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

[orc]

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

An interesting point / theory was put forward by the Bank of Cyprus (case since settled in claimants favour but for a minimal sum to cover court costs only) which is also relevant to the scots case. Attached a point from their defence below. Not sure whether any one is really interested in reading all the banks defences we have had in on cases which have now ended. Obviously we have made the decision that historicals are history, but if others want to continue and are not simply relying on a single scots case to decide whether to go on, then they may be of use so let me know and I'll get them all together somewhere publicly. Or even if anyone wants to talk about the legalities and arguments in the cases.

Thanks for that offer Amethyst which is incredibly generous.

I don't have any charges myself but am still reluctant to give up the chase- call me an old git, well not so old!

[EXC]

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

Originally Posted by BBC
Chancellor George Osborne is expected to announce later that the Bank of England will be given the key role in regulating the UK financial sector.
In his first Mansion House speech, he is tipped to return this power to the Bank at the expense of the Financial Services Authority (FSA).
Before the election, Mr Osborne had suggested he would abolish the FSA.

However he is expected to say that the FSA will continue to have the role of supervising individual banks.
The FSA has come in for criticism for not doing enough to prevent or limit the crisis in the financial markets.

The important thing for us is that the FSA is finished - and good riddance to them - and that consumers will get a dedicated banking regulator.

''As readers of this blog will know, the Financial Services Authority is to be dismantled. The part that's supposed to prevent banks taking dangerous gambles, which regulates and supervises them, will become a subsidiary or arm of the Bank of England.
And the bits that are supposed to protect consumers and crack down on crooks will be injected respectively into a new Consumer Protection Agency''

BBC - Peston's Picks: Osborne's big City moment

[EXC]

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

This is the part of George Osborne's Mansion House speech which dealt with consumer protection. I'm not sure about lumping the new consumer protection authority in with 'markets' and also the emphasis on it preserving the UK as the leading global financial centre which sounds a bit contradictory to me - in fact a bit FSAish . There should be some more detail on Thursday.





''We will also establish a powerful new Consumer Protection and Markets Authority.
It will regulate the conduct of every authorised financial firm providing services to consumers.
It will also be responsible for ensuring the good conduct of business in the UK's retail and wholesale financial services, in order to preserve our reputation for transparency and efficiency as well as our position as one of the world's leading global financial centres.''

[natweststaffmember]

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

And Hector Saintz(not sure on that spelling) is remaining at the FSA until that goes and is heading up the new organisation being set up as an offshoot of the Bank Of England. I watched the speech last night and the first thing I thought was, who cares, lol! I should care but.....no doubt in time I will care again...

[EXC]

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

I wonder what's going to happen with the Financial Ombudsman Service now that the FSA is being disbanded?

Although the FOS generates some income from case fees, the FSA funds it and also sets it's budget.

http://www.financial-ombudsman.org.u..._notes/QG1.pdf

[EXC]

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

Govan have updated their site on the Sharp case.

Govan Law Centre: Bank charges update from GLC

[Amethyst]

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

Defence from HBOS in linked post >> Legal Beagles Consumer Forum - View Single Post - OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

In the case of Sharp v. Bank of Scotland, the defender applied to remit the case to the ordinary court procedure. As our client is eligible for civil legal aid this was not a problem (legal aid is not available for small claims in Scotland, but it is for ordinary cause actions). However, we may oppose this in other cases where appropriate, and will disseminate this knowledge if successful. Accordingly, the case of Sharp will proceed to an Options Hearing next month, and it is likely a 'debate' (a court hearing on all of the legal arguments) will take place shortly thereafter. This is necessary because the banks defence to a s.140A Consumer Credit Act (CCA) claim is to argue that the banking contract was not a regulated credit agreement. The banks are also arguing that claims cannot go back before 6 April 2007.

Accordingly, if we can persuade the court that these lines of defence are irrelevant and wrong in law, this would leave claims to be determined on the facts as regards the unfair relationship test and the level of unfairness and consumer detriment. Of course, in many cases the level of unfairness is severe. Because cases depend so much on their own facts under the CCA - whether in terms of the transitional arrangements or the unfair relationship test - there may be little point in cases being sisted or stayed. Each case is different, and under the CCA each case is looked at specifically between the parties, the contract between them and the consequences of the charges on that customer.

....................

[EXC]

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

However, although for the purposes of s140 of the CCA that is the relevant credit agreement, it does not follow that the unarranged overdraft fees debited on each of those occasions should be considered to be the price payable for the provision of that credit.
The unarranged overdraft fees are part of the package of remuneration payable to the defender for the whole range of services made available by them (as are the returned item fees). Accordingly in so far as the pursuer contends that the cost of the unarranged overdraft fees is excessive compared to the events giving rise to them no relevant issue under s140A of the CCA arises.

Indeed and this is problem with using CCA as the fees are not for the provision of credit as Lord Phillips stated in the Supreme Court judgment:

''I agree with Andrew Smith J that a careful analysis of the transactions giving rise to the obligation to pay the relevant charges leads to the conclusion that they are not the prices in exchange for the transactions in question''

[orc]

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

Thankyou EXC and Amethyst

We need to wait till next month firstly and then longer.

Banks will be wheeling in the big guns.

I guess the best approach is to expect nothing and carry on as at present.



I had posted on Govan's site earlier:



Posted by Govan Law Centre at 16:08
Labels: Care Accolades Awards 2010, Prevention of Homelessness Partnership


2 comments:


Anonymous said... Congratulations to all concerned.

We hope you can soon post further success re the proof hearing on bank charges case at Glasgow Sheriff Court today. Many people eagerly awaiting an update.

Orc
11 June 2010 16:20
GLC said... Many thanks; a GLC bank charges update has been posted today (see the entry for Friday 18 June 2010).
18 June 2010 08:46

[Amethyst]

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

For reference (if you arent sure when and how the unfair relationship rules apply and why 6 April 2007 is important);

112. Sections 140A to 140C will apply to all new agreements made after the commencement date and will apply to any agreements already made which continue in existence at a specified date after commencement. The period between the commencement date and the specified date is called the “transitional period.”
Sections 137 to 140 of the 1974 Act will continue to apply to agreements that have
been completed (e.g. no party has any further obligations under the agreement
because no further sums are payable) before the end of the transitional period. The
transitional period will allow creditors to ensure that any agreements that will
continue beyond the end of the transitional period comply with the amended 1974
Act.

The banks argue that each 'informal request' for extra overdraft without prior arrangement is a new credit agreement (which is the case under the CCA DG Determination I believe)and that each is concluded once that money is repaid (ie a credit for more than the value of the 'informal request' payment) thats the end of that credit agreement. So for pre April 07 charges to be claimable you must have had informal payment requests paid, and not repaid the same or a larger amount into the account before April 2007 thus the credit agreement remains. It of course doesnt apply to unpaid items as no 'credit' is given - also that the fees charged are not fees for the consideration of whether to supply credit or part of the cost to the cust of having that credit but part of the package of services (as per SCoJ Judgment ref quote EXC posted before)

The people supporting the CCA 140 arguments are saying that once you are in overdraft this consitutes a credit agreement until you are out of overdraft and no longer have an overdraft available (ie its a running credit agreement which ends once the facility is not available) so if you had an overdraft pre Apr 07 and still had it post April 07 then associated charges are reclaimable under unfair relationship rules.

No idea if that explains anything any clearer or just confuses people.

I am not recommending people try this route at all, just think if people are watching the GLC case it help to have an understanding (well this is only my vague understanding) of what the arguments are / might be.

With regards to GLC - the quote I posted before is very over simplified - a banking contract is not generally a regulated credit agreement unless in overdraft (as seen by the determination which I'll find in a min) and the above bit should explain the April 07 relevance.

THREAD about the determination, overdrafts and the consumer credit act. Overdrafts CCA - Legal Beagles Consumer Forum

Oh, and once the argument that the CCA applies and to what dates and whether it actually applies to the charges imposed (ie the charges are part of the OD agreement) THEN comes the argument that there is an unfair relationship - and thats a very individual argument based on how each customer and bank have behaved throughout the claim period of the account. The bank don't have to prove it is a fair relationship just that it isnt unfair.

[ed.]

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

Surely though their argument now just loops back to the original CCA example 22, they ignored this and it's true wording and it wasn't argued in the Test Case by the OFT and went with 'service/consideration/package angles, but now are back to the bread and butter where a service/package fee is charged in both cases (allowing the excess/denying the borrowing) when the CCA is clear that in denying the request it is breach of contract and allowing the excess is it's own remedy.

They are just rewording (again) the part of the example and The Act until it suits them.

[Amethyst]

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

Interesting case if you are interested in the EU angles of implementation of the unfair terms directive.
Caja de Ahorros y Monte de Piedad de Madrid v Asociacion de Usuarios de Servicios Bancarios (Ausbanc) (2010)

On those grounds, the Court (First Chamber) hereby rules:
1. Articles 4(2) and 8 of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, which authorises a judicial review as to the unfairness of contractual terms which relate to the definition of the main subject‑matter of the contract or to the adequacy of the price and remuneration, on the one hand, as against the services or goods to be supplied in exchange, on the other hand, even in the case where those terms are drafted in plain, intelligible language.

2. Articles 2 EC, 3(1)(g) EC and 4(1) EC do not preclude an interpretation of Articles 4(2) and 8 of Directive 93/13 according to which Member States may adopt national legislation which authorises a judicial review as to the unfairness of contractual terms which relate to the definition of the main subject‑matter of the contract or to the adequacy of the price and remuneration, on the one hand, as against the services or goods to be supplied in exchange, on the other hand, even in the case where those terms are drafted in plain, intelligible language.

[orc]

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

Noticed on Govan Law Centre web site that they are hosting a seminar on bank charges, amongst other interesting and current issues. Posted as it might be of interest to organisations, as too costly perhaps for claimants.


Advance notice of new GLC seminars in 2010 @Orkney Street


Reclaiming unfair bank charges after OFT v. Abbey National and others, Monday, 29 November, 9.30am - 12.00pm (registration from 9am).

UK citizens received over £1bn in refunded bank charges until the OFT raised its bank charges test case in 2007. To almost universal surprise the Supreme Court ruled in favour of the banks last year, but on a very narrow point of law. However, the UK banks have been suggesting to over one million customers that because ‘they won’, their charges are fair and it’s all over for refunds. The reality is somewhat different and more complex.

This seminar will analyse the scope to reclaim unfair bank charges under the Unfair Terms in Consumer Contract Regulations 1999 post the decision of the UK Supreme Court, and the prospects of founding upon sections 140A and 140B of the Consumer Credit Act. Delegates will be updated on the progress of Scottish test case litigation in this field, and the strategies of the banks.

The event will be led by Mike Dailly, Principal Solicitor at Govan Law Centre. From 2005-2007 Mike acted as the solicitor to the UK unfair bank charges campaign undertaking litigation across the UK with senior counsel in London, and the help of UK consumer groups. Since the decision in the OFT test case, Mike has worked with MoneySavingExpert.com, a team of barristers who specialize in banking law, and other consumer groups to identify alternative solutions for UK consumers to obtain redress.

Cost: £65 (concessionary rate for voluntary organizations £55).

[Bankstormer]

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

Noticed on Govan Law Centre web site that they are hosting a seminar on bank charges, amongst other interesting and current issues. Posted as it might be of interest to organisations, as too costly perhaps for claimants.


Advance notice of new GLC seminars in 2010 @Orkney Street


Reclaiming unfair bank charges after OFT v. Abbey National and others, Monday, 29 November, 9.30am - 12.00pm (registration from 9am).

UK citizens received over £1bn in refunded bank charges until the OFT raised its bank charges test case in 2007. To almost universal surprise the Supreme Court ruled in favour of the banks last year, but on a very narrow point of law. However, the UK banks have been suggesting to over one million customers that because ‘they won’, their charges are fair and it’s all over for refunds. The reality is somewhat different and more complex.

This seminar will analyse the scope to reclaim unfair bank charges under the Unfair Terms in Consumer Contract Regulations 1999 post the decision of the UK Supreme Court, and the prospects of founding upon sections 140A and 140B of the Consumer Credit Act. Delegates will be updated on the progress of Scottish test case litigation in this field, and the strategies of the banks.

The event will be led by Mike Dailly, Principal Solicitor at Govan Law Centre. From 2005-2007 Mike acted as the solicitor to the UK unfair bank charges campaign undertaking litigation across the UK with senior counsel in London, and the help of UK consumer groups. Since the decision in the OFT test case, Mike has worked with MoneySavingExpert.com, a team of barristers who specialize in banking law, and other consumer groups to identify alternative solutions for UK consumers to obtain redress.

Cost: £65 (concessionary rate for voluntary organizations £55).

So what will this do? Im not sure i understand the point - can someone please educate me. Also are the individual cases any closer to a resolution?

[EXC]

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

So what will this do? Im not sure i understand the point - can someone please educate me.

I'm as baffled as you TBH. It's unclear who it's aimed at and what it's meant to achieve for them.