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

[Centium5000]

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

Compare and contrast the statements of the last Director General of Fair Trading (DGFT) with the current Chief Exec of the OFT which replaced his role:

John Vickers, DGFT, May 2001, http://www.oft.gov.uk/shared_oft/speeches/spe0501.pdf:

The independence of the OFT is important for the same reason as the independence of the
Bank of England. Decisions are made on the merits manifestly without regard to political
considerations. (At least that should be manifest, though some comments reported in the
3
press, and the nature of some lobbying efforts, suggests that OFT independence is a truth
that is not yet quite universally appreciated).
If the right competition policy decisions were generally popular, the case for their
depoliticisation might be a little less strong. But any decision on a competition case is likely
to be unpopular in some quarters—and sometimes those quarters have well-resourced voices.
Competition policy is not the route to universal praise.
Independence from business interestsand interest groups generallyis no less important
than independence from political interests. And here too perceptions should match reality.

John Fingleton, OFT Chief Executive, January 2009, http://www.oft.gov.uk/shared_oft/spe...09/spe0109.pdf:

The OFT – and other competition agencies – need to be able to respond
quickly to changing priorities, and display a degree of pragmatism in
recognising times when other policy interests may over-ride competition
policy. At the same time, our role as advocates of competition, within
government, with fair-dealing businesses and beyond has never been more
important; supporting governments in tackling powerful private vested
interests whose solutions would cost us dearly well into the future.

It's clear that the OFT is still there to staunchly act in the consumer's interest - the problem I have is that it will 'display a degree of pragmatism in recognising times when other policy interests may over-ride competition policy.'

Is this one of those situations?

[charitynjw]

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

38 Degrees | Tell the Chancellor to tax bankers' bonuses - email him now.

[Yoda]

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

I'd like to be a fly on the wall here

http://www.bba.org.uk/bba/jsp/polopo...?d=143&a=17015

I think the bank are very scared right now. If there is no truth about unenforceable agreements as the MOJ/FSA/ BBC/ The press and the banks and Uncle Tom Cobbley etc.. seem to think, then why in hell are they having a seminar in what looks like 'another way we can shaft the consumer'?

[Amethyst]

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

EXC, Budgie and Tom met with the guys from the OFT who are running the litigation. PCA market study and UTCCR inevstigation this afternoon for a couple hours and they'll update in depth a bit later. Am just doing a small article so keep eyes open for that.

Doesn't sound like we will have any definitive development until very close to, or even after, christmas.

[natweststaffmember]

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

LB meeting with the OFT to discuss way forwards in Charges investigations - Legal Beagles

PLEASE CAN EVERYONE READ THE ANNOUNCEMENT PLEASE.

[Luminol]

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

After reading the Announcement, firstly thanks to Bud, EXC and the other guys working behind the scenes.

Secondly, my opinion is that I think OFT should pursue a case, Im not all legal minded so I can't say which point they should go for etc, I just would like to have some justice...

Lumi x

[EXC]

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

Just to confirm what the OFT said today about when they expect to announce whether to continue the UTCCR investigation: They are still awaiting final counsel's advice on the prospects of regulation 5 but still hope to make an announcement this month ''if at all possible''.

The main thing the OFT wanted to know from the campaign is whether we want them to continue - of course we said yes.

[Guest]

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

Implicitly, they appear to be saying "forget court, we'll let the banks sort themselves out and introduce legislation otherwise".

This is in keeping with the comments in Supreme Court judgement regarding "a matter for parliament".

My question would be: does this imply direction to the OFT not to look at charges retrospectively and do they have to follow this line?

Not retrospective = banks keep existing charges

Any new legislation couldn't be retrospective as the banks could then challenge it under the Human Rights Act.

Grrr!

Thing is, courts are still obliged to consider claims made on a valid legal basis under existing law.

Just feels like we are being steered away from this course of action.

Can't help thinking of this scenario: consumers win, banks owe £2+ billion in charges per year for 6+ years, don't have the funds to pay, government has to bail out, arg! economic crisis part 2.

Effectively, that kind of thinking means that however unfair the situation might be we daren't put things right.

That's politics for you.

Legislation can be retroactive by virtue of the doctrine of Parliamentary Sovereignty and even if this were not the case, the Human Rights Act does not apply to banks since it only applies to humans. The clue is in the name.

It seems to me that it would be a great deal more constructive to wait for the OFT's announcement rather than indulge in wild speculation.

[EXC]

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

Re today's meet we met with 4 OFT officials - all senior people in the test case and UTCCR investigation team including Claire Hart who sits on the OFT Board.

They were genuinely interested in our views on how the campaign would continue in either scenario - OFT to continue their investigation or not.

Needless to say they didn't give us any indication as the whether they will or not as their final decision will rest on the final advice from their legal counsel as to the prospects of success using regulation 5.

The problem the OFT see is that even using 5 it could be tricky to apply without going near the 'price' and therefore being exempted by 6 (2).

To use their example, if 5 was used to pursue unfairness in the imbalance of the contract, the banks would argue that if the charges were just 20p, it wouldn't cause the ''significant imbalance'' that 5 requires and because of that it is related to the 'price' issue and therefore could be exempted under 6 (2).

They are concerned that if their counsel's advice is that there is a less than reasonable chance of success, continuing with the investigation could give claimants false hope.

[Centium5000]

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

I'm wasn't indulging in speculation, I was asking the question whether the government's position on charges would have an effect on the OFT's approach.

It's positive to read that today's meeting with the OFT was about true consultation with consumer groups - it's what I have come to expect of them and I believe they are consumer champions.

My point was about the political pressure being exerted given the current economic situation and whether that will affect the OFT.

The Human Rights Act is applicable to 'legal persons' (e.g. companies) not only natural ones despite its name.

Retrospective laws can be made under Parliamentary Sovereignty but there would be a storm if that was done contrary to the HRA and our obligations under several treaties. It would impact the commercial certainty and predictability of English law.

I really don't want to start a lengthy debate about HRA or Parliamentary Sovereignty but I felt the need to reply.

[natweststaffmember]

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

I have to say that that is the main problem I have with Regulation 5 and that is how I make the contract imbalance WITHOUT referring to price or remuneration. I hope you guys can get me away from that because at the moment I can't and I want to.

[Centium5000]

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

Here's one for you Nattie...

How about the fact that the bank chooses which service is provided (assess and then pay or assess and then reject) and therefore which fee the customer pays?

That's not directly related to price, it's more that the customer cannot be certain what the outcome of any trasaction will be.

The customer might not want any assessment to take place, just have the payment rejected. They don't have this option because the non-negotiated contract doesn't allow it.

The reason for the service is presumably to ensure that the customers financial commitments are paid - but what if the cost of not paying is less than the banks charge for assessment? Surely then the customer would not then want to avail themselves of the service.

By writing 'deemed request for overdraft assessment' into the contract, the bank deprives us of the choice that they have. They're working as our agent in paying out from our account so shouldn't they consider our wishes, not just impose them? To me that's a significant imbalance and to my detriment.

That's my take on Reg 5(1), don't need to touch the price with a bargepole.
------------------------------- merged -------------------------------
In addition, the bank has the right to keep assessing Direct Debits as a request for overdraft even if the previous requests have been declined and nothing has materially changed on the account to affect the decision.

This is surely unfair and as we can't stop them from doing this there is a clear imbalance of rights.

[natweststaffmember]

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

But it doesn't mean that it will lead to a refund of ALL charges requests. It could be an avenue for some refunds based on that though.

[Amethyst]

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

The reason for the service is presumably to ensure that the customers financial commitments are paid - but what if the cost of not paying is less than the banks charge for assessment? Surely then the customer would not then want to avail themselves of the service.

that kinda touches on price adequacy doesnt it ?

If you look at the Lloyds account where you opt to have everything returned/declined they charge still for each bounce and a monthly fee on top.

It does cost more for a bank to return something unpaid (debit card payment / direct debit) than it does to just pay it. (ref South African Comp Commission Report)

[Guest]

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

I'm wasn't indulging in speculation, I was asking the question whether the government's position on charges would have an effect on the OFT's approach.

It's positive to read that today's meeting with the OFT was about true consultation with consumer groups - it's what I have come to expect of them and I believe they are consumer champions.

My point was about the political pressure being exerted given the current economic situation and whether that will affect the OFT.

The Human Rights Act is applicable to 'legal persons' (e.g. companies) not only natural ones despite its name.

Retrospective laws can be made under Parliamentary Sovereignty but there would be a storm if that was done contrary to the HRA and our obligations under several treaties. It would impact the commercial certainty and predictability of English law.

I really don't want to start a lengthy debate about HRA or Parliamentary Sovereignty but I felt the need to reply.

This is simply incorrect. Human rights do not directly apply to companies and you are misunderstanding the definition of "legal person" in the legislation.

A legal fiction exists that allows companies to benefit from certain human rights, for example, a company may enjoy a right to the protection of its property under Article 1, Protocol 1 of the European Convention of Human Rights as given effect to in English law by the Human Rights Act 1998. It is important to appreciate however, that the rights and duties that a company has as a legal person differ from that of a human being. A company does not benefit from the right to education or freedom of religion under the Act and neither would they be able to defend an action brought against them, such as the one you suggested.

It follows therefore, than any retroactive legislation would not run contrary to the Act, notwithstanding that Parliamentary Sovereignty takes priority in any case.

The OFT are not the enemy here and we should be supporting them.

Finally, there was discussion recently regarding extending the protection of "human rights" to the great apes and a few years ago a Brazilian court was asked to grant an order of Habeas Corpus in respect of a chimpanzee. I am damn sure apes would be granted these rights long before banks would.