Suing under Section 75

[Pezza54]

If a claimant sues just the credit card company for a breach of contract by the service provider, and the ccc needs help from the sp to form a defence, do the ccc and sp join up
to remain as one defendant? What happens if the sp refuses to help the ccc?
Thanks for any advice.

[atticus]

The card company has the right to be indemnified by the supplier (s75(2)), and has the right to have the supplier made a party to the case (s75(6)).
My view is that the card company's position can end up being neutral: if breach of contract by the supplier is established, it gets an indemnity i.e. the right to be repaid by the supplier. If the court finds no breach of contract by the supplier, the card company has no liability.

Others may have different views.

[R0b]

The purpose of s75 is to give you that added protection and to be able to bring a "like" claim against the credit card company. The credit card co. and the service provider are jointly liable so you are able to sue either one or both as joint defendants.

To answer your question, I don't think the service provider and credit card company would work together to file a defence for the reasons Atticus has given, rather it's more likely that if there's a significant sum of money the credit card co. would counterclaim against the service provider as part of the same proceedings to recover any costs or losses. Certainly, there is no obligation for the service provider to help the credit card company.

To maximise your chances of success, it would be wise to sue both the service provider and the credit card co. as part of the same claim. You draft your claim primarily against the service provider who would be the first defendant and then once you have set out your particulars, you then say that the credit card co. is jointly and severally liable under s.75 of the consumer credit act 1974 based on the same facts.

If the service provider fails to file a defence, you can obtain judgment against the service provider whilst continuing proceedings against the credit card co. again to maximise your chances of recovery.

[Pezza54]

Thanks Atticus and Rob

Rob, under your method, if the sp defends the claim and the claimant wins, he could end up chasing the sp for the award, who may not have the finances to pay up. The ccc could have decided not to defend the claim. What would happen then? Only 60% of successful claimants receive their money.

Is the following route a possibility in the small claims track? Please correct me if I am wrong.

The claimant claims against the ccc. The ccc applies to the court to have the sp added as a second defendant. The court accepts the application and instructs the claimant to send amended claim form, poc, to the 2nd defendant who can decide to submit a defence or not. The ccc remains a defendant as they have a liability under s75.

My question is, if the claimant wins, which defendant would the judge instruct to pay the award?

[R0b]

Both parties are jointly (both responsible to perform the obligations) and several (liable each as individuals for the same breach/loss). If your loss is £500 then you might choose to sue the SP and CCC for £500 (joint liability) or the SP for £100 and the CCC for £400 (several liability).

If you sue the SP and CCC at the same time as jointly liable defendants and are successful, you can choose who you want to recover the money from. Most likely you will pursue the CCC but you may find that the SP has assets that you decide its far easier and quicker to get your money through the SP than the CCC. Even if you win a default judgment against the SP you are not required to discontinue your claim against the CCC due to the joint liability, the claim against the CCC continues.

If you only decide to sue the CCC and the CCC is successful, that's the end of the road. You can't then decide to sue the SP because you lost that opportunity when you opted to only sue the CCC. That's why you should sue both even if there is a distinct possibility the SP may not have any assets. Sure it's possible the SP and CCC might collude with one another to formulate a defence but the CCC is heavily reliant on the SP to explain the situation and provide the evidence.

The Money Claims Online service allows you to sue two defendants so I can't see any reason why you would decide to sue the CCC only as it maximises the potential of recovery, unless as I've pointed out the SP is no longer trading. It's entirely your choice and you are not paying any additional fee for two defendant's but if you want to sue the CCC only then go for it.

[Pezza54]

Thanks Rob
I will consider your advice before making a decision.

[atticus]

I agree with R0b

[Pezza54]

The trader (service provider) has gone into voluntary liquidation and closed premises. Finance provider did not get round to issuing an additional claim beforehand. Can the defendant finance company still defend my s75 claim after stating they know little about the claim in their defence?

[atticus]

They can try. But will they succeed? Can you prove the trader's breach of contract?

[Pezza54]

The FOS investigator decided there had been a breach of contract but the ombudsman disagreed after stating he decides on what is fair and reasonable and doesn't necessarily provide the same decision you may get in court
If a defendant in their defence just states the claim is not proved but fails to say why they believe the claim isn't proved, is that a bare denial?

[R0b]

If a defendant in their defence just states the claim is not proved but fails to say why they believe the claim isn't proved, is that a bare denial?

Possibly, depends on the language used.

A bare denial would be something like 'It is denied the Defendant is liable under the contract.'

Defendant's are entitled to require the claimant to prove their case in which case the defendant should use language similar to 'The Defendant is neither able to admit nor deny the allegation and the claimant is put to proof' or 'The Defendant makes no admission as to the allegations surrounding the breach as it does not have the knowledge or information in it's possession to provide a response. The Claimant is required to prove that a breach did in fact occur.'

The difference between a denial and a non-admission is that with a denial, you have to explain why you deny the allegation, whereas a non-admission means that the claimant needs to prove their case and if they do and a court agrees, the defendant will be liable. A bare denial is not allowed and if you think there is a bare denial, you should ask the court to take the assumption that the allegation in question is admitted.

[Pezza54]

Thank R0b and Atticus
The Defence states the defendant understands the contractor is willing and able to carry out the work. That isn't the position now as the contractor is in liquidation. Should I mention this at the hearing?
Note use of the word "is" and not "was"
Is there a possibility that if I lose my claim the judge decides that I should go back to the contractor, suffer any increased cost and continue with the contract.

[R0b]

You could wait until the hearing, or you could write/email the CCC on a without prejudice save as costs basis saying:

1. You have become aware that the contractor has now entered liquidation and closed up shop, with the implication being that they are no longer able to perform the work as suggested in their defence. In any event, presumably the contractor had an opportunity to carry out the work but given that the dispute has reached legal proceedings, you have no confidence in the contractor either doing the work at all or to an acceptable standard. NB. I am speculating here but you can tweak according to the facts.

2. It would be in both party's interests to settle the case rather than allow this to continue to a full hearing and incur further costs on both sides unnecessarily. Obviously any unreasonable rejection of settlement talks or offers by the CCC will be used as evidence when it comes to costs and conduct of the defendant.

It may or may not elicit a response or offer to discuss settlement terms, but at least you have made an effort to try and settle which would go in your favour at a hearing.

[Pezza54]

Thanks, should I copy the email to the defendant's solicitor? Sorry just realised ccc stands for credit card company not county court
Would I need to include "save as to costs" if the claim has been allocated to the small claims track?

[atticus]

Absolutely refer at the hearing - and before it - to the contractor's liquidation.