What does the recent Judgment in the Test Case mean for you ?

[Amethyst]

On the 8th October Justice Smith handed down Judgment in the test case between the OFT and the Bank with regards to historical terms.

The banks have NO terms historically which can be deemed as penalty clauses.

He still has to decided if Historic Terms ARE subject to an assessment of fairness under the Unfair Terms in Consumer Contract Regulations 1999.

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What happens now?

The Judgement will be subject to appeal. This is expected to commence 28th October.

It is expected that the waiver will remain in place until at least January 2009.

Hardship claims will continue. Please visit our Hardship forum if you are in financial difficulty.

The OFT now have to decide what is a fair and proportionate charge and we expect they will ask the banks to sign a formal undertaking to charge proportionally to their costs.

The PCA report consultation which is underway at the moment will also deal with the future of charge levels, structures and transparancy in personal current accounts.

What do I need to do?

Nothing.

If your claim is in court and under a stay, it will remain so until the FSA lifts the waiver and this is not expected until at least January.

You do not need to amend your particulars of claim in the courts, or write to your bank.

The same applies if your claim is on hold with the Financial Ombusdman.

Continue entering your complaints and claims for charges to the banks, unless you are in hardship they will just be added to the pile, but better in the pile than out of it.

Does this affect Business Claims ?

The read across to accounts other than Personal Current Accounts has not been decided upon by the court. In the initial judgement the Judge stated a read across to Basic and Business accounts, however this was only on current terms. You should continue entering you complaint with the Bank and with the Financial Ombusdman Service. We do not recommend entering new court claims at this time.


Does this affect Credit Card Claims ?

No this does not affect Credit Card claims. We espect these to be looked at in the future to clarify things but for now continue reclaiming your over limit and late payment charges from Credit Cards.

[natweststaffmember]

Re: What does the recent Judgement in the Test Case mean for you ?

On business claims can I ask you for a clarification on that. Were all accounts included in the verdict last week?

[Amethyst]

Re: What does the recent Judgement in the Test Case mean for you ?

No. The read across was touched on at the handing down but no read across was confirmed for historical terms. For current terms a read across to basic accounts and business acounts on the penalty charges judgement was stated by Justice Smith back in April.

[natweststaffmember]

Re: What does the recent Judgement in the Test Case mean for you ?

So are we still awaiting clarification from Justice Smith on Business charges for historical terms and conditions?

[Amethyst]

Re: What does the recent Judgement in the Test Case mean for you ?

If he decides to clarify on it at all as they are not part of the test case. I think that will all come much later. But yes, we still awaiting clarification from Justice Smith on Business charges for historical terms and conditions.

[strangewayofsavin]

Re: What does the recent Judgement in the Test Case mean for you ?

If he decides to clarify on it at all as they are not part of the test case. I think that will all come much later. But yes, we still awaiting clarification from Justice Smith on Business charges for historical terms and conditions.

Will it happen though?
With the Government being a major share holder in several banks, they will be basically taking themselves to court, the only winners would be the the barristers (at the tax payers expence).
Would it not be easier and quicker for the government to wipe the slate clean, by refunding the charges, and passing legislation to cap charges at £4? (wishfull thinking)
I cannot see the government getting a desicion against themselves (even though they are stupid), and giving their opposition/s another stick to whack them with.

[natweststaffmember]

Re: What does the recent Judgement in the Test Case mean for you ?

That is not entirely the case SWOS. The government is a major shareholder in a PLC with 15% stake(RBS) and they are underwriting RBS Rights issue for anothe 45%(which if no one buys means that they are a majority shareholder). The £5 billion pounds comes at an interest rate of 12% or about £150,000 per day that the money is effectively loaned. The government can interfer only to a certain degree and the terms of it have nothing in it with regards to litigation against RBS. So it is Business as usual while these tough times go through. Without doubt ordinary shareholders want RBS to sell their stake very quickly because RBS Group is not an investable asset if there is no dividend payout, something the BBC picked up with regards to who will buy the new rights issue shares.