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

[EXC]

Re: OFT Test Case on Bank Charges update - Supreme Court Judgment coming soon !

Just wanted to pick Budgie's brains on his interpretation of this section of the House of Lords appeal hearing transcripts that deal with the issue of a reference to the ECJ.

From my perspective it seems to support my view that the case can only be referred to Europe on the courts' own initiative.

Either way it seems pretty clear that neither party is keen on it as it would take for ever and a day to happen.


LORD PHILLIPS: Thank you. There is just one point. You are seeking to persuade us to overturn judgments at first instance and in the Court of Appeal.

MR SUMPTION: Yes, for different reasons.

LORD PHILLIPS: For different reasons. Is that something we can do, or is it not something that we ought to refer to the European court?

MR SUMPTION: The position as under the Treaty, article 2(4), is that your Lordships and my Lady are obliged to refer, if it is necessary to do so, in order to decide the case. That has been the subject of a certain amount of overt judicial refinements at ECJ level, which is the origin of the Acte Clair principle and a certain amount of pragmatic and unadmitted refinement by successive courts, one example of which is the decision of the House in First National which it was not necessary to refer.

The practical problem about a referral which is why, as it is delicately put in the OFT's case, no party has shown a tremendous amount of enthusiasm for it, is the delay involved. It is suggested that this might get priority in the OFT's printed case. I have to say that my experience of these matters, which I have compared with that of others who have a great deal more experience of them, is that there is, frankly, no prospect of getting priority on this, but that is the practical reason, it is not a matter which should influence your Lordships.

It is fair to say that this is a slightly unusual situation, first of all, because the major questions actually boil down to -- one of the main questions is the analysis of the particular banking setup and these contract terms and how they operate, which, of course, is not itself a question of EC law.
The other is that, slightly unusually among consumer protection directives, this is a directive which assigns the primary enforcement role to national competitive authorities. That is provided for in the directive itself, and it is the reason why the OFT has given specific responsibility for this in the regulations giving effect to the directive.

The other factor is that -- actually, a very large proportion of the national -- of the member states have, in fact, not directly transposed the directive into their own laws, generally as in the case of Spain and the Netherlands, because they have elected to have a higher standard than the minimal one prescribed, or else, in the case of Germany, because they think their existing laws sufficiently cover the matter. So one is dealing with a situation in which the view of a national court is likely to be relatively more important than is ordinarily the case, but, having made all of those points, ultimately the question for the Committee is whether you consider that it is necessary to do so in order to decide the case. The mere fact that you would be overruling the different reasons given by the judge and the Court of Appeal is not a reason for doing it. After all, in First National, the court overruled the Court of Appeal and arrived at its own conclusions for reasons that were somewhat different from those of Mr Justice Evans-Lombe.

If I may make one final point on that, which the Committee will quite rightly accuse me of trying to have my cake and eating it at the same time, it is this: there is, I would suggest, a world of difference between a decision that there is to be added to an EC directive a really rather considerable superstructure of additional regulation dependent on refinements that are not in the text, and simply saying that the directive means what it says, no more and no less. If your Lordships and my Lady take the latter view, the case for a reference is very much weaker than it is if you take the same view as the Court of Appeal and consider that there has to be imported into this directive an additional dimension of regulation.

[WendyB]

Re: OFT Test Case on Bank Charges update - Supreme Court Judgment coming soon !

Well I really hope Budgie can interpret it cos tbh it makes bugger all sense to me lol

[natweststaffmember]

Re: OFT Test Case on Bank Charges update - Supreme Court Judgment coming soon !

Reference to Acte Clair
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------------------------------- merged -------------------------------

References to the European Court of Justice

The EC Treaty (Article 234 – formerly 177)makes provision for national courts to refer questions of law to the European Court of Justice (ECJ) for a “preliminary ruling.” Art. 234 states:-

“The Court of Justice shall have jurisdiction to give preliminary rulings concerning:
a) the interpretation of this Treaty;
b) the validity and interpretation of acts of the institutions of the Community and of the European Central Bank;
c) the interpretation of the statutes of the bodies established by an act of the Council, where those statutes so provide.

Where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court of Justice to give a ruling thereon.

Where such a question is raised in a case pending before a court or tribunal of a Member State, against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court of Justice.”


The procedure therefore permits any national court or tribunal to make a reference to the ECJ. Within the U.K. the majority of references have come from the higher courts but there have been some references from Magistrates’ Courts etc. – see for example,Torfaen Borough Council v B & Q plc(Case 145/88) [1989] ECR 3851. [This case was concerned with restrictions in theShops Act 1950on Sunday trading. Ultimately, English law was amended by theSunday Trading Act 1994 ].


Where the point of EC law arises before a court from which there isno national judicial redress (e.g. the House of Lords) then the reference “shall”be made. Although Art. 234 uses the word “shall”, the House of Lords is not actually required to refer every point of EC law. It would only do so if the House of Lords considered the point not to be already clear. This is referred to as the “acte clair” doctrine. Although some Judges and academic commentators have heartily endorsed “acte clair” it is controversial.

In Commissioners of Customs and Excise v Samex [1983] 1 All ER 1042, Lord Bingham urged caution and suggested that a reference should be made unless the national court can “with complete confidence” resolve the issue itself. However, inR v Chief Constable of Sussex ex parte International Trader’s Ferry Ltd [1998] 3 WLR 1260, the House of Lords did not make a reference on the interpretation of the EC Treaty.

Where a reference is made, it is the ECJ which interprets EC law and it is for the national court to then apply that interpretation. The procedure seeks to achieve uniformity in the interpretation of EC law. Once the ECJ has made a ruling, it would set a precedent for the courts and tribunals of all Member States. However, the ECJ itself is not bound by its' own previous decisions.

There have been numerous references to the ECJ from national courts or tribunals. One problem has been the delay in getting the reference heard and decided. Since the early days of the EC some reforms have been introduced. However, further calls for reform have been made – e.g. theTreaty of Nice 2000allows the Court of First Instance to hear some references.


Source: Europe

[Budgie]

Re: OFT Test Case on Bank Charges update - Supreme Court Judgment coming soon !

Thanks Natty that's very useful.

There isn't a way to easily explain the referenced transcript passage but I will have a go. It's problematical because you really cannot just isolate this particular exchange and apply a specific meaning to it ! The previous couple of minutes worth of transcript bear heavily on matters as well.

Firstly I believe there is a mistake in the transcript ( I will speak personally to the transcription staff myself PMSL ).

article 2(4) should read article 4(2)

article 4(2) states as follows :-

2. Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplies in exchange, on the other, in so far as these terms are in plain intelligible language.


What the overall passage from the transcripts basically means is that Sumption is "helpfully" explaining the situation regarding a possible referral of matters to the ECJ.

I believe that in effect he is requesting a referral to the ECJ should the Lords feel that they are unable to make a decision ( to decide the appeal ) with confidence that their interpretaton of the European directive ( as related in the UTCCR1999 ) is 100% correct.

It's also a challenge to the Lords to actually make a decision and thereby avoid having to refer matters to the ECJ for clarification. Sumption's view ( and in my view Sumption's hope ) is that the result of such a referral is likely to tie up this issue for many many years and would result in many additional layers of regulation under UTCCR1999 depending on the type of contract / service being provided, the specific contract and the specific terms involved.

Quite honestly I really don't believe that a referral to the ECJ is going to get the type of response from the ECJ that the banks would expect ( and are maybe hoping for ). The ECJ will just not be interested in extending the European directive in this way. The very fact that most other Member states do not have Consumer protection regulations directly flown down from the directive ( because their own regulations are far stricter than the European directive ) is IMO sure to increase the likelihood of the ECJ "bouncing back" the need for the regulatory bodies and the national courts of the UK to resolve the issue themselves.

IMO the 'bounce back' of a referral to the ECj would happen quite quickly and if the Supreme Court are forced to make a decision ( without the possibility of a ruling from the ECJ then ( again IMO ) there is no way that the Supreme Court are going to overturn the decisions made by the High Court and also the Appeal Court.

As a seperate point the reference a few minutes earlier to article 4 (1) is also very interesting and worth another read through.

For reference Article 4(1) states :
1. Without prejudice to Article 7, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent.

[Budgie]

Re: OFT Test Case on Bank Charges update - Supreme Court Judgment coming soon !

................................and just because we all need reminding from time to time !!!

I have highlighted and commented what I believe are a couple of key points that lead me to believe that we shouldn't be too worried about a decision going against us. !

Here's the European directive annexes in full.

Article 1
1. The purpose of this Directive is to approximate the laws, regulations and administrative provisions of the Member States relating to unfair terms in contracts concluded between a seller or supplier and a consumer. (The directive is only meant to approximate the laws and regulations - the individual member states interpret them as they consider applicable to their own systems)
2. The contractual terms which reflect mandatory statutory or regulatory provisions and the provisions or principles of international conventions to which the Member States or the Community are party, particularly in the transport area, shall not be subject to the provisions of this Directive.

Article 2
For the purposes of this Directive:
(a) 'unfair terms' means the contractual terms defined in Article 3;
(b) 'consumer' means any natural person who, in contracts covered by this Directive, is acting for purposes which are outside his trade, business or profession;
(c) 'seller or supplier' means any natural or legal person who, in contracts covered by this Directive, is acting for purposes relating to his trade, business or profession, whether publicly owned or privately owned.

Article 3
1. A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.
2. A term shall always be regarded as not individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term, particularly in the context of a pre-formulated standard contract. The fact that certain aspects of a term or one specific term have been individually negotiated shall not exclude the application of this Article to the rest of a contract if an overall assessment of the contract indicates that it is nevertheless a pre-formulated standard contract.
Where any seller or supplier claims that a standard term has been individually negotiated, the burden of proof in this respect shall be incumbent on him.
3. The Annex shall contain an indicative and non-exhaustive list of the terms which may be regarded as unfair.

Article 4
1. Without prejudice to Article 7, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent.
2. Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplies in exchange, on the other, in so far as these terms are in plain intelligible language.

Article 5
In the case of contracts where all or certain terms offered to the consumer are in writing, these terms must always be drafted in plain, intelligible language. Where there is doubt about the meaning of a term, the interpretation most favourable to the consumer shall prevail. This rule on interpretation shall not apply in the context of the procedures laid down in Article 7 (2).

Article 6
1. Member States shall lay down that unfair terms used in a contract concluded with a consumer by a seller or supplier shall, as provided for under their national law, not be binding on the consumer and that the contract shall continue to bind the parties upon those terms if it is capable of continuing in existence without the unfair terms.
2. Member States shall take the necessary measures to ensure that the consumer does not lose the protection granted by this Directive by virtue of the choice of the law of a non-Member country as the law applicable to the contract if the latter has a close connection with the territory of the Member States. An important paragraph which I believe places the ball firmly in the court ( excuse the pun ) of the national courts. There is an obligation on the Courts to ensure that Consumers are protected. IE the Supreme Court have the power to interpret the directive, as they see fit, to ensure that the Consumer is protected.

Article 7
1. Member States shall ensure that, in the interests of consumers and of competitors, adequate and effective means exist to prevent the continued use of unfair terms in contracts concluded with consumers by sellers or suppliers.
2. The means referred to in paragraph 1 shall include provisions whereby persons or organizations, having a legitimate interest under national law in protecting consumers, may take action according to the national law concerned before the courts or before competent administrative bodies for a decision as to whether contractual terms drawn up for general use are unfair, so that they can apply appropriate and effective means to prevent the continued use of such terms.
3. With due regard for national laws, the legal remedies referred to in paragraph 2 may be directed separately or jointly against a number of sellers or suppliers from the same economic sector or their associations which use or recommend the use of the same general contractual terms or similar terms.

Article 8
Member States may adopt or retain the most stringent provisions compatible with the Treaty in the area covered by this Directive, to ensure a maximum degree of protection for the consumer.

Article 9
The Commission shall present a report to the European Parliament and to the Council concerning the application of this Directive five years at the latest after the date in Article 10 (1).

Article 10
1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive no later than 31 December 1994. They shall forthwith inform the Commission thereof.
These provisions shall be applicable to all contracts concluded after 31 December 1994.
2. When Member States adopt these measures, they shall contain a reference to this Directive or shall be accompanied by such reference on the occasion of their official publication. The methods of making such a reference shall be laid down by the Member States.
3. Member States shall communicate the main provisions of national law which they adopt in the field covered by this Directive to the Commission.

Article 11
This Directive is addressed to the Member States.
Done at Luxembourg, 5 April 1993.
For the Council
The President
N. HELVEG PETERSEN

(1) OJ No C 73, 24. 3. 1992, p. 7.
(2) OJ No C 326, 16. 12. 1991, p. 108 and OJ No C 21, 25. 1. 1993.
(3) OJ No C 159, 17. 6. 1991, p. 34.
(4) OJ No C 92, 25. 4. 1975, p. 1 and OJ No C 133, 3. 6. 1981, p. 1.


ANNEX
TERMS REFERRED TO IN ARTICLE 3 (3) 1. Terms which have the object or effect of:
(a) excluding or limiting the legal liability of a seller or supplier in the event of the death of a consumer or personal injury to the latter resulting from an act or omission of that seller or supplier;
(b) inappropriately excluding or limiting the legal rights of the consumer vis-à-vis the seller or supplier or another party in the event of total or partial non-performance or inadequate performance by the seller or supplier of any of the contractual obligations, including the option of offsetting a debt owed to the seller or supplier against any claim which the consumer may have against him;
(c) making an agreement binding on the consumer whereas provision of services by the seller or supplier is subject to a condition whose realization depends on his own will alone;
(d) permitting the seller or supplier to retain sums paid by the consumer where the latter decides not to conclude or perform the contract, without providing for the consumer to receive compensation of an equivalent amount from the seller or supplier where the latter is the party cancelling the contract;
(e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation;
(f) authorizing the seller or supplier to dissolve the contract on a discretionary basis where the same facility is not granted to the consumer, or permitting the seller or supplier to retain the sums paid for services not yet supplied by him where it is the seller or supplier himself who dissolves the contract;
(g) enabling the seller or supplier to terminate a contract of indeterminate duration without reasonable notice except where there are serious grounds for doing so;
(h) automatically extending a contract of fixed duration where the consumer does not indicate otherwise, when the deadline fixed for the consumer to express this desire not to extend the contract is unreasonably early;
(i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract;
(j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract;
(k) enabling the seller or supplier to alter unilaterally without a valid reason any characteristics of the product or service to be provided;
(l) providing for the price of goods to be determined at the time of delivery or allowing a seller of goods or supplier of services to increase their price without in both cases giving the consumer the corresponding right to cancel the contract if the final price is too high in relation to the price agreed when the contract was concluded;
(m) giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract;
(n) limiting the seller's or supplier's obligation to respect commitments undertaken by his agents or making his commitments subject to compliance with a particular formality;
(o) obliging the consumer to fulfil all his obligations where the seller or supplier does not perform his;
(p) giving the seller or supplier the possibility of transferring his rights and obligations under the contract, where this may serve to reduce the guarantees for the consumer, without the latter's agreement;
(q) excluding or hindering the consumer's right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to the contract.
2. Scope of subparagraphs (g), (j) and (l)
(a) Subparagraph (g) is without hindrance to terms by which a supplier of financial services reserves the right to terminate unilaterally a contract of indeterminate duration without notice where there is a valid reason, provided that the supplier is required to inform the other contracting party or parties thereof immediately.
(b) Subparagraph (j) is without hindrance to terms under which a supplier of financial services reserves the right to alter the rate of interest payable by the consumer or due to the latter, or the amount of other charges for financial services without notice where there is a valid reason, provided that the supplier is required to inform the other contracting party or parties thereof at the earliest opportunity and that the latter are free to dissolve the contract immediately.
Subparagraph (j) is also without hindrance to terms under which a seller or supplier reserves the right to alter unilaterally the conditions of a contract of indeterminate duration, provided that he is required to inform the consumer with reasonable notice and that the consumer is free to dissolve the contract.
(c) Subparagraphs (g), (j) and (l) do not apply to:
- transactions in transferable securities, financial instruments and other products or services where the price is linked to fluctuations in a stock exchange quotation or index or a financial market rate that the seller or supplier does not control;
- contracts for the purchase or sale of foreign currency, traveller's cheques or international money orders denominated in foreign currency;
(d) Subparagraph (l) is without hindrance to price-indexation clauses, where lawful, provided that the method by which prices vary is explicitly described.

[davidl]

Re: OFT Test Case on Bank Charges update - Supreme Court Judgment coming soon !

I saw this artical on hsbc charges if it is any use to anyone

http://www.moneysavingexpert.com/new...raft-fee-limit

[Tools]

Re: OFT Test Case on Bank Charges update - Supreme Court Judgment coming soon !

Its very useful thank you, we also have it here in announcements.

[EXC]

Re: OFT Test Case on Bank Charges update - Supreme Court Judgment coming soon !

I called the Supreme Court and spoke to all sorts of people - short of a judge - to get some clarification on whether there is any kind of appeal procedure for either party to have the judgment reconsidered in the ECJ and nobody had a clue.

[EXC]

Re: OFT Test Case on Bank Charges update - Supreme Court Judgment coming soon !

Nick,

Yes, I can confirm this judgment is expected before the end of the Michaelmas term.

As soon as we have a judgment date we will announce this on our website and we will of course publish the full judgment and a press summary as soon as it is given.

Sian Lewis,
Head of Communications,
UK Supreme Court,
Parliament Square,
London SW1P 3BD

[ROBSTER]

Re: OFT Test Case on Bank Charges update - Supreme Court Judgment coming soon !

Back to the usual Hymn sheet then!

Strange, Rob's comments last Thursday ("it will be days not weeks").

May be they will put out the press comment the day of the Queens speech to make sure it's not at the top of the news? Or is that the cynic in me?LOL

[stewie082]

Re: OFT Test Case on Bank Charges update - Supreme Court Judgment coming soon !

Bank charges:

The following judgment will be given on Wednesday 25 November 2009 at 9.45 am:

Office of Fair Trading (Respondents) v Abbey National plc and others (Appellants)

http://www.supremecourt.gov.uk/

[Amethyst]

Re: OFT Test Case on Bank Charges update - Supreme Court Judgment coming soon !

Can we start a new thread now ? This one is daftly long, and now we know the whens we can get our teeth stuck into the wherefores.

Here we are....

OFT v Banks Judgment 25th November 2009 - 9.45am - Legal Beagles

[Amethyst]

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

Bit late but finally got a reply (after 2 attempts of them saying its irrelevant now the case has been judged grrr) Think he meant something else in the last line tho lol

As the waiver has not lapsed Barclays should be contacting you with the outcome of your bank charges complaint.

???????

Still not good enough. Barclays Reserve wasnt in the waiver when they first introduced it, they said so on numerous occassions, then applied to go back in because it didnt work out how they wanted. Thats the info I want not this tosh.

Our Ref: .ISS01147557/PC46011

Dear Ms xxxxx

Thank you for your email sent on 27 November 2009.

Your enquiry

I understand from your email that you would like to know if Barclays applied for a new waiver to cover their reserve account. You are aware of the Supreme Court Judgement and would like the Financial Services Authority (FSA) to comment.

Our response

I would like to thank you for contacting us further about this situation.

I can confirm that the waiver that was in place in connection with the test case was a blanket waiver in respect of all current accounts. Therefore if account terms were changed or a new type of account were introduced by a firm the original waiver would still apply.

As the waiver has not lapsed Barclays should be contacting you with the outcome of your bank charges complaint.

I trust this is of assistance.

Yours sincerely


P Jones (Mr)
Customer Contact Centre
Financial Services Authority
Consumer Helpline: 0845 602 2185 (call rates may vary)
Home page : FSA Money made clear

Get clear, impartial information from the UK's financial watchdog.
No selling. No jargon. Just the facts.

[EXC]

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

Get clear, impartial information from the UK's financial watchdog.
No selling. No jargon. Just the facts.