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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.
Please don't pm me about specific questions unless you have posted and it has not been dealt with or unless the matter is confidential. Please include a link to the post you want me to look at. If you have received a defence, contact me.
Advice & opinions of BankFodder, The Consumer Action Group and The Bank Action Group are offered informally, without prejudice & without liability. Use your own judgment. Seek advice of a qualified insured professional if you have any doubts.
I agree with you BF I have been prepared to go to court all along. yesterday, by coincidence, I had to go to a county court as a witness and actually saw a court bundle in use. This was a great help to me as a layperson. This was one of many cases heard yesterday and I think the judge must have had a bee in his bonnet about bank charges being reclaimend. I know a couple of other smug people who have never had money problems with the same attitude. We should just all carry on and be prepared to go to court and state our case clearly. I think this judge may rue the day he made this judgement, I think it will come back to haunt him for some time.Hilary
We should just all carry on and be prepared to go to court and state our case clearly. I think this judge may rue the day he made this judgement, I think it will come back to haunt him for some time.Hilary
It was on Radio 4 yesterday with martin Lewis.
go to BBC - Radio 4 - Home date was tuesday 15th May then click on P in the then find P again and click on the programme PM LISTEN link the BBC radio player will come up after about 30 seconds, then use the time increments of 15 mins and 1 min to take the timing to 48 mins and listen in.
Martin Lewis was very positive.
It seems that this was sloppy and ill-judged and lazy all round, particularly in terms of the judgement and elements of the claim.
Just one question, as presentation of the Bank's Ts and Cs appears critical to any claim, specificall in refuting the service as oppolsed to penalty argument, are full Ts and Cs available anywhere on this site?
I am now very very scared, I have had numerous problems with Lloyds on my business account and the acknowledgement of service was 18 April therefore today (16th May) is the deadline day. I am just so scared that as I have a very very poor relationship with Lloyds they will do the same to me, I have followed every instruction on this very very helpful site and I just hope that I win my claim which is for £4900. Lloyds have been very unprofessional bankers to date. Although I recently had two very small successes, they 'advised' me to take out a Business Loan for cash flow and to pay off the overdraft two years ago, we recently paid this off and then I filed a claim to reclaim the PPI as self employed/directors, after many letters we actually received this money back. I then wrote a letter of complaint (used a template from here for guidance) as they had closed the account without notice on the day they received my lba for charges, I received an apology and a £100 for goodwill! I just hope they dont use my case for bank charges as a test case!
Personally I have my account contract, which isn't up to much and dates from 1993. My issue is when I opened my account I accepted penalty charges, which at the time were NEVER declared as a service because they were just £10. My main problem now and why I am suing Lloyds TSB is because over time they have increased this charge to £25, then £35 and it fluctuates even for the same bounced direct debit or what have you. I did not agree to this charge increase, and now I am aware of my rights I want to know how they have calculated this amount. This is what I will challenge in court, and ask for greater disclosure on.
I also refute the suggestion that any such service could be worth £35. They refuse to make a payment on my behalf and then have the cheek to call it a 'Service' and snatch £35 from my account for the pleasure!
I still don't see how the banks can get away with it.
deadthings, you are in a very strong position now, as I am with HSBC. If you have a copy of your original contract, you have evidence to show that charges for the same thing were once applied as penalty charges, and are now applied as fees. You can now refer to the report on 'cloaking penalty charges' (anyone got a link to that?) and challenge Lloyds to explain how their change in strategy differs from this.
Trouble is, you'll have to get them into court.
On a side note, customers of other banks should not be surprised if they receive a revised T&C's leaflet over the next week or so explaining about their new "services & fees"..
deadthings - could we have a scan of your account contract please.
Please don't pm me about specific questions unless you have posted and it has not been dealt with or unless the matter is confidential. Please include a link to the post you want me to look at. If you have received a defence, contact me.
Advice & opinions of BankFodder, The Consumer Action Group and The Bank Action Group are offered informally, without prejudice & without liability. Use your own judgment. Seek advice of a qualified insured professional if you have any doubts.
My take on this is that the judge merely agreed with Lloyds that it wasn't a penalty charge, and some of the fee, could be used to service the account. If thats the case why are accounts marketed as Free Banking?
Surely Llyods have misold the account if this is the case?
Im new to this, bit seeing that the Lloyds TSB ruling went against the claimant it makes me slightly nervous. I have issued a summons to Intelligent Finance and initially did not even consider getting a solicitor, now i am swaying?
Is there any advice that anyone could give to prepare correctly for court?
I am in the process of claiming bank charges back from HSBC on behalf of my son and I do now feel discouraged about yesterday's victory for Lloyds.
It is taking alot longer than I thought - I first requested bank statements back in March and they were here within 3 weeks (they even returned the cheque for £10) so I thought that was a good start. But since then I don't seem to have got very far. After working out the charges of £1,439 plus interest of £317.92 I wrote again requesting a refund this time. I had a reply 2 weeks later from their Service Quality Team at their Leeds branch saying they were looking into the matters raised and they would contact me with a full response when they had completed their investigation (and enclosing their booklet called 'Listening to your comments'). Nothing received since in spite of a further reminder letter sent to them at the Leeds branch three weeks later threatening court action. I now don't know whether to send another letter (but to their Head Office) or to issue court documents to them through Money Claim Online. It costs £120 and I don't know now whether to risk it yet or not. Has anybody out there had any recent success reclaiming bank charges from HSBC and did it have to go to court?
This really is alarming; I’m afraid I don’t take much comfort from the fact that Lloyds won this case without even trying!
Does anyone know whether the claimant intends to appeal this decision? It is of course only then a case gets to the higher courts that it sets a precedent but I think there is little doubt that Lloyds will take great encouragement from it and may perhaps be motivated to start defending. It will be interesting to see what happens over the coming weeks to see what Lloyds do with cases that have already been allocated trial dates. This leaves me feeling very nervous.
If I've helped, please tick the scales at the bottom left of this message!
17th Sept: Found this site!
Lloyds TSB
22 Sept: Subject Access Req. 3 Nov: statements arrived. Charges calulated at:
A/c 1 - £2,178.01 + int of £1,206.54 (18.4% authorised)
A/c 2 - £206.11 + int of £211.07 (18.4%) 7 Nov - prelim. 3 Dec - LBA 13 Dec - £750 offered 23 Dec - £750 credited 28 Dec - rejection letter 2 March - issued 16 April - complained at court failure to forward defence
Halifax
22nd September: Subject Access Request. 4th November: No reply so LBA giving 7 days.
Cap One
22nd September: Subject Access Req. 5th October: Letter saying no record of account! 15th October: Replied telling them to try harder... 22nd October: Subject Access Req acknowledged.
Don't be nervous. Mr Berwick will have the full support of a lot of very experienced people if he decided to appeal. This case was a freak anomaly & the judgement was taken with very little evidence & without even a contract to challenge.
Continue as normal & prepare as best you possibly can.
I agree that this is a bit of a godsend to Lloyds, but only because it will encourage them to continue to be as obstructive as possible, so no change there then!
I hope that Lloyds do start defending, particularly in cases over £5,000 that do not fall within the small claims track, as these require full disclosure as I understand it.
I cannot speculate on the Judge's motivation in this case but his actions do seem perverse. Maybe his haemorrhoids were playing up!
Have heart - I was in court this morning myself and a clever smart solicitor tried to get my application dismissed on the grounds of insufficient detail - I had felt there was enough supplied but in the end managed to get an adjournment - the scales are definitely tipped in favour of the banks/loan companies etc., and it really is tough out there - I took my case hearing very seriously and read everyhthing, typed up masses, spent days on it , but still nearly fell at the first hurdle........
Having now read the draft judgement in detail, it appears even more perverse. It is , by admission of District Judge Cooke, based on scanty, unargued evidence and without the benefit of any terms and conditions as evidence. He appears to assume what the contract is, assume what terms and conditions were applied, assume that a leaflet with its ambiguous language is enough of a representation of the contract on which to make a judgement.
He then proceeds to apply his view of contract law unmitigated by Consumer legislation as if this were a contract between equal partners.
This really needs to be challenged as it goes against the fundamental principle that these charges are penalties and not service charges and accepts that they are service charges just because the bank says so.
An appeal must go ahead so we all need to think about how to support Mr Berwick.
Hello Bankfodder,
My case is being heard in court next week, do you fancy going with me, you would be more then welcome. so would everyone else for that matter.
Pen
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cases won
28th July Single Claim for bank charges against LTSB, £6,800 WON with CI to date of Judgement
18th July Joint Claime against LTSB £7,800 WON with CI to date of Judgement.
I also have an ongoing claim against Lloyds. Interestingly on Martin Lewis' site today - I just read his latest email - he said he would help Mr Berwick if he wished to appeal - even financially if necessary. So if you can contact Mr Berwick, let him know!
Lloyds victory in Birmingham
victory in Birmingham
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