Test Case Deal?

[EXC]

Iv'e had this from Bob Egerton today. He's written to OFT Chief Executive John Fingleton to seek reassurances that the test case will not be put under any political pressure. I'll be doing the same.

Look out for a possible grubby deal between the government and the banks early in the New Year. The Guardian today is suggesting that
there could be a carve up of Northern Rock between various high street banks. But the banks will exact a price. See Guardian article at

http://www.guardian.co.uk/business/2007/dec/18/northernrock.creditcrunch

In particular, near the end of the article:

"The banks which agreed to participate in any break-up plan would be expected to exact a price for their support. They would demand reassurance that they would not suffer financial loss as a result and hope to receive a sympathetic hearing from the government which has previously hit the sector with a range of reviews - starting with Don Cruickshank's industry-wide inquiry and culminating in capping overdraft charges - aimed at denting their profitability."

So could it all be sorted out before 14 January, the start of the test case?

[Tools]

Re: Test Case Deal?

Nothing would surprise me EXC.

[Guest]

Re: Test Case Deal?

What does surprise me about all this is that we are talking here about illicit profit. That is to say, profit derived from the levying of fees that are de facto unlawful.

Just what is it about the banks that makes them believe that they are not subject to the law?

If a stream of profit for a company is derived from something that they should not be doing then why do they think - and all those who comment on it from the press etc. - that they should be allowed to make up this "lost" profit elsewhere?

The element of profit that is derived from those unlawful fees should be denied them and the banks need to understand that they cannot expect to simply make that up from other sources - they should not have been enjoying it in the first place!

[EXC]

Re: Test Case Deal?

----- Original Message ----- From: EXC
To: Kate Farrow OFT
Cc: Emily Woodman OFT
Sent: Wednesday, December 19, 2007 8:45 AM
Subject: Guardian Article



Dear Kate/Emily

According to an article in yesterday's Guardian some high street banks who are interested in buying parts of Northern Rock would be seeking some kind of deal with regard to the capping of overdraft charges.

http://www.guardian.co.uk/business/2007/dec/18/northernrock.creditcrunch

The article states:

"The banks which agreed to participate in any break-up plan would be expected to exact a price for their support. They would demand reassurance that they would not suffer financial loss as a result and hope to receive a sympathetic hearing from the government which has previously hit the sector with a range of reviews - starting with Don Cruickshank's industry-wide inquiry and culminating in capping overdraft charges - aimed at denting their profitability."

This would of course be of great concern. Could you give me some kind of reassurance that the OFT would not succumb to any political pressure that would
distort the outcome of the test case and the final determination of the level and nature of overdraft charges.

Many thanks

EXC

[IvorBigUn]

Re: Test Case Deal?

Nothing surprises me anymore. The banks will without doubt be looking for ways to recoup the 'losses' when the charges case is complete.

[EXC]

Re: Test Case Deal?

Although I 've had a bland assurance from OFT re the potential Northern Wreck deal another worry presents itself. The test case, as we all know, was scheduled to start 14 Jan. They now 'anticipate' it will start on 16th.

Although It's only 2 days I'm a bit surprised that six months after it was announced and just a few weeks before it was due to start they don't appear to have a court
date nailed down.

----- Original Message ----- From: Kate Farrow
To: EXC
Sent: Friday, December 21, 2007 11:53 AM
Subject: RE: Guardian Article

Dear Nick

The OFT is the UK's independent consumer and competition authority. Our mission is to make markets work well for consumers. It is in order to make the personal current account market work well for consumers that we are conducting the market study and the investigation and test case under the UTCCRs. We do expect to understand the wider context of consumer interests in the market, hence the market study, but we will do that independently, not in response to any political pressure.

You have commented favourably on OFT's positive approach recently on the test case. Let's see how we get on when it gets into court mid-January (we currently anticipate it starting on the 16th).

Have a very good Christmas,

Regards

Kate Farrow | Retail Banking| Markets & Projects - Services| Office of Fair Trading
Fleetbank House | 2-6 Salisbury Square | London EC4Y 8JX | T: 020 7211 8816 |F: 020 7211 8819

[Paule]

Re: Test Case Deal?

(we currently anticipate it starting on the 16th).

Ahh.. but which year?????

[EXC]

Re: Test Case Deal?

Bob Egerton has had a response from OFT Chief Executive John Fingletons office. Although it is a completely different department that responded to my enquiry the response is almost identical to mine. Spooky.

From: Rob Williamson <Rob.Williamson@oft.gsi.gov.uk>
> Date: 21December 2007 11:46:55 GMT
> To: Bob Egerton
> Subject: RE: OFT/Banks test case
>
> Bob
>
> Thank you for copying me in on your email to John Fingleton. I have
> been asked to reply.
>
> The OFT is the UK's independent consumer and competition authority.
> Our mission is to make markets work well for consumers. It is in order
> to make the personal current account market work well for consumers
> that we are conducting the market study and the investigation and test
> case under UTCCRs. We do expect to understand the wider context of
> consumer interests in the market, hence the market study, but we will
> do that independently, not in response to any political pressure.
>
> You have commented favourably on OFT's approach in recent paperwork on
> the test case. Let's see how we get on when it gets into court
> mid-January (we currently anticipate it starting on the 16th).
>
> Have a very good Christmas
>
> Regards
>
>
> Rob

[agnes]

Re: Test Case Deal?

What does surprise me about all this is that we are talking here about illicit profit. That is to say, profit derived from the levying of fees that are de facto unlawful.

Just what is it about the banks that makes them believe that they are not subject to the law?

If a stream of profit for a company is derived from something that they should not be doing then why do they think - and all those who comment on it from the press etc. - that they should be allowed to make up this "lost" profit elsewhere?

The element of profit that is derived from those unlawful fees should be denied them and the banks need to understand that they cannot expect to simply make that up from other sources - they should not have been enjoying it in the first place!

You have put into words so well, exactly what I have been protesting all along. I get so angry about this because there are so many of us in this country who are disgusted at the way the government is manupulating even the justice system, and yet we are not heard Any private company would have to face immediate action in the these circumstances.

[Niklowe]

Re: Test Case Deal?

Agnes,

I actually think that there is a groundswell of opinion forming, that is going to make politicians of all parties sit up and listen in the near future. They do not seem to understand that the internet is a very powerfurl communication tool. The undercurrents of discontent are growing by the day.

[Tools]

Re: Test Case Deal?

The test case, as we all know, was scheduled to start 14 Jan. They now 'anticipate' it will start on 16th.

Although It's only 2 days I'm a bit surprised that six months after it was announced and just a few weeks before it was due to start they don't appear to have a court
date nailed down.

They have known for some time that it would start on the 16th , of that I have no doubt , their webpage was updated yesterday to also include the change of venue

The High Court test case, which is a key part of the investigation, is seeking to establish the preliminary legal principle of whether the provisions of the UTCCRs that deal with unfairness apply. It will also address the additional point of law of whether the charges can be a penalty at common law. It will not lead to a judgment as to whether charges themselves are fair or not. The OFT will decide after the initial judgment what steps to take should it win the test case and conclude from its financial investigation that any of the charges are unfair. The hearing, due to begin on 16 January, is being held at the International Dispute Resolution Centre, 70 Fleet Street, London EC4Y 1EU.

Below is a timeline providing information about this work.

A search of the page properties reveals this

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Are the OFT putting their findings to the banks before the Test Case commences?

Again , quoted from the OFT itself

5. The OFT's market study is taking a holistic look at whether the personal current account market is working well for consumers. In particular it will assess the extent to which consumers help drive competition. The market study is currently in its evidence gathering phase, and the OFT will publish its findings by the end of the year.

15 November 2007
After reviewing interactions with court proceedings and taking legal advice it has been decided that the findings of the market study into banks will not be published in advance of the test case.
See press release

[Nattie]

Re: Test Case Deal?

I think that the OFT are going to make a deal with the Banks to cut charges down. I suspect that things that have happened internally have set the stage for it to happen. I'm not sure that it is the end of free banking as it is called but I do believe that the structures are in place if the banks LOSE the case for there to be a fee based structure for banking. It may not happen but things are in place in case it does.

[Guest]

Re: Test Case Deal?

Unless any deal the OFT strike up with the banks is enshrined in law then it carries no legal force and, as with the £12 "limit" on credit card charges, will be open to challenge in the courts in the usual way.

Under the law, a finding of penalty makes any contractual claim unenforceable in its entirety and faced with a claim, the banks would then only be able to counterclaim for their actual costs which they would have to plead and prove individually and some grubby stitch up between big banks and the limp-wristed OFT is not going to overturn more than a century of legal precedent.

[Paule]

Re: Test Case Deal?

Unless any deal the OFT strike up with the banks is enshrined in law then it carries no legal force and, as with the £12 "limit" on credit card charges, will be open to challenge in the courts in the usual way..

And when this happens, the flood gates will open again, and all the courts who have stayed cases, on the banks request, without listening to the real arguements for hardship etc, will now have to fit in 6 months worth of cases as well as all the new cases they will appear.

I can see that if you are going have a long wait to get your court date from now on, which will then give the banks longer before they have to settle, unless they get the blind courts again to think that they will be allowed to charge the 'Deal' figure.

[enaid]

Re: Test Case Deal?

So is this how it is?
The Law must be changed to make the charges unlawful and thus making it ok for the banks to charge what they like.
If the law is not changed and they stick a fee on of a set amount as with CC's then we can still carry on claiming until they can prove their actual cost.
These two outcomes if the banks lose.
Where does it leave us if the banks win?