LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

[Amethyst]

Lloyds Overdraft Terms deemed Unfair in new Bank Charges Victory

Lloyds Bank in Taunton

Lloyds TSB has been ordered to pay a customer over Ł1700 after it unfairly applied bank charges to his account and damaged his credit file.


In what we believe is the first bank charges court claim victory since such cases were stayed in July 2007, LegalBeagles member Oliver Foster-Burnell (‘orfoster’) has been successful in his claim for a refund of charges and interest.


The claim was brought against Lloyds TSB at Taunton County Court where Mr Deputy District Judge Stockdale held that despite the Supreme Court judgment, the unarranged overdraft charges levied on Mr Foster-Burnell were contrary to the requirement of good faith as per section 5(1) of the Unfair Terms in Consumer Contracts Regulations 1999 and, as such, unfair.


Oliver Foster-Burnell, the Claimant in this case said: “It is unfair that the banking industry are allowed to profit while anyone suffers financial hardship by applying these charges and allowing charges to snowball out of control, it skews the imbalance between the banks making huge profits and consumers around the country suffering difficulties, I am so pleased that in my case the judge awarded in my favour”.

Mr Oliver Foster-Burnell

Oliver continued: “I’ve had such amazing support from the LegalBeagles forum and my legal team who have done an excellent job in supporting me”


The bank was ordered to re-imburse the claimant Ł743 in charges plus interest. The court also awarded the claimant non-pecuniary damages of Ł1000 for a related incorrect default to his credit file.

• You can read the full judgment here

We consider this County Court Judgment to be highly significant and although it can only be persuasive as authority currently it will almost certainly be subject to appeal and could be ground breaking.


The ruling does not effectively overturn the Supreme Court Judgment made back in November 2009 but adds a further dimension to future claims, particularly to customers who have suffered from financial difficulties whilst in an overdraft situation with their current accounts.

Taunton County Court

Mr Foster-Burnell’s case was brought using relatively new case law established in the European Court of Justice: Nemzeti Fogyasztóvédelmi Hatóság v Invitel Távközlési Zrt C‑472/10 (“Hatóság”)



In the Hatóság case the ECJ found that price variation clauses in consumer contracts must have reason for and method in their mechanism clearly set out. In Orfoster’s case, as with all standard current account contracts, Lloyds simply increased his overdraft charges without reason or method.


The claimant was also awarded damages for an incorrect default registered on his credit file. Although the judge held that no damage had been done to the file by the ‘default’, the fact that Lloyds had agreed to the claimant repaying the overdraft by way of a debt management plan it meant that no default had in fact occurred.


Nick Spooner, co-owner of the LegalBeagles consumer forum stressed that ‘’until the appeals process in this case is exhausted we do not recommend anyone using these arguments in litigation. We would like to congratulate Oliver and thank his legal team of Kate Briscoe (Howlett Clarke Solicitors and co-owner of LegalBeagles.info), and counsel Tom Brennan for their dogged determination in continuing the fight for fairness .”

[guitarsnspanners]

Re: LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

It's not quite as simple as that as the judge found that there were a particular combination of factors in the Foster-Burnell case for which the principles established in Hatosag applied so it doesn't have universal application in any event . I can't give you any more details on the other case I'm afraid.

Thanks for that EXC.
I'll take a further look at the judgement and try and work out what those factors were. Have any other site members or people reading this thread had any luck with any of these arguments I wonder? If nothing else I'm interested to see how it all pans out, especially as the original UKSC judgement was so vague, but of course the banks read it in their favour. Ha!

[EXC]

Re: LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

It's not quite as simple as that as the judge found that there were a particular combination of factors in the Foster-Burnell case for which the principles established in Hatosag applied so it doesn't have universal application in any event . I can't give you any more details on the other case I'm afraid.

[guitarsnspanners]

Re: LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

Lloyds didn't appeal but the claimant sought leave to appeal the part of the judgment that confined the effect of the unfair term to just the claimant but it was dismissed at the application hearing on jurisdictional grounds ie a County Court cannot make rulings that bind other courts.

There is another long running case (unrelated) against another bank that's knocking on the door of the Court of Appeal which is attempting to introduce the same arguments on the strength of the Foster-Burnell judgment although it's a bit of a long shot whether it'll be heard.

Thanks EXC.
So, that's confusing really.

Even as the case cannot now be used to set binding precedent, surely the overall precedent was the part of the Hasotag case used in making the judgement that said the charges were assessable for fairness as they could be updated and changed at any time? I thought that this was the part of the argument that effectively superceded the UKSC judgement enabling the Foster-Burnell case to be successful?

Also, what is the other case please. and is there any update for that?

Sorry for all of the questions, I'm watching this very closely as I'd like to find out if I can use these arguments against Nationwide, who took nearly Ł2000 pounds from me, and which was (at the risk of sounding over dramatic) financially crippling. So I'm sure you understand my interest!

Thanks again

[EXC]

Re: LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

Is there any update on this case? I'm keen to hear if Lloyd's did actually appeal, and what the outcome of that appeal was. It' be great to think that the argument used in this case would have an application for other charges claimants

Lloyds didn't appeal but the claimant sought leave to appeal the part of the judgment that confined the effect of the unfair term to just the claimant but it was dismissed at the application hearing on jurisdictional grounds ie a County Court cannot make rulings that bind other courts.

There is another long running case (unrelated) against another bank that's knocking on the door of the Court of Appeal which is attempting to introduce the same arguments on the strength of the Foster-Burnell judgment although it's a bit of a long shot whether it'll be heard.

[guitarsnspanners]

Re: LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

Is there any update on this case? I'm keen to hear if Lloyd's did actually appeal, and what the outcome of that appeal was. It' be great to think that the argument used in this case would have an application for other charges claimants

[ploddingon]

Re: LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

I had a few cases on hold. Has anyone else tried claiming since this victory? Are there any other relevant threads worth looking at? I would like to give it a go, as I am very short of cash.

[ncf355]

Re: LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

I'll contribute to that if you're looking for donations - greater good and all that

[Kafka]

Re: LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

About touch over 3 hours I'd say.

[pt2537]

Re: LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

roughly how much is it likely to cost?

difficult to say, depends on the length of the hearing. I would expect a day to cost somewhere around Ł150-200 roughly

[leclerc]

Re: LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

roughly how much is it likely to cost?

[pt2537]

Re: LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

Wouldn't Howlett's be prepared to obtain the transcripts?

Unlikely, the work on this case has already been done pro bono, so i doubt the firm would spend money as well on the transcripts.

[Tools]

Re: LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

Wouldn't Howlett's be prepared to obtain the transcripts?

[pt2537]

Re: LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

Thx

It'll be interesting how they report it because it happened so quickly and you weren't clear precisely what was said that seems to get his back up.

digital recording so its gonna show everything

[pt2537]

Re: LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair

I think this would be an excellent idea! How do we get this from the Court?

you need a Court form EX107, it costs money sadly but id expect no more than Ł150 to obtain although proper enquiries would be needed.