Post by Patrick Torsney on Dec 3, 2010 10:16:19 GMT 1
Here is a case study from a legal aid funded advice agency in Northumberland. Here, two cases were opened for the clients, one a Debt case and the other, a specialist Welfare Benefits matter. What is interesting about this case is that the reform proposals say that legal aid will be kept for cases involving repossession or eviction of the client from their home, however any work in respect of welfare benefits would be removed entirely from scope of funding.
Whilst this might mean the house was saved the first time around, it certainly means that the next time around it is very likely it would not be were the underlying issues around entitlement and any subsequent appeals not addressed. Read on...
Mr and Mrs N live in a small rural town in Northumberland. Mrs N approached her local CAB for help because a loan company had threatened to repossess their family home of over 20 years because of £470.00 worth of arrears
She was at her wits end as the loan company refused to accept a delay in payments, which she asked for because her husband had been signed off work after an apparent breakdown
The original loan was for £4500, over 5 years. They had been paying it for two years, and it was secured against their house, which was also mortgaged with a different lender. Mr and Mrs N only had 3 years left on the original mortgage and had timed the smaller loan – taken to buy a 2nd hand car so that Mr N could continue to travel to his work – to end at roughly the same time as the mortgage.
Mr N never recovered from his “breakdown”, which turned out to be the onset of Alzheimer’s disease. When Mrs N first went to her CAB, Mr N needed increasing amounts of daily care, and Mrs N was hoping not to have to give up her own part-time job, which increasingly was providing her some small respite from caring for her husband and keeping her in touch with friends outside her home.
Mr N had, throughout their long marriage, handled most of their finances, although Mrs N had always managed the day-to-day running of the family’s budget. Mr N was becoming confused, losing his short term memory at an alarming rate, and was frequently aggressive to Mrs N, who obviously found this hard to come to terms with. She and her husband loved each other, and watching her husband deteriorate like this, and having to watch over him to make sure he didn’t harm himself or others, was taking up all her time and emotional energy, and she did not know what else to do about the loan which she just couldn’t afford, and keep up with the mortgage as well. She and her husband had never before even considered they might need to claim benefits, and Mrs N, in spite of eventually having a care manager from Social Services appointed to help look after her husband’s needs, did not know if any benefits were available to her or her husband.
Mrs N did not know where her husband had put the paperwork for the loan. She had assumed it would be with the mortgage papers, but it wasn’t.
Mr and Mrs N were eligible for Legal Aid, and, after first meeting with a generalist adviser, who identified both potential benefits issues and the obvious debt issue, she met with two different specialist advisers who worked in tandem on the different legal issues.
A clear entitlement to disability benefits was identified for Mr N, although as he was already over 60 years old, he was entitled to Attendance Allowance rather than Disability Living Allowance. The Care Manager had suggested that Mrs N make a claim for for Disability Living Allowance (DLA). The adviser explained that Mrs N herself was not entitled to this benefit, and Mr N would need to appoint Mrs N as his appointee to enable her to deal with his own claim for Attendance Allowance.
For Mrs N the claim process was confusing and difficult, especially given her distressed circumstances. She was assisted with the technical aspects of the claim, and also had advice about Carers Allowance which she might be entitled to if she had to give up her job (or if her earnings and work hours were low enough).
In the meantime, a specialist debt adviser suggested that if her loan agreement was regulated by the Consumer Credit Act, it might be possible to apply to the Court for a Time Order. This would allow the Court to alter the terms of the agreement so she could afford to repay it and avoid the house being repossessed by the lender. As she did not have the original paperwork immediately available, it was suggested that she give her consent for the adviser to act on her behalf, and an approach was made to exercise her right under the Consumer Credit Act to obtain a copy of the loan agreement on payment of the Statutory Fee of £1.00.
A copy of the loan agreement was provided by the lender, who also agreed to put recovery action on hold for a short time. The loan agreement did clarify that it was an agreement regulated by the Consumer Credit Act, and it was dated before certain amendments were made to the Consumer Credit Act in 2007. But more than this, it also revealed what was ostensibly a small error in the way the agreement was made up, which in the opinion of her legal adviser made the whole agreement totally unenforceable, because an administration charge of less than £50 had been added to the agreement as a part of the amount of credit. Mrs N did not think such a small error could cause the loan to be unenforceable. She couldn’t believe that for the sake of a £50 charge being entered in the wrong place in the agreement she might get the Court to agree to declare that the loan, and the security it had over the house, was not to be enforced and that she would no longer be required to repay the loan, and the threat of possession action would be taken away.
The adviser initially wrote to the lender to point out his opinion, and asked the company to agree to voluntarily write off the loan balance and remove the charge on the property from the land registry. Initially the company refused to agree to any such voluntary action, and went so far as to issue a possession claim for the loan. Following further legal arguments about the loan agreement, about Multiple Agreements and Unenforceable agreements, the lender finally agreed to sign up to a Consent Order writing off the balance of the loan, and removing the security from the land registry. A very short meeting was required at the local County Court for a District Judge to give effect to the Consent Order, but the matter did not have to go to a full trial, saving the Court, the adviser, and perhaps most importantly, Mrs N, the time and costs which would have undoubtedly been incurred.
There were two Legal Aid cases undertaken – at a cost of around £450 to the taxpayer (it was “as high” as this because the benefits legal adviser needed to obtain a medical report from Mr N’s doctor to confirm his Alzheimer’s Disease and comment on his condition).
An expensive trial was avoided, and only a small amount of the Court’s time was taken up – the cost of which was paid for by the lender. Mr and Mrs N retained their home, avoiding the costs that would undoubtedly have fallen to the local authority (ultimately paid for by the tax-payer again) of having to rehouse Mr and Mrs N. And such action would also have caused Mrs N to find it harder to cope, possibly to the point where she would have had to be treated herself for stress and depression.
Following the advice on the disability benefits and the assistance with the claims procedure, Mr and Mrs N were also able to afford to maintain payments against the main mortgage. If this hadn’t been resolved then even the sterling work on the secured loan may have been in vain given the main mortgage lender would themselves have probably taken their own legal proceedings when payments went into arrears.
The costs to the taxpayer if Mr and Mrs N had not received expert legal advice paid for by legal aid are incalculable. They would undoubtedly have been far greater than £450.00, but worse than that, Mr and Mrs N would have ended up losing their home unjustly – they would have been denied access to justice – and that surely would have been the greatest cost of all.
Whilst this might mean the house was saved the first time around, it certainly means that the next time around it is very likely it would not be were the underlying issues around entitlement and any subsequent appeals not addressed. Read on...
Mr and Mrs N live in a small rural town in Northumberland. Mrs N approached her local CAB for help because a loan company had threatened to repossess their family home of over 20 years because of £470.00 worth of arrears
She was at her wits end as the loan company refused to accept a delay in payments, which she asked for because her husband had been signed off work after an apparent breakdown
The original loan was for £4500, over 5 years. They had been paying it for two years, and it was secured against their house, which was also mortgaged with a different lender. Mr and Mrs N only had 3 years left on the original mortgage and had timed the smaller loan – taken to buy a 2nd hand car so that Mr N could continue to travel to his work – to end at roughly the same time as the mortgage.
Mr N never recovered from his “breakdown”, which turned out to be the onset of Alzheimer’s disease. When Mrs N first went to her CAB, Mr N needed increasing amounts of daily care, and Mrs N was hoping not to have to give up her own part-time job, which increasingly was providing her some small respite from caring for her husband and keeping her in touch with friends outside her home.
Mr N had, throughout their long marriage, handled most of their finances, although Mrs N had always managed the day-to-day running of the family’s budget. Mr N was becoming confused, losing his short term memory at an alarming rate, and was frequently aggressive to Mrs N, who obviously found this hard to come to terms with. She and her husband loved each other, and watching her husband deteriorate like this, and having to watch over him to make sure he didn’t harm himself or others, was taking up all her time and emotional energy, and she did not know what else to do about the loan which she just couldn’t afford, and keep up with the mortgage as well. She and her husband had never before even considered they might need to claim benefits, and Mrs N, in spite of eventually having a care manager from Social Services appointed to help look after her husband’s needs, did not know if any benefits were available to her or her husband.
Mrs N did not know where her husband had put the paperwork for the loan. She had assumed it would be with the mortgage papers, but it wasn’t.
Mr and Mrs N were eligible for Legal Aid, and, after first meeting with a generalist adviser, who identified both potential benefits issues and the obvious debt issue, she met with two different specialist advisers who worked in tandem on the different legal issues.
A clear entitlement to disability benefits was identified for Mr N, although as he was already over 60 years old, he was entitled to Attendance Allowance rather than Disability Living Allowance. The Care Manager had suggested that Mrs N make a claim for for Disability Living Allowance (DLA). The adviser explained that Mrs N herself was not entitled to this benefit, and Mr N would need to appoint Mrs N as his appointee to enable her to deal with his own claim for Attendance Allowance.
For Mrs N the claim process was confusing and difficult, especially given her distressed circumstances. She was assisted with the technical aspects of the claim, and also had advice about Carers Allowance which she might be entitled to if she had to give up her job (or if her earnings and work hours were low enough).
In the meantime, a specialist debt adviser suggested that if her loan agreement was regulated by the Consumer Credit Act, it might be possible to apply to the Court for a Time Order. This would allow the Court to alter the terms of the agreement so she could afford to repay it and avoid the house being repossessed by the lender. As she did not have the original paperwork immediately available, it was suggested that she give her consent for the adviser to act on her behalf, and an approach was made to exercise her right under the Consumer Credit Act to obtain a copy of the loan agreement on payment of the Statutory Fee of £1.00.
A copy of the loan agreement was provided by the lender, who also agreed to put recovery action on hold for a short time. The loan agreement did clarify that it was an agreement regulated by the Consumer Credit Act, and it was dated before certain amendments were made to the Consumer Credit Act in 2007. But more than this, it also revealed what was ostensibly a small error in the way the agreement was made up, which in the opinion of her legal adviser made the whole agreement totally unenforceable, because an administration charge of less than £50 had been added to the agreement as a part of the amount of credit. Mrs N did not think such a small error could cause the loan to be unenforceable. She couldn’t believe that for the sake of a £50 charge being entered in the wrong place in the agreement she might get the Court to agree to declare that the loan, and the security it had over the house, was not to be enforced and that she would no longer be required to repay the loan, and the threat of possession action would be taken away.
The adviser initially wrote to the lender to point out his opinion, and asked the company to agree to voluntarily write off the loan balance and remove the charge on the property from the land registry. Initially the company refused to agree to any such voluntary action, and went so far as to issue a possession claim for the loan. Following further legal arguments about the loan agreement, about Multiple Agreements and Unenforceable agreements, the lender finally agreed to sign up to a Consent Order writing off the balance of the loan, and removing the security from the land registry. A very short meeting was required at the local County Court for a District Judge to give effect to the Consent Order, but the matter did not have to go to a full trial, saving the Court, the adviser, and perhaps most importantly, Mrs N, the time and costs which would have undoubtedly been incurred.
There were two Legal Aid cases undertaken – at a cost of around £450 to the taxpayer (it was “as high” as this because the benefits legal adviser needed to obtain a medical report from Mr N’s doctor to confirm his Alzheimer’s Disease and comment on his condition).
An expensive trial was avoided, and only a small amount of the Court’s time was taken up – the cost of which was paid for by the lender. Mr and Mrs N retained their home, avoiding the costs that would undoubtedly have fallen to the local authority (ultimately paid for by the tax-payer again) of having to rehouse Mr and Mrs N. And such action would also have caused Mrs N to find it harder to cope, possibly to the point where she would have had to be treated herself for stress and depression.
Following the advice on the disability benefits and the assistance with the claims procedure, Mr and Mrs N were also able to afford to maintain payments against the main mortgage. If this hadn’t been resolved then even the sterling work on the secured loan may have been in vain given the main mortgage lender would themselves have probably taken their own legal proceedings when payments went into arrears.
The costs to the taxpayer if Mr and Mrs N had not received expert legal advice paid for by legal aid are incalculable. They would undoubtedly have been far greater than £450.00, but worse than that, Mr and Mrs N would have ended up losing their home unjustly – they would have been denied access to justice – and that surely would have been the greatest cost of all.
