OFT WIN

[tomterm8]

Re: OFT WIN

I agree

for instance as far as I understood S69 statutory interest can only technically awarded by a court so to encourage chasing that I feel is unwise.

Let alone the rest

statutory interest is not available for debts incurred on Consumer Credit agreements, so I am no personally convinced that there is any basis for claiming it, albeit that the claim is technically a restitutionary claim.

[sam]

Re: OFT WIN

Of course it is up to you whether or not to accept the money now but we would suggest that you consider refusing any offer the bank agrees to pay you interest at 8%.

If your bank only offers you your actual charges, then begin a Court Claim for the charges plus interest, accept the charges in part payment and continue your claim for the balance of the outstanding interest. We consider that it is highly likely that your bank will choose to settle the whole claim rather than go to court.

The way I read that is charges and 8% interest, not charges plus interest at C.I. AND on top 8%. Maybe im wrong. There are sites that only advise claiming the 8% which is payable before court.

[Amethyst]

Re: OFT WIN

Which 8% is payable before court sam ?

Stat Interest isnt applicable at all until you are in the courts system.....the only interest payable before court would be CI....and as Budgie knows only too well , I'm not a great advocate of CI on banks current account claims.

[sam]

Re: OFT WIN

Claiming stat interest at 8% instead of claiming C.I. interest. Like the mortgage claims, when I phoned up my old mortgasge they paid back the over charge plus 8% stat interest

[EXC]

Re: OFT WIN

From The Times

April 29, 2008


Bank charges can be assessed for fairness

Office of Fair Trading v Abbey National plc and Others in the Queen’s Bench Division


http://business.timesonline.co.uk/to...cle3835012.ece

[Amethyst]

Re: OFT WIN

Queen’s Bench Division
Published April 29, 2008
Office of Fair Trading v Abbey National plc and Others
Before Mr Justice Andrew Smith
Judgment April 24, 2008


Terms in standard form contracts between bank and customer providing for relevant charges were not exempt from assessment as to fairness.


Mr Justice Andrew Smith so held in the Queen’s Bench Division when considering the application of the claimant, the Office of Fair Trading, for a declaration that the relevant terms and charges in current agreements, and to some extent in historical agreements, by the defendants: Abbey National plc, Barclays Bank plc, Clydesdale Bank plc, HBOS plc, HSBC Bank plc, Lloyds TSB Bank plc, Nationwide Building Society, and Royal Bank of Scotland Group plc, were not excluded from an assessment for fairness under regulation 6(2) of the Unfair Terms in Consumer Contracts Regulations (SI 1999 No 2083).


The banks brought counterclaims seeking declarations which were, inter alia, directed not only to the application and effect of the 1999 Regulations but also to whether their terms included penalties and so to that extent were unenforceable at common law.


Mr Brian Doctor, QC, Miss Jemima Stratford, Mr Richard Coleman and Miss Sarah Love for the Office of Fair Trading; Mr Ali Malek, QC and Mr Richard Brent for Abbey National; Mr Iain Milligan, QC, Mr Andrew Mitchell and Mr Simon Atrill for Barclays; Mr Richard Salter, QC, Mr John Odgers and Mr Adam Kramer for Clydesdale; Mr Robin Dicker, QC, Mr Timothy Howe, QC, Mr Jeremy Goldring and Mr James McClelland for HBOS; Mr Richard Snowden, QC, Mr Mark Hoskins, Mr Daniel Toledano and Mr Patrick Goodall for HSBC; Mr Bankim Thanki, QC, Mr Richard Handyside and Mr James Duffy for Lloyds TSB; Mr Geoffrey Vos, QC and Ms Sonia Tolaney for Nationwide; Mr Laurence Rabinowitz, QC, Mr Malcolm Waters, QC, Mr David Blayney and Mr Benjamin Pilling for Royal Bank of Scotland.


MR JUSTICE ANDREW SMITH said that the terms in standard form contracts provided for four basic categories of relevant charges about which the claimant was concerned: unpaid item charges, paid item charges, overdraft excess charges, and guaranteed paid item charges.


The terms generally used by the banks for personal current accounts, other than basic accounts, were in plain intelligible, or largely in, plain intelligible language.
The banks’ terms and charges did not amount to penalties and so were not unenforceable at common law against the customer. The banks had argued that the charges were not payable upon a breach of contract on the part of customers.


None of the provisions that the claimant identified meant that the customer was under a contractual commitment such that relevant charges could have been a penalty for breach of the commitment, and so unenforceable at common law.


If there was doubt about the meaning of these provisions, they would have been given the interpretation most favourable to the consumer and so as to avoid customers being under any contractual commitment.


On the question of whether the fairness of the terms was excluded from assessment by the claimant, the banks submitted that the charges were the price or remuneration, or part of the price or remuneration, for services that they supplied and therefore regulation 6(2) applied to the terms.


The banks made two principal submissions: The whole package argument They supplied a “bundle” or “package” of services to their current account customers which enabled the customers to manage their day-to-day finances, including services whereby customers could, without prior arrangements, request an overdraft by issuing a payment instruction which, if executed, would create or increase borrowing from the bank, and where the bank chose to grant such a request, customers could borrow from the bank on its standard terms.


The relevant charges, together with other revenue in particular form from interest paid by customers on borrowing and the use of credit balances in customers’ accounts, were the price or remuneration for the package or services.


His Lordship held that the payments were not made in exchange for the whole package of services supplied by the bank when it was operating a current account.
Further, the payments were not the price or remuneration for those services in any natural meaning of the phrase or within the meaning of regulation 6(2).
The payments would not have been so recognised by the typical customer when he opened a current account with a bank, and they were not generally so presented by the banks in their terms or other documentation.


Moreover, the basis of the whole package argument was that the relevant charges were not the price or remuneration for services but part of the price or remuneration for services.


An assessment of the fairness of the relevant charges did not involve an assessment of the level or adequacy or appropriateness of the overall price or remuneration for the package of services supplied by the bank, and an assessment of the fairness of the relevant charges as against those services, apart from being entirely beside the point, would not have intruded upon the essential bargain between the parties that the United Kingdom intended under Council Directive 93/113 EEC (OJ 1993 L95/29) and the 1999 Regulations should be protected from assessment. The specific services argument If the charges were not to be regarded as part of the price or remuneration for the package of services supplied by the banks to customers with current accounts, then they were the price or remuneration for some part of those services; that was, for the services or a service supplied in connection with borrowing requests where no facility had been arranged in advance.


His Lordship held that each of the four categories of relevant charges needed to be considered separately but none of them was the price or remuneration in exchange for services by way of providing an unarranged overdraft. Therefore, the specific services argument was rejected.


Therefore the banks’ arguments failed and it followed that the relevant terms were not exempt from assessment under the 1999 Regulations.


That was not surprising since regulation 6(2) exempted assessment of the fairness of the balance of the essential bargain between a seller or supplier and a consumer.


As the banks themselves explained, under a “free-if-in-credit” price structure, the economic balance in a contract between a bank and its current account customer was between the package of services supplied by the bank and the total benefits to the bank from operating the current account, not only by way of relevant charges but also in particular by way of the use of the funds if the account was in credit and interest if it was in debit.


On no view did an assessment of the relevant charges, or relevant terms, impinge upon the adequacy of the totality of the benefits received by the bank in exchange for the package of services.


The claimant’s investigation might well have involved consideration of the fairness of the structure of a “free-if-in-credit” pricing regime but that was very different from an assessment of the overall adequacy of the benefits to a bank from operating it.


Solicitors: Mr Omar Yaqub, Office of Fair Trading; Ashurst LLP; Simmons & Simmons; Addleshaw Goddard LLP; Allen & Overy; Freshfields Bruckhaus Deringer; Lovells LLP; Slaughter & May; Linklaters LLP.

[ed.]

Re: OFT WIN

Chasing CI alone having charges refunded is one thing and doable.

Chasing S69 interest when charges were offered pre court filing, would have you thrown out.

Chasing S69 interest when charges were offered after filing in Court, is risky but still doable, especially if going for costs aswell.

[Budgie]

Re: OFT WIN

Stat interest is only applicable once you start a court claim.

At that time you can choose to request stat interest on the whole claim from the date of each charge to the date of claim issue and then at an equivalent daily rate from the date of claim issue to the date of settlement.

If you decide to claim for any other form of interest you can obviously try to claim this back from day one of your claim against the financial organisation. This might be simple interest, or compound interest or a super duper inflated interest as used by some reclaiming sites. The obvious thing is that you have to realise that you will have to justify and argue your interest claim as well as your claim for repayment of the charges. If you are claiming interest on this basis I personally believe it is more sensible to forget all about stat interest from the date of issuing your court claim and just claim with the same method all the way through. I know that some sites recommend claiming CI from the date of each charge to the date of filing your claim at court and then stat interest from the date of your claim being issued to the date of judgment or earlier settlement, that doesnt make any sense to me.

Claims for anything other than statutory interest are likely to be quite difficult and should only be undertaken if you are confident of arguing your case should it actually go to Court. Help is available if you need it for this type of claim. However I will mention here that as far as I am aware this site advocates claiming stat interest only for bank charge claims. Not my personal view but there you go.

Budgie

[Budgie]

Re: OFT WIN

Am not gonna bother quoting the whole thing.

But I must say that

Marc Gander's take on where we are.

Is the biggest load of c**p that I have ever seen, has this actually been posted on CAG?

[scoobydoo]

Re: OFT WIN

"On the basis that the bank will be obliged to repay you your court fees as well, a County Court claim is likely to be much more profitable."

I am sorry I dont agree with this either . In cases where the charges have caused subsequent hardship or extreme circumstances of course I can understand the subsequential loss argument and applaud all attempts to reclaim these.

However IMO this statement makes the majority of claimants seem greedy . We all know there has to be some charge and personally I made up my mind I would have accepted the charge less £12.00 per incident and have been happy with that. Personally I think that statement is the type of thing that gets sites a bad name.
IMO

Waiting to be shot down

[scoobydoo]

Re: OFT WIN

And the more I read it the more I agree with budgie

[Amethyst]

Re: OFT WIN

No shooting from me scoob.

ummm although

"On the basis that the bank will be obliged to repay you your court fees as well, a County Court claim is likely to be much more profitable."

How does repaying you your court fee that you have stumped up in the first place make it more profitable?

Anywayyyyyyyyyyy I suggest we get on with our own take on it and leave the CAG take well alone.

[EXC]

Re: OFT WIN

I will say, for the benefit of our members, that the 'FSA Compensation Scheme' is not something that exists and I have certainly never heard of it.

[Froggy]

Re: OFT WIN

Going back to CI + 8%, there is a precedent on bank charges I believe. Halliday v. HBOS(2007) where the claimant got charges and interest(appealed for CI) and lost. Queen's Bench appeal I believe. Sorry I have no link for the case.

[Froggy]

Re: OFT WIN

Stephen Hone from PC has given his thoughts to members of that forum. I will reproduce it here.
The Judgment



Okay after reading the judgment it is clear the are a number of point that need to be addressed.


1. in my opinion one of the most important is the fact Mr Justice Andrew Smith
Did not consider the so-called “basic” accounts, which he states offer a more limited range of services than conventional current accounts and upon which Banks do not allow customers to arrange an overdraft facility.

Clearly these account need to be assessed even more that the “normal” accounts. If the banks do not (my emphasis added) allow their customers to arrange an overdraft yet customer can and do go into “unauthorised” overdrafts then clearly this is a breach of contract, therefore I would submit that this situation clearly supports the penalty argument as well as the Unfair Terms Argument.

2. The next failing in my opinion was that Mr Justice Andrew Smith was only concerned with Relevant Terms and Relevant Charges in the Banks’ due to a Litigation Agreement and for case management reasons, his judgment only really focused on the banks current terms.

Whilst I can see the problems of considering all the historical terms, nonetheless this exercise has to be undertaken in any event. There are a large number of cases held on stays which clearly rely on historical terms.

Therefore one must ask the question on what grounds were these claims stayed, If the very terms they rely on were not to be assessed in the test case. This is an Issue members may wish to address with the local MP and their local county court and or the FSA.

3. Business claims, in my opinion this judgment has caused an end to business claims which are using the Bank new terms and conditions. This is because the Mr Justice Andrew Smith finding on the service argument and his decision that there is no breach of contract.

However is must be noted that the Judgment was based only on Consumer contract and not Business contracts. Nevertheless we have to be realistic and I can see a court following Mr Justice Andrew Smith reasoning’s and applying the same principle to business contracts. (Subject to the terms of the contract) therefore my advise to business claims is, if your claims above 5K don’t issue a claim just yet. Claims below 5k are in the small claims track and as you all know there is generally no award for costs.

Additionally one comment did catch my eye Mr Justice Andrew Smith said “As far as Lloyd's TSB is concerned, there is (perhaps understandably in view of the issues raised in the pleadings) no evidence before me whether it had any contractual power to introduce changes to its contracts with its existing customers”

Clearly Lloyd's TSB customer need to look in to this issue in detail if you have copies of your old contracts check to see if Lloyd's did in fact have the contractual power to change its contracts.


Now we have to wait on the OFT, but even when and if the OFT recommends a lower bank changes level they probably "in fact I can almost guarantee" that they wont force the banks to refund the six years so it will be down to thousands of consumers to do what they were doing right form the start “FILE A CLAIM”

So my verdict is that the Test case has to date played right into the hands of the banks and resulted in them have a rest bite from paying out.

Now we are left with the OFT to decided what it will do, and what is worse we may all have to wait on an Appeal

If the banks do appeal the worst thing is that an appeal still won’t cover all the historical terms and all types of banks accounts on offer. So even after all the appeals and judgments, we could still be left with thousand of consumers unsure of their legal position , An issue that needs to be addressed
urgently.