Contractual Interest - Precedent - LOST

[steven4064]

One of the problems is that 'CI' is not alwasy used to mean the same thing.

 

What is clear (at least to me) us that you can claim any interest the bank charged you on their charges -so for a current accout that would be the proportion of any overdraft interest attributable to the unlawful charges. For a credit card it is compound interest at their normal APR (this could be called 'CI')

 

Then there is s69 interest. For current accounts, you can add it to every charge and every interest payment you made on the charges from the date that 'payment' was made. ('payment' is in quotes because what I said applies even if the account was overdrawn and you didn't 'pay' anything - this is another story)

 

For a credit card, you only claim it if for some reason your 'CI' calculation stops short in time - in our case because the card account was closed - we claimed CI up until that point and s69 thereafter. If the card account is still open, claim the CI up to the point of judgement because that is what they have charged and continue to charge you.

 

The argument over CI on current accounts is whether there is any route to claim compound/contractual (eg unauthorised borrowing rate) interest instead of just the overdraft interest we were actually charged. The idea that we should get CI becasue the unlawful bank charges are effectively the bank taking out an unathorised loan from us has been knocked on the head. So has the idea that we should get CI because the bank has been using the money they took unlawfully from us to make money for themselves.

 

There is another possible route which we are exploring at the moment that the banks have abused there position of trust and therefore we can claim CI as compensation. THis argument is unproven and we are still thinking round it - see the link in the post above.

[jubaxt]

thanks ur a star u are.lol

[newbody]

Can definetley claim CI at unauthorised rate under M&R F&B is definetley dead The CI element of my claim was thrown out today on that argument as the Judge put it the term is not in the contract so you cannot do it to them but they can to you as it is in the contract

[steven4064]

This not a surprise - there was a test case the other week

[newbody]

wasnt a surprise to me either but as case had been geared to it had to continue through with it

[steven4064]

I understand - did you get your charges back though?

[newbody]

28 days to pay or goes to trial judge reckons should be settled by then

[chezt]

28 days to pay or goes to trial judge reckons should be settled by then

 

Did you get awarded any interest on top of the charges?

[Glenn UK]

This not a surprise - there was a test case the other week

 

Really?

 

i thought there was a case in a county court where the claimant lost the argument he put in favour of CI. As yet I am not sure there has been anything published in terms of a court reprt of transcript to allow the issues to be dissected.

 

As much as it has repurcussions it doesnt make a test case, nor set a precedent.

 

Or has there been a case in a higher court that i have missed?

 

Glenn

[GaryH]

It was a High Court judgement - so a precedent. The summary was reproduced earlier in this thread, I believe, if not PM me your e-mail address if you like and I'll send it to you.

 

Mind you, even before that there were pretty solid authorities on the limited discretion the courts had to imply terms in contracts, and in what situations. Unfortunately fairness is not one of them. I think Davy Offshore v Emerald Field Contracting was the "settled law" referred to in the Halliday judgement, authough I'm not 100% sure. 5 Factors necessary before a term can be implied are;

(1) it must be reasonable and equitable;

(2) it must be necessary to give business efficacy to the contract, so no term will be implied if the contract is effective without it;

(3) it must be so obvious that `it goes without saying';

(4) it must be capable of clear expression;

(5) it must not contradict any express term of the contract.

[GaryH]

Yes here - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/97691-contractual-interest-precedent-lost-5.html#post927041

 

He lost in the County Court first then appealed.

[Fox Mulder]

I just received a third offer letter from DG in relation to my claim against First Direct, offering just short of the basic amount claimed - that is, minus any form of interest, CI or the 8 per cent. In the letter, though, DG acknowledges,

 

"At best you are only entitled to the statutory rate of 8%"

 

So they're definitely, unsurprisingly, wise to the recent judgement. They point out that,

 

"You are claiming interest at the rate of 18.7% on the basis of mutuality and reciprocity..... no legal principle upon which you are entitled to claim interest on that basis...."

 

So. What do I do now? I am going to reject their offer because it is LESS than the basic amount taken without any interest at all. The Court would surely recognise that the recent judgement was made against CI SINCE my claim was submitted, and that previous claims were settled WITH CI and so I was acting on currently available knowledge and previous evidence in claims. So the Court would - tell me if wrong - likely just go for the 8 per cent on that basis. So I would still get more from going all the way to Court than what DG is set on offering me as a maximum (three times they've offered the same amount).

 

But in my rejection letter to DG do I reference this precedent case, that I know of it and on that basis state I am willing to accept settlement at 8 per cent interest? It's a fair whack, several hundreds more, than they've put on the table to date.

 

If someone could help out in how to respond to DG with regard to ongoing claims that have in the past referenced CI and now find they can't claim CI, I for one would be hugely appreciative. Thank you.

 

I won't reply to DG until I've got some sound advice from someone here, so will keep checking back. So please - anyone? I should point out that in addition to Draft Order for Directions, I also requested with my AQ that the defence be struck out and may yet find the judge accedes to that.

[Glenn UK]

Yes here - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/97691-contractual-interest-precedent-lost-5.html#post927041

 

He lost in the County Court first then appealed.

 

Gary

 

Thanks for that, do you know if the judgement has been published in full?

 

Glenn

 

PS ill do a google on it anyway and reprt back if it has.

[GaryH]

I'm not sure that it has tbh, at least not that I have seen. The OP is still around, I think, so it may be worth asking him for a copy. I'd certainly be interested to see the full judgement too.

[Glenn UK]

Somehting that occurs to me, is that the claim for CI under M&R and more recently the revised F&B has always been of dubious legal status.

 

The advice was always to maintain a claim in tact and not to accept any partial settlements.

 

In this case the claimant had already recevied and settled the claim with the execption of CI.

 

The message must be to those who have submitted claims and being told to bogg off is dont accept any partial settlements.

 

If you can get the case listed for a hearing then the bank are morelikley to settle than not, even at the CI, the alternative is for them to risk arguing in court over the charges and not just the CI.

 

This of course is not for the faint hearted and does of course carry a risk.

 

If you are not up for it, accept the Sec 69 interest or dont claim CI in the first place.

[newbody]

Mine was intact and it was at the allocation/case management hearing where judge dudley ruled out the CI element under M&R F&B so unfortunatley it wont get to a full hearing on that part

[GaryH]

In this case, I believe that the OP was refunded the charges against his wishes then the bank successfully applied to strike out the rest - which he subsequently appealed against hence the High Court case.

[Glenn UK]

LOL @ Newbody

 

i know lifes a bitch isnt it, its as well i had AoP in my claim because my claim for more than sec69 is ongoing.

 

FWIW Abbey did the same to me last time, hence using a different approach this time.

 

Not all banks do the hearing thing though, i guess primarily becuase they have to stump up for counsel or a solicitor for the day and the cost benifits are usually pretty small. abbey have taken a different view.

 

Glenn

[Glenn UK]

Interesting Gary, i guess its aproblem where an account is still active, in my case my accounts are closed so its not so easy for the banks to do that.

 

Of course not everyone is in the same position and of course there are ways or accepting whilse effectivley rejecting the payment. whether the court would be happy or not would of course be up to the judge bearing in mind the circumstances of the case.

 

FWIW it is important that claimants dont lose site of the fact that the overall objective is to get a settlement they are happy with, to to get into court (unless their mad of course).

 

The cl;aiming process is in part a kind of game and how youy play will affect your chances. If you play and end up in court imho your chances are much reduced of getting a good result simply because the opposition has the upper hand, they have been playing for longer and have better resources than us generally.

 

glenn

[voyager9]

Quote:

Originally Posted by voyager9

it looks like i may get c.i against hbos because they have failed to file a defence even though they achnowledged, so in the morning am going for default judgement which will hopefully mean i get it by default .

 

i was going to settle for charges + 8% but hell if they cant be bothered defending then why not.

 

voyager9

 

 

You'll probably find they will file the defence late anyway and it will be accepted.

 

hi everyone well default judge has been granted together with c.i

and they acknowledged so they cant plead non receipt of claim.

 

voyager9

 

:grin: :grin: :grin: :grin:

[newbody]

LOL @ Newbody

 

i know lifes a bitch isnt it,

 

Glenn

aint it just but at least had ago would have been more peeved if i hadnt had tried and it turnt out to be successful still such is life and at least still looks like getting charges back which is what i was primairly after the rest was a bonus so means only 2 week in folrida instaed of a year lol

 

And well done Voyager

[Glenn UK]

Newbody

 

I agree with yuo its best to try and i am sure that we will find a route which stops the unjsut enrichement of the banks, the top 4 high street banks are estimated to have made 4.5Billion from unlawful charges last year.

 

Seems really unjust that they get to keep it.

 

JMHO

 

Glenn

[GaryH]

Newbody

 

I agree with yuo its best to try and i am sure that we will find a route which stops the unjsut enrichement of the banks, the top 4 high street banks are estimated to have made 4.5Billion from unlawful charges last year.

 

Seems really unjust that they get to keep it.

Absolutely. Even if they paid every single charge they ever took back with added 8% interest then the profit from re-investing the sums whilst in their possession would probably still amount to billions.

 

It seems to be recognised that law courts should have discretion to grant compound in certain circumstances, and that its unfair that they don't. The Law Commission have recommended a change in the law to grant courts the jurisdiction - in fact, have you read their paper on compound interest? If not let me know and I'll find it. Its quite interesting.

[chezt]

I just received a third offer letter from DG in relation to my claim against First Direct, offering just short of the basic amount claimed - that is, minus any form of interest, CI or the 8 per cent. In the letter, though, DG acknowledges,

 

"At best you are only entitled to the statutory rate of 8%"

 

So they're definitely, unsurprisingly, wise to the recent judgement. They point out that,

 

"You are claiming interest at the rate of 18.7% on the basis of mutuality and reciprocity..... no legal principle upon which you are entitled to claim interest on that basis...."

 

So. What do I do now? I am going to reject their offer because it is LESS than the basic amount taken without any interest at all. The Court would surely recognise that the recent judgement was made against CI SINCE my claim was submitted, and that previous claims were settled WITH CI and so I was acting on currently available knowledge and previous evidence in claims. So the Court would - tell me if wrong - likely just go for the 8 per cent on that basis. So I would still get more from going all the way to Court than what DG is set on offering me as a maximum (three times they've offered the same amount).

 

But in my rejection letter to DG do I reference this precedent case, that I know of it and on that basis state I am willing to accept settlement at 8 per cent interest? It's a fair whack, several hundreds more, than they've put on the table to date.

 

If someone could help out in how to respond to DG with regard to ongoing claims that have in the past referenced CI and now find they can't claim CI, I for one would be hugely appreciative. Thank you.

 

I won't reply to DG until I've got some sound advice from someone here, so will keep checking back. So please - anyone? I should point out that in addition to Draft Order for Directions, I also requested with my AQ that the defence be struck out and may yet find the judge accedes to that.

Anyone got any comments on FoxMulder's Q ... I'd be interested in the comments as I think I may be finding myself in the same situation shortly!

[newbody]

the trouble is the claims settled prior were not by the courts decree but by way of goodwill i believe in which case no precedent is set as has now happened against CI under M&R but you can still argue for COMPOUNDED INTEREST in the stat 8% as Sec 69 does not rule it out as a possibility that small claims can award compound over simple interest even at 8% it can make a small difference

the supreme courts act 1981 does not specifically exclude the award of compound interest at common law claims Rather it recognises that the court can award simple interest and the courts have the right to award compound interest to appropriate claims It would be down to the defendant to prove if they had borrowed the same sum of money from another financial institution they would have only paid simple interest then it is only fair that the defendant pays simple interest not compound. However the interest awarded in commercial transactions would normally be compounded Sempra Metals Ltd Vs Irc2005 ewca civ 389, 2005 3 wlr 521 539 para 44 (Chadwick L.J)