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

[Amethyst]

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

The Consumer Credit Act 2006 enables courts to re-open "unfair [credit] relationships"4 on behalf of the debtor or any surety An individual who undertakes an obligation to pay a sum of money or to perform some duty or promise for another in the event that person fails to act.

surety n. .

The law applies:

now to all new credit agreements written from 6 April 2007;

from 6 April 2008 to all credit agreements written before 6 April 2007.

The new law will not apply if the agreement was written before 6 April 2007 and is or becomes a completed agreement (i.e. paid off) before 6th April 2008.

A court can make an order if it finds that the relationship between the creditor and debtor arising out of a credit agreement (or that agreement taken with any "related agreement") is unfair to the debtor as a result of:

any of the terms of the agreement;

the way in which the creditor has exercised or enforced any of his rights under the agreement;

any other thing done (or not done) by or on behalf of the creditor, whether before or after the making of the agreement.

The court is required to have regard to all matters it thinks relevant in determining whether a relationship is unfair.

Under the new law, the court can require the creditor to (i) repay any sum paid by the debtor or guarantor guarantor n. a person or entity that agrees to be responsible for another's debt or performance under a contract, if the other fails to pay or perform. (See: guarantee)

GUARANTOR, contracts. He who makes a guaranty.
2. to the creditor or any other person; (ii) require the creditor to do or not to do (or cease doing) anything specified in the order in connection with the agreement; (iii) reduce or discharge any sum payable; (iv) direct the return of any property provided as a security; (v) otherwise set aside any duty imposed on the debtor or guarantor; (vi) alter the terms of the agreement; or (vii) direct accounts to be taken between any persons.

Once the debtor or guarantor claims that the credit relationship is unfair, the onus is on the creditor to prove otherwise.

[Yoda]

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

I don't feel there are much legs in 5(1) of UTCCR or s 140 of the CCA with regards to historical refunds. The rest, misrepresentation etc, I don't know, not feeling overly confident that the powers that be will allow that to happen however true it is/may be.

I really think the best bet is a competition enquiry, a negotiated end to the reclaims so people arent disadvantaged (much as we have spelt out in the report) and concentrating on future charges through new regulation and the pressure from OFT PCA market study.

I'm probably having a down day but I'm tending to lean on the straw clutching side of things - we all know the charges are unfair and have throttled us in the past - I just want to concentrate on making sure they can't in the future and the people in hardship are treated properly and fairly, and making sure that people can come out the otherside of court claims without having lost too much.

I don't want to give up because I have been there, crying my heart out BEGGING some call centre nobody to refund the banks charges so I can pay my mortgage and feed my kids and I will keep fighting but I wont take others down any route I'm not confident in.

Sorry but I'd feel crap if I didn't say that, feel crap for saying it too but there we are, its ONLY MY PERSONAL OPINION and a fuzzy emotional one at that so feel free to ignore me.- am off to make a MASSIVE CHOCOLATE CAKE now.

When things go wrong, as they sometimes will,
When the road you're trudging seems all uphill,
When the funds are low and the debts are high,
And you want to smile, but you have to sigh,
When care is pressing you down a bit-
Rest if you must, but don't you quit.
Life is queer with its twists and turns,
As every one of us sometimes learns,
And many a fellow turns about
When he might have won had he stuck it out.
Don't give up though the pace seems slow -
You may succeed with another blow.
Often the goal is nearer than
It seems to a faint and faltering man;
Often the struggler has given up
When he might have captured the victor's cup;
And he learned too late when the night came down,
How close he was to the golden crown.
Success is failure turned inside out -
The silver tint in the clouds of doubt,
And you never can tell how close you are,
It might be near when it seems afar;
So stick to the fight when you're hardest hit -
It's when things seem worst that you must not quit.

Keep up the fantastic work you are doing Amethyst, we are ALL behind you every step of the way. You are an inspiration to us all.

[Amethyst]

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

Thank you Yoda thats quite perfect for this situation we're all in at the moment, we won;t give up - we know the charges are unfair - it is an uphill struggle - but we WILL get there one way or another. Think that should be an anthem for the campaign at this point !

[Yoda]

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



Absolute Classic!

[EXC]

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

I really think the best bet is a competition enquiry,

Me too and although it wouldn't deal with refunds on historicals by itself, it would open the floodgates to some kind of class action on historicals based on it.

This happened after the OFT's competition enquiry findings into JJB, BA & Virgin and the Marine Hose enquiry.

BTW good article on the present bank charges situation http://www.newlawjournal.co.uk/nlj/content/watch-space

[Amethyst]

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

Just posted on CAG by Natty

Re: H.O.L Test case appeal. Judgement Declared. ***See Announcements***
That seems to be left over from the old announcement. Templates will most likely not be available within two weeks (unless the OFT say No and Counsel are confident with the arguments presented) . The OFT do not expect any announcement until near christmas or early January (source LB's meeting with them) and we should support them in that as they have to make the right decision.

I know LB are trying to get something from the MOJ on the overall position of the stays - the original information was it was down to each individual claimant, but without the OFTs announcement thats incredibly difficult.

If stay ends are coming up I would suggest a brief letter to the courts with claim reference and outline of your last stay order, and, apologies again for quoting LB, something like

''Following the recent judgment by the Supreme Court (25th November 2009) Case [2009] UKSC 6 (On appeal from: [2009] EWCA Civ 116 ) it is extremely likely that further litigation will follow, either between the OFT and the defendant or otherwise to generally decide the issues. I therefore respectfully submit that it would be appropriate for the Court toapply/continue a general stay in this claim pending resolution of the issues raised.''

I do not consider it wise for anyone to be applying to lift any stay whilst decisions have not been made. The Banks, FSA, Government and OFT AND Courts are all in communication about the next steps, but this may not feed down to the individual judges as has been said previously, so it might be an idea to check the situation out at your individual courts.

[EXC]

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

Well done Nattie.

[Budgie]

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

Excellent post Natty :santa_cheesy:

[EXC]

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

Just a little reminder why you should never ever believe what court staff say, let alone what people tell you they say - posted on CAG:

''Just spoken to Bradford County Court and was told by case management that they haven’t been given any directions as yet on the bank charges cases. She also told me that she thought it was still being dealt with by the House of Lords.''

[Smasher]

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

I just registered on another forum today, and I just had to take a screenshot of the captcha phrase. I don't believe in all that fate & signs stuff, but this was an ikle bit spooky! :o

[Amethyst]

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

hedwig - isnt that harry potters owl ?

ohhhh you mean penalties

The OFT would welcome notification of the results of court cases involving unfair relationships, and copies of relevant judgments. These may be sent to credit.guidance@oft.gsi.gov.uk or by post to Martin Goulden, Head of Credit Policy, Office of Fair Trading, Fleetbank House, 2-6 Salisbury Square, London EC4Y 8JX.

Shall we ask him if he's had any ?

[Smasher]

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

hedwig - isnt that harry potters owl ?

ohhhh you mean penalties

One letter short I know, but I related 'hedwig' to the apparel of 'your honour'..

[Amethyst]

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

Judgment said that we could have stronger regulations

Lord Walker commented that ministers and Parliament had decided to transpose the directive
as it stood rather than to confer the higher degree of consumer protection afforded by the
national laws of some other member states. Parliament might wish to consider whether to
revisit that decision (Para 52). Lord Mance endorsed this comment (Para 118).

So we (Tools and I) thought a peek at the German Civil Code might be a plan.

http://www.gesetze-im-internet.de/en...civil_code.pdf
German Civil Code in English

EUR-Lex - 31993L0013 - EN
EU Directive

http://www.opsi.gov.uk/si/si1999/19992083.htm
UTCCR




100 page booklet from Building Societies Association outlining the seven different 'fairness' laws etc. Might be interesting to see. I had a look on their site but couldnt see anything. Apparently its recently been issued to members.

[Tools]

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

OK, this was something I was looking at over the weekend in regard to still being able to use Regulation 6(2) in certain circumstances.

Article 4(2) states:-

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.

and is interpreted in Regulation 6 of the UTCCR 99 Regs as:-

(2) In so far as it is in plain intelligible language, the assessment of fairness of a term shall not relate-

• (a) to the definition of the main subject matter of the contract, or
  
  (b) to the adequacy of the price or remuneration, as against the goods or services supplied in exchange.

In my opinion (limited as it may be) there may still be scope to add Reg 6 into certain claim arguments if your account was operated under one of the examples Andrew Smith J. declared to be "largely in PIL except in respect of..."

These were certain examples of
Abbey, Barclays, Clydesdale and HBOS

In Andrew Smith J. original Judgment he said...

Conclusion about plain intelligible language
293. I therefore conclude that the terms of four of the Banks, HSBC, Lloyds TSB,
Nationwide and RBSG are in plain intelligible language. Those of Abbey, Barclays,
Clydesdale and HBOS are in plain intelligible language except in certain specific and
relatively minor respects.
294. What is the effect of my conclusions that the terms of four of the Banks are largely
but not entirely in plain intelligible language? The Banks’ position is that any
assessment of fairness should in these circumstances be restricted to “the parts of the
term” that are not plain and intelligible. The OFT’s position is that, “The term is
thereby opened, as a whole, to the full assessment of fairness”. The parties did not
fully develop their arguments at the hearing before me, the issues that are raised are
not straightforward (not least as to how a “term” is identified for the purpose of this
enquiry, given that the OFT recognises that a single contractual clause can comprise
more than one “term”) and the question is one of some general importance. If I had
held that otherwise Regulation 6(2) applied to the Bank’s terms, I would have invited
submissions as to how the positions adopted in these broad terms by the parties are to
be applied to my conclusions about the terms and in light of my conclusion about the
nature of the exemption from assessment if Regulation 6(2) does apply (see paragraph
436 below). Since in my judgment Regulation 6(2) does not in any event protect the
Banks’ terms from assessment as to fairness, it is unnecessary for me to say more
about this.

Amethyst is telling me in my ear that she remembers Abbey and HBOS did appeal these points and their permission to appeal was turned down.

In the appeal hearing it was said...

Plain Intelligible Language
116.
Abbey and HBOS applied for permission to appeal against the judge’s order so far as it related to the issue of plain intelligible language, the judge having refused permission in relation to all his rulings on that point. The judge held that Abbey’s documents failed this test in three respects, of which only two are under challenge on appeal, and that HBOS’ documents failed in one respect. Both appellants accept that, if their main appeal fails, this aspect of the case is academic. We can therefore deal with it briefly.
117.
The judge dealt with the subject of plain intelligible language generally at [83] to [104] and [119] to [122]. Neither appellant challenges what he said in those passages. In particular, he said that the question whether terms are in plain intelligible language was to be considered from the point of view of the average consumer who is reasonably well informed and reasonably observant and circumspect: see [89]. He held that non-contractual material made available to the customer before or at the time the contract was made could and should be taken into account in deciding whether the contractual language was plain and intelligible: see [92] to [94]. He said that the standard to be achieved was whether the contractual terms put forward by the seller or supplier are sufficiently clear to enable the typical consumer to have a proper understanding of them for sensible and practical purposes: see [119]. These conclusions are not in issue on the appeals, nor are the judge’s other general
Judgment Approved by the court for handing down. OFT v Abbey National & ors
observations about plain intelligible language. It is common ground, not only that the typical customer is reasonably well-informed and reasonably observant and circumspect, but also that he or she is taken to read the relevant documents and to seek to understand the contractual terms from that reading. It is also to be noted that at [294] the judge reserved for eventual future argument, if it became necessary (as it did not on his conclusion, and as it does not on ours on the main appeal), the issue as to the effect of a failure to satisfy the plain intelligible language obligation.
118.
What is said by each of Abbey and HBOS is that the judge did not apply his own test when he came to consider their respective documents, but rather applied an incorrect, narrow and legalistic test.
119.
In each case the respect in which he held that the documents failed the test, and which is challenged on appeal, fell within the area of uncertainty as to the scope of a Relevant Charge, by way of inconsistencies or conflicts in the wording relating to the levying of the Relevant Charges: [116]. The points now at issue are as follows:
i)
He held that two of Abbey’s conditions are in conflict as to whether a Paid Item Charge is incurred when a payment instruction does not cause the account to become overdrawn (because it already is overdrawn) but increases the amount of the overdraft, and that this meant that the terms were not in plain intelligible language: see [150] to [151].
ii)
He also held that the plain intelligible language test was not met by Abbey’s terms as to whether an Instant Overdraft Monthly Fee was charged if a customer gives a Relevant Instruction during the month but payment is refused, because of a lack of clarity as to the meaning of the phrase “used the Instant Overdraft service”: see [152] to [153].
iii)
In relation to HBOS he held that there was a conflict as between the contractual terms and a non-contractual leaflet, causing uncertainty as to whether the Unarranged Overdraft Fee is charged only during the month in which the account goes into unarranged overdraft, or also during succeeding months if the account remains in that position: see [218] to [220].
120.
Even if we had not concluded that the main appeal ought to be dismissed, we would not have granted permission to appeal to Abbey or HBOS on these issues. No point of wider importance arises, given that the parties accept the correctness of what the judge said about the applicable principles. Therefore the points decided by the judge only relate to the respective banks and to their current documents. For those reasons, we do not accept the submission made on behalf of both banks that permission to appeal should be given on the ground of a compelling reason, regardless of whether there is a reasonable prospect of success on the appeal.
121.
The judge expressed his conclusions quite briefly on each point, but the points are, in their nature, apt for decision as a matter of impression and not suitable as the subject of detailed textual analysis. As to the merits of the issues, it seems to us that the judge was correct in the conclusion that he reached, for the reasons he gave, as to the conflicts within the documentation and their resultant lack of clarity to the hypothetical customer.
Judgment Approved by the court for handing down. OFT v Abbey National & ors
122.
For HBOS Mr Dicker criticised one sentence in [219] of the judgment on the basis that the judge had considered the position on the basis of only selective reading on the part of the hypothetical typical customer. Any substance that there might have been in that point is taken away by the next sentence in which the judge correctly addressed the effect of the documents as a whole.
123.
For those reasons, briefly expressed both because of the nature of the issues and also because the question is academic, we refuse permission to appeal to Abbey and HBOS on the plain intelligible language appeals.
CONCLUSION
124.
For these reasons we conclude:
i)
that an assessment of the fairness of the Relevant Charges is not precluded by regulation 6(2) of the 1999 Regulations and that the appeal must be dismissed; and
ii)
that the applications by Abbey and HBOS for permission to appeal on the basis that the judge was wrong to hold that some of their Relevant Terms imposing Relevant Charges were not in plain intelligible language should be refused.
125.
We wish to add by way of postscript that in the course of this appeal we have had the great assistance of two judicial assistants, Katherine Apps and Rebecca Wright. We would like to take this opportunity of thanking them for all their help.

Since his decision that the overall the Relevant Terms were assessable under 6(2) was overuled in the Supreme Court and decided that they were not assessable, the fact that the terms he found to be not fully in PIL should now be looked into to see if they should now be looked at under Regulation 6(2) even if it is then found there is no argument to use, I still think it should be looked at.

Also, if your account was operated under any T&C's not submitted by the OFT to the test case for consideration by the court.

We are currently compiling a list of the T&C`s that could fall into this category, but this is still a work in progress.

Thoughts anyone?

[Amethyst]

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

OFT to make announcement DECEMBER 22nd - says Sarah McArthy-Fry - Legal Beagles


Re Tools post below. I do think there are some legs in it specifically for HBOS, otherwise I feel the actual non PIL terms are too limited to have a major effect. But definately worth looking into a bit more.