I still believe bank penalty charges are clearly illegal and am posting this to make people aware of the argument NatWest will use.

I took NatWest to the small claims court (Shoreditch) in May 2005. It was over around £1,050 of charges (plus interest) for going over my overdraft over a period of 4 years.

No NatWest person appeared but they sent a very impressive barrister (cost over twice the £1,200 I was claiming - I know because they told me the costs to try and put me off, though you cannot generally be made liable for the other sides costs).

Their barrister argued that it was not a penalty because I had not broken my contract and that the cost was simply a charge for a service provided.

So I was in the odd position of seeking to argue I had breached the contract, whereas NatWest were arguing I had not.

Now I did have a barrister, as one had offered to do it for free. But this meant I got little chance to put my case as he was there for speak to me - and he didn't seem convinced anymore of my case.

So my first advice is to defend yourself unless you have a barrister totally convinced of the case.

I should have done two things:

1) Found a clause clearly stating that it is a breach of the contract to go over the overdraft. (I believe there is somewhere it says you are in breach of contract if you do not have sufficient funds in the account at 3.30 to meet whatever cheques or payments fall due the next day.)

2) Put the argument that costs to the bank are minimal. Clearly it is all automated. Their barrister tried to give the impression it all has to go to a higher level and be debated. In fact information I later got under the Data Protection Act made clear I was seen as a very reliable customer and there was no question of bouncing a cheque.

They were also careful not to have a NatWest manager present. (My manager sent a statement.) Otherwise they could be questioned aobut whether it is regarded internally as a penalty and as to the actual costs.

I wish good luck to anybody taking this further and am happy to chat about my experience. I believe the penalty laws are clear and on our side.

yours

Henry Stewart

[email protected]

PS: There were no costs beyond the court fees (about £200 in total). I have no regrets about taking NatWest to court.

Can you scan and post a copy of the District Judges Order please? This would be very helpful.

This is very interesting. I got a letter back from Natwest recently in response to my 7 day court action letter. The letter begins by saying "I am sorry to hear you are unhappy with the service you have recently received". I did not mention the word "service" in my letter. I put it down to them churning out standard letters without any thought. It now looks as if it was no mistake, and this is the approach they will take.

Ouch Henry, sorry it turned out like that

1) Found a clause clearly stating that it is a breach of the contract to go over the overdraft. (I believe there is somewhere it says you are in breach of contract if you do not have sufficient funds in the account at 3.30 to meet whatever cheques or payments fall due the next day.)

I'm assuming that any leaflet of "Terms & Conditions" would form part of the contract with the bank - and therefore, if you breach a clause in the Ts&Cs, you'd be in breach of contract? I've just found separate clauses in my A&L Ts&Cs leaflet that talk about the account must be in credit unless there's an agreed overdraft; and cleared balance at the start of the day being sufficient to cover all debits due that day....

Cheers

Michael

I am already aware of your case and referred to it early on in the Forum history in Legalities, I think.

Of course I think that it is important for everyone to understand that their case can go to court and can be lost as occurred in your case.

A few things which I don't understand are why the argument that the bank was only allowed to charge a reasonable price per s.15 Suppy of Goods and Services was not presented to the court. I am not aware that this argment has been tested but in my view it is a sound argument. It would also require then the bank to reveal its costs in order to show that its "fees" were reasonable.

This argument is included in the Case Guidance notes and is also discussed elsewhere on the forum

I know that the barrister in your case montiors this site from time to time and of course it would be very welcome if he were to let us know what he thinks about the case and how it might have been won.

Is there any chance of a scan of your particulars of claim and of the bank's defence? Did they supply you with a bundle of any evidence before the trial? It would be useful to see them.

In my ignorance here I admit... my thoughts are tho this was in March 2005 since then more high cases and high profile ones have been successful so I would have thought this would now lean in our favour?

As far as I know, no other cases have gone to court. They have either been settled or judgment has been given in default.

Judgment in default is just as good as going to court.

I just got a copy of Natwest policy and it says

If you break your agreement with us and we have cause to issue a Default Notice to you requiring you to either repay the debt or remedy breach of agreement, we will charge you £30 for our administrative costs in issuing the Default Notice

I would say the barrister was ill prepared

If I understand this correctly:

The banks' current defence for the application of charges (application, not level) is that you broke the Ts & Cs and therefore contract

Their only succesful defence to date is that you didn't breach Ts & Cs/Contract

One successful defence - shot to pieces for short term gain...I was always under the impression that banks were intelligent, tactical market players...seems that I was under the wrong impression. Ho hum!

Know thine enemy.

we will charge you £30 for our administrative costs in issuing the Default Notice

This charge would also be recoverable wouldn't it?

Fascinating. It must have taken some cajones from someone at the bank to go into court with that argument. I wonder if there were some technical problems with Henry's case which made them confident they could get it dismissed.

I stopped using lawyers for litigation long ago. I find that they are very resistant to taking specific instructions as to how to proceed with the case, and they are never, ever, as motivated as you are to win.

and they are never, ever, as motivated as you are to win

That is a very pertinent point, and well worth bearing in mind. If the banks do allow further court actions, and they appoint a legal representative, Robert's post clearly indicates that we would have a slight advantage of immediacy.

That's not the only advantage. I've used the fact that I'm representing myself to do all sorts of things in court which a lawyer would never get away with. I've done things like:

spring huge surprises on the other side (usually a big no-no);

managed to get the case adjourned repeatedly because 'I don't understand it' - forcing the other side into another costly hearing;

managed to completely alter my case during the hearing and after the other side has put their defence, - with the help of the Sheriff. (much to their lawyer's chagrin).

Nowadays, I only use lawyers for commercial stuff for my business.

Henry

Why didnt you prepare yourself more?

Is it not possible to try again ?

Henry, what date did this go to court?

Henry, what date did this go to court?

His post said May 2005

Guys, Henry only posted once to kindly tell us his story, there's little point in asking him questions, as I don't think he visits.

He did leave his e-mail in his post though, and said he was happy to talk to people, so e-mail him if you need to know more. (And feel free to report anything of interest!)

This is indeed a shame, and we can only hope that is was bad presentation of the case or unwitting omission of facts that led to the bank winning their case (no offence to the barrister in question intended).

Can the bank now quote this case in subsequent cases?

I myself am intending to take Natwest to court and am working on some extra arguments to the ones on here as I want to have the best chance possible of winning my case (too much money at stake!).

In light of this maybe we could start a new thread on working towards defeating this specific defence tactic. It could possibly be the wording of Natwest's T&Cs that have given them an advantage here. Perhaps someone legally minded could take a look at them in more detail.

I would be very happy to find more poeple wanting to work with me on this one.;-)

Cases in County Court Small Claims track do NOT set legal precedents as they are of insufficient authority.

I am currently researching how to get my money back from Natwest! I'm trying not to feel put off by what I have just read and hope since more cases have come to light that Natwest may give in alot easier.

They owe me £3,362.35 and claim that these charges are fair.

If anybody can give me advice as to what I need to do... in what order.... and how long I leave between each letter/action...I would appreciate it. I can't seem to find a clear list of what action to take although I am reading peoples stories of claiming.

Keep up the good work guys and I shall be sure to keep you informed of my progress.

x Carrie x

Carrie

Have a good read through the FAQs

Its time consuming but well worth it:)

so far Natwest have paid £102294 to 81 members this is the only case that has lost probalbly the only one that got to a hearing,there is plenty of help from others on the site

Thank you for your response. I'm currently reading through the FAQ... making notes as I go!

x carrie x