Lloyds victory in Birmingham
It is important to get this in perspective.
This judgment was produced by a District Judge in a
County Court. This means that the judgment is not binding on any other court or on any other judge in the country. Of course there might be some judges who may be influenced by it and no doubt Lloyds will be encouraged.
May people and the press are saying that it is the first time that a case has actually gone before a judge and this first time, a judge has immediately came down in favour of the bank. This is not true. This is not the first case. Many cases have come before the courts in similar circumstances.
The bank - as on many occasions before - failed to submit its bundle. It appeared to lose
interest. They didn't make the expected offer of settlement. On the day of the hearing, they didn't turn up.
This has happened many times before with many banks and credit card companies. In every case previously the judge
dismissed the defence and found in favour of the claimant.
This case was different because the judge actually conducted a line of questioning. He secured admissions from Kevin on several points and eventually produced a judgment which was in favour of the bank.
There is no reason why other judges should follow this and conduct similar cases in a similar way.
In his judgment the judge admits that really he has been provided with insufficient evidence by either of the parties. He agrees that he does not even have a copy of the current account contract.
He then goes on to say that, taking a relaxed view of the rules of evidence he decided to find out what the banks T&Cs were for himself. He did this by surfing the Internet. The Judge states that he was unable to discover any further information on the bank's website and was therefore obliged to make a decision based the scant information available to him and on the basis of certain assumptions and inferences which he made during his reasoning.
Very significantly the judge did not particularly seek to look behind the contract at what really happened in the real world of personal banking. The judge felt that this was not necessary as he felt that the contract worked perfectly well as stated. This means that when he made his decision, it was based purely on the written contractual terms as Lloyds bank claim them to be.
A particular problem with this in my view is that by accepting without question the bank's interpretation of the current account contract the judge opens the door to any organisation to get round the law of penalty charges merely be producing a document which describes them as a "service".
The judge did not discuss the fact that for over one hundred years many senior judges have recognised that parties do try do circumvent penalty charge law by cloaking their penalties as services. Even the OFT in their April 2006 report specifically warned banks against the practice of disguising penalties as services.
Despite this, many of the banks have done exactly this and this Birmingham Judge appears to condone the practice.
A particular weakness of the judgment is that it ignores the intended effect of consumer legislation such as UTCCR 1999. Consumer legislation generally is intended to imply terms into contracts in order to redress the balance between greatly unequal bargain partners - the banks one hand, and the consumer on the other. The judge appears to have applied very strict business principles. He appears not at all to considered the inequality of the bargaining parties which is such an important aspect of modern Contract Law.
If this judge's ruling is allowed to stand or is followed by other
County Court judges then it will render UTCCR and other consumer legislation completely useless because any powerful organisation will be able to avoid it simply by having the right wording in their T&Cs.
If for only this reason I do not think that the judgment in Berwick v lloyds will have any lasting effect.
What should you do right now?
I think that the clear lesson here is that claimants should start taking their claims rather more seriously then they have so far.
Claims need proper preparation and ordinary litigants in person need to let other know that their claims are going to court.
This victory by Lloyds is discouraging but there is no reason yet to suggest that people should not stop claiming their money back.
Just start taking it seriously and prepare in good time.
We've said it often before - now here's the proof.
Lloyds victory in Birmingham 
