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Example POCs with CI - for discussion - C/Card

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  • #16
    It is simply not credible to assume that, had the bank not taken a sum in charges, we would have been able to earn 29.9% (or higher) interest on it and therefore we are entitled to claim that back on the whole sum for the entire period we are claiming for. Speaking for myself i am not presuming i could have earned this or indeed any other specific rate.

    This appears to be the "standard" unauthorised rate employed by the banks which is why I used it here. Of course, you can claim any level of interest as long as it is reasonable. However, the court can decide not to allow you interest or only to allow you part of the interest and this is precisely what has been happening.



    There is no legal basis for the “mutuality and reciprocity” argument. It is my opinion that the banks taking these charges and charging this interest rate cannot be interpreted as us lending them money. I agree we haven't leant them money they have unlawfully taken it from us.

    Regardless of the terminology used, the taking by them of this money does not mean you may claim back all of your charges at the same rate - see Robinson v. Harman 1848.

    Mutuality of contract is the reciprocal understanding or agreement between parties that is a requirement in the creation of a legally enforceable contract. It means that an obligation must rest on each party to do or permit to be done something in consideration of the act or promise of the other. Neither party is bound unless both are bound. It does not mean that you are entitled to charge the other party just because they are able to charge you. Were that the case then you would also be obliged to provide your bank with chequebooks, credit cards, loans, clearing facilities along with all the other things that we expect from banks.

    In Bank contracts, the Bank has a right to impose interest at the unauthorised rate.

    I disagree the unauthorised rate is in effect a further penalty charged in terrorem upon our breach of contract. It is effect a cloaking term which allows the defendant to charge a further penalty upon our breach of contract. edit nearly forgot the bank has also breached the terms of the contract by acting outside of the law have they not?

    There are two ways you could view this - you could argue that the charging of this rate is an extortionate credit bargain or you could argue that it is a penalty - but how does claiming back everything you have been charged at this rate, when in fact you very probably only paid it for a very short period of time constitute anything other than this on your part?


    This is what we agree to when we enter into the contract. There is no right in the contract for us to receive interest at anything other than the published rate on credit balances. Any right to interest must be found under the common law.

    Regarding the Account of Profits argument, this could get hugely complex. See for example Esso Petroleum Co Ltd v. Niad Ltd [2001] Ch D and A-G v. Blake [2001] 1 AC 268 where this is explained in more detail before you consider using this argument.

    In A-G v Blake, an account of profits was described as

    "An account of profits will be appropriate only in exceptional circumstances. Normally the remedies of damages, specific performance and injunction, coupled with the characterisation of some contractual obligations as fiduciary, will provide an adequate response to a breach of contract. It will be only in exceptional cases, where those remedies are inadequate, that any question of accounting for profits will arise. No fixed rules can be prescribed. The court will have regard to all the circumstances, including the subject matter of the contract, the purpose of the contractual provision which has been breached, the circumstances in which the breach occurred, the consequences of the breach and the circumstances in which relief is being sought. A useful general guide, although not exhaustive, is whether the plaintiff had a legitimate interest in preventing the defendant's profit-making activity and, hence, in depriving him of his profit."

    If you choose this course of action you are moving away from what is a relatively straightforward breach of contract claim (our breach too, remember) and into an area of law concerning the award of damages, both compensatory and exemplary, which is going to be tricky and could prove very expensive. agreed

    Bear in mind also that restitution does not necessarily mean recovery of all gains made by the Defendant. Certain other factors are relevant to the measure of recovery. Where the Defendant made a substantial contribution, to which the Claimant was not entitled, it is conceivable that the Claimant will only recover the value of that which was taken from him or that profits will be apportioned or that the defendant will receive quantum meruit for his contribution (Boardman v Phipps [1967] 2 AC 46 [32].) For example, the bank will have made profit with or without your money and unless you are George Soros, what money you have in the bank will have made little or no difference to their overall profit. disagreed, the bank makes substantial profits on the basis of their unlawful removal of money from their customer accounts, to consider a single charge as insignificant is IMHO missing the point. although of course a court may agree with your viewpoint.

    You have totally disregarded the bargaining power that the sums involved confer on the banks. Remember that in the scheme of things the sums taken in charges represent a tiny fraction of the banks' overall net worth.



    If you wish to begin a claim for exemplary damages, then this would appear to be the way to do it - but should you lose, you will lose a great deal more than a few extra pounds in interest. A claim such as this will not be heard on the Small Claims Track, irrespective of the value of the claim.

    Initially you will need to convince the Court that you are entitled to the remedy of an account of profits from what is your breach of contract. In itself, no mean feat. Then you will need to persuade the Court that subsequent to your breach of contract the charges levied constitute unjust enrichment to the bank and that the measure of damages is not only the loss to you, the contract breaching party, but also the gain to the enriched party.

    Finally, crisbian for completeness we should not talk about winning these claims, to my knowledge nobody has won anything. There has yet to be a contest and if there is no contest then there is no winning or losing - thus far the banks have disposed of the litigation by paying out the claim prior to any hearing. You may have been paid the rate of interest that you claimed, but you did not "win" that rate of interest.

    Agreed, before any interest or AoP can be considered the court has to decide if the claimant is entitled to recover the charges full stop and there's the rub, if the claimant asks for stat interest or is offered stat interest plus the charges they have to decide whether to accept and stop action or whether to refuse and proceed to court.

    The only course of action where the latter action can be considered in any way sensible is if the claim for CI or AoP is included is if a claim for unlawful charges has to be heard at the same time. The question then becomes whether the claimant blinks first or the bank does. Blinking first could become very expensive.

    It could and I have said over and over that we need to remain steadfast, the banks have a great deal more to lose than we do

    Comment


    • #17
      Simian - do you have any legal precedents to support your views, or are they just based on your opinion? From having a look around it seems that some people have been successful in claiming contractual interest, but they seem to have achieved this because the bank settled the claim before it got to court. Are you aware of anyone actually making a successful argument?

      Comment


      • #18
        Originally posted by Cetelco View Post
        You could demonstrate that you were unlawfully deprived of the opportunity to earn interest your money, but how do you propose to demonstrate that you can earn a rate of 29.9%? You would be lucky to get a fraction of that even in the most audacious of investments. What access are you referring too? You only pay the unauthorised rate for a few days at a time - to attempt to apply that to six years worth of charges is not credible.
        The bank has already demonstrated that this is possible, as they have actually charged this rate, and continue to do so. Whether or not I could do the same is indeed a matter for debate, but not at this time. Whether or not I propose to set up a loan-sharking business, or simply give the money to charity is not the subject here. The fact is that I have been denied the opportunity to do anything at all with the money, by the other party to the contract. This is an opportunity to earn 29.9% denied, not a promise of untold riches broken, IMO.

        You are asking for a great deal more than to be "
        restored to the position we would have been in, had the money not been retained originally" It is a well established legal principle that where a party sustains a loss caused by a breach of contract by the other party to the contract, the innocent party is, so far as money can do it, entitled to be placed in the same situation, via the payment of damages incurred, as if the contract had been performed (i.e. had there been no breach) Robinson v. Harman (1848) 1 Ex. 850 at 855. How do you reconcile a claim of 29.9% with this? You have not lost this money. It has not been charged to you for six years, yet you attempt to claim it.
        Scenario A: I have been overdrawn by an amount which exceeds my authorised O/D limit for 6 years, and been charged 29.9% interest on my entire O/D balance throughout that period. The bank haven't lost that money - they are charging me it, for "Unauthorised Borrowing."
        Scenario B: The bank has made unauthorised deductions from my account over this period. This is unauthorised borrowing, as there was no authority from me - or in law - to do so.

        With regard to restitution, the position I would have been in then is that I would have had that money to "play with." If the bank only charged 8% for unauthorised borrowing, then I would be claiming 8%, as that is the position I could reasonably be expected to have been in now, as a party to the contract, by charging the other party for retaining that money. I maintain that the damaged party has a right to be returned to the position that they could reasonably be expected to have attained by the present time.
        Mutuality of contract is the reciprocal understanding or agreement between parties that is a requirement in the creation of a legally enforceable contract. It means that an obligation must rest on each party to do or permit to be done something in consideration of the act or promise of the other. Neither party is bound unless both are bound. It does not mean that you are entitled to charge the other party just because they are able to charge you. Were that the case then you would also be obliged to provide your bank with chequebooks, credit cards, loans, clearing facilities along with all the other things that we expect from banks.
        In order to fulfil our part of the contract, we are obliged to make funds available, and arrange payments by various means. This includes direct branch inpayments, telephone and online banking, loss of interest during monetary transfers (both by cheque and online electronic transfers, and even cash inpayments sometimes.) The bank is not obliged to call on us to collect money, or pay a portion of our internet access/phone bill. So we have a balance, I believe. Where is the balance in the interest rates being charged ?

        This is chalk and cheese. Contracts are not necessarily symmetrical, that is to say, the obligations that rest on each party are not identical for each party, you seem to want all of the good bits and none of the bad bits.
        Agreed - chalk and cheese. Assymetry. Fairness and balance are not mirror images. We put our plusses and minuses on one side of the scales, and the other party does likewise with their side. We blindfold the good lady, and we await the result. whether it's chalk, cheese or charcoal matters not, IMO. I only want the same good bits that the defendants consider they are entitled to.In Bank contracts, the Bank has a right to impose interest at the unauthorised rate. This is what we agree to when we enter into the contract. There is no right in the contract for us to receive interest at anything other than the published rate on credit balances. Any right to interest must be found under the common law.
        Then this must be an unfair contract term if it confers a right on one party but not the other.

        Then it is within your power to renegotiate the contract or to refuse to agree to the contract and not only that, the test for an unfair term is not as clear cut. Again, these contracts are not symmetrical as the two parties to the contract are not symmetrical.
        Whereas a potential party to a contract, as a consumer, is theoretically able to negotiate the terms of that contract, I would argue that this negotiation is beyond the capabilities of most consumers. And having said that, the nature of the banking business has been such that any such negotiations are opposed by a cartel which backs up each other and renders any re-negotiation within the industry impossible. I thus maintain that re-negotiation of a banking services contract for the majority of consumers is not possible.
        Bear in mind also that restitution does not necessarily mean recovery of all gains made by the Defendant. Certain other factors are relevant to the measure of recovery. Where the Defendant made a substantial contribution, to which the Claimant was not entitled, it is conceivable that the Claimant will only recover the value of that which was taken from him or that profits will be apportioned or that the defendant will receive quantum meruit for his contribution (Boardman v Phipps [1967] 2 AC 46 [32].) For example, the bank will have made profit with or without your money and unless you are George Soros, what money you have in the bank will have made little or no difference to their overall profit.
        But the idea of AoP is to ascertain what profit they actually are expected to have made fro mour little bit of money. This is done by finding the overall company profit as a percentage, and simply applying it to our charges in disgorgement. Any mitigating expenditure will already have been accounted for.

        This is a very simplistic view of an Account of Profits and not one that a court would take. If you have billions of pounds at your disposal then you are able to secure a much better return on any investments than if you have just a few thousand. It is not enough to simply do some simple arithmetic because the use to which you could put your money versus a banks billions cannot be so simply compared.
        That is fair enough comment. Because of the banks' size and potential, they do indeed have better opportunity to secure a good return on their investment. But if that opportunity is to be considered here, then my own opportunity should also. This was an opportunity to earn 29.9% on my capital, which has been denied me.
        If you wish to begin a claim for exemplary damages, then this would appear to be the way to do it - but should you lose, you will lose a great deal more than a few extra pounds in interest. A claim such as this will not be heard on the Small Claims Track, irrespective of the value of the claim.
        This then, will bring the risk of being asked for Standard Disclosure ?

        Absolutely yes, but it moves you away from the relatively simpl and established tennet that the law is clear on liquidated damages and into a whole new area - notwithstanding Standard Disclosure you could lose on a myriad of other more complex points of law.

        I would prefer to be in the area of Standard Disclosure to the area of liquidated damages most days !!
        Now, this bit I really could do with some help with, if you guys would be so kind. To my simian mind, the Accountancy of Profits and Standard disclosure go hand-in-hand, in that the same arguments for both are put forward, albeit under a different banner.Initially you will need to convince the Court that you are entitled to the remedy of an account of profits from what is your breach of contract. In itself, no mean feat. Then you will need to persuade the Court that subsequent to your breach of contract the charges levied constitute unjust enrichment to the bank and that the measure of damages is not only the loss to you, the contract breaching party, but also the gain to the enriched party.
        Yes, I agree it won't be an easy task, but who said it would be ? I do know this approach is being discussed elsewhere, and progress is being made, I believe

        I would liken this to a duel. The protagonists will argue shout and posture in order for one to make the other back down. This is the prelim and LBA stage - the trial is where they actually stand back to back and begin to pace before turning to fire.

        So far none of the banks have had the stomach for it - and given what they stand to lose, I do not imagine they will.
        I feel that we have indeed picked up the gauntlet. Yes, we are no more than turnip-eating Baldrick's with nowt but a cunning plan each, but as "Men of Straw" we have a strength. I consider this strength to be in the fact that we have so little to lose in comparison to their billions - and thus so much to gain.

        Comment


        • #19
          Originally posted by ditto View Post
          Simian - do you have any legal precedents to support your views, or are they just based on your opinion? From having a look around it seems that some people have been successful in claiming contractual interest, but they seem to have achieved this because the bank settled the claim before it got to court. Are you aware of anyone actually making a successful argument?
          As a point for consideration, the legal process is not about winning legal arguments per se, it is about finding a resolution to a problem you have with another party.

          You are seeking the best outcome you can, or to put it another way, an outcome you are happy with.

          If the outcome arises out of pre hearing 'negotiations' then this has to be the best solution for both parties.

          If a defendant chooses to settle pre hearing rather than enter into court to defend its charges then they will have to pay what the claimant asks for or risk exposing themselves to the full glare of the courts spotlights wont they.

          On the other hand the claimant has to take care not to expose themselves to the risks of costs should they for some reason loose their claim.

          As i see it the legal arguments are interesting, important and very useful in helping the claimant present a good claim in the hope that they get a settlement they are happy with before it gets to a hearing.

          If we actually get into a court hearing and unless we have legal support we are actually at a big disadvantage for obvious reasons.

          So all in all a settlement pre hearing is all i want, and in that vein i have had 6 claims with 4 being paid with CI.

          of the other 2 i had defaults removed and decided it was the best outcome for me, the other one i also had a default removed following an AQ hearing where i made a faux pas which made it difficult for me to press for a full hearing on the CI issue.

          JMHO

          Glenn

          PS Cetelco don't think I've given up its just i should be working. LOL
          Last edited by Glenn UK; 6th July 2007, 08:36:AM.

          Comment


          • #20
            I take your point Glenn, but I was asking whether or not Simian has any actual legal precedent to support his position. Is there a case out there somewhere where one party was able to apply Simian's interpretation of mutuality and reciprocity. I'm about to start a claim and want to know if this is a route worth taking.

            Comment


            • #21
              Ditto, I'm sorry for not replying to you earlier - Cetelco's post wore me out !!!

              As Glenn mentioned, the object of the exercise is not to end up in court - it is to achieve a settlement beforehand if possible. I have made a dozen small claims now, and have received full settlement with max rate compounded CI on them all before court. But I had to give the clear impression that I was prepared to go into court if necessary.

              I have simply used a POC that works for me, but which does not cite case law, and I have not yet had to delve into that. What I express here is not learned legal terminology, but the opinion of a layman. If I ever have to back it up in court, then I guess I will have to find the case law - although I would expect it to be in the court bundle (unless I'm building my claim from scratch).

              If that time comes, then I will research my case law, but until then, I am just expressing my layman's opinion. If you are interested in building your own claim, then I'm afraid I'm not the guy to point you to all the case law, so I'm afraid you will have to do your own research on that, my friend. If that research then proves my sincerely held opinions and views to be mistaken, then I will be happy to acknowledge that, and will walk away an enlightened person for having discussed it with you.

              Comment


              • #22
                Thank you for that very honest reply Simian. i think I'll probably stick to normal interest. I don't think my knowledge of this is as extensive as yours!

                Comment


                • #23
                  Very kind of you, Ditto. My knowledge of CI is limited to my experience, and I have never been up the court steps with it. Good people like Glenn have, however, and I would heed his advice, as his research is exhaustive, and his opinion more firmly founded in law.

                  FWIW, fairness and balance have a greater legal backing (in the UTCCR), and the Account of Profits approach is beginning to supercede CI with regard to claiming interest.

                  For those who do not wish to delve into all this, though, I agree - just plain old s.69 interest is the safer bet. To go for more than that, you do indeed have to be prepared to read up and go the distance.

                  Comment


                  • #24
                    Re: Example POCs with CI - for discussion - C/Card

                    Hi folks,

                    Has the sempra case been considered for this type of claim. I know of one claimant who if I remember rightly is using SOGAS as the basis of her claim and seems to be getting them running scared with sempra also. Just a thought which may you may have already considered.

                    Tanz

                    Comment


                    • #25
                      Re: Example POCs with CI - for discussion - C/Card

                      Just a small point - para 4.b. in your POC appears to be addressed directly to the Bank, as if it were from a letter. Surely that should be trying to make a point to the Court, and should not be addressed to the bank?

                      Tom
                      I will not provide support by Private Message under any circumstances. This is for your protection and mine. Any advice I give is my own opinion and carries no legal weight. Check it before you use it!
                      Over Ł1200 claimed in several actions against several organisations.

                      Comment


                      • #26
                        Re: Example POCs with CI - for discussion - C/Card

                        As far as I'm aware Sempra is a recently determined case and I was not aware of it when i claimed originally. Depending on the outcome of the OFT case I will bring it to the courts attention.

                        The AoP arguments are complex and fraught with problems for a lay person IMHO, although i did raise it, and a few eyebrows i hasten to add. Assuming the OFT case goes our way then i will be asking the court to consider Compounded interest on the basis of Sempra.

                        Glenn

                        Comment


                        • #27
                          Re: Example POCs with CI - for discussion - C/Card

                          No interest, whether compound or simple, is recoverable at common law and the Courts have no jurisdiction to make an award of compound interest on a personal claim for restitution of a sum of money paid by mistake or following an unlawful demand (Westdeutsche v Islington), but sometimes interest, compound as well as simple, is recoverable in equity.

                          However, in Sempra Metals Ltdv Inland Revenue an award of compound interest was necessary to achieve full restitution and, hence, a just result. Lord Nicholls held that, in the exercise of its common-law restitutionary jurisdiction, the court had power to make such an award.

                          Here, as elsewhere, the law of restitution was sufficiently flexible to achieve a just result. To avoid what would otherwise be an unjust outcome the court could, in an appropriate case, depart from the market-value approach when assessing the time value of money or, indeed, when assessing the value of any other benefit gained by a defendant.

                          The interest rate for any restitutionary claim therefore should be the rate at which you could borrow the relevant amounts you state you have lost in the market at the relevant time. Somewhat far short of the rates that many of these claims are made for and very probably the reason that so many of them are bound to fail. Couple that with the desire to have these cases heard on the Small Claims Track and you begin to see why so many are simply dismissed.

                          Comment


                          • #28
                            Re: Example POCs with CI - for discussion - C/Card

                            In Brennans claim he attempted AoP but from reading the appeal judgement here:
                            1. Account of Profits/Expert Evidence (paragraphs 7-11)
                            2. In his submissions the claimant linked the claim for an account with his application to adduce expert evidence. The judge found that the work done by Professors Molyneux and Struthers (assessing the actual cost of unauthorised borrowing) did not relate to National Westminster Bank as it would need to if it was to be relevant to present action. No offer of relevant further research had been made. Having regard to their views already expressed publicly about the banking industry generally it was doubtful whether the professors could be regarded as independent of the issues and impartial. He declined permission to adduce their evidence in the action. The judge found that in the absence of such evidence it would be impossible to order an account of profits. There were no facts upon which the trial judge could find that an account was an appropriate remedy.
                            3. <LI value=33> As to the merits of the claim for an account generally, it was, as Lord Nicholls observed in Attorney General v. Blake [2001] 1 AC 268, an exceptional course. In the normal case the remedy of damages will suffice: "A useful general guide, although not exhaustive, is whether the plaintiff had a legitimate interest in preventing the defendant's profit making activity and hence depriving him of his profit".
                            4. The judge found that there were no exceptional circumstances in the present case.
                          • I seems he failed to argue it properly. It may have been better to go down the time value route.

                          Comment

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