Do you have a dispute about goods? Our finance litigation solicitors can help

Many disputes can arise in relation to goods that may have been sold outright or leased to a customer under a finance agreement.

Issues can arise out of:

  • Faulty and/or not fit for purpose
  • Sale by description or sample
  • Ownership disputes
  • Fraud
  • Unfair contract terms
  • Unfair relationship
  • Financial difficulty

Goods supplied must meet the standard that a reasonable person would consider to be satisfactory (the law sets out several factors which must be taken into account when considering what this is) such as any description and the price paid.  Goods must also be fit for their purpose.

If the goods do not meet the relevant standard, a customer could be entitled to require their repair, replacement, reduction of price or rejection and reimbursement of all the money they paid for them.  A customer could also seek sums for any further financial losses which they have encountered.

It is important to establish whether there is a fault with the goods as these matters can quickly escalate.  In order to resolve these claims early it is important to engage with your customer and it may be necessary to obtain an expert report.  In addition, it is important to be aware of relevant time frames in relation to rejecting goods, completing any necessary work or providing a replacement as a failure to meet these could prejudice a defence.

Luscombe Gray can assist with every aspect of a satisfactory quality dispute.  We will advise you on the strength and prospects of the claim against you, and – where you wish to proceed further – provide legal representation and expert handling of your case. Our expertise ensures the claim is brought it to the best possible conclusion.

Whether an item has been purchased outright or subject to a finance agreement the law implies a term into the contract that the goods must match their description.

If the goods do not match their description or are not the same as the sample seen by the customer, the customer could be entitled to replacement, reduction of price or rejection and reimbursement of all the money paid for them.  There may also be a claim for further financial losses which the customer has encountered.

It is important to establish what, if any, difference there is between the goods supplied and description or sample provided as these matters can quickly escalate.  In order to resolve these claims early it is important to engage with your customer and it may be necessary to obtain an expert report.  In addition, it is important to be aware of relevant time frames in relation to rejecting goods, completing any necessary work or providing a replacement as a failure to meet these could prejudice a defence.

Luscombe Gray can assist with every aspect of a dispute relating to sale by description or sample.  We will advise you on the strength and prospects of the claim against you, and – where you wish to proceed further – provide legal representation and expert handling of your case. Our expertise ensures the claim is brought it to the best possible conclusion.

The law implies that when an item is sold or leased the seller or creditor has good title to the goods.  In the event that there is a competing ownership claim over an item which you purchased there may be a claim for compensation by the rightful owner of the goods and the party to whom you have sold or leased the goods.

In the case of a motor vehicle subject to a hire purchase agreement, if your customer has sold the car to a third party, it may be recoverable from the third party by way of a claim for wrongful interference and/or conversion.  A third party will likely try to establish that they are an innocent purchaser under the Hire Purchase Act 1964 and we can assist with assessing and dealing with any such claim.

Whilst there should be safeguards in place to prevent it from happening, it is not uncommon for goods to be purchased or finance agreements to be entered into in someone’s name, without their knowledge.

This may not be known to you until such a time that your customer has defaulted on payment, as inception of the agreement may have been dealt with by an agent on your behalf.  In such cases it is important to obtain as much evidence as possible, which may include instructing a handwriting expert to analyse the signature on the documentation.  Our specialist, Katherine Clark, is experienced in dealing with these types of claims and can advise you on the strength and prospects of your claim and she can deal with it on your behalf ensuring it is brought it to the best possible conclusion.

There are a number of pieces of legislation which aim to ensure that the terms of contracts between businesses and consumers are fair and do not prejudice consumers.  For example, you cannot try to exclude liability if the goods are not of satisfactory quality or fit for purpose.

Whilst there are some very prescribed provisions which you cannot exclude liability for, there are also grey areas.  In order to assess whether these are unfair terms a fairness test is applied.  This test considers the subject matter of the contract, the circumstances when the contract was entered into, the other terms of the contract or any other relevant contracts.

The effect of an unfair contract term is that you will be unable to enforce that term of the contract.  The remainder of the contract remains in force, save for that term.

In relation to finance agreements which are regulated by the Consumer Credit Act 1974, the court has wide ranging powers where a relationship between a consumer and creditor is established to be unfair.  The relationship may be considered unfair for the following reasons:

  1. Any of the terms of the agreement or related agreements;
  2. The way in which the creditor has exercised or enforced his rights under the agreement or any related agreement; or
  3. Any other thing done (or not done) by, or on behalf of, the creditor either before or after the making of the agreement or any related agreement.

In addition, the court can take into account “all matters it thinks relevant”.  The scope of what could be considered unfair is wide, it could be something done or not done before the agreement was entered into, and the burden of proof is on you to show that the issue raised was not unfair.

If the court finds that there is an unfair relationship then there are a number of remedies available, including requiring you to reimburse a customer some or even all of the money paid under the agreement.

If a customer is experiencing financial difficulty and is struggling to pay instalments to a creditor under a finance agreement which is regulated by the Consumer Credit Act 1974, we can engage with your customer to reach a resolution acceptable to both parties.

Treating customers fairly is at the heart of any settlement negotiations entered into with your customers, terms agreed must be affordable and acceptable.  We will conduct an assessment with your customer to understand their financial circumstances, including their income and means, and any other creditors to ensure that any offer agreed meets their ability to pay.  Not only does this ensure that the principles relating to treating your customer fairly are adhered to, but it also ensures that the best possible outcome is reached for you by entering into settlement terms that are likely to run smoothly.

In July 2019 the FCA launched a consultation on proposed guidance for firms on the fair treatment of vulnerable customers.  We welcome this consultation process and the guidance which will be issued in due course in order to improve the treatment of individuals suffering temporary or long-term issues which may have an impact on their financial circumstances and ability to manage their affairs.  We are acutely aware that vulnerabilities must be identified and we will provide you with our guidance and recommendations as to any forbearance which should be given to vulnerable customers.

Instructing Luscombe Gray

Luscombe Gray is a boutique finance litigation firm, providing a legal service tailored to the needs of our clients.

We believe first-class commercial legal support should be available to all organisations. Whatever the size of your business, we are more than willing to provide our services and put our specialist skill and knowledge at your disposal.

Your case will be handled by Katherine Clark personally, so you can be certain that your business will be able to call upon the expertise of an experienced finance litigation solicitor. Throughout her career, Katherine has helped a wide range of businesses with their disputes, representing a range of financial services providers including asset finance companies, short-term loan providers and banks.

Luscombe Gray is based in the heart of Yorkshire, in Harrogate, with the reach to assist clients across the country.

If your business needs legal support for a service charge dispute, contact Luscombe Gray for clear, ethical, expert advice.

Speak with Katherine today

Katherine Clark - Litigation Solicitor

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