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“Order of processing uncertainties”
126. A complaint of “order of processing” uncertainty is also made about the terms of all eight Banks. It would appear from the evidence that there is no established banking practice whereby it is determined which “off-line” payment instructions within a batch are given priority for processing and payment. At Clydesdale, for example, a member of staff has discretion about this, and, as that Bank’s evidence explains, will often give priority to such payments as mortgage or loan repayments.
127. The OFT does not allege that the Banks are contractually obliged to process the transactions upon a customer’s account in a particular order if instructions are received simultaneously, provided the account is conducted in accordance with established banking practices. It is not necessary in this judgment to decide what obligations a bank has in these circumstances: see Paget’s Law of Banking 13th Ed. (2007) p.472. Nor is it necessary to examine the provisional view expressed by Griffin J in Dublin Port & Docks Board v Bank of Ireland, [1976] IR 118 at p.138 that “a banker should pay his customers’ cheques in the order in which they are presented, subject to the interest of the customer being taken into account”. It is sufficient to observe that if and to the extent that a bank is under any obligation to his customer about the order of processing instructions or which are to be paid in priority to others, the obligation arises from an implied contractual term.
128. As I have said, the order in which payment instructions are processed might affect whether a particular instruction is a Relevant Instruction and incur Relevant Charges, or indeed how many of a customer’s payment instructions might make him liable for Relevant Charges. As a result of uncertainty about the order in which the Banks might process payment instructions, the customer might not know in advance what Relevant Charges will be levied upon his account. It would be possible for the Banks to reduce this uncertainty by committing themselves to process instructions in a particular order. However, either the OFT’s complaint is that the Banks’ terms do not set out an implied provision of the Bank’s terms or, as with the complaint of criteria uncertainties, it is not about the clarity of the Banks’ contractual terms at all but about uncertainty as to how accounts will be operated by the Banks in practice. Whichever it be, I reject the OFT’s case that the Banks’ terms are not in plain intelligible language because of order of processing uncertainties.
129. It is therefore necessary to consider further the OFT’s complaints about uncertainties relating to “available funds”, “timing”, “Relevant Instructions and “scope”. None of these is directed against all eight Banks, and the terms of each Bank need separate consideration. I must therefore explain the accounts offered by the Banks and the standard form documentation that they use.
126. A complaint of “order of processing” uncertainty is also made about the terms of all eight Banks. It would appear from the evidence that there is no established banking practice whereby it is determined which “off-line” payment instructions within a batch are given priority for processing and payment. At Clydesdale, for example, a member of staff has discretion about this, and, as that Bank’s evidence explains, will often give priority to such payments as mortgage or loan repayments.
127. The OFT does not allege that the Banks are contractually obliged to process the transactions upon a customer’s account in a particular order if instructions are received simultaneously, provided the account is conducted in accordance with established banking practices. It is not necessary in this judgment to decide what obligations a bank has in these circumstances: see Paget’s Law of Banking 13th Ed. (2007) p.472. Nor is it necessary to examine the provisional view expressed by Griffin J in Dublin Port & Docks Board v Bank of Ireland, [1976] IR 118 at p.138 that “a banker should pay his customers’ cheques in the order in which they are presented, subject to the interest of the customer being taken into account”. It is sufficient to observe that if and to the extent that a bank is under any obligation to his customer about the order of processing instructions or which are to be paid in priority to others, the obligation arises from an implied contractual term.
128. As I have said, the order in which payment instructions are processed might affect whether a particular instruction is a Relevant Instruction and incur Relevant Charges, or indeed how many of a customer’s payment instructions might make him liable for Relevant Charges. As a result of uncertainty about the order in which the Banks might process payment instructions, the customer might not know in advance what Relevant Charges will be levied upon his account. It would be possible for the Banks to reduce this uncertainty by committing themselves to process instructions in a particular order. However, either the OFT’s complaint is that the Banks’ terms do not set out an implied provision of the Bank’s terms or, as with the complaint of criteria uncertainties, it is not about the clarity of the Banks’ contractual terms at all but about uncertainty as to how accounts will be operated by the Banks in practice. Whichever it be, I reject the OFT’s case that the Banks’ terms are not in plain intelligible language because of order of processing uncertainties.
129. It is therefore necessary to consider further the OFT’s complaints about uncertainties relating to “available funds”, “timing”, “Relevant Instructions and “scope”. None of these is directed against all eight Banks, and the terms of each Bank need separate consideration. I must therefore explain the accounts offered by the Banks and the standard form documentation that they use.
