The Bloodster vs Nat West

[fendyweather]

Go get em bloodster, and youre also showing them in the process that you wont be intimidated............ brilliant. I will keep an eye on your post as its as exactly same stage as mine so, keep it updated would you please. thanks. Fendy xxx

[thebloodster]

Of course I will Fendy, thanks for all your help!! xx

 

Sent the letters off yesterday (Weds)

[thebloodster]

She has now received a letter from the court giving her a court date of July 26th. I have not seen the document myself yet to see what else it says but I will get my hands on it tomorrow!!

[Parkvale]

thebloodster, There should be directions from the judge stating what you and Cobblers have to provide. Keep us posted. Good luck.

[thebloodster]

Yes she did mention something about that on the phone but I'll let you know what it is tomorrow. Should she win this claim I know she has had charges since the start so we will be going for them again!!

[thebloodster]

Well tomorrow(?!) has finally arrived!! I eventually managed to get the "Notice of Allocation to the Small Claims Track (Hearing)" from her.

 

It states that the parties shall exchange the following not later than 4pm on the 15th June 2007.

 

(a) The written statements of evidence of any witness whose evidence is relied on in support of or in defence of the claim.

 

(b) Copies of any documents which a party proposes to rely on.

 

So what do I do now?! What is this asking, is this where the court bundle comes into it. The court date is on 26th July 2007 so it seems there is a big gap between the two dates mentioned

[steven4064]

What you need is:

 

Copy of your schedule (yet again!)

Photocopies of all the statements which have charges on them

A statement of evidence (make sure you include T&Cs)

The court bundle

 

Steven

 

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[thebloodster]

At first glance I'm hoping this is pretty straight forward but the evidence bit is worrying me. I have the current T&C for her account (nov 2006) which they kindly enclosed with her offer recently, but will I need older ones? What should I do with the T&C Leaflet - should I copy it?

 

Also is that the only evidence I need? This is starting to worry me now!!

[steven4064]

Ideally you should include the T&Cs that were current whe the account was opened. You should write to Cobbetts straight away copied to the court for them. You should say that they are requested under CPR Pre-Action Protocol 4.6©.

 

Don't worry too much though, you can go with the most recent ones (Nov 2006) - the main difference is that they have tried to obscure the fact that the charges are penalties. Fortunately it still shows.

 

I will attach a statement of evidence based on currentT&Cs in another post. Perhaps someone else will comment on them before you send them off.

 

Steven

 

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[steven4064]

STATEMENT OF EVIDENCE

- The Claimant submits that the charges levied to his account, as set out in the enclosed schedule and notwithstanding the Defendant’s defence that the charges levied are genuine pre-estimates of the cost to the Defendant of dealing with the Claimant’s defaults and are reasonable, are default penalty charges arising out of 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.

- 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 Defendant’s charges are not related to or intended to represent any actual loss arising from a breach of contract, but instead unduly enrich the Defendant, which exercises the contractual term in respect of such charges with a view to profit and with a view to deterring the Claimant from further breaches.

- In the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co [1915], Lord Dunedin stated that a clause is a penalty if it provides for “a payment of money stipulated as in-terrorum of the offending party”, i.e. if it is designed to scare or coerce or is used as a threat.

- The breaches of contract in this case relate to late (monthly) payments to the account. For example, a payment of £9.32 was due on 11 January 2003 but unpaid until 3 February. I was then penalised for this breach by way of a charge of £15.00 on 29 January 2003. Subsequently, charges were increased to £18. The claimant holds this charge and indeed every other charge in question, to be punitive in nature, and wholly disproportionate. (Subsequent to the OFT report “Calculating fair default charges in credit card contracts - A statement of the OFT's position”, April 2006, the Defendant has reduced these charges to £12, but no such charges have been applied to the Claimant’s account.)

- The current Bank Terms and Conditions (November 2006) state in relation to these charges:

Operations on the account

 

If at any time we receive instructions to withdraw funds from the account where

- there are insufficient funds available to cover the withdrawal, or

- the requested withdrawal would cause an agreed overdraft limit to be exceeded

we may exercise our sole discretion and, without contacting you, either (1) refuse to pay some or all of the item and/or (2) allow an overdraft to be created or allow the borrowing limit to be exceeded (in which case, the new or excess overdraft is an unarranged overdraft).

For the purposes of assessing whether you have sufficient funds available to cover the withdrawal, or whether the withdrawal would cause an agreed overdraft limit to be exceeded, we will look at the cleared balance (plus, where applicable, any unused agreed overdraft facility) on your account at 3.30 pm on the working weekday before we receive the instruction to withdraw funds.

AND

Fees, Interest and Other Charges

 

Fees for operating the account and interest rates and charges payable are charged as detailed in the leaflet 'A guide to Personal Current Account Fees' relating to the account and are subject to review from time to time. If any changes are made, details of the revised charges will be sent to you at least 30 days before the implementation date for the charges.

- In the leaflet referenced must be considered to form an integral part of the Terms and Conditions. In relation to these charges, it says

 

Unarranged borrowing - interest and fees

Interest

 

We would encourage you to agree an overdraft limit with us so you can avoid any unnecessary charges. If there is not enough money in your account and you have not contacted us to arrange an overdraft limit in advance, we may not allow you to withdraw money. Also we may not be able to pay your cheques, Standing Orders or Direct Debits... We will charge a fixed fee for each item we do not pay.

 

- The Claimant contends that these Terms imply a term requiring that, in the proper running of the Account, sufficient funds (including any agreed overdraft facility) must be maintained in the account to cover withdrawals or the result will be a charge. (It should be noted that this Condition applies even in cases over which the customer has no control ,eg the paying of a Direct Debit where the payment date and amount are controlled by the payee.)

- Further, the Claimant contends that, although these charges are referred to as “Fees for operating the account”, the Term is a clear statement that a charge will be imposed if the customer breaks the requirement that sufficient funds be in the account at the time of any withdrawal. The term itself sets out that the charge arises purely on the occurrence of the event and, as such, is a penalty or default charge rather than a fee for operating the account.

- Further, the Claimant contends that there is a very strong argument that these charges constitute “disguised penalties” – the OFT report “Calculating fair default charges in credit card contracts - A statement of the OFT's position”, April 2006, says,

“4.21 Attempts to restructure accounts in order to present events of default spuriously as additional services for which a charge may be made should be viewed as disguised penalties and equally open to challenge where grounds of unfairness exist. (For example, a charge for 'agreeing to' or 'allowing' a customer to exceed his credit limit is no different from a charge for the customer's 'default' in exceeding his credit limit.) The UTCCRs are concerned with the intention and effects of terms, not just their mechanism. “

- On overdrafts the current Terms and Conditions say:

Overdrafts

 

Overdrafts are available on request ..... We may refuse to pay a cheque (or allow any other payment or withdrawal) which could have the effect of exceeding the overdraft limit. If we do pay a cheque (or allow any other payment or withdrawal) which results in the overdraft limit being exceeded, it will not mean that the overdraft limit has changed, or that we will pay any other cheque (or allow any other payment or withdrawal) which would have the same effect. You agree that if you or any appropriately authorised signatory on the account:

a) formally requests an overdraft limit or an increased overdraft limit and we agree to the request; or

b) informally requests an overdraft by issuing a payment instruction in any form (eg issuing a cheque or making a card transaction on the account) which either through exercise of our discretion to pay the item on presentation for payment or through payment being guaranteed to a third party, results in the account becoming overdrawn when no agreed overdraft limit is in place or which results in the overdraft limit being exceeded;

in either case, this will be treated as a variation to the contract (ie not revoking and replacing any earlier agreement) under which overdraft facilities are provided by us. If they arise through exercise of our discretion to pay items presented for payment or through payment being guaranteed to third parties, they will be an unarranged overdraft.

 

- The Claimant contends that the word ‘variation’ is another example of the Defendant attempting to disguise penalties and that charges arising because of these contract ‘variations’ are just another form of ‘disguised penalty’.

 

- The Claimant refers to the fact that normally contract variations arise because some event or circumstance has arisen during the course of the operation of the contract that was not envisaged at the time the contract was executed. In this case, the Defendant has effectively written a contract variation into the contract. The Claimant contends that this has the effect of making the subject of the variation, namely the ‘informal request for an overdraft’ a breach of the implied contract term that the customer must maintain sufficient funds in the account to cover all withdrawals.

- Regarding unfairness in contract Terms, the UTCCRs say:

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 the contract and the contract was pre and mass produced and the Claimant had no opportunity to negotiate the clause, or indeed any of the contract. In this context, the OFT report says:

“3.23 We consider that in a consumer contract, where the parties are not of equal bargaining power, any estimate that included costs which could not legitimately be claimed as damages from an individual consumer in a case brought at common law, and which made a material difference to the overall charge, is likely to constitute a penalty in law “

- Following on from the above, the claimant does not accept The Defendants contention that the charges are enforceable as an administrative charge but rather that they are penalties, unless they can be shown to be directly related to actual losses incurred by the Defendant due to the specific breach of contract. 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. A penalty however, is unenforceable.

- The law states that a contractual party cannot profit from a breach and the charge for a loss suffered from a breach of contract should be the amount necessary to put both parties in the same position before the breach occurred. This means that Liquidated damages should be charged. This is backed up by case law – Robinson Vs Harman 1848.

- It is settled law that the charge for loss or damage arising from a breach of contract must be proportionate to the loss incurred.

- Lord Dunedin stated in the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co 1915 –

“the sum is a penalty if it is greater than the greatest loss which could have been suffered from the breach”

- 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;

- The Claimant refers to the OFT report, where a thorough investigation into default charges levied by the British financial industry was conducted:

“5.3 As a practical measure, to help encourage a swift change in market practice, we are setting a simple monetary threshold for intervention by us on default charges. The threshold is £12. [emphasis mine]

“5.4 Our presumption will be that credit card default charges set above this level are unfair unless there are exceptional factors that legally justify the higher charge. Where we see a fee above the threshold, we are likely to challenge the charge but will have regard to all the business circumstances and any exceptional factors in deciding whether to do so or not. We will regard charges set below the threshold as either not unfair, or insufficiently detrimental to the economic interests of consumers in all the circumstances to warrant regulatory intervention at this time

“5.5 We regard the setting of the threshold as a provisional practical measure to move the market towards compliance. We should make it quite clear that we are not inviting the banks to align their charges at such a threshold figure. We are not proposing that default fees should be equivalent to the threshold, and a court will certainly not consider that a default fee is fair just because it is below the threshold. ... This approach leaves scope for different models of charging, provided they are cost-related.

“5.12 We expect all credit card issuers to take on board the principles contained in this statement and to recalculate their default charges accordingly. Credit card issuers are being asked to confirm by 31 May [2006] their response to this statement and their willingness to make any necessary adjustments to their credit card default charges. We are mindful that changes to a default charge may require IT system and other business changes by the credit card issuers. Some of these changes may take some time to fully implement, for example updating documentation for consumers. Nevertheless, in view of the scale of consumer detriment involved in the imposition of unlawful default charges, we consider that steps to reduce charges should be taken as a matter of exceptional priority even if this means that consequential changes occur at a later date …”

- 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".

- In order to ascertain whether the Defendant’s charges are an unenforceable penalty or are liquidated damages, the true costs incurred by the Defendant need to be thoroughly examined to establish whether or not the charge truly represents a genuine pre-estimate of its likely loss incurred by the Claimant’s contractual breaches.

- On two occasions, the Claimant has requested that the Defendant justify its charges by providing details of the costs incurred as a result of the Claimant’s contractual breaches. Each time those requests were ignored.

- The Claimant therefore refers to recent work where estimates of actual costs to banks through customer breaches of contract have been assessed. Whilst not directly comparable in that the charges assessed relate to bank current accounts, the Claimant submits that the IT systems used are sufficiently comparable to make a comparison reasonable:

- 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 (about 22 pence). The study’s key findings stated that in its opinion the Australian Bank’s cheque and direct debit refusal fees were likely to be penalties at law.

- Further, in an American study (Consumer Federation of America “Bounced Cheques: Billion Dollar profits II”) it was estimated that the American banks’ cost to process a returned direct debit payment was between US$0.48 and US$0.65 (between 24 and 33 pence).

- The Defendant, nor 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.

- For their recent BBC2 documentary “The Money Programme” (broadcast 12 December 2006) , 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.

- The recent BBC “Whistleblower” programme had unprecedented access to the computer system operated by one of the major UK banking groups (Yorkshire and Clydesdale Banks). Using this system, the programme concluded that the costs of handling delinquent accounts are a maximum of £2.00 per time and normally very much less as the £2 assumed an unusual amount of manual handling. Senior personnel within Barclays admitted the same thing. The programme also concluded that it is inconceivable that the other UK banks are any different.

- It is submitted that the Defendants charges are applied by an automated and computer driven process similar to that in the above cases. No letter is sent and no other communication from the Defendant received: the computer system merely adds the charge to the next statement. It is therefore impossible to envisage how the Defendant can incur costs of £15 or £18 by carrying out this completely automated process.

- The Claimant asked the Defendant to provide evidence of any manual intervention that may have occurred in relation to the account, under a Data Protection Act 1998 right of subject access request. In the Defendant’s reply dated 4 January 2007, the Defendant explicitly states that “there has been no manual intervention on this account”.

- As set out previously, it is submitted that The Defendant’s charges can not be considered to be an administrative charge. In arguing that they are, they also effectively admit that they make profits from these fees. As set out above, the charges cannot be considered to be liquidated damages. They are not a pre-estimate of loss incurred as a result of the breach of contract. The charges are punitive, and unduly and substantially enrich the Defendant. As such, they are a contractual penalties and unenforceable at law.

- However, and without prejudice to the above, in the event that the charges were accepted as being a fee for a service, the claimant submits that they are unreasonable under section 15 of the Supply of Goods and Services Act 1982.

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

Signed, dated.

Documents attached in support of this statement

· Account Contract

· Office of Fair Trading report, April 2006

· House of commons early day motion, May 2006

· BBC commission conclusion

· Australian Default charges report, Nicole Rich

· Data Protection Act Subject Access Request for evidence of manual intervention and reply

· All pre-litigation correspondence between the parties

 

There are copies of all the documents on the site - some of the things youwill have to supply. In particular change the bits in blueto reflect your case - read trough carefully to make sure there aren't any more bits that need changing for your particulars

 

Steven

 

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[thebloodster]

Thanks again for that Steven and I'm sure i'll need some help over the weekend. I've been looking at the court bundle thread http://www.consumeractiongroup.co.uk/forum/guidance-notes/64911-got-court-date-guide.html and it mentions that I should have all the correspondence between me and the bank - does that include their solictors (I assume yes) and the letters from the court (I assume no) Should I include the defence from Cobbetts

[steven4064]

Yes to all the correspondence between you and NAtWest/Cobbetts. You don't need to inlclude the letters from the court - everyone has those and similarly Cobbetts defence.

 

Steven

 

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[thebloodster]

Help!!! I think i've made an error. I have just noticed that two charges on the schedule have incorrect dates against them. What should I do as obviously this will amend the interest charge I'm claiming - what should I do? One day is out 3 days and one is out a month both resulting in less interest.

 

I hope this doesn't blow my chances

[thebloodster]

Right, I have noticed in the basic court bundle it says "latest schedule of charges" so would I be able to update the dates and get away with the error.

 

Also in the basic bundle post is this all I need for the standard directions

 

 

The small claims track 'standard directions' -

Typically in small claims track cases, the directions will be these -

 

 

Quote:

Each party must file and serve copies of all documents on which that party intends to rely at the hearing, no later than fourteen days before the hearing.

 

The original documents must be brought to the hearing

 

 

To comply with these directions, you will need to submit copies of all the evidence and other documents upon which you would rely on in court, to both the other side and the court office, no later than 14 days before the date of the hearing. You must retain the original documents.

 

 

 

The documents/evidence you will need to submit will include;

 

 

- Schedule of charges

- Statements showing charges have been made

- All correspondence between you and the bank

- All cases and statutes upon which your claim relies

- OFT report

 

All this can be found in the Basic Court Bundle

 

Additionally, you should add as much other evidence as you can compile. Examples of other useful pieces of evidence are;

 

 

-

The Competition Commission report

- The McNamara interview

- Australian Default Fee's report

- BBC Commission conclusion

 

 

Thanks

[steven4064]

Right, I have noticed in the basic court bundle it says "latest schedule of charges" so would I be able to update the dates and get away with the error.

I don't think so (in a sing-song voice)

 

THe list in the last post is all you need (It's pretty exhaustive anyway)

 

Steven

 

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[thebloodster]

Thanks Steven but I meant the latest schedule of the charges I have for the charges I have. In other words do I go with the list of charges as it was when I last sent it - 24th Apr or do I send a updated list up to say Weds date when I'm intending sending the bundle off. If it is the latter one would I get away with correcting my two errors?

[steven4064]

You send another copy of exactly what you have already sent them. You can't change your claim at thispoint witout sumitting a N244 and paying £35 which you can't get back. You might just point out the 2 errors on it though - I don't that counts as changing your claim - it's just being upfront and honest

 

Steven

 

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[thebloodster]

How should I go about doin that though? Would it be a matter of putting a note in with the charges saying that I have amended two dates on the schedule of charges? I haven't actually added anything new - that will be the next claim against them

[steven4064]

I hink what I would do is to leave the schedule as it is but put in a not aying that the two dates are in error and putting the correct ones. That way, you are not changing anything they have seen already, merely pointing out a discrepancy, which makes non differenece to the claim.

 

Does anyone else agreedisagree with this course of action?

 

Steven

 

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Any opinions are without prejudice & without liability.

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[thebloodster]

Thanks again Steven.

 

I'm really unsure about this and maybe it may be the best course of action. However it does actually slightly alter the claim as the interest is actually slightly less. - I may give MoneyClaim a quick ring tomorrow to ask them what their view is!!

 

 

Another question!! Given that it Nat West bank statements can actually fit two to a A4 page should I copy this onto two on a page or should I keep them as seperate pages?

[steven4064]

I don't think it matters to the court how you copy them so I would go with saving the trees

 

Steven

 

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Any opinions are without prejudice & without liability.

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[thebloodster]

Another thing on this thread as worried me. I last sent a list of charges dated 24th Apr with the letters for the New AQ strategy. However since then I have noticed two date of charge errors on the schedule. What should I do with this?

 

Include in the bundle the list Dated 24th Apr without amending the two dates but put a note on a seperate sheet before it explaining the error.

 

OR

 

Amend the dates on the list and again include a note mentioning the change

 

OR

 

Include a new updated list ie as at 13th Jun and change the dates to the correct ones.

 

Thanks for your help!!

 

I urgently need an answer to this query as I've got to send my docs off tomorrow and I need a decision. Please help

[hedgey06]

Not sure how to answer this one bloodster - I'd hate to give you duff advice. Why don't you send a PM to Michael Browne and ask him to look at the last post for you? He'll know exactly what to do. Good luck, hedgey xx

[Michael Browne]

Don't drive yourelf mad over this. It's such a minor discrepancy that frankly no-one will give a monkeys. The charges are the same and the only difference is a tiny amount of interest.

 

Either just submit the Apr 24th list and say nothing

 

or amend the dates on the list and again include a note mentioning the change

 

It will not affect your claim, just go with whichever you're most comfortable and then forget about it.

[thebloodster]

Thanks Michael - My mind is now at ease!! I'm going with the second option as I'd prefer to be upfront about it!!