Difference between revisions of "Statement of Evidence"
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I, the Claimant, believe all facts stated to be true. | I, the Claimant, believe all facts stated to be true. | ||
− | Signed, | + | Signed, |
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<span style="color:blue">Letter from Martin Orton, Lloyds TSB Customer Recovery Centre </SPAN>- <span style="color:red">or any letter or material in which the charges are described as 'defaults', 'penalties', 'covers costs', etc. </SPAN> | <span style="color:blue">Letter from Martin Orton, Lloyds TSB Customer Recovery Centre </SPAN>- <span style="color:red">or any letter or material in which the charges are described as 'defaults', 'penalties', 'covers costs', etc. </SPAN> | ||
− | Office of Fair Trading report, April 2006 | + | Office of Fair Trading report, April 2006 [http://www.oft.gov.uk/advice_and_resources/publications/guidance/unfair-terms-consumer/oft842 OFT Report] |
− | House of commons early day motion, May 2006 | + | House of commons early day motion, May 2006 [http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=30753&SESSION=875l EDM Report] |
Automated charge notification letter/s. <span style="color:red">Include a couple of examples. Preferably use ones where charges have been incurred over ridiculously small shortfalls and if possible, include 2 letters notifying of charges incurred on the same day </SPAN> | Automated charge notification letter/s. <span style="color:red">Include a couple of examples. Preferably use ones where charges have been incurred over ridiculously small shortfalls and if possible, include 2 letters notifying of charges incurred on the same day </SPAN> | ||
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Data Protection Act Subject Access Request for evidence of manual intervention | Data Protection Act Subject Access Request for evidence of manual intervention | ||
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Revision as of 16:56, 14 July 2007
Here's the 'Statement of Eidence' which can be used for c) of the Draft Direction Order (or if ordered in Directions by the judge.)
Remember this is not to be submitted with the AQ, but after the judge has ordered directions.
The first statement is to be used if your bank has defended the claim on the basis that the charges are a legitimate contractual service charge - ie. Lloyds TSB
The second statement is to be used if the bank has defended on the basis that the charges are proportionate to, or a pre-estimate of, their actual losses - ie. Abbey
One or two banks don't plead in detail as to why their charges are not a penalty, only that they were debited in accordance with the T&C's, etc - Ie. Barclay's. If this is the case, the third statement would be the most suitible.
Please think carefully about what does or doesn't apply to your own particular claim and amend as necessary. Similarly, if you can think of any more evidence relevant to your claim, add that in too.
Usual disclaimer applies - Im not a lawyer (far from it!) and the following is just my interpretation which I prepared for my claim and that I have amended to be relevant to others. Its offered without liability.
text in black - template
text in red - guide notes
text in blue - examples. Replace with your own information.
'Service Charge' Statement
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This next statement is suitable for claims in which the defence contends that the charges are proportionate to or a pre-estimate of their actual loss.
Again, think carefully about what applies to your claim and amend to suit if necessary.
Text in black - template Text in red - guide notes Text in blue - examples, replace with your own.
'GENUINE PRE-ESTIMATE' STATEMENT -
Quote:
Claim Number:*******
In the ******* County Court
Between:
Your name
(Claimant)
and
Bank Plc
(Defendant)
_________________________ _____
STATEMENT OF EVIDENCE
_________________________ _____
1. The claimant submits that the charges levied to his bank account, as set out in the enclosed schedule, are, notwithstanding the defence of the defendant, default penalty charges arising from and relating directly to breaches of contract, both explicit and implied, on the part of the claimant. As a contractual penalty, the charges are unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations 1999, the Unfair Contracts (Terms) Act 1977, and the common law.
2. It is admitted that the Defendants charges were levied in accordance with the terms and conditions of the account in question. However, it is submitted that the Defendants charges are not related to or intended to represent any actual loss arising from a breach of contract, but instead unduly and extravagantly enrich the Defendant which exercises the contractual term in respect of such penalty charges with a view to profit.
3. The Claimant cites the case of Robinson v Harman [1848] 1 Exch 850, which states that a contractual party cannot profit from a breach of contract and that the charge for a loss suffered from the breach should be the amount necessary to put both parties in the same position before the breach occurred.
4. Lord Dunedin in the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co [1915] AC 79 set down a number of principles in definition of a penalty clause and how such clause may be ascertained from a liquidated damages clause. These principles include -
"It will be held to be a penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison with the greater loss that could conceivably be proved to have followed from the breach" and;
"The essence of a penalty is a payment of money stipulated as in-terrorem of the offending part; the essence of liquidated damages is a genuine covenanted pre-estimate of damage"
5. The Claimant will further rely on numerous recorded authorities dating throughout the 20th century up to the most recent case of Murray v Leisureplay [2005] EWCA Civ 963, all of which have upheld and reinforced the principles set down by Lord Dunedin defining contractual penalty clauses and the unenforceability thereof.
6. Further, under the Unfair Terms in Consumer Contracts Regulations 1999, schedule 2 (1) includes to define an example of an unfair clause as -
"(e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation;"
7. The breaches of contract in this case relate to exceeding the contractually agreed limits of an overdraft facility, and having insufficient funds available to pay a direct debit or a standing order. Add an example of a charge incurred due to going over by a small amount, for example -On one occasion in June 2006, a direct debit payment was returned due to insufficient funds in my account. The shortfall was only one pound and nineteen pence. I was then penalised for this breach by way of a charge of £**. The claimant holds this charge and indeed every other charge in question, to be punitive in nature, and wholly disproportionate.
8. It is not disputed that the Defendant is entitled to recover its damages following the claimant’s breach of contract, and it is entitled to include a liquidated damages clause. The Claimant contends that the charges made by the defendant are disproportionate, excessive, exorbitant and extravagant, and believes it to be unconscionable that they represent, are a pre-estimate of, or are in any way related to; its actual loss suffered as a result of the Claimants breaches of contract.
9. The defendant has declined to answer the Claimant’s written requests for information regarding its administrative costs, or other such costs, incurred as a result of the contractual breaches from which its charges arise. Further, the Defendant has declined to offer any explanation whatsoever in regard of how its charges are calculated, or any other such justification thereof, despite repeated requests to do so.
10. In a recent study undertaken in Australia, (Nicole Rich, “Unfair fees: a report into penalty fees charged by Australian Banks”) it was estimated that the cost to an Australian Bank of a customers direct debit refusal was estimated to be in the region of 54 cents. By reviewing the banks’ charges against the above figure, the study estimated that banks could be charging between 64 to 92 times what it costs them to process a direct debit refusal. The study’s key findings stated that in its opinion the Australian Bank’s cheque and direct debit return charges were likely to be penalties at law.
11. The Defendant, or indeed any of the UK banks, has never published any information to support how their charges are calculated, or what their actual costs associated with such breaches are, or what revenue they derive from such charges.
12. For their recent BBC2 documentary “The Money Programme”, the BBC appointed a commission of former senior banking industry figures and business academics to attempt to ascertain the actual costs to the UK banks of processing a customer’s breach of contract. They concluded that the absolute maximum conceivable cost that could be incurred by a direct debit refusal or overdraft excess is £2.50, and of a returned cheque £4.50. They did state however, that the actual cost is likely to be much less than this. The commission also estimated that the UK banks collectively derive as much as £4.5billion in profit a year from their charging regimes.
13. It is submitted that the Defendants charges are applied by an automated and computer driven process. It is therefore impossible to envisage how the Defendant can incur costs of £** by carrying out a completely automated and computer driven process. This process consists of a computer system ‘bouncing’ the direct debit, and sending out a computer generated letter. Note that the letter received notifying of a charge is identical in every instance, and if multiple breaches occurred on the same day, a separate letter will be sent in each instance.
14. Additionally, I asked the Defendant to provide me evidence of any manual intervention that may have occurred in relation to my account, under a Data Protection Act 1998 right of subject access request. No such information was forthcoming.
15. The claimant also cites a radio interview in 2004 with Lloyds TSB’s former head of personal banking, Peter McNamara, in which he states the charges are used to fund free banking for all personal customers as a whole.
16. The claimant cites the statement from the Office of Fair Trading (April 2006), who conducted a thorough investigation into default charges levied by the British financial industry. While the report primarily focused on Credit card issuers, the OFT stated that the principle of their findings would also apply to Bank account charges. They ruled that default charges at the current level were unfair and unlawful within their interpretation of the UTCCR’s.
17. On 22nd May 2006, the House of Commons passed an early day motion which welcomed the OFT's statement that default charges should be proportionate to the actual loss incurred. The house described such default charges as "exorbitant" and "excessive".
18. Further, under the UTCCR:
“5. - (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.
(2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.
(3) Notwithstanding that a specific term or certain aspects of it in a contract has been individually negotiated, these Regulations shall apply to the rest of a contract if an overall assessment of it indicates that it is a pre-formulated standard contract.
(4) It shall be for any seller or supplier who claims that a term was individually negotiated to show that it was.”
Schedule 2 also includes such clauses (to define examples of unfair clauses) as:
“(i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract;
(j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract;
(m) giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract.”
The defendant is a multi-national corporation. The term regarding charges was inserted unilaterally in contract. The contract was pre and mass produced and I had no opportunity to negotiate the clause, or indeed any of the contract.
The cost of Lloyds charges have increased twice during the period in which my account was held, neither time was I given the opportunity to negotiate, or even notified of this increase. This means the bank has unilaterally altered the terms of my account contract to my detriment, and to their advantage.
19. As set out above, the Defendant’s charges can in no way be considered to be liquidated damages. They are not a pre-estimate of, or in any way related to, the Defendant’s loss incurred as a result of the breach of contract. The charges are punitive, held "in-terrorem", and unduly, substantially and extravagantly enrich the Defendant. As such, they are disproportionate contractual penalties and unenforceable at law.
I, the Claimant, believe all facts stated to be true.
Signed, dated.
Documents attached in support of this statement
Office of Fair Trading report, April 2006
House of commons early day motion, May 2006
Automated charge notification letter/s. Include a couple of examples. Preferably use ones where charges have been incurred over ridiculously small shortfalls and if possible, include 2 letters notifying of charges incurred on the same day
BBC commission conclusion - BBC NEWS | Business | The Money Programme bank commission
Australian Default charges report, Nicole Rich - http://www.clcv.net.au/downloads/Med...20Report .pdf
Transcript of telephone communication with Lloyds TSB 'personal banking' department.
Data Protection Act Subject Access Request for evidence of manual intervention
Transcript of radio interview with Peter McNamara, former head of personal banking, Lloyds TSB.
All pre-litigation correspondence between the parties
Remember that all settled cases and statutes are to be submitted for direction d)
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