CCA and UTCCR arguments

[hicskis]

Re: CCA and UTCCR arguments

I've focused in on this comment by Lord Mance in the Superior Court Judgement - paragraph 100:

If the agreement to incur the Relevant Charges is part of an overall package contract, its vulnerability to challenge and, if permissible, any assessment of its fairness under the Directive and Regulations must, as I have said, depend upon an analysis of such agreement as part of the package contract. Otherwise, as Mr Sumption pointed out, a customer could challenge each separate part of a package in isolation, although as a whole the price or remuneration charged was unchallengeable.

What? You can't challenge the fairness of charges on the basis of price, but you could challenge, if permissible, the charges on the basis of the price of the account?

Therefore the new arguments have to be on the fairness of the price of an account, not on the fairness of the charges that make up part of an account?

[ThunderBird]

Re: CCA and UTCCR arguments

Is that why the banks have started to intoduce Opt In/Opt Out fee based accounts - so there's a choice?

[EXC]

Re: CCA and UTCCR arguments

What? You can't challenge the fairness of charges on the basis of price, but you could challenge, if permissible, the charges on the basis of the price of the account?

I think he's referring to a fairness challenge to the agreement, not the price.

[hicskis]

Re: CCA and UTCCR arguments

I'm still trying to get my head around the legalities - but in essence i'm saying that to ascertain that the charges are unfair you have to prove that the package of services (the contract) was Unfair. This can be done on the basis of lack of choice and/or the price of that package - anyhows the banks would have to prove fairness.

If i'm right in my preliminary thinking then there was historically a lack of choice in accounts - now not so - is that why the bank's have introduced the choice because they now know they are on thin ice??

[EXC]

Re: CCA and UTCCR arguments

I'm still trying to get my head around the legalities - but in essence i'm saying that to ascertain that the charges are unfair you have to prove that the package of services (the contract) was Unfair. This can be done on the basis of lack of choice and/or the price of that package - anyhows the banks would have to prove fairness.

No challenge can be made that goes anywhere near the price. A fairness challenge would be aimed at the overall imbalance in the contract as a whole.

[hicskis]

Re: CCA and UTCCR arguments

Yes I was leaning that way too - that's the point of law i'm trying to get my head around - however in:

Bairstow Eves London Central Ltd v Smith (2004)

http://www.hmcourts-service.gov.uk/j...arlingtons.htm

Para 25 - Particular gratitude is due to the Judge for having himself located the authority of First National Bank. Guided by this authority, the landscape becomes clear. The object of the Regulations [UTCCR] is not price control nor are the Regulations intended to interfere with the parties freedom of contract as to the essential features of their bargain. But, that said, regulation 6(2) must be given a restrictive interpretation; otherwise a coach and horses could be driven through the Regulations. So, while it is not for the Court to re-write the parties bargain as to the fairness or adequacy of the price itself, regulation 6(2) may be unlikely to shield terms as to price escalation or default provisions from scrutiny under the fairness requirement contained in regulation 5(1). I say "may be unlikely" because, of course, much depends on the individual contract under consideration. When, however, regulation 6(2) is inapplicable so that regulation 5(1) is engaged, it does not follow that a term will be adjudged unfair; whether or not a term is unfair involves a separate inquiry but one which cannot be undertaken at all insofar as regulation 6(2) is applicable and bars the way.

You would therefore have to challenge the contract as a whole and that could therefore, if possible, re-open the door on price - or not?

[EXC]

Re: CCA and UTCCR arguments

You would therefore have to challenge the contract as a whole and that could therefore, if possible, re-open the door on price - or not?

No. The terms would have to be challenged in the context of the balance of the overall contract, not in reference to price but by the application, triggering and frequency of the charge terms.

This is what Baroness Hale was getting at during the House of Lords hearing:


MR CROW: Thank you, my Lord. Could I pick up a couple of loose ends from this morning? First, my Lady Hale's question, if the OFT wanted to undertake, in a sense a structural challenge. Having taken instructions, we have nothing to add to the response I gave, which is that the remit which is given to the OFT under the directive is a term-by-term targeted challenge, not an opportunity for a structural challenge.

BARONESS HALE: You couldn't take a group of terms and say, "Taken together, do these pass the fairness test?"

MR CROW: One would have to consider each term in the context of the contract as a whole. I guess one could have a several challenge, but I think one wouldn't end up -- it is getting too abstract -- with a collective challenge to the contract as a whole. It would have to be a challenge to the terms severally.

BARONESS HALE: There are several terms that say you pay this for this, and this for this, and this for this, and put together that tots up to something that produces a significant imbalance. That would seem to me to be an extremely sensible sort of enquiry to be made and one which would not lead to some of the deleterious results that others might.

[hicskis]

Re: CCA and UTCCR arguments

I would agree that we have to look an the entire contract as a whole - as a package. This will understandably require a consideration of the terms that make that up as a whole - but the essence is on that whole complete package and that is what we need to focus on.

If the terms to which you refer i.e charging, frequency, triggering etc are proven to be Unfair under section 5(1) UTCCR, as a whole, as part of the whole contract - the package - then one could invoke the case law below:

Regulation 5 of the Unfair Terms in Consumer Contracts Regulations (UTCCR) 1999

5. – (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

Bairstow Eves London Central Ltd v Smith (2004)

http://www.hmcourts-service.gov.uk/j...arlingtons.htm

Para 25 - Particular gratitude is due to the Judge for having himself located the authority of First National Bank. Guided by this authority, the landscape becomes clear. The object of the Regulations [UTCCR] is not price control nor are the Regulations intended to interfere with the parties freedom of contract as to the essential features of their bargain. But, that said, regulation 6(2) must be given a restrictive interpretation; otherwise a coach and horses could be driven through the Regulations. So, while it is not for the Court to re-write the parties bargain as to the fairness or adequacy of the price itself, regulation 6(2) may be unlikely to shield terms as to price escalation or default provisions from scrutiny under the fairness requirement contained in regulation 5(1). I say "may be unlikely" because, of course, much depends on the individual contract under consideration. When, however, regulation 6(2) is inapplicable so that regulation 5(1) is engaged, it does not follow that a term will be adjudged unfair; whether or not a term is unfair involves a separate inquiry but one which cannot be undertaken at all insofar as regulation 6(2) is applicable and bars the way.

A ruling of unfairness under section 5(1) UTCCR could reopen the door to what was thought closed.

[EXC]

Re: CCA and UTCCR arguments

If the terms to which you refer i.e charging, frequency, triggering etc are proven to be Unfair under section 5(1) UTCCR, as a whole, as part of the whole contract - the package - then one could invoke the case law below:

A ruling of unfairness under section 5(1) UTCCR could reopen the door to what was thought closed.

The 'case law' deals with price escalation and defaults, neither of which are a feature of bank charges.

[hicskis]

Re: CCA and UTCCR arguments

Why not - the price of charges escallated over time did they not?

http://consumerwiki.co.uk/index.php/...ion_of_Charges

http://www.legalbeagles.info/forums/...ad.php?t=13476

[EXC]

Re: CCA and UTCCR arguments

You're confusing price escalation with price increases.

[hicskis]

Re: CCA and UTCCR arguments

I'm sorry - call me daft - but what's the difference?

[natweststaffmember]

Re: CCA and UTCCR arguments

Why not - the price of charges escallated over time did they not?

http://consumerwiki.co.uk/index.php/...ion_of_Charges
Cheaky git, that information is from Yourbank aka moi and is already in the lloyds TSB forum........tsk!!!!
http://www.legalbeagles.info/forums/...ad.php?t=13476

PMSL.................

[EXC]

Re: CCA and UTCCR arguments

I'm sorry - call me daft - but what's the difference?

A price escalation clause provides that the seller can raise the stated contract price - due, for example, to the seller's costs increasing - without notification.

Any increase in bank charge pricing is notified in advance to enable the customer to withdraw from the contract.

[hicskis]

Re: CCA and UTCCR arguments

Sorry Nattie - I thought you might like that but it was useful to make the point.

So back to that - if a bank can increase it's price on notification, surely it reserves that right in the contract with an escallation clause :tung: