YAY! A&L have settled the FULL amount without having to go to court! I used the standard letters and didn't get anywhere, so I composed a final letter before court action of my own, worded in a frank and straightforward manner and they've sent me an agreement to pay on the condition that I don't raise any more charges against them (which I won't because I'm moving my account to HSBC as they do instant account transfers!).
My letter basically said:
"you know you can't win this, all other cases have been won by the claimant, save us all a lot of time and settle now".
AND THEY DID!
I'll upload my letter here in a minute - feel free to use it in the library for other people - it worked for me, it could work for you too!
Complete and full refund in under a month - how good is that? :D