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

[rdm2006]

snap bookie lol

[seriously fed up]

I think that is rather a sweeping way of looking at this judgement guys.

First of all the issue wasnt actually whether the charges were fair but whether OFT had the legal right to conduct an investigation into whether they were fair or not. One might well ask why the banks didnt want this to happen (see my last offering on this), but they didnt - hence the case.

The issue centred on Unfair Contract Terms in Consumer Contracts Regulations 1999 and Regulation 6 (2) (b), which limits the ability of OFT to assess the fairness of contracts, but 62b excludes "value for money" issues from such investigation (otherwise the loaf of bread could get investigated). Court of Appeal had decided that while OFT could not examine core terms in the contract, ancillary terms - such as charges - could be assessed. The Supreme Court decided that all terms were excluded from value for money assessment.

The OFT were subjected to criticism all along for the using the Unfair Contract Terms Regs in general and that Regulation in particular, and have effectively thrown in the towel. But its been argued that other elements of the Regs could be productive. I have even seen it argued tha the Consumer Credit Act (reformed s140 - see 2006 Act) could be better. But in any event its quite clear that the fight goes on - Walls, Sharpe for instance

Edited July 17, 2010 by seriously fed up

[bornrich]

I'm assuming the banks will now all follow suit on this tactic which will be a crying shame.

 

I wonder if the judge on my case could be persuaded that the defendant bank has had plenty of time to raise the issue of complexity but has failed to do so and that the hearing should be allowed to go ahead? At our last meeting the barrister did not object to the allocation of a considerable amount of time set by the judge to discuss, in particular, the merits of the 5.1 argument.

 

If I do actually manage to get into that court I'll be ready with my argument along with a couple of big diagrams to illustrate two of my points on the unfairness of the banking relationship. Namely the charge on a charge (with interest that technically should not be charged) that triggers a further charge the proceeding month. And the other is the interest charged on charges which, added up over numerous years, has triggered a charge in itself. Both of which have caused detriment to myself blah, blah... It may sound complicated but with the help of a diagram or two I'm sure the judge would be able to understand the 'complexities'.

 

I got the feeling the judge on my case wanted to hear the arguments, having allocated a fair amount of time for the case. I don't know, sometimes these Barristers think they're the only smart people on the planet.

 

Anyway, I've a week or so to go before the bank's deadline to respond to my revised POC so we'll see what happens.

 

Bornrich.

[rebel11]

Unfortunately, you've missed a lot in your argument,

 

The banks shot themselves in the foot, instead of being up front, honest and acting in good faith. They initially said that they don't make a profit from charges, they simply cover costs, they refuse to give a breakdown of their costs, but now it's part of their core business and they make lots of profit. Now I can see why it's complex. Even the banks thought the Supreme Court decision was going to go against them, that pretty much sums it up. Funnily enough

my bank wrote to me a couple of days before the judgement telling me

the Penalty Charges on my account were a mistake.

 

 

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.

[rebel11]

Application to the European Court of Human Rights

 

GLC stick to their guns, thats what i love about them:D

 

Govan Law Centre: ECHR application following Walls v. Santander

 

Edited July 17, 2010 by rebel11

[paulwlton]

Application to the European Court of Human Rights

 

GLC stick to their guns, thats what i love about them:D

 

Govan Law Centre: ECHR application following Walls v. Santander

 

 

I take my hat off to Mr Daily & co.

[seriously fed up]

If I had a hat, I would too

See also Law change call after ruling on bank charges - Herald Scotland | News | Home News

Copy of Cubie's judgement is attached. One of the things that struck me in reading it is this. In the Scottish small claims system, the only appeal is to the Sheriff Principal on a point of law. Thus, had Mrs Walls succeeded in this case in this forum, it would not, I think, have constituted any kind of precedent (in contrast say, to the Hamilton case heard by Sheriff Pender, and referred to in the judgement, which sank the application for Walls to be heard under Small Claims). Now that the case is in Ordinary Roll, if Walls is successful, then it will be precedent. Could be another example of the banks shooting themselves in the foot perhaps?

wallsvsantander.pdf

Edited July 17, 2010 by seriously fed up
add copy of case and ref

[caro]

I take my hat off to Mr Daily & co.

 

Absolutely. GLC has never waivered in it's commitment and it's nice to see them continue steadfastly.

[Bookworm]

I think that is rather a sweeping way of looking at this judgement guys.

First of all the issue wasnt actually whether the charges were fair but whether OFT had the legal right to conduct an investigation into whether they were fair or not. One might well ask why the banks didnt want this to happen (see my last offering on this), but they didnt - hence the case.

The issue centred on Unfair Contract Terms in Consumer Contracts Regulations 1999 and Regulation 6 (2) (b), which limits the ability of OFT to assess the fairness of contracts, but 62b excludes "value for money" issues from such investigation (otherwise the loaf of bread could get investigated). Court of Appeal had decided that while OFT could not examine core terms in the contract, ancillary terms - such as charges - could be assessed. The Supreme Court decided that all terms were excluded from value for money assessment.

The OFT were subjected to criticism all along for the using the Unfair Contract Terms Regs in general and that Regulation in particular, and have effectively thrown in the towel. But its been argued that other elements of the Regs could be productive. I have even seen it argued tha the Consumer Credit Act (reformed s140 - see 2006 Act) could be better. But in any event its quite clear that the fight goes on - Walls, Sharpe for instance

No, it's a succinct summary of the test case, which was on the following issues:

a - are the charges capable of amounting to penalties?

b - can the charges be assessed by the OFT under the unfairness test of the UTCCR?

(there was also the plain and intelligible thing, but let's concentrate on the 2 main issues)

a - Smith J found that current T&Cs were not capable of amounting to penalties. Apart from a tiny window in NWB's T&Cs sometimes in 2001 which may be able to amount to penalties, he also found that the historical T&Cs were not penalties.

The OFT didn't appeal that point. Penalties argument, over and out.

 

b - Smith J found that the charges WERE assessable for fairness under the UTCCR and came under the remit of the OFT. He also stated that the charges were not a core term, in a classic Solomon judgment. (not penalties, not core, what WERE they? More anon)

The banks did appeal that point. Onwards and upwards to the Appeals Court.

 

With the penalties argument dead in the water, the only (!) point still argued was whether the charges came under the remit of the OFT.

 

The appeals court concurred with the original judge and upheld that the charges were not core terms and an integral part of the package and were therefore assessable by the OFT.

 

The banks then took it to the Supreme Court, which decided that the charges WERE after all a core term and integral part of the contract and as such their level couldn't be assessed for fairness by the OFT.

OFT, over and out.

 

Therefore, your post as higher up contains arguments which can no longer be argued. The highest court in the land has spoken, and ALL any bank has to do if you go to court using those arguments is present the SC decision, and it will be over and out for you too.

 

Call it sweeping if you like, but these are the simple facts of the aftermath of the shambles of the last 3 years. You can't argue liquidated damages, you can't argue penalties. Sorry.

[Bookworm]

Application to the European Court of Human Rights

 

GLC stick to their guns, thats what i love about them:D

 

Govan Law Centre: ECHR application following Walls v. Santander

 

Ah, the European Court... The GLC does what the OFT should have done last year. Nice to see someone does have the balls to keep up the fight.

 

The test case. The changes to the CCA74. Now this decision. What a pattern, hey. We get statutory rights to help us fight the big guys, but when we try to actually use those, they get restricted further and further, or downright ignored, or changed so we can't even access them to fight our corner anymore.

[seriously fed up]

Right, ok BW, but please go and have a look in Cubie's determination. In particular go to paragraphs 9 and 10 which refer to Walls' poc paragraph 6 (2) and (3). These suggest that the charges imposed are excessive and punitive (2) and involve cross-subsidy (3). Now what that suggests to me is either that Mike Dailly is wasting everybody's time (unlikely - and it rather looks as if the Sheriff missed it as well) or the situation with respect to charges isnt quite as bleak as you seem to be suggesting.

[seriously fed up]

Right, ok BW, but please go and have a look in Cubie's determination. In particular go to paragraphs 9 and 10 which refer to Walls' poc paragraph 6 (2) and (3). These suggest that the charges imposed are excessive and punitive (2) and involve cross-subsidy (3). Now what that suggests to me is either that Mike Dailly is wasting everybody's time (unlikely - and it rather looks as if the Sheriff missed it as well) or the situation with respect to charges isnt quite as bleak as you seem to be suggesting.

 

Moreover I think I am right in saying that the OFT case involved charges for bank accounts, and thus has no force for credit card claims for the return of fees?

[rdm2006]

Moreover I think I am right in saying that the OFT case involved charges for bank accounts, and thus has no force for credit card claims for the return of fees?

 

SFU apologies if i am wrong but you seam to have confused the two issues

 

Under the UTCCR the charges have been found not to be penalties and the level can not be challenged as they are a core part of the contract (forming the overall cost)

 

Under the CCA the overall cost can be seen to be excessive and extortionate and can be challenged under this law.

 

I am not knocking you down, I just don't want someone to fail because they tried to argue the wrong case.

 

This may be overly simplified but i have done this to help show where the difference lies...

 

edit when looking at GLC argument look to see which point is being argued under which law/regulation

Edited July 17, 2010 by rdm2006

[seriously fed up]

I would also draw to your attention the conclusions of Anthony Scriviner's opinion on the next steps after the Supreme Court decision - in particular that the only way forward is for customers to commence/ continue proceedings against banks (107); and that the Supreme court decision does not prevent customers proceeding with claims for unfairness (108). Scriviner argues there that the Court was dealing with a different point.

Copy of this opinion can be found here http://www.consumeractiongroup.co.uk/forum/oft-test-case-updates/248268-sheriff-puts-bank-scotland-31.html#post3039192

[rdm2006]

No one is saying that these points are wrong, All we are saying is that they have to be argued under the correct law or regulation.

 

As stated above the level of charges can not be challenged as excessive and extortionate under the UTCCR

 

However, under the CCA the overall cost of credit can be seen as an extortionate bargain (and the banks have already stated that the charges form part of the overall cost)

[Bookworm]

Moreover I think I am right in saying that the OFT case involved charges for bank accounts, and thus has no force for credit card claims for the return of fees?

Yep, that's correct, I don't think anyone says otherwise? :-? (well, apart from the banks that is! )

[seriously fed up]

SFU apologies if i am wrong but you seam to have confused the two issues

 

Under the UTCCR the charges have been found not to be penalties and the level can not be challenged as they are a core part of the contract (forming the overall cost)

 

Under the CCA the overall cost can be seen to be excessive and extortionate and can be challenged under this law.

 

I am not knocking you down, I just don't want someone to fail because they tried to argue the wrong case.

 

This may be overly simplified but i have done this to help show where the difference lies...

 

edit when looking at GLC argument look to see which point is being argued under which law/regulation

 

All appreciaated, BUT

 

1. Dailly's poc refers to the CCA - I would guess the reformed s140 (though I dont know not having seen the original poc - surmising this from the determination at para 8)
   
2. There is also a reference in the determination - at para 14 to UCTR. Now I suspect he is using Reg 5 here (and not 6 as OFT did), but - and to some extent this is my point - the OFT case lost on particular grounds, which as you point out cant be gone back on (unless some brave soul takes it to Europe). But this doesnt kill off the argument that contingent bank charges (eg overdrawn fees) should reflect their cost to the lenderAs pointed out already, at para 9 Cubie refers to the argument in the poc that the charges are excessive and punitive.
   

I would also draw attention to Scrivener's opinion that "the Supreme court decision does not prevent customers proceeding with claims for unfairness (at para 10 7). Scriviner argues there that the Court was dealing with a different point (OFT's right to investigate) and that unfairness claims can still proceed, though, I accept not on "value for money" criteria (ruled out be reg 6 of UCTR). However, if you work through Cubie's determination its quite clear that Mike Dailly is in pursuit on the basis that the charges are both excessive and punitive (these are the words used in the determination). One of the bases for this is CCA,. but there is also reference to UCTR therein

[means2anend]

I woke up this morning to catch up on the last 2 days...At 11:37 am this morning I was reading thriugh this thread and was feeling ambivalent UP UNTIL REBEL's 07.45 when it read that there is to be an application to the EU whaaaaaaaa!!!!!:D:D....I am in a twizzzzzz!!!!...

 

Yes! Hats off to you Mike Daiily AND Team GLC

m2ae

Edited July 18, 2010 by means2anend
change ''appeal'' to ''application''

[means2anend]

If I had a hat, I would too

See also Law change call after ruling on bank charges - Herald Scotland | News | Home News

Copy of Cubie's judgement is attached. One of the things that struck me in reading it is this. In the Scottish small claims system, the only appeal is to the Sheriff Principal on a point of law. Thus, had Mrs Walls succeeded in this case in this forum, it would not, I think, have constituted any kind of precedent (in contrast say, to the Hamilton case heard by Sheriff Pender, and referred to in the judgement, which sank the application for Walls to be heard under Small Claims). Now that the case is in Ordinary Roll, if Walls is successful, then it will be precedent. Could be another example of the banks shooting themselves in the foot perhaps?

 

ABSOLUTELY SFU

 

This is EXACTLY the point I made as soon as the Walls scenario came out on this thread...I made the point that it may be a blessing in reality as the Banks while having 'saved the day' were going to possibly suffer on the ''bigger stage and that inadvertantly they have given themselves ''too much rope''...I think Undercover Elsa at that time also ''saw'' what was going to happen and made the point too.

 

m2ae

[means2anend]

Another important factor is that NOW this is in the EU ''tray''...this may well go all the way to the top:D...yeeeeehaaaaa!!!!

 

Things have a funny way of having their ''own momentum'' and once started cannot be stopped

 

m2ae

[means2anend]

No one is saying that these points are wrong, All we are saying is that they have to be argued under the correct law or regulation.

 

As stated above the level of charges can not be challenged as excessive and extortionate under the UTCCR

 

However, under the CCA the overall cost of credit can be seen as an extortionate bargain (and the banks have already stated that the charges form part of the overall cost)

 

Sorry for appearing pedantic RDM...but ''extortionate'' bargains no longer exist under CCA 1974..that test s137-140 was deemed to be too high...it is now Unfair and can be challenged under UCCTR which in this respect you are correct...right arguments under right regulations...Had The original argument been brought under amended s140 1974 inserted by CCA 2006 it would not have been about extortionate bargains but an unfair relationship...AND Reg 5 UCCTR looks to unfairness too..how sad that whilst Reg5 and 6 are ''next to each other that OFT chose Reg6 NOT 5 as RDM says right argument but under wrong provisions=No No

 

m2ae:)

Edited July 18, 2010 by means2anend

[means2anend]

I have just read the Herald's article...I think that there is something sinister in the Banks using this point of law complexity to move the case up so as to exclude the poorer litigant...In fact is IS BECAUSE IT IS IN THE PUBLIC INTEREST THAT THAT THE POINT IN ISSUE MUST BE HEARD...and NOT swept under the carpet which is effectively the result of this move by the banks...The strange consequences that may follow because Sharp is entitled to legal aid suggests to me that Walls ''fell in between the gap'' probably because s/he was not earning too much but was not earning too little'' yet whose income was such that took him/her out of the Legal Aid bracket.

 

 

I am sure that Legal Aid is available on the state of income AND the MERITS of the CASE which the Walls and Sharp cases are except that one qualifies and the other does not purely on income grounds...If this is the case then this does not really mean a blanket transfer (for all who claim) to the High Court

 

But that is the best place to be in order to attach weight to the outcome...and so it is better in my opinion for poorer litigants who qualify on income grounds 'cos there is certainly a case on the merits now it seems...So really looking forward tro this one!!!

 

An application to the EU then only makes sense when the litigant is not able to be granted Legal Aid due to the fact that their income takes them slightly over threshold...hence it must be challenged on ''Right To A fair Trial'' for a ''particular'' ''pecunious'' type litigant''

 

m2ae

Edited July 18, 2010 by means2anend

[means2anend]

Of course the litigant with Legal Aid could have requested it heard in the High Court for the same reasons as banks...but the risk was BEFORE the SC decision were unknown...NOW the grounds for challenge have been clearly defined or at the least appear to have been suggested by the SC under ''Unfair'' principles....

 

Poorer litigants in my opinion if the value of the claim is irrelevant should for the same reasons as the banks start in High Court..

[seriously fed up]

I know from reading it somewhere - probably the Herald - that with the cap on costs gone, in theory at least the costs that could be put on Ms Walls, should she lose, would be unlimited (I have seen an estimate of £10k, but others say more). For a £3k claim, Dailly's advice to his client was that it wasnt worth the risk.

Moreover, Dailly's view that she wouldnt get legal aid seems clear. On the other hand, this is not the situation with Sharpe, so that can go ahead. Mike Dailly has blogged on this at the GLC home page (its entitled "Priced out of Justice"). Its quite long so I wont copy it - it should come up for you on google - but the conclusion is noteworthy imo

We are reminded of the parable from The Trial: “Before the Law stands a doorkeeper. . . . The doorkeeper sees that the man is nearing his end, and in order to reach his failing hearing, he roars to him: ‘No one else could gain admittance here, because this entrance was meant solely for you. I’m going to go and shut it now.’”

As far as starting in the High Court, there is a sense in which you are correct m2ae - but only if you have access to legal aid, and probably a strong and resolute nerve steadied by a good legal team. On the other hand, if this argument is sound then it will take only one such case to be successful (and not be bought off!). I do think though that you misunderstand the Scottish small claims procedure as, were it not for the bank raising the ante by kicking the case to Ordinary Roll, it is in Small Claims that this sort of thing should be getting dealt with. Cubie is correct that there are issues of complexity - but on the other hand, a small claims case will be heard by a Sheriff. It was put to where, according to the system, it should be heard. McCaskill's pov (see Dailly's blog) is disgracefully supine (though Kenny, despite trying to play the rebel from time to time, does have a record of acquiescing to authority) but if the case gets to Europe (which is going to take time, but has a good chance of success) then things will HAVE to change.

 

[means2anend]

Yes SFU that is why the application to the EU is to lift the restrictions on a ''class of persons''...we are not talking here of Sharp but Walls..and this was my point above..that a particular poor type of litigant is going to be affected.So The Scottish secretary may have to relook at this refusal of the Law Reform..

 

OR

 

Walls could stay pending the outcome of Sharp!!!

 

rgds

 

m2ae