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100,000 Frozen Cases - The Facts

Monday 11th May 2009

I would like to bring some remnants of sanity to the subject of the alleged “100,000 Frozen Unenforceable Credit Agreement claims.”

There is a lot of nonsense being published in the media about a "stay" or "freeze" of all Consumer Credit Act claims.

Categorically, this is completely untrue.

There is NO STAY, and NO CASES have been frozen.

This has been confirmed with the Court in Chester this very morning (8th May 2009) by our Legal team, who won the Walker case that is referred to.

This is a malicious rumour being put about by those with a very different agenda.

The only thing the Judge is suggesting is that the Court wants to consider what would be the effect if such a stay was brought in.

Our legal team have a meeting booked to discuss this matter in detail on 18th May in Chester, with His Honour Judge Derek R Halbert.

Attached to this email is a copy of the correspondence that has been published by Judge Derek R Halbert of the Chester County Court. Please read this carefully. It is important that you understand the inference of the correspondence. 

Reports have appeared in the media over the last couple of days stating that Chester County Court has issued a stay on all proceedings relating to unenforceable credit agreements. These reports are incorrect, yet they have appeared in newspapers, websites and various editorials.

The TRUE FACTS are that as a result of a case in the name of Walker at Chester County Court which was appealed to Judge Derek R Halbert and which the lender, Southern Pacific Personal Loans Ltd, lost due to their non-compliance with the prescribed requirements of the Consumer Credit Act 1974.

The issue of the appeal related to a specific technical point about what constitutes the “total amount for credit”.

In relation to many of the reports we have seen, the law has been incorrectly stated and language suggests that there is a “legal loophole”. This could not be further from the truth; in fact the case that was won in the Chester County Court underpinned the very essence of the Consumer Credit Act 1974.

The Act, as it has stood since 1974, was amended in 2006, and the amendments came into force in April 2007. The change affects NEW credit agreements and the ‘old law’ still applies to agreements taken out before the change was made. The change itself, involves primarily the introduction of a new regime of unfair relationships, and the introduction of a new discretion for the court to determine unenforceability.

Under the ‘old law’ the court has NO DISCRETION and the law is established and has been tested up to the House of Lords and is regularly stated in case Law.

Because of the tactics and strategies of lenders, who are now actively meeting to collectively address their past non-compliance, we believe that part of their strategy involves negative marketing in relation to the industry, including disseminating regular mis-information, for example recent reports on the BBC, Timesonline, Thisismoney and many more, which are simply inaccurate and which do not reflect the true facts. We are in the process of developing a full response to as many of the inaccurate reports as we identify.

In the meantime, in relation to the Chester County Court issue, a proposal has been submitted to the senior judiciary because County Court judges require ‘directions’ in relation to the unenforceable claims they are dealing with.

The ‘direction’ process is a formal way of the judiciary giving guidance to lower courts on how to process, examine, determine and conclude cases. This is a normal and common practice within the courts. In relation to the specific case and the implications of the proposed stay being converted into an actual stay of proceedings, we continue to work closely with the leading experts, including the lawyers and barristers who conducted the case and continue to have utmost confidence in the law and the decision that was made on appeal.

Should a  stay in proceedings occur, this will not prevent us from continuing to seek new business as any and all claims will still be based on the established proven ‘old law’ (i.e. the Act from 1974). Because of the nature and importance of the issues in the case relating to legal definitions as well as the significance of ensuring consumer rights are protected and consumers are given the opportunity to exercise those rights, we will be closely involved with all the proceedings and the senior judicial, legal and academic experts with whom the claims process has been developed over the last couple of years.

We understand that the ‘headline’ of this incident may be of some considerable concern to our customers and introducers, however you should always remember that our audit process is proven and based on sound, reliable, tested and accurate processes developed by leading experts with the approval of counsel and various QCs.

The banks are acutely aware of the nature of their non-compliance, and are attempting to avoid their legal responsibilities by adopting tactics such as applying unscrupulous PR and marketing campaigns (directed at uninformed and legally unskilled consumers).

The banks know that they have lost the legal and moral arguments in relation to their failures over the past few years and the most important thing to remember is that a lender CANNOT enforce ANY consumer credit agreement unless THEY go to court and get an order.

HERE’S THE RUB FOR THE LENDERS…

In the event that proceedings are in fact stayed in the future, the banks will not be able to take any action WHATSOEVER against any client or customer of My Claims Supermarket due to the nature of actions being “stayed”.

Please bear in mind that lenders will be unlikely to accept the impact stayed proceedings will have on their cash flow - as there will be none – since ANY AND ALL consumer agreements found to be challengeable will be suspended as they will be deemed to be in dispute (as per Consumer Credit Act 1974 s65(1), 66(1)A, 127(3), Regulation 6(1) and Schedule 6 of the Consumer Credit Agreement regulations 1983 – to name just a few…) including any payments made. 

Should this in fact become the situation that we find ourselves in, this inevitably will make the claims market more attractive to consumers at a time of deep recession and we are confident that the banks will revert to their previous strategy of defending individual actions.

We will keep you fully advised of all developments, in particular the meeting next week with the judge and the legal teams representing both parties.

By Duncan Pearson
Legal Sevices Director
My Claims Supermarket
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