WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

[Lord_Alcohol]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

Aren't we viewing a "duty of care" as being the general duty of a data controller to observe all of the principles set out at Schedule 1, and not some additional duty which the court is referring to here?

In any case, Smeaton was about CRAs, not a lender forming an illegal contract.

If there is no duty of care then the Scots court judgement would have been modified by the SC, as surely that would be a matter of law, yet the SC upheld the award for the breach.

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

This is from Smeaton regarding duty of care

1. Approaching the matter on the basis of the traditional three-fold test of foreseeability, proximity and whether it is fair, just and reasonable to impose a duty, Mr Handyside supplied four compelling reasons which, to my mind, demonstrate conclusively why it is inappropriate here to superimpose on whatever is the statutory duty a co-extensive duty of care in tort. Thus:-
   "(1) It is doubtful whether it was reasonably foreseeable that the recording of incorrect data on Mr Smeaton's credit reference would cause him any loss, having regard to the practices operated by the credit industry set out in the Guide to Credit Scoring 2000. A person whose credit application was rejected because of adverse CRA data would be told of that fact and would be entitled to take steps to correct (or dispute) that data and to require the lender to reconsider the application for credit having regard to further, correcting information provided by the applicant.
   (2) It would also not be fair, just or reasonable to impose a duty. In particular, imposing a duty owed to members of the public generally would potentially give rise to an indeterminate liability to an indeterminate class.
   (3) It would also be otiose given that the DPA provides a detailed code for determining the civil liability of CRAs and other data controllers arising out of the improper processing of data.
   (4) Apart from the DPA, Parliament has also enacted detailed legislation governing the licensing and operation of CRAs and the correction of inaccurate information contained in a credit file in the CCA 1974. This provides for the possibility of criminal sanctions, but does not create any right to civil damages. In such circumstances it would not be appropriate to extend the law of negligence to cover this territory."

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

The bottom line in this for me is that HFC took the word of DSG as being correct and defaulted Mr Durkin without checking to see if DSG were correct in what they were saying, and in doing so failed in it's duty of care to Mr Durkin.
So any company reporting a default has a duty of care to check that the information and amounts are true and fair, if they fail to do so or the consumer later proves the default to be incorrect then the company reporting has failed in it's duty of care and the consumer is entitled to recompense.

I don't think that proving the duty of care breach is the problem, it is the allocation of damages, either under the act or in common law. Read the cases mentioned earlier.

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

Here you go Andy, from the horse's mouth;

http://ico.org.uk/for_organisations/...6/compensation

An interesting angle is the defence - the data controller has to show that it took reasonable care before reporting data. If it cannot, as in the case here, then it hasn't got one (see the last sentence on the link above).

Hope this helps.

Indeed from the same piece

No. But an individual who has suffered financial loss because of a breach of the Act is likely to be entitled to compensation.

Proving that you have suffered financial loss is the issue, as opposed to general unsubstantiated losses.

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

Where does it say that a data subject is not entitled to compensation, or has to prove loss?

I have copied the section and highlighted in my previous post, perhaps you should google "civil damages"

[Lord_Alcohol]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

Here you go Andy, from the horse's mouth;

http://ico.org.uk/for_organisations/...6/compensation

An interesting angle is the defence - the data controller has to show that it took reasonable care before reporting data. If it cannot, as in the case here, then it hasn't got one (see the last sentence on the link above).

Hope this helps.

[Bankers Reform]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

The bottom line in this for me is that HFC took the word of DSG as being correct and defaulted Mr Durkin without checking to see if DSG were correct in what they were saying, and in doing so failed in it's duty of care to Mr Durkin.
So any company reporting a default has a duty of care to check that the information and amounts are true and fair, if they fail to do so or the consumer later proves the default to be incorrect then the company reporting has failed in it's duty of care and the consumer is entitled to recompense.

[Bankers Reform]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

From 40: Damages resulting from HFC’s breach of its duty of care are confined to injury to Mr Durkin’s credit in the sum of £8,000.

I think if a consumer can prove a failure in duty of care then £8k is the accepted sum from this Supreme Court judgement.

[Lord_Alcohol]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

The duty of care was established, this is not an issue, the issue is the application of unsubstantiated general damages, I see no precident for this here.

Read s.13(1) DPA - it's in black and white.

To assist you: the "damage" meaning, in this case, "injury to credit"; and the award, in this case, being £8K. Unless you mean that "damage" in this section means specific or actual loss?

[Lord_Alcohol]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

Perhaps if you actually read the section

Where does it say that a data subject is not entitled to compensation, or has to prove loss?

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

From the Supreme Court ruling:


33. I take a different view. HFC, knowing of Mr Durkin’s assertion that the credit agreement had been rescinded, was under a duty to investigate that assertion in order reasonably to satisfy itself that the credit agreement remained enforceable before reporting to the credit reference agencies that he was in default. HFC could readily foresee that registration of a default could damage Mr Durkin’s credit: it said so in its letter of 22 July 1999. As it knew that Mr Durkin’s assertion of rescission of the sale agreement was unresolved, it had the options of (i) saying nothing to the credit reference agencies or (ii) if it chose to notify them, incurring the duty to him to take reasonable care to ensure that the notification was accurate (cf. Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465, 486 per Lord Reid). HFC made no enquiries before intimating Mr Durkin’s alleged default to the credit reference agencies. After Mr Durkin complained about the entries on the credit registers, HFC told him to “sort matters out” with DSG. As the First Division recorded in amended finding of fact 21, HFC made no enquiries and, at all material times throughout the litigation, accepted without question DSG’s position that Mr Durkin had not been entitled to rescind the contract of sale.

34. It is relevant to ask what would have happened if HFC had made enquiries (McWilliams v Sir William Arrol & Co 1962 SC (HL) 70). The answer is clear. If HFC had contacted DSG, it is likely that DSG would have said that it contested the rejection of the computer. But HFC would not have known whether DSG’s stance was correct. If it had been faced with a contested rescission of the supply agreement and an asserted rescission of the credit agreement which it was not in a position to resolve, HFC should have refrained from intimating a default until the issues were resolved. HFC could have sought to test the continued effectiveness of the credit agreement by suing Mr Durkin to enforce its terms. Alternatively, it could have waited for Mr Durkin to sue to resolve the issue, as he later did. It would have known that if it did so, it was entitled to be indemnified by DSG under section 75(2) of the 1974 Act. But it should not have intimated the default without a reasonable basis for the belief that it had occurred. In so doing it acted in breach of its duty of care to Mr Durkin.

36. HFC did not contest the award of £8,000 for injury to Mr Durkin’s credit if it were established that it had breached its duty of care to him.

40. I would allow the appeal and declare that Mr Durkin was entitled to rescind and validly rescinded the credit agreement by giving notice to HFC in about February 1999. Damages resulting from HFC’s breach of its duty of care are confined to injury to Mr Durkin’s credit in the sum of £8,000. I would give the parties an opportunity to agree the date from which interest should run and the rate or rates of interest to be applied.

33 states that HFC owed a duty of care to Mr Durkin that before reporting to the CRA's they should check that the info is correct and fair.

34 states similar

36 and 40 confirms £8k for damage to credit for failing in it's duty of care to Mr Durkin.

The duty of care was established, this is not an issue, the issue is the application of unsubstantiated general damages, I see no precident for this here.

Section 36 says"did not contest contest" there was no ruling on the point it was not contested.

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

As I see it, s.13(1) simply says the data subject is entitled to compensation - it doesn't say he has to prove loss.

Perhaps if you actually read the section

View outstanding changesstatus warnings

13Compensation for failure to comply with certain requirements.

(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)

In 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.

[Bankers Reform]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

From the Supreme Court ruling:


33. I take a different view. HFC, knowing of Mr Durkin’s assertion that the credit agreement had been rescinded, was under a duty to investigate that assertion in order reasonably to satisfy itself that the credit agreement remained enforceable before reporting to the credit reference agencies that he was in default. HFC could readily foresee that registration of a default could damage Mr Durkin’s credit: it said so in its letter of 22 July 1999. As it knew that Mr Durkin’s assertion of rescission of the sale agreement was unresolved, it had the options of (i) saying nothing to the credit reference agencies or (ii) if it chose to notify them, incurring the duty to him to take reasonable care to ensure that the notification was accurate (cf. Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465, 486 per Lord Reid). HFC made no enquiries before intimating Mr Durkin’s alleged default to the credit reference agencies. After Mr Durkin complained about the entries on the credit registers, HFC told him to “sort matters out” with DSG. As the First Division recorded in amended finding of fact 21, HFC made no enquiries and, at all material times throughout the litigation, accepted without question DSG’s position that Mr Durkin had not been entitled to rescind the contract of sale.

34. It is relevant to ask what would have happened if HFC had made enquiries (McWilliams v Sir William Arrol & Co 1962 SC (HL) 70). The answer is clear. If HFC had contacted DSG, it is likely that DSG would have said that it contested the rejection of the computer. But HFC would not have known whether DSG’s stance was correct. If it had been faced with a contested rescission of the supply agreement and an asserted rescission of the credit agreement which it was not in a position to resolve, HFC should have refrained from intimating a default until the issues were resolved. HFC could have sought to test the continued effectiveness of the credit agreement by suing Mr Durkin to enforce its terms. Alternatively, it could have waited for Mr Durkin to sue to resolve the issue, as he later did. It would have known that if it did so, it was entitled to be indemnified by DSG under section 75(2) of the 1974 Act. But it should not have intimated the default without a reasonable basis for the belief that it had occurred. In so doing it acted in breach of its duty of care to Mr Durkin.

36. HFC did not contest the award of £8,000 for injury to Mr Durkin’s credit if it were established that it had breached its duty of care to him.

40. I would allow the appeal and declare that Mr Durkin was entitled to rescind and validly rescinded the credit agreement by giving notice to HFC in about February 1999. Damages resulting from HFC’s breach of its duty of care are confined to injury to Mr Durkin’s credit in the sum of £8,000. I would give the parties an opportunity to agree the date from which interest should run and the rate or rates of interest to be applied.

33 states that HFC owed a duty of care to Mr Durkin that before reporting to the CRA's they should check that the info is correct and fair.

34 states similar

36 and 40 confirms £8k for damage to credit for failing in it's duty of care to Mr Durkin.

[Lord_Alcohol]

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

As I see it, s.13(1) simply says the data subject is entitled to compensation - it doesn't say he has to prove loss.

It seems to me that a court has to consider compensation where breach of the act by a data controller occurs, and that it's just quantum at issue and nothing else (unless actual loss is shown).

So a bank's barrister would: (a) have to show that the data controller wasn't in breach of the DPA, and; (b) that no compensation is payable even if it is was. I wonder then if courts will use Durkin as a guide in awarding compensation, rather than a sum set in stone?

Rico's point about using the small claims track is interesting, especially now the limit is increased to £10K.

Re: WON !! Richard Durkin v HFC / PC World supreme court judgment 26/03/14

My understanding is that the supreme court upheld the Scottish award for £8k and that it is binding on ALL UK courts.
The £8k was never challenged by HFC and was accepted as remedy for injury to credit resulting from incorrect default, so long as Mr Durkin could prove the default was incorrect.
This has now been proven, therefore £8k is set in stone as the accepted remedy for injury to credit.
There has been previous case law to this effect in the past (Kpohraror v Woolwich)

Problem this is that to my knowledge Kpohrah has never been held to support general losses where there has not been some proof of damages(although not quantified), in other words just having a misplaced marker is not enough, there has to be a likelihood that some loss has been is is likely to be incurred. there has been several case which have ateempted to rely on this and they have failed. (Haliday, Smeaton) and also many lower court cases.

Also as said earlier the award in this case was uncontested as well as being in a Scottish court, the principle has not been tested the bank merely allowed the claim. Any bank barrister worth his salt would say that this judgment was merely the option of the bank and on these particular facts, there was no point of law proven here.