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Santander succeed in having charges case removed from small claims track ***WON***

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"Banks are said to have delivered a “death blow” to thousands of Scots attempting to sue them over unfair overdraft charges.

 

In a landmark case, high-street giant Santander yesterday convinced a Glasgow sheriff that such actions were too complex for consumer-friendly small claims courts."

 

Customers hit by ?death blow? in bid to sue banks - Herald Scotland | News | Home News

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Well, at least now we know what their plan is.

 

INTIMIDATION.

 

IMO, it's an indication that they are scared, ill-prepared and unwilling to defend their arguments in a straightforward way. How complex can it be to really decide the issue?

 

Well, there only needs to be one positive ruling in a Higher Court and it will all be over with. Once the new arguments are tested, if the consumers win, the banks will start paying out, if not, well, it's game over and time to find new lines of attack elsewhere!

 

But the point is, whatever the banksters do, the new arguments will need to be fully tested.

 

Whatever happens, justice will prevail in the end. Banskters collusions and deep pockets not withstanding. There's much more to life than money!!!


The matrix is intrinsically flawed. Within it is the program for it's own destruction. If you are reading this, you are in the matrix and it's days are numbered...so watch out! :eek:

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Which is exactly what Directive 93/13 was supposed to rule out.

 

 

1. Where a jurisdiction clause is included, without being individually negotiated, in a contract between a consumer and a seller or supplier and where it confers exclusive jurisdiction on a court in the territorial jurisdiction of which the seller or supplier has his principal place of business, it must be regarded as unfair within the meaning of Article 3 of Directive 93/13 on unfair terms in consumer contracts in so far as it causes, contrary to the requirement of good faith, a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

( see para. 24 )

2. The protection provided for consumers by Directive 93/13 on unfair terms in consumer contracts entails the national court being able to determine of its own motion whether a term of a contract before it is unfair when making its preliminary assessment as to whether a claim should be allowed to proceed before the national courts.

The national court is obliged, when it applies national law provisions predating or postdating the said Directive, to interpret those provisions, so far as possible, in the light of the wording and purpose of the Directive. The requirement for an interpretation in conformity with the Directive requires the national court, in particular, to favour the interpretation that would allow it to decline of its own motion the jurisdiction conferred on it by virtue of an unfair term.

 

Perhaps someone should use the banks tactic of writing directly to the supreme court


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I presume the English courts will follow suite if argued in the same way by the bank's legal team. On a positive note it was never going to be easy for a LIP to argue points of law in the small claims and needs to go higher up the food chain in any case.


An appeaser is one who feeds a crocodile, hoping it will eat him last. <br />

Winston Churchill

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Who paid the sheriff? or should it be shot?

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It defeats the principles of Justice, to obtain justice, you need money. :eek:


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Once there is a case go against them, they'll regret costs not being limited :p The "no win no fee" ambulance chasers are sure to run a few adverts for bank charge reclaiming and this will cost the banks dearly!


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Since GLC are representing the client, would they not do the case under a CFA and hence be keen to get to a higher court so that they get their costs, since they are so confident of their case? If they lose, the insurance pays.

 

For ordinary people it will be difficult but shouldn't be for a firm.

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Life has a funny way of turning round and biting you....The banks may be unwittingly saving the day BUT not the bigger picture...It seems that they are sacrificing short term for the big one.If these issues are inevitably being forced to be heard in the High Courts in an attempt to dissuade the pecunious customer from exercising their rights then so be it...Inevitably any decision there has more authority.

 

m2ae

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Tifo you got a good point..These Banks have inadvertantly opened up the doors for business again making it worthwhile in terms of costs awarded for these companies to take them on again;)

 

m2ae

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I had put a post on the Scotland forum, unaware that the matter had been raised here. Some of what I said there has been covered, but not quite all, so I copied it here

Walls v Santander The above is a case of a customer reclaiming overdraftlink3.gif charges that was being heard at Glasgow Sheriff Court by Sheriff Cubie. There is a report on the outcome in today's Herald newspaper (http://www.heraldscotland.com/news/h...anks-1.1041325) - basically Cubie has accepted the bank's case that the issues were too complex to be heard under small claims and should go through the ordinary roll. The problem with this is that it opens up the pursuer (Ms Walls in this case) to unlimited costs, it says at one point in the story.

I think it looks an important case for us to be aware of, but at the same time I think the spin that is being put on it by the paper is interesting in itself in a number of ways:

 

  1. the paper says costs awarded against Ms Walls could be unlimited - later on they quote Mike Dailly of Govan Law Centre as suggesting anything up to £10k (still a hell of a risk for a £3k claim, but not unlimited)
  2. there do appear to be, as the Sheriff puts it, "exceptional issues" in this case. So do these apply more generally, or at they verging on the unique. Unfortunately the report doesnt go into this and there is nothing on the GLC website. But if the latter, then it is really a "death blow"?
  3. to some extent it seems to fly in the face of policy, which was to extend small claims to larger sums and keep them out of ordinary roll. In this respect we will need to see what McCaskill proposes to do next (think he is at the golf today!)
  4. Sharp v BOSlink3.gif is still - as far as I know - ongoing and that will explore an unfair relationship as a basis of claims against the banks for unfair chargeslink3.gif.

Thus, while Walls is a set back, I wonder if it really is as bad (from a consumer pov) as the Herald is making out. However that is the view that many people will acquire. We'll see if Mike Dailly gets on to them - perhaps a letter in their letter page - as he is not the sort of guy to let them away with what could be a siginficantly misleading portrayal of the situation

Comments anyone?

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TIFO, you seem to be presuming the claimant has ATE insurance, if this is the case, the insurance is in place to protect the claimant from an adverse costs order from the defendant (if the claimant loses).

 

An ATE policy does not cover the claimant's costs, if the claimant loses his solicitors will get nothing, if the claimant is successful then he will obtain costs from the losing side.

 

Most ATE policies require the solicitor to be engaged on a CFA basis, that gives the underwriters the comfort that if a solicitor is prepared to take that risk they are likely to succeed.

 

Forgive me if I have misinterpreted your post, I was struggling with the meaning of it.

Edited by GuidoT
Added the last sentence

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in reply to SFU

but not unlimited
As MD points out a figure of £10,000, remember the Ian hamilton issue which was similar in that it was going to get kicked to a higher court.the figure he mentioned was £100,000 which he couldn't afford,and dropped the case(It should be point out that Ian Hamilton is a QC and was a Sheriff)

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If the terms of the contract between the bank and its customer are so complex that they can't be decided on by a Sheriff sitting in a small claims court, how on earth can that contract be fair on the consumer?

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Funny how the Banks were silent in the past as to the complexity of the issues....

 

m2ae:rolleyes:

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Quite true. I dont suppose anyone really knows till the case gets heard. Mike Dailly, as a good sol. has counselled his client and the case has been dropped.

My principal target was the newspaper and whoever held the journos hand as he wrote the story. You cant but agree that its not good news. My point is whether its quite as bad as the newspaper makes it out to be and why their story takes this pov?

 

in reply to SFU

As MD points out a figure of £10,000, remember the Ian hamilton issue which was similar in that it was going to get kicked to a higher court.the figure he mentioned was £100,000 which he couldn't afford,and dropped the case(It should be point out that Ian Hamilton is a QC and was a Sheriff)

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Funny how the Banks were silent in the past as to the complexity of the issues....

 

m2ae:rolleyes:

...Yes...:rolleyes:... thought that ever so authoritative and final ruling by the SC put paid to all that and showed just how ridiculous consumers were being to challenge such 'reasonable' charges.

 

...now it's complex!!!!...:eek:

 

Oh yeah, when it suits them. And just how is a consumer supposed to understand them if they are sooooooo complex?:roll:


The matrix is intrinsically flawed. Within it is the program for it's own destruction. If you are reading this, you are in the matrix and it's days are numbered...so watch out! :eek:

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If the terms of the contract between the bank and its customer are so complex that they can't be decided on by a Sheriff sitting in a small claims court, how on earth can that contract be fair on the consumer?

 

Just because a contract is complex does not mean it is unfair any more than a contract will be fair because it is simple, though I readily concede that a complex contract may be difficult to defend.

 

If a contract says: "If you overdraw on your account we will charge a fee of £25" that is crystal clear. It is the man who comes along and says: "I am not bound by this obligation I have entered into because..." who introduces the complication.

 

How can anyone who has followed the OFT case possibly doubt that the legal issues are complex? The problem is that people have deluded themselves into thinking that the law must be simple because they perceive the ethical issues to be simple. So strong is the belief that the law is on the consumer's side that every time the consumer loses in court (and I am waiting to hear of a case where the consumer has won) the whole thing is turned round to show that the consumer really won and that the banks only enjoyed a pyrrhic victory.

 

The small claims track is designed for low value straightforward claims. You can almost say that once you start quoting legal authority that the case is unsuitable to be dealt with in the small claims track. The fact that parties may risk costs in an action is both a good and a bad thing. It is a good thing as it discourages frivolous actions and encourages litigants to negotiate a settlement. It is a bad thing as it discourages those with a good case but limited resources from seeking justice. Pending some Solomon squaring the circle, it will remain a sad fact that the legal system (as opposed to the law itself) favours the man with the deepest pockets.

 

As for the law itself, the situation is not so much that the law was set up to favour the banks, but rather that the law as it is happens to favour the banks.

  • Haha 1

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Your opening comment about complex and simple contracts and fairness is deceptively simple, but, I think omits a good deal. For one thing, if a contract is complex then it is more likely that the better resourced party can take an advantage.

The progress that consumers have made has been to penetrate that complexity and realise that therein there are elements that might advantage them. For instance you say that "If you overdraw on your account we will charge a fee of £25" is cystal clear and, in terms of the words on the page, yes it is. But suppose it said ""If you overdraw on your account we will send the boys round with baseball bats". Of course the objection to that is that it would be unlawful, but arguably so too is "If you overdraw on your account we will charge a fee of £25" - as my poc against a lender to reclaim my unlawful fees reads " If the Defender is able to establish that the contract did contain these terms, the Pursuer will contend that these charges are unenforceable by law, being unfair charges designed to penalise the Pursuer for breach of contract and to generate profit for the defendant for the actual loss occurring to the Defender rather than being liquidated damages designed to compensate the defendant for the actual loss occurring to the Defender as a result of the breach". So the T&Cs can say we will charge you £x if you go overdrawn/ are late with a payment etc - but these fees have to reflect the losses incurred by the lender. They cant just come up with a number

I really dont follow your point about quoting legal authority taking it out of small claims. There is a legal process. Its in front of a Sheriff who I am sure will be looking for guidance - if only for the sake of consistency - from earlier decisions. Your argument seems to me to be a poor one as is your conclusion that the law favours the man with the deepest pockets. Sadly this is true, but it really should not be and therefore your conclusion that the law just happens to favour the banks also strikes me as unreasonably supine. The law is not some sort of natural force - its the manner in which we have agreed to resolve - or at least settle - our differences. If you are happy that it advantages "the big guy" over the "little guy" then I suppose that is up to you, but I for one will be looking to McCaskill to address this issue and rebalance things one way or another.

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My suggestion that if you start quoting authority the matter will not be allocated to the small claims track was not to be taken seriously. However, anyone arguing for a refund of bank charges is either going to have to explain why the Supreme Court decision does not apply or have a new line of argument. Either way, some serious legal arguments will have to be considered.

 

I fear your argument will fail. Why should the level of bank charges reflect the cost incurred by the bank any more than the price of bread should reflect the cost to a supermarket? Despite all the court cases, everyone still keeps banging in the same argument which comes down to: Of course bank charges are penalties/unfair. Stands to reason.

 

I find the remainder of your comments puzzling as they do not seem quite to follow on from anything I said.

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A loaf of bread is a commercial product and the manufacturer will realise as much profit from it as he can make. Exceeding overdraft/ late payments are breaches of contract, and this situation is governed by the law of contract so while the other party can expect to make good their loss its not an opportunity to make as much profit as he can. Generally fees such as this should reflect the loss caused to the lender.

The argument that succeeded in the Supreme Court was that a bank account was an integrated product and you couldnt hive off a part of the package and look at in isolation. The OFT by following the line or argument that they did have made things more difficult for the consumer, but I think the fundamental argument still holds good. Indeed another case being heard in Glasgow (Sharp v BoS) may move things ahead again but with a different legal argument - most recent detail on this is at Govan Law Centre: Bank charges update from GLC. For the curious, Sharp is already on the ordinary roll as legal aid is available to him, so the tactic in Walls wont (hasnt succeeded)

The point is illustrated by the end of the quote from my poc that fees charged by banks in the event of breach of contract (late payment/ going over limit etc) were "unfair charges designed to penalise the Pursuer for breach of contract and to generate profit for the defendant, for the actual loss occurring to the Defender, rather than being liquidated damages designed to compensate the defendant for the actual loss occurring to the Defender as a result of the breach"

I tend to agree there is a kind of dominant thought that bank charges are penalties and are unfair. To some extent the banks have brought this on themselves. But they face the problem that they never have been willing to actually address the charge - to show that the fees they charge in the event of a breach of contract (and this is clearly different from say the arrangement fee which was key to the Walker case, which can be as much or as little as the lender can get away with - more like the loaf of bread) do reflect their costs.

You will just have to take my word for this, but a friend was in the past the Operations Director for a large multinational bank's call centre in the UK. I asked him about this and he confirmed not only that they didnt know what costs were caused to them by (say) going over limit - he reckoned maybe a couple of pounds, but that was a best guess. But more dammingly he confirmed that the fees they charged were market driven - they charged what everyone else charged.

But the problem is that we, the customers, cannot prove this. We cant prove this because we dont have access to the data. Only the banks have access to the data and they wont address the issue, preferring to adopt other strategies, as they have done in the Walls case - to kick it up to a level where the man in the street (or in this case the woman in the street) cant take the chance, given the relatively small amount that they might win (or lose).

My last paragraph concerns this in your post - "As for the law itself, the situation is not so much that the law was set up to favour the banks, but rather that the law as it is happens to favour the banks." As Marx once famously said, "the point is not to understand history but to change it". I happen to agree with your understanding of the banks and the law, but I would like to change this.

Lastly, I would be looking to Kenny McCaskill to address the problem that Walls has opened up in the manner suggested by Mike Dailly in the press today - if a case is elegible to go through small claims because of its size (less than 3 grand) then if it gets put up to Ordinary roll that the cap on costs goes with it (see Law change call after ruling on bank charges - Herald Scotland | News | Home News)

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The problem, SFU, is that your argument as quoted, is out of date. The Supreme Court in their "wisdom", saw to that, by declaring that the charges are a core part of the contract and as such their level can not be challenged. The 1st judge in the OFT v Banks cases had already decided the charges couldn't amount to penalties.

 

So whether we like it or not, and let's face it, most of us don't, there is no point in going on about the penalties argument, nor the liquidated damages issue, or the fairness of the level of the charges. That ship has sailed. End of.

 

If you want to present a case which has a chance of succeeding, then you need to address the case from a different angle. It's not fair, it may well feel like a complete both stitch-up and cop-out, but that's where we are in the aftermath of the catastrophe that was the Test Case. :-(

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Exceeding overdraft/ late payments are breaches of contract,

 

The first court found that these were not breaches of contract and that the charges could not therefore be penalties. Follow this argument and you are doomed to fail. :( sadly

 

Why should the level of bank charges reflect the cost incurred by the bank any more than the price of bread should reflect the cost to a supermarket?

 

on the same theme - why should bank charges be any different than airline tickets and yet BA fell into bother over the level of the cost of a flight especially when they tried to set them with virgin if I remember correctly.


HTH (Hope This Helps) RDM2006

 

THE FORCE (OF CAG) IS WITH YOU

;)

 

We've Helped You To Claim - Now Help Us Remain

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All advice and opinions given by people on this site are personal, and are not endorsed by Consumer Action Group or Bank Action Group. Your decisions and actions are your own, and should you be in any doubt, please seek qualified professional legal Help.

 

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