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Is UCTA 1977 the best option for my case?

Is UCTA 1977 the best option for my case?

Postby tommydog35 » Thu Mar 22, 2018 10:52 am

I am now at the stage where I am considering launching court proceedings. Despite repeated calls to settle my case, the other party has refused all settlement. I also submitted a complaint the the financial ombudsman, but this is not appropriate as my case exceeds £150. The details of my cases are as follows:

I had an account with a UK financial institution (won't name names, but it's a similar type of setup to Paypal) where nearly £1000 was deposited. I opened the account
in 2006. I last accessed the account online in 2008. I recently tried to withdraw my funds in December this year, but was told that the account was terminated and the funds had "expired", so there was nothing to release to me. The financial institution provided the following information:

1) Account is terminated after 12 months of not being used (2009)
2) From the time of account termination, the account holder has 6 years to redeem their funds (2015)

Although they are quoting 2015 as the date that the funds "expired" I only became aware of this matter in December 2017, after I complained that I could not login to
my account. I honestly believed that I still had an active contract with the financial institution and could access my funds.

My point is that when I opened the account in 2006 I was not aware of a clause where funds can "expire" and be refused to the customer. In my opinion this is a particularly onerous clause and at no time was it ever pointed out to me when opening the account. Had I know this, I would not have opened an account with the
financial institution. Additionally, I received no correspondence giving warning that my funds were about to "expire". This is not how a responsible financial institution behaves. I recently had an account with Barclays that had been dormant for 10 years. Barclays were only too happy to trace my funds and return them to me.

For the above reasons I believe the terms that the company rely on to deny me my funds are unfair. I am aware that UCTA has been replaced by new legislation, however
at the time of opening my account (2006) UCTA was the governing legislation. Also at the time of "expiry" of my funds (2015) UCTA was the governing legislation.

So is UCTA the most appropriate legislation to launch proceedings under if I want to use the unfair contract argument, or are there problems with time limits pursing
this action in 2018 (remember I only became aware of this situation in this December)? Are there any other legal avenues that I could pursue?
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Re: Is UCTA 1977 the best option for my case?

Postby atticus » Thu Mar 22, 2018 11:31 am

I take it that the institution still exists.

You do not need to mention unfair terms legislation in making your claim: you will use that to rebut their defence if they try to run that line.

Other than that - complain to FCA? Financial Ombudsman? Personal money page of a newspaper?
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Re: Is UCTA 1977 the best option for my case?

Postby tommydog35 » Thu Mar 22, 2018 12:31 pm

Why not mention unfair terms legislation. They have already told me that they won't return my funds because of terms XYZ and I have told them that I don't recognise the legal validity of terms XYZ. In response they have said our position remains unchanged and we have no further comment.

Also in terms of UCTA do you think I have a strong argument? Based on the facts I have provided, is a court likely to conclude that the terms they rely on are unfair? Or is my case very weak with no hope of success?
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Re: Is UCTA 1977 the best option for my case?

Postby atticus » Thu Mar 22, 2018 12:53 pm

The point is that you argue the case the defendant puts before the Court. If it gets to court proceedings they may decide that it is not an argument they wish to run in Court. Do not tackle an argument that is not made. You will have a chance to reply to the Defence.

Your argument seems to me to have substantial merit - if this institution chooses to defend your claim based on that provision.
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Re: Is UCTA 1977 the best option for my case?

Postby theycantdothat » Thu Mar 22, 2018 1:02 pm

A bit of a tricky one. The answer may be to consider the nature of the relationship between you and the financial insitution (FI). The money you deposited was not for the FI to supply good or services, but to apply in the purchase of goods and services from others as directed by you. In other words, they were something like a bank providing banking services. Whilst I cannot cite any authority, I think it has to be the case that a bank, and accordingly the FI, are acting in a fiduciary capacity, that is as a trustee, when holding funds. If that is the case then section 21(1) of the Limitation Act 1980 applies. It says (omitting parts not relevant to this thread):

No period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action [...] to recover from the trustee trust property[...]

If a condition of the terms of business include a provision that the funds are irrecoverable if certain conditions are met, I suggest that the provision is void as being repugnant to the essence of the arrangement.
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Re: Is UCTA 1977 the best option for my case?

Postby tommydog35 » Thu Mar 22, 2018 1:14 pm

atticus wrote: Do not tackle an argument that is not made. You will have a chance to reply to the Defence.


Thank you for your opinion. I would be really grateful if you could answer 2 points:

1) If they do run a defence and I choose to rely on unfair contractual terms to rebut that defence, are there any time limitations for relying on UCTA? I ask this as UCTA is old legislation?

2) Also I presume any time limit on bringing proceedings should go from the time when I became aware that they would not release my funds (December 2017) And not the time they say my funds "expired" (2015)
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Re: Is UCTA 1977 the best option for my case?

Postby tommydog35 » Thu Mar 22, 2018 1:24 pm

theycantdothat wrote:The money you deposited was not for the FI to supply good or services, but to apply in the purchase of goods and services from others as directed by you. In other words, they were something like a bank providing banking services.


It must be pointed out that they did provide me with the facility to accept payments from others as well (as Paypal does). In fact I mainly kept the account for accepting payments from others if I sold personal belongings.

theycantdothat wrote:If a condition of the terms of business include a provision that the funds are irrecoverable if certain conditions are met, I suggest that the provision is void as being repugnant to the essence of the arrangement.



You use the phrase "repugnant to the essence of the arrangement." is this a principal in equity? Do you have any links where I can read about this principle.

Many thanks
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Re: Is UCTA 1977 the best option for my case?

Postby atticus » Thu Mar 22, 2018 1:47 pm

q1. No.

q2. That is what they may argue. If so you may need to defeat the clause to defeat the argument. NB the limitation period for bringing a contract claim is six years from the date on which the cause of action arose.

Can I ask - is there a reason that you left this (and the other account you mentioned) so long?
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Re: Is UCTA 1977 the best option for my case?

Postby dls » Thu Mar 22, 2018 1:56 pm

Identify the company you are dealing with - exactly, and the juriscition from which they operate.

If (and a bif if) they are within the UK and operate under UK law, you may have a head start.
If they are based within the EU it would assist.

Under UK law a bank is a company offering current account facilities - the abaility to accept deposits and make payments on your behalf.

I would need to be convinced that a bank holds a deposited sum in trust. My understanding is that is simply a balance on an account - a debt in contract. A bank holds no particular asset - it admits a debt. The standard limitation period would be 6 years for a contract debt. I suspect that a bank (as such) would be obliged to apply a longer period, but the place to look for your answer would not be a simple disappliance of limitation.

See also

Financial Conduct Authority’s Banking Conduct of Business Sourcebook
https://www.handbook.fca.org.uk/handbook/BCOBS.pdf
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Re: Is UCTA 1977 the best option for my case?

Postby atticus » Thu Mar 22, 2018 2:25 pm

following on from that, the question is when the cause of action arises, that being of course when the limitation period starts to run. I suspect that with a bank it would be when the bank does not honour your instruction to withdraw funds when it holds sufficient funds to meet that instruction.

Needless to say, the terms of the contract (banks call them mandates) will cast more light.
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