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Proposed Group Litigation Orders (GLOs)
Important: If you are interested in becoming involved in a Group Litigation Order, please reply to this post stating:
·which bank (or banks) you have a claim against
·whether you are eligible for legal aid (see below)
Please do not post any additional information at this stage, as you may be contacted later by private message for any additional information.that we need.
The issue of bank charges, their lawfulness and their continued use has been completely overtaken by the OFT test case proceedings. Attempts by individual consumers to find redress, either through the banks’ own complaints procedures, or through the courts, have now ground to a halt whilst the test case continues and whilst the FSA waiver remains in place.
Although the OFT and the FSA are undertaking serious and much needed work through the test-case and the PCA market study, there are legitimate concerns within consumer circles that the interests of the consumer are not being adequately represented or protected.
The judgment of Smith J. makes it clear that bank charges are subject to the requirement of fairness, and the OFT has now written to the banks with their preliminary conclusion that these charges are unfair. Nevertheless the banks are still imposing these charges with impunity and routinely ignoring consumer complaints, citing the FSA waiver and the test case as justification. Without any proper redress through the court system, consumers are becoming increasingly frustrated by this apparent unequal treatment, particularly those consumers suffering from financial hardship.
Given the current financial crises affecting the UK banking industry, it is unsurprising that the banks are not seeking a quick resolution to the issue of bank charges. There are already in excess of 65,000 “bank charge” claims in the court system, and OFT figures suggest that in excess of 12 million people could have a claim against their bank; the final compensation figure could be well in excess of £10billion.
Even when the test case is fully resolved some time in late 2009 or early 2010, there will remain a number of outstanding legal issues, since neither the OFT nor the FSA have any statutory powers to bring proceedings on behalf of consumers. These issues include, but are not limited to:
And whilst the test case continues, there are pressing concerns for many claimants:
With legitimate concerns that the consumer’s interests are not being properly advanced or protected, it is essential for consumers to be properly represented. Whilst no individual could be expected to have the resources to fund their own legal team, collectively consumers could have a much greater say in how their interests are protected through the use of Group Litigation Orders.
A Group Litigation Order (‘GLO’) is an order made by a Court to manage claims which give rise to common or related issues of fact or law (the ‘GLO issues’). Essentially, one claim is used as a test case to deal with the GLO issues, and all claims which are proceeding on related issues of fact or law are attached to that claim by way of a Group Register. Any ruling that is made in respect of the test case will be binding on all other cases on the Group Register. This is sometimes referred to as a “class action”.
The benefits of GLOs in these cases against the banks are substantial: a GLO claim is automatically assigned to the multi-track, and so funding can be obtained from the Legal Services Commission if a sufficient number of claimants are eligible for Legal Aid. This would allow for proper representation by solicitors and enable a litigation team to be put together for consumers. Preliminary discussions have taken place with the Legal Services Commission and funding could, in principle, be granted for such GLOs. This would allow consumers to have their own interest advanced properly by a substantial legal team, and ensure that no deals are struck behind closed doors by the banks and the regulators without their involvement.
But before more detailed discussions and preparatory steps can be taken, it is important to establish whether there is sufficient interest from claimants for these GLOs to go ahead. There have been indications from the Courts that this may be the most sensible way to deal with the tens of thousands of claims already in the system, and the hundreds of thousands that may well follow. It should be noted that a Court has powers to order such a GLO of its own initiative and can add additional claimants to the Group Register. It may be better, however, for such initiative to come from consumers themselves.
To that end, please take a moment to consider the following:
If you have already issued your claim, would you be interested in joining a Group Litigation Order?
If the answer to that question is Yes, please reply to this post stating:
·which bank (or banks) you have a claim against
·whether you are eligible for legal aid (see below)
Please do not post any additional information at this stage, as you may be contacted later by private message for any additional information. Please note there is a separate post for discussion of the proposed GLOs, so please do not post any comments or discussion within this post.
Once the data from this poll has been collated, a further post will set out progress on the current discussions with solicitors and the Legal Services Commission in respect of GLOs.
Legal Aid criteria. If you can answer YES to both of the following criteria, you should be eligible for legal aid:
When calculating your capital, you should include any equity which is over £100,000 in your property (though you can deduct up to £100,000 for any mortgage on that property).
Thank you for taking the time to read this information and responding to this post. Hopefully, with your support, we can join enough claimants together on GLOs to properly protect the interests of consumers and to ensure a fair result on compensation for these bank charges.
Thomas Brennan
Barrister
Atlas Chambers
Important: If you are interested in becoming involved in a Group Litigation Order, please reply to this post stating:
·which bank (or banks) you have a claim against
·whether you are eligible for legal aid (see below)
Please do not post any additional information at this stage, as you may be contacted later by private message for any additional information.that we need.
The issue of bank charges, their lawfulness and their continued use has been completely overtaken by the OFT test case proceedings. Attempts by individual consumers to find redress, either through the banks’ own complaints procedures, or through the courts, have now ground to a halt whilst the test case continues and whilst the FSA waiver remains in place.
Although the OFT and the FSA are undertaking serious and much needed work through the test-case and the PCA market study, there are legitimate concerns within consumer circles that the interests of the consumer are not being adequately represented or protected.
The judgment of Smith J. makes it clear that bank charges are subject to the requirement of fairness, and the OFT has now written to the banks with their preliminary conclusion that these charges are unfair. Nevertheless the banks are still imposing these charges with impunity and routinely ignoring consumer complaints, citing the FSA waiver and the test case as justification. Without any proper redress through the court system, consumers are becoming increasingly frustrated by this apparent unequal treatment, particularly those consumers suffering from financial hardship.
Given the current financial crises affecting the UK banking industry, it is unsurprising that the banks are not seeking a quick resolution to the issue of bank charges. There are already in excess of 65,000 “bank charge” claims in the court system, and OFT figures suggest that in excess of 12 million people could have a claim against their bank; the final compensation figure could be well in excess of £10billion.
Even when the test case is fully resolved some time in late 2009 or early 2010, there will remain a number of outstanding legal issues, since neither the OFT nor the FSA have any statutory powers to bring proceedings on behalf of consumers. These issues include, but are not limited to:
- What can be recovered by consumers? The full charges, the interest on those charges? What about any consequential losses, such as a resulting bankruptcy or the repossession of a family home?
- What rate of interest can consumers reclaim: the statutory 8%, compound interest or the contractual interest that the banks have imposed?
- Does the Statute of Limitations and the 6-year rule apply to bank-charge claims?
And whilst the test case continues, there are pressing concerns for many claimants:
- Can consumers facing financial difficulty bring an injunction to stop these charges? Can all consumers?
- Can the stays on cases involving financial hardship be challenged?
- Can the ongoing FSA waiver be challenged in light of recent developments?
With legitimate concerns that the consumer’s interests are not being properly advanced or protected, it is essential for consumers to be properly represented. Whilst no individual could be expected to have the resources to fund their own legal team, collectively consumers could have a much greater say in how their interests are protected through the use of Group Litigation Orders.
A Group Litigation Order (‘GLO’) is an order made by a Court to manage claims which give rise to common or related issues of fact or law (the ‘GLO issues’). Essentially, one claim is used as a test case to deal with the GLO issues, and all claims which are proceeding on related issues of fact or law are attached to that claim by way of a Group Register. Any ruling that is made in respect of the test case will be binding on all other cases on the Group Register. This is sometimes referred to as a “class action”.
The benefits of GLOs in these cases against the banks are substantial: a GLO claim is automatically assigned to the multi-track, and so funding can be obtained from the Legal Services Commission if a sufficient number of claimants are eligible for Legal Aid. This would allow for proper representation by solicitors and enable a litigation team to be put together for consumers. Preliminary discussions have taken place with the Legal Services Commission and funding could, in principle, be granted for such GLOs. This would allow consumers to have their own interest advanced properly by a substantial legal team, and ensure that no deals are struck behind closed doors by the banks and the regulators without their involvement.
But before more detailed discussions and preparatory steps can be taken, it is important to establish whether there is sufficient interest from claimants for these GLOs to go ahead. There have been indications from the Courts that this may be the most sensible way to deal with the tens of thousands of claims already in the system, and the hundreds of thousands that may well follow. It should be noted that a Court has powers to order such a GLO of its own initiative and can add additional claimants to the Group Register. It may be better, however, for such initiative to come from consumers themselves.
To that end, please take a moment to consider the following:
If you have already issued your claim, would you be interested in joining a Group Litigation Order?
If the answer to that question is Yes, please reply to this post stating:
·which bank (or banks) you have a claim against
·whether you are eligible for legal aid (see below)
Please do not post any additional information at this stage, as you may be contacted later by private message for any additional information. Please note there is a separate post for discussion of the proposed GLOs, so please do not post any comments or discussion within this post.
Once the data from this poll has been collated, a further post will set out progress on the current discussions with solicitors and the Legal Services Commission in respect of GLOs.
Legal Aid criteria. If you can answer YES to both of the following criteria, you should be eligible for legal aid:
- Income: is your gross income £2530 per month or less, or are you in receipt of Income Support, Income Based Jobseeker's Allowance, Income Based Employment and Support Allowance or Guarantee Credit?
- Capital: is your capital (savings, etc) less than £8000, or are you in receipt of Income Support, Income Based Jobseeker's Allowance, Income Based Employment and Support Allowance or Guarantee Credit?
When calculating your capital, you should include any equity which is over £100,000 in your property (though you can deduct up to £100,000 for any mortgage on that property).
Thank you for taking the time to read this information and responding to this post. Hopefully, with your support, we can join enough claimants together on GLOs to properly protect the interests of consumers and to ensure a fair result on compensation for these bank charges.
Thomas Brennan
Barrister
Atlas Chambers
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