Baronstoneybroke v Lloyds : settlement offered

[Spiceskull]

There is a wealth of information and reports to rely on, not least of which is the OFT statement of April 5th. Don't forget, the ONLY people who disagree with it are the banks, and whilst it should not be the mainstay of any claim, it, like Rbrears 'service' argument , are parts of the counter we can all use.

 

It is a case of analysing the bank's response, and using the appropriate elements to counter their arguments. It is a win-win situation for us, as everytime the bank comes up with a new argument, we all work towards a new rebuttal for all. Pretty soon the banks are going to run out of excuses, and they will start having to be truthful instead...

[rbrears]

I fully accept that there is the SOGAS argument. And of course we should be forearmed with all possible alternatives. Whilst I accept it is an alternative I think it is much weaker.

[dinghy]

There is a wealth of information and reports to rely on, not least of which is the OFT statement of April 5th. Don't forget, the ONLY people who disagree with it are the banks, and whilst it should not be the mainstay of any claim, it, like Rbrears 'service' argument , are parts of the counter we can all use.

 

True, however as I've stated, whilst Rbrears 'service' argument is good, it fails to respond to LTSB's point 6 and is therefore IMHO incomplete in respect of a response to this defence. (No offence intended Rbrears but we are all learning together and I may be wrong myself... )

 

It is a case of analysing the bank's response, and using the appropriate elements to counter their arguments. It is a win-win situation for us, as everytime the bank comes up with a new argument, we all work towards a new rebuttal for all. Pretty soon the banks are going to run out of excuses, and they will start having to be truthful instead...

 

I'll drink to that (even at this time of the morning !)

[Spiceskull]

True, however as I've stated, whilst Rbrears 'service' argument is good, it fails to respond to LTSB's point 6 and is therefore IMHO incomplete in respect of a response to this defence.

I disagree - if you take an holistic view of Rbrears letter as a whole, point 6 is the defence that is shot down most of all. There is no single answer to counter point 6, rather a step by step proof that the bank is wrong on this point.

[dinghy]

To some extent that is true... But if you take an holistic view of their defence, which is in essence "this is a service charge and as such is fair & reasonable" I don't think that it responds to the second part of that argument ?

 

I guess we just ain't going to agree on this ! But IMHO we need to be comprehensive in these attacks... (or these defences of their defences ) and not purely focus on what we believe to be the strongest element...

[lee6370]

Does the SOGAS arguement not force the banks to reveal the costings of the charges?

 

Point 6 states it's a fair and reasonable charge, inorder to prove this point do they not need to tell us what the cost is and the profit margin?

[rbrears]

First they have to prove what services they provided AND that they were part of the contract AND that they are entilted to charge for them AND that these contratual provisions were made clear to the consumer. They just will not be able to do this (well not on my bank's T&Cs anyway).

 

IF they can do this only THEN do we argue about whether the price is reasonable. Tbh if they get over the above hurdles then they will probably win on the price argument. The costs are set out in the T&Cs and the T&Cs provide for the prioce to be changed from time to time - if a court agrees that they are services I don't see the scope for a section 15 SOGAS argument succeeding.

[dinghy]

First they have to prove what services they provided AND that they were part of the contract AND that they are entilted to charge for them AND that these contratual provisions were made clear to the consumer. They just will not be able to do this (well not on my bank's T&Cs anyway).

 

Not sure I entirely agree with this (on the history of this thread perhaps not entirely surprising ! ) Once (/if) they prove the services are part of the contract I would have thought that is prima facie conclusive they are entitled to charge... Furthermore I'm not entirely sure that these contractual provision need to be made 'clear' to the consumer... Unless they are a particularly 'onerous' clause included by reference(In which case Dennings infamous red ink/red hand may be apropriate)

 

IF they can do this only THEN do we argue about whether the price is reasonable. Tbh if they get over the above hurdles then they will probably win on the price argument. The costs are set out in the T&Cs and the T&Cs provide for the prioce to be changed from time to time - if a court agrees that they are services I don't see the scope for a section 15 SOGAS argument succeeding.

 

In this respect it all really depends on what they argue to be the actual service... If it is the simple act of stopping or allowing a dd (or whatever the charge is for) then an argument I've seen elsewhere is the business account charge for a dd / cheque etc gives them something like a 3000% mark-up (presuming the cost for paying and stopping are similar) clearly unreasonable.

The banks would also need to prove their costs and their mark-up are within the reasonable bracket (whatever that may be - probably between 50-150%) which is something, certainly up to now they don't want to do, due to 'commercial sensitivity' or IMO due to the fact that they can't make out this defence...

 

HOWEVER, having read the above defence, they may argue that it's not a penalty per se but a withdrawel of a benefit... In which case it's then down to their costs of running the whole account... A slightly different ball-game. One I'm not sure at this moment in time how to attack...

[rbrears]

We could discuss it all day. No-one in legal practice talks about Denning anymore (which is a shame since he was such an interesting chap) Thats the realm of undergraduate law students.

 

In a consumer contract uncertainty will always be construed in favour of the consumer. My own bank's T&Cs are not clear about the services provided, or whether the charges relate to a service and the uncertainty will and should be resolved in my favour.

 

If the price for a service is agreed in the contract section 15 SOGAS has no application and there will be no discussion about mark-ups or a "reasonable bracket". Looking at the threads on this subject the arguments against the service argument always morph into arguments relevant to penalty charges and not to SOGAS.

 

In reality the whole thing will stand or fall on succeeding in arguing that the charges are penalties and that the bank's description of them as service charges is merely an attempt to disguise those penalties.

[Spiceskull]

In reality the whole thing will stand or fall on succeeding in arguing that the charges are penalties and that the bank's description of them as service charges is merely an attempt to disguise those penalties.

Very true, and the whole point of the small claims court is to settle disputes quickly, efficiently and with the minimum of fuss.

 

Indeed, the small claims court is not concerned with legalese...if the bank's Ts&Cs/Contract terms are unclear, or it is apparent to the judge that they are not clear to the consumer, I would imagine that they would be compelled to offer a simpler explanation.

 

This, of course, would put the bank in the position that they would need to explain in plain English, with facts and figures to justify the explanation...which of course they would be more than willing to do...

[dinghy]

We could discuss it all day.

 

true ! Just want to ensure that everyone is fully informed.

 

No-one in legal practice talks about Denning anymore Thats the realm of undergraduate law students.

 

I know but i) I like the imagery of that particular quote... ii) I am an undergraduate law student ! (& Denning is one of bains of an llb students life !) iii) I just like the imagery !

So are you in legal practice ?

 

In a consumer contract uncertainty will always be construed in favour of the consumer. My own bank's T&Cs are not clear about the services provided, or whether the charges relate to a service and the uncertainty will and should be resolved in my favour.

 

Ok conceded however there is a difference between certainty and clarity

 

If the price for a service is agreed in the contract section 15 SOGAS has no application and there will be no discussion about mark-ups or a "reasonable bracket".

 

In reality the whole thing will stand or fall on succeeding in arguing that the charges are penalties and that the bank's description of them as service charges is merely an attempt to disguise those penalties.

 

TBH I'm not entirely clued up on SOGAS:oops: so (for the moment at least ) I'll have to defer to your better knowledge... I just knew that that was an argument produced by others... Perhaps should have cribbed on that a little more !

[lee6370]

This thread is helping a lot of poeple, so lets not let things get to confusing.

 

At the end of the day the bank has to prove it's providing a service, and given the amount of evidence that it a breach of contract we're being charged for this is no small task on their part.

 

After all it's not just the letters and emails from the nobodys at LLoyds that have stated the charges are for failing to keep to the terms and conditions, Mr Eric Daniels, Group Chief Executive of Lloyds TSB, himself refers to penalty charges several times in his evidence to the Treasury Committee.

[dinghy]

Indeed, the small claims court is not concerned with legalese...

 

I'd be interested to see anything that justifies that statement...

[Spiceskull]

I'd be interested to see anything that justifies that statement...

Maybe legalese is the wrong word to use - what I meant was that a Judge would not look favourably on the 'big, well funded' party bamboozling the smaller, litigant in person, with lots of legal and contract jargon.

 

Your average layman understands plain and simple English, and I would expect the Judge to compel the bank to offer explanations in this fashion...

[Robertxc]

I'd be interested to see anything that justifies that statement...

The small claims court is intended for lay people with no knowledge of the law. The whole point is to give the common man access to the legal system without the requirement to be represented by a lawyer. Therefore, by definition the small claims court is far more concerned with the facts of the matter, than having all the legalese in perfect order. There have been numerous occassions when I've gone to court with no notes or written materials at all, and simpy stated my case to the sheriff (much to the irritation of the other side). In fact, the sheriff will often go to quite great lengths in talking to a party litigant to make sure he/she understands their case correctly.

 

With regard to 'provision of service' arguement, is there a case for saying that if a breach of contract occurs (i.e. bounced DD), then that breach is by definition no longer part of the contract, therefore any provision of service which the bank provides to rectify the situation should in fact be governed by a seperate contract? This is obviously wild specualtion.

[Spiceskull]

With regard to 'provision of service' arguement, is there a case for saying that if a breach of contract occurs (i.e. bounced DD), then that breach is by definition no longer part of the contract, therefore any provision of service which the bank provides to rectify the situation should in fact be governed by a seperate contract? This is obviously wild specualtion.

Wow - are you a member of a dangerous sports club? That is so out of the boundary as to beggar belief...what an amazing angle to try...

[dinghy]

The small claims court is intended for lay people with no knowledge of the law. The whole point is to give the common man access to the legal system without the requirement to be represented by a lawyer. Therefore, by definition the small claims court is far more concerned with the facts of the matter, than having all the legalese in perfect order. There have been numerous occassions when I've gone to court with no notes or written materials at all, and simpy stated my case to the sheriff (much to the irritation of the other side). In fact, the sheriff will often go to quite great lengths in talking to a party litigant to make sure he/she understands their case correctly.

 

Whilst I wouldn't dispute that the small claims court is designed to be more amenable to the litigant in person and much brevity is allowed in consideration of that fact (as your own cases prove) I think it is a little disengenious to suggest that they are not concerned with legalese... They still quite clearly have to follow the law otherwise the case can end up in the appeals courts which in turn puts a huge stain on a judges copybook and may prevent/slow their own ascent to the higher courts...

[thecornflake]

I've made quite a few notes against the service agrument, as I know I will up against it when I claim against my bank (NW). I have to agree the Lloyds defence is the best seen so far and does need some thought to successfully get round it.

 

To clarify some points on the SOGAS act -

"where the price of a service is not fixed at the time the contract is made, a reasonable price will be implied"

 

Although the price of charges is indeed agreed when you first take out an account, this argument coul dbe used when the bank has since changed their charges. In this case it could come under the Sale of Goods act as the agreed fee would no longer be relevant and it could be argued that the fee, being no longer part of the contract, must be determined by s.15 of the act relating to reasonableness.

 

The specific workding of the UTCCR 1999 is -

 

"5. - (1) 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."

 

This of course is widely open to interpretation and I'm not sure if it could be used or not.

 

To further complicate things and provoke more unecessary legal discussion (mainly because I'm bored) you could also consider use of Section 25(2)(d0 of the Consumer Credit Act covering 'unfair or improper business practice'. This type of unfair practice can be a result of -

- Debtors are led or allowed to believe that they are legally liable to pay such charges where this is not the case.

- Collection charges provided for in the credit agreement are levied at an unreasonable amount and/or are disproportionate to the main debt

 

The second point is of course specifically worded to apply to collection charges and I don't think this would relate to the ones we are talking about.

 

Oh, and I tried to find a legal definition of 'service' but came up with several different ones. The most useful is -

 

"service n. 1) paid work by another person, either by contract or as an employee. "Personal services" is work that is either unique (such as an artist or actor) or based on a person's particular relationship to employer (such as a butler, nanny, traveling companion or live-in health care giver). 2) the domestic activities of a wife, including the marital relationship (consortium), are legally considered "services" for which a deprived husband may sue a person who has caused injury to his wife. 3) the official delivery of legal documents ("service of process") such as a summons, subpena, complaint, order to show cause (order to appear to show reasons why a judge should not make a particular order), writ (court order), or notice to quit the premises, as well as delivery by mail or in person of documents to opposing attorneys or parties, such as answers, motions, points and authorities, demands and responses."

(Taken from http://legal-dictionary.thefreedictionary.com/service)

 

If this could be used it would be great as it specifically mentions the work being carried out by a person. As the charges are automated this would be a very good argument against the service, however several other definitions have not mentioned this point.

 

I think in summary the best option is to argue against it being a service, and the bank having cloaked penalty charges as service fees. This is the most obvious conclusion that any normal person would reach and in small claims it should work well. With the backing of the workding within the OFT ruling and RBREARS contributions to this thread I think it is the best way forward.

 

...and that's my lunch break gone...;-)

[Spiceskull]

...and that's my lunch break gone...

Ach...there are always better thing to do than eat in your lunch break...

[dinghy]

That is a fantastic post !

 

My congratulations and gratification goes out to you....

 

Have an e-beer from me...

[lee6370]

Just a quick question.

 

Has anyone phoned the solicitors and said "got your defence, are you having a laugh?"

 

and if not what do you think will happen if i do?

[Movingon]

Personally I would not play "fast and loose" with the legal system, which is now in full sway. Let the Judge ask them if they're having a laugh.

[Baronstoneybroke]

I have received my allocation paper (N149). I am hopelesss at paperwork so please help me with this stage. On page 3 it asks for Other information (what will help the judge etc.) What sort of thing should I put in there?

[lookinforinfo]

Let's assume I have a £500 overdraft and I am on it, with a £30 d/d from

the water board pending a decision by the bank.

 

If they pay it, then I can concede that they have performed a service. They have

increased my overdraft, prevented me from embarassment with the water board,

and allowed me to conform to the w/b's T&C's. Mind you, I have paid through the nose for it as by the end of the month that transaction alone will have put me up

to almost £600 o/d depending on which bank is involved.

 

If they don't pay it- what service have they provided me? They haven't prevented

me from owing more, since they will charge me £25 plus I still owe the Water board

£30. They haven't saved me from embarassment, in fact they have added to it

since I am now in breach of the W/B's T&C's as well as the banks'. The only service

I can see is that they have returned my d/d to the receiving bank-a letter, an

envelope and a stamp. Which wasn't what I wanted. For this they charge £25?

 

 

If they now claim it is a service, what is the service they provide and when was

it introduced? WE will require the T&C booklet where it describes these charges

as being a "service" and the date that booklet was sent out to their customers.

And an explanation as to their standard letters for unauthorized charges never

including the term.

[ukdickie31]

I must say this is a fantastic thread. So informative.

 

Just popped along to the LTSB web site.. Charges explaines as follows..

 

**************************************************************

 

If you make a mistake

We understand that everyone can make mistakes from time to time. This is why we won’t charge you fees the first day you go overdrawn without agreement, as long as you haven't done so in the previous 12 months.

 

If you go overdrawn without agreeing this with us

We charge a higher rate of interest for unauthorised borrowing and we display this rate in all our branches, and on our personal overdraft rates. We will also charge you for any unauthorised borrowing; details are in the following table. These will be charged to your account monthly.

 

Overdraft excess fee Charges

We charge this when you go overdrawn by £10 or more above any agreed limit, or by £10 or more without any agreed limit. We will charge this fee again on each day we make a payment for you that increases your unauthorised overdraft by £10 or more.

£30 a day (maximum of 3 charges in any one monthly charging period - maximum of £90)

 

Returned item fee Charges

You'll be charged this fee whenever there is not enough money in your account to make a payment, such as direct debit, cheque or standing order.

£35

 

 

We will write to you every time we are unable to pay an item, or the first time you go overdrawn by £10 or more without agreement. We use the balance on your account at the start of the day* to make decisions on whether or not to pay cheques and other items presented for payment that day. Please make sure you have enough cleared funds in your account at the close of business the day before the payment is due to cover any payments that you wish to make.

 

**************************************************************

 

I can't see the word SERVICE at all !

 

 

 

 

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