OFT Test Case on Bank Charges ......from House of Lords to Supreme Court

[EXC]

Re: TODAY at the House of Lords - OFT v Banks latest news

just read the bbc report....

''He also said it was "assuming a great deal" to suggest that banks might have to automatically make huge refunds to their customers if they lost the current appeal.
"Banks will not necessarily have to reimburse everything", he said. ''


Excuse me, unless you change the law they will.

I suppose he could be referring to limitations act which would tho ride over his 1995 argument.

I didn't hear Crow say that but I might have missed it as it's not easy to listen from the cheap seats.

I agree that he could have been referring to the limitation period rather than the level of refund against each charge but hopefully the transcripts will put it into context. I'm assuming transcripts will be available but if it works like the High Court there is an embargo period of 21 days (I think) before they're published. Will find out today.

[dad]

Re: TODAY at the House of Lords - OFT v Banks latest news

I didn't hear Crow say that but I might have missed it as it's not easy to listen from the cheap seats.

...I'm assuming transcripts will be available but if it works like the High Court there is an embargo period of 21 days (I think) before they're published. Will find out today.

1. Yes, it was definitely discussed. Dr Crow was responding to a question from the Bench. Roughly what he said was that there is ECJ case law to say that where something is ruled unlawful under European law it does not follow that restitution has to be made. I think he made reference to a particular ECJ case but I didn't catch the name. (Having though about it - the charges would not be ruled unlawful under European law but a UK regulation so there is an interesting point if ECJ case law properly applies).

2. As to transcripts, the legal teams were getting live transcripts to their PCs (which I could read over the shoulder of one of the lawyers). I spoke to the ladywho set it up at the beginning of the day and she was from Merrill Legal Solutions. So it already exists and given that the banks have already paid for it getting a copy 'should' be a bit cheaper.

HTH

Dad

[EXC]

Re: TODAY at the House of Lords - OFT v Banks latest news

Thanks Dad - glad you went.

I do vaguely remember the discussion about the ECJ case but after 3 days my powers of concentration were waning. Yet another item to look for in the transcripts.

We've obtained all the test case transcripts from Merril so far - 40 quid = VAT a day.

[Goldie75]

Re: TODAY at the House of Lords - OFT v Banks latest news

When will we find out the outcome of this appeal??

[EXC]

Re: TODAY at the House of Lords - OFT v Banks latest news

In the normal course of events judgments take ''6 to 8 weeks'' to be handed down but the court breaks up for a 2 month summer recess on 30 July. This is why the estimates are for September/October and also why the OFT said they were hoping for it by the end of July.

During the hearing it was clear that Lord Phillips is aware of the urgency with regard to the ''huge, no vast, number of stayed cases in the County Courts''.

I was reliably informed yesterday that the HoLs 'fast-tracked' the hearing so lets hope they fast-track the judgment.

[Goldie75]

Re: TODAY at the House of Lords - OFT v Banks latest news

Thank you, here's hoping to a speedy judgment....

[Budgie]

Re: TODAY at the House of Lords - OFT v Banks latest news

According to this article it appears that it is the duty of National Courts to not only make their own analysis of the fairness of a contract but that they also have an obligation to do so. IMO this is at odds with suggestions that matters need to be referred to the ECJ. IMO the decision appears to rest with the national rather than the European Court.

Note that this is a very recent judgment so may not have actually filtered down to the HoL, OFT and UK banks yet.


Courts must assess unfair terms in consumer contracts, says ECJ


OUT-LAW News, 04/06/2009

Courts in the EU must examine and rule on terms in consumer contracts that may be unfair even if no consumer has complained about them, the European Court of Justice (ECJ) has said. The duty will exist when a company seeks to enforce a consumer contract.

The European Union's Directive on unfair terms in consumer contracts governs contracts because consumers have no bargaining power when presented with pre-written contracts to sign. It says that any term that is unfair will not be binding.
A Hungarian woman was taken to court by her mobile phone provider Pannon. It enforced a term of its contract with her which said that the court in Budaörsi had jurisdiction over the contract. The woman, Sustikné Győrfi, lived 275 kilometres away from Budaörsi. She receives invalidity benefit and there is no direct public transport between where she lives and Budaörsi.
The Budaörsi court said that the normal place of jurisdiction would be the court where Győrfi lives, and asked the ECJ whether it had the right or an obligation to examine the contract term governing jurisdiction for unfairness, even if the consumer in question had not raised an objection to its fairness.
The ECJ, the European Union's highest court, said that the court had not only the right to make its own analysis of the contract's fairness, but an obligation to do so. Only if courts do that, it said, are consumers protected in the way the EU legislation envisages.
"The system of protection introduced by the Directive is based on the idea that the consumer is in a weak position vis-à-vis the seller or supplier, as regards both his bargaining power and his level of knowledge," said the ECJ ruling. "This leads to the consumer agreeing to terms drawn up in advance by the seller or supplier without being able to influence the content of those terms."
Referring to an earlier ECJ ruling involving Salvat Editores, the ruling said that "the aim of Article 6 of the Directive would not be achieved if the consumer were himself obliged to raise the unfairness of contractual terms, and that effective protection of the consumer may be attained only if the national court acknowledges that it has power to evaluate terms of this kind of its own motion".
"Article 6(1) of the Directive must be interpreted as meaning that an unfair contract term is not binding on the consumer, and it is not necessary, in that regard, for that consumer to have successfully contested the validity of such a term beforehand," it said.
The ruling said that previous ECJ decisions indicated that courts had not only a right but a duty to assess terms on behalf of consumers.
"The nature and importance of the public interest underlying the protection which the Directive confers on consumers justify the national court being required to assess of its own motion whether a contractual term is unfair, compensating in this way for the imbalance which exists between the consumer and the seller or supplier," it said.
"The court seised [i.e. having ownership] of the action is therefore required to ensure the effectiveness of the protection intended to be given by the provisions of the Directive. Consequently, the role thus attributed to the national court by Community law in this area is not limited to a mere power to rule on the possible unfairness of a contractual term, but also consists of the obligation to examine that issue of its own motion," it said.
The ECJ was also asked what factors should be taken into account to determine fairness. It said that distance, which was the primary concern in Győrfi's case, could itself deny people access to justice.
Referring again to the Salvat Editores case, the ruling said that: "a term [deciding jurisdiction] obliges the consumer to submit to the exclusive jurisdiction of a court which may be a long way from his domicile. This may make it difficult for him to enter an appearance. In the case of disputes concerning limited amounts of money, the costs relating to the consumer’s entering an appearance could be a deterrent and cause him to forgo any legal remedy or defence".
"The Court therefore concluded that such a term falls within the category of terms which have the object or effect of excluding or hindering the consumer’s right to take legal action," it said.
The ECJ did say, though, that it could not rule generally on whether a term was unfair, that national courts had to make decisions based on the facts of the case in hand.


Here is a link to the relevant European judgment http://curia.europa.eu/jurisp/cgi-bi...umaff=C-243/08

[Paule]

Re: TODAY at the House of Lords - OFT v Banks latest news

Its here too

http://www.legalbeagles.info/forums/showthread.php?t=17483

[Budgie]

Re: TODAY at the House of Lords - OFT v Banks latest news

Yep, just found that Pkea.

Well I have read the article and the judgment three times now and IMO its readily applicable to the test case situation.

It doesn't matter a fig whether the OFT have jurisdiction or not.
The UK Courts themselves have a duty and an obligation to decide whether the relevant terms in the various banking contracts are unfair....... end of

[natweststaffmember]

Re: TODAY at the House of Lords - OFT v Banks latest news

is that grounds whatsoever for a claimant to ask for a stay lifted then?

[Budgie]

Re: TODAY at the House of Lords - OFT v Banks latest news

is that grounds whatsoever for a claimant to ask for a stay lifted then?

Probably not at the moment Natty as the Litigation agreement between the Banks and the OFT does make reference to the next stage of the test case and the question of the fairness or unfairness of the relevant terms and the stays were ordered beause of that Litigation agreement.

However it does appear from reading the referenced judgment that the last two years have basically been wasted because it doesnt really matter whether the terms are assessable for fairness or not by the OFT because ultimately the national Court has both the right and an obligation to make a decision regarding the fairness or unfairness of these terms anyway.
Basically, the national Court could have ordered that the parties just proceeded straight to stage two of the test case and got down to the nitty gritty of whether the terms are fair or unfair.

[Amethyst]

Re: TODAY at the House of Lords - OFT v Banks latest news

Bud - you seen this BBC NEWS | Business | What next for bank overdraft fees?

"Unjust enrichment"
According to Marc Gander of the Consumer Action Group (CAG), restitution has a clear legal meaning - one which means the banks might have to repay even more money than they had gained by levying the fees.
"Restitution would involve paying damages for what is called "unjust enrichment", he says.
"The banks have taken the fees and charges, and invested them at commercial rates, typically by lending the money to borrowers, and making very substantial profits.
"In theory all that might have to be repaid too," he adds.
.

Wheres all the arguments for and against restitution and CI on bank accounts again?

[Budgie]

Re: TODAY at the House of Lords - OFT v Banks latest news

Bud - you seen this BBC NEWS | Business | What next for bank overdraft fees?



Wheres all the arguments for and against restitution and CI on bank accounts again?

PMSL - Funny how one minute Gander is talking about statutory 8% interest and now he is waxing lyrical about unjust enrichment and restitution. You can find all you need to know in my Capital One claim ( the exact same principals apply and IMO have always applied to bank accounts ).

[Amethyst]

Re: TODAY at the House of Lords - OFT v Banks latest news

lol I know and half agree (well as you know) - be interesting to see how he intends quantifying it.

[Amethyst]

Re: TODAY at the House of Lords - OFT v Banks latest news

Wasn't ignoring EXC's part either btw

But Nick Spooner of the campaign group Legal Beagles thinks the banks may have little scope for negotiation.
"Once the OFT has been given the right to assess the charges as unfair, then I think a refund of past charges should follow almost automatically," he says.
"A second round of litigation would deal with future fees," Mr Spooner suggests.