Limitation Act 1980: Let's knock it on the head

[Glenn UK]

The Limitation Act is there to prevent people making frivolous claims, unfortunatly if you can't argue round it, the court won't consider the claim.

 

Im sorry, im not legally trained, as i understand it the Limitations Act protects someone from a frivolous case in certain circustances.

 

The claim of unfair or illageal bank charges is not a matter of contract, so it would seem Sec 32 is applicable. so the bank either made a mistake, was fraudulent or concealed the plaintiffs right of action.

 

If this is the case then why is the use of the banks claim to have fair and legal charges not perverse when in this context?

 

I cannot see how a defense which relies on a bank saying im innocent but in case you think im guilty then the lijitations Act applies.

 

If you have a link or can point to a thread/post which helps me understand Id be pleased to see it.

 

Sorry if Im being dim, Im trying to understand how the law works on this issue and I realsie that it may not be fair or logical, well at least not entirely from a lay viewpoint.

 

cheers

 

Glenn

[alanfromderby]

When you defend a claim it is important to cover every option - just in case one part of your defence falls.

 

In my claim against Bristol & West they are claiming that their charges are lawful, are a true reflection of cost, and I agreed to their terms and conditions. They are also pointing out that part of the claim is over six years old so that part is statute barred.

 

The aim is two-fold, firstly, they are trying to muddy the waters, and perhaps get me to capitulate on part of the claim - thus reducing their liability. Secondly, they are painting a picture that shows that my claim is not only wrong on one point, it is wrong on lots of points.

 

It is all a game of bluff, and intended to unnerve anyone who is unsure of their ground legally. You only have to spend a short amount of time to find posts on this forum where the claimant has received a copy of the Defence from the bank and starts to panic.

 

The bottom line is that they are clutching at straws - they have no case that they can risk taking into court, so they have to try and blind people with legal science just on the off-chance they can get away with a reduced settlement.

[Glenn UK]

Alan

 

i realise that, my argument seems to be logical to me and has impications for the banks defence. I think the point is, is it something worth adding into ones case when presenting at court to try to counter the banks defence should it come to it?

 

LOL listen to me, ive only just sent out SARs but already Im perry mason!

 

Glwnn

[alanfromderby]

I think it is important to use every bit of ammunition that comes to hand.

[paulwlton]

I bet the shredders are working 24-7.

[deemacperth]

The laymans term of a frivilous claim is someone seeking to make the claim to injure the other party rather than recompense themselves. The argument being, if you knew about it and didn't claim within the 6 years, why now?

 

Thats the basic interpretation and unfortunately, if you can't convine the judge of some reason not to apply the statute, then he won't consider the legality of the issue in question. It is statute barred.

[Glenn UK]

LOl but isnt it true to say that the charges were only known to be illegal in april this year, and more specifically i only knew when i joined this website a few weeks ago?

 

So the six years starts from now not when the offence was orignally commissioned.

 

This would be the same if they knowingly stole from your account and hid the theft. The six years begins when you discover or might reasonably have discovered the theft, not from when they started stealing.

 

Convincing the judge he shouldnt apply the statue of limitation may be hard, but it is wroth a go and FWIW from the claims I have seen settled the banks dont seem to be willing to go to court on this matter specifically.

 

As much as we may not have a lot of respect for the banks if it was as clearcut as some seem to say then it would have tested and case law made, they have had ample opportunity dont you think?

 

I dont know much about contract law, but i do know that to underestimate the banks would be a serious flaw in our apprach, they are not stupid and if they could defend a signficant poriton of the potential claims simply by getting the limitations act element proved they would it would save them haggling over every amount more than 6 years old.

 

JMHO

 

Glenn

[maybelline]

The laymans term of a frivilous claim is someone seeking to make the claim to injure the other party rather than recompense themselves. The argument being, if you knew about it and didn't claim within the 6 years, why now?

 

Thats the basic interpretation and unfortunately, if you can't convine the judge of some reason not to apply the statute, then he won't consider the legality of the issue in question. It is statute barred.

 

thanks thats very interesting.

[deemacperth]

No problem.

 

Glenn, that's what we're trying to set out here. There's been a few ideas bandied about as seminole stated, you hit them with more than 1 argument so that there's more chance they'll fall over.

 

Unfortuantley it's a bit hard to prove they deliberately concealed the nature of their charges, so that's why we're looking into mistake and misrepresentation.

 

Don't forget, the more legal arguments you produce, the more the bank has to pay their lawyers in disproving the argument, so you start getting to the point where the bank will just write it off without the argument as a cost saving exercise.

[maybelline]

I personally saw an item on a programme on tv about this before the ruling, and that is when I first approached the bank and they replied, so my claim is a follow up to that.

 

In October 05 I wrote to my bank, stating my belief that the charges 'were disproportianate.. and unfair'.

 

I therefore believe that I brought this to their attention and they replied to me denying this and advising me they had charged me 83 times, I am claiming these charges from the date I brought this to their attention.

 

I believe I discovered the concealment, fraud etc and brought it to their attention under the regs of the Limitation Act.

[SaudiMail]

Can anyone help, the RBS are using the Limitations Act to stop me claiming back charges. They say they haven't charged me anything in the past 6 years. They passed my overdraft on to their debt collecting agency and I'm still paying them £50 month so is the debt still active. Not sure what to do about this one.

[Glenn UK]

SaudiMail

 

Do you know what chagres they applied to your account in the period you are interested in?

 

If you dont then you need to make a formal request for the information called a subject access request (i think).

 

If you have the data then its up to you to decide if you want to claim.

 

As i understand it the limitations act is being used, in my opinion (untrained, argumentative and legally ignorant) it is being misapplied and misinterpreted.

 

The acts is about limiting your right to make a claim after the passage of time in this case six years from when you could reasonably have discovered or did discover the damage.

 

For this to apply it has to be the case that you either knew our could have discovered the fact that the charges were in fact unlawful.

 

The bank could also claim that thier charges were lawful.

 

I understand that some people have claimed and won charges more than 6 years old.

 

If you havent read through the faqs its probably worth having a read and then seeing how that sits with your situation.

 

HTH

 

Glenn

[maybelline]

just pondering some more - so the OFT says the charges are 'unfair', so if not agreed with by banks why arent they challenging OFT ruling, since they seem to be arguing that they didnt know it was unfair before being told so.

[Glenn UK]

First off the OFT hasnt made any law, so its only an opinion until or unless it gets tested in court i believe.

 

so the banks dont need to challenge it.

 

However, clearly the claims are increasing and, as has been said elsewhere, the banks will decide at what point the legal challenge becomes a viable issue bearing in mind they may loose.

 

What is certain in my mind is that this is only an exercise in accounting, when and if the cliams become signficnat in the banks terms, they will challenge legally the claims we are making.

 

The 'when/if' is dependant on how much it wil cost them to challenge versus the potential benifits/drawbacks.

 

JMHO

 

glenn

[Shanks]

Well, I pushed it http://www.consumeractiongroup.co.uk/forum/other-institutions/18630-pushing-6-year-claim.html#post164823 on the basis of 'in for a penny....'

 

and for the moment at least my bank would appear to prefer to settle out of court on this 'for matters of commercial expediancy' of course.

 

Good luck to anyone else who takes this route, although I am sure you won't need it

 

Cheers

[paulwlton]

This page was last updated:

09/20/2006 13:26:33Contract: payments made under a mistake of lawUntil recently, payments made under a mistake of law - such as money paid due to a misunderstanding of what the law was - have not been recoverable. Only payments made under a mistake of fact have been recoverable. The distinction has often been very difficult to discern, bringing the law into disrepute. In Kleinwort Benson, the House of Lords has changed the law, to say that now all payments made under a mistake are recoverable. The distinction between mistakes of law and mistakes of fact has been abolished at a stroke.

Kleinwort Benson involved the recovery of sums arising from local authority interest-swap deals. These financial devices had been used by a number of local authorities for many years as a means of avoiding restrictions on capital expenditure. Their validity was challenged by a local authority auditor and the Court of Appeal held in Hazell that the deals were beyond the powers of the local authorities. Kleinwort Benson had a number of claims against local authorities with which it had entered into interest swap deals. But, as some of the payments had been made more than six years earlier, it seemed that its claims were barred under the Limitation Act 1980. However, there was a possible way to succeed in bringing a claim. Under s32(1)© of the Limitation Act 1980, the limitation period for claims where a mistake has occurred runs from the date the mistake is discovered. Kleinwort Benson therefore claimed that it had made payments to the local authority under the mistaken belief that the interest swap deals were lawful. The Court of Appeal decision in Hazell had 'discovered' the mistake and it was, therefore, entitled to make a claim within six years of that decision.

 

I have been making payments, bank charges, in the mistaken belief that they too were lawful.

In April 2006 (OFT REPORT) i discovered the charges were unlawful.

Could this case be used in court to rely on, still the problem is banks say their charges are fair and reasonable, i'm afraid this issue needs contesting in a higher court, but i think this will be challenged soon.

[Glenn UK]

Paul

 

i didnt have the details you have buts the same as i have been given to understand ie you mistakenly believed the charges were lawful and paid them.

 

Sec 32.1.c applies i believe. it would be useful to have a link to that if you have one, or even better a link to Hazell vs ? Ill see if i can find one too.

 

Glenn

[paulwlton]

Check out LEGAL500COM.

[Glenn UK]

i think this is the link

 

Kleinwort Benson Ltd v. Lincoln City Council Kleinwort; Benson Ltd v. Mayor etc of the London Borough of Southwark and Others Kleinwort; Benson Ltd v. Birmingham City Council Mayor etc of the London Borough of Kensington and Chelsea and Others [1998] UKHL 38; [1999] 2 AC 349; [1998] 4 All ER 513; [1998] 3 WLR 1095 (29th October, 1998)

 

I havent read it all only the introduciton but it looks relevant.

 

If anyone has the time to read it all and correct/reinforce this that would be good.

 

Glenn

[paulwlton]

This case was decided after the Kleinwort benson descision.

 

 

Judgement - Nurdin v. Peacock

[maybelline]

I have read through these, can you extrapolate for me, and will I need these for my case, challenging the use of limitations act as is their defence, I do not consider the date of my claim form to be the date of discovery of unlawful charges.

[Prospero]

The way I read it is that you can claim back everything, right back to the beginning. If the bank or the court contests this, quote Nurdin based on Kleinwort. Tell them that you made the payments believing them to be lawful.

 

The whole basis of our claims is that the charges are unlawful, either as penalties or unfair terms, and this is what we are asking the court to decide. If the court agrees, and also agrees that the bank with its teams of lawyers must have known that the charges were unlawful, then clearly from Nurdin and Section 32(1)c of the Limitations Act 1980 as amended by the Latent Damage Act 1986 you have six years to start your claim from the date you became aware that the charges were unlawful.

 

Whether the long stop of 15 years back applies as in the case of negligence claims is not clear to me. Maybe someone else has a view on this.

[johnhn]

Just read this from start to finish, as I'm STILL trying to work out exactly what I can reclaim, and how.

 

One thing strikes me as odd:

 

Many people here have stated "I paid the charges under the mistaken belief that they were lawful". But...none of us actually have a choice, do we? We don't "pay". The money is simply taken by the bank.

[alanfromderby]

This is a tricky legal issue. You do have what is called the "First Right of Appropriation". Thus, if you have some money going into your account, you have the right to send a notice to the bank before it reaches your account, giving them a list of how you wish it to be spent.

 

You can state that you wish to withdraw it all - and they legally have to adhere to your request. HOWEVER, if you don't chose to use that "First" right, they will then be able to allocate the money within the terms and conditions that you agreed.

 

On that basis, it could be said that you had the option NOT to pay the charges.

 

Clearly the bank will close an account operated in this way very quickly - but I would say that this is the legal argument that would stand if your question was ever to be tested.

 

Hope that helps explain it.

[johnhn]

that's fine, but i doubt it was in my t&c's 17 years ago, so how would i have known?

 

i would also assume that that right could only be exercised if, at the time of paying-in sufficient funds were available (otherwise you're effectively veto-ing an overdraft limit).

 

i.e. if my balance is £750 debit against an agreed overdraft limit of £120, and I have a charge of £150 due to be applied, if I pay in my salary of £750, I can only "assign" £120, and either way it doesn't prevent the bank from removing the £150 from my account - have you ever heard of a bank NOT applying a charge due to insufficient funds?

 

meanwhile, of course, the charges mount up. "luckily", funds always seem to be available to pay those... ...which (oh! what a coincidence!) virtually guarantees i'll be paying them next month, and the month after. it's regrettable of course, but if I don't operate my account responsibly...

 

this is "constructed debt", isn't it?

 

incidentally, my current position is that i am no longer willing (or, technically, financially able) to pay my salary into my account as it will immediately be swallowed by my overdraft, which consists almost entirely of bank charges - i would be left with nothing. I have no means of reducing my overdraft to the point where I can, for example, assign the necessary funds to a loan repayment direct debit...

 

I have been refused an increased overdraft limit of £1000 (due to the effect "informal overdraft requests" have had on my credit score...)I have been offered a managed loan (i.e. buy another even more expensive product from us so you can pay our charges, or feck off) though!

 

sorry for rambling. I can scarcely stop shaking with rage, never mind construct a rational argument.

 

anyway.

 

If you employ a service-provider to provide a service, you will agree a price in advance, based on the cost of providing that service+profit margin. When the work is completed, the service-provider will invoice you.

a)You will then have a period of time within which either to pay the amount of the invoice, or, should some discrepancy between the service provided and amount charged present itself, dispute the invoice. The service-provider would then have the opportunity to claim the amount from you in court.

b)Pay the invoice, and, if some discrepancy between the service provided and amount charged present itself, you will then have the opportunity to claim a sum commensurate with that discrepancy in court.

This means that, even if you have agreed a price in advice for the bank's "service" (i.e. in your original contract), they may unilaterally vary this price, or the work done, at any time, without renegotiation of the contract with you, they do not invoice you for their work (merely presenting you with a receipt, i mean statement), do not give you the opportunity to consider whether or not you accept or dispute the amount charged, and now, of course (arguably) are actively removing all routes to recourse. They simply take the money, and tough luck. They are in the unique position - among service providers - of having direct access to and full control of the funds with which they are paid. "dear account holder, we require payment of...oh, wait a minute, here it is, thanks, we'll just help ourselves. have a nice month".

where's the offer and acceptance? I appreciate that "terms may vary", but where is the fairness in a freewheeling contract where he terms are unilaterally "agreed"?

Just an observation

 

Oh. One more thing to bring us vaguely back on topic. Is a bank account contract a simplo contract, or a contract made by deed?

 

Couple of random-ish quotes from "English Law" for consideration:

 

"If the plaintiff is the victim of fraud or acts under a mistake, the limitation period will not begin to run until the true state of affairs is discovered or should with reasonable diligence have been discovered"

 

"Where there is a current account there is a presumption that the creditor has not appropriated payments to him to any particular item. The major item is a bank current account. Appropriation here is not on a chronological basis, i.e. the first item on the debit side if the account is reduced by the first item on the credit side: a first in first out principle."

 

Re:The Unfair Contract Terms Act 1977 - "The burden of proving that the clause is reasonable lies upon the pary claiming that it is - usually B, the person in business"

 

"There is no general rule of law which states that a fair price must be paid in all transactions and some unfair contracts will be held binding provided the parties were of equal bargaining strength."

 

"The court will, in what it regards as an appropriate case, set aside a contract which is affected by improper pressure by one party or where there is inequality of bargaining power".

 

thoughts? this is making my brain hurt.