Battle with Abbey

[GaryH]

Hi Rebecca, welcome to CAG:)

 

In answer to your question has anyone been to court, against Abbey, no they haven't. Abbey are one of those banks who will fight you and try to frustrate you right up untill the last minute, before capitulating at the 11th hour, sometimes only a day or two before court.

 

They do this in the hope that they'll put you off and that you'll drop out. If you stay firm and stick to your guns you'll get there soon enough, but you've still got a little bit of work to do and you must comply with any court orders to submit your evidence, etc, although everything you will need is here on the site.

 

Can you post up the wording of the order from the court please, then I can tell you exactly what you need to do. In the meantime have a read of this link - http://www.consumeractiongroup.co.uk/forum/guidance-notes/64911-got-court-date-guide.html

 

If you could also give me a brief background to your claim so far that would be great, stuff like what letters you've sent, what responses you've got, how the £16,000 is made up (charges + 8% interest?), etc.

 

Also, I'm going get this thread moved over to the Abbey forum for you.

 

Which bank is your claim against Cally?

[GaryH]

[Deleted - duplicate post]

[GaryH]

I need to know more - sorry, but an application to strike out is certainly not par for the course.

 

Same questions as a month ago really;

If you could also give me a brief background to your claim so far that would be great, stuff like what letters you've sent, what responses you've got, how the £16,000 is made up (charges + 8% interest?), etc.

Also, crucially, what did you use as your particulars of claim?

 

Its not to late to sort this out, but you'll have to act on this.

 

Have you got a scanner? I'm going to PM you my e-mail address - it would be very helpful if you could send me your POC, their defence, the notice of the application to strike out, and the notice of the preliminary hearing.

[GaryH]

Have you got a fax machine? If not they have a fax service at staples, or your local library. I'll PM you my fax number - block out all the personal details, I need to see;

 

Your charges schedule,

Your particulars of claim,

Abbey's defence,

The notice of prelim hearing,

The notice of application to strike out,

Any other orders from the court, or letters from Abbey

 

This is a large claim with an element of risk - it needs to be done properly, following correct procedure, which it clearly has not up to now!

 

Don't worry, its not too late, but I really wish you'd have answered my questions (by PM too!) a month ago! Never mind, get the paperwork sent ASAP and we'll see whats what.

[GaryH]

No problem Rebecca, your not a pain - and sorry if I sounded harsh, but I just don't want Abbey to be able to pick off your claim!

 

Did Inga say the request to strike out was on the allocation questionnaire? If so, its not a formal application so thats one thing at least. I'm still worried though that if they feel they've got grounds to request a strike out then somethings clearly gone wrong somewhere - and I suspect it's with your statement of case (POC). If you fax me the list above I can identify where you've gone wrong and help you put it right.

[GaryH]

Yes, thanks. I'm a bit pushed for time at the moment - I'll get back to you on it tomorrow afternoon.

[GaryH]

Hi Rebecca,

 

I'm sifting through the paperwork now. Couple of questions;

 

How did you file your court claim? Was it online via MCOL or direct to your local court on form N1?

 

What did you use as your Particulars of claim?

 

Particulars of claim is the text which sets out the basis of your claim. It would have gone in the main box on MCOL, or on the second page of the N1 form.

[GaryH]

Also Rebecca, this order from the court dated 20th Feb - regarding the vagueness of your POC and threatening to strike out your claim if you do not provide further information within 14 days - what did you provide in response to it?

 

Was it one of the 3 letters you faxed me, plus just your bank statements?

 

Don't worry, we're getting somewhere now - I'm confident we can get this back on track.

 

Oh, and just out of interest, were you using another website during the early stages? If so, would you mind telling me which one?

[GaryH]

Rebecca, can you get back to me on this ASAP please? Thank you.

[GaryH]

Ok, thanks.

 

No, I would think that its extreamely unlikely that Abbey would settle before the prelim, becouse as it stands at the moment your claim would be struck out. They would'nt back out and pay up a claim which they would not lose.

 

You've actually been lucky - the court, IMO, have been remarkably tolerant. Most judges would probably have struck out your claim long ago.

 

Your statement of case (POC) needs to clearly and concisely set out the nature of your claim in fact, and its basis in law. You need to disclose a cause of action - I.e on what legal grounds you are filing a court claim. This was what Abbey were asking for in their letter to you.

 

Although I haven't actually seen your POC, its clear that this is the root of the problem, on top of the fact that the claim was initially estimated. Also, your responses when the court asked you to provide further information were not satisfactory and not what was requested.

 

At the Prelim, I think its clear that the court will request that you establish the basis of your claim in law. In other words, provide details of the grounds of your claim against the bank.

 

In a very brief nutshell, the basis of your claim is that the bank have levied charges when you have breached your account contract, such as when you exceed an overdraft limit. These charges hugely exceed the actual loss incurred by the bank as a result of your breaches. By law, the amount charged by the bank should only be enough to cover its actual costs - I.e less than £2! The charges that they have charged you are therefore a disproportionate penalty.

 

Disproportionate contractual penalties are unenforceable as they are against the law. They contravene - The Unfair Terms in Consumer Contracts Regulations 1999, Unfair Contracts (Terms) Act 1974, and various case law authorities including Dunlop Pneumatic Tyre -v- New Garage Motor Co 1915.

 

You need to set this out to the judge in court on Wednesday - as well as sincerely apologising to the judge for the inconveniance of your misunderstanding's previously.

 

You should take with you some proper particulars of claim, as you will probably have to substitute them for your existing ones. Alongside your POC you will also need a schedule of charges. This is a list of each and every charge alonside the date, reason (I.e. Unpaid DD, etc), and amount of each.

 

Heres the POC you should take -

http://www.consumeractiongroup.co.uk/forum/bank-templates-library/681-4-particulars-claim-n1.html (3 copies, and 3 of your schedule)

 

With a bit luck the judge will then allow your claim to proceed.

 

Any questions?

 

Also, have you been in contact with Kate?

[GaryH]

Your main objective, as set out above, is to establish the validity of your claim. In other words, give the court good reasons as to why it should proceed. Then there then are a couple of less critical issues too.

 

Objectives on Wednesday

 

1) Set out the basis of your claim.

 

See the post above. Also, have a read of this, and also take a copy with you -

Claim Number:*******

In the ******* County Court

 

Between:

 

Your name

(Claimant)

 

 

and

 

 

 

Bank Plc

(Defendant)

 

 

 

 

_________________________ _____

 

 

STATEMENT OF EVIDENCE

_________________________ _____

 

 

1. The claimant submits that the charges levied to his bank account, as set out in the enclosed schedule, are, notwithstanding the defence of the defendant, default penalty charges arising from and relating directly to breaches of contract, both explicit and implied, on the part of the claimant. As a contractual penalty, the charges are unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations 1999, the Unfair Contracts (Terms) Act 1977, and the common law.

 

2. It is admitted that the Defendants charges were levied in accordance with the terms and conditions of the account in question. However, it is submitted that the Defendants charges are not related to or intended to represent any actual loss arising from a breach of contract, but instead unduly and extravagantly enrich the Defendant which exercises the contractual term in respect of such penalty charges with a view to profit.

 

3. The Claimant cites the case of Robinson v Harman [1848] 1 Exch 850, which states that a contractual party cannot profit from a breach of contract and that the charge for a loss suffered from the breach should be the amount necessary to put both parties in the same position before the breach occurred.

 

4. Lord Dunedin in the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co [1915] AC 79 set down a number of principles in definition of a penalty clause and how such clause may be ascertained from a liquidated damages clause. These principles include -

 

"It will be held to be a penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison with the greater loss that could conceivably be proved to have followed from the breach" and;

 

"The essence of a penalty is a payment of money stipulated as in-terrorem of the offending part; the essence of liquidated damages is a genuine covenanted pre-estimate of damage"

 

5. The Claimant will further rely on numerous recorded authorities dating throughout the 20th century up to the most recent case of Murray v Leisureplay [2005] EWCA Civ 963, all of which have upheld and reinforced the principles set down by Lord Dunedin defining contractual penalty clauses and the unenforceability thereof.

 

6. Further, under the Unfair Terms in Consumer Contracts Regulations 1999, schedule 2 (1) includes to define an example of an unfair clause as -

 

"(e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation;"

 

7. The breaches of contract in this case relate to exceeding the contractually agreed limits of an overdraft facility, and having insufficient funds available to pay a direct debit or a standing order. Add an example of a charge incurred due to going over by a small amount, for example -On one occasion in June 2006, a direct debit payment was returned due to insufficient funds in my account. The shortfall was only one pound and nineteen pence. I was then penalised for this breach by way of a charge of £**. The claimant holds this charge and indeed every other charge in question, to be punitive in nature, and wholly disproportionate.

 

 

8. It is not disputed that the Defendant is entitled to recover its damages following the claimant’s breach of contract, and it is entitled to include a liquidated damages clause. The Claimant contends that the charges made by the defendant are disproportionate, excessive, exorbitant and extravagant, and believes it to be unconscionable that they represent, are a pre-estimate of, or are in any way related to; its actual loss suffered as a result of the Claimants breaches of contract.

 

9. The defendant has declined to answer the Claimant’s written requests for information regarding its administrative costs, or other such costs, incurred as a result of the contractual breaches from which its charges arise. Further, the Defendant has declined to offer any explanation whatsoever in regard of how its charges are calculated, or any other such justification thereof, despite repeated requests to do so.

 

10. In a recent study undertaken in Australia, (Nicole Rich, “Unfair fees: a report into penalty fees charged by Australian Banks”) it was estimated that the cost to an Australian Bank of a customers direct debit refusal was estimated to be in the region of 54 cents. By reviewing the banks’ charges against the above figure, the study estimated that banks could be charging between 64 to 92 times what it costs them to process a direct debit refusal. The study’s key findings stated that in its opinion the Australian Bank’s cheque and direct debit return charges were likely to be penalties at law.

 

11. The Defendant, or indeed any of the UK banks, has never published any information to support how their charges are calculated, or what their actual costs associated with such breaches are, or what revenue they derive from such charges.

 

12. For their recent BBC2 documentary “The Money Programme”, the BBC appointed a commission of former senior banking industry figures and business academics to attempt to ascertain the actual costs to the UK banks of processing a customer’s breach of contract. They concluded that the absolute maximum conceivable cost that could be incurred by a direct debit refusal or overdraft excess is £2.50, and of a returned cheque £4.50. They did state however, that the actual cost is likely to be much less than this. The commission also estimated that the UK banks collectively derive as much as £4.5billion in profit a year from their charging regimes.

 

13. It is submitted that the Defendants charges are applied by an automated and computer driven process. It is therefore impossible to envisage how the Defendant can incur costs of £** by carrying out a completely automated and computer driven process. This process consists of a computer system ‘bouncing’ the direct debit, and sending out a computer generated letter. Note that the letter received notifying of a charge is identical in every instance, and if multiple breaches occurred on the same day, a separate letter will be sent in each instance.

 

14. Additionally, I asked the Defendant to provide me evidence of any manual intervention that may have occurred in relation to my account, under a Data Protection Act 1998 right of subject access request. No such information was forthcoming.

 

15. The claimant also cites a radio interview in 2004 with Lloyds TSB’s former head of personal banking, Peter McNamara, in which he states the charges are used to fund free banking for all personal customers as a whole.

 

16. The claimant cites the statement from the Office of Fair Trading (April 2006), who conducted a thorough investigation into default charges levied by the British financial industry. While the report primarily focused on Credit card issuers, the OFT stated that the principle of their findings would also apply to Bank account charges. They ruled that default charges at the current level were unfair and unlawful within their interpretation of the UTCCR’s.

 

17. On 22nd May 2006, the House of Commons passed an early day motion which welcomed the OFT's statement that default charges should be proportionate to the actual loss incurred. The house described such default charges as "exorbitant" and "excessive".

 

18. Further, under the UTCCR:

 

“5. - (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

 

(2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.

 

(3) Notwithstanding that a specific term or certain aspects of it in a contract has been individually negotiated, these Regulations shall apply to the rest of a contract if an overall assessment of it indicates that it is a pre-formulated standard contract.

 

(4) It shall be for any seller or supplier who claims that a term was individually negotiated to show that it was.”

 

Schedule 2 also includes such clauses (to define examples of unfair clauses) as:

 

“(i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract;

 

(j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract;

 

(m) giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract.”

 

The defendant is a multi-national corporation. The term regarding charges was inserted unilaterally in contract. The contract was pre and mass produced and I had no opportunity to negotiate the clause, or indeed any of the contract.

 

The cost of Abbey's charges have increased twice/three times/four times during the period in which my account was held, neither time was I given the opportunity to negotiate, or even notified of this increase. This means the bank has unilaterally altered the terms of my account contract to my detriment, and to their advantage.

 

19. As set out above, the Defendant’s charges can in no way be considered to be liquidated damages. They are not a pre-estimate of, or in any way related to, the Defendant’s loss incurred as a result of the breach of contract. The charges are punitive, held "in-terrorem", and unduly, substantially and extravagantly enrich the Defendant. As such, they are disproportionate contractual penalties and unenforceable at law.

 

I, the Claimant, believe all facts stated to be true.

 

Signed, dated.

That basically sets out your legal argument.

 

Although Wednesday is not the final hearing, the above will be useful to convince the judge you have a valid claim which has a reasonable prospect of success.

 

2) Request allocation to the small claims track.

 

Give reasons why your claim should be allocated to the small claims track. These reasons include -

 

- The claim is a consumer dispute, for which the small claims track was specifically designed

 

- Overriding objective's require both parties to be on an even footing - the small claims track can provide for this whereas the fast track would mean costs exposure which would be a heavy burden for you but insignificant to the defendant

 

- The law relating to contractual penalties is long established in both common law and statute - therefore the issues are of fact, not of law.

 

3) Propose directions

 

Take along the draft order for directions to propose to the judge. Here -

http://www.consumeractiongroup.co.uk/forum/general/57708-draft-order-allocation-questionnaires.html#post482148

 

The reasons for proposing the directions are also set out at the bottom of the post below - post #3.

 

Also, have a read of this thread -

 

http://www.consumeractiongroup.co.uk/forum/guidance-notes/64911-got-court-date-guide.html

[GaryH]

Thank you Gary, this really is all very helpfull and will get to work srait away. However, Am confused only over the fact that the court when \\\I called on fri said thry had recieved no request or order to have this case sruck out or set aside, I have no evidence of this either, So Abbey will go in on wednesday and will request to get it struck out then, is that possible for them, or too late, just so I know? Regardless I will be ready with evidence and paper in arms, to hopefuuly backfire their cunning plans. !Rebecca

Abbey, in a sence, don't really need to request a strike out - as it stands at the moment the judge will probably consider that the claim has no reasonable chance of succeeding, and will strike it out of his own initiative.

 

Of course, you do have a valid claim against the bank - they have taken money which they've no legal right to take. However, you must present your case in a manner which is acceptable to the court. You've sued a bank for the return of charges - its imcumbent on you to demonstrate in legal terms why the charges are unlawful.

 

Thats what the above will do. If you do a bit of reading up, get your head around it - its not actually very complex - you'll soon get the hang of the logic, you just need to put some time into researching it thats all.

 

This is why we tell users to make sure they do a good bit of reading before they file a claim, although obviously its too late now in your case.

 

I'm 100% confidant that your claim will be ok, so long as you present the above to the judge and show him you've got a valid claim.

 

As I said before, you should certainly apologise for your mis-understanding previously, and tell the judge that you have now taken advice and will not make the same mistakes again. Tell him/her that you are now fully aware of what you need to do to make your case.

 

Also, don't worry about court. Its nothing to fear at all. Its with a district judge in small claims court, which is designed to be informal and accessable to normal people without the need for solicitors. Its nothing more than an office type room with you, the judge and the other side (if they turn up!) sat around a table. I promise you its nothing to worry about at all. Most judges nowadays are very friendly, and he/she will recognise that you are acting in person and should take the lead.

 

You'll be fine. Get through the prelim and you'll probably find Abbey pay up soon after.

 

Forgive me ,but who is Kate?

 

One of the site helpers, she was going to PM you.

[GaryH]

Excellent, well done:)

 

Remember also the POC, which are linked to in a post above.

 

Buy a ring binder or 3 folders and keep your 3 copies of everything in it. You'll then be able to access what you need and pass it to the judge when its asked for.

 

Set it out in sections as above if you like - 1), 2) and 3)

 

1) Will contain the POC, your schedule and the statement of evidence (3 copies of each)

2) Will contain a sheet of paper with the reasons for allocation to the small claims track (3 copies),

3) The draft order and the reasons why they should be ordered (3 of each)

 

You should head each sheet of paper like this;

 

Your name -v- Abbey PLC

In the xxxxxxxx County Court

Claim Number: *******

 

Also, I now no longer need the paperwork you faxed me. Would you like me to return it by post, or cross cut shred it?

[GaryH]

Best of luck today Rebecca (not that you'll need it;)), let us know how you get on.

[GaryH]

Hi Rebecca,

 

Well done in court last week, I heard it went very well. Excellent.

 

Don't dissapear yet though, you still have some work to do. Has the notice of allocation arrived from the court yet? It'll contain directions for what you need to submit as evidence. You need to comply with this on time, then soon after you should find they settle.

 

Post the order up here and I'll help you with what you need to do.

[GaryH]

Hi again,

 

This is a prime example of why you should not contact the banks solicitors by telephone. They'll bluff you into thinking things that may not necessarily be true and try to haggle you down over the amount.

 

Take no notice. Accept nothing less than the full amount. Yes they have incurred loss as a result of each default - BUT - the whole point is that they will not tell you what that loss is. Untill they do then the charges are unenforcable in their entirety. When they prove their costs, then you'll reduce your claim by that amount - I.e never!!!

 

I would strongly advise you not to ring them again. They'll come to you, don't worry about that, and, what they said about Abbey claims being heard in court is an absolute load of old..... erm... well, y'know!!

 

I'm certainly not aware of a single Abbey claim which has been heard at a final hearing or trial.

 

Stick with it, keep coming back here at every stage, and you'll get every single penny back I can assure you of that.

[GaryH]

Nothing for you to worry about Rebecca - Abbey do not deny that their charges arise from a breach of contract, so Lloyds service charge defence and the judgement is irrelevant to you.

 

In any event the judgement in many peoples view is flawed. Leave to appeal has been granted.

[GaryH]

My understanding from Kate is that Abbey were ordered by the judge to submit a new defence within 14 days - this is becouse their defence originally was to object to your POC. Now you have amended your POC they then get the right to amend there defence as well.

 

Totally as expected, and nothing to do with the Lloyds thing.

 

You should hear from the court soon in the form of a "notice of allocation to the small claims track" - this will give you the court date and time, and directions.

 

You then submit your evidence (court bundle), then shortly after you should find that Abbey pay up.

 

Post the order as soon as you get it and we'll tell you what you need to do.

[GaryH]

Can you post the wording of the order up here?

 

The defence is highly likely to be the standard one so I'm not to concerned about seeing that.

 

Perhaps one of the Abbey regulars (noob?) could link you to a thread where the standard defence is posted so you can compare?

[GaryH]

Hiya

 

I have compared the new defence with the old and it is exactly the same, just a specific amount. so i am cool about that.the order as follows:

it is ordered that:

1, claimant has permission to amended paticulars of claim( copy handed to council at preliminary)

done already

2. the defendant shall be permitted ,if so advised, to serve and file an amended defence by 4pm 0n 16th May.

done already

3.With consent of the parties the claimbe allocated to the small claims trackto be heard on a date and time to be notifiedto the parties by the court, estimate 2 hours.

self explanitory - no action needed

4.each party shall deliver to the other party and to the court office copies of all documents on wich the partie sintend to use at the hearing, no later than 14 days before the allocated hearing date.

These are the 'standard small claims track' directions. This requires you to submit a bundle of the documents on which your claim relies to the court and Abbey no later than 14 days before the hearing. See the http://www.consumeractiongroup.co.uk/forum/bank-templates-library/33060-basic-court-bundle.html for most of what you need.

5. copies of sighned statements setting out the evidence of all witnesses on whom each party intends to rely andcopies of decided cases and other legal material to be relied apon must be included in the documents mentioned in paragraph 3 above.

A witness statement. Basically just the statement of evidence as posted on the previous page, but we'll rehead it and tighten it up a bit first. I see no harm in getting it in early, it may prompt them to settle earlier. I'll help you prepare this on Saturday or Sunday.

6. claimant to advise the court if case is settled.

Self explanitory

7. claimant pay the defendants court fee of £65.00.

Oh yes Kate mentioned that - have you paid it yet?

 

Keep the receipts of any paper, ink or other stationary and you can apply to get your costs back when they settle. Also keep a record of the time spent on the claim at the rate of £9.25 per hour, for the same reason.

 

Any questions just ask.

[GaryH]

You're welcome. Complying with that order is the final hoop - your on the home straight now.

[GaryH]

Here you go. Send it to inga.kirkman@abbey.com

 

Dear Ms Kirkman,

 

You v Abbey Plc

Claim Number: *******

 

Further to our telephone conversation on **/**/**, I wish to stress once again that I do not intend to reconsider my position in respect of the amount at which these matters will be settled.

 

For the avoidance of doubt, I am fully amenable to an amicable settlement of this claim and am aware of my duty to mitigate my loss.

 

However, until such time as Abbey Plc discloses verifiable information concerning its true losses incurred (if any) as a result of my contractual breaches, I will contend that the exorbitant charges which have been so liberally and indiscriminately levied to my account are unenforceable in their entirety.

 

Upon disclosure of such costs information I will of course be happy to amend the value of my claim accordingly, in order that both parties may be in the same position as before the breach occurred - in accordance with the principles of common law upon which my claim is based.

 

Furthermore, I am wholly disappointed that you have chosen to erroneously refer to the case of Berwick -v- Lloyds as relevant in respect of my own claim against your client.

 

I consider this spurious reference to a case which holds no relevance whatsoever to be intimidatory and clearly intended to persuade me into accepting a derogatory sum in settlement of this claim. I therefore require your reference to this judgement to be retracted by return. If you do not do so, I intend to draw the courts attention to this matter forthwith.

 

Finally, I no longer wish to discuss these matters over the telephone. All communications and negotiations must hereinafter be in written form, whether by electronic mail or otherwise. Any further attempts at telephone contact will be regarded as harassment and dealt with accordingly.

 

A copy of my most recent schedule of charges is attached to this message for your due consideration.

 

Kind Regards

[GaryH]

Let me know when she responds.

 

I've got a feeling that a full settlement should'nt be far away now.

[GaryH]

Hi Becca,

 

Did you send it? Any response yet?

[GaryH]

Great. Let us know what she responds with.