Blemain Finance Limited.

[pt2537]

Over the last four years or so, i have been involved in a case that to be honest i never thought would end. It started back in 2016, when a new client enquiry landed on my desk. To set the background, when the client arrived she had already lost in possession proceedings dating back to […]


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[EnglandPi]

I have enjoyed your blog, very interesting, thank you for posting.

[EXC]

Well done Paul. Glad to see you're still making a nuisance of yourself.

I'm only half way through the judgment but great you got a UTCCR win.

Have you let Tom know of the win?

[pt2537]

No mate i havent spoken to Tom for a while, work has been so crazy busy that ive been working a fair bit over the weekends too.

[pt2537]

Ive put the two key findings from the judgment on the blog now .

So now for the key parts of the Judgment. On the question of the interest variation clause, the Judge concluded

1. In my judgment the clause is unfair, within the meaning of the that term in regulation 5 as set out above, for the following reasons:
   (a) First, although a reason is specified, in what I consider to be plain language, for the potential operation of the clause that reason is very broad. Indeed, the reason given is simply “market conditions” and broadened out further by the words “actual or expected”.
   (b) Secondly, the consequence of the broad nature of the reason strikes me as making it difficult for the consumer to predict with any degree of certainty when, or to what effect, the lender might seek to operate the clause.
   (c) Thirdly, and similarly, whilst I accept a valid reason for alteration is given, its breadth would make it difficult for a consumer to challenge whether the clause was being activated for genuine reasons.
   (d) Fourthly, the period of notice before the variation bites is very short, namely only seven days.
   (e) Fifthly, although a consumer does enjoy the ability to redeem this right is curtailed by early redemption penalties, albeit on a sliding scale, throughout a significant period of the Agreement.
2. I have accordingly reached the conclusion clause 4 is and was not binding on Ms Charles.

On the question of the tariff of charges and the term allowing Blemain to charge what it arguably wanted, the Judge said the following

1. Having considered matters further, and with the benefit of further argument from both sides (in conjunction with the submissions from trial) I have reached this view:
   (a) The question of incorporation per se was probably something of a “red herring”. Neither party appeared to suggest, so far as I could see, that whether the sheets themselves were incorporated – in the proper contractual sense of becoming terms – was necessarily the end of the matter.
   (b) The absence of prior provision of the sheets, however, could be said to affect the question of construction because the Agreement has to be construed in its proper factual matrix. Prior provision of such sheets would be part of that matrix, as would their absence.
   (c) Another part of that matrix, however, as demonstrated by Ms Charles’s own evidence, is the common knowledge of the likelihood of financial institutions adding “charges” in the event of breach.
   (d) All words of the clause need to be considered and the reference to “other costs, charges and expenses” (my emphasis) is likely to mean something in addition to the earlier, well understood, “legal …costs”. The control mechanism for such
   “other” costs, charges and expenses (i.e. as opposed to the “legal costs”) is unclear.
   (e) The word “incur” connotes becoming liable to, or subject to, the matters in question. On reflection, it seems to me that it may be somewhat artificial, and too narrow/literal, to confine the clause to specific, hypothecated sums of money spent. I note, also, that clause 2 (f) of the Agreement provides for interest where “…the Lender has to pay someone else…” in relation to amounts falling due under 2 (a) to (e). Although by no means determinative (as clause 2 (a) to (e) refers to a large number of matters) this does somewhat reinforce the view that there may be circumstances where a cost, charge or expense can be charged even though the Lender has not had to pay someone else (i.e. the type of internal overhead style charge Blemain has actually levied pursuant to the tariff sheets).
   (f) Absent the contractual incorporation of an actual tariff of charges, or a mechanism for the determination of such charges, the consumer is left in an open-ended position regarding the amount of such charges, which is capable of abuse.
   (g) Furthermore, even if one adopted the construction that specific charges or expenses paid for needed identifying, the clause is still sufficiently broad to disable the customer from knowing what categories of cost, charge or expense they may face, or of what scale (save that they relate to efforts to obtain payment). Further, recovery is on the indemnity basis.
   (h) Such a term, therefore, is capable of operating and have the effect of requiring the customer to pay a disproportionate amount in the event of breach.
   (i) Even with a tariff sheet incorporated, if (as here over certain periods of time) charges are per letter and multiple arrears letters are sent in rapid succession, the clause would have the effect of requiring the customer to pay a disproportionate charge in the event of breach.
   (j) In the event the tariff sheets were incorporated then, prior to May 2010, these would in themselves be unfair within the meaning of regulation 5, in my judgment, because what the lender would be contractually entitled in this event to
   have charged a specific cost per letter, without any restriction at all on number of letters; this, again, is capable of resulting in a disproportionate charge.
   (k) The potency of the clause and its potentially disproportionate effect is exacerbated by the fact that interest (indeed, so far as I can see, compound interest) can be added to sums falling due under the clause where the lender has paid money out.
2. For these reasons, I have ultimately reached the view that (a) my initial construction of the clause in the draft judgment was too narrow and (b) this clause is unfair pursuant to the Regulations in creating a significant imbalance in the parties’ rights and obligations under the Agreement to the detriment of the consumer.

[meellis]

Well done PT very interesting result. Before this pandemic I had requested information from a certain Brentwood company about the wording on their terms in relation to charges and the implementation of them. In particular the wording" we will add our costs, expenses and charges to your account as soon as we have to pay them or decide to charge them. You should pay them at that date . If you do not we will charge interest on them under clause ** ". They argue their tariff of charges cover this but I stated that their tariff cannot state exactly when they have to pay any expenses or decide to charge them because it is very open. I also stated that it infers that I would be informed of the date so I can choose to pay them which has never happened. It seems all these companies work around variations of the same theme.

[Sickofbullies]

Well done Paul-I heard from my solicitor today. I have a similar case with Together. It seems there is to be a meeting on 25th June to discuss our counterclaim-re changes, unsolicited visits, secret commission, interest rates, the use of Monarch Recoveries, and the settlement of our costs following a win against them earlier this year. If this meeting does not prove successful then it's back to court we go. This will make a good book one day as a help to others.