When does the SB clock start for the purposes of limitation

[Guest]

Statute of Limitations Cause of action (start date for six year clock) This agrees with the advice given by the main agencies.

1 On credit cards and standard fixed sum loans/HP agreements
When the creditor could/is able/can start the process needed to get all of their money back i.e. arrears and future sums.

2 The fact that they may choose not to start that process straight away has no effect on the clock. If they choose not to start that process for some months after they are contractually able then they have not extended the Limitation period by those months.

3 The kind of breach committed by a debtor which would in turn enable full demand for early repayment would be contained within the Terms of the contract, and in order to establish absolutely the SB date then the debtor will need to consult those terms.

4 The date on which a default is registered with a credit reference agency is not an accurate indicator of the COA.

Overdrafts.
If a contract exists the debtor should refer to those to establish the breach date.
If there is no such agreement then the clock will start from the date on which the bank formally request repayment.
(The situation described above refers to the usual "tacit overdraft" arrangement, that is one where there is no pre-arranged facility but the bank allows the account to go overdrawn. )

The new regulations issued in 2011 stated that when this kind of agreement is first entered into (the bank issues the overdrawn funds) they must send a notification under section 74A of the CCA giving the terms of the credit provided. This is not the COA as it does not demand repayment.

Should the lender "significantly overdraw" on their limit they may receive a notice under section 74B this is advice only. Unless it is accompanied by a demand for repayment the Cause of action would commence on the demand rather than the notice.

When trying to identify the cause of action on an overdraft of this kind, my advice would be to search any correspondence for the first demand for repayment issued by the bank.

Some overdrafts of course come with a repayment schedule and terms and conditions, on these the cause of action would be the same as any other agreement and depend on the terms contained

In addition to this there is recent case law which suggests a COA may be delayed until after the issuance of a DN under section 87 of the act.
This has yet to be proven in court, if in doubt my personal advice would be to err on the side of caution and take the start of the clock as being later rather than sooner

After this the clock will be reset by any payment or formal written notice sent to the creditor.

[FlamingParrot]

Re: When does the SB clock start for the purposes of limitation

This has yet to be proven in court, if in doubt my personal advice would be to err on the side of caution and take the start of the clock as being later rather than sooner

After this the clock will be reset by any payment or formal written notice sent to the creditor.

I totally agree and keep saying that all the time, don't know why people are so anxious to establish the exact date when they've obviously waited 6 years, why can't they wait a few more months?

In reality, the exact date is only relevant when the creditor starts proceedings in the nick of time, although in this case the debtor could probably put forward a SBd defence if the last payment was over 6 years ago (in England) and leave it up to the creditor to prove it's not SBd and argue over the cause of action. Can you post up any case(s) where the creditor has won in court arguing the technicalities of the CoA?

[Guest]

Re: When does the SB clock start for the purposes of limitation

I totally agree and keep saying that all the time, don't know why people are so anxious to establish the exact date when they've obviously waited 6 years, why can't they wait a few more months?

In reality, the exact date is only relevant when the creditor starts proceedings in the nick of time, although in this case the debtor could probably put forward a SBd defence if the last payment was over 6 years ago (in England) and leave it up to the creditor to prove it's not SBd and argue over the cause of action. Can you post up any case(s) where the creditor has won in court arguing the technicalities of the CoA?

There is lots of case law about involving COA issues, unfortunately not much directly related to consumer credit. Lots of anecdotal evidence of course.

There does seem to be a rise in creditors challenging COA claims on the grounds that the agreement was still live when the debtor purports the clock to have started, mostly on OD cases.
Unfortunately as usual threads just get abandoned and you never seem to see how the issues are resolved.

[Guest]

Re: When does the SB clock start for the purposes of limitation

Regarding the reversal of proof issue, there is case law which illustrates what you say;
in Congregation Union Inc v Harriss and Harriss [1988] 1 ALL ER which makes clear that the burden of proof shifts to the claimant to show that they are able to bring a claim within the limitation period
also in CPR under PD 16 Para 13. If they *can* show that this is the case the defendant would have to provide evidence to the contrary - Cartledge v E. Jopling [1963] AC 758in

[jon1965]

Re: When does the SB clock start for the purposes of limitation

I totally agree and keep saying that all the time, don't know why people are so anxious to establish the exact date when they've obviously waited 6 years, why can't they wait a few more months?

Agree as well .
I think the reason why people (I) would want to know the exact date is that I will/worry about getting a claim in those last few months and you know how I worry and question what if all the time.

There is of course another reason and that you see other posters on here and other sites getting told to send the SB letter when it blatantly isn't SB it is nice to be able to have some authority with which to back it up. Although I am not sure when or even if creditors will want a ruling on this forewarned is forearmed. I am guessing that the more spurious SB claims they get, the more likely they are to want to get it set down

[Guest]

Re: When does the SB clock start for the purposes of limitation

Yes it is a good point. If it is a matter of claiming that the account is statute barred, why take the risk of doing so before the default date.

Of course if you are being chased for repayment anyway there is no reason why you should not claim SB, as said it reverses the burden of proof and they have to prove otherwise.

As far as overdrafts are concerned, the situation described above refers to the usual "tacit overdraft" arrangement, that is one where there is no pre-arranged facility but the bank allows the account to go overdrawn.

The new regulations issued in 2011 stated that when this kind of agreement is first entered into (the bank issues the overdrawn funds) they must send a notification under section 74A of the CCA giving the terms of the credit provided. This is not the COA as it does not demand repayment.

Should the lender "significantly overdraw" on their limit they may receive a notice under section 74B this is advice only. Unless it is accompanied by a demand for repayment the Cause of action would commence on the demand rather than the notice.

When trying to identify the cause of action on an overdraft of this kind, my advice would be to search any correspondence for the first demand for repayment issued by the bank.

Some overdrafts of course come with a repayment schedule and terms and conditions, on these the cause of action would be the same as any other agreement and depend on the terms contained.

http://www.legislation.gov.uk/ukpga/1974/39/section/74A