In 2012, the High Court considered a case involving a mortgage on a loan originally granted by Bank of Scotland (Ireland) Limited. The loan was subsequently transferred to Bank of Scotland plc. and was managed by Certus on its behalf. The High Court found that an employee of Certus was not permitted to confirm the debt due to Bank of Scotland plc. under the Bankers’ Books Evidence legislation (or otherwise) because that person was not an employee of Bank of Scotland plc.
In a recent decision involving Ulster Bank, the High Court has again had to consider who can give evidence on behalf of a bank. Ulster Bank Ireland Limited originally granted a facility to a company which was guaranteed by an individual. After the borrower defaulted, the collections process was moved to the Ulster Bank Group’s collections and recoveries department which was operated by Ulster Bank Limited, a separate group entity with responsibility for dealing with arrears across the Ulster Bank Group.
In the legal proceedings against the guarantor, evidence of the debt due (approximately €100,000) was given to the Court through an Affidavit sworn by an employee of Ulster Bank Limited. At the initial hearing, the Master of the High Court struck out the claim by Ulster Bank Ireland Limited on the basis that the evidence provided was hearsay and inadmissible as it had been provided by an employee of a different legal entity, namely, Ulster Bank Limited.
Ulster Bank Ireland Limited appealed this decision to the High Court and following consideration of various decisions and the group structure, the judge decided that, the bank must comply with the Bankers’ Books Evidence legislation when seeking to prove a debt in civil proceedings or produce the “author” of the records to give evidence regarding the debt.
In this case, as the witness providing the evidence was not an employee of the lender, UIster Bank Ireland Limited, but an employee of another Ulster Bank group company, the Court found that the evidence did not comply with the legislation and was inadmissible.
These decisions create potential difficulties for banks where debt collection has been outsourced to another entity, even if it is an affiliate. The cases highlight that care must be taken that an appropriate person is providing evidence to the court.