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SLAB's CEO
Lindsay Montgomery |
The decision effectively means that no-one in Scotland can ever obtain civil legal aid to pursue a modest bank charges claim, and further, that any complex consumer credit or consumer law complaint of a modest value is unlikely to ever qualify for legal aid in Scotland. In short, SLAB have killed-off access to justice for many tens of thousands of consumers in Scotland.
The previous unfair UK bank charges campaign, which Govan Law Centre played a key role in as solicitors to the UK campaign team, resulted in over £1bn being refunded to consumers across Great Britain and Northern Ireland. Despite the widescale public interest in enabling tens of thousands of Scots reclaim unfair overdraft fees, SLAB has refused legal aid on the grounds of a 'cost-benefit analysis test'.
The 'cost-benefit analysis' is based upon an assumption that a 'privately paying client of modest means would not pursue an ordinary action in these circumstances'. Of course, the fact the action was ordinary cause and not a small claims, was due to the court holding that the subject-matter was legally complex; and the fact UK banks have sought to remove claims against them from the small claims court.
GLC had agreed to cap all of its fees and outlays at a purely nominal sum (£375) in order to keep the risk to the public purse to a bare minimum and proportionate level. We also pointed out the case was not just about money, it was a matter of huge public interest, and we were also seeking an order to prohibit the future imposition of overdraft charges under s.140B of the Consumer Credit Act 1974. All of these arguments were summarily dismissed by SLAB.
Today, GLC has written to SLAB advising that in order to avoid the need for a petition for judicial review of the Board’s refusal of civil legal aid in this case, as Wednesbury unreasonable,
et separatim irrational and illegal, we would ask the Board to reconsider its decision to refuse civil legal aid under reference to the following relevant and significant considerations:
"If the Board granted civil legal aid then in relation to the cost/benefit analysis, GLC's client and this firm would undertake to seek a protective expenses order to cap expenses at the equivalent small claims limit, and if this was not granted the Board could reconsider its position;
The Board will be aware of the wider Scottish public interest in this case, and that if civil legal aid cannot granted for bank charges cases due to the cost/benefit analysis applied by the Board, as in this case, the Board will be acting unlawfully in relation to section 6 of the Human Rights Act 1998 and inter alia the applicant’s entitlement to a fair and public hearing. The Board will note the court has already assessed this case as dealing with complex and difficult factual and legal issues in determining to remit same to the ordinary court. Without the benefit of civil legal aid our client will denied access to justice; and
The applicant’s claim proceeds upon a case under the Unfair Terms in Consumer Contract Regulations 1999 and separately, the Consumer Credit Act 1974. Said Regulations were enacted by the UK to implement its European Community law (EC) obligations under the Unfair Consumer Contract Terms Directive 93/13/EC, while the Consumer Credit Act 1974 (as amended) implemented the UK’s obligations under the Consumer Credit Directive 2008/48/EC (and earlier). The foregoing rights that the applicant enjoys are guaranteed by the Charter of the Fundamental Rights of the European Union. The refusal to grant legal aid in our client’s case is a contravention of Article 47 of the Charter. Article 47 provides as follows:
“
Right to an effective remedy and to a fair trial
Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal in compliance with the conditions laid down in this Article.
Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law. Everyone shall have the possibility of being advised, defended and represented.
Legal aid shall be made available to those who lack sufficient resources in so far as such aid is necessary to ensure effective access to justice”.
GLC's Principal Solicitor, Mike Dailly said:
"Govan Law Centre believes the Scottish Legal Aid Board has dealt a death blow to tens of thousands of people in Scotland who would like to obtain a refund of unfair bank charges. We believe that the Board has acted unlawfully, unreasonably and irrationally, and we will challenge the Board in order to protect our clients' European Community law rights. Once again the Board has demonstrated that it cannot be entrusted with the responsibility for monitoring and safeguarding access to justice in Scotland. The Board does not appear to understand access to justice in Scotland; in many respects the Board has become a major threat to vulnerable Scots securing access to justice.".
Access to justice denied: Scottish Legal Aid Board kills off hope of reclaiming unfair bank charges in Scotland
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With around £9bn of Payment Protection Insurance (PPI) mis-sold to UK consumers the issue of the mis-selling of financial products is big consumer news; yet the potential for the mis-selling of consumer credit products - particulary pay day loans and second charge mortgages regulated under the Consumer Credit Act - is relatively new and unchartered waters. 
