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

[Amethyst]

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

Thanks Crash and showergirl, we're all extremely indebted to exc and budgie for attending and reporting back to us all. the bbc reports are okay as far as they go but its so good to get the little snippets and scene setting from actually being there.

Sounds like theres not as many people there today, queues a lot shorter but then yesterday they had the new speaker voted in in the HoC so guess that had a lot to do with it as well as first day excitment.

Anyway Bud and EXc will call me with the goss and probably sign in here at lunch time if not before so check back then

Hopefully after the Abbey guys had his say we should get the OFT starting to set out their arguments possibly after lunch. I hope their arguments hold more water than those put forward yesterday by sumption, and they back attack on the 'consequences' and 'cross subsidy' points. So far it seems the lords are on the consumers side but you know with these things you can never tell and when it comes down to it its the law that will be interpreted not consequences.


Am still wondering if the banks intend on pushing the price control issue against the OFT at some point in the future.

[righty]

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

Arguing against price control AME ......... IMHO it's inevitable they will should they lose this round

[Amethyst]

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

Bit of scene setting for you

Jubilee Cafe - scene of coffee and muffins and david camerons mint aeros


They are in committee room 4a which looks like this ..... (probably with better hairstyles (except budgie) )




This is jonathon Sumption who is talking now


then Abbey's guy - not sure who yet think its Ali Malex but we'll see shortly


and then the OFT - Jonathon Crow - this afternoon




these are the Lords....

Lord Phillips



Lord Walker



Baroness Hale



Lord Mance



and finally... Lord Neuberger of Abbotsbury




Is Lord neurberger actually lord Mance without his glasses ?

[Amethyst]

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

Also just to say that anyone from any other sites can use any of my posts on this thread (inane ramblings as they may be) so long as the source is attributed correctly, if they help that is lol.

[crashbandicoot]

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

Cool, thanks for that, can imagine them fighting and spitting all over each other now...!!

[righty]

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

Crikey! who's the guy in the front row with all the hair playing with his phone............. not one of you guys is it?

[Paule]

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

Crikey! who's the guy in the front row with all the hair playing with his phone............. not one of you guys is it?

Thats Tools, with his ferrets curled up on his head to keep it warm...lol

[Tools]

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

Crikey! who's the guy in the front row with all the hair playing with his phone............. not one of you guys is it?

That is Sideshow Bob

[Amethyst]

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

This mornings occurring

Vos said if the charges were found to be unfair it would apply back to when regulations began in 1995 - limitations issue not touched upon tho as yet

Jonathon Crow doing really well - he spent most of the time answering Sumptions arguments from yesterday. A big part has been about how competition issues and consumer protection issues are interlinked and how the UTCCR are meant to promote competition.

One of the Judges said the charges are extortionate. Lord Phillips asked Vos why they don’t just call the charges Penalties.

Fair bit about price and how a typical consumer would be aware of charges and that they likely to incur one over the lifetime of their account and thus that made them a core term and part of the price.

Lord Phillips if these are penalties they should simply say they are penalties and should be able to justify the figures

Vos said the judgement had already deemed the terms not penal and that wasn’t being appeal

Crow is quoting big chunks from the Cruikshank report, PCA reports, NI competition commission report

Vos also admitted his previous (april 08) comments about foregon interest not being part of the price and said it was irrelevant anyway - so feck knows why they bought it up yesterday

[Amethyst]

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

Budgie will write up things much better in a little while

[dad]

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

Lord Phillips if these are penalties they should simply say they are penalties and should be able to justify the figures

Vos said the judgement had already deemed the terms not penal and that wasn’t being appeal

The banks have appealled saying that the charges are part of the price. So the banks have put in issue what the charges actually are.

There is the remote possibility if the majority of the Law Lords agree that they could say 'no the charges are not part of the price they are clearly a penalty and Smithy was wrong. The HoL is not bound by Smithy's judgment.

It is probably too much to hope for such an outcome, but that would certainly introduce the cat to the pidgeons.

After all the Master of the Rolls clearly told the banks not to appeal.

Dad

[EXC]

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

Quick Update from the HoL

Sumption finished off his submissions this morning.
Main thrust was that relevant charges are part of the "price" and are core terms and therefore not subject to UTCCR.

"Apart from overdraft interest the insufficient funds fees are the only fees or price paid by the Consumer so must be the price"

His conclusion was that "If the terms describing the charges are assessable then the Banks are exposed. It would mean that the charges could be unenforcable from the date the directive came into force ( subect to limitation act ) and might mean that the contracts were unenforcable in toto". There would be severe financial consequences for the banks and the probable loss of the free if in credit banking model"

Lord Phillips asked "It has been said that some of these charges may be penal to the Consumer, some may say extortionate" Why havent the banks simply said that these are penalties and set at the levels that they are to cover thier costs"

Sumption replied along the lines that the arguments regarding penalties had already been decided by Justice Smith in the lower court. The resort for extortionate pricing should be via the competition route rather than contractual. The solution should be via market structural remedies.

Lord Phillips, the difficulty is that one cannot measure the service provided for the price.

Sumption It doesnt matter whether banks wish to apply charges the way that they do either as a way to provide free if in credit banking to those Customers who keep their account mostly in credit or as a means to pay the highest dividends to shareholders compared to other banks.

Lord Phillips - One might argue that the former is the more laudible approach.

Vos from Natiowide then presented some alternative arguments most of which were focussed on trying to identify a "typical consumer". His point was that a typical consumer is one who pays or expects to pay relevant charges and not someone who puts £1 million into an account and has no expectation of ever paying charges.

Vos also said that "Charges are significant and would be significant to the typical consumer as we have described him"

and "You have to bear in mind that these charges are "if" charges that may or may not come into play.

and even if consumers enter into contracts with no intention of ever incurring charges this has no bearing as to whether these are core terms, which they are.

Lord Phillips," if you dress up your penalty as the cost of exercising an option you can't then condone it as a penalty"

More to follow and we will elaborate on most of the above points later this evening.

Crowe has now started on his submission for the OFT and has started by drawing the Lords attention to the Cruickshank report, the Northern Ireland commission report and the OFT's PCA report and is attempting to demonstrate that the competition aspects and consumer protection aspects of the charges are closely linked and cannot be seperated as the banks have stated

Budgie and Exc

[fuzzybrain]

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

Budgie will write up things much better in a little while

I think you are doing a brilliant job

Thanks for the regualr updates, its great to know what's going on - especially as you explain it all really well.

I love the Robin hood quote!! But the thought of bankers in tights - yuk!!!! :tung:

[StoneLaughter]

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

Dad also makes a very valid point. The banks are calling into question what the charges' nature actually is and therefore have re-opened the possibility of adjudging them penal.

[Amethyst]

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

Can the penalty argument be bought back into it even though it is not being appealed by the OFT? Can they be penal AND UTCCR ? I do like thispart ''Lord Phillips asked "It has been said that some of these charges may be penal to the Consumer, some may say extortionate" Why havent the banks simply said that these are penalties and set at the levels that they are to cover thier costs"''