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

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I agree m2ae - I think we are talking about slightly different things. My point was the very practical point that without going to Europe we probably arent going to get anywhere. MacCaskill's response to date is very disappointing. It has to be remembered that it was he, as Justice Secretary at Holyrood, who raised the limit for small claims from £750 to £3000. His response to Walls has been to say that the decisions doesnt change anything - that a litigant can still put a case through small claims as long as its £3k or less. But of course the problem is Kenny, is it not, that the banks will kick it into the long grass of Ordinary Roll. And the particular class of person who is excluded is, probably most of us. Its not the very rich, who can afford the risk. Its not very poor who can (still) get Legal Aid. Its the 70-80% of us in between who are excluded. As I said already, this is a guy who likes to be seen as "one of the boys" but has a clear respect for "authority" when it calls him to heel. I really cant understand why he wouldnt follow Dailly's suggestion of allowing the cap on expenses to remain if the respondent kicks it up to Ordinary Roll of their motion.

Not sure what GLC will do about Walls. I suppose a stay is one option. Simply not making a further application until Sharpe is determined would be another route, I think.

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How long does it take for the Euro Court to get going?


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Months at the very least. In Feb 2010 they had 110,000 cases pending.

 

http://www.echr.coe.int/NR/rdonlyres/37C26BF0-EE46-437E-B810-EA900D18D49B/0/ENG_QR.pdf

 

From what Govan were saying though they are using this more to bump the Justice Secretary into reviewing some dropped alterations than to actually go through the entire ECHR process. Possibly?

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As a comparison, the Bosman case was sent to the Court by the Belgian Court of Appeal, in 1993, and it wasnt till the end of 1995 (15th December actually) that the judgement was handed down.

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.how sad that whilst Reg5 and 6 are ''next to each other that OFT chose Reg 6 NOT 5 as RDM says right argument but under wrong provisions=No No

 

m2ae:)

 

Just to clear the point OFT argued under section 5.1 but used a reason (Value for Money) which was excluded under section 6. ;)

 

With regard to the extortionate bargain I did state that this was over simplified to show the difference. ;)

 

edit one for the banks

 

t'is a complicated web we weave

when we practice to deceive

 

Right back at ya :lol:

Edited by rdm2006

HTH (Hope This Helps) RDM2006

 

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The law is simple! The problem is it seems to favour the banks. This is not because the law was formed with the banks in mind, but because of the way contract law and consumer law happen to be.

 

In my opinion, it was always difficult to see when you looked at the terms of the average contract between a bank and a customer how (a) any charge could be a contractual penalty or (b) the UTCCR would help strike out a term relating to charges because you had get over Reg 6 (2) (b). The flaw at the heart of the argument was effectively to insist that banks should not make a profit from charges, or at the very least that banks should be treated in a different way from other businesses.

 

What was lost in the enthusiasm to try and show that charges were penalties or unfair was that in many cases the real problem was not so much the level of charges (though that was bad enough) but the way that the banks manipulated the system to create a knock on effect so that charges kept racking up. It was presumably felt there was no need to think about how charges were applied if it could be shown they were all penalties or unfair. Concentrating on how the charges were applied would not have entailed having to argue whether the charge was in itself penal or unfair. I think people are coming round to seeing that this may be the way forward and how the UTCCR can be used without having to worry about Reg 6 (2) (b).

 

Instead of concentrating on the position of the individual customer it would have been much better to challenge the banks on the wider issue that the consumer was not being offered a real choice. That would have meant concentrating on reducing charges for the future rather than reclaiming charges, but I feel sure that more would have been achieved. It was always going to be the case that the banks would fight having to pay out vast sums of money, whilst they could live with changing charging structures - they had after all done it before when in answer to popular demand free-if-in-credit banking was introduced.

 

The irony of the present position where the banks can point with satisfaction to the Supreme Court decision is that it would never have happened if the campaign had not been so successful to start with. Waving banners declaring success encouraged more and more claimants until in the end the banks had to do something. It is regrettable that those who did not claim early are having to suffer the disappointment that, contrary to expectation encouraged by the early success and insistence that the success was due to the law being against the banks, the law does not look like being with them. People must though forget about the early success as it was based on the banks' policy of taking the line of least resistance and not on the law. What the law is and how much in charges will be recovered still remains to be seen.

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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

 

 

I was going to refer to that but it appears to have gone from the thread ?

 

In agreement ( I think) with Aequitas, in the notes with the Opinion it is suggested that the areas to look at that don't fall foul of 6(2) are

 

7. The question of good faith is certainly one which will need to be considered in the European context, and comparisons from other jurisdictions should be sought.

8. In light of the extracts above on “good faith”, the following broad themes of unfairness can be drawn:

i. Imbalance/Weak Bargaining Position

ii. Concealment/Lack of Prominence

iii. Necessity

iv. Indigence/Hardship

v. Cycle of debt/Consequences for the Consumer

These themes can be used individually or combined together to attack the Relevant Terms as being unfair.

 

I think it was due to consumer pressure that the test case went ahead rather than a competition enquiry like in NI, South Africa and Australia which resulted in lowering charges ?

Edited by 008139

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I rather think it was due to BANK pressure myself. :rolleyes:

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Yes indeed ... six of one and half dozen of the other

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I think the pressure was the number of cases pending.

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The law is simple! The problem is it seems to favour the banks. This is not because the law was formed with the banks in mind, but because of the way contract law and consumer law happen to be.

 

In my opinion, it was always difficult to see when you looked at the terms of the average contract between a bank and a customer how (a) any charge could be a contractual penalty or (b) the UTCCR would help strike out a term relating to charges because you had get over Reg 6 (2) (b). The flaw at the heart of the argument was effectively to insist that banks should not make a profit from charges, or at the very least that banks should be treated in a different way from other businesses.

 

 

 

Fair enough, but recall that until the very last gasp of their appearance before the Supreme Court, it was the banks who were insisting the charges were levied to cover their costs. They didn't change horses in mid-stream, they were within touching distance of the bank when they realised the water was much deeper than they had expected. That was the basis on which charges were challenged up to that point, and it was the bank's definition, not the claimants.

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I think it went something like this:

 

1. Customers said that bank charges were penalties.

 

2. The argument was circled far and wide and the banks began to fear there might be something in it.

 

3. The banks, instead of looking at the argument, insisted that charges could not be penalties because they were reasonable.

 

4. When they did start to look at the argument they realised that there was almost certainly nothing in it (as proved to be the case).

 

5. They therefore shifted their position to one where the fact that charges were too high (which everyone knew to be the case) became irrelevant as it was, they argued, no more than the price agreed for services.

 

The law goes quite a long way to protect consumers. However, what it does not do is to prevent a man from driving a hard bargain. That is why the UTCCR specifically exclude the court from making any enquiry as to the price agreed to be paid for goods and services. Whilst the point that the Supreme Court had to decide may have been narrow, I think it emerges clearly from the judgement that bank charges are the price paid for services.

 

I think it is worth once again quoting Lady Hale from the SC judgement:

 

...should this or any other Parliament be minded to take up the invitation given in the last paragraph of Lord Walker's judgement*, it may not be easy to find a satisfactory solution. The banks may not be the most popular institutions in the country at present, but that does not mean that their methods of charging for retail banking services are necessarily unfair when viewed as a whole. As a very general proposition, consumer law in this country aims to give the consumer an informed choice rather than to protect the consumer from making an unwise choice. We buy all sorts of products which a sensible person might not buy and some of which are not good value for the money. We do so with our eyes open because we want the product in question more than we want the money. Should financial services be treated differently from other goods and services? Or is the real problem that we do not have a real choice because the suppliers all offer much the same product and do not compete on some of their terms? This is the situation here. But it is not clear to me whether the proper solution is to find some way of forcing the suppliers to compete with one another in the terms they offer or whether the solution is to condemn one particular model of charging for those services. Fortunately, however, that is for Parliament and not for this Court.

 

*"Ministers and Parliament may wish to consider the matter further. They decided, in an era of socalled “light-touch” regulation, to transpose the Directive as it stood rather than to confer the higher degree of consumer protection afforded by the national laws of some other member states. Parliament may wish to consider whether to revisit that decision."

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The banks didn't start to look at the arguments until the final presentations to the Supreme Court?

 

Actually the banks were claiming that their charges covered costs *long* before the consumer campaign started.

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The banks didn't start to look at the arguments until the final presentations to the Supreme Court?

 

Actually the banks were claiming that their charges covered costs *long* before the consumer campaign started.

 

Think Aequitas was meaning up until the test case the banks still thought there was something in the penalty arguments so stuck to the 'cover costs' line. Once penalties was chucked out by Justice Smith, the banks saw that they no longer needed to claim that and the final argument 'part of the price or a package of services' came about.

 

The transcripts of all the hearings are very useful to read to get your head around how the test case progressed and the arguments changed and strenghtened throughout in favour of the banks.

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That's the kinder version. You could also say that the banks knew the charges WERE penalties and were getting away with it until things kicked off, hastily rewrote their T&Cs to make them a not-penalties argument, thus giving the judge a chance to find in their favour on both new and historical terms, and once that was so handily out of the way, concentrating on the core terms part. :rolleyes:

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As SFU says, the Sharp case is still ongoing. Perhaps that why Mike Dailly of GLC advised this client to give up - as Sharp can get legal aid and this client can't.


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As SFU says, the Sharp case is still ongoing. Perhaps that why Mike Dailly of GLC advised this client to give up - as Sharp can get legal aid and this client can't.

 

Quick note to say we haven't advised any of our clients to give up!

 

We've enrolled a motion to sist (stay) in Walls v. Santander UK plc pending an application to the European Court of Human Rights (ECtHR) in Walls v. United Kingdom. The ECtHR has to first determine whether the application is admissible (having regard to its new, revised criteria). Admittedly, the ECtHR process is slow, but that does not cause any difficulty.

 

Essentially, this approach is designed to preserve our client's rights, prompt law reform, and also to potentially protect the rights of other consumers who have to drop the cases for fear of costs i.e. because if the ECtHR case was successful (in principle) certain consumers might be entitled to sue the state for damages. Not ideal, as it should be the banks, but at least it could preserve a right to recompense for disenfranchised citizens.

 

The key target is of course the banks and their unfair charges. In that regard, we have a number of cases proceeding (including Sharp v. Bank of Scotland plc, and Reid v. Clydesdale Bank plc, among others).

 

The banks have put forward highly technical and complex legal defences which will require to be 'debated'. It won't be easy, they are throwing a lot of money at defending these cases, and we do not underestimate the challenge, however, I anticipate having a decision on the banks relevancy and competency defences later this year.

 

So, at present there is no reason to give up hope.

 

Mike

Govan Law Centre

  • Haha 3

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*gazes in awe at Mike* (I'm a girl, don't worry! :-D)

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Fantastic to see you on CAG Mike. I too am in awe and have long been a great fan of GLC.

 

I am so pleased that you have not given up the fight and look forward to reading more good news.

 

Do you believe that the outcome of this case will carry the same weight in England and Wales, as it will in Scotland as obviously things aren't exactly the same?

Edited by caro
typo!

 

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:p

 

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Do you believe that the outcome of this case will carry the same weight in England and Wales, as it will in Scotland as oviously things aren't exactly the same?

If Mike wins - then we'll argue that it does.

If he loses then we'll argue that it doesn't.


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Many thanks Bookworm, Caro and Bankfodder. GLC is a big fan of CAG, and we have done a lot of good partnership work over the years.

 

The law that we are attempting to found upon (CCA and UTCCR) applies on a UK-wide basis, and the way the English and Scottish courts operate is of course to consider the decision of Scottish and English courts, respectively, as 'persuasive' only on UK law issues (or 'highly persuasive' if it's a senior court such as the Inner House or Court of Appeal).

 

However, that's not really the point, because if we are able to have any UK court reject the banks relevancy and competency defences, then that will be helpful, and the arguments on how to do this can be disseminated via CAG and MSE to help other people to do likewise.

 

If we can get passed the technical defences we are then left with the substantive issue (which would require a trial/proof) of whether charges are fair or unfair in relation to the CCA and/or the UTTCR (except of course in relation to the 'level' of charges for UTCCR, standing the UK Supreme Court's decision - but we can argue on the level of charges under CCA). I believe that's an argument we can win; there is a considerable amount of evidence in our favour, including the significant detriment and distress to the individual consumer in a particular case.

 

Mike

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Hi Mike:)

 

Very many thanks for taking the time to update us here!

 

As someone who has already been forced to withdraw due to costs implications (in England), I truly appreciate the huge efforts you are making and the implications your potential success could have for very many other claimants.

 

Good Luck to you and your clients :D

 

Landy x


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Quite agree Landy.

 

I realise there's a way to go yet Mike, but it's very encouraging to know that the fight goes on.

 

I know that others are also continuing with cases imminent, so let's hope we get more good news soon.


 

What's Best for You?

 

 

The Consumer Action Group is a free help site.

Should you be offered help that requires payment please report it to site team.

 

Alliance & Leicester Moneyclaim issued 20/1/07 £225.50 full settlement received 29 January 2007

Smile £1,075.50 + interest Email request for payment 24/5/06 received £1,000.50 14/7/06 + £20 30/7/06

Yorkshire Bank Moneyclaim issued 21/6/06 £4,489.39 full settlement received 26 January 2007

:p

 

Advice & opinions given by Caro are personal, are not endorsed by Consumer Action Group or Bank Action Group, and are offered informally, without prejudice & without liability. Your decisions and actions are your own, and should you be in any doubt, you are advised to seek the opinion of a qualified professional.

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very pleased to stand corrected Mike and will watch developments with great interest

I'm watching with interest aswell (8% to be exact ;))


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