IN THE STOCKPORT COUNTY COURT Claim No 7SK***** B E T W E E N:
KURT HAMSTER
Claimant
and THE ROYAL BANK OF SCOTLAND PLC
Defendant
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SKELETON SUBMISSIONS OF THE DEFENDANT
FOR THE HEARING ON 13 SEPTEMBER 2007
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1.On 13 April 2007, the Claimant (Mr Hamster) issued a claim for the repayment of £1,888.71 in unauthorised overdraft charges from the Defendant (‘RBS’). He claims that those charges are unfair under the Unfair Terms in Consumer Contracts Regulations 1999 and/or are a penalty.
2.On 15 August 2007 District Judge Clegg ordered that Mr Hamster's claim be stayed pending the outcome of Office of Fair Trading v Abbey National & Others (2007 Folio 1186) (‘The Test Case’).
3.On 21 August 2007 Mr Hamster applied for that stay to be lifted.
4.These are the skeleton submissions of RBS, in opposition to that application
5.It is respectfully submitted that the court should not make the orders sought by Mr Hamster. The stay should continue, pending the outcome of the Test Case, which will be binding on this court. Further, no injunctions should be made. The stay ensures that Mr Hamster’s claim is dealt with in the most orderly, proportionate and just manner. It does not prejudice his position.
6.Following a large number of complaints against banks in relation to unauthorised overdraft charges, the Office of Fair Trading (‘The OFT’) launched an investigation into the fairness of those charges.
7.On 27 July 2007 the OFT commenced proceedings in the Commercial Court, under CPR Part 7, against eight banks. The Test Case was commenced following two agreements (‘The Agreements’) between the OFT, the eight banks, and the Financial Services Authority (‘The FSA’).
8.The Test Case will lead to the Commercial Court ruling on various issues concerning the applicability of the Unfair Terms in Consumer Contracts Regulations 1999 to each of the eight banks’ current account agreements and charges.
9.On 31 July 2007 David Steel J ordered that the trial of the Test Case be expedited. A Case Management Conference will be held on 12 October 2007, and the trial has been listed for 14 January 2008, with a time estimate of 8 days.
10.The FSA and the OFT have decided not to progress complaints about unauthorised overdraft charges until the outcome of the Test Case is known.
11.In the Agreements, the OFT recognised that stays of the individual claims against the eight banks were desirable. Paragraph 1.6 provides:
The OFT recognises the desirability of achieving a fair and orderly resolution of the relevant issues and will not object to any request or application for a stay of other court proceedings between RBSs and their customers concerning the Relevant Terms and/or Relevant Charges.
12.In an email of 27 July 2007 to the Designated Civil Judges, Moore-Bick LJ, the Deputy Head of Civil Justice stated that he would be surprised if a stay, pending the outcome of the Test Case, did not commend itself in most of the individual cases.
13.As the court is no doubt aware, County and Mercantile Courts have now stayed the majority of individual claims, pending the outcome of the Test Case.
14.As in almost all unauthorised overdraft charge claims, the legal issues that will fall to be determined in this case are the same as those that will be determined by the Commercial Court in the Test Case. It is in the best interests of justice that the individual claims are stayed until the outcome of the Test Case. This allows a specialist court – following submissions from the OFT and the various banks – to determine the issues.
15.Mr Hamster has not adduced any evidence, or given any reason, that properly distinguishes his case from the majority of other unauthorised overdraft charge claims. He does not allege that the stay itself will cause him any special detriment. In the evidence in support of his application, he claims that the stay should be lifted because it:
15.1.infringes his rights under Article 6 of the European Convention on Human Rights, because it will prevent his claim being determined within a reasonable time;
15.2.is contrary to the overriding objective, because it is disproportionate to the sums involved;
15.3.favours the bank;
15.4.was made ex parte and was therefore ‘carried out in an inappropriate and biased manner.’
In fact, a stay is in accordance with the overriding objective and Article 6, and is in the best interests of justice.
16.The threshold for a breach of Article 6 through unreasonable delay is high. In Dyer v Watson [2002] UKPC D1, Lord Bingham stated:
In any case in which it is said that the reasonable time requirement [in Article 6] … has been or will be violated, the first step is to consider the period of time which has elapsed. Unless that period is one which, on its face and without more, gives grounds for real concern it is almost certainly unnecessary to go further, since the convention is directed not to departures from the ideal but to infringements of basic human rights. The threshold of proving a breach of the reasonable time requirement is a high one, not easily crossed.
17. Mr Hamster’s claim does not meet this threshold. There is every likelihood that Test Case, and Mr Hamster’s claim, will be finally determined within a reasonable time of the issue of his claim (13 April 2007). The trial of the Test Case will be conducted in January 2008, and it was a term of the Agreements that any appeals would be conducted expeditiously
18.As in the vast majority of individual unauthorised overdraft claims, the overriding objective favours the continuation of the stay of Mr Hamster’s claim.
19.His claim may only be for a relatively small sum, but its determination will require the court to decide upon complex legal issues. As stated above, those issues are exactly the same as fall to be determined in the Test Case.
20.The preparation and hearing of the arguments on the legal issues for Mr Hamster’s claim would require extensive preparation and considerable judicial time. This would arguably be disproportionate to the amount claimed by Mr Hamster. The Test Case offers the most efficient and proportionate means to resolve those complex legal issues in an expeditious manner.
21.In the Test Case, counsel for the OFT will put forward the complex legal arguments that Mr Hamster would otherwise have to make in this case. Therefore, contrary to Mr Hamster’s argument, the Test Case will ensure equality of arms between him and RBS.
22.The continuation of the stay minimises the risk of inconsistent judgments. If a different decision were reached in this case to the Test Case there would be probably be an appeal. This would unnecessarily increase the costs of Mr Hamster’s claim.
Other issues 23.The lack of any evidence of substantial prejudice caused by the stay shows that Mr Hamster’s application is premature, if not ill founded. Should the situation change while awaiting the outcome of the Test Case it will be open to either party to apply for the stay to be lifted, or for injunctions to be imposed, on the basis of concrete facts.
24.In the meantime, Mr Hamster is protected from any prejudice by his claim for interest. He will also be able to seek to amend his claim, or bring further claims, for any further charges that may be imposed on his account.
25.In previous correspondence Hamster has referred to s.187 of the Social Security Administration Act 1992. This is neither relevant to the issue of a stay, or this claim as a whole. It concerns the assignment or charging of certain benefits.
26. Mr Hamster seeks, in the alternative, for the court to continue the stay, but subject to injunctions in relation to (a) further penalty charges on his account; (b) the closure of his account; and (c) adverse credit references. It is submitted that the tests for making those injunctions are not met in this case.
26.1.There is no evidence that a money remedy would be inadequate; any further unauthorised overdraft charge related losses by Mr Hamster should be capable of financial assessment.
26.2.The status quo is that RBS is entitled to take various actions, and levy charges, subject to the terms and conditions of the account. It is this position that should be preserved, and not altered by the making of the proposed injunctions.
26.3. Mr Hamster has not offered an undertaking to pay any further unauthorised overdraft charges, and any other damage suffered by RBS, if he were to obtain the injunctions and RBS were to win the Test Case.
26.4.In relation to the account closure injunction: Mr Hamster has not adduced any evidence to suggest that his account might be closed. Nor has he identified a cause of action that prevents RBS from doing so upon reasonable notice.
26.5. In relation to the adverse credit reference injunctions: Mr Hamster has not adduced any evidence to show that there are already adverse credit entries against him, or that any are likely to be made in future. He claims only that RBS remains ‘at liberty’ to make such entries. But if RBS made such a reference, in relation to the disputed charges, it would arguably be in breach of the Banking Code. This is the one that dropped him and the RBS in the s**t
27. In relation to the injunctions generally, RBS is already adhering to requirements placed on it by the FSA, the OFT and the Financial Ombudsman Service. None of those bodies, at present, regard it as necessary to impose, or seek to impose, any restrictions on RBS in relation to standard unauthorised overdraft claims.
The Hamster v RBS Stockport CC - Application for removal of stay.**Lost** 
Skeleton submission of the RBS 
Re: The Hamster - Application for removal of stay.**Lost** 
