Case Management Conference 13th Oct. 06

[dolfos]

It was not contractual interest. Funny though, the barister suggested that it could have been and his argument would not have been so effective. I supported that view of reciprocity to the judge and he just smiled to himself as though that was a very weak idea.

 

Anyway, I still have the case to settle and my other remaining NatWest claim. So its back to the drawing board trying to figure out a more accurate way to calculate interest. And get the words together to argue whatever position I take. Not to convince a judge but to get a water tight arguement to enforce settlement prior to a hearing. I think we can be sure the banks wont tell us the figure, but they will probably keep making offers.

 

Sorry if making you repeat yourself I am trying to get my head straight on this. Does the above mean the barrister would have found it very hard to argue against your interest rate if it had been the contractual rate and you had not compounded it. I have just sent off a claim against HSBC using the compounded spreadsheet which has bumped my claim up to 40K (on 25K of charges over three years) so I am very much eager to see what arguments you can come up for it.

You have done so well and seem to have the ball fully in your court!

well done!

[zootscoot]

For the legal basis for compound interest check out the following case:

 

House of Lords - Westdeutsche Landesbank Girozentrale v. Islington London Borough Council

[njtkc]

ZOOTSCOOT -read your house of lords westdeutsche.........islington council

 

not a legal eagle I'm afraid,,,,,, read the majority of it, got the bones of it I think but couldn't get to a conclusion, lots of jargon debate but does it support compound interest or is it against it.

[zootscoot]

The basic jist is that you can claim compound interest if there exists a trust (not applicable in our claims) or if the claims are based in the law of restitution for unjust enrichment (applicable to our claims) where the defndant is a commercial lender.

 

The reasoning for imposing compound interest is that where the defendant is a commercial lender it can be assumed that they will relend your money and charge compound interest on it. Therefore if they were not obliged to pay compound interest they would be unjustly enriched by profiting from the use of your money.

 

On this basis I would say that you could claim the contractual rate compounded, but I don't think the courts would accept the unauthorised rate compounded as it is a big assumption to make that all of your money would be applied to fund unauthorised lending.

 

Hope this helps

 

Zoot

[doryphor]

In the eventuality that you put forth a claim where you specified the unauthorised rate, which of the following is the more likely:

 

a) that judgement would fall back to the authorised compounded rate

b) to the 8% s.69

or

c) that the case would be thrown out, or whatever the legal jargon is for meaning you would lose lol.

(Not a legal eagle - not even a legal sparrow!)

[zootscoot]

Depends on whether you put in your particulars of claim an alternative for s.8 interest. If you did the court is likely to fall back on the s.8 if not you could lose the interest altogether, but not the charges. Its always best to put in the alternative, as compound interest is an equitable remedy and therefore lies with the discretion of the judge. In other words it is always open for the judge to refuse it.

[doryphor]

Cool - not actually got to the court stage on either of my current current account claims, but will bear that in mind.

 

If I may pick your brains zootscoot, as you seem particularly knowledgeable! With regards to the compound interest in claims, do you know how this works (if at all) with regards to credit/store card claims?

 

Cheers

 

(Apologies for the temporary thread hijacking!!)

[dolfos]

For the legal basis for compound interest check out the following case:

 

House of Lords - Westdeutsche Landesbank Girozentrale v. Islington London Borough Council

 

thankyou this makes things much clearer

[Glenn UK]

Depends on whether you put in your particulars of claim an alternative for s.8 interest. If you did the court is likely to fall back on the s.8 if not you could lose the interest altogether, but not the charges. Its always best to put in the alternative, as compound interest is an equitable remedy and therefore lies with the discretion of the judge. In other words it is always open for the judge to refuse it.

 

For a point of clarification Zoot, is it for the claimant to prove they're entitled to claim it (compound interest that is) and therefore not discretionary as such?

 

I understand that is in effect discretionary because if you don't prove it the judge wont allow it, but its a slightly different spin and places the onus more on the claimant.

 

Glenn

[zootscoot]

Equitable remedies are always discretionary even if you prove your case the judge does not have to grant it. It depends on whether the judge thinks that justice demands it. Its a reasonable assuption the banks will relend the money and will therefore profit from its unlawful activity, in which case the justice will be on stripping the defendant of that profit.

[Glenn UK]

Zoot thanks for that.

 

I was also thinking about the principle of the issue and what to claim.

 

Not withstanding the discretionary nature of the interest claim, does the fact that the way the money was taken from the claimant impact on the courts views in any way?

 

It seems to me that from a lay viewpoint that the excess o/d rate is rate to choose from being comparable with what the banks have done, as least in concept.

 

With regards to the unjust enrichment argument I can see entirely where your coming from, although one could argue that the bank wants your money entirely for that purpose since its where they make the most money in lending terms anyway.

 

Clearly they would rather lend at the highest rates rather than at the lowest rates particularly where the risks are relatively low.

 

Lending money to domestic customers in our society by way of excess o/d cannot be considered high risk investment in my view at least not when compared to some investment activities that large financial organisations consider, just think of Bering's or was it Barings?

 

JMHO

 

Glenn

[zootscoot]

Hi Glenn,

 

I think it would be quite difficult making the unauthorised rate stick because the banks will argue that they are far more likely to relend it as a loan or mortgage with much lower rates of interest. The banks do not generally allow people to operate their accounts in unauthorised rate for any length of time.

 

Also as it is an equitable remedy the equitable maxims apply ' he who comes to equity must do equity' and the 'clean hands' principle. Which basically means to rely on an equitable remedy you must be seen to act fairly and reasonably in the conduct of your case. Don't forget we are already ondodgy ground here as we are relying on our own breach of contract to obtain a remedy. To go for unauthorised rate may be seen by the court as being too greedy and a step too far to do what is necessary in order to achieve justice.

 

Hope this helps

 

Zoot

[Glenn UK]

Zoot

 

Thanks for that, although its an interesting dilema you raise, in my view we are not relying on our breach to claim the equity although I am sure you are right from a legal viewpoint.

 

We are reacting to an unlawful activity by the banks, cleary if their actions were lawful there would be no claim. Its not the breach that causes the claim simply the unlawfulness of their penalties.

 

This discussion does make me think about the way i have phrased my claims and makes me wonder if i should have done something different?

 

Still no point in crying over spilt milk if it gets to court i have to argue wherhe i can claim contractual rates at all, let alone which rate to charge.

 

Glenn

[Down and out]

. Martyn Lewis has well and truly sealed the banks fate today. County Courts will have to start recruiting.

 

.

 

 

I'm interested to know just what has Martin Lewis got to do with this?

[bill-k]

I'm interested to know just what has Martin Lewis got to do with this?

I don't know about Haydn, but if it weren't for Martin Lewis appearing on TV., I would not have known about the CAG/BAG forums, Down&Out. I suspect that Haydn & myself are amongst a huge number of people who would have been morbidly ignorant of our Right to Reclaim.

 

Dare I ask - how did you find out about CAG, yourself ?

 

It may well be that if somebody told you, you could follow the trail back to Martin Lewis !!!

 

Bill.

[nathal]

aa

[Down and out]

I don't know about Haydn, but if it weren't for Martin Lewis appearing on TV., I would not have known about the CAG/BAG forums, Down&Out. I suspect that Haydn & myself are amongst a huge number of people who would have been morbidly ignorant of our Right to Reclaim.

 

Dare I ask - how did you find out about CAG, yourself ?

 

It may well be that if somebody told you, you could follow the trail back to Martin Lewis !!!

 

Bill.

 

Someone did tell me but it was long before Martin Lewis found about the site and started to publicise it on his site.

 

However, I do agree that Martin Lewis has sent a lot of people here but I have noticed that an awful lot of people seem to think that the bank charges campaign was Martin Lewis' idea.

It definitely wasn't.

[Its WAR]

Lets get back to business. CMC ORDER has now arrived. I have already recovered the bank charges back and the CMC has therefore: 1) struck out that portion of my claim. 2) NatWests application to strike out the balance is refused. 3) The CMC has allowed the claim to continue in respect to the interest and section 69 interest. 4) I have permission to revise and or further particularise the schedule of interest and can reserve docs to NatWest. 5) Natwest can serve an amended defence. 6) The claim is transferred back to Taunton.

 

This means I can raise fresh argument to support my claim for interest and could even approach the interest from a different angle. So its back to the drawing board to recalculate and introduce a whole set of new arguments.

 

Also, my other Natwest claim is returned to Taunton too. (I had accepted a part payment subject to the case continuing but Natwest have not sent the cheque). It will be interesting to see which case gets the sooner hearing date.

[gizmo111]

Lets get back to business. CMC ORDER has now arrived. I have already recovered the bank charges back and the CMC has therefore: 1) struck out that portion of my claim. 2) NatWests application to strike out the balance is refused. 3) The CMC has allowed the claim to continue in respect to the interest and section 69 interest. 4) I have permission to revise and or further particularise the schedule of interest and can reserve docs to NatWest. 5) Natwest can serve an amended defence. 6) The claim is transferred back to Taunton.

 

This means I can raise fresh argument to support my claim for interest and could even approach the interest from a different angle. So its back to the drawing board to recalculate and introduce a whole set of new arguments.

 

Also, my other Natwest claim is returned to Taunton too. (I had accepted a part payment subject to the case continuing but Natwest have not sent the cheque). It will be interesting to see which case gets the sooner hearing date.

 

Ok - any specific bits you need help with? If I can help I will. They are doing similar to me - but on loan interest. http://www.consumeractiongroup.co.uk/forum/natwest-bank/11431-nat-west-3-claims.html

[Will Scarlet]

Hi Haydn,

I've been following this thread with interest as I too am of the opinion that, on the basis the banks have availed themselves of our money in an unlawful and unauthorised fashion, then interest can be applied in reverse at the unauthorised borrowing rate applied to our accounts. I am not a lawer, I hasten to add, but, apart from the CAG, I have some very heavy-weight 3rd party advice and the general consensus of opinion is that this IS arguable.

I am adopting the approach that this is a charges + interest applied to account in lieu of charges + u/a borrowing rate applied to each charge for the amount of time (in days) since the default was applied to the account.

I agree that to average this was tenuous to say the least, but I don't think you are on the wrong track, it just needs a bit of tweaking, calculations need to be exact and the argument sound. Keep us updated!

What is interesting is that they've already paid you the charges....

 

My comments are my opinion only.

[MrMSHarrow]

This is my personal position on claiming but may help Haydn with his interest calculation. Claim under three headings: 1. Excessive charges. The CAG spreadsheet is excellent. 2. Excess overdraft interest. The notes at the front of the spreadsheet explain the idea. 3. Unauthorised borrowing. This the spreadsheet does not cover and I have modified mine. The claim can go back 6 years or 2190 [approx] days. For example I am claiming from 1 Aug 2000 to 31 July 2006. I am charged £50 on 1 Aug 2000. I consider this unauthorised borrowing by the bank and so I charge £50 x 29.5% x 2190/365. I am charged £100 on 30 Aug 2000 [30 days into my 2190] and so I charge £100 x 29.5% x [2190-30]/365. And so on.=(D14*V14/365*U14) is the formula for the first charge. My modification adds all these interest charges together to get a value under heading 3. Add the figures in 1, 2 and 3 together and this is what you consider the bank owes you. It becomes due one day after 31 July 2006. The total of 1,2 and 3 is set in concrete as being the amount the bank owes you on 1 Aug 2006. This is the sum you claim via the Court. However, as the bank did not pay this sum on 1 Aug 2006, you can add 8% on a daily basis from 1 Aug 2006. I see the following as potential pitfalls: Take great care to ensure that you use the bank's own unauthorised borrowing rate. Don't get involved with trying to split interest charges between authorised and unauthorised rates - too difficult. Items 1 and 2 are easy to quantify and explain. Item 3 is equally easy to quantify and explain. The illegal charges taken by the bank appear on the spreadsheet against the dates they were charged. You are simply applying the bank's own unauthorised interest rate to their unauthorised deductions from your account. Beware, I have no legal training but this approach seems logical, easy to quantify precisely and gives the barrister no scope to argue.

[bill-k]

MrMSHarrow - I like your simple approach, and as you say, its' simplicity appears to leave little room for argument. However, I notice that the contractual interest calculation is for simple interest, and not compound.

 

Can I ask - Have you actually claimed with this, yet?

 

- and have you considered claiming the contractual interest compounded daily ?

 

I agree, though, that the defendant is less likely to argue the amount of simple contractual interest, as this could be considerably less than the compounded rate.

 

I mention this, as I myself am claiming compounded in my claims, as I also believe is Haydn here.

[MrMSHarrow]

To bill-k

You make two very good points. Firstly, I am in the process of claiming and I am awaiting a date for a CMC. The interest which I am claiming is on the basis which I have outlined.

Secondly, I get the feeling that a lot of people are very nervous about going to Court. I have therefore tried to keep the claim as simple as possible - hence I have not compounded the interest. The more complicated the claim formula, the easier it will be for a barrister to trip you up. Don't forget that they do that for a living every day of their lives. They only have to show that part of your claim is wrong and the judge will find against you. I think that this is Haydn's problem. His averaged interest is demonstrably not correct and I fear the barrister will give the jugde a knowing look and ask for the claim to be dismissed. Whilst we are working to establish our claim on the balance of probabilities, it is up to us, the Claimant, to prove our case to that level of test. Could the average claimant explain compound interest to a non-numerate judge againt aggresive questioning from the Defendant's barrister? Go for compound if you are confident, if not, go for the simple interest solution. After all, 29.5% is not bad in itself.

[bill-k]

Thanks for that, MrMSHarrow. Yes, the fear of the courtroom by Mr J Public is the banks' main pe-court defence, and I reckon that anybody who isn't nervous isn't sufficiently aware. I have seen other claims where they have knowingly chosen simple interest over compound, and are winning.

 

However, I have also seen arguments that contractual interest, by its' very nature, has to echo the bank's rate and method of calc., before it can be accepted as contractual by the court. Seems like Hobson's choice at present. I've had a couple of small pre-court wins on contractual compound, but I, too am jittery about future larger claims.

 

As Litigants in Person, I hope (and nothing more than that) for a sympathetic Judge, but that is relying on Lady Luck, gawd bless 'er. The "Knowing look from the Barrister to the Judge" is indeed worrisome !!

 

Thanks again for that.

[CrispDust]

Harrow, it really isn't that difficult to adjust for compund contractual interest if you have the APR, but it makes a HUGE difference to the end result ie using your simple example:

£50 at 29.5% APR simple interest gives £88.50 total after 5 years.

£50 at 29.5% APR compounded each year over gives £182.10!!

This is after all the way the banks do it, infeact monthly, although the APR figure means yearly or monthly compounding makes no difference.

 

But i would agree you have to know exactly what you are talking about in court. There again how many barristers are any better at maths than you or me? All they need to know is how to add several zeros on to their fees!