Statute barred/cause of action

[jon1965]

Hi
I have been reading some interesting if confusing comments regarding statute barred dates
For this lets think England and Wales and either a current credit card or loan (not one that has already been defaulted)

I have read several different opinions ranging from 6 years from last payment or acknowledgement all the way to six years from issuing a default or the end of a fixed term loan.

I had thought it generally accepted that it was 6 years from the first missed payment as I thought that was the cause of action. I know some DCA's are suggesting it is 6 years from the registering of a default with CRA (read one on here somewhere)

Thoughts please

[FlamingParrot]

Re: Statute barred/cause of action

Hi
I have been reading some interesting if confusing comments regarding statute barred dates
For this lets think England and Wales and either a current credit card or loan (not one that has already been defaulted)

If it hasn't been defaulted, the clock hasn't even started ticking! :clock: There would be no cause of action till contractual payments are stopped.

I have read several different opinions ranging from 6 years from last payment or acknowledgement all the way to six years from issuing a default or the end of a fixed term loan.

I posted on this thread this morning: http://www.legalbeagles.info/forums/...ht=#post391721

You may also want to look at this thread: http://www.legalbeagles.info/forums/...statute+barred

It can be trickier with overdrafts because the cause of action won't be till the bank recalls the overdraft, which could well be several months after you stopped paying anything into your current account.

I had thought it generally accepted that it was 6 years from the first missed payment as I thought that was the cause of action. I know some DCA's are suggesting it is 6 years from the registering of a default with CRA (read one on here somewhere)

Registering a default with the CRAs has nothing to do with SBd, sometimes they default you years after you stopped paying altogether (they shouldn't but they often do), or else your default could have dropped off your credit file whilst the clock hasn't even started ticking, as is often the case when people go on DMPs or make token payments for years. So there's absolutely no relation between SBd and your credit file, even when I know there are some out there who advise you to check your credit file and if the debt doesn't show, it must be SBd. It's not the case. :nono:

[jon1965]

Re: Statute barred/cause of action

Thank you FP
It really is a minefield and does raise lots of questions as to how long those of us with unenforceable agreements have to be on our guard against sneaky DCA's and the like.
It is plainly not fair to rely on a DN being issued as some are never issued or issued so late because maybe you have been in a DMP (Two of mine didn't default me until I went down to £1 a month) . Equally markers with CRA's as some do not report.
I suppose a fixed term loan such as a payday loan is a bit easier as the whole balance is due on a certain date.

I suspect that a good Judge would take a common sense approach and say it starts from the time the OC could have taken action not that they did.

There seem to be a lot of people currently claiming SB because "its 6 years since I last paid" and I had a rather heated discussion with a certain military gentleman this morning who advised a poster that 6 years from last payment was ok.

Of course with overdrafts I believe they have to be renewed every year

[FlamingParrot]

Re: Statute barred/cause of action

Thank you FP
It really is a minefield and does raise lots of questions as to how long those of us with unenforceable agreements have to be on our guard against sneaky DCA's and the like.
It is plainly not fair to rely on a DN being issued as some are never issued or issued so late because maybe you have been in a DMP (Two of mine didn't default me until I went down to £1 a month) . Equally markers with CRA's as some do not report.
I suppose a fixed term loan such as a payday loan is a bit easier as the whole balance is due on a certain date.

I suspect that a good Judge would take a common sense approach and say it starts from the time the OC could have taken action not that they did.

There seem to be a lot of people currently claiming SB because "its 6 years since I last paid" and I had a rather heated discussion with a certain military gentleman this morning who advised a poster that 6 years from last payment was ok.

The exact date only becomes an issue if they start proceedings, :juge: otherwise, if they haven't paid in 6 years, what are they going to do -other than buy some bubbly to celebrate?
I think I know who the gentleman in question may be, I thought he had retired...

Of course with overdrafts I believe they have to be renewed every year

Not always, but the point is not so much that, but at which point does the bank recall the O/D, because that's just part of your current account, which can go in the red and stay there for months, until the bank sees no money has been paid in for a while, but for how long? My business account was overdrawn (by a few hundred) for a long time (over 6 months), the bank never demanded payment of the O/D, perhaps because it was made up purely of their own charges, and they kept adding more interest/charges on top. It's still a live account, as I had to use it again to have my money paid in and the O/D was paid off at that point, but it must have been 9 months after the account first went into the red.

[Guest]

Re: Statute barred/cause of action

Yes indeed there are a number of overdraft cases on the go OTR at the moment where SB letters have been sent and really they are not, because the bank may not have called in the arrangement any time near when the last payment was made into the account, why should they.

[jon1965]

Re: Statute barred/cause of action

It is quite a wake up call and something i hadn't realised. It is pretty much ok for me because most of my accounts were defaulted before I made the last payments and the few that weren't I have all the paperwork for so will not get caught out.
The problem will be for those that for whatever reason suddenly stopped paying and then get a claim at say 6 years 1 month and happily write off saying haha I know I owe you money but it is SB so go forth and frankly if I had not known better I may have been one of those.
Luckily the DCA's do not seem to be fully aware although Crapquest are citing the date of default

[panther12]

Re: Statute barred/cause of action

There seem to be a lot of people currently claiming SB because "its 6 years since I last paid" and I had a rather heated discussion with a certain military gentleman this morning who advised a poster that 6 years from last payment was ok.

From my observations the advice given regarding SB depends on which forum you visit, which is why my preferred forum is LB as you get good quality sound help from people who actually know the legislation and know what they're talking about.

[jon1965]

Re: Statute barred/cause of action

Sadly there are people who seem to think that number of posts equate to knowledge. I am pretty confident on my position on all my accounts with the possible exception of my santander current account as they spent months demanding payment or we will restrict/close/cancel your account. The debate OTR got very heated with 3 people firmly at one extreme .

It has even been suggested that BMW v Hart is ongoing . Does anyone have an idea on that? Maybe i will PM PT and ask him if he has time

[Gorang]

Re: Statute barred/cause of action

This thread has got me thinking here

http://www.legislation.gov.uk/ukpga/1980/58/part/I

2

Time limit for actions founded on tort.
.
An action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued.

5

Time limit for actions founded on simple contract.
.
An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.

As PT said in the thread above Post 11

The service of a default in my opinion is something the creditor does when there is a breach, breach of contract is a cause of action, limitation requires a cause of action to accrue etc

My view on this for overdrafts is if the overdraft is in the red (ie into unauthorised borrowing) then the bank has the right to (and they have done in many occasion's) terminate the overdraft, and they then can take legal action to recover monies due IF they decide they want to
IMO
overdraft = simple contract
cause of action (creditor not paying) = tort (debtor can take legal action) as soon as creditor realises cause of action has occurred
So IMO, Tort ability starts after, the debtor has been sent 2nd statement, after last payment made by debtor into the account

ie

overdraft goes into the red on 1st Jan
creditor sends statement advising of such on 20th Jan
debtor chooses NOT to pay (this provides creditor with cause of action)
creditor sends next statement on 20th Feb (this confirms to both parties that a breach of contract has happened)
creditor then has cause of action for tort (ie as debtor didn't pay, creditor can then decide to at that time IF they choose to do so, terminate the contract and take legal action )

IF they decided to take legal action that soon, whether they would win or not is an entirely different issue, but the fact is they do have the "option" to take legal action that soon IF they want to

So in my opinion the SB'd clock would start after 2nd statement has been sent, as the creditor is then, aware the that the debtor has not paid/is not paying therefor giving creditor just cause for tort, and that would be after they have sent the 2nd statement, after, the last payment made by the debtor, NOT, when or if the creditor decides to issue a DN or record a default

IMHO the default notice has nothing to do with it, it is when the creditor has the first "opportunity" to take legal action that starts the SB'd clock

IMHO same applies to credit cards accounts and loans

[Guest]

Re: Statute barred/cause of action

IMHO the default notice has nothing to do with it, it is when the creditor has the first "opportunity" to take legal action that starts the SB'd clock

IMHO same applies to credit cards accounts and loans

Hmm does the creditor " have the opportunity" to demand full payment on an account which has only been contractually breached, common law says no.

Of course this could be overridden by a valid termination clause in the contract.

Then we have the DN, the statute says that no demand for early payment can be made, in fact the creditor is not "entitled" to..

Keeping in mind that the contract cannot overshadow the statute.

:santa_smiley:

[Gorang]

Re: Statute barred/cause of action

Hmm does the creditor " have the opportunity" to demand full payment on an account which has only been contractually breached, common law says no. What does the DN do, it demands payment.
As the contract has been breached, then that gives the creditor the opportunity to issue a DN so the fact that the creditor CAN now issue a DN then this IMHO starts the SB'd clock,
whether the creditor does or doesn't issue the DN, well that is the creditors choice,
If they choose NOT to issue, makes no difference as the opportunity was still there for them to do so, so does not affect the SB'd clock to start ticking

Of course this could be overridden by a valid termination clause in the contract.

Then we have the DN, the statute says that no demand for early payment can be made, in fact the creditor is not "entitled" to.. 2 months (or 2 statements) after the last payment has been made is not a early demand as the creditor can issue a DN at that time, makes NO difference if the creditor decides NOT to issue a DN, that is the creditors choice/problem, not the debtors, the fact remains that the creditor HAD the opportunity to do so, therefor the clock starts ticking IMHO, if a creditor decides NOT to issue a demand for payment for yrs after to avoid the clock from starting then that could be looked at as unfair terms and conditions as well I suspect

Keeping in mind that the contract cannot overshadow the statute.

:santa_smiley:

They can't have it both ways when they feel like it, they can't claim contractual law then claim common law when it suits them because they don't want the SB'd clock to start

I'm maybe not putting this across correctly, the point I am trying to make is, once the creditor has the "opportunity" to (or can within all guidelines) issue the DN for payment, then that is the point the clock starts ticking

And if they choose not to issue, then that is their problem NOT the SB'd clocks problem nor the debtors if you see what I mean

[Guest]

Re: Statute barred/cause of action

No you put your point very well, however there must be a demand for payment, section 6(3) and it is one of the essential elements of a COA in simple contract, no matter how you look at it they cannot make one until the sums become due and payable.

I suppose this may be unfair but I personally cannot see how you get around it.

I suppose it will take a test case to sort out the issue once and for all.

[Gorang]

Re: Statute barred/cause of action

I suppose it will take a test case to sort out the issue once and for all.

very true