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The OFT test case means that there is a chance that cases will be stayed (meaning put on hold) pending the outcome of the decision. There has been a lot of speculation and misinformation regarding stays both in the media and within discussions on the forums.

The following information was obtained by Martin Lewis directly from the Royal Courts of Justice, The Strand, London and it is hoped that this will clear up some of the questions.

I was passed these questions from the court service as they are a matter for the judiciary. I hope these answers provide you with the information you required.

1. The Banks & OFT wrote to the master of the rolls. Does this mean the MOR has accepted their request and is looking for a general stay. I would like to officially request whether this has been accepted and to hear how it is to be implemented in the courts.

 

Answer: The MoR decided not to issue an order staying all outstanding cases. Instead he asked the Deputy Head of Civil Justice to write to all Designated Civil Judges, (which he has done) inviting them to consider staying outstanding claims on a case by case basis as appropriate. Designated Civil Judges are the senior circuit judge responsible for a group of courts. S/he may agree arrangements with the district judges sitting at each individual court.

 

 

2. If it has been accepted by the MOR. Can I confirm

 

Answer: Whether case is stayed or not is a matter for the judiciary taking into account all the circumstances of the individual claim

 

b. That unless a stay is requested by one of the parties there will not be an automatic stay

 

Answer: A stay will be considered if a request is received from one of the parties or a judge may direct that proceedings are stayed without an application.

 

c. If one of the parties requests the stay, then the other party may still object to the stay.

 

Answer: If an application is made by one of the parties for a stay, the judge may hear the application. Otherwise judges may stay a case at their own initiative. If a judge orders a stay after a hearing, a party may appeal. If a case is stayed on the courts' own initiative (i.e. without a specific request from the parties and without a hearing), a party may apply for the judge to review his/her decision at a hearing. Parties would need to pay additional court fees for appeals and applications.

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This means that it is quite clear there is no automatic applications of stays. It is up to the individual judge whether to order a stay. It is difficult to predict how things are going to progress at this stage and there is likely to be inconsistencies in approach by different banks/courts.

 

It is likely that all banks will immediately request a stay. Indeed Lloyds and Barclays have stated this is their position. There is also the possibility that judges will order stays on their own initiative.

 

If a stay is ordered you will have the opportunity to contest this. You would do this using form N244 making a formal application to lift the stay. This costs £30 if you have consent of the defendant or £60 if the defendant does not consent. There is no guarantee that this will be successful and it is difficult to tell at this stage what approach the courts will take. There are some early indications to show that the courts are not necessarily minded to order a stay. In fact yesterday in Birmingham (where recent bank charge claims have been lost by claimants) the judge gave the claimants a choice to have their case stayed or to continue. More recently however, it seems that stays are unlikely to be lifted.

 

If the bank indicates that it is going to apply for a stay you can lodge an objection to this with the court. This can be done be a simple letter with out the need to fill in form N244 or pay a fee. Alternatively if the application for a stay is to take place at a hearing take the objection to the court. Be sure to always send a copy of the objection to the defendant.

 

In the link below is a suggested template for an application for removal of a stay where one has been ordered by the court, adapted from one used where claims were stayed in relation to claims transferred to the mercantile court. This was generally very succesful at removing stays.

 

 

http://www.consumeractiongroup.co.uk/forum/bank-templates-library/17065-application-removal-stay-updated.html#post1046820

 

Below is an alternative template from the penalty charges forum which was produced in consultation with a barrister and is reproduced with the kind permission of penalty charges.

 

Which one you use is entirely up to you and you may like to produce your own based on bits of both. You might also like personalise it with any of your particular details which are relevant to why you need to have your case proceed.

 

The template below the one from Penalty Charges is one used by a user adapted to her particular circumstances and is a very good example of objecting on the grounds of hardship. (Although please note there are reservations regarding the applicability of the Social Security Administration Act.) This user used the objection in court on 8th of August. Interestingly the judge was not happy to go ahead with the hearing for fear of pre-empting the OFT test case. He also did not want to order a stay because of the hardship it would cause. He put it to the defendant (HSBC) that a stay should be granted provided HSBC accepted the conditions that no charges should be applied to the account during the stay. HSBC refused the conditions and the case was adjourned for a further hearing to consider the stay on Thursday 16th Aug.

 

For information on sists, the Scottish equivalent of a stay, follow this link:

 

http://www.consumeractiongroup.co.uk/forum/scotland/111089-info-sists-relation-bank.html

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With thanks to penalty charges

Respectfully request that the stay which was ordered by xxxxxxxxxx on the XXXXXXXX be removed.

 

 

 

The claimant relies on the following grounds

HUMAN RIGHTS

1 The Claimant contends that a stay of all court actions in which the preliminary issues identified in the Agreement of 25th July 2007, made between the Office of Fair Trading (OFT) and the Banks (the Agreement), a copy of which is annexed hereto, are raised, contravenes my rights under the European Convention on Human Rights (ECHR) as set out in Schedule 1 of the Human Rights Act 1998, Article 6.1.

 

2 Art.6 1. Of the Convention provides that, in the determination of their civil rights everyone is entitled to a fair and public hearing within a reasonable time. The OFT v the Banks case is not going to be resolved within a year from its commencement. Further, given the importance of the issues there will almost inevitably be an appeal from a first instance decision and any stay could endure for two years or even more. This is plainly not a reasonable time within which to resolve the vast majority of claims before the Courts, which like mine are small claims.

 

THE OVERRIDING OBJECTIVE

3 CPR 1.1(2) sets out considerations which the Court must give effect to.

(a) ensuring the parties are on an equal footing

The Banks and the OFT will be represented in their case. We as consumers are not represented. The case will determine issues essential to many cases, like mine, before the County Courts, yet we have no voice in them. There are particular circumstances in individual cases which will raise arguments the OFT are not aware of, nor can the case be expected to deal with the terms and conditions in all cases as not all Banks and Building Societies are listed as Defendants. Even if I were to be somehow joined in the OFT case, I would have no funding for representation and would therefore be prejudiced in a case with some heavyweight lawyers. The Court would properly ensure the parties in my case remain on an equal footing by allowing it to proceed.

 

(b) Saving expense

Expense would be saved by allowing my case to proceed in the normal way. Arguments on this issue are already set out below and apply equally under this head.

© dealing with cases which are proportionate to

(i) the amount of money involved

In my case, I claim £ in charges unlawfully levied by the (name of Bank). This a large sum for me but a negligible sum for the Defendant. It is of no consequence to the Bank that I may be deprived of an opportunity to resolve my dispute for a further year to two years, as they already have my money and in any event they are under no financial pressure to resolve the case fairly and speedily. I on the other hand am extremely anxious to have my case determined as speedily as fairness permits and the comparatively low amount of money involved, so far as the Bank is concerned, does not warrant the resolution of the dispute being delayed further.

 

(ii) the importance of the case

 

My case is very important to me, though given the commercial strength and power of the Bank, of relatively little importance to them. Nor can the Banks fairly argue that all of a sudden the principles as a whole are important to them so that all claims against them must be stayed, as they seek to do in the OFT case. This is not an argument which lies with them to make, given their approach to cases like mine. The Banks’ strategy to litigation of this kind is almost without exception, to put in a defence and settle shortly before the trial. It is very rare when the Banks bother to argue any defence. In other words, they treat cases like mine as another commercial decision. They have never sought to see a case through, take it to appeal if necessary and seek to establish certainty over the principles they assert are so crucial now, they necessitate a stay of all claims. Certainly of all the cases dealt with by my representative (penaltycharges.co.uk), I am told and believe that not one case out of …….has been taken to trial. The Bank has always settled. If these issues were so critical to them they were at liberty to see their arguments through in a case, take it to appeal and seek certainty on the issues in an appellate court in the normal way. Only now do they seek to do so but in a way which involves the suspension of all the hundreds of cases against them.

 

(iii) to the complexity of the issues

The issues of whether the Banks’ charges are capable of being assessed for fairness under the Unfair Terms in Consumer Contracts Regulations 1999 and whether they amount to penalty charges, whether for breach of contract or as a payment for services as the Banks now allege, is not so complex that it warrants the stay of all claims in which these issues are at large. The arguments are commonly dealt with days in day out by the County Courts who are more than adequately placed to deal with them. The complexity/simplicity of the issues is no reason to grant a stay, rather it is a reason why the County Court should continue to determine them.

 

(iv) to the financial position of each party

 

Many Claimants are normal people on low or average incomes who have been deprived, in many cases, of several thousand pounds going back up to 6 years. I am on a low income and have suffered hardship as a result of the Bank’s charges. I will continue to suffer hardship for a much longer period if the stay is allowed. The Banks have virtually unlimited funds by comparison. I like many other Claimants would be financially prejudiced by the matter going off for a long period, not just by the fact that if I win I will have been deprived of my money for a much longer period, money that would make a significant difference to my life, but also by the fact that in the meantime, the Banks can continue to charge me their outrageous penalties, incurring further hardship on me, for the period of the stay. I can have my private law dispute resolved expeditiously and fairly by the Court allowing my action to proceed to trial in the normal way.

 

(d) ensuring the case is allowed to proceed expeditiously and fairly

 

· This case will not be expeditiously dealt with if delayed for up to 2 years. The Banks have had years to invite the OFT to issue their case against them. Many hundreds of cases have gone through the Courts already, arguing the same points that are set out as preliminary issues in the OFT case. I should not be deprived of the same opportunity that all those other Claimants had, simply because the Banks have elected to take this route vis a vis the OFT.

· In any event, my case, as many others do, involve other additional arguments to those listed as preliminary issues in the OFT case. One major issue is the amount of recoverable bank charges and the costs to the Banks of taking the particular step they charge for. There is clearly an issue over what is a reasonable charge for say a returned cheque or at what stage a charge moves from a reasonable one to an unenforceable penalty. These are not dealt with in the preliminary issues listed in the Agreement. It is not fair to postpone the determination of my case because some issues are identical to the preliminary ones in the OFT case, while there remain issues in my case which are unaffected by the OFT case. Fairness is properly ensured by allowing all the issues in my case to be determined at the same time, by the same Court which hears all the evidence and all the arguments.

· Another additional argument in my case is the fact that I am in receipt of [insert benefit name] benefits which are paid directly into the my account. The category of benefit that I receive is deemed as inalienable under the Social Security Administration Act 1992 (s.187) which statesasfollows:

 

187.—(1) Subject to the provisions of this Act, every assignment of or charge on—

(a) benefit as defined in section 122 of the Contributions and Benefits Act;

(b)any income-related benefit; or

©child benefit

and every agreement to assign or charge such benefit shall be void; and, on the bankruptcy of a beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors.

My argument is that penalty charges by the Bank amount to an unlawful charge under Section 187. Allowing a stay will allow the Defendant to continue this practice, which will cause undue hardship and which, if found in my favour, cannot be properly compensated.

ADDITIONAL POINTS

 

4 The defendant remains at liberty to enter my name on the default register which it and other banks routinely do in respect of unlawful penalties which are unpaid by their customers. The banks have direct and privileged access to this register. They have no need to obtain a County Court judgment before they may enter a default on the register. This default remains on the register for 6 years and causes enormous inconvenience and damage to reputations. Were my name to be entered on the default register I would find it very difficult to get credit or a mortgage and I would have to pay higher fees for any credit, which I did manage to obtain. Allowing a stay of all claims like mine would facilitate this invidious practice, which cannot properly be compensated for, should I be successful. The damage will already have been done.

 

IN THE ALTERNATIVE

5 If the court decides not to accede to my request to remove the stay I respectfully request that the court makes the stay conditional on the following orders:

 

1) That the defendant bank is prevented from applying further charges to my account until the final settlement of the matter.

2) That the defendant is prevented from applying interest to any outstanding amounts which are comprised of charges until the settlement of the matter.

3) That the defendant is prevented from closing my account.

4) That the defendant is prevented from making any entry on its own systems or from communicating any similar information to any third party about any matter relating to charges on my account and/or the payment or non payment thereof until the final settlement of the matter.

5) That the defendant remove any adverse entry on its own records insofar as it relates to charges on my account or the payment or non payment thereof. (The Court has the power to do this under the Data Protection Act 1998 ).

6) That the defendant arranges the removal of entries from the records of any third parties to whom it has previously communicated information insofar as it relates to charges on my account. (The Court has the power to do this under the Data protection Act 1998.)

7) That these orders remain in place until the settlement of my claim.

 

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  • 2 weeks later...

Your address

Court address

Date

Dear Sir/Madam

Claim Number: XXXXXX

Hearing date: 9th August 2007

I understand that D&G Solicitors, on behalf of their client HSBC Bank pls, will be requesting an order to stay my action until resolution of the bank's proceedings with the Office of Fair Trading. I respectfully request that any such request for a stay be denied. In addition to requesting a stay, the Bank appears to have failed to submit the required paperwork as directed by the Court.

 

The claimant relies on the following grounds

 

HUMAN RIGHTS

 

1 The Claimant contends that a stay of all court actions in which the preliminary issues identified in the Agreement of 25th July 2007, made between the Office of Fair Trading (OFT) and the Banks (the Agreement), a copy of which is annexed hereto, are raised, contravenes my rights under the European Convention on Human Rights (ECHR) as set out in Schedule 1 of the Human Rights Act 1998, Article 6.1.

 

2 Art.6 1. Of the Convention provides that, in the determination of their civil rights everyone is entitled to a fair and public hearing within a reasonable time. The OFT v the Banks case is not going to be resolved within a year from its commencement. Further, given the importance of the issues there will almost inevitably be an appeal from a first instance decision and any stay could endure for two years or even more. This is plainly not a reasonable time within which to resolve the vast majority of claims before the Courts, which like mine are small claims.

 

THE OVERRIDING OBJECTIVE

 

3 CPR 1.1(2) sets out considerations which the Court must give effect to.

 

(a) ensuring the parties are on an equal footing

 

The Banks and the OFT will be represented in their case. We as consumers are not represented. The case will determine issues essential to many cases, like mine, before the County Courts, yet we have no voice in them. There are particular circumstances in individual cases which will raise arguments the OFT are not aware of, nor can the case be expected to deal with the terms and conditions in all cases as not all Banks and Building Societies are listed as Defendants. Even if I were to be somehow joined in the OFT case, I would have no funding for representation and would therefore be prejudiced in a case with some heavyweight lawyers. The Court would properly ensure the parties in my case remain on an equal footing by allowing it to proceed.

 

(b) Saving expense

 

Expense would be saved by allowing my case to proceed in the normal way. Arguments on this issue are already set out below and apply equally under this head.

 

© dealing with cases which are proportionate to the amount of money involved

 

In my case, I claim £xxxx.xx plus £xxx.xx interest on penalties plus £xxx.xx interest at 8% for charges unlawfully levied by HSBC, not withstanding court costs of £xxx. This a large sum for me but a negligible sum for the Defendant. It is of no consequence to the Bank that I may be deprived of an opportunity to resolve my dispute for a further year to two years, as they already have my money and in any event they are under no financial pressure to resolve the case fairly and speedily. I on the other hand am extremely anxious to have my case determined as speedily as fairness permits and the comparatively low amount of money involved, so far as the Bank is concerned, does not warrant the resolution of the dispute being delayed further. Additionally, the bank have unilaterally and without explanation increased penalty charges to £150 a month since I began court proceedings which has substantially increased the hardship suffered for myself and my children, and such charges are only being imposed because these very same charges force me to exceed the agreed overdraft limit each month.

 

(ii) the importance of the case

 

My case is very important to me, though given the commercial strength and power of the Bank, of relatively little importance to them. Nor can the Banks fairly argue that all of a sudden the principles as a whole are important to them so that all claims against them must be stayed, as they seek to do in the OFT case. This is not an argument which lies with them to make, given their approach to cases like mine. The Banks’ strategy to litigation of this kind is almost without exception, to put in a defence and settle shortly before the trial. It is very rare when the Banks bother to argue any defence. In other words, they treat cases like mine as another commercial decision. They have never sought to see a case through, take it to appeal if necessary and seek to establish certainty over the principles they assert are so crucial now, they necessitate a stay of all claims. Certainly of all the cases dealt with by my representative (consumeractiongroup.co.uk), I am told and believe that not one case out of thousands has been taken to trial. The Bank has always settled. If these issues were so critical to them they were at liberty to see their arguments through in a case, take it to appeal and seek certainty on the issues in an appellate court in the normal way. Only now do they seek to do so but in a way which involves the suspension of all the hundreds of cases against them.

 

(iii) to the complexity of the issues

 

The issues of whether the Banks’ charges are capable of being assessed for fairness under the Unfair Terms in Consumer Contracts Regulations 1999 and whether they amount to penalty charges, whether for breach of contract or as a payment for services as the Banks now allege, is not so complex that it warrants the stay of all claims in which these issues are at large. The arguments are commonly dealt with day in day out by the County Courts who are more than adequately placed to deal with them. The complexity/simplicity of the issues is no reason to grant a stay, rather it is a reason why the County Court should continue to determine them.

 

(iv) to the financial position of each party

 

Many Claimants are normal people on low or average incomes who have been deprived, in many cases, of several thousand pounds going back up to 6 years. I am on a low income and have suffered hardship as a result of the Bank’s charges. I will continue to suffer hardship for a much longer period if the stay is allowed. The Banks have virtually unlimited funds by comparison. I like many other Claimants would be financially prejudiced by the matter going on for a long period, not just by the fact that if I win I will have been deprived of my money for a much longer period, money that would make a significant difference to my life, but also by the fact that in the meantime, the Banks can continue to charge me their outrageous penalties, incurring further hardship on me, for the period of the stay. The Bank now routinely take almost 25% of my Working Family Tax Credits benefits in penalty charges each month. I can have my private law dispute resolved expeditiously and fairly by the Court allowing my action to proceed to trial in the normal way.

 

(d) ensuring the case is allowed to proceed expeditiously and fairly

 

· This case will not be expeditiously dealt with if delayed for up to 2 years. The Banks have had years to invite the OFT to issue their case against them. Many hundreds of cases have gone through the Courts already, arguing the same points that are set out as preliminary issues in the OFT case. I should not be deprived of the same opportunity that all those other Claimants had, simply because the Banks have elected to take this route vis a vis the OFT.

· In any event, my case, as many others do, involve other additional arguments to those listed as preliminary issues in the OFT case. One major issue is the amount of recoverable bank charges and the costs to the Banks of taking the particular step they charge for. There is clearly an issue over what is a reasonable charge for say a returned cheque or at what stage a charge moves from a reasonable one to an unenforceable penalty. These are not dealt with in the preliminary issues listed in the Agreement. It is not fair to postpone the determination of my case because some issues are identical to the preliminary ones in the OFT case, while there remain issues in my case which are unaffected by the OFT case. Fairness is properly ensured by allowing all the issues in my case to be determined at the same time, by the same Court which hears all the evidence and all the arguments.

· Another additional argument in my case is the fact that I am in receipt of Working Family Tax Credits benefits which are paid directly into the my account. The category of benefit that I receive is deemed as inalienable under the Social Security Administration Act 1992 (s.187) which states as follows:

 

187.(1) Subject to the provisions of this Act, every assignment of or charge on—

(a) benefit as defined in section 122 of the Contributions and Benefits Act;

(b)any income-related benefit; or

©child benefit

and every agreement to assign or charge such benefit shall be void; and, on the bankruptcy of a beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors.

 

My argument is that penalty charges by the Bank amount to an unlawful charge under Section 187. Allowing a stay will allow the Defendant to continue this practice, which will cause undue hardship and which, if found in my favour, cannot be properly compensated.

 

ADDITIONAL POINTS

 

4 The defendant remains at liberty to enter my name on the default register which it and other banks routinely do in respect of unlawful penalties which are unpaid by their customers. The banks have direct and privileged access to this register. They have no need to obtain a County Court judgment before they may enter a default on the register. This default remains on the register for 6 years and causes enormous inconvenience and damage to reputations. Were my name to be entered on the default register I would find it very difficult to get credit or a mortgage and I would have to pay higher fees for any credit, which I did manage to obtain. Allowing a stay of all claims like mine would facilitate this invidious practice, which cannot properly be compensated for, should I be successful. The damage will already have been done.

 

IN THE ALTERNATIVE

 

5 If the court decides not to accede to my request to deny the stay I respectfully request that the court makes the stay conditional on the following orders:

 

1) That the defendant bank is prevented from applying further charges to my account until the final settlement of the matter.

2) That the defendant is prevented from applying interest to any outstanding amounts which are comprised of charges until the settlement of the matter.

3) That the defendant is prevented from closing my account.

4) That the defendant is prevented from making any entry on its own systems or from communicating any similar information to any third party about any matter relating to charges on my account and/or the payment or non payment thereof until the final settlement of the matter.

5) That the defendant remove any adverse entry on its own records insofar as it relates to charges on my account or the payment or non payment thereof. (The Court has the power to do this under the Data Protection Act 1998 ).

6) That the defendant arranges the removal of entries from the records of any third parties to whom it has previously communicated information insofar as it relates to charges on my account. (The Court has the power to do this under the Data protection Act 1998.)

7) That these orders remain in place until the settlement of my claim.

Yours sincerely

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Thanks

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