Mercedes Benz - Ridiculous back and forth VT situation

[R0b]

Re: Mercedes Benz - Ridiculous back and forth VT situation

As mentioned above, here's an example of a response to their LBA under the new Debt PAP. There is wording that I have put in paragraphs, you will need to consider whether it is applicable or may require further information from you. There is also wording in brackets about further information and I've used the word OR to indicate that you should only use one or the other paragraph. A word version of this letter is attached at the bottom.


Dear Sir or Madam,

[Claimant] v [Your Name]

I am writing to acknowledge receipt of your letter before action dated [insert date] and setting out your client’s allegations made in connection with a [give details of the agreement as set out in the LBA]. More specifically, your client’s suggestion that I am liable for [insert details of what they are alleging you are liable for]. In accordance with the Pre-Action Protocol for Debt Claims (the “Protocol”), I have enclosed the completed Reply Form.
You will note from the enclosed Reply Form that I deny any liability in relation to your client’s allegations. My reasons are as follows:

• [set out the reasons why you dispute liability]

[Without prejudice to the above denial, you have supplied me with [little or no] documentation or information relating to your client’s claim. I am unable to properly consider these allegations and I therefore require further information from your client.]

OR

[Without prejudice to the above denial, I require further information from your client in order for me to properly consider the allegations (as set out below). Without such information, I am not in a position to provide a full response to the allegations made against me within the time limit set out in the Protocol.]

The following information is required:

• [set out documents or information you need from the creditor]

Until your client has complied with my request for further information, I would therefore suggest that any action your client is considering be deferred. Upon receipt of the said information, I anticipate that a full response will be provided within 30 days (I refer you to the Protocol under the heading What happens if I fill in and return the Reply Form in time? at page 9 which explicitly states creditors should allow a further 30 days before commencing legal proceedings). Please therefore confirm that your client will not to take any further action until it has provided the necessary information and/or documentation and until you are in receipt of my full response.

If, however, your client pursues its claim notwithstanding its failure to supply the further information as requested, I reserve the right to draw this letter to the attention of the court and seek an adverse costs order as a result of non-compliance with the Protocol as well as any other order the court deems appropriate.

[Finally, I would like to add that pursuant to paragraph 3.3 of the Protocol, I request that all future correspondence be sent to the following email address: [insert email address]. If this position should change, I will let you know.]

I look forward to hearing from you.


Yours faithfully,


[Name]


Enc. Reply Form

[jonnyfeng]

Re: Mercedes Benz - Ridiculous back and forth VT situation

Hi @R0b

I have used your template and added addition details as suggested. Please see the attached PDF, and advise if this is suitable. With regards to explaining my reasons, i have simply quoted CCA.

Is this ok for me to do, i did not wish to go in depth explaining my arguments at this stage, or should i?

Regards

***WRONG FILE ATTACHED***

[jonnyfeng]

Re: Mercedes Benz - Ridiculous back and forth VT situation

[MENTION=71570]R0b[/MENTION] Apologies i uploaded the wrong document,

It was one from another thread i was reading earlier,

Please see the correct one attached. If anyone can delete the previous for me that would be great, as i was unabel to do so.

Kind regards

[Amethyst]

Re: Mercedes Benz - Ridiculous back and forth VT situation

If anyone can delete the previous for me that would be great, as i was unabel to do so.

done xx

[R0b]

Re: Mercedes Benz - Ridiculous back and forth VT situation

Hello,

Just a few comments highlighted below on suggested changes.

1. Amend the following sentence below in the first paragraph:

"... setting out your client’s allegations relating to end of contract charges under a Hire Purchase Agreement dated 30/06/2013. [LAST SENTENCE REMOVED]"

2. I would combine the second paragraph with the first.

3. As for your reasons for denying liability, I think you need to do more than simply regurgitate the sections of the CCA. You might want to consider saying something like the following (and consider numbering each argument for ease of reference):

"1. In accordance with section 99(1) of the Consumer Credit Act 1974 ("CCA"), I gave written notice to your client on [date] explaining that I am exercising my right to voluntarily terminate the agreement with immediate effect. Upon doing so, section 100(1) of the CCA is immediately invoked in that my liability arising out of or in connection with the agreement is strictly limited to a maximum of one half of the total price payable. As you will be aware, the definition of 'total price' is set out in section 189 of the CCA. The 'total price' means the total amount payable under the agreement including any sum relating to an option to purchase but it explicitly does not include any sums which are payable if they are categorised as a penalty, compensation or damages as a result of breaching the terms of the agreement. The excess mileage sums that your client seeks is considered to be a form of liquidated damages and therefore falls within the excluded category of compensation and/or damages for breach of the agreement. Therefore, such sums are not recoverable for the purposes of calculating my liability owed to your client. This is further confirmed by section 173 of the CCA whereby it states that any contractual term which imposes additional liability (whether direct or indirect) on the debtor and is inconsistent with the provisions of the CCA, shall be void and unenforceable.

2. Even if (which is denied) excess mileage charges are recoverable, my liability is still capped at one half of the total amount payable and cannot be forced to pay more than this amount. Again, any contractual term requiring me to do so is contrary to section 173.

3. In any event and notwithstanding the above, section 100(1) only allows your client to recover sums which are due and payable immediately before termination of the agreement. As mentioned above, I gave notice to your client on [date] and so termination of the agreement was effected on [date] or at the latest [insert date] allowing for the postal delivery rules. Your client issued the invoice for excess mileage charges on [date] and it is therefore unarguable that these charges became due and payable after termination of the agreement taking effect, and not before."

4. As for your section on further information required, I'm not sure you need the evidence to show the loss because the excess mileage charges are based on a formula within the agreement are they not? Also i don't think you need to mention evidence of the cars reasonable condition because they haven't alleged that yet - they have simply said that its end of contract charges assuming excess mileage. You might want to say the following (again numbered for ease):

"1. You have suggested your client claims end of contract charges in the sum of £2,106.96. Please can you confirm that these charges relate solely to excess mileage charges? If not, I require an itemised breakdown of these charges and the basis on which your client claims to be entitled to the same.

2. There was a vehicle condition report carried out following collection of the vehicle. Please provide a copy of this."

Note I haven't mentioned the service history or MOT etc. because that should already be contained in the condition report? If you feel it necessary to ask for it then its up to you, at least if you have it you don't have to use it if no longer needed.

5. You missed the bracket off on the last paragraph at the beginning, that will need to be removed.


Just to reiterate, these are suggestions and you don't have to accept any of them - this is your claim so you will need to deal with it as you see fit and you are in the best position to know what you do and don't need.

[jonnyfeng]

Re: Mercedes Benz - Ridiculous back and forth VT situation

Good afternoon [MENTION=71570]R0b[/MENTION]

I was logged out of my profile on this and was unabel to recover my password so was not able to come back.

I recieved a response from MC solicitors after responding using suggestions discussed here.

The response from them allowed me 14 days to further respond, i have attached the document here.

It seems they are basing there argument on excess mileage being deemed a liability "accrued before termination breach the obligation to take reasonable care of the goods"

What can you offer in suggestions to respond at this stage, im still adamant from what i have read that they cant win this surely!?

[R0b]

Re: Mercedes Benz - Ridiculous back and forth VT situation

Looks like a typical response from them based on previous exchanges. Did they enclose a copy of the condition report or any other documents/information you asked for?

Their claim is essentially based on two things. Reliance on the contractual clause allowing for excess mileage but this ought to be rebutted by the fact that Section 99 as a whole is subject to section 100(1) which severely limits what they can recover - it rests on the wording of section 100(1), namely where it specifically states "one-half of the total price of the goods and ... any sums in respect of the total price due immediately before termination." As I've pointed out before, 'total price' has a very specific meaning which does not include the recovery of sums for compensation/damages for breach.

As for the argument of failing to take reasonable care, MBFS' claim in effect is for financial loss only (assuming they don't dispute any physical damage based on the report). As far as a duty to take reasonable care is concerned, the courts have commonly taken the same approach as that of a duty of care under tort law i.e. negligence. In order for them to claim pure financial loss, they must prove that the wording of section 100(4) was intended to cover a duty to avoid causing financial loss. It is well established by the courts that in the absence of explicit wording, pure financial loss is not recoverable if there is no physical damage. Whilst there is no specific definition of reasonable care in the CCA, that definition is well established by the courts in tort law as meaning physical damage. There is nothing within the wording of section 100(4) to suggest that you are under a duty to take reasonable care in avoiding financial loss rather the correct construction is that the duty to take reasonable care is limited to physical damage of the goods. To hold you liable for pure financial loss is beyond the scope of your duty.

Murphy v Brentwood DC (A House of Lords case) is the leading case on this and Lord Bridge explained it like this:

“If a manufacturer negligently puts into circulation a chattel containing a latent defect which renders it dangerous to persons or property, the manufacturer, on the well known principles established by Donoghue -v- Stevenson (1932) A.C. 562, will be liable in tort for injury to persons or damage to property which the chattel causes.

But if a manufacturer produces and, sells a chattel which is merely defective in quality, even to the extent that it is valueless for the purpose for which it is intended, the manufacturer's liability at common law arises only under and by reference to the terms of any contract to which he is a party in relation to the chattel, the common law does not impose on him any liability in tort to persons to whom he owes no duty in contract but who, having acquired the chattel, suffer economic loss because the chattel is defective in quality. If a dangerous defect in a chattel is discovered before it causes any personal injury or damage to property, because the danger is now known and the chattel cannot safely be used unless the defect is repaired, the defect becomes merely a defect in quality.

The chattel is either capable of repair at economic cost or it is worthless and must be scrapped. In either case the loss sustained by the owner or hirer of the chattel is purely economic. It is recoverable against any party who owes the loser a relevant contractual duty. But it is not recoverable in tort in the absence of a special relationship of proximity imposing on the tortfeasor a duty of care to safeguard the plaintiff from economic loss. There is no such special relationship between the manufacturer of a chattel and a remote owner or hirer.”

Does the duty to take "reasonable care" of the goods extend to avoiding pure financial loss? Based on past case law I very much doubt it but that's my view. "reasonable care" is a familiar phrase within the courts and well established in tort law - the standard of care is not particularly high. If the court were to imply that the duty also included a duty to avoid causing loss to MBFS that would surely impose a higher standard than reasonable.

I've attached a Consultation on VT back in 2004 when the government looked at removing it from the CCA (though it chose to keep it). I would suggest you specifically look at Section 5 and 6 which confirms that your liability is limited to 50%. Bullet point 4 of Section 6 specifically confirms your liability "for any amount that has not been paid under the original agreement up to a maximum of 50% of the total amount due to be paid under the Agreement." The next bullet point also says that you must return the goods in a reasonable condition - no suggestion that you must avoid causing financial loss.

This is of course my opinion and clearly MBFS have a different one - it will be a case of persuading the judge in court that all of this is evidence towards your liability being limited to 50% and that whilst MBFS may consider themselves to be left with a de-valued car, the CCA does not allow for such recovery.

[jonnyfeng]

Re: Mercedes Benz - Ridiculous back and forth VT situation

Thanks [MENTION=71570]R0b[/MENTION] i must say i am extremely interested in reading your responses, and then leading onto reading more and more about this.

In this instance where they have responded, i have been given 14 days to further reply, as noted in the letter i attached on the last post. Unfortunately i have to respond today now.

Based on this, i appreciate and understand what you have expressed, would you see it feasible that i continue to respond arguing my case at this stage, ie. would i respond with more information such as you have mentioned, or do i respond explaining that i reject the offer to conform to the payments etc.

They havent really given me an alternative other than to submit a payment or details to arrange a payment scheme.

Kind regards, and apologies for the lack of time, as mentioned i was unable to access leagle beagles due to losing my password

[R0b]

Re: Mercedes Benz - Ridiculous back and forth VT situation

I can't really say what you should and shouldn't do as it is your case and ultimately up to you to defend. I think the next step for MC is probably to issue a claim against you for the recovery of those sums, it will be up to you to put in a robust defence and then argue it as best you can and persuade the judge. Let's remember that MBFS have no evidence to support their claim that 100(4) extends to economic loss whereas you have the Consultation Paper which confirms your position that is what Parliament intended these provisions to mean. On top of that, if the High Court in the Merlin case I mentioned above decides that "damage ... to property" under the relevant Act only covers physical property damage or injury, then surely the same must apply to the meaning of "reasonable care of the goods" in the absence of any express wording (I selected this case as it related to a depreciation in house value because of radioactive dust around the property rather than any physical damage to it - similar to your current position).

You have to weigh up what might be best for you and it is always a risk going to court, and nobody can say for certain whether you will win or lose as it is how you fare on the day. If you can afford to save up that amount within about 6-8 months then you might want to have your day in court and try to argue it. Otherwise if you do lose, you will have to pay in full within one month of the judgment or you will have a CCJ on record, something I am sure you want to avoid. To give you an example, have a read of the link below which shows the kind of defence you might put in if a claim is issued (a working draft of mine though I've not added reference to 100(4) yet).

https://www.dropbox.com/s/97x00owbod...01.18.doc?dl=0