Appeals - Days 1, 2, 3 and 4... so far

[EXC]

Re: APPEALS - Day One

There's only 3 judges - I think Ame mis-typed as Justice Smith couldn't review his own judgment - but I was thinking the same thing myself. I'll try and find out tomorrow.

[Amethyst]

Re: APPEALS - Day One

whoops silly me. Will fix my head on the right way round tmw.

[TANZARELLI]

Re: APPEALS - Day One

There's only 3 judges - I think Ame mis-typed as Justice Smith couldn't review his own judgment - but I was thinking the same thing myself. I'll try and find out tomorrow.

I think they can have a majority decided appeal judgment ie 2-1 in favour or against.

[Amethyst]

Re: APPEALS - Day One

oooo not a good day on our side.




The first main argument Rabinowitz presented to the court was against Justice smiths comments that it 'is not natural use of language' to say an account is a bundle package for a particular price.

Rabinowitx disagrees and says Justice smith is looking at two snapshots in time (one where account is in credit and one where in debit) Rabinoitz argued he should look at the account at the time the contract is signed. Waller said the the 'free if in credit' model is not a snapshot at the time the contract is signed as the contract is variable.

Justice Smith stated when a customer is in credit there is no charge, but when in debit he is charged. Rabinowitz is saying smiths cherry picking and should be concentrating on contract at time it was signed and the judgement should have been made solely on the terms of contract when signed.


Rabinowitz and Waller had a chat, Rabinowitz saying no obligation on customer to keep contract, he could just move or close account, but less easy for bank to do that. Waller said is that realistic re moving overdrafts / switching (ref the PCA report)

Rabinowitz went on to compare not paying charges if in credit, only if in debit, to using no win no fee services of solicitors, and estate agents.
the Judges agreed and one gave a further example of a builders quote - where they charge to give the quote but you dont necessarily get a new house. So make a charge for a service without the customer having a benefit. Legal Beagles

Waller then asked why the different types of charges, why have seperate charge for unauthorised overdrafts, unpaid items etc why not just add to interest.

Rabinowitz stated there are regualtions governing the rateof interest they can charge, but then changed his mind after a whisper from a colleague and stated it is just a choice the bank can make.

So why have a seperate charge?

Rabinowitz said because there are different processes involved then laid into the OFT a bit saying it was their way of controlling prices in the market.

He disputed Justice Smiths Judgement (para 403) that no service was supplied when an item was returned unpaid.

Rabinowitz said it was like private doctors consultation - in that they would charge £50 for a consultation but wouldnt necessarily cure you.

all the Judges agreed.

Paras 406 to 409 of Judgement Justice Smith said charges only made in particular circumstances and not in exchange for services.
Rab said still is a service the bank has the right to charge or not charge for a service so the service is deciding whether to pay or not and bank has complete discretion so long as its in terms and conditions.

[righty]

Re: Appeals Day Two

I fail to understand some of the logic ie builders paid quote

Of course you get a service whether or not the builder constructs the building. You the client get to know how much the build is likely to cost enabling you to compare other prices & the builder giving the quote receives payment

[ROBSTER]

Re: Appeals Day Two

Well said righty ..I was just putting this together:
Rabinowitz went on to compare not paying charges if in credit, only if in debit, to using no win no fee services of solicitors, and estate agents.
the Judges agreed and one gave a further example of a builders quote - where they charge to give the quote but you don’t necessarily get a new house. So make a charge for a service without the customer having a benefit.

Is it me or is that an appalling analogy ?

When a builder charges for a quote it is to cover the costs of site visits, analysing bespoke plans and material lists etc..which may well involve sub contracting quantity surveyors, and in any case the price reflects the time, travel and cost involved in providing the service (the quote) it’s a bit unfair to compare it to an automated charge in any context. If a builder started inflating the price of a quotation by 20 times his actual costs he would not usually be invited to quote for any jobs...unless all the builders in the country routinely charged on the same scale....which they don’t because they might be perceived to be acting as a cartel if they got together and attempted that stunt.(!)

“You don’t necessarily get a new house” but the builder doesn’t make enough money to start boasting he makes 30% of his profits through quoting for exactly the same spec job to his clientele every time they invite him to quote “in error” (collectively) several thousand times a day.

[EXC]

Re: Appeals Day Two

Just to expand a bit on Ame's post:

Rabinowitz began on the 'package' or 'bundle' of services for the price issue, disputing Justice Smith's judgment that said 'it is not a natural use of language to say a it's bundled package of services for a cost when for those who are in credit, there is no cost.

Rab said Smith ''was asking the wrong question'' and ''taking 2 separate snapshots of time''. He argued that it is only at the point of when the contract is made that is relevant. (Though I must say that contradicts Nationwide's pleading that the contract changed when the customer went into debit).

Lord Justice Waller countered ''But the 'free if in credit' model can change but virtue of the 'if' ''

Rabinowitz went on to stress that, unlike the bank, if a customer wanted to terminate the contract for any reason and move to another bank he is free to do so. Then there was an amusing exchange:

Waller - ''But is that realistic? Can I move an overdraft to another bank just like that?''

Rab - You have the choice. But I'm sure my Lord has never been in overdraft!

Waller then made a facial expression that denoted he had.

The RBS QC then started to get the upper hand and countered Waller's line from yesterday that the charging structure must be unfair if Peter pays for Paul by comparing it to no-win-no-fee lawyer or an estate agent where a service is supplied but payment is contingent on an event. Either was a service is supplied whether it results in a charge or not. All three judges appeared to agree with him.

Waller asked him why make seperate charges for paid item fees when you could achieve the same by increasing the interest? Rab said that there were regulations governing the amount of interest chargable but after one of his sidekicks whispered in his ear he said ''Oh no, I'm told there's not. It's simply because the banks have that choice''.

He disputed Smith's view that unpaid item fees were for a service paragraph 403 of the judgment) by giving another analogy of a private doctor charging the same for a treatment whether the patient is cured or not. Again the judges seemed to agree.

On paid item fees Smith's judgment states that the charges are only triggered on particular circumstances but Rabinowitz argued that there is still a service. He said a bank must have the right to charge or not to charge for that service.

More in a bit

[ROBSTER]

Re: Appeals Day Two

Rabinowitz said it was like private doctors consultation - in that they would charge £50 for a consultation but wouldnt necessarily cure you.

A private doctor can perform a limited number of bespoke consultations every day and charges accordingly for each and every one. Much like an AA patrole man, who wont necessarily fix your car.

I have examples of 13 charges being applied on the same day for "the same consultation"


"all the Judges agreed" Now I'm worried.

[righty]

Re: Appeals Day Two

I still fail to see the logic behind that argument as no doubt the consultation resulted in a diagnosis which MUST have been a benefit to the patient. The consultation DID not result in the patients condition being worsened & in fact may have resulted in the patients condition being improved in the longer term

[Amethyst]

I think possibly. as Bud pointed out to me on the yogurt pots earlier, the judges nodding in agreement probably is more that they understand the point than actually agree with Rabs views (I hope anyway lol)

I like the doctor analogies....thing is you can spin anything to suit your point of view if you try hard enough Lets hope the judges aren't fooled.

[EXC]

Re: Appeals Day Two

On the matter of how the 3 judges reach their ruling, Tanz was right in that it will effectively be a majority decision. In the event that one doesn't agree with the other two, the odd one out makes a 'dissenting' judgment but this in no way devalues the validity of the overall judgment.

When the appeal judgment is handed down the losing party has the right to apply for leave to appeal (to be heard in the House of Lords) then and there and if it is refused they then have the right to apply for appeal directly to HoL.

The lawyers I spoke to today said that due to the importance and high profile of the case it would be very unlikely that an application to appeal would be refused.
------------------------------- merged -------------------------------

When a builder charges for a quote it is to cover the costs of site visits, analysing bespoke plans and material lists etc..which may well involve sub contracting quantity surveyors, and in any case the price reflects the time, travel and cost involved in providing the service (the quote) it’s a bit unfair to compare it to an automated charge in any context.

I think what Rab was getting at is that the 'service' of considering a request for an unauthorised overdraft, whether it's granted or not DOSEN'T have to reflect the cost of providing the service and the price is a commercial decision for the banks.

During the debate on this Rab did, in a roundabout way, concede that the consideration 'service' can be quite an automated process but the infastructure that facilitates it is ''expensive'', something that Smith said in the original hearing was ''irrelevant''.

[Budgie]

Re: Appeals Day Two

Well said righty ..I was just putting this together:
Rabinowitz went on to compare not paying charges if in credit, only if in debit, to using no win no fee services of solicitors, and estate agents.
the Judges agreed and one gave a further example of a builders quote - where they charge to give the quote but you don’t necessarily get a new house. So make a charge for a service without the customer having a benefit.

Is it me or is that an appalling analogy ?

When a builder charges for a quote it is to cover the costs of site visits, analysing bespoke plans and material lists etc..which may well involve sub contracting quantity surveyors, and in any case the price reflects the time, travel and cost involved in providing the service (the quote) it’s a bit unfair to compare it to an automated charge in any context. If a builder started inflating the price of a quotation by 20 times his actual costs he would not usually be invited to quote for any jobs...unless all the builders in the country routinely charged on the same scale....which they don’t because they might be perceived to be acting as a cartel if they got together and attempted that stunt.(!)

“You don’t necessarily get a new house” but the builder doesn’t make enough money to start boasting he makes 30% of his profits through quoting for exactly the same spec job to his clientele every time they invite him to quote “in error” (collectively) several thousand times a day.

Excellent work Robster

Am pretty sure that the OFT's Mr Crow will counter Rab's analagy using similar arguments.

Am also pretty sure that Private Doctor analagy is easily countered with the fact that no one would knowingly choose to pay for a private Doctor's appointment that they knew was going to make them even sicker than they were already.

[righty]

Re: Appeals Day Two

It is irrelevant in that the systems have to exist anyway which is why we argue the charge is unfair

[tomterm8]

Re: APPEALS - Day One

I think what Rab was getting at is that the 'service' of considering a request for an unauthorised overdraft, whether it's granted or not DOSEN'T have to reflect the cost of providing the service and the price is a commercial decision for the banks.

Except that when the prices for these "services" are nearly identical throughout an industry, and reflect a markup of several thousand percent, it might seem that some de facto evidence exists of a cartel operating in restraint of trade.

[EXC]

Re: Appeals Day Two

Indeed but alas not an issue for the court to consider. But with the OFT considering referring it to the Competition Commission there is hope yet.