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

[EXC]

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

It looks like the coalition has reaffirmed it's commitment to end unfair banks charges, according to a written question & answer in the House of Commons last week.

Martin Horwood (Lib Dem: Cheltenham)
''What discussions have taken place with the Office of Fair Trading and the Financial Services Authority on a framework for bank charges since 2009?''

Mark Hoban (HM Treasury)
''The Treasury has regular meetings and discussions with the Office of Fair Trading (OFT) and Financial Services Authority (FSA) on bank charges as part of the process of policy development. The Government stated in the coalition agreement that:

"we will introduce stronger consumer protections, including measures to end unfair bank and financial transaction charges."

We are considering how best to implement this commitment and will bring forward proposals, in consultation with OFT and FSA, in due course.''

[natweststaffmember]

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

This may already be covered but here is a case where GLC has opposed an order to go to a higher court
Govan Law Centre: Bank charges update: remit from small claims to the ordinary court

[EXC]

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

The OFT have issued their 'Terms Of Reference' to the development work on opt-outs and guidance to banks dealing with customers in financial difficulty.

On opt-outs it's really just an update on progress with a commitment to an agreement on minimum standards by December this year and with a view to being included within the Lending Code by 31 March 2011.

On guidance for banks dealing with customers in financial difficulties, although the work is ongoing, banks will in the meantime be required to publish their own existing policies by September this year which can be used as a reference for complaints to the bank and the Financial Ombudsman. The definition of 'financial difficulty' they will be using appears to be the existing definition in the Lending Code (but I've asked for clarification as it is contradictory):

'Personal consumers should be considered to be in financial difficulty when income is insufficient to cover reasonable living expenses and meet financial commitments as they become due.'

What is significant is that it is clear that the guidance will not only apply to customers in financial difficulties but also those at significant risk of being in financial difficulty.

Beagles have been named as a key stakeholder in the ongoing work.

[Amethyst]

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

Excellent thanks EXC

5.1 As announced in March 2010, the OFT will continue to monitor the PCA
market actively to ensure that there is movement towards an equilibrium
that works well for consumers. We note that since March 2010, a
number of PCA providers have introduced new PCA products and
revised their charging structures. As part of its ongoing monitoring
activities, the OFT will in September 2010 provide a short update on
progress in the PCA market.
5.2 In particular, the OFT will be collecting information from the industry on:
• the options available for customers that do not want access to
unarranged overdraft facilities
• the level of charges for UOCs, especially for unpaid items,
• the choice of charging structures (or models) of PCAs available to
customers across the market, and
• the treatment of customers in (or at significant risk of being in)
financial difficulty as a result of unarranged overdraft charges (or
their equivalents).
5.3 In addition, we expect to review adherence to earlier commitments made
by the PCA providers around transparency and switching as set out in
the October 2009 follow up report. It will also review adherence to the
commitment made by the major PCA providers to have published
existing responsibility policies online by September 2010.
5.4 Our September 2010 update will report back on theses issues, and also
set out further progress we expect to see in the PCA market.
5.5 The update report will be also be an important piece of evidence as part
of the OFT's review of barriers to entry, exit and expansion in the retail
OFT1249 | 14
banking market.10 While this review is looking at personal banking as a
whole, and SME banking, the PCA market forms an important part of the
retail banking landscape, and information on market developments will
be an important factor in assessing barriers to entry. We expect to
publish this review in the autumn.
10

Sounds like September will be an interesting month.

- consumer organisations, for example Which?, Customer
Focus as well as those with a specific interest in the issues
such as MoneySavingExpert and Legal Beagles.

Is Customer Focus actually Consumer Focus ?

Also interesting that they have devoted a chapter to Freedom of Information requests and the Enterprise Act, at least shows they are expecting the usual FOI following these kinds of reports lol.

[orc]

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

On holiday, just noticed this whilst browsing- not sure if posted elsewhere, but thought folks would want a link. Nothing on Govan yet.



Customers hit by ‘death blow’ in bid to sue banks

http://www.heraldscotland.com/news/h...anks-1.1041325


David Leask
Share 0 comments
15 Jul 2010
Banks are said to have delivered a “death blow” to thousands of Scots attempting to sue them over unfair overdraft charges.
In a landmark case, high-street giant Santander yesterday convinced a Glasgow sheriff that such actions were too complex for consumer-friendly small claims courts.
The bank’s victory means any customer who wishes to fight for their money back will face unlimited costs at a sheriff court – rather than the cheap proceedings of small claims.
The ruling affects about 800 people in Scotland whose cases are currently going through the courts, as well as thousands who are considering action.
Santander was being sued for £3000 by NHS worker Allison Walls for what she believes were six years’ worth of unwarranted overdraft charges.
Walls, a married mother-of-two from Glasgow, was one of some 800 Scots waiting to sue their banks through small claims. Yesterday she said she would have to drop her case after it was switched to the ordinary roll of the sheriff court – where she could face costs of £10,000 in her bid to get her £3000 back. “That is not a risk I can afford to take,” she said.
Walls’s lawyer is Mike Dailly of the Govan Law Centre, one of the solicitors at the forefront of a UK-wide bid to reclaim bank charges.
Dailly said the Walls case would have huge repercussions for the thousands of other customers who were hoping to get their money back.
He said: “I understand that banks across the UK are now trying to get unfair bank charge claims removed from the claims system. I have no doubt this is a premeditated strategy to kill off all such claims before the courts because legal expenses are only capped for small claims.”
The effect of leaving the small claims system in Scotland is that consumers become exposed to potentially unlimited expenses in the event of losing. For those eligible for legal aid there will be a contribution to pay that may exceed the value of the dispute, making it pointless.
Dailly added: “For those ineligible for legal aid it would be crazy to proceed. The strategy is clearly designed to deliver a death blow to consumers’ claims.”
The Scottish Parliament raised the ceiling for small-claims actions from £750 to £3000 just three years ago. Justice Secretary Kenny MacAskill explicitly said that move would help those fighting banks over charges.
The sheriff who backed Santander – Andrew Cubie of Glasgow – cited MacAskill’s views in his judgment. But he said “there could well be exceptional complexity” in the Walls action, adding: “I consider that there are difficult questions of law to be resolved in this case.”
A spokesman for MacAskill yesterday declined to comment on any individual case, but said: “It was always understood that, if a sheriff deemed the matters under discussion to be complex, such cases could be treated as an ordinary action.”
Santander said its lawyers regarded the case as far too complicated to be heard under small-claims procedures.
Dailly believes that tens of thousands of Scots – and more people elsewhere in the UK – would have used the small-claims system to sue their banks if they could.

[Amethyst]

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

Cheers orc, not suprising. Happened with Angrybank too.

I do agree that the cases are very complex now and are rightly out of small claims, both in England and Scotland. 'Right' as in procedurally not morally. Needs a decent legal aid case (so Sharp v HBOS with Govan), or a decent Repreentative action with full ATE insurance as back up - and the insurers wont touch it. I wouldnt put any individuals into court in England or Scotland with a bank charges case at all at the moment, the risk is far too great.

Enjoy the rest of your hols

[Jester]

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

Amethyst - Far be it from me to suggest courses of action from LB, but given the news Budgie got yesterday that the Coalition Government WOULD like to meet with Consumer Groups such as on the subject of Unfair Bank Charges, might it not be worth a punt showing Vince Cable examples of where the Banks - with their unlimited legal funds - are trying to skew the law away from Consumers exercising their rights due to cost ?

The law is supposed to be fair and available to all. Unfortunately, as we often see it's more a case of how rich you are to fight for your rights. This cannot be right and maybe is something we should be canvassing people such as Vince Cable on.

We now have numerous examples of this happening that we can show to prove how the Banks continue to intimidate people in these ways and thus keep themselves 'above' the law ... or certainly 'above' being called to task to prove they are not attempting this.

[Amethyst]

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

Yes they should be made aware. To be totally honest I could see a case being whacked up to fast/multi track or ordinary cause whether the banks apply for it or not, the legal aspects of this now are very complex - small claims were always meant for basic cut and dried cases where there isnt really a point of law argument - more a judge judy thing to argue out who owes who what (I know what I mean anyway).

Be good if Bud gets the meet with the Consumer dept set up. We're keeping an eye on the OFT and LSB future of banking stuff and giving input from the groundlevel where needed. Theres also some work going on with conumer redress within the coalition to sort these issues of consumers having to individually go through the court system to gain redress in issues of this type.

Oh, and burgers to your first sentence, you are as much a part of LB as anyone and suggestions for courses of action are exceeeeeeeedingly welcome, I'm all out of ideas at the mo !

[Jester]

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

Well maybe the first step is to 'publicise' the fact that this is happening. Get it out into the public eye so to speak. That way, it is a subject that the Government simply cannot ignore.

The most vulnerable part of the population is being denied access to Justice through these intimidatory tactics by the Banks.

If this new government is serious about fairness to all in the Banking Industry, then they need to commit to forcing the Banks into transparency .... and this is one of the most important ways they could achieve this.

Of course, they could do this quite easily by first forcing the State-Owned banks into this transparency. The rest would then have to follow suit. Sadly, even the state-owned banks will claim this is unfair as it then reveals 'inner secrets' to the competition. But the closed-ranks have to be broken somehow.

[Amethyst]

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

Jester - It appears Mike Dailly has set off on the campaign trail to amend the law (because it doesnt suit this circumstance I guess - I don't necesarily agree tho) and publicise the issues.

http://www.heraldscotland.com/news/h...rges-1.1041558

''
He (Mike Dailly) said: “I believe we could resolve this by ensuring that the small-claims cap on expenses travelled with the case. This would mean a Scottish consumer could never be intimidated with the prospect of disproportionate legal expenses.''

“This would require a minor statutory amendment, which could strike a fair balance by excluding such protection where litigants were unreasonable in the conduct of a case”.

What is deemed as unreasonable ? That is how it works at the moment - small claims are exempt from costs except at the judges discretion for vexatious/unreasonable actions - Dustymare had substantial costs against her in small claims for applying to amend her POC to the new arguments and instead being struck out. Was that unreasonable ?


When it comes down to it these cases are incredibly complex and involve a mass of law. I can't really say it any better than Aequitas has over on CAG , so hopeful he/she won't mind if I just quote directly.

Just because a contract is complex does not mean it is unfair any more than a contract will be fair because it is simple, though I readily concede that a complex contract may be difficult to defend.

If a contract says: "If you overdraw on your account we will charge a fee of £25" that is crystal clear. It is the man who comes along and says: "I am not bound by this obligation I have entered into because..." who introduces the complication.

How can anyone who has followed the OFT case possibly doubt that the legal issues are complex? The problem is that people have deluded themselves into thinking that the law must be simple because they perceive the ethical issues to be simple. So strong is the belief that the law is on the consumer's side that every time the consumer loses in court (and I am waiting to hear of a case where the consumer has won) the whole thing is turned round to show that the consumer really won and that the banks only enjoyed a pyrrhic victory.

The small claims track is designed for low value straightforward claims. You can almost say that once you start quoting legal authority that the case is unsuitable to be dealt with in the small claims track. The fact that parties may risk costs in an action is both a good and a bad thing. It is a good thing as it discourages frivolous actions and encourages litigants to negotiate a settlement. It is a bad thing as it discourages those with a good case but limited resources from seeking justice. Pending some Solomon squaring the circle, it will remain a sad fact that the legal system (as opposed to the law itself) favours the man with the deepest pockets.

As for the law itself, the situation is not so much that the law was set up to favour the banks, but rather that the law as it is happens to favour the banks.

As I see it, bank charges claimants DO NOT have a good case at present, it is very complex and individual, and needs to be in fast track/ordinary cause if it is to be resolved. To do that some one has to take the risk. Hausfelds LLP, Tom Brennan and Anthony Scrivener QC, don't see it as a risk weighted in our direction at all. Neither do I.

[hicskis]

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

I suppose then we will find out soon enough whether Govan Law think they have a case, or were just wishful thinking - and we will see if they have the metal to see it through.

Any victory in the Small Claims Court (and this is where i am surprised) could have, and most likely would have been appealed into the normal process where costs would be incurred.

Therefore i do not see why Govan Law is getting so excited, and why they are fussing with an Individual's Human Rights, and the European Courts and all.

What is needed is a player with very big balls.

[Amethyst]

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

Govan Law Centre: ECHR application following Walls v. Santander

and the judgment from earlier in the week in Walls v Santander. - worth reading is very interesting

[hicskis]

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

Well it's interesting that the lower courts believe the issues are too complex for them, and that a higher court should be dealing with it.

However thinking outside the box as ever - what about the new Finanicial Services Act 2010? There are provisions that avoid the court route and permit the FSA in effect to regulate - make rules where consumers suffer loss of damage.

This would require a Consumer Group, for example, to apply to the FSA to have a Consumer Redress Scheme set up. Currently this piece of the Law is not in force - only when the Treasury authorizes it, or the FSA apply to have it authorized will it be enacted. However this is just a time issue.

http://www.fsa.gov.uk/Pages/About/Wh...10/index.shtml

Perhaps Leagle Beagles could ask the FSA to ask the Treasury to set up a "Consumer Redress Scheme" under section 14 of the "Financial Services Act 2010":

Measures to protect consumers

14 Consumer redress schemes

(1) This section applies if—
(a) it appears to the Authority that there may have been a
widespread or regular failure by relevant firms to comply with
requirements applicable to the carrying on by them of any
activity;
(b) it appears to it that, as a result, consumers have suffered (or may
suffer) loss or damage in respect of which, if they brought legal
proceedings, a remedy or relief would be available in the
proceedings; and
(c) it considers that it is desirable to make rules for the purpose of
securing that redress is made to the consumers in respect of the
failure (having regard to other ways in which consumers may
obtain redress).

[hicskis]

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

I call for Governmental Intervention in regards to the Unfair practice of excessive bank charges and disproportionate overdraft rates.

As will be highlighted in Panorama's documentary tonight on BBC these rates are - extortionate.

This is anti-competiive behaviour and breaches the Competition Act 1998 section 18 Abuse of Dominant Position, and the Enterprise Act 2002 section 188 Cartel Offence.

The British Bankers Association by use of "The Lending Code" which is a private agreement between banks have used this document to allow banks in the United Kingdom to abuse their dominant position, and this agreement is therefore a Cartel agreement to allow UK banks to "rip-off" their customers.

The British Bankers Association have today released a press announcement prior to the airing of Panaroma's documentary "How to beat the banks" - defending their practices that are outlined in the private agreement between the banks called "The Lending Code".

I call for an immediate investigation by the Office of Fair Trading into this Cartel activity, and call that the Treasury orders the Financial Services Authority (FSA) to instigate a "Consumer Redress Scheme" under the Financial Services Act 2010 so that consumers can be compensated.

[EXC]

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

This is what could be quite an exciting (albeit long term) development.

Your views needed! BIS taking unfairness assessibility of ancillary charges to EU. - Legal Beagles Consumer Forum

Consumer Rights Directive consultation - unfair charges - Legal Beagles Consumer Forum



We'd appreciate your views.