LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

[Amethyst]

Re: LegalBeagle Wins Bank Charge Case

This bit of the judgment --

81. The Claimant seeks damages pursuant to section 13 of the
Act which provides for payment of compensation in the
following circumstances :
(1 )An individual who suffers damage by reason of any
contravention by a data controller of any of the
requirements of this Act is entitled to compensation from
the data controller for that damage.
(2)An individual who suffers distress by reason of any
contravention by a data controller of any of the
requirements of this Act is entitled to compensation from
the data controller for that distress if-
(a)the individual also suffers damage by reason of the
contravention, or
(b)the contravention relates to the processing of personal
data for the special purposes.
(3)1n proceedings brought against a person by virtue of
this section it is a defence to prove that he had taken such
care as in all the circumstances was reasonably required
to comply with the requirement concerned.

82.1 am satisfied that the Claimant is entitled to
compensation under Sub-s. (1) above but as he has not
pleaded, nor gave any evidence about, suffering distress, I
do not propose to award any damages under Sub.s. 2.

83. In order to assess those damages I propose to follow
the dicta of Tugendhat J. in Vidaii-Hall & Ors. -v- Google
lnc.(2014) EWHC 13 by whom consideration was given to
a claim under 8.13 of the Act and when he expressed the
preliminary view that damage under s.13 does include
non-pecuniary loss.

84. In the present case there is some suggestion that the
Claimant was prevented from obtaining a mortgage by
reason of the filing of the default against him but I saw no
documentary evidence to support that claim and I do not
propose to allow it. Thus I make no award for pecuniary
loss but I will award non-pecuniary damages but not at the
level awarded in Durkin -v- DSG Retail Ltd. (2014)
UKSC 21, where the Pursuer was awarded Ł8000.00 for
damages to his credit rating. I have concluded that the
Defendant was not entitled to file a default and I am
satisfied that the Claimant has been put to a good deal of
trouble in his endeavours to resolve this matter in his
favour, as is evident from his correspondence with both
the Defendant and the Information Commissioner, as well
as being obliged to bring these proceedings, but as I have
seen no evidence of damage to his credit rating, I
consider that an award of Ł1000.00 is appropriate.



There was a bit of weirdness at the beginning of the claim where the claim hasn't actually pleaded anything on the default issue in his original claim so I don't know how much that affected the case later on - the main concentration was on the bank charges aspect - the ICO had already said they thought the default unfair so the court were backing that up really.

[Fred]

Re: LegalBeagle Wins Bank Charge Case

How can a Default not do damage to a credit file?
-------------------------------------------------------

Is it because he or she can have it amended by application to the credit agency especially now ?

[ncf355]

Re: LegalBeagle Wins Bank Charge Case

OK, Thanks Ame

Just had the impression that Khop and Durkin gave us authority for larger damages without proof of specific loss, but I'll get over too that thread

[Amethyst]

Re: LegalBeagle Wins Bank Charge Case

I think they didn't evidence particular damage - the judge mentions suggestion of a mortgage that didn't go through but that no evidence was offered and the point wasn't pursued etc... so I think it was just the default didn't really have that much effect (although think Orfoster might beg to differ) There's a fair bit on his thread about the ICO and the default / credit file issues (linky http://www.legalbeagles.info/forums/...ase-court-28-1 )

[ncf355]

Re: LegalBeagle Wins Bank Charge Case

Congratulations to Oliver and all those that have assisted in him with this case, fantastic news!

(Even better that it's happened in god's own county, Somerset!)


I found this bit curious though....................

"The claimant was also awarded damages for an incorrect default registered on his credit file. Although the judge held that no damage had been done to the file by the ‘default’, the fact that Lloyds had agreed to the claimant repaying the overdraft by way of a debt management plan it meant that no default had in fact occurred."

How can a Default not do damage to a credit file?

Were the arguments from Khopraror (spelling?) and Durkin used for this?

[Fred]

Re: LegalBeagle Wins Bank Charge Case

Yes section 65 and 66 do seem to say taht the judge could not consider this to be a fair term IMO. Very interesting in that it is a similar term which is used to validate the variation of account credit charges in general.

What amount of credit can be placed on the the original OFT bank charges case ongoing at the time & the associated behaviour of the banks in that consumers in difficulty could still make claims for bank charges, was this just related to the potential outcome or possibly the meanings in this case ?

Is it that the potential charges that could be incurred are in no way predictable so as to place a consumer in such a position of not being able to plan for any such change ?

Re: LegalBeagle Wins Bank Charge Case

Yes section 65 and 66 do seem to say taht the judge could not consider this to be a fair term IMO. Very interesting in that it is a similar term which is used to validate the variation of account credit charges in general.

[EXC]

Re: LegalBeagle Wins Bank Charge Case

I will have to read it again , it seemed to me that it was said that since the debtor could not withdraw from the agreement he had not no opportunity to exercise this right and therefore had no choice but to accept the variation.

Just re-read it and maybe you're right.

Re: LegalBeagle Wins Bank Charge Case

Disappointingly the judgment held that he did have the right to withdraw from agreement although in reality he didn't have the capability as he was overdrawn. As Tom would say ''a right without remedy is no right at all''.

But I do agree with you that a clause in any consumer contract that has the effect of not being able to withdraw is inherently unfair.

I will have to read it again , it seemed to me that it was said that since the debtor could not withdraw from the agreement he had not no opportunity to exercise this right and therefore had no choice but to accept the variation.

[Fred]

Re: LegalBeagle Wins Bank Charge Case

Keep it going..............................I can use this stuff for learnings if nothing else, if proven solid the implications are big for "unsecured" a massive interest for lots with little hope :tinysmile_twink_t2:

[EXC]

Re: LegalBeagle Wins Bank Charge Case

The ability to vary a term unilaterally has, as the judgment says always been qualified by a term which says that the agreement may be terminated by the debtor if he did not agree, however this was also addressed, as of course if the debtor is in deb it he cannot terminate the agreement so it is itself is not a fair term and unenforceable.

Disappointingly the judgment held that he did have the right to withdraw from agreement although in reality he didn't have the capability as he was overdrawn. As Tom would say ''a right without remedy is no right at all''.

But I do agree with you that a clause in any consumer contract that has the effect of not being able to withdraw is inherently unfair.

[Amethyst]

Re: LegalBeagle Wins Bank Charge Case

''''For the foregoing reasons and in reliance upon the ECJ
decision in Hatosag I therefore conclude that, as between this
Claimant and this Defendant the term in question, namely
Conditions 15.4 and 15 .6, is unfair because I am satisfied
that, in the words of Regulation 5 (1):
it causes significant imbalance in the parties' rights and
obligations arising under the contract to the detriment of the
consumer.'' Para 69 of the Judgment ( http://legalbeagles.info/judgment-fo...-bank-charges/ )

Condition 15.4 provides:" We can make any change to
the terms of this agreement or the additional terms that
apply to a particular account or service (such as
our .... charges or overdraft terms'').

Condition 15.6 provides: "We can also make any other
changes to the terms of this agreement ... . or can introduce
new charges as long as we give you sufficient advance
personal notice."

I do believe this will cross over to others who have had incessant charges added to their accounts taking them further and further into overdraft despite having informed the bank they are in financial difficulty.

We think it will also assist those who have come to arrangements to repay overdrafts with the bank before being defaulted on their credit files.

Re: LegalBeagle Wins Bank Charge Case

Not had such a good read for a long time. Hearty well done to all concerned.
A lot of issues there brought into the light IMO.
The ability to consider unfairness under section 5 on terms which are unilaterally altered on the permission of a term in an agreement which says just that the creditor can do so for instance, this was the subject of a judgement I saw on her by Fred, who had a successful decision against a sub-pime lender in an interest rate matter. This is a very valuable point IMO.

The ability to vary a term unilaterally has, as the judgment says always been qualified by a term which says that the agreement may be terminated by the debtor if he did not agree, however this was also addressed, as of course if the debtor is in deb it he cannot terminate the agreement so it is itself is not a fair term and unenforceable.

The damages issue was also inter sting, and i was interested to hear of the google case which I admit I have not read, I note they did not take Durkin into account on this occaision, however the award of 1000 for none pecuniary losses is significant and is interesting after smeaton.

Again well done to everyone on this.

[MIKE770]

Re: LegalBeagle Wins Bank Charge Case

Lloyds Overdraft Terms deemed Unfair in new Bank Charges Victory

Lloyds Bank in Taunton

Lloyds TSB has been ordered to pay a customer over Ł1700 after it unfairly applied bank charges to his account and damaged his credit file.


In what we believe is the first bank charges court claim victory since such cases were stayed in July 2007, LegalBeagles member Oliver Foster-Burnell (‘orfoster’) has been successful in his claim for a refund of charges and interest.


The claim was brought against Lloyds TSB at Taunton County Court where Mr Deputy District Judge Stockdale held that despite the Supreme Court judgment, the unarranged overdraft charges levied on Mr Foster-Burnell were contrary to the requirement of good faith as per section 5(1) of the Unfair Terms in Consumer Contracts Regulations 1999 and, as such, unfair.


Oliver Foster-Burnell, the Claimant in this case said: “It is unfair that the banking industry are allowed to profit while anyone suffers financial hardship by applying these charges and allowing charges to snowball out of control, it skews the imbalance between the banks making huge profits and consumers around the country suffering difficulties, I am so pleased that in my case the judge awarded in my favour”.

Mr Oliver Foster-Burnell

Oliver continued: “I’ve had such amazing support from the LegalBeagles forum and my legal team who have done an excellent job in supporting me”


The bank was ordered to re-imburse the claimant Ł743 in charges plus interest. The court also awarded the claimant non-pecuniary damages of Ł1000 for a related incorrect default to his credit file.

• You can read the full judgment here (pdf 12.4mb)

We consider this County Court Judgment to be highly significant and although it can only be persuasive as authority currently it will almost certainly be subject to appeal and could be ground breaking.


The ruling does not effectively overturn the Supreme Court Judgment made back in April 2008 but adds a further dimension to future claims, particularly to customers who have suffered from financial difficulties whilst in an overdraft situation with their current accounts.

Taunton County Court

Mr Foster-Burnell’s case was brought using relatively new case law established in the European Court of Justice: Nemzeti Fogyasztóvédelmi Hatóság v Invitel Távközlési Zrt C‑472/10 (“Hatóság”)



In the Hatóság case the ECJ found that price variation clauses in consumer contracts must have reason for and method in their mechanism clearly set out. In Orfoster’s case, as with all standard current account contracts, Lloyds simply increased his overdraft charges without reason or method.


The claimant was also awarded damages for an incorrect default registered on his credit file. Although the judge held that no damage had been done to the file by the ‘default’, the fact that Lloyds had agreed to the claimant repaying the overdraft by way of a debt management plan it meant that no default had in fact occurred.


Nick Spooner, co-owner of the LegalBeagles consumer forum stressed that ‘’until the appeals process in this case is exhausted we do not recommend anyone using these arguments in litigation. We would like to congratulate Oliver and thank his legal team of Kate Briscoe (Howlett Clarke Solicitors and co-owner of LegalBeagles.info), and counsel Tom Brennan for their dogged determination in continuing the fight for fairness .”

Good old Shire Hall

[EXC]

Re: LegalBeagle Wins Bank Charge Case

In addition to the Hatosag judgment the claimant's skeleton was supported by another ECJ judgment RWE Vertrieb AG v Verbraucherzentrale Nordrhein-Westfalen e.V. (Case C-92/11)

http://curia.europa.eu/juris/documen...t=1&cid=180655

The relevant paragraphs are 49 to 54.