cAHOOT FILES DEFENCE - WHAT NEXT?

[caro]

About to send this - any thoughts??

 

Thank you for your letter dated 11.04.07, however I note that you quote an incorrect claim number (7QZ22064). The correct claim number is as above. I am wondering if this is why your settlement offer of £1300 is so much lower than the sum claimed for? The sum claimed is £1940.57 as at 29.03.07 although this will increase daily in terms of interest and costs in respect of compiling my court bundle.

 

Further you state that I have not entered into meaningful settlement negotiations whereas I have been trying to resolve this matter for months, on the 29.03.07 I actually offered to settle either for the full amount or alternatively a reduction in my claim to reflect the actual cost to the bank of each of the items on my schedule, although I would obviously require a breakdown of how these costs had been calculated. I maintain that this is a reasonable attempt at settlement (thus preventing either side incurring further costs or wasting more of the courts valuable time). I could suggest that by offering such a derisory amount that you have not entered into meaningful settlement negotiations, not to mention the fact that you have ignored my previous attempts to resolve this matter as requested in my letters from (insert date of preliminary letter) and subsequent letters thus forcing me into legal action.

 

 

Additions shown in red, but leave out this bit I think.

 

I might even suggest that you only applied for a stay to delay matters further.

 

As you are aware the stay expires on 16.04.07 and if I do not receive a reasonable settlement offer I will have no alternative but to write to the court and ask for allocation of a court date forthwith

.

 

Perhaps change this to

 

As you are aware the stay expires on 16.04.07 and if I do not receive a reasonable settlement offer I will write to the court with draft directions for the information I am requesting regarding your actual costs be provided, along with a list of similar claims settled in court, and claims settled before a hearing, or that your defence be struck out if not provided within 14 days.

 

FYI I'm referring to these draft directions.

 

http://www.consumeractiongroup.co.uk/forum/post-90321.html

 

[poppynurse]

Well Cahoots time is up and they have not replied so I am writing to the court asking for a court date. I have spoken to court and I don't have to submit another allocation questionnaire. How long is it likely to take now???

[caro]

Varies from court to court I think.

[poppynurse]

Finally got a court date - for August!!! Then I'll have to start all over again because they keep adding charges every month

Is there any advantage to submitting the court bundle early???

[ukmp3]

Yes - do it asap as the time frame for Cahoot to respond is then 21 days or as directed by the court.

 

The more prepared you look the better

[caro]

I don't see a benefit to doing the bundle too early, because by the time it is due there may be new information that becomes available to support your case. Anyway they may settle before you even need one.

[ukmp3]

Got to say I disagree.

 

The court wont want this case any more than any other bank claim. If all the paper work is in and tidy, as required and without a fuss they tend to take the opinion that "at least everything is in order" - well thats from my experience anyway.

 

I wouldn't make the court wait for anything - let em have it and put the ball back in the banks court - so to speak.

[poppynurse]

My court date of August 20th seems a long way away....is it worth emailing Inga Kirkman saying that I'm about to start preparing my court bundle and will be adding the preparation costs to the claim unless they would like to settle now???? I could do with getting it sorted as they keep putting more charges on each month.........

[ukmp3]

All I can suggest is what has happened in my case.

 

Prepare and send the bundle - when cahoot get it they will decide that it isnt worth them defending and they will pay out.

 

see http://www.consumeractiongroup.co.uk/forum/cahoot/75856-ukmp3-cahoot-7qz31652-2.html#post917044

 

As far as I know you cant claim the costs - I did ask for them in the court bundle for consideration by the judge - maybe that helped Abbey (Cahoot) settle.

[poppynurse]

My court bundle is now in......it took me ages to prepare but I guess now I just sit and wait

[poppynurse]

Well my court date is the 20th and I haven't received a bundle from Abbey. My bundle went off 10 days ago. The court said that bundles had to be in 14 days before court so that was yesterday....what should I do now? If Abbey don't submit a bundle does that mean I win???

[ukmp3]

Might have something to do with this - posted on Cahoots front page......

 

Bank charges

 

 

What is happening?

On 27 July, the Office of Fair Trading (OFT), Abbey and six other UK banks and a building society started a court case to decide on the legality of unauthorised overdraft charges. The British Bankers’ Association has made a statement on behalf of the banks involved. You can read this statement at BBA - British Bankers' Association - Home

This case is called a "test case" because the decision will clarify the law in this area and is likely to apply to all current and new claims against current account providers about unauthorised overdraft charges.

We will continue to post updates on our website to keep customers informed of progress on the test case as this could run for at least a year.

What will happen to customer complaints about unauthorised overdraft charges?

Like most banks and building societies, we will not be dealing with or resolving customer complaints on unauthorised overdraft charges while the test case is running.

If you do complain about your unauthorised overdraft charges, we will write to tell you that we have received your complaint and that we will record it on your file. When a final decision is reached in the test case, we will contact you as soon as possible to tell you how we will resolve your complaint. We will apply the decision in the court case to all complaints we receive.

Why are the banks allowed to stop dealing with unauthorised overdraft charge complaints during the test case?

We applied to the Financial Services Authority (FSA) for a suspension of the normal timetable for dealing with unauthorised overdraft charge complaints. The FSA decided that, in the circumstances it was appropriate to grant us a suspension of our obligations under the FSA's complaint handling rules while we sought legal certainty on this issue. The suspension is subject to a series of conditions designed to protect customers' rights. You can read the form of the FSA suspension here: Financial Services Authority

All customers who have made a written complaint on unauthorised overdraft charges but who have not yet had their complaint resolved will receive a letter to explain the position with respect to their complaint.

Can I make a court claim for a refund during the test case?

Yes, but we will apply to the court to put your case on hold while the test case is running. This is because the issues being raised in customer complaints on unauthorised overdraft charges are being considered in the test case.

Can I complain to the Financial Ombudsman Service about my bank charges?

The Financial Ombudsman Service (FOS) has decided not to review complaints while the test case is running. If you do complain to FOS, you will receive a letter explaining that.

What if I have already been made an offer?

We will stand by any offer to settle a complaint or court claim that we have already made to our customers. If you have received an offer to settle from us, we will be writing to you again shortly. Our letter will explain that customers have two months to decide whether to refuse our offer and wait for the decision in the test case. If you do choose to refuse an offer, your complaint or claim we will be held and recorded by us until there is a final decision in the "test case". We will then contact you again as soon as possible to finally resolve your complaint.

I have already accepted an offer from you. Will my claim be revisited?

If you have accepted a 'full and final settlement', we believe it unlikely you would be awarded a further sum even if the test case indicates a potentially larger amount. However, this does not preclude you from asking for repayment of any new charges incurred if the courts find they are unlawful.

How long will the "test case" take?

At this time it is too soon to give any exact timescales for a conclusion to the "test case" but it could go on for more than a year. We have agreed with the OFT and the FSA to conduct the test case in an efficient, prompt and orderly way.

Where can I find out more?

Customers can contact us by calling 08456 022631 where they will hear an automated announcement and can then speak to an advisor.

Alternatively, you can find more information through the following links:

The Financial Services Authority: Financial Services Authority

The Office of Fair Trading: The Office of Fair Trading: making markets work well for consumers

The Financial Ombudsman Service: Financial Ombudsman Service

The British Bankers' Association: BBA - British Bankers' Association - Home

[poppynurse]

but surely they still have to abide by the court order unless the judge orders a stay?

[ukmp3]

What exactly did the order from the court say?

 

Reason I ask is that I had to get my bundle in 8 weeks before the court date and then abbey had to get theirs in 14 days after mine, again a month before the court date (given the judges team time to read it through. Yours does seem very last minute!

 

Have you also rung the court to find out what is going on. It is possible abbey wrote to them requesting a stay due to the OFT action, the court would then let you know and that may take several days to come through.

 

Abbey do like leaving things until the last miunte - I guess they are "busy"!

 

Let me know how you get on......

[caro]

It depends on the judges order, whether you've won now poppy. You're quite right that it's up to the judge to decide on a stay, and until you hear to the contrary, it's business as usual. See what the order says, and what happens if anyone fails to do as ordered.

[poppynurse]

Still no bundle from cahoot, that makes them 7 days late. I rang the court (Grantham) and spoke to the clerk who wasn't particularly helpful. She says it will be upto the judge on the day (next monday) whether he will allow late submission or not so effectively cahoot could turn up on the day and still be allowed to argue their case??? I've also received the standard letter from abbey about the oft situation but they have not requested a stay on my case specifically as yet according to the court, but if they do the judge will consider it apparently (having already been allowed a stay to allow negotiations on settlement that they requested and then didn't attempt I will be well annoyed if they get another one!).

I've written to the judge asking for judgement as they defaulted on the order to produce documents at least 14 days before the hearing but the clerk said they have a large backlog so he may not see it before the hearing.....

[Harvey32]

Hi Poppynurse

 

Please can you let me know what you included in your bundle? I'm a bit worried that I'll miss something relevant to Cahoot.

 

Cheers

 

Harvey

[poppynurse]

I used the bundle template and also put in a list of abbey's settled cases

[Harvey32]

Thanks PN, I don't suppose you could point me in the direction of the list of settled cases please?

 

I used the bundle template and also put in a list of abbey's settled cases

[gwildfire]

I would also add the terms and conditions, Cahoot are stupid as the T&C's say its a "penalty charge" UFCA! and that it only covers their "administrative costs"

[Harvey32]

Thanks gwildfire I wasn't sure so added the t's and c's anyway as I noticed the bit about admin costs lol. My bundles went off today by courier so I'm just hoping I don't get stayed! Court date isn't until Oct 5th.

 

I would also add the terms and conditions, Cahoot are stupid as the T&C's say its a "penalty charge" UFCA! and that it only covers their "administrative costs"

[poppynurse]

I am furious, due in court on Monday, received order of stay today (saturday) despite my request for judgement as cahoot hadn't bothered to submit bundle, gutted

[karens25]

hi poppynurse

so your case has been stayed, was the defence struck out? the banks do seem to get it all their way! ive been informed by abbey they are sending a barrister to attend my case on monday, (absolutely terrified!) to request a stay although the defence has been struck out, will keep you posted

karen

[poppynurse]

No the defence was not struck out which is why I am so cross - the banks can apparent show contempt for the court and get away with it

Good luck today, let us know how it goes!

[poppynurse]

well having calmed down a bit I decided to apply for the stay to be lifted....I have sent a fee because the judge didn't mention that in his order, and apparently the judge initiated the stay not cahoot (who's side are they on???)

This is what I have sent, fingers crossed for me please!

 

I strongly object to the proposed order of a stay in respect of the claim detailed above upon the following grounds:

Human rights

It interferes with my rights under the European Convention on Human Rights directly and as enacted in the Human Rights Act 1998.

Art.6 1. of the Convention provides that “ In the determination of his civil rights … everyone is entitled to a fair and public hearing within a reasonable time.”

It is submitted that in a claim for a relatively small sum an indeterminate stay which depends on some litigation unconnected to the instant case, between two other parties who have no relation to the parties in the instant case is not reasonable.

It is not clear that the matter will be heard as predicted and in the event that it does go to trial, there could then be appeals and subsequent appeals so that the matter might become protracted and even last as long as 2 years or more – from the date of the commencement of trial. Even if the predicted case does go to trial, it is not certain that it will proceed to judgment as it is entirely possible that there will be a settlement during the course of the litigation so that the question in issue is inconclusive.

Financial Hardship

The repeated application of penalty charges to my account has caused me significant financial hardship and placed me in a downward spiral of debt. The application of charges and interest on the same has now continued for many months because as a self-employed father of three (one of whom is disabled) I am not in a position to absorb the charges and put the account back in order and thus avoid further charges. I struggled to find the funds to bring the case to court and did this as a last resort. If the case is not settled until after the test case, which may take years, it may be too late for me to recover financially.

 

The Overriding Objective

It is submitted that the Overriding Objective requires that my case is allowed to proceed speedily so that a just settlement may be obtained by the parties to this case. There is no complicated issue of law. The common law relating to contractual penalties is settled law since the late 1800s and has been reinforced as recently as the Unfair Terms in Consumer Contracts Regulations 1999 which itself is the result of a European directive.

 

Cahoot (Abbey)

The defendants Cahoot have already settled many similar cases.

In the attached list of cases (see bundle), the court will see that Cahoot were defendants in at least 50 cases. In most of these Cahoot actually filed a defence and returned their allocation questionnaire, obliging the claimant to do the same. However, in every one of these cases, Cahoot bank settled the matter before the hearing.

 

Other cases

It is true that there are currently many other cases which are litigating on the same issue of contractual penalties. However the court may be unaware that not a single case so far has gone to a hearing. It is submitted that the predicted test case is most unlikely to go to a hearing and that it will be settled out of court and therefore produce no useful decision from a higher court.

It is further submitted that the defendant in the instant case has no intention of going to a hearing.

It is submitted that the pattern of cases settled so far suggests very strongly that the banks are merely using the justice system as a publicly funded means of intimidating their customers and dissuading them from pursuing their legitimate right.

It is submitted that this is abusive of the justice system and of the public resource.

 

 

Balance of convenience

The sum claimed is insignificant to the bank but it is a significant sum to me. Further more although a stay prevents me from recovering my money, the defendant bank is not prevented from levying its charges or interest on debt comprised of those charges so the order of the court has the effect of favouring a powerful and well-resourced institution and does not place any restriction on their continued application of penalties which I say are unlawful.

Further, many banks are now routinely closing the accounts of their customers who commence claims against them. This amounts to a sanction for seeking a ruling from the justice system and as such is a basic denial of citizenship. I will remain at risk of such action despite the fact that my remedy has been placed on an indeterminate hold.

Additionally, the defendant remains at liberty to enter my name on the default register which it and other banks routinely do in respect of unlawful penalties which are unpaid by their customers. The banks have direct and privileged access to this register. They have no need to obtain a County Court judgment before they may enter a default on the register. This default remains on the register for 6 years and causes enormous damage to reputations. Were my name to be entered on the default register I would find it impossible to get credit or a mortgage and I would have to pay higher fees for any credit which I did manage to obtain.

It is submitted that a stay will incur great financial difficulties for me and yet be insignificant for the defendant bank. In fact a stay is supportive of the banks litigation strategy which is to take the claimant to the door of the court and then to settle the claim.

 

The Status Quo

The stay does not maintain the status quo. As submitted above, a stay favours the bank by preventing the claimant’s pursuit of his legitimate remedy without placing any restriction upon the banks activities which the claimant submits are unlawful and/or retaliatory.

Furthermore, as submitted above the present case concerns a relatively small sum and is at a late stage in proceedings, and therefore I submit that to impose an indeterminate stay is unnecessary, inappropriate, not in the interests of justice and further, is detrimental to my rights in a way which is unfair and inequitable.

 

Test Case

It is agreed that a case in which the issues were fully argued would be of enormous benefit. However, as has been explained above, the bank so far has settled the 50 example cases and it is clear that it is their abusive litigation strategy which is responsible for the problem of the large number of cases being started against them. Every one of the cases settled so far has presented an opportunity to settle the common issue of contractual penalties. Despite their massive resources and access to high level expertise the defendants have declined to allow the issue to be decided.

My case presents another opportunity for the question to be definitively settled as should the defendants lose, they have the resources to continue the matter through the appeals process and through the court hierarchy.

It is respectfully submitted that the court’s order to stay the claim creates more uncertainty and more difficulty.

It is respectfully submitted that if the predicted test case referred to by the district judge in his order, was actually in the course of a trial at the present moment so that it was more certain that the matter would be tried and that a decision would be likely to be reached, then there would be good grounds for staying all similar actions including my own.

However, it is respectfully submitted that none of this is at all clear and on the evidence of all of the cases conducted so far it is submitted that the predicted test case is most unlikely to be heard at all.

 

The OFT and their powers under the Unfair Terms in Consumer Contracts Regulations 1999

The Unfair Terms in Consumer Contracts Regulations 1999 gives the power to the Office of Fair Trading to seek injunctions to prevent the use of unfair terms in consumer contracts. More than that, the UTCCR specifically prevents the private citizen from pursuing this remedy on his own behalf.

The OFT conducted a 2 year investigation of the contractual charges regime. They received a great deal of confidential evidence from the banks.

The OFT has already announced that it considers that the contractual penalty charge regimes of these financial institutions are unfair.

It is not at all clear why the OFT has not now proceeded to seek injunctions in the face of the banks’ refusals to comply. This is particularly serious when the Regulations have prevented the citizen from doing so.

However, it is submitted that the issue of a test case and the definitive settling of the banks’ penalty charging system is a matter to be borne by the OFT or some other public body who are tasked and resourced to deal with this matter. It is not a burden to be suffered by the private citizen and in particular by myself in the instant case.

Complexity of the Issues

The complexity or otherwise of the legalities arising from the bank charges issue should be viewed in context.

The test case between the banks and the OFT is essentially to determine whether or not the terms permitting the banks to levy their ‘overdraft charges’ are subject to an assessment of fairness under the Unfair Terms in Consumer Contracts Regulations 1999.

 

The fundamental issue to be tested is whether the contractual provisions permitting such charges fall within the ambit of regulation 5 and are thus subject to an assessment of fairness, as the OFT contend, or whether they are, as the banks contend, excluded by virtue of Regulation 6 because they are a core term or that they relate to the adequacy of the price or remuneration, as against the goods or services supplied in exchange. This is a complex issue of legal interpretation and should be viewed against the background of the banks’ recent policy of restructuring their account contracts to present the charges as being fees for banking services as opposed to damages payable on a breach. All terms expressly prohibiting the exceeding of overdraft limits and making payments without sufficient funds have been re-drafted so as to present the event leading to a charge being made as an “informal request” for an increased overdraft limit. It is in this respect that the test case will determine whether or not the charges are subject to the assessment of fairness notwithstanding such re-drafting of contract terms.

 

There are no such complex issues in the present case. This claim is not primarily based upon regulation 5 of the UTCCR, and indeed the claimant is prepared to drop that aspect from the claim. The basis of this claim is that the charges imposed arise directly from breaches of contract. This can easily be demonstrated by the existence of terms in the account contract which expressly prohibit the making of any payment without sufficient funds to cover it.

 

The charges were thus payable upon clear breach of contract, as stated by the defendant in its own defence, and are therefore subject to the long settled principles of common law relating to contractual penalty clauses. The issue therefore is a simple one of fact – specifically whether the actual cost to the bank of the breach is proportionate to the charges it imposes.

 

The claimant submits that it is wholly inappropriate and unnecessary to stay a claim at such a late stage in proceedings which can be easily and routinely disposed of by the County Court.

 

In view of the above, if the court is not minded to proceed, the claimant respectfully suggests that the case may be adjourned for one month and an order made similar to the draft attached. If the defendant cannot/will not comply with such an order then the defence should be struck out as having no realistic prospect of success.

 

Defendant's Conduct

The Defendant has repeatedly refused to contest all claims similar to the present for "commercial" or "costs" reasons, yet it now sends a barrister to each hearing solely to argue for a stay. Furthermore the defendant is likely to attend this hearing having breached the order for pre-hearing directions, without instructions to defend the claim, instead relying solely on the court granting astay. In this case the defendant requested a stay initially to attempt to settle and then ignored the majority of my attempts to communicate, the defendant failed to submit a court bundle as ordered. The claimant submits that this is presumptuous and displays the arrogant and disrespectful attitude towards court orders and procedure in general which is entirely typical of the defendant's conduct in these proceedings to date.

 

In the alternative

If the court decides not to accede to my request to remove the stay I respectfully request that the court issues the following injunctions:

• That the defendant bank is prevented from applying further penalty charges to my account until the final settlement of the matter.
  
• That the defendant is prevented from applying interest charges to any outstanding amounts which are comprised of penalties until the settlement of the matter
  
• That the defendant is prevented from closing my account
  
• That the defendant is prevented from making any entry on its own systems or from communicating any similar information to any third party about any matter insofar as it relates to penalty charges until the final settlement of the matter.
  
• That the defendant remove any derogatory entry on its own records insofar as it relates to penalty charges. (The Court has the power to do this under the Data Protection Act 1998 )
  
• That the defendant arranges the removal of entries from the records of any third parties to whom it has previously communicated information insofar as it relates to penalty charges. (The Court has the power to do this under the Data protection Act 1998. )
  
• That these injunctions remain in place until the settlement of my claim
  
• That should my claim proceed to a hearing that a decision should be made at the hearing as to whether these injunctions should be made permanent
  
• That if the matter should not proceed to a hearing because the defendant decides to settle outside court, that these injunctions should become permanent.

Additional orders

If the court does accede to my request for a removal of stay then I respectfully request that the case be allocated to the small claims track but that the defendant be ordered to make standard disclosure.

It is submitted that an order for standard disclosure will assist greatly in bring these and other similar claims to a speedy and just conclusion.

The matter is suitable for the Small Claims Track as it involves no issue of law – the law is well established. It only involves questions of fact – in particular the true costs of the banks default charges system. The OFT has already formed its conclusion about this. Standard disclosure will put the matter beyond doubt. As I rely upon the bank as my fiduciary it is clear that they have a duty to act in utmost good faith in relation to their conduct of their contract with me. I submit that they do not act in good faith in relation to me or their other customers in the matter of penalty charges.

Proposed Draft Order for Directions

1. The Defendant shall within [14 days] file and serve a response to the Claimant's witness statement and schedule of charges, stating in respect of each item claimed;

• a) Whether such charge is accepted to be a penalty, and if not why not;
  
• b) Whether the defendant's admistrative expenses as referred to in its defence are incurred as a result of manual or automated administration or otherwise;
  
• c) As such charge is alleged to be a genuine pre-estimate of the Defendant's loss incurred by the Claimant's actions, all facts and matters intended to be relied upon as showing that such was a proper estimate of such loss, and all evidence to be adduced at trial as to what the true cost of dealing with the matter was;
  
• d) Copies of decided cases and other legal materials to be relied upon.

If the Defendant fails to comply with this order, the Defence will be struck out without further order.

 

2. Upon compliance with paragraph 1, the small claims hearing will proceed to be heard at [time] on [date] at Grantham County Court.