OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

progress isn't it


They amended it last night to read

The template letters and legal advice should be available within the next two weeks via the Free weekly email and via the other free campaigning sites including the Consumer Action Group, Penalty Charges and Legal Beagles. The trio will also contribute to the process.

[LuggerBugs]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

WOOHOO!!!

[EXC]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Worth having a listen to today's Money Box on the judgment and beyond where Mike Dailly talks about the potential of sec 5 and the work on the new POCs.

Also Angela Knight who nevers fails to amaze. She begins by advising people to ''read the case'' but then her contention that the issue of sec 5 was ''dealt with'' and even ''decided'' in the test case clearly suggests that she herself hasn't. She only would have needed to have read the Supreme Court press release to know that ''...the charges might still be open to assessment by the OFT on other grounds under regulation 5''.

BBC iPlayer - Money Box: 28/11/2009

It's the first time I've heard a recording of Lord Phillips reading out the judgment and it brought back some spooky memories of when I turned round to Amethyst in the court room thinking 'did he really just say that?' while she was desperately changing a pre-prepared post on her phone to the LB Twitter page from ''We won!'' to ''We lost!''.

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

BBC - BBC Radio 4 Programmes - Money Box

Mike Dailly & Angela Knight on Moneybox

(Paul Lewis was sitting in front of meeeeee lol)

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

SNAP !

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Legal Beagles - Transcripts House of Lords Appeal Hearing

If you want to read the banks arguing FOR cross subsidisation in the HOL hearing.

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Thought this was a nice post on MSE

alnewhaven
MoneySaving Newbie


Join Date: Sep 2008
Location: Edinburgh
Post Count: 3
Thanked 3 Times in 1 Post



Been following these threads for the last few days. Should state firstly that I used to work for one of the banks (until 1997); one of my duties at various times included reviewing accounts daily and taking the decision whether or not to pay items. Initially no charges were levied but following the introduction of 'free' accounts, then an Unpaid charge was introduced. Some discretion was allowed at that time and I have to say I could never see the purpose in refusing to pay a customers direct debit/cheque which was causing a Ł20 excess over any agreed limit; but then charging him Ł25 to do so? (Figures used purely as examples) You're not helping the customer; you still have to look at the same excess every day until he clears it and ultimately if you force him into increased debt through these charges, you amy never get the money back anyway.
Seems to me that that element of using discretion to make that judgement has gone. Yes, there is a case for levying a charge for 'bouncing items' but rather than slap it on the account immediately, add it to the accrued charges which are now notified to the customer in advance ( they didnt used to do that until a few years ago). At least the customer would have the opportunity to plan for it and it would avoid the iniquitous scenario of incurring a further charge simply because of charges

[natweststaffmember]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

He nearly said MoneyB....ox just after speaking with Angela Knight. I think she did talk that.....

[Knight_Templar]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Ame, what new PoC should I use and would that be on form N244? You mention that soemone can represent me, is that an offer???

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

lol you wouldnt want me representing you in court even if I could, I'm ridiculously shy.

You can nominate a friend of relative I believe to attend on your behalf as long as you arrange it with the court first.

No need to do anything yet, waiting on proper new POCs and the OFT's decision which could change everything yet again, so yep just be patient for a week or so.

[Knight_Templar]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Patient??? You do realise I'm a man

If I have no one to represent me what is the next best thing? Just in writing?

I know, I know, wait and see!!!!

I would like to echo the thanks of those gone before me, you have kept us informed and buoyant. Thank you.

[Emerald]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

progress isn't it


They amended it last night to read

So is this a fresh start? Will all 3 really be working together or is it something CAG has been forced to say and is just so they can get the support of cox and dailly? I so hope it is real -if it is makes al lthe setbacks and infighting worthwhile in a strange kind of way.

[Budgie]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Just bumping Judgemental's post up again, mainly as a reminder for me to do some figure work on the possibility of a resurrected penalty argument.

In addition to the UTCCR section 5 argument, the banks defence opens two more doors.

First, the ‘penalty’ argument has not been challenged beyond the High Court. The Banks original defence to this was that ‘their charges are a fair reflection of their costs’. This has now of course been blown out of the water by their admitting the charges are an integral part of the services. . . . is it not possible that the OFT legal team have actually been very smart by not appealing that decision? In anticipation that the Banks would have to say things to prove otherwise if they were to be successful in defending the UTCCR argument, so a stronger ‘penalty’ challenge could be brought at a later date if necessary.

Second, the CCA has the ‘unfair relationships’ provisions . . . one person in default is paying for another persons free banking would stand a very good chance of being deemed an ‘unfair relationship’, courts would then have the power to re-write the agreement.

The Sale of Goods Act which applies to services may now come in to play, in addition to a potential referral to the Competitions Commission, it looks like the defence used to get the ruling in the banks favour will now turn around and kick them in the bo**ocks (for want of a better phrase).

[Budgie]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Also just bumping up this extract from the original Smith High Court judgment again ( mainly for my own reference )

This was where Smith was referring to the additional declarations required by the banks in relation to good faith aspect ( The good faith reference referred to in regulation 5 ). He decided, in his judgment, to refuse to give the requested declarations.

It is clear that the "unfairness aspects" referred to in regulation 5 are most likely only determinable with reference to the contract terms in force at the date of commencent of the contract.

This effectively makes each person's claim an individual claim based on the particular bank in question and the particluar version of the contract that was in force at the date the contract commenced.

It is plainly obvious therefore that if the regulation 5 argument holds water, which I am positive it does, then it is certain that any litigation is going to have to be 100 % focussed on historic terms. It would naturally follow that a victory for us would ensure that the terms are non binding on the Customer ( regulation 8 ) from the date of commencemnt of the contract and therefore full charges refunds would be highly likely.

Good faith and section 5 were not covered again in either the Appeal Court or the House of Lords hearings.


442. The Banks’ argument that I should grant the third declaration faces a further difficulty. As I have mentioned, in the First National Bank case (cit sup at para 13, and see too para 20) Lord Bingham made it clear that “fairness must be judged as at the date the contract is made, although account may properly be taken of the likely effect of any term that is then agreed and said to be unfair”. The question therefore arises when in the circumstances of the present case and the current account contracts between a Bank and an individual customer the contract is to be taken as being made. One obvious answer might be that it is made when, possibly many years ago (maybe before 31 December 1994, the date referred to in article 10 of the Directive), the Bank agreed with the customer to operate a current account. But there is an equally obvious objection to this: the Relevant Terms that are the subject of the issues between the parties were in many cases not included in the contract when it was first made, but were introduced into it at some later date (whether by way of consensual variation or by way of what is called in Chitty on Contracts, 29th Ed (2004) at para 22-039 a “unilateral power of variation” exercised by the Bank). Assuming that the fairness of the Relevant Terms is not to be assessed as at a time before they were introduced into the contract between Bank and customer, it does not necessarily follow that the fairness is to be assessed when they were so introduced rather than at some later date, for example when the parties make what I have termed a specific contract, such as that explained in Paget’s Law of Banking 13th Ed (2007) at para 7.1 to which I referred at paragraph 417 above.

443. This question was not identified in advance as one that I was to consider at this hearing of preliminary issues, and not one with which the parties dealt in their written submissions. Indeed, I think that it is fair to say that its potential importance and the difficulties that it entails were not identified by the parties before I raised it during the hearing. Although some of the Banks made some oral submissions about it, in the end the Banks told me that its implications were of such potential importance that they did not wish me to answer it until they had had the opportunity to consider it further. The OFT, for its part, made no submissions as to the date as at which any assessment of fairness is to be made in the circumstances of this case, and did not dissent from the Banks’ request that I should not decide the question in this judgment, reserving its position as to whether it should be decided by me after further argument.

[EXC]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

This is an extract from the House of Lords (aka Supreme Court) transcripts where Baroness Hale ponders the prospect of the banks winning and in that scenario clearly encourages the OFT's Jonathon Crow to have another go (presumably using section 5), explains to him how to do it and actually seems to be saying that their is an imbalance. My emphasis at the end.

BARONESS HALE: I was thinking more of the cross-subsidy, a range of different charges operating in different ways, which is not uncommon. It is a feature that bank accounts do share with some other contracts.

MR CROW: Yes.

BARONESS HALE: That, in a sense -- what is being said is partly that the charges for the unpaid -- insufficient funds charges are too high in themselves, but also they are too high, even if they are looked at as part of a general package. At least that might be what is being said.

MR CROW: What is being said provisionally by the OFT, it not yet having reached a final view, is that the way -- there are two elements in the charges that need to be kept in mind. One is their amount, but the other is the triggering event that causes them. It is the interaction between those two that gives rise to concern, which is why it is not just a question of price control, which is what we keep having chucked at us; it is the way in which these clauses operate that causes concern, which is exactly what issue 2 is all about. It is not a sort of structural objection to the "free-if-in-credit" model. What it is is a concern over the manner in which this aspect of the regime is currently operating, given the various elements that we will go through in paragraph 81 of our case. So it is not just a matter of price, but, equally, it is not so expansive as a sort of a structural challenge to the whole of the "free-if-in-credit" model as a matter of principle. That is not what is under review. It is the unauthorised overdraft charges by reference to, as I say, the triggering, the way they work and the amount.

BARONESS HALE: No doubt you are going to come on to that in more detail. Obviously, although, of course, the focus is on terms, it is the effect of the various terms, the combination of terms -- you could be looking at more than one term in order to look at something, which is why I put the question to you.

MR CROW: Yes.

************************************************** ************************************************** ********************

MR CROW: Thank you, my Lord. Could I pick up a couple of loose ends from this morning? First, my Lady Hale's question, if the OFT wanted to undertake, in a sense a structural challenge. Having taken instructions, we have nothing to add to the response I gave, which is that the remit which is given to the OFT under the directive is a term-by-term targeted challenge, not an opportunity for a structural challenge.

BARONESS HALE: You couldn't take a group of terms and say, "Taken together, do these pass the fairness test?"

MR CROW: One would have to consider each term in the context of the contract as a whole. I guess one could have a several challenge, but I think one wouldn't end up -- it is getting too abstract -- with a collective challenge to the contract as a whole. It would have to be a challenge to the terms severally.

BARONESS HALE: There are several terms that say you pay this for this, and this for this, and this for this, and put together that tots up to something that produces a significant imbalance. That would seem to me to be an extremely sensible sort of enquiry to be made and one which would not lead to some of the deleterious results that others might.

MR CROW: We will certainly give some thought to that. I am grateful.