Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

[EXC]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

I'm not sure if we got this sorted or not - so I'm just chucking in a belated two penn'orth, if I may.
An 'interest bearing' account is, I believe, an account which receives interest from the bank (or 'depositee' ??). This is not the same as income tax - this is investment income. So, £100 deposited in a savings account that pays 2.5 % per year will have 'earned' interest to the value of £2.50 in the first year. I think it's important to realise that the account balance of £102.50 is NOT liable for income tax at the end of the year. ONLY the £2.50 'earned' interest is taxable.

Yes I think that's what leclerc meant - that the interest earned would be taxable.

1. judicially, the LA 'clock' no longer starts at the JR outcome, but at the loan inception date ? - but;

2. the FSA/FOS do not impose such a limitation ?

Yes that's pretty much it.

The Judicial Review had no bearing on limitations in court proceedings as it was only concerned with the FSA's/FOS's complaints handling rules and not points of law as such, in contrast to the bank charges test case where the judiciary froze the limitations period for the duration of the litigation.

Some profess that you can circumvent the usual 6 year limitations period by using the exception in section in 32.1 but I firmly believe that you can't for PPI mis-selling. The only case I know of where this was tested in contested proceedings it failed miserably Lexology


With complaints, firstly a bank can technically dismiss a complaint without considering it's merits after 6 years has passed as per DISP - the FSA's complaints handling rules. But in general terms the FOS will accept most of those dismissed complaints. The only major exceptions being where PPI was sold before 14 January 2005 by companies who were not regulated by the FSA prior to that date and were not members of the General Insurance Standards Council at the point that the event complained of occurred.

[Angry Cat]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

But in general terms the FOS will accept most of those dismissed complaints. The only major exceptions being where PPI was sold before 14 January 2005 by companies who were not regulated by the FSA prior to that date and were not members of the General Insurance Standards Council at the point that the event complained of occurred.

"The only major exceptions being where PPI was sold before 14 January 2005 by companies who were not regulated by the FSA prior to that date and were not members of the General Insurance Standards Council at the point that the event complained of occurred."[Emphasis Added]

Many, many consumers logged their complaints well before 2004/2005 to firms who had signed up to the ABI and the subsequent GISC.

Sadly, their concerns fell upon deaf ears...

[kitchenart]

Blackhorse won't cancel my PPI?

I have started a claim 8 weeks ago against Blackhorse finance for the return of my PPI payments (£181 per month). When I started the claim I wrote in the letter that I wished to cancel this policy and stop paying them £181 per month. They contacted us and said that I couldn't cancel it and stop my payments at this time. Is this correct? I would have assumed I could cancel the PPI at any time and stop the payments. Does anyone know what the situation is with this type of thing?

[EXC]

Re: Blackhorse won't cancel my PPI?

I have started a claim 8 weeks ago against Blackhorse finance for the return of my PPI payments (£181 per month). When I started the claim I wrote in the letter that I wished to cancel this policy and stop paying them £181 per month. They contacted us and said that I couldn't cancel it and stop my payments at this time. Is this correct? I would have assumed I could cancel the PPI at any time and stop the payments. Does anyone know what the situation is with this type of thing?

Is the PPI for a mortgage?

Is it single premium PPI ie was it added to a loan in one lump some to be paid as part of the loan?

[Paul210]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

Further to above:-

For some undisclosed reason, it is NOT assumed that we might have spent a bit more on our kidz, our holidayz, or to improve our generally declining standard of living, etc. It is assumed that those of us who need to borrow money are also in a position to save it !!! I don't follow that train of thought, and I do not think it is a reasonable assumption to make. For that reason, I do not think the 8% should be taxable.

only problem is that the argument the money could have been in an interest earning account is not the justification for the interest being taxable, it is the main plank of the original decision to award the 8% in the first place. By saying no one would have saved the money and would have spent it you do away with the argument that a further financial loss was made in that the money could have been invested and therefore basically say no compensatory interest for potential further financial loss would be due. If the lenders stopped paying this then the forum boards would light up within a matter or minutes with people claiming its unfair. Basically you get the 8% interest because if it went to litigation this is what you could claim at court so FOS and the lenders (a few exceptions apart) take the same view.

Also people seem to be getting hung up on whether 8% simple is realistic, this isnt a figure either the lenders, the 'government' (as a wide ranging title used commonly on here) or HMR&C have come up with, its simply been borrowed from the same rate the courts use for judgement debts as laid out in section 17 of the judgements act 1838.

HMR&C tax the 8% as to strip it down to its most basic form this is interest being paid by a bank and the current tax rules state that that makes it taxable, irrespective of whether its from a current or savings account or a ppi reclaim. Not all lenders will deduct at source and some who do may not deduct if they pay you gross (rather than net) interest on your other accounts with them i.e. thay are aware you are self emplyed as you have business accounts with them.

In the overall scheme of things I suspect that there are as many consumers who've had refunds and not told the tax man as there will be people deducted at source and not happy about it. (not that i'd ever imply anyone on here would avoid their tax laibility!!!)

[Bill-K]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

Thanks for that explanation, Paul, and I think I can see what you mean. Yes, I do realise that the rate of 8% pa simple interest is based on the Statutory rate set by the courts since 1993. Prior to this, I believe it was 15 % !!! What I cannot find anywhere is a clear legal definition of exactly what this interest is to compensate the claimant for.

It seems a narrow and somewhat illogical view to presume that a borrower - paying a higher rate of interest on his debt - would use any surplus cash he had to invest in a savings account that paid a paltry rate in comparison. It would seem far more logical - and reasonable - to me to presume that he would have used the money to pay off his high interest debts. I don't see how it can reasonably be presumed that he would choose to put - say - £1000 per year into a savings account that paid him £25, instead of reducing a loan by £1000, and thus saving himself ten times that much.

To my 'lay' thinking, this is compensation for the loss of 'enjoyment' of money which had been unlawfully taken from him. 'Enjoyment' to me means the freedom to choose what to do with it. To presume that he would choose to invest it so badly cannot be reasonable, IMO.

I would also have to say that, if the presumption IS that he would have invested in a savings account - or any other commercially-available method of investment, then this does NOT square with the use of a Simple rate of interest in calculating such compensation. He would, I think, be hard-pushed to find a commercial investment opportunity so bad that it only paid in Simple interest. In effect, I contend that the interest calculation of 8% Simple undermines the very argument supporting the presumption.

Lord Nicholls said (in Sempra):-

"We live in a world where interest payments for the use of money are calculated on a compound basis. Money is not available commercially on simple interest terms. This is the daily experience of everyone, whether borrowing money on overdrafts or credit cards or mortgages or shopping around for the best rates when depositing savings with banks or building societies. If the law is to achieve a fair and just outcome when assessing financial loss, it must recognise and give effect to that reality."

[Turboman]

Re: Blackhorse won't cancel my PPI?

Depends on where you are in the agrrement cycle

When was the agreement started----generally with Black Horse if the agreement was for less than 5 years-on your Agrreement will be detailed sums of refunds + you would expect a revised total monthly paymentif you cancel

• when 1 quarter of term elapsed
• half term elapsed
• three quarter temm elapsed

If you are over a longer term and past 5 years into it-your ppi cover will have expired-but you still are contracted to pay the original PPI Monthly payment till redemption

I have started a claim 8 weeks ago against Blackhorse finance for the return of my PPI payments (£181 per month). When I started the claim I wrote in the letter that I wished to cancel this policy and stop paying them £181 per month. They contacted us and said that I couldn't cancel it and stop my payments at this time. Is this correct? I would have assumed I could cancel the PPI at any time and stop the payments. Does anyone know what the situation is with this type of thing?

[EXC]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

What I cannot find anywhere is a clear legal definition of exactly what this interest is to compensate the claimant for.

I'd like to know that too. I had always assumed that 8% simple interest had at least an element built into it to counter the effects of inflation as if the consumer was to be put into the position he was in before the mischief occurred at a point years hence it would have to.

The FSA covered the issue of compensatory interest in the consultation paper CP10/06 which was the catalyst for the Policy Statement 10/12. In upholding the 8% rate it took into account the higher interest the customer would have been charged on the amount borrowed:


3.37
Some industry responses objected that the rate of 8% simple interest that the proposed guidance applies to redress payable by firms to complainants is too high and should be reduced, being more than an investor could have obtained. Some responses also referred to recommendations by the Law Commission in 2004 on pre-judgment interest in court cases, which included that the courts should normally award interest at 1% above Bank of England base rate.

Our response
We have not been persuaded that it is appropriate to use a rate less that 8%, nor do we agree that the interest rate that might have been earned through investment is the only relevant factor. The intention of the guidance is that a customer is put in the position that they would have been in if the sale had not been flawed. In attempting to achieve that, it is appropriate to consider not only what loss the customer may have suffered by not having invested his money or leaving it where it was, but also other effects of not having that money available to him. In the particular circumstances of PPI the customer is already one who is taking on a debt, and the interest rates payable on the amounts borrowed are likely to be considerably in excess of investment returns. It is likely in practice that the effect on the customer will be difficult to specify precisely. For that reason we are content that the rate of 8% should be applicable in general. We understand that this is the rate usually adopted by the FOS and we see no reason to depart from it.

http://www.fsa.gov.uk/pubs/cp/cp10_06.pdf

[Angry Cat]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

BK, no doubt you have read the following?
http://www.justice.gov.uk/lawcommiss...t_Interest.pdf

[Bill-K]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

Cheers for 'gophering' that, EXC.

...In upholding the 8% rate it took into account the higher interest the customer would have been charged on the amount borrowed:
But only inasmuch that it used that argument to refute the suggestions that the 8% rate should be reduced. IMO, it should also have considered the potential injustice of 8% being considerably less than the loss suffered by the customer in not being able to reduce their loan interest by the amount they have been deprived of, say I.

3.37
Our response
We have not been persuaded that it is appropriate to use a rate less that 8%, nor do we agree that the interest rate that might have been earned through investment is the only relevant factor. The intention of the guidance is that a customer is put in the position that they would have been in if the sale had not been flawed. In attempting to achieve that, it is appropriate to consider not only what loss the customer may have suffered by not having invested his money or leaving it where it was, but also other effects of not having that money available to him. In the particular circumstances of PPI the customer is already one who is taking on a debt, and the interest rates payable on the amounts borrowed are likely to be considerably in excess of investment returns. It is likely in practice that the effect on the customer will be difficult to specify precisely. For that reason we are content that the rate of 8% should be applicable in general. We understand that this is the rate usually adopted by the FOS and we see no reason to depart from it.

http://www.fsa.gov.uk/pubs/cp/cp10_06.pdf

I consider the highlighted sentence to be an avoidance of the responsibility to address this aspect fully.

BK, no doubt you have read the following?

TBH, AC, no - I haven't, and I thank you for the link. I have difficulty reading such documents these days, and usually rely on good peeps such as EXC or yourself to 'spoon-feed' me. That's why I mostly stick to maths and mechanics side these days, and prefer to be seen as the 'Bloke on the Clapham Omnibus.' However, I guess if I AM gonna butt in on discussions like this, then I really should read such documents. I've downloaded it, and will read it when I can. First, I have to change the font style - I really can't stand Times Roman !!!

[Angry Cat]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

Cheers for 'gophering' that, EXC.I consider the highlighted sentence to be an avoidance of the responsibility to address this aspect fully.

TBH, AC, no - I haven't, and I thank you for the link. I have difficulty reading such documents these days, and usually rely on good peeps such as EXC or yourself to 'spoon-feed' me. That's why I mostly stick to maths and mechanics side these days, and prefer to be seen as the 'Bloke on the Clapham Omnibus.' However, I guess if I AM gonna butt in on discussions like this, then I really should read such documents. I've downloaded it, and will read it when I can. First, I have to change the font style - I really can't stand Times Roman !!!

LOL BK, it is rather long winded as these documents generally are...
However, the following plus links may save you some laborious reading:

Pre-judgment interest on debts and damages
Resource type: Legal update: archive
Status: Published on 17-Sep-2008
Jurisdictions: England, Wales
On 16 September 2008, the government published its response to the Law Commission's 2004 report on pre-judgment interest on debts and damages. The government agreed that, where pre-judgment interest is awarded, the court may specify the rate of interest. It is likely that the rate of interest will be set by reference to the Bank of England base rate from time to time.

Currently, in the absence of any contractual entitlement to pre-judgment interest, the court has discretion as to the rate of interest to be applied. The starting point is the rate prescribed in section 17 of the Judgments Act 1838, which has remained at 8% since 1993. The proposed changes are welcomed as they are likely to provide greater certainty and rationality. Section 35A of the Supreme Court Act 1981 and section 69 of the County Court Act 1984 will be amended accordingly, although the timetable for implementation is as yet unclear.

The government rejected the Law Commission's recommendation that, where a judgment was £15,000 or more, there should be a presumption that interest will be awarded on a compound basis. Although the government did not rule out considering this issue again, it has no plans to do so for the foreseeable future. The response notes that compound interest is available in appropriate cases as a restitutionary remedy. (See Legal update, Lords confirm recovery of compound interest.) PLC - Lords confirm recovery of compound interest
However, simple interest will continue to be awarded in the majority of cases.

Source: Ministry of Justice

But of course, you already knew that didn't you plus Sempra?

IMHO, this is just another revenue stream for the Gov (HMRCS)...

And, a very unfair one at that for many, many consumers.

There are many cases that could be put forward as examples!

[Angry Cat]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

Apologies for slightly veering off topic and into compound interest.
But the HMRC recent extra revenue gain makes my blood boil...hopefully some up and coming barrister who specialises in tax technicalities may come up with valid legal argument/reasoning as to why this may be unfair to the general consumer.

[Bill-K]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

LOL BK, it is rather long winded as these documents generally are...
However, the following plus links may save you some laborious reading:

But of course, you already knew that didn't you plus Sempra?

IMHO, this is just another revenue stream for the Gov (HMRCS)...

And, a very unfair one at that for many, many consumers.

There are many cases that could be put forward as examples!

OK. Cards on the table - I didn't know that, either, AC. Thank you again for the enlightenment. Is the Judgements Act 1838 perhaps the key to our search for the legal definition of what "Statutory Interest" is supposed to compensate us for ?

I have read Sempra, but TBH a lot of the legal terminology - and even the grammar - goes over my head. I have to rely on spoon-fed morsels, such as the Lord Nicholls quote.

Regarding compound interest - I consider it as a part of the topic (if I dare !!!) - as it is as much an essential part of any interest calculation as the numerical rate used, IMO.

[EXC]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

I think that the 8% usually awarded by the FOS is, although based on the statutory rate (that a court would usually award), actually compensatory interest and as such is liable for income tax and always has been.

technical notes - is compensation taxable?

[burkey]

Re: Latest Update on PPI Judicial Review - NO APPEAL - get your claims in......

hi as anyone experienced the same problems as me got a ppi offer off lloyds tsb in july 2011 which i accepted but have heard nothing since tried to get in touch since but no joy convinced no one manninig phone and as it premium nuber lloyds must be getting money back that way tried everything i know but no joy can anybody out there advise me thanks burkey:tinysmile_hmm_t2: