated to the small claims. (Claims above 5K can and have been allocated to the small claims).

 

Points to argue in your favour include:

 

1. It is a consumer dispute and should be allocated to the small claims which is designed particularly for consumers.

 

2. You filed the claim believing it would be dealt with in the fast track and did not anticipate the risk of bearing the costs in the Multi Track. So to transfer to Multi track would be grossly unfair.

 

3. Under the overriding objectives of the Civil Procedure Rules there is an obligation on the judge to ensure the parties are placed on an equal footing. As the defendant is a huge financial institution it would be unfair to place this in the fast track or multi track as they would have the advantage in being able to bear the risk of costs whereas you do not and you do not have access to specialist legal teams.

 

4. The points of law relied upon are well established and settled law with no complex issues of interpretation. There is thus no need for it to go to the County Court or High court.

 

5. Whilst you have repeatedly tried to contact the defendant to resolve the issue, they have failed to respond to any communication, they have refused your request for a breakdown of their costs in order to satisfy you that their ERC was lawful.

 

6. You believe fully in the justice of your case and if it is to be transferred to the multi track could the court ask that no cost orders will be made against you.

 

 

This is likely to be a scare/ delaying tactic but you need to be prepared that they may fight this all the way. You might want to also have a look at Sandy v Gmac's thread who have been through a similar experience.

 

http://www.consumeractiongroup.co.uk/forum/other-institutions/7223-sandy-gmac-rfc.html

 

Hope this helps

 

Zoot

[ANNALH]

OK. Thanks Zoot I will do that.

 

I noticed that they have ticked a box to say they want it dealt with without a hearing. Why would they do this?

[zootscoot]

That would be in relation to the track allocation. This would be to stop you from putting forward your arguments for disagreeing with going to to the multi -track. If you contest this it should go to a hearing and you would need to go to court. So in your letter state that you would like a hearing regarding this in order to put your points across.

[Les Gunn]

AnnaLH

 

Been reading this and they sound like a right bunch of b******s.

 

Whatever you decide, the best of luck - that said, these people think they have the law on their side...how naive they are...!

 

We're behind you all the way!

 

[rascal3103]

Hi Annalh,

 

I will be watching with interest. I am just about to apply for my MCOL with the aid of Zootscoots recent Pm with valuble info. Cant thank Zoot enough.

Good luck with yours and keep us all informed.

 

Stef

[ANNALH]

The Judge has set an allocation hearing on Weds 4th October (next week!!!)

time allowed is 15 minutes and it says I have to attend.

Has anyone been to an allocation hearing or know what will happen? Will the bank be at that hearing??

[zootscoot]

See Sandy v Gmac thread. I posted a link above. You might want to pm Sandy and ask what it was like.

 

All the best

 

 

Zoot

[ANNALH]

DLA have requested the allocation hearing on Wednesday be conducted by telephone. I agreed to this as I do not have the time to go to the court so I am waiting for them to set up conference call facilities so it can be done.

[zootscoot]

Best of luck,

 

Let us know how yu get on.

 

Zoot

[ANNALH]

DLA requested the allocation hearing be done by phone. I agreed.

Put to judge today who refused so it looks like DLA will have to attend tomorrow.

[KPH]

Good Luck Anna, I am one of a plenty I am sure, who are waiting to see how it all goes for you, fingers crossed

[ANNALH]

I was thinking of using an argument based on the fact that i was backed into a corner and it wasnt my choice to terminate the mortgage therefore they shouldnt have charged me a redemption fee. As if they didnt have my arm behind my back i would have stayed with them for years (at least until after the tie-in period).

Even if i dont get the ERC back I want them to prove the 'admin' charges. I want them back as im sure they just looked at what they had to pay me (the excess after the house was sold) and made that figure their 'admin' charges so i didnt get anything.

[KPH]

From what Zoot has posted it does seem pretty clear that some precendent has been set in case law, I suppose its a case of convincing the judge of the connection between your circumstances and them

[GSMGuy]

Now this is interesting - Just in the process of remortgaging myself, and Rooftop want an ERC of almost £9k!!! Time for a new thread.....

 

Mike

[furndire]

I've been reading this post with interest - good luck for tomorrow.

[zootscoot]

Good luck Anna,

 

Don't forget this is an allocation hearing so you will not be expected to argue the points of law in your case. But make sure you put forward the 6 points I made in the earlier post.

 

All the best

 

Will be thinking of you

 

Zoot

[ANNALH]

Hi Guys,

 

Bit of a mixed result today. Abbey sent a barrister who had a lot to say for himself.

 

The Judge refused Abbeys request to move it to the multi-track. The barrister then said they want to appeal and requested that the main hearing in 2 weeks time is adjourned pending the outcome of the appeal. The Judge agreed on the basis that it may spark lots of other cases and may cost Abbey lots of money/set a precedent etc.. so said it would be passed to a higher judge to decide.

 

The barrister then asked for an order for costs and judge said no need because it has not been moved from small claims track.

 

Thats it really, some other waffle quoting legal case numbers that went over my head, but I am happy with that for now.

[paddym]

Annalh reading your thread i would say 50 - 50 and maybe make abbey rethink their strategy ?

[Les Gunn]

Well done Anna - I would say 50/50, but I wonder how long Abbey will be paying Barrister fees, based on the avalanche of claims that'll be coming...?!

 

[tamadus]

Hi Guys,

 

Bit of a mixed result today. Abbey sent a barrister who had a lot to say for himself.

 

The Judge refused Abbeys request to move it to the multi-track. The barrister then said they want to appeal and requested that the main hearing in 2 weeks time is adjourned pending the outcome of the appeal. The Judge agreed on the basis that it may spark lots of other cases and may cost Abbey lots of money/set a precedent etc.. so said it would be passed to a higher judge to decide.

 

The barrister then asked for an order for costs and judge said no need because it has not been moved from small claims track.

 

Thats it really, some other waffle quoting legal case numbers that went over my head, but I am happy with that for now.

 

That sounds like a fairly good result to me ANNALH. You went to court and took on a barrister and stopped him getting it moved to multi-track. I have no doubts that you will (or should) win the appeal. Lots of other cases are about to start anyway, I already sent a LBA for my claim of just over £2000 so I will be issuing MCOL in just over a week.