Contractual Interest

[Glenn UK]

Re: Contractual Interest

As i understand it the principle of account of profits is that the courts determine a)if the proifits made were unjust or not and if they do then b) theres a detrmination of how much they actually profitted unjustlyby.

I think in reality i think that if a court action based on account of profits was won, that it would be a two stage affair

1st determining if the claim warranted such an aciotn and the second the determinaiton of the actual remedy.

in principle a claimaint sdhould not be put in a better position than they were at the start, notwithstanding any compensaiton awarded by the courts for injuries.

So i think the issues would be highly complex and would require the appointment of an expert by the courts. I cannot see how an assessment by a claiminat nor the assessment by the defendant could be relied upon by either party.

JMHO

Glenn

[strangewayofsavin]

Re: Contractual Interest

Thanx glenn, your input is always appreciated, but in our arguement's for contractual interest, is it in our best interest to over complicate the argument?
would an argument of gaining a position of control via a standard form contract not be an easier argument ?
it is always an impressive point of veiw, to argue every section of the current, or historical terms and conditions set out by these financial companies, to argue the implecations in a legal chat, about section bla bla of the such an act, I fear that these over complications, are playing into the hands of gready barristers, as they are prepared for legal jargon and over complications.
Every Mortgage company have a set menu if you like, and depending on your qualifications depends on what product you are sold, if you want £100,000, and you have a good credit report you get interest rate A, a slight negative in the report and you get interest rate B, which is 1 1/2% over BOE base rate, & so on, these are manufactured products designed to create as much profit as possible, and as most of joe public are unintelligent in their eyes, buyer beware, as these terms were set out in non negoitiable contracts, yes we should have got advice, yes we could have declined, but most people still feel lucky to get the mortgage offer, and except, due to their current conditions.
As reported recently, Banks and financial institutes have acted irresponsibly (as have the MP's), the answer is going to be simple, as per the penalty charges argument, as our knowledge grows, as does our confidance, and our ability to argue such cases, and more complexity, is met with further complex arguements.

[Glenn UK]

Re: Contractual Interest

SWOS

I think maybe i need to make sure I'm talking about the same things you are when we talk about contractual interest.

I am talking about recovering money they made unlawfully out there consumers over and above the actual interest the consumer may have paid.

In terms of KISS I agree it would be nice, however we are talking law here and unless I am much mistaken when it comes to contemplating going to court one has to try to think of all the angles. The other side and the courts will have afar wider reading of the law than we and the other side will no doubt use it.


Westie and others seem to think that the cost of this kind of claim, if won, would have no impact on the banks because of the large numbers bandied about in the press re their turnovers, debts etc.

There is areal difference though between the money spoken about in the press in respect of these huge numbers and the money we are talking about.

Most of the numbers spoken about in terms of debts insured, turnover etc is not 'real' money. It is money the banks might realise if they sold all their assets. I don't know how much cash a given bank would have it they had to stump it all up today but the sums possible given the impact of the kind of claims spoken about would mean they would have to pay out in cash.

so whilst in terms of turnover, profits etc a few half a billion is not a large sum, it is when you have to realise that and pay it out in cash if a bank had to find a few hundred million pounds in cash to pay out to consuemrs they would notice.

I have no idea of the actual sums paid out by the banks, estimates seem to vary wildly but if unjust enrichment or an account of profits were proved and widely applied the sums would magnify out of all proportion tot he original losses incurred by the claimants.

JMHO

Glenn

[Budgie]

Re: Contractual Interest

It's true Glenn.

The only figures you see mentioned are the actual monies taken from Consumers in questionable charges. This is the first level of unjust enrichment.

If you then consider that the Banks or credit card providers or mortgage companies have had the use of that money and been able to turn that money to account on a day by day, month by month and year by year business then the actual total amount of 2nd level unust enrichment is phenominal, especially when you take into account the compound interest rates that these companies use in their normal day to day business.

The case regarding bank charges will be decided soon in the House of Lords, but it is clear that credit card companies are still settling claims as soon as a court claim is filed because they do not wish to risk even a non precedent setting county court judgment against them. It was also clear from my own credit card claim that they are even more unwilling to risk a judgment against them for a claim for a specific level of compound interest.

As far as the bank charges test case is concerned the matter regarding compound interest will be raised and resolved as part of some form of resultant group litigation order which is likely to be bought about to resolve issues that will not be decided as part of the test case.

In the meantime there is nothing to stop any individual Claimant from including, as part of their claim, compound interest as restitutional remedy for the time value loss of their money and as disgorgment of the 2nd level unjust enrichment of the offending Company.

There isn't a huge amount of case law around regarding disgorgment in relation to unjust enrichment but there is some and more will be uncovered as time goes by. The very nature of these claims is such that they tend to get settled, out of Court, before a final hearing.

Budgie

[Glenn UK]

Re: Contractual Interest

I spent a lot of time reading about this area of law a while ago but haven't looked for ages.

in terms of costs its quite easy to see how figures will add up. A single £20 charge 6 years old would yield a little over 80 (60 interest plus principle) @26%, if like me you had charges going back to 1997 a single charge of £20 yields over £200 total.

If you then add the interest i had paid on those charges plus the compound interest on that as well the figures rapidly become v.large. I think my claims against abbey totalled about £4K over a period from 1997 till around 2005 (don't have the dates to hand).

I think the big 4 hight st banks have claimed profits of c450m/year based on charges alone.if you take that figure for six years round it down to an average of 375m for arguments sake you end up with a figure of around 5.5 billion in repayment assuming all charges are repaid and interest accrues at 26% (which of course it wont on all the charges). Think northern rock here, how would the big high st banks cope if forced to pay out in readies cash to claimants to the tune of a billion pounds or so in short order?

I think that this claims for charges financially could be problem for banks if a) some form of resitutionary claim based on unjust enrichment can be won and b) if a claim is won which takes account of sec 32.

My feeling is on the former that its likely to come in the longer term, on the second count i think that the banks are on very dangerous ground if they argue or seek a judgement on the limitations act and sec 32.

Currently when the lose and start paying claimants back they will simply offer 6 years, bit like the cc com,panies do and for 99% of claimants they will be happy.

if they take a case on sec 32 to court it will highlight their position especially if they lose.

JMHO

Glenn

[Glenn UK]

Re: Contractual Interest

Incidentally at the risk of opening a can of worms here and I don't want to but i think it's worth making the observation.

If my sums are close the impact on a bank forced to pay out huge sums off cash in the short term could damage the existence of a bank, This is why i have argued that the test case may end earlier than expected.

I know I'm probably in a minority of one here, but it seems to me that when the banks lose the knock on effects could threaten the existence of one or more banks.

If they can, and i stress if, they may try to end the test case sooner if they can.

JMHO

Glenn

[ROBSTER]

Re: Contractual Interest

Good points Glenn.

Here's my thinking on section 32.

If I worked for a bank and took (pinched) £1 week for 20 years on discovery of this would the bank say give us back £312 (6 years X £52) or would they say give us back £1040 (20 Years X£52). The answer is the latter although if the bank does nothing about it for six years from the moment of discovery there may not be a case to answer.

Banks will ”try it on" with claimants suggesting they are only entitled to six years (not helped by the likes of Martin Lewis and some other sites).

You have six years to do something about it once you discover the act so in my book that’s until Feb 2012 (six years after the OFT brought to our attention the fact that these charges my not be lawful in the Credit Card investigation). I have never seen a bank or credit card put up any fight against this argument. I hve expressed my concern about what happens in March 2012 on other posts, if I were a bank that would be the time to consider instructing a defence based on section 32.

BANKS ARE NOT REALLY BEING “HELD TO ACCOUNT” ON THE INTEREST ELEMENT
Most individual claimants are happy to settle for a straight cash offer of charges for the last six years as a court appearance is understandably daunting for the average man in the street. If the banks get away with that they are thumbing their noses at their clients as they have had use of those charges and as you rightly pointed out are likely to have been enriched many times over on those funds and banks have not really been "held to account" even the 8% Statutory interest rate (which may appear generous in current times) misses the mark; if they have been lending the funds out at 26%+ (compounded) they still have an enrichment which they would not otherwise have generated.
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Well it’s a big if.

If I managed to convince a judge that there was a case for awarding interest based on unjust enrichment and if my mates in accounting law could demonstrate how the banking model works to the court and if the judge agreed a payout based on my earlier hypothesis it wouldn’t take many claims to blow a hole in £250 billion.

Wasn't it the Bank of England who insured the £250 Billion money with premiums met through the money supplied by the government in the wake of the failed rights issue?

That makes 2 of us Glenn

Budgie?

[crashbandicoot]

Re: Contractual Interest

Guys and gals, I've been reading threads/posts on CI with interest but wanted to know your thoughts as the test case has progressed on a bit more?

Do we have any more arguments for and against claiming CI at this stage?

Thanks,

Crash

[dasli]

Re: Contractual Interest

ooo...
nice...