OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

[PocketTheDifference]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Again with people in debt and banks laughin at us at this precise moment in time etc etc champagnee swigging T***ers keep read this stuff all day.

Bankers 'need to join real world', minister says


RBS is said to want to pay a total of £2bn in bonuses this year

A government minister has told bankers "to come back into the real world" after Royal Bank of Scotland directors threatened to resign over bonuses.



Doesn't this just make you feel sick, Ive said it before but they ARE just laughing at us from their high up officess :@

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Well, that was news to us, to the OFT, even to the 80% of in-credit customers who still appear to believe the interest foregone is the consideration for their services while the Relevant Charges are the cost of the other 20% operating in breach of contract.

The mistake in law and good faith arguments are the same thing in essence and both have to be enshrined in fact (is that right?) So the consumers need to show where the bank made statements or provided terms in the contract which would have led any reasonable man to come to the 'mistaken' conclusion that interest foregone was the consideration price and the charges a penalty for their misdeamenour.

.

• Alternatively, or in addition, the mistake goes to the root of the matter as it renders the nature of the service contracted different from what was contracted. This is because neither party considered the Relevant Charges to be consideration for services, rather they were for breach or default, and therefore although provided they were not contracted.

Consumers thought the charges were a penalty (punishment/deterrent) for breaching their contracts which AT THAT TIME stated clearly that they were payable for default/breaches of the contract.

Just finding something from YB two tics and some T&C's which state that clearly x

http://www.oft.gov.uk/shared_oft/per.../scheduleb.XLS (historic T&C's)

2004 Half Year Financial Results - Analyst Briefing Transcript - The National Australia Bank Group - NABGroup (NAB penalty fees annual report)

In 06/07 the banks were clearly of the argument that the charges were penaltys but were not disproportionate and went to lengths to tell us that the costs were high due to manual intervention (which clearly went out the window in the mid/late 90's)

[rhysjames250]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Hi guys, I bank with Nationwide, and this is on their website. What do you make of it??


Further developments in the Office of Fair Trading test case

Latest Update
Nationwide and seven banks were engaged in a test case with the Office of Fair Trading (OFT) to decide the legality of unauthorised overdraft charges. It was agreed that the only way of bringing clarity and certainty to this issue is for the courts to make a judgement.
On 25th November 2009 the Supreme Court delivered its judgement.
The Supreme Court ruled that the unauthorised overdraft charges are not subject to a test of fairness on the basis of cost.
If you have already made a complaint to Nationwide, you do not need to do anything further at this time. We will be processing your complaint in accordance with the FSA rules and will write to you in due course.
We will work with the OFT and FSA to agree the next steps.
Case Background
Nationwide and seven banks were engaged in a High Court test case with the Office of Fair Trading (OFT) to decide the legality of unauthorised overdraft charges. It was agreed that the only way of bringing clarity and certainty to this issue was for the courts to make a judgement.
On 24 April 2008, the High Court issued its judgement on the first stage of the test case process. The preliminary ruling covered three aspects:

1. On the issue of whether the charges were penalties, the judge ruled that they were not.
2. The judge ruled that Nationwide’s terms and conditions are in plain and intelligible language.
3. The judge ruled that charges are subject to the test of fairness under the Unfair Terms in Consumer Contracts Regulations 1999. The judge did not say the fees are unfair, only that a court can determine their fairness.

On 8 October 2008, the High Court issued its judgement on whether the banks' historic overdraft charges were capable of being penalties. Nationwide was not part of this exercise, because the OFT agreed that our historic terms and conditions relating to charges are so similar to our current terms and conditions that, on the basis of the judge’s earlier ruling, they do not amount to penalties.
The judge who decided the first stage of the test case gave the parties, including Nationwide, permission to appeal the part of the judgment that says their charges are subject to the test of fairness. A hearing took place in the Court of Appeal between 28 October and 5 November 2008. On 26 February 2009, the Court of Appeal issued its judgment. On 2 April 2009, Nationwide and the banks involved in the test case were granted permission to appeal to the House of Lords (now the Supreme Court). That appeal was heard on 23, 24 and 25 June 2009.
On 25th November the Supreme Court ruled that unauthorised overdraft charges are not assessable for fairness on the basis of cost.
This internet site will be updated with further details when they are

Thanks Rhys

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

From MSE Heard from your bank/court about your claim being restarted? Please let us know. - MoneySavingExpert.com Forums


Jph64
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Join Date: Dec 2009
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Lifted stay and time to re present - Banck charges reclaiming
I attended a schedule hearing today to lift a stay of proceedings on a bank charge reclaiming case against the Nationwide Building Society. The stay was lifted and I have been given until 8th January to amend the particulars of my claim. I feel that this may now be a test case and I am looking for support. Can anyone help me? John

[Luminol]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Looks like HSBC are hanging fire for time being:

The world's local bank





Information on Overdraft Court Case

Latest Update : 25 November 2009 Decision of the Supreme Court (formerly House of Lords)

The Supreme Court has ruled that the level of the bank's current unarranged overdraft fees are not assessable for fairness under the Unfair Terms in Consumer Contracts Regulations (UTCCR).
The ruling means the Office of Fair Trading is not able to continue to investigate the level of unarranged overdraft charges as part of their investigation into the fairness of those fees.
HSBC and the other banks involved in the court case will continue to work with the FSA and the OFT to determine the next steps in resolving this issue. This website will be updated once the next steps are agreed.
The FSA Waiver has now come to an end and therefore anyone who has lodged a complaint relating to unarranged overdraft fees will receive a response to their complaint over the next few weeks. The banks will continue to apply normal processes to any new complaints that are received.

Q: What does this decision by the Supreme Court mean?
A: Legally, it means the level of unarranged overdraft charges is not assessable for fairness and, therefore, that the Office of Fair Trading is not entitled to assess the cost of unarranged overdraft fees for fairness.
Q: Does this mean the banks won't be refunding charges?
A: We are working with the OFT and other banks on the implications of the decision. In the meantime claims for overdraft refunds remain on hold and we will get back in touch with all customers as soon as the next steps are agreed.
Q: What happens now?
A: The next steps are to be agreed with the Office of Fair Trading and the FSA. Claims for unarranged overdraft fee refunds remain on hold.
Q: When will the case be concluded?
A: The banks will work with the OFT and FSA to agree next steps to conclude matters.

[natweststaffmember]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

All banks are currently holding fire and even the judiciary are as well.

As an aside, I do actually agree with the RBS Board with regards to their argument(but this is NOT the thread to talk about that).

[PocketTheDifference]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Thats a little positive outcome

[Amethyst]

Not all .....

so the mistake is - the banks made us all think we were breaching our contract when we were making unauthorised payments and thus had to pay a penalty for it - when in fact, as has now been proven and judged upon, they were actually charges for a service and we werent breaching our contracts we were just asking and paying for a consideration service.

(no ? lol hey I'm trying)

[Centium5000]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

You got it Ame

Now the mistake can't be a mistake as to the law - we're all assumed to be aware of that - but a mistake in fact as you suggested.

The mistake in fact is that a service is being provided as part of the package rather than the consumer acting outside of contract.

The word unauthorised is key here; legally, if something is unauthorised it is without permission - as in taking without the owner's consent, theft etc.

What the banks mean, and what the SC takes it as, is not pre-approved. We are paying for the approval service - whether it goes either way, to pay or not.

As unauthorised has a different meaning to not pre-approved to a reasonable person, in both legal and common parlance, the mistake on the part of the consumer is reasonable.

The bank might argue that in the performance of the contract, these amount to the same thing. They do not.

If the consumer believes, without correction by the bank, that this is a charge in breach there is an implied term - that the charge will be proportionate to the breach.

If the consumer understands that they are contracting services, they understand (as they are assumed to understand the law) that the fee may not be proportionate and may elect to either attempt negotiation on an individual basis or look for a more competitive price.

Moreover, they will have different implicit terms in regard to the execution of the contract, for example regarding the timeliness, quality and care with regard to the Relevant Terms.

They are entering into a fundamentally different bargain.

Ergo, the contract should be (at least) voidable as they did not assent to contract those services in return for consideration.

Phew! Feel dizzy now!

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Thanks Centium that makes things clearer I think. I'll just muddy it up again.

Legal Beagles - Midland 1996 T&Cs

Just for example the terms spell out it is a breach and they MAY charge you.

This is basically the penalty argument, but as they have been proven not to be penal, the banks must have mislead you into believing they were penal.

Does it matter if this was purposeful (knowingly mislead in order to gain a pecuniary advantage)or by mistake ? ie mistake of law or fraud ? ( ref Speeches in 2006 - Claims against Professionals: Negligence, Dishonesty and Fraud (from Tools) )

We signed the contracts in good faith believing the T&Cs within them to be as a reasonable consumer would understand them to read insofar as you werent allowed to overdraw and you would therefore pay a fee for breaching a particular term in the agreement (ie where the banks say YOU CANNOT EXCEED YOUR AGREED OVERDRAFT WITHOUT PERMISSION ) so you believe that fee was to cover the extra administration costs of you breaching that term.

The Supreme court have ruled that the terms actually were fees for a service of consideration and for subsidising accounts and paying for the service of actually holding an account.
You wouldnt, as a reasonable man, believe that that fee would cover the entire cost of the package of services provided by the bank in the account, and in excess of that everybody elses account.


So therefore they mislead you, whether purposeful or not, into believing you were paying to cover the costs incurred by the breach.

Or have we gone off the track again ? It is close to penalties, but basically the banks made out they were penalties until this case started, then said oh no they were fees for a service, the courts have agreed and agreed they werent penalties, therefore it stands to reason that the banks misled us by mistake or by fraud in the original contracts.

(and also as a breach of contract you would only expect to incur one or two over the lifetime of the account which you wouldnt reasonably expect to cover all the services etc - but you would expect, if it was said to be a fee for the service of considering if you can temporarily extend your overdraft, to use that as required - if you see what I mean)

This also takes us back to the non negotiable and cross subsidy arguments.

Tools will expand on that later anyway if it is on the right track.

[gjr1960]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

HSBC got it wrong only cant assess for fairness re cost they suggest OFT cant assess at all !!rubbish reg 5 , also they are careful to suggest "current " terms why one asks eh !!

Why pay excessive unfair bonuses to people who cant even read law reports or blogs

[Centium5000]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Legal Beagles - Midland 1996 T&Cs

Just for example the terms spell out it is a breach and they MAY charge you.

This is basically the penalty argument, but as they have been proven not to be penal, the banks must have mislead you into believing they were penal.

Does it matter if this was purposeful (knowingly mislead in order to gain a pecuniary advantage)or by mistake ? ie mistake of law or fraud ? ( ref Speeches in 2006 - Claims against Professionals: Negligence, Dishonesty and Fraud (from Tools) )

Wow! Hadn't thought of that - didn't want to consider fraud because of the burden of proof element.

...but that is something altogether different, dishonesty in the equittable rather than criminal sense.

What we're talking about here is the bank acting in a fiduciary capacity and therefore any act in their interest and against ours is automatically in breach of the implied trust.

I believe if we weren't owed a fiduciary responsibility, my argument above would be pretty tough to escape, but if we are owed such a responsibility the conclusion is inescapable!

Of course the banks owe us a fiduciary responsibility as we put (sometimes all) our funds in their trust and ask them to transact on our behalf. They are clearly acting in their own interest ahead of ours by the way they structure repayments / levy payments.

Don't know where the criminal law would sit on this, but then again we're all about financial justice right?

Wikipedia article on fiduciary responsibility and remedies: http://en.wikipedia.org/wiki/Fiducia...y_and_remedies

Thanks Ame, that's brilliant.

[Yoda]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Is there anything in Estopple that is of any use?

Estoppel is a doctrine of law to prevent or bar some assertion of fact or law by party. Estoppel applied when two statements present a contradiction with the result that the earlier is taken as the truth. An application of the doctrine prevents a defendant setting up the true set of facts (namely represented by its change of position), and force the defendant to accept the set of facts as represented by him. Therefore, estoppel precludes a person from asserting something contrary to what is implied by his or her previous action or statement or by a previous judicial determination concerning that person. Put another way, and generally speaking, when parties proceed on a common assumption of either fact or law, neither of the parties will be permitted to go back on the common assumption arising from the representation when it would be unfair or just for him to do so. Whether or not the common understanding arises from a mistake or misrepresentation is immaterial.

I was just thinking about what the lenders told the treasury select committee the charges were for and what they told the SC they were for. Two different explanations.

[Centium5000]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

It may be that 'estoppel by silence' is what is actually happening when the bank doesn't correct the consumer's mistaken belief.

If they share the same basis in law, it'd be more grist to the mill.

I think the difference is that estoppel is solely about detriment (to the consumer), whereas the uncorrected unilateral mistake is about benefit gained (by the banks) by not correcting the mistake.

It does appear that the underlying facts amount to the same thing though. Nice spot.

The Relevant Terms are wrong (and apparently challengeable) in so many ways.

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Yoda, can you paste the two different versions side by side, just for ease, please