OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

[Yoda]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

And what about this for going back further than the 6 yrs under the SOL Act?

Estoppel by laches precludes a party from bringing an action when the party knowingly failed to claim or enforce a legal right at the proper time. This doctrine is closely related to the concept of statutes of limitations, except that statutes of limitations set specific time limits for legal actions, whereas under Laches, generally there is no prescribed time that courts consider "proper." A defendant seeking the protection of laches must demonstrate that the plaintiff's inaction, Misrepresentation, or silence prejudiced the defendant or induced the defendant to change positions for the worse
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Yoda, can you paste the two different versions side by side, just for ease, please

Sorry Ame, which two versions?

[Yoda]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Below is the meaning of Consideration within the context of a properly executed contract.

Consideration for a particular promise exists where some right, interest, profit or benefit accrues (or will accrue) to the promisor as a direct result of some forbearance, detriment, loss or responsibility that has been given, suffered or undertaken by the promisee. The consideration must be executory or executed, but not past.

Consideration can be anything of value (such as an item or service), which each party to a legally-binding contract must agree to exchange if the contract is to be valid. If only one party offers consideration, the agreement is not legally a binding contract. In its traditional form, consideration is expressed as the requirement that in order for parties to be able to enforce a promise, they must have given something for it (quid pro quo): something must be given or promised in exchange or return for the promise. A contract must be "met with" or "supported by" consideration to be enforceable; also, only a person who has provided consideration can enforce a contract. ( My emphasis)In other words, if an arrangement consist of a promise which is not supported by consideration, then the arrangement is not a legally enforceable contract. Mutual promises constitute consideration for each other. ("I promise you to do X, in consideration for which promise you promise me to do Y").

Does the bold part mean that, as a DCA (who has purchased the debt,) has not given consideration, they cannot enforce the debt?

[Centium5000]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

I would have thought that statute would have priority, so if the DCA can point to legislation that provides that right they would be able to enforce it.

[TANZARELLI]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

This reminds me of conversations over in the locked down CI forum on PenaltyCharges anf then more recentrly on PAG.

We thrashed about with estoppel and mistake for hours and hours lol

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

pmsl joy of joys isn't it. Anyway I think the point is all this misrep etc takes us back to good faith in essence and thus the imbalance under 5(1).

[Guest]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

A debt is a property right referred to in law as a chose in action. A chose in action means `a thing that can be sued for` and is an actual capital resource. It exists where there is an entitlement to receive a sum of capital at a future date, for example a debt.

It is tangible and can be bought, sold and otherwise traded.

[ROBSTER]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

[quote=Amethyst;140899]....You wouldnt, as a reasonable man, believe that that fee would cover the entire cost of the package of services provided by the bank in the account, and in excess of that everybody elses account.


So therefore they mislead you, whether purposeful or not, into believing you were paying to cover the costs incurred by the breach.

......(and also as a breach of contract you would only expect to incur one or two over the lifetime of the account which you wouldnt reasonably expect to cover all the services etc - but you would expect, if it was said to be a fee for the service of considering if you can temporarily extend your overdraft, to use that as required - if you see what I mean)

quote]
Didn’t want to interrupt you & Centium "mid flow" earlier Ame but:

You know all of these "fees for the service of considering if you can temporarily extend your overdraft".

I know they average around £30 a time and some times banks were inundated by individual applications for such considerations. 8 times in one day by the same customer on the same account for example (that bank computer must have wondered what sort of idiot would make multiple applications all on their "usual pay day" when the DDs hit).

Sorry I digress

Any way in all my time of looking at bank charges I can not remember a single "charge for the consideration of a temporary overdraft extension" on a paid DD i.e. you actually got said extension of an overdraft.

I would suggest that up until the OFT test case and maybe since there is not one person in the UK (and enjoyed such service charges) who has ever been successful in their individual application for an over draft extension.

What are the chances of that?

Ill tell you the answer at least One in One Hundred Million.

Am I right ?


PS
Don’t bother looking for that "One" by the way. Statistically he/she has won the lottery and then got struck by lightning.
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Point being in the case of DDs, if it really was a service fee for consideration of an OD extension you would expect it to be charged when you did get the extension (like never) as well as when you didnt (like always).

[Centium5000]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

lol @ the bank computer! Nice one Robster

I think you're right, but they may have enjoyed the retrospective 'charge for each transaction paid whilst unauthorised overdrawn' in addition to the 'unauthorised overdraft fee'.

So, in plain intelligible language, a charge for making payments from a facility you're not permitted, and a charge for asking the bank to permit what they haven't already permitted.

Brilliant.

How could anyone mistake this as a charge for breach(?)

[EXC]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

I can't help thinking that although the general principle of mistake/misrepresentation seems to have some merit, it would be difficult to apply and prove as it would be dependent on the specific position of the particular bank and particular customer before, during and beyond the point the contract was made making each challenge too individual to cater for en masse.

[Centium5000]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

I see your point, not one that lends itself to a ready-made template.

Sorry for getting so excited - 'mistake' looked a killer but I can see that mass roll-out would be difficult.

[ROBSTER]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Mass roll out might be a "mistake".

There are so many banks with so many different accounts with so many "modern"and and "historic" T&Cs.

If I were a lion (which I'm not masbeagle) I would pick off the weakest first and work my way through the heard.

Where would I start?

mmmmmm

Pre July 2003 NatWest anyone?

Dinner is served masbeagle

[Centium5000]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Lloyds TSB pre-2003:

If you go overdrawn without agreeing this with us If you do go overdrawn, or go above an agreed limit without arranging a higher amount first, we charge a higher rate of interest for this unauthorised borrowing. We display this rate in all our branches and on our website. Any unauthorised borrowing means extra work for us, we cover this by charging you the following fees.

(my highlighting)

Looks like a charge for breach to me, but I could be 'mistaken'. Later terms don't do much to correct my mistake, just omit the line about 'covering this'.

Roar!

[Budgie]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

I believe there is some mileage in the common law mistake argument.

It doesnt matter about the fact that it would have to be individually argued against each seperate iteration of each banks terms and conditions because that will also have to be the situation wrt the forthcoming legal argument on "good faith" anyway. Also, this was the case with regards to the High Court hearing where virtually all sets of terms and conditions of the banks were looked at in detail by Smith.

It would be fairly simple to include a cause of action to a new POC alongside the unfairness arguments we have already been looking at under regulation 5 and I see no harm in doing so.


However, it's now time to throw my additional "ressurection of the common law penalty" argument into the cooking pot !!!!

As well as looking at terms and conditions from the mistake angle I also suggest that Claimants look at the charge notification letters they may have received from their banks prior to the test case and also at letters they may have received from their banks in response to their original preliminary or LBA letters. Neither of these types of letters were looked at by Smith during the High Court hearings, if they had of been I suspect we may have seen a different result wrt the common law penalty issue.

For example charge notification letters :

My Halifax claim was stayed at the allocation hearing stage

My POC referred to common law penalty, UTCCR1999, UCTA1977 +SOGAS.

According to Smith's High Court judgment the relevant Halifax terms and conditions do not contractually identify a breach condition that is linked to a resultant charge. So the terms describing the charges are, according to Smith, not capable of bieng penal.

However, letters I received from the Halifax ( charge notification ) state the following

" We haven't been able to pay the item (s) shown below because there wasn't enough money in your account. To cover our costs, we make a charge of £39 ( maximum 3 charges per day ) for any item we can't pay. We will take this money from your account seven days from the date of this letter. If it causes you to have an unauthorised overdraught, we will also charge you interest at the unauthorised rate and a monthly unauthorised overdraft fee of £28."

Now, to my point of view, the letters themselves are referred to in the terms and conditions so are a part of the contract. The wording of the letter describes the reason for the charge ( because they didn't pay the item ), the amount of the charge (£39) and what the charge is actually for ( to cover their costs ).

Furthermore, in response to my preliminary letter Halifax wrote :

"When you opened your account, you agreed to our terms and conditions which explained that charges would be applied if you did not keep to the terms of the account."
and
"We apply these charges because when customers have insufficient funds in their account to cover a payment they have asked us to make, this means additional work for us. As a result we feel it is reasonable to charge for this service."
and
"As previosley explained, the charges you are asking us to refund are our fees for the additional work that we carry out when a Customer requests a payment
without insufficient funds in their account."
and
"If you continue to manage your account in this way, future charges will be applied to your account."
and ( very important )
"If you need greater flexibility, we may be able to help you by providing an overdraft or extending your overdraft facility. This can help to keep the costs of any unauthorised transactions down."

So, in my opinion this letter links the charges to breaches of the terms and conditions, links the charges to failed transactions owing to insufficent funds and confirms the charge is intended to cover the costs of the extra work involved. Goes on to re confirm the penal nature for continued breaches and then finally confirms that the charges are not for consideration of an overdraft or overdraft extension by virtue of the fact that that service is offered as an alternative option.

Now, irrespective of the Supreme Court decision regarding 6 (2) I was intending to continue my claim on the penalty charge aspect using the above.

Common law mistake adds another string to my bow ( following the Supreme Court judgment ) and the additional possibility of unfairness under Regulation 5.1 make a glorious hat trick. SOGAS is a back up.

Budgie

[EXC]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

I see your point, not one that lends itself to a ready-made template.

Sorry for getting so excited - 'mistake' looked a killer but I can see that mass roll-out would be difficult.

Don't be sorry, we have a duty to ourselves to explore all possible avenues.

[askl]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

I believe there is some mileage in the common law mistake argument.

...
However, it's now time to throw my additional "ressurection of the common law penalty" argument into the cooking pot !!!!

As well as looking at terms and conditions from the mistake angle I also suggest that Claimants look at the charge notification letters they may have received from their banks prior to the test case and also at letters they may have received from their banks in response to their original preliminary or LBA letters. ...

Budgie

I'm totally with you. My hearing on 15 Jan for a personal guarantee for a NatWest business account has always included this argument.

http://www.legalbeagles.info/forums/...809#post128809

The 2001 NatWest notifications state that "As dealing with unpaid cheques means extra administrative work, I have charged a fee of £30.00 to your account to cover these costs." In contrast a customer requested stopped cheque, where there is in fact a fee for a service and greater bank administration time, the Claimant only charges £7.

This is one of many reason I had understood the charge to be a penalty (Andrew Smith also identified these charges as penalties for personal accounts - there is no obvious reason why a business account holder would view their charges differently - the contracts appear to be the same - including the credit card explanatory leaflet mention by Andrew Smith in his conclusion last year).