Banking update: report and review on recent cases and issues

Restrictive covenant - if in doubt, lender should be notified; the costs risk of insolvency proceedings; interim payments; service of claim form; Wragge & Co's banking and finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

Normal banking behaviour; joint and several liability; contempt of court and adjournments; last known address for service; appeal to the Supreme Court on unfair relationship.

Litigation reform proposed: all change please

The Government has published its response to its consultation on 'Solving disputes in the county courts' (March 2011), setting out the proposals it intends to take forward.

Banking update: report and review on recent cases and issues

Mortgage fraud, who picks up the tab?; mortgagees' rights take priority over those of equity release scheme vendors; civil restraint orders; no notice of lack of authority.

Banking update: report and review on recent cases and issues

Valuation evidence; the Etridge guidelines should always be followed; trustee in bankruptcy v innocent purchaser; application to amend too late; no duty of care owed by valuer.

Banking update: report and review on recent cases and issues

Wragge & Co's banking and finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

Wragge & Co's banking and finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

Mortgage fraud leads to return of funds to lender; first past the post for creditors; no need to disclose names of employees; the Office of Fair Trading's mental capacity guidance for consumer credit businesses.

Rules are rules chaps: not disclosing commission on a PPI sale was not unfair

This week, the Court of Appeal rejected an appeal by the claimants in Harrison v Black Horse Ltd. Further to their alert of 12 October 2011, Wragge & Co's litigation experts now analyse this landmark decision in further detail.

PPI mis-selling claims: Court of Appeal rules in favour of lender and confirms compliance with ICOB rules is key

The Court of Appeal has today rejected an appeal by the claimants in Harrison v Black Horse Ltd. This is an important decision for lenders faced with payment protection insurance (PPI) mis-selling claims. In particular, numerous court actions have been stayed pending its outcome.

Banking update: report and review on recent cases and issues

Using the small claims court to keep costs down; negligent advice by surveyors; no conflict of interest for trustees in bankruptcy; no piggy-backing of additional applications on to pre-trial review.

Banking update: report and review on recent cases and issues

Marshalling of debts; negotiations to be considered as a whole; disclosure of client contact details; summary judgment criteria; Wragge & Co's banking and finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

Consolidation of a loan does not affect security; security from principal debtor does not preclude claim against guarantor; undue influence and misrepresentations defeat statutory demand; surveyor owes no duty of care to buy-to-let purchaser.

Banking update: report and review on recent cases and issues

Recovering the costs of enforcing a charge; confirmation from the Court of Appeal – Part 36 offers cannot be time limited; the need to get service right; Wragge & Co's banking and finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

Wragge & Co's banking and finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

Final orders rarely revoked; bank held to fee estimate; limited discretion on bankruptcy order and enforceable guarantee; the latest on the cases and issues affecting the lending industry.

Judicial review of PPI complaints handling fails

The High Court decision in the British Banker's Association's (BBA) judicial review of the Financial Services Authority's payment protection insurance complaints handling procedure was handed down yesterday. The BBA lost on all three grounds of challenge.

Finance company is not a private purchaser - an update

In the November edition of our banking update, we referred to the High Court decision of Welcome Financial Services Ltd v Nine Regions Ltd t/a Log Book Loans. Here is the latest update from the case.

Banking update: report and review on recent cases and issues

Over-optimism does not necessarily lead to misrepresentation; consequences of failing to attend trial; mental capacity; new lending code for borrowers.

Banking update: report and review on recent cases and issues

Wragge & Co's banking and finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

A review of badly drafted guarantees, unilateral notices, Part 36 offers, and the Insolvency Services policy on bankrupt's principal residence.

Courts continue to find in lenders' favour on PPI mis-selling claims

Six judgments have been handed down dealing with allegations of payment protection insurance premium mis-selling and breach of the Insurance Conduct of Business Rules. All six judgments are in favour of the lender and Wragge & Co acted for the lender in three of the cases.

Banking update: report and review on recent cases and issues

Wragge & Co's banking and finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

Wragge & Co's banking and finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

No prejudice to borrower, guarantee not void for non-disclosure; administration orders and limitation periods; Part 36 and litigants in person; surveyor's duty of care to buy-to-let purchaser and a right to subrogation.

Banking update: report and review on recent cases and issues

Tracing claims, ratification of actions, pre-action disclosure application and economic interest in bankruptcy application required.

Borrowers 0 – Lenders 3

There have been three judgments dealing with Consumer Credit Act test cases that lenders need to be aware of. Dealing with allegations of payment protection insurance premium mis-selling, mis-statement of APR rates and breach of the Insurance Conduct of Buisness Rules.

Banking update: report and review on recent cases and issues

The meaning of charge for credit, enforcing charging orders, abuse of process considerations, tracing claims and the Financial Service Authority's responsible lending consultation; Wragge & Co's Banking and Finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

Wragge & Co's Banking and Finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

What constitutes actual occupation, no claim against Court Services for failure to register bankruptcy petition, getting the name of the parties correct and clear reasoning required for court's decision.

Banking update: report and review on recent cases and issues

An order for sale and Convention considerations, undue influence, implied withdrawal of a Part 36 offer and reasonableness of after the event insurance premiums.

Banking update: report and review on recent cases and issues

A defendant making a "claimant" part 36 offer, considerations of an unfair relationship, payment starts time running again and good reason required for failure to attend trial.

The innocent purchaser v the innocent finance company: who gets better title?

Nemo dat quod non habet or, as they say in English, no one can pass better title to goods than they possess. But there are exceptions to this principle of English law.

Banking update: report and review on recent cases and issues

Obtaining information despite stay of enforcement, the need to act in good faith, recoverability of costs in small claims, penalty for destroying documents and a consultation on orders for sale for Consumer Credit Act debts.

Reporting under POCA - the need for a human process and clear audit trail

The decision of the Court of Appeal in Shah & another v HSBC Private Bank (UK) Ltd will give lenders some cause for concern.

Banking update: report and review on recent cases and issues

A review of civil litigation costs, the need to make enquiries of occupiers, restitution, bankruptcy over security and a consultation on mortgagee's power of sale.

Supreme Court hands down judgment in bank charges test case

The Supreme Court has handed down judgment in the highly publicised test case brought by the Office of Fair (OFT) against seven leading high street banks and one building society on the legality and fairness of bank charges.

Banking update: report and review on recent cases and issues

Wragge & Co's Banking and Finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issue

Unfair relationships due to secret commission, costs penalties for failing to disclose relevant documents, claiming damages from the Court Service and contempt of court, the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

The meaning of "realisation" under the Insolvency Act, warranty of identity of client, costly late withdrawal from mediation and the underlying requirement for the "without prejudice" rule to apply.

Banking update: report and review on recent cases and issues

Guarantees and variations, unjust statutory demand and civil restraint orders, Wragge & Co's Banking and Finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

Valid debentures despite forged signature and invalid board resolutions, costs entitlement following an acceptance of a Part 36 offer and the pre-action protocol seven months on.

Debt Relief Orders - the latest tool in the debt relief toolbox

For debtors with limited liabilities, little surplus income and minimal gross assets, the new Debt Relief Order (DRO) is a further tool to consider in managing their debts.

Banking update: report and review on recent cases and issues

Wragge & Co's banking and finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

Charging orders and intervening bankruptcy, enforcement of undertakings, disclosure under the Proceeds of Crime Act, Wragge & Co's banking and finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

Wragge & Co's banking and finance experts bring you the latest on the cases and issues affecting the lending industry.

Banking update: report and review on recent cases and issues

Unfair Terms in Consumer Contracts Regulations; no time limit on enforcing charging orders; enforcement of an unless order; and the new mortgage arrears pre-action protocol.

Financial Ombudsman Service not bound by common law

In determining a complaint under the Financial Services and Markets Act 2000, the financial ombudsman's opinion as to what is fair and reasonable in all the circumstances of the case carries more weight than the common law.

Claiming compound interest

Back to Basics

This briefing note will be of particular interest to all those involved in consumer credit transactions and is of general interest on the basic principles of contract law.

Wragge & Co appoints new partner to finance litigation practice

Wragge & Co LLP has boosted its finance litigation practice with the appointment of new partner Greg Standing.

Are you being served?

The courts insist parties abide by the terms of their contract and will be strict about deadlines.

Last known address for serving claim forms

When is an innocent third-party purchaser not an innocent purchaser?

Contract, what contact?

A crucial element of contract law is an intention by the parties to create legal relations.

My word is my bond

Motor finance companies sometimes take personal guarantees as extra security on transactions.

Sellers Beware!

The Sale of Goods Act implies certain terms into all sale contracts, one of which is that goods will be of satisfactory quality.

Creditor entitled to be first past the post

Whether a finance company can collect on a finance agreement debt may depend on whether the debtor is insolvent, and if not, how quickly it can take enforcement action.

Keeping the costs of small claims down

Any monetary claim which has a financial value of £5,000 or less will generally be allocated to the small claims track (court). In this track, the strict rules of evidence and procedure do not apply and the trial (or final hearing) is relatively informal.

Any way, any time, any order

The case of White v Davenham Trust Ltd has reaffirmed that a creditor can choose its own method of enforcing a debt which has been guaranteed by an individual even though it continues to hold security for that debt from the principal debtor.
 

Fit for purpose

The Court of Appeal recently reminded us of the application of the statutorily implied term regarding the fitness for purpose of goods, which is important to finance companies where dealers arrange the financing of the vehicles they supply.

Unfair terms in consumer contracts

In the Office of Fair Trading v Ashbourne Management Services Ltd, the court looked at standard form contracts relating to minimum membership periods, cancellation and debt collection.

Bribery Act 2010 - an update on adequate procedures

Implementation of the Act was delayed due to provide guidance on certain provisions of the Act that were raised as concerns during the consultation process. That guidance has now been issued and the Act comes into force on 1 July.

PPI mis-selling decisions in lenders' favour

There has been a further spate of judgments in recent months arising out of the high volume of payment protection insurance (PPI) mis-selling claims being brought against lenders.

Vicarious liability for employee's deceit

This month's case review is a salutary tale that will be of interest to dealerships and finance companies alike.

Finance company is not a private purchaser

The court has confirmed a business that provides finance to consumers, and enters into a bill of sale over a vehicle as security for that finance, is not a private purchaser under the Hire Purchase Act 1964 (HPA).

Adequate procedures needed to prevent bribery

When the Bribery Act 2010 (the Act) comes into force in April 2011, motor finance companies, their directors, mangers and senior officers need to be aware of the penalties for failing to implement adequate procedures to prevent bribery.

Technical defect not fatal to default notice

A minor technical defect in a default notice will not necessarily assist a debtor in invalidating the notice if it can be shown that the debtor has suffered no prejudice as a result of the non-compliance.

Fishing for evidence not permitted

The court has confirmed it will not assist would-be claimants to obtain evidence to try to substantiate wholly speculative claims.

High Court victory on PPI mis-selling claim

In Black Horse Ltd v Speak, the lender advanced the sum of £7,012.39 to the defendants pursuant to a regulated consumer credit agreement.

Debtor fails to win on technicality

In what might be perceived as a further 'try on' by claims management companies, the court has once again taken a robust view in favour of the lender.

Cost on discontinuance of claim

When a claimant discontinues its claim, the usual position is that it has to pay the defendant's reasonable legal costs. This is the general presumption under the Civil Procedure Rules and applies unless there is good reason for it not to.

Contractual right to costs in the small claims track

Finance companies often find themselves litigating in the small claims track. 

Lenders beware

The decision of the Court of Appeal in Shah & another v HSBC Private Bank (UK) Ltd (HSBC) will give lenders cause for concern.

Unfair relationship applies to live agreements only

In the case of Soulsby and Soulsby v FirstPlus Financial Group Plc (1) and Loans.co.uk Limited (2), FirstPlus advanced money to the claimants under three successive written credit agreements arranged via a broker.

Voluntary v compulsory liquidation

An agreement with a company has gone into arrears. The vehicles may or may not have been sold. The company has placed itself into voluntary liquidation. Can the finance company take steps to protect itself?

Creditors' rights not extinguished

Last month, I reported on the OFT draft guidance note on how to comply with duties to give debtors and hirers copy documents and statements of account following requests under sections 77 - 79 of the Consumer Credit Act 1974. There has now been a case.

Guidance on giving information

Readers are likely to have seen an increase in requests for information under sections 77(1), 78(1) and 79(1) of the Consumer Credit Act 1974 (the Act).

It's a matter of timing

Securing judgments by way of charging orders over property is a popular way for finance companies to enforce against debtors. Often, this process is a race against time before a bankruptcy or winding-up order is made.

"Without prejudice"

The use of the words "without prejudice" on correspondence or in a meeting where there is a "dispute" over a finance agreement can potentially lull the parties into a false sense of security.

Justice trumps ability to pay

Finance agreements with a debtor company are often backed by personal guarantees from the directors of the company. If insolvency proceedings are contemplated, you need to consider whether you could bring the same action against the principal debtor.

That old chestnut!

Guarantee or indemnity? A guarantee is a promise to answer for the debt of another who remains primarily liable, the liability of the guarantor being secondary. However, with an indemnity, the surety assumes primary liability.

Unfair terms in consumer contracts

In consumer contracts entered into on a business's standard terms, the court can find on a claim by an individual consumer that a term is unreasonable and unenforceable as against that particular consumer.

Debt Relief Orders - the essentials

Individuals unable to pay their debts have an additional form of debt relief available to them following the introduction of the Debt Relief Order (DRO) on 6 April 2009.

Intervening bankruptcy fails to thwart charging order

When an individual is made bankrupt or a company is wound up, any dissipation of assets, or enforcement proceedings completed after the date of the presentation of the petition are liable to be set aside (s 346 Insolvency Act 1986 (IA)).

Payment by instalments

In these difficult financial times it is not unusual for a debtor to ask for additional time to pay outstanding finance instalments, or any judgment that might have been obtained against him.

Charging orders remain enforceable indefinitely

Having obtained a judgment following default in payment of a finance agreement, the obtaining of a charging order over the debtor's property is an effective way of ensuring that the judgment is secured and that payment will be made.

Funding options for litigation

Conditional fee agreements (CFAs), often combined with insurance policies, have been used in the personal injury market for a number of years to enable parties to bring claims in circumstances where they might otherwise be unable to afford to do so.

Guarantees - business or consumer?

Business loans guaranteed by individuals involved in the management of the business are not caught by the UTCCR. Such guarantors are unlikely to be able to prove that the terms of such a guarantee are unreasonable and so unenforceable.

Serving proceedings

Lenders issuing and serving proceedings need to be aware of the changes to the rules on service of proceedings in England and Wales which came into effect on 1 October 2008.

Ombudsman complaints

If consumers' complaints cannot be resolved to their satisfaction by the body complained of, they have the right to complain to the Financial Ombudsman Service (FOS) under the Financial Services and Markets Act 2000.

Settlement by cashing cheque

When attempting to negotiate repayment from a debtor, it might initially appear attractive to accept and bank a cheque offered in payment and then pursue the debtor for the remainder.

Conversion for wrongful retention

A recent case has restated the basic principles of a claim in conversion fir wrongful retention of goods.

Civil Procedure Rules

A new pre-action protocol for general litigation claims is likely to be added to the Civil Procedure Rules (CPR) that govern litigation in the UK.Read what this could mean for motor finance companies.

No contractual effect

In ING Lease (UK) Ltd v Harwood a director unsuccessfully attempted to escape liability under a personal guarantee by alleging an agreement had been reached in negotiations that he would not be personally liable.

It's still my property!

In Schwarzschild v Harrods Ltd, the court confirmed that for a claim in conversion to arise, there has to be both an unequivocal demand for delivery up and an unequivocal refusal to do so.

Get the basics right

The case of County Leasing Ltd and another v East is a reminder of the need to get the simple things right when enforcing hire-purchase and loan agreements, such as calculations of arrears, notices of termination and demands for payment.

Get the basics right

The case of County Leasing Ltd and another v East is a reminder of the need to get the simple things right when enforcing hire-purchase and loan agreements, such as calculations of arrears and demands for payment, even the agreements are unregulated.

Limit to ROT reach

ROT clauses are often found in agreements for the sale of goods whereby a seller seeks to reserve the ownership of those goods until certain conditions are met, usually payment in full. However, they may not be suitable in every transaction.

Fraudulent misrepresentation

Renault UK Ltd v Fleetpro Technical Services Ltd & Anor is an interesting case. It confirms that fraudulent misrepresentations can be made to a machine such that, if loss is suffered as a result, a claim in damages can be brought.

Damages for fraudulent misrepresentation as to ability to supply cars

The case of Parallel Imports (Europe) Ltd  (T/A Baglan Car Centre) v Radivan & Anor is a reminder to dealers that care needs to be exercised where there is a history of trading with a supplier.

Title disputes

Fairfax Gerrard Holdings Ltd and others v Capital Bank Plc (now Bank of Scotland Plc by substitution) is a reminder that retention of title clauses are a clumsy and unreliable method of taking security over an asset, including over motor vehicles.

VFS Financial Services (UK) Limited v Euro Auctions & Others Limited

This article analyses a case about the correct measure of damages payable to a finance company whose goods have been unlawfully converted by a third party.