A PPI litigation overview

Proofs of evidence in PPI cases

We are experienced in the provisions of the "Agreements Regulations", "Total Charge for Credit Regulations", "Cancellation and Copies of Documents Regulations" and "Enforcement, Default and Termination Regulations" and in vetting agreements for running account credit or fixed sum credit for enforceability.

Financial Mis-selling and Unfair Relationships

We are also experienced in financial mis-selling in individual agreements and in consolidation transactions, the use of the "Unfair Relationship" legislation to obtain substantial relief from such practices where often the FSA cannot or will not help and the calculation of loss arising on unfair consolidations of borrowing.

Breach of Fiduciary Duty by Brokers

Breach of Fiduciary Duty arises where advice is given to a consumer by a person with a personal interest in the matter about which advice is being given or acts for another party who has such an interest such as an independent broker. We will distinguishing when fiduciary duty arises and when it does not.  The fiduciary duty arising is distinct from contractual duties to use reasonable skill and care etc (which may well co-exist). Breach of this duty does not depend of proof of dishonesty. It arises through permitting such a situation to come about and then not putting the consumer's interest first.  Equity grants relief in the form of rescission or equitable compensation in lieu. We have traced the development of this equitable principle to the present day.

Irredeemable Unenforceability

This is quite distinct from the Carey v HSBC and McGuffick v Royal Bank of Scotland cases which dealt with temporary unenforceability under S.77/78 of the Act only. 

• The extended effect, on a regulated agreement, of mis-selling of PPI on the correctness of the terms such as statement of amount of credit (as opposed to statement of cost of credit) and statement of repayment terms can render pre April 2007 agreements for fixed sum credit irretrievably unenforceable.
• Likewise the solicitation of regulated agreements for credit cards by documents which either do not embody all their terms or state interest incorrectly can have the same effect. E.G. Interest may be determined daily, compounded monthly and expressed annually but the Consumer must be told - so he can check his statements. We see many cases of 'rounding' of interest (as opposed to APR) which the Agreements Regulations do not permit. We also see cases where APR is taken by the banks to the very limit of statutory tolerance (which is permitted) but then the rounding regulations are ignored to keep it with statutory tolerance (which is not permitted).  Small amounts gained by cheating should not be dismissed as de minimis in particular where the practice extends over thousands of agreements.
• APR is a contractual term. If it is mis-stated the Claimant is entitled to have the correct APR applied, which may have the effect of rendering the statements or repayment amounts incorrect

Financial Services and Markets Act 2000

We will pursue post January 2005 Claims for damages under section 150 of the Financial Services and Markets Act 2000 for breach of ICOB or ICOBS. We will also advise on pre January 2005 claims where the provisions of the GISC Private Code, the ABI terms or the Finance Leasing Association terms may provide a remedy for financial mis-selling. There are test cases under way at the moment.

Assigned Toxic Debt

We are becoming depressingly familiar with debts dismissed on the balance sheets as 'toxic' but pursued by the Assignees of Creditors in the Courts with reconstructions of documents they have lost or maybe never had in the first place, based on (often) multiple assignments the terms of which are never disclosed. We can advise on the steps to take to root this out at an early stage.

Problems of Disclosure and the refusal to admit that Documents are Lost or cannot be produced

For cases on regulated agreements without mis-sold PPI which may be unenforceable for miscalculation of APR or repayment terms we are familiar with the OFT guidelines for the calculation of APR and the use of Checker or Dual Calc for those purposes not in a manner which can be deployed in Court but as a vetting process to evaluate whether expert assistance is worth obtaining.

'Non enforcement' enforcement

Financial institutions, in order to by pass scrutiny in court, are pursuing remedies which the Courts, for now, do not view as enforcement, such as denigration of financial standing via credit reference agencies, speculative statutory demands, assignment of debts to foreign companies and others. Sometimes the principles being utilised are sound but they are often very slovenly in achieving it. 

Ancillary Remedies

The financial remedies (declaration of unenforceability, equitable compensation and recovery of undisclosed commission and unfair charges under UTCC Regs) and the interrelation between e.g. undisclosed commissions and paid PPI instalments when assessing equitable compensation are all matters on which we are happy to accept instructions, as are ancillary proceedings e.g. for pre action disclosure or for injunctions under the Prevention of Harrassment Act.

CFA

If your client is a consumer we may be able to offer our services on CFA terms in selected cases.  We use an adaption of the standard APIL form of CFA common in personal injury litigation. Owing to the increased risk associated with this type of litigation we request a variation from APIL terms in that (a) if a defence is filed we require the opportunity to view it and draft a Reply if needed and (b) if the case gets as far as exchange of witness statements we reserve the right to advise on evidence at that stage before the matter is finally prepared for trial.

If you would like advice, drafting or advocacy services on any of these matters - or a no-obligation preliminary chat with counsel about how to go about them - call 0151 236 5415.