Contractual Interest? - Judge doesent seem to think so

[millymollymoo]

As well as the link in post 45. I have a draft here for a bill to be passed concerning allowing awards of compound interst.

 

http://www.lawcom.gov.uk/docs/lc287bill(1).pdf

 

Milly

[Glenn UK]

 

 

I seek compensation, and the bank offers to pay £100. That puts me financially back in pretty much the same position as if the bank had never taken a penalty. I am not asking for compensation, i am asking for my money back and the fact that the defendant made lots of money using mine means they should give me what they made.

The fact they took my money unlawfully means they have been unjustly enriched.

 

 

 

The point is, I have suffered what I believe the law terms a "loss of amenity" - in this case, the loss of the use of the £100. For which a court, if it agreed with you would award the base rate and if your lucky add a percent or two since this is what you may have got if you invested it well.

 

But suppose I borrowed the money to make up the shortfall, thus avoiding missing out on a meal with my wife etc. I would have paid interest on the loan. If I could show that I had taken out the loan as a result of the unlawful penalties, I would have an argument that the bank should repay me the interest on the loan. That argument may or may not persuade a judge, but it is at least plausible.

 

However, the interest I am arguing for would not be what I could get from my investing £100, nor the amount the bank could get from investing it; it is the amount *I* would have to pay to borrow the money.

 

Now, I argue that the cost of a loan to cover the amount of penalties is a good guide to the right compensation for the loss of amenity - even if I do not actually take out a loan. (If I take out a loan, I do not lose out on the use of the money for a year, but I do pay the interest. If I do not take out a loan, I do not pay the interest, but I do lose out on the use of the money.)

 

Where no loan to cover the penalties is taken out, we have to settle on an interest rate for the notional loan. As the bank is in the money-lending business, it seems reasonable to use the bank's own rate - that is, charge them however much they would have charged me to borrow the money to cover their penalties. After all, they can hardly object that their own interest rates are unreasonable.

 

Tim

 

Tim i don't think there is anything wrong per se in what you say only that IMHO its a pretty weak argument at least in my case because its full of suppose this that or the other.

 

The unjust enrichment follows on if the charges are unlawful without a doubt.

 

If the banks invested that money and made money from it it follows they have benefited from their unjust enrichment and as a principle the benefits should be passed back to the person who was originally wronged.

 

JMHO

 

Glenn

[Castlebest]

Thanks Crisp & Glenn

 

Firstly one important point not made clear earlier, the allocation hearing is stayed for 28 days for SCM and I to try and agree settlement. If I go back I need to be well prepared! It was not the right time to press all issues as none of us including SCM agent knew what had really been offered/paid, hence stay.

 

I think we are missing the point, Golf has one of the buggers in court !!!!! and has a good chance of nailing them !!!!!!!!!!! I doubt very much they will show again far too dangerous for them...

 

BUT

 

If they do show we need to make sure golf is totally convinced where he is going and the facts he needs with him not argue semantics and cloud the issue and the mind of anyone facing a judge.

 

I’m sure the banks have their moles here (they would be stupid not to) to sow the seeds of doubt and report back, we need to be aware of this because its just causing confusion.... just look at this thread... golf has spoken twice and we have pages of alternate theories based on two short posts and a lot of "if's"

 

I’m sure from what Golf said he is on the case and I’m sure if he needs assistance he knows who to ask... good luck my friend

 

pete

[thecornflake]

 

Where no loan to cover the penalties is taken out, we have to settle on an interest rate for the notional loan. As the bank is in the money-lending business, it seems reasonable to use the bank's own rate - that is, charge them however much they would have charged me to borrow the money to cover their penalties. After all, they can hardly object that their own interest rates are unreasonable.

 

Tim

 

Good argument there but to use it I believe you should use the highest rate they would charge on a loan rather than the unauthorised borrowing rate.

 

Of course, if missed payments affect your credit rating to the point where you can't get a loan and the only option is unauthorised borrowing...which is what happens anyway as they take the charges from your account and charge you that rate.

 

My reasoning may be flawed due to my current lack of caffiene but basically it goes back round to using the loss of amenity argument to claim back using the rate we were charged anyway?

[thecornflake]

This link about claims for compound interest gets quite interesting from 2.42 to 2.54. Although it's just a Law Commission Discussion Paper, it starts off with a summary of the law surrounding interest on claims. Regards, Mad Nick

http://www.lawcom.gov.uk/docs/cp167.pdf

 

Have you read sections 2.12 - 2.13 in this document?

 

"...Even without such an express term, it is an established custom that any interest owed to and by bank is treated in this way...."

 

(referring to compound rather than simple interest, although contractual compound interest is mentioned in 2.12)

[debt_mountain]

I have a contractual interest + loss of savings claim in court on Wednesday with Nationwide. Is there any info anyone wants me to take along and ask the judge - add to my evidence? It is too late to add anything before hand but I could ask the court to accept additional stuff?

 

My thread is http://www.consumeractiongroup.co.uk/forum/nationwide/35933-debt_mountain-nationwide-pt2.html

 

Nationwides defence said "the defendant is not due any additional interest" - they paid me the satandard 8% s69 in an early part payment to my account.

 

In there witness statement / bundle they mention nothing of an arguement that they should not pay the additional interest, they just focus of what they have already paid, charges and 8%.

 

Doesn't look like they are strongly fighting this additional interest and they are not even intending appearing or giving an "oral evidence".

 

I have claimed the 7.75% authorised contractual plus my loss of earning interest on the unlawful charges at the Nationwide rate of 4.85% compound (at the time of service).

 

I am going to ask the judge to award damages as he sees fit but at a minimum the 4.85% I am claiming.

[Glenn UK]

Debt mountain, I think that any presentation on contractual interest should cover the following bases

 

1. the concept of unfair terms where if a term only allows one term some benefits/relive then it can unfair therefore for the term to stand it should be allowed both ways. UTCCR I'm paraphrasing you need to check the right sections exact wording.

 

2. The Banks have unjustly enrichment themselves at your expense by imposing unlawful penalty charges. IMHO its critical to keep emphasising unlawful when describing their charges.

 

3. As a result of their unjust enrichment they have had the 'enjoyment' of your money and invested and lent it at rates of their choosing. Specifically mention lending at unauthorised OD rate, authorised, unsecured loans.

 

 

4. It would be unconscionable to allow the bank to keep the proceeds from their unjust enrichment at the expense of the claimant.

If they are allowed to retain the profits made from this unlawful activity this would leave them enjustly enriched and this would be unconscionable in that no one should be allowed to retain profits from unlawful activities.

 

5. The Defendant should be forced to disgorge themselves of the profits they made on the money they took unlawfully form your account.

 

6. I would say that you should make it clear that although you have asked for unauthorised OD rate that you recognise the actual rate is determined by the courts and you are not specifically asking for this rate.

 

Item 6 is a matter of opinion but it seems to me that if the court thinks you are being greedy then it wont go down well.

 

7. Ask the defendant how much money they have made from the unlawful charges they imposed on your account and ask if they can substantiate it.

 

Just a few things off the top of my head hope that helps.

 

Glenn

[natwesttookmymoney]

Bong i think i did, but Ive been a bit busy today and am busy right now on my 'paper' for my AQ Wednesday. ill look as soon as i have a bit more time.

 

Glenn

 

PS Moi disagree? Nooooo your confusing me with some other awkward git

 

Probably me!:D

 

Westy

[progenic7]

Hi all,

 

been reading through this thread with interest though IMHO i suggest we may be going off at a tangent with the unjust enrichment argument. When you look at the case law on the subject the majority of it points to the defendant disgorging himself only in a way that leaves the claiment the same as they started off. Generally the judge wont agree to any form of compensation on a claim on tort or contract, and the ones they do this are so complex with so many boxes to check i dont think it sits well with most judges.

I feel we stand a better chance of "disgorgment" if you will by claiming on "quasi" contract under the Misrepresentation Act. In doing this of course the judge awards the "unjust enrichment" part back to the claiment, but also has a tendancy to award a high rate of compensation. ie compound contractual interest.

Im not a lawyer and exactly how the claim should be worded im not sure, though after reading much case law on both subjects i feel the Misrep Act is a better way to go, if your looking for that "little bit extra"

 

The argument should be fairly simple under contract law as the banks term is unfair, as per UTCCR and SOGA ect as they claim only to recover their costs, this is of course a total misrepresentation of fact. They actually as we all know recover their costs (£2 maybe) then add hundreds of % on top to make profit and enrich themselves.

[AtomicDust]

Hi all,

 

I'm new to the site and in the process of waiting for bank statements to arrive having sent Data protection S.A.R letter 7th Feb 07. I am informed I should recieve them in batches shortly.

 

Regarding pursuing contractual/compounded interest, I don't understand why people can't or don't pursue claims for the recovery of this money and interest that is proprtionate to the profits being made by the banks per anum.

 

For example, Barclays have hit record profits and seen 20% increase up on last year, how can they justify not handing over 20% in interest to those who successfully pursue them for unlawful charges? I doubt the banks would be willing to disclose any figures as to exactly how much they are profitting from such!

[newbody]

some of are trying for this and there is alot of posts across the site in regards this subject where we are debating(for want of a word) the best angle and arguments to use to the courts to try and justify why we should be given it

[cankster]

Dont know if its any good to anyone but natwest settled today in a case im doing for a friend for the tune of ----

 

2078 CHARGES & COSTS

 

2296 CONTRACTUAL INTERST AT 29.8%

 

 

http://www.consumeractiongroup.co.uk/forum/natwest-bank/67250-court-thursday-contractrual.html

 

Marvellous

[AtomicDust]

Dont know if its any good to anyone but natwest settled today in a case im doing for a friend for the tune of ----

 

2078 CHARGES & COSTS

 

2296 CONTRACTUAL INTERST AT 29.8%

 

 

http://www.consumeractiongroup.co.uk/forum/natwest-bank/67250-court-thursday-contractrual.html

 

Marvellous

Well done Cankster.

 

I've only become familiar with contractual interest as of today having read Haydn's and Mcuth's threads. Bit scary lol.

 

I've been reading all day! I don't think I would be able to push a claim for contractual interest at this point, but little bit more reading and who knows?

[natwesttookmymoney]

Regarding the unjust enrichment arguement, it would seem that there is actually a precident against awarding compound interest on those grounds. Page 56 - http://fds.oup.com/www.oup.co.uk/pdf/0-19-928753-8.pdf

 

Hi, Gary

 

Where is the precedent against you suggest this book has? I've skim-read the early pages and noticed in the preface "...restitutionary remedies are triggered by unjust enrichment, wrongdoing and the vindication of property rights..."

 

I'm sure you've read a great deal more so can you point me to the precedent against you suggest this book has?

 

W

[photoman]

Hi Gary,

The link in your last post was a Fascinating read !

Advise all to read.

Regards the precedent you talk of (page 56 onwards) regards the awards of Compounded interest.

Seems to me that the House of Lords ruled that as Parliament had already made laws providing for the award of simple interest, it was not upto the House of Lords to decide that Compounded interest should instead be automatically awarded in all cases, so decided to not rule in favour of allowing such awards as an automatic right.

However, it appears the right is still available dependent upon the circumstances of the case. (and the law commission has also commented upon how in cases over £15k such claims are more readily permissable)

 

Also to quote.

In Westdeutche Landesbank Girozentrale v Islington London Borough Council the issue for the House of Lords was whether compound Interest was available in respect of all restitutionary claims. By a majority it was decided that, since the jurisdiction to award compound interest was equitable, compound interest could only be awarded in respect of equitable restitutionary claims.

Now, If I understand this correctly, it again comes back to mutuality (as inferred by the term equitable).

 

"compound interest could only be awarded in respect of equitable restitutionary claims".

 

IMVHO.

Considering that we ourselves have throughout the term since the penalty, already actually paid compounded interest on the penalties (their own original restitutionary claim), then our claim for such charges back now makes it an equitable restitutionary claim. Thus we too can claim compounded interest?

 

Have I got this right, or totally wrong?

Is this a correct laypersons interpretation ?

[progenic7]

Hi all,

 

on gary's point of unjust enrichment (very valid point) it is very well known that in case law almost every case that goes by a judge on the unjust enrichment basis he almost always doesnt award contracual interest.

There is a few circumstances in which this would happen though its highly unlikely to be awarded in a bank fee case (if and i doubt this very much that the judge would accept an argument of unjust enrichment) The whole subject is in itself a very complex one as far as the law goes, and is fraught with dangers for the claimant.

I have read over 50 cases on the subject of late and most of them either failed on that issue, were struck out, or the claimant ended up using the defence in the alternative.

 

I would seriously recommend that anybody wanting a good argument for contractual interest try using the misrepresentation act s2. And on studying the subject in detail you will find that the judge almost always awards interest at contractual rate, almost always awards costs ect and on the face of it the whole subject is far less risky.

The case would have to be bought under whats known as "quasi contract law" and in this situation a couple of interesting things occur.

The issue of proof is moved to the other side, ie instead of you needing to prove your case the defence has to prove that you are wrong (then ofcourse prove their costs - not gonna happen)

The judge will almost certainly then award you full compensation for this.

 

Their is loads of good case law on this matter, more than enough to blow the defence right out of the water

 

good luck to all

[millymollymoo]

Thanks for your suggestions progenic. If this has not been mentioned in your POC's can the argument be used ? Quasi Contract ???

 

I am off to research....

 

Milly X

[progenic7]

Thanks for your suggestions progenic. If this has not been mentioned in your POC's can the argument be used ? Quasi Contract ???

 

I am off to research....

 

Milly X

 

 

Hey Milly,

 

Well im not saying that it cant be used in the case as im sure a judge would see through what the barristors are doing. In a criminal case then im sure this point would be valid as both sides would be expected to produce a professional and legally correct argument. However in the civil courts things are different as you are the litigant in person and are not really expected to know what your doing.

They do have a very valid point though, you cant acuse something of being unfair, and not in line with UTCCR, SOGA ect but then not actually say whats unfair. ie is the bank unfair, the manager, his wife, his wifes dog ? whats unfair and what is it specifically relating to in law ?

What referrs to what ? do you see where they are going with this ?

when my dad pointed this out i could see straight away he was right.

Alot of people are making this very same mistake, and like i say i dont think it will matter in 90% if claims anyway because they wont make it to court. And even if they do i think most judges will see what the defence is trying to do but wont allow it.

Though to be professional and correct, and to make a case that actually makes sense i think it wise to take your time and make a proper case.

 

ps. "quasi contract" is sort of in between Tort and Contract Law, when a claim under the misrep act is brought for an unfair term for instance, its often referred to as a "quasi contract claim". I wouldnt worry about that too much

 

IMHO

Johnny

[Mr Chips]

Hi don't know if it helps anyone, but i have gone for contractual interest on all 6 of my claims, 3 settled in full so far. I will not back down if they persue a case to court - if judge rules that i can only have 8%, then that is fair enough. Isn't there a bit in the unfair contracts legislation that says that there can't be anything in the contract which does not equally apply to both parties - i may have this wrong, i am not legal (you may have guessed!).

 

 

Mr C.

[photoman]

Hi all,

 

on gary's point of unjust enrichment (very valid point) it is very well known that in case law almost every case that goes by a judge on the unjust enrichment basis he almost always doesnt award contracual interest.

There is a few circumstances in which this would happen though its highly unlikely to be awarded in a bank fee case (if and i doubt this very much that the judge would accept an argument of unjust enrichment) The whole subject is in itself a very complex one as far as the law goes, and is fraught with dangers for the claimant.

I have read over 50 cases on the subject of late and most of them either failed on that issue, were struck out, or the claimant ended up using the defence in the alternative.

 

I would seriously recommend that anybody wanting a good argument for contractual interest try using the misrepresentation act s2. And on studying the subject in detail you will find that the judge almost always awards interest at contractual rate, almost always awards costs ect and on the face of it the whole subject is far less risky.

The case would have to be bought under whats known as "quasi contract law" and in this situation a couple of interesting things occur.

The issue of proof is moved to the other side, ie instead of you needing to prove your case the defence has to prove that you are wrong (then ofcourse prove their costs - not gonna happen)

The judge will almost certainly then award you full compensation for this.

 

Their is loads of good case law on this matter, more than enough to blow the defence right out of the water

 

good luck to all

 

Progenic,

Very interesting points regards Misrepresentation act '67, and its application to claiming claims for contractual rates.

Particularly interesting also that the burden of proof falls upon the defendent to prove that they could not have reasonably known the unfair terms were misrepresentative. Difficult, given the vast amounts they spend on lawyers and solicitors.

 

Just wondering about the reference to "Quasi-Contract"?

Is this.

a/ A verbal or implied agreement that constitutes a contract that effectively nullifies any writen contract?

b/ A verbal or implied agreement that constitutes a contract that operates alongside any written contract?

c/ Neither of the above?

 

ALSO:

Just wondering if the Misrepresentation act could also be used in any way to invoke sec32c of the Statutes of Limitations act (concealment), thus raising the bar on claims prior to 6 years ??

[photoman]

For anyone interested in commenting on Misrepresentation act, heres a link to it,

Misrepresentation Act 1967 (c.7) - Statute Law Database

[InKogneeToh]

Hi

 

My interpretation of the application of this Act is where a misrepresentation by one party has induced the other to enter into the contract. If you are thinking of using this Act in relation to a bank charge claim then what was the misrepresentation that induced you to set up the current account?

 

You certainly cannot claim that the fact that the bank pre-advised you that you would be charged e.g. £30 for an unpaid DD misrepresented what the charge would be because they did in fact charge you that amount. They also did not state (before you entered the contract) that the charge was a genuine pre-estimate or the true cost of your breach.

 

Nothing they stated before the contract had begun qualifies as a misrepresentation that had the direct effect of influencing your decision to enter into it.

 

Regards, Pam

[natwesttookmymoney]

The terms and conditions I was supplied by the bank say 'English Law applies to the contract between you and us'.

 

The charging regime isn't in accordance with established English Law - statute, precedent and practice.

 

Is it not potentially a misrepresentation to say that English Law applies, thus giving the impression that the bank will abide by the LAw and behave in a lawful manner, and then behave otherwise?

 

W

[photoman]

The terms and conditions I was supplied by the bank say 'English Law applies to the contract between you and us'.

 

The charging regime isn't in accordance with established English Law - statute, precedent and practice.

 

Is it not potentially a misrepresentation to say that English Law applies, thus giving the impression that the bank will abide by the LAw and behave in a lawful manner, and then behave otherwise?

 

W

 

Indeed,

I was induced into entering into the contract with them (as opposed to some backstreet or foreign bank) by being given the impression that I would be protected by English law. Misrepresentation !!

[InKogneeToh]

 

Is it not potentially a misrepresentation to say that English Law applies, thus giving the impression that the bank will abide by the LAw and behave in a lawful manner, and then behave otherwise?

 

 

Hi

 

The phrase 'English Law applies' means that the contract is subject to English Law. It does not mean that the bank is stating that they have complied with English Law.

 

Regards, Pam