OFT v Banks 'win / win' result that worries me

[Shazzaw]

All,

Please firstly accept my apologies for posting at this stage possible results as to what is going to happen as I do understand that there is a long way to go yet and speculating about possible outcomes is really not the done thing.

However, over the last few days I've been wondering what could really happen and lets say in 2 years time when we're reflecting on all of this what we'll be telling people about our crusade against the banks back in 2008.

I apologise in advance for my ignorance also but I'm just hoping some people could give me their thoughts on the following.

As I understand it the OFT can decide on the unfairness of current charges but as they've staed on their website have no authority to consider historical charges. Call me cynical but in seeking a 'win / win' situation is it not probable that the upshot of all this is that the OFT and Banks sit down and agree that all charges from the date of 24 April (or at a short time thereafter) should be fair at a level for example of £12, however all charges prior to this - as they cannot be ruled on by the OFT - stand?

Did not Justice Smith state that whatever judgment he made on current terms would likely be the same as historic terms so that his consideration that current charges are not a penalty will also mean that historical charges were not a penalty.

My worry is that if the OFT can ensure that they bring all future charges down to £12 they'll say they have won and stopped the banks from charging excessive levels, however the banks will also consider this a victory as they will not have to repay the couple of £billion in excessive charges we've all paid over the last 6 years and are currently on hold.

Just hoping someone can put my mind at rest that the chances of this happening are unlikely, as whilst a cap on future charges would be great, myself like so many others have so much dependent on current stayed claims that would mean thousands to me.

Apologies again for not being the most educated in legal knowledge but would just appreciate the thoughts of those more knowledgable on this subject than me and hopefully this thread can disapper rather quickly!!

Thanks in advance for any thoughts and hoping someone will tell me that I haven't got a clue what I'm talking about as the above scenario will simply not happen!!

shazzaw

[Amethyst]

Re: OFT v Banks 'win / win' result that worries me

Hi Shazzaw - well was waiting to see if anyone else answered lol.

Just hoping someone can put my mind at rest that the chances of this happening are unlikely

basically no - it could happen. unlikely in my opinion but its a possibility.

however all charges prior to this - as they cannot be ruled on by the OFT - stand?

That won't happen in my opinion unless the Judge rules that historic terms are subject only to UTCCR and are deemed NOT penalty charges, then the OFT decides that £38 is actually a fair charge, which is extremely unlikely in my opinion.

If they do place a cap on charges, and previous terms are classed as penalties then you should be able to reclaim the full amount prior to the change in T&C's, as they would be deemed unlawful

Does that help a little bit (hey kick starts the conversation anyway doesn't it) - really we just don't know yet - but most of us believe we will be able to reclaim most of the charges pre T&C changes back for 6 years and the difference to the new cap(if there is one) since the new T&C's.

Ame
xx

[Shazzaw]

Re: OFT v Banks 'win / win' result that worries me

Hi Ame,

Many thanks for your thoughts and like you I was wondering whether anyone would reply to give their take on things!!

Really appreciate your reply but what worries me - and I'm hoping is the point that I'm missing - is this bit you posted:-

"That won't happen in my opinion unless the Judge rules that historic terms are subject only to UTCCR and are deemed NOT penalty charges,...."

Wasn't this what he decided with regards to current terms - i.e; charges are subject to UTCCR but deemed not penalties - and that he stated at the end of the trial whatever his thoughts on current terms would closely resemble his thoughts on historical terms that he'd announce soon after the judgement??

[Amethyst]

Re: OFT v Banks 'win / win' result that worries me

He did indeed...if he does state historic terms are only subject to UTCCR (which IMO he can only do if he ignores the wording of the old T&C's which I don't think he can do) then they can be assessed for fairness and the cap thing would apply to those too.

[Shazzaw]

Re: OFT v Banks 'win / win' result that worries me

Thinks this is where I'm getting confused then!!

So basically we DO NOT want him to rule that historic terms are subject to UTCCR - correct??

If this is the case though then how we can claim historic charges if they do not come under UTCCR??

Sorry for being a dimwit but am trying to work out what we would be the best we could hope for when Judge Smith gives us his view on historical terms hopefully in the not too distant future.

[Amethyst]

Re: OFT v Banks 'win / win' result that worries me

Yes -we want the historical terms to be deemed penalties for breach of contract (in an ideal world). That makes them unlawful and that means they have to repay the amount in full. (someone shout at me if I'm wrong pls)

[Shazzaw]

Re: OFT v Banks 'win / win' result that worries me

Thanks Ame.

I guess it's massively important then when we get to hear Justice Smiths take on Historical Terms which hopefully he'll deliver soon.

As he has stated for current terms that charges are NOT penalties and that it's assumed this view will cross over to historical terms then we're hoping he'll make a U turn and decide that charges on historical terms ARE in fact penalties??!!

Once again hoping I'm way off the mark here but my worry remains that he'll be stating that historical charges are not penalties also and thus cannot be reclaimed.

Thanks ago for your thoughts though.

Shazza

[Amethyst]

Re: OFT v Banks 'win / win' result that worries me

lol think I'm as confuddled as you are but yes you are right.

shall I shout some other peeps see if they have an opinion on this?

[EXC]

Re: OFT v Banks 'win / win' result that worries me

I'm as confused as anyone but I see no reason why, if historical T&Cs are deemed unfair under UTCCR that they can't also be deemed as penalties.

[Shazzaw]

Re: OFT v Banks 'win / win' result that worries me

lol also!! Maybe the two of us are getting each other more confused with each post!!!

Yes, I must admit that it would be nice to hear some of the VIPS (EXC, Budgie, Tomterm, Cetelco, Argentarius, etc take on things and see whether they agree with the fact that - with regards to possible reclaiming of past 6 years charges - it's looking worrying due to the fact that the ruling has stated that under current terms charges ARE NOT penalties and Judge Smith has indicated that this will also cross over to historical terms thus meaning any charges incurred over the last 6 years are not penalties also and thus cannot be reclaimed!!

[Sapphire]

Re: OFT v Banks 'win / win' result that worries me

Ok I've read this and tbh I'm even more confused than I was before. So here's what I think:

I think that we won't know what the Judge will decide until he decides himself, therefore if he decides to decide in favour then his decision will be something that we will have to decide to abide by, BUT then again we could decide to make a decision to decide to appeal against his decision.

I hope I have made myself clear on this, although I couldn't really decide whether or not to post so I made the decision to decide later.

[EXC]

Re: OFT v Banks 'win / win' result that worries me

it's looking worrying due to the fact that the ruling has stated that under current terms charges ARE NOT penalties and Judge Smith has indicated that this will also cross over to historical terms thus meaning any charges incurred over the last 6 years are not penalties also and thus cannot be reclaimed!!

It was no surprise that he ruled current T&Cs as not penalties as, with the possible exception of Nationwide, all the banks changed their T&Cs to avoid the penalty issues (as well as intrducing the service charge).

Remember that the judge only considered a very small selection of sample historicals (I think it was 1 or 2 per bank) which may indicate that he won't be in a position to make a judgment on penalties at this stage.

[Budgie]

Re: OFT v Banks 'win / win' result that worries me

Judges actual words at the end of the test case were as follows :-

"I have already said that the reason I felt it appropriate to deal with the current terms at this stage, and not deal with the historic terms, is because there is every indication that to some extent my findings will translate readily to a significant proportion of the historic terms, and
that, while nothing is certain, might well lead to decisions on the historic terms being made in very short order, within a month one would certainly hope. I can't go so far as to say that necessarily they will translate to all the historic terms, and one will have to take stock as to what the residue is, how significant they are, and the residue is in terms of number of accounts and customers involved, and the management of the residue can only be considered at that stage."

I think the key words are "there is every indication that to some extent my findings will translate readily to a significant proportion of the historic terms, and that, while nothing is certain, might well lead to decisions on the historic terms being made in very short order"


I truly believe that the Judge has played things straight with everything so far. It is no real surprise that he found the present terms of the banks to be both in PIL and not capable of being penaltys. After all, that is why the Banks frantically changed their terms and conditions once the test case was announced, so as to try to avoid the penalty issue, the PIL issue and the relevance of UTCCR1999.

I honestly think that at the time he made this statement the Judge could not have spent too much time studying the historic terms basically because of the sheer volume of work involved in getting to grips with the issues in relation to the present terms. I tend to read his above words in the context of thinking that after giving his initial judgment he might then be able to more easily make decisions regarding the historic terms. I honestly don’t think he was necessarily implying that the same decisions would automatically be carried back from the present terms to the historic terms, that’s why he said “while nothing is certain”. He would certainly be able to apply some of the same argumenatative tests to the historic terms as he has applied to his analysis of the present terms. However that doesn’t mean he will reach the same decisions, basically because there are some rather significant changes between the historic terms and the ones recently issued.

So to summarise we just don't know what that judgment is likely to be as far as historic terms are concerned. We can only speculate, the only person who does know at the moment is the Judge and even he may not have yet made his decision.

Personally I suspect that the decision with regard to UTCCR 1999 will be the same as for the present terms. I suspect that the Banks may lose the PIL argument for some but not all historic terms. I also think that we stand a good chance of winning the penalty argument for at least some of the standard bank accounts based on historical terms and probably winning it for all of the very basic bank accounts.

When will the Judge actually let us know his thoughts on the Historical terms? It all points to either just before or even at the case Management Conference scheduled for the 22nd May.

I don’t know how EXC feels but maybe we should do some discrete lobbying with the OFT, to try to see if we can get any indication at all as to whether the OFT are pushing for these additional judgments to be issued prior to the Case Management Conference on 22nd May. The only way that stays will be lifted in the County Courts is after these judgments have been handed down. I am sure that the OFT’s main thrust at the moment will be in analysis of the judgment relating to the present and future terms and how they will be arguing against the inevitable appeals to be raised by the Banks. I think any talk of deals being done behind the scenes is unreasonable. The OFT have won the victory they required, as far as the UTCCR 1999 and present terms are concerned, why should they compromise.

Budgie

[EXC]

Re: OFT v Banks 'win / win' result that worries me

I don’t know how EXC feels but maybe we should do some discrete lobbying with the OFT, to try to see if we can get any indication at all as to whether the OFT are pushing for these additional judgments to be issued prior to the Case Management Conference on 22nd May. Budgie

My feelings are that they won't give us any indication at all. Lets not forget they are a government department, albeit non-ministerial, and civil sevants are bound by all sorts of disclosure restraints - not least on the subject of commercial litigation.

However I do think that we could - on behalf of the campaign as a whole - formally submit a list of our concerns and what issues we feel need addressing ie basic accounts. I doubt whether we'd gleen anything from it but it could be a constructive exercise.

[scoobydoo]

Re: OFT v Banks 'win / win' result that worries me

Do we know if anyone in the past has ever had a letter form a bank in the uk calling them penalty charges? something in the back of my mind seems to ring a bell about a customer getting a letter using this wording and OTR we were commenting how can they deny that they are penalties when they have put it in writing. Dont think I would be able to find it now - and the bank would probably blame some minion for using the icorrect wording - but it was just a thought.