Bank charges fight still alive: GLC guest comment on MSE

Bank charges reclaiming has largely fallen off the radar after the banks' 2009 Supreme Court victory. But GLC's Mike Dailly thinks the fight is still on. 

In a guest comment piece on MoneySavingExpert.com, Mike argues that last month's High Court defeat of banks on mis-selling payment protection insurance (PPI) may present the catalyst for change that consumers having been waiting for. That case clarified the precise status of the Financial Service Authority's (FSA) rules. 

Consumers may found upon the FSA's new banking rules to argue that overdraft charges are not 'fair' to the individual customer who has to pay them because their price is calculated to cross-subsidise 'free banking' for customers who remain in credit.  They can use them to seek financial redress.  Read Mike's article here.

Bank charges fight still alive: GLC guest comment on MSE

Scotland's Justice Secretary must back Scottish Consumers over unfair bank charges says MSP

Consumers in Scotland are being denied justice against UK banks according to the MSP for Glasgow Ballieston, Margaret Curran, who is the local constituency MSP and MP for GLC's client Jennifer Sharp. 

Ms Sharp has been refused legal aid by the Scottish Legal Aid Board to pursue her claim for a refund of unfair bank charges against the Bank of Scotland plc.  Labour MSP and MP Margaret Curran has issued the following statement:-

" 'Scotland’s Justice Secretary has refused to back Scottish consumers who are challenging unfair and excessive bank charges. The Justice Secretary needs to decide whose side he’s on. Scotland’s consumers or the banks? Scottish consumers are being routinely denied access to justice on this issue and Kenny MacAskill must break his silence and support hardworking Scots who’ve been treated unfairly by the banks'.

Last year there were approximately 120,000 Scottish households who had complained about excessive overdraft charges. The banks have since rejected their complaints and now there is effectively no redress through the Scottish courts on this issue.

In July, Kenny MacAskill claimed Scottish consumers have no problem in trying to recover overdraft charges in our courts: 'People are still able to raise bank charge cases in the small-claims court – this ruling does nothing to stop that. We totally support the right of people to bring such actions and the courts will decide each case on its own merits.'

However, the experience of Scots tells a very different and worrying story. Kenny MacAskill has displayed nothing but arrogance, and incompetence in failing to do anything whatsoever to help financially vulnerable Scots at least be able to access justice – with at least 120,000 Scottish households standing to benefit from action on this issue.

Last week the Scottish Legal Aid Board (SLAB) refused to grant civil legal aid for citizens on low income/benefits to pursue court actions for a refund of unfair bank charges.  In the cases of Sharp v. Bank of Scotland plc and Reid v. Clydesdale Bank plc SLAB refused legal aid because they said the value of the sums sued were too small.

Applying a ‘cost/benefit analysis’ test, SLAB said someone who was able to privately fund litigation would not risk spending their own money to pursue a claim under £3,000. Of course, this was the reason the small claims system was set up with restricted expenses.

However, bank charges cases in Scotland have been removed from the small claims system by the courts on the motion of UK banks (a tactic used in other parts of the UK too). Accordingly, as matters stand Scotland’s legal aid and civil court system have failed Scottish consumers who want to try and reclaim their overdraft charges.

Scotland’s Justice Minister needs to wake up from his slumber on this issue and take urgent action".

Scotland's Justice Secretary must back Scottish Consumers over unfair bank charges says MSP

Access to justice denied: Scottish Legal Aid Board kills off hope of reclaiming unfair bank charges in Scotland

SLAB's CEO
Lindsay Montgomery

The Scottish Legal Aid Board (SLAB) has refused to grant civil legal aid in a leading Scottish test case on unfair UK bank charges - Sharp v. Bank of Scotland plc - with their decision to refuse legal aid being upheld on an internal appeal to the Board this week. 

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

Update: unfair bank charges on BBC 1's Rip-off Britain

Unfair bank charges, including clients of Govan Law Centre, were featured on BBC 1's Rip-off Britain at 9.15am on Monday, 29 November 2010.

Sadly, the programme decided to take a soft approach and focus on peripheral issues around charges (e.g. communication concerns) as opposed to the tough question of whether the UK bank charging model was unfair in law, whether it was morally acceptable to exploit vulnerable consumers to subsidise better off customers,  as well as overlooking the plight of thousands of UK consumers still trying to seek refunds of unfair charges.

Update: unfair bank charges on BBC 1's Rip-off Britain

Scottish bank charge cases: amended pleadings

If you have a small claims action seeking a refund of unfair bank charges sisted at the sheriff court then chances are it will be dismissed unless you amend the basis of your claim, in light of the Supreme Court's decision in OFT v. Abbey National plc and others [2009] UKSC 6.

MoneySavingExpert.com have produced a detailed guide on bank charges here. Disclaimer: If you decide to amend, and your case is before a sheriff court in Scotland, GLC is providing some example court documents - however, please note these are illustrative and are used at your own risk; also please bear in mind you must amend these to suit your personal circumstances, and you should obtain independent legal advice before using same.

In order to amend a small claims Statement of Claim an 'Incidental Application' must be submitted to the court; if you are a party litigant (i.e. without a solicitor) the sheriff clerk will help you serve this. No court dues are payable to amend. You can attach your proposed Amended Statement of Claim to the Incidental Application, so that all of this is served on the bank.

> Example AMENDED STATEMENT OF CLAIM
> Example INCIDENTAL APPLICATION

Can I use the new CCA unfair relationship test for past charges?
Sections 140A and B of the Consumer Credit Act (CCA) came into force in April 2007. In summary, you won't be able to use the CCA for charges before 6 April 2007 if your account became a 'completed agreement' before 6 April 2007 or between 6 April 2007 and 5 April 2008. In other words if you were still in unauthorised overdraft, incurring charges or owing money to the bank, before 6 April 2007 and after 5 April 2008 then you should be fine (and you should be able to go back as far as you like). These transitional rules come from para 14 et seq., schedule 3 of the Consumer Credit Act 2006.

What happens next?
Once the Incidental Application and Amended Statement of Claim are served on the bank, the case will then call at the date and time allocated to you by the sheriff clerk. You must appear (or be represented in court) at this time in order to 'move' the application i.e. to ask the sheriff to grant the things you are asking the court to do in the Incidental Application.

What am I asking the court to do?
You need to ask the court to allow you to amend the Statement of Claim (as proposed in your Amended Statement of Claim)and the 'crave' (if you want to ask the court to prohibit future charges), ordain the defenders to lodge defences/amended defences, and to fix a diet of proof (an evidential hearing).

Can the bank object to my amendments?
Yes, the bank can object. However, it is entirely a matter of discretion on the part of the sheriff whether to allow you to amend. You would want to point out that these changes have been made necessary because of the Supreme Court's decision in the OFT test case, and this requires you to refine the regulation 5, UTCCR case. You can note that the President of the Supreme Court, Lord Phillips, made it clear that “it remained open to question whether bank charges were fair” in relation to regulation 5(1) of the UTCCR (para 80 of the Supreme Court’s judgment). And that the insertion of a CCA case supplements your case; so it is reasonable to amend. The relevant rule of court which is important here is SmCR 12.1, which provides as follows:

12.1. — (1) The sheriff may, on the incidental application of a party allow amendment of the summons, form of response or any counterclaim, and adjust the note of disputed issues at any time before final judgment is pronounced on the merits.

What happens if I am permitted to amend?
Hopefully, a diet of proof (evidential hearing) will be fixed. As regards the CCA part of any claim, section 140B(9) makes it expressly clear that the onus of proof will be on the bank to show that charges were 'fair'. However, you would still want to lodge evidence to show that charges were excessive to you as an individual customer. One could argue, the banks conceded before the Supreme Court that their charges significantly cross-subsidised 'free if in credit' banking for 42m customers. There are 54m current account customers in the UK, but only 12m customers ever pay overdraft charges. If one were to interrogate that data, it would become apparent that at the bottom of that 12m cohort will be people who incur regular multiple charges (and at the top there will be customers who incur one or two per annum); thus the more charges you incur the more you will be disproportionately contributing to free services for other customers, and the more you will be in finanacial difficulty (with charges on charges, and interest on top). Is that a fair relationship as regards the customer in penury? Or is that a fair balance between the rights of the bank and the position of the customer in penury? Only the court can decide these questions, and it will be important, we think, to lodge evidence to show the impact bank charges have had on the customer's day to day life.

What happens if I do nothing?
Your small claim may be dismissed. Be careful, because the bank may seek an award of expenses. If you do not proceed with a small claim to a proof (in good faith) the restricted expenses protection flies off and you could be liable to summary cause scale expenses. If you want to give up and drop your case it would be wise to ask the bank to agree to this on a 'no expenses due to or by' basis. If you decide to proceed you may be able to get support from one of the free online UK consumer forums such as the Consumer Action Group, MSE, LegalBeagles, or PenaltyCharges.

Scottish bank charge cases: amended pleadings

Bank overdraft charges face new legal attack

From the BBC's UK business news: A law centre in Scotland has revived the UK legal campaign against bank overdraft charges. In November, the Supreme Court ruled that the scale of bank charges could not be challenged as unfair under consumer contract rules. But a client of the Govan Law Centre has won the right to challenge the Bank of Scotland's overdraft charges under the Consumer Credit Act. The bank will now have to demonstrate that its charges are not excessive. Read the full story here.

Bank overdraft charges face new legal attack

Sheriff puts Bank of Scotland to proof on bank charges

- Onus of proof now on Scottish bank to show charges were not excessive

THE BANK OF SCOTLAND has failed in its attempt to prevent a customer amending her claim for unfair bank charges, recalling the sist, and fixing a full evidential hearing at Glasgow Sheriff Court this morning (Friday, 19 February 2010).

UK banks have been telling over one million of their customers in the UK that they now had no legal basis to reclaim unfair charges in light of last November's Supreme Court ruling. However, the Supreme Court itself had suggested that charges could still be challenged under different legal grounds, and Govan Law Centre (GLC) had sought to amend their client's claim to incorporate a revised 'regulation 5' case under the Unfair Terms in Consumer Contract Regulations 1999 (UTCCR), and significantly, an additional claim under the new section 140A of the Consumer Credit Act (CCA, as amended in April 2007).

Counsel for the bank, instructed by Dundas and Wilson CS LLP, had objected strongly to the pursuer's substantial amendments, arguing it would be 'improper' to allow the customer to amend her claim in this way. GLC's Mike Dailly, representing the customer, explained to the court that it was necessary to amend the claim in order to take on board legal developments, and although consumers could no longer attack charges as 'excessive in price' under the UTCCR, they could do so under the s.140A of the CCA. The ability to do so was hugely significant, as was the fact the onus of proof to show charges were not excessive was on the bank under the CCA.

In Sharp v. Bank of Scotland plc, Sheriff Baird, a senior sheriff at Glasgow Sheriff Court, rejected the submissions for the defenders, and granted the pursuer's application to substantially amend her Statement of Claim and Crave, recalled the sist, and fixed a full evidential hearing (know as a 'proof' in Scotland) for 11th June 2010.

Mike Dailly, Principal Solicitor at Govan Law Centre said:

"Over the last few weeks, UK banks have been telling one million customers that there were now no grounds to reclaim bank charges, standing November's Supreme Court's decision. Of course, the Supreme Court itself had explained that charges could still be challenged under different legal grounds, and that is what Sheriff Baird has permitted our client to do today at Glasgow Sheriff Court".

"But besides a challenge under reg. 5 of the UTCCR, the Bank of Scotland now faces a fresh challenge that charges were excessive and unfair under the Consumer Credit Act. That is a potentially devastating case for them to answer, because under this new law the onus of proof is on the bank to show that charges were fair. Given that our banks have admitted they subsidise 'free-if-in-credit banking' by squeezing more money out their poorest customers through bank charges, they will now have to defend the indefensible. And, they will have the added problem that we are asking the court to prohibit them from imposing future charges under the CCA".

"In a nutshell, our new arguments are hugely more powerful than the ones deployed by the OFT in their unsuccessful test case. Evidentially, the new arguments require the bank to prove their charges were fair - which is tactically significant for consumers. The new arguments not only enable consumers to seek a refund of past charges, but entitle them to ask the court to prohibit future bank charges. That is hugely significant, and in many respects, we believe the new bank charges campaign is going to be a tougher propsect for the banks than the pre-July 2007 campaign. And of course that previous campaign saw refunds in excess of £1bn for consumers across the UK - so we are incredibly optimistic".

Sheriff puts Bank of Scotland to proof on bank charges

Unfair bank charges: free help to amend existing complaint letters

What's this about?
Over the last two and half years complaints about unfair bank charges had been placed 'on hold' by UK banks and the Financial Ombudsman Service (FOS). This was because the UK's financial regulator - the Financial Services Authority (FSA) - had granted a waiver, which resulted in all complaints being frozen pending the outcome of the OFT's bank charges test case.

That waiver was lifted by the FSA after the OFT lost its test case before the UK Supreme Court. Most banks will now tell you that because they won they will not be refunding any bank charges, and that this issue is now closed. For example RBS is now writing to customers advising "we do not believe that there is any other legal basis on which the level of these charges can be challenged". It's untrue and incorrect to suggest that bank charges are 'fair' or cannot be challenged. The OFT lost on an extremely narrow technical point, and a consensus remains that bank charges are legally unfair and excessive.

Importantly, the UK Supreme Court was careful to explain that its judgment did “not resolve the myriad cases that are currently stayed in which customers have challenged Relevant Charges”. In particular, the court made it clear that “it remained open to question whether bank charges were fair” in relation to regulation 5(1) of the Unfair Terms in Consumer Contract Regulations.

What should I do now?
If you have an existing complaint with your bank or the FOS, it is likely this will be rejected unless you AMEND your grounds of complaint, to take on board the impact of recent developments, and explain why you are still entitled to a refund of unfair bank charges. There is no need to pay for anyone to help you do this - you can do this yourself, or with the free help or support of a community law centre solicitor, money advice agency or Citizens Advice Bureaux. Details of where to locate free help is set out below.

GLC has drafted the following downloadable example letters for use within the UK:

(1) Letter to bank with amended grounds of complaint:
| Word document link | htm link |

(2) Letter to the Financial Services Ombudsman with amended grounds of complaint:
| Word document link | htm link |

Use the following links to locate free help from a local advice agency in the following locations: glasgow; scotland; england & wales; northern ireland; ireland

It is understood (see the comment thread below) that the FOS has written to some people who have sought to amend their complaints, advising them that it is necessary to first put these 'new' grounds of complaints to the bank. This would effectively mean starting the complaint all over again. A suggested letter explaining why the 'amendments' are not 'new grounds' is here:

(3) Letter to FOS requesting a determination of the original complaint (as amended):
| Word document link | htm link |

There is no guarantee of success, however, we are encouraging UK consumers to insist upon their right to pursue a complaint with their bank and the FOS. If you are successful in obtaining a refund please let us know, by posting a comment below.MoneySavingExpert.com will be producing free updated guidance on how to reclaim unfair bank charges in the next week or so, so please sign up to the free MSE e-mail alert, for further details.

Unfair bank charges: free help to amend existing complaint letters

Dark day for consumers as OFT drops challenge to unfair charges

THE OFFICE OF FAIR TRADING (OFT) has announced that it is dropping its legal challenge to the fairness of overdraft charges. GLC's Mike Dailly, Principal Solicitor said:

“This is truly a dark day for millions of consumers across the UK. The news that the OFT has dropped it legal challenge to unfair bank charges is quite possibly the worst Christmas gift any statutory regulator could give to hard working families struggling to make ends meet and hoping to get a refund of excessive overdraft charges at some stage".

"Before the OFT raised its unsuccesful test case individual consumers were able to obtain £1 billion pounds in refunds. Since the OFT stepped in, all refunds have been on hold for two and half years. As the OFT has dumped its challenge, the banks will move to strike out 50,000 court cases across the UK; the Financial Ombudsman may move to reject 15,000 complaints, while the banks will move to reject the one million or so customer complaints it has placed on hold over unfair charges. Quite literally it's a consumer disaster".

"We believe the OFT was legally and morally obliged to continue with its challenge. Legally because the Supreme Court advised the OFT in its judgment that the door to challenging the fairness of charges remained open under regulation 5 of the UTCCR (Unfair Terms in Consumer Contract Regulations 1999), and separately because new grounds of challenge under the Consumer Credit Act became available from 2007 onwards. Morally, because consumers were doing very well in obtaining their own refunds before the OFT stepped in, and it's wrong to leave them high and dry now".

"Once you assume the role of the UK's leading consumer champion, you can't have a faint heart. You can't desert the public when the going gets tough, you've got to see things through to the end. If consumers are to be thrown overboard without any life jacket by the OFT, then at least the UK Government's current Financial Services Bill contains provisions for 'class' or 'multi-party' actions. It won't be easy, but it may be possible for consumers to use these new provisions to take on the banks directly".

"In Scotland, there is nothing to stop the Scottish Government fast tracking the introduction of a system for multi-party actions, as recommended by the Scottish Civil Courts Review. At present Scotland does not even have the 'Group Litigation Order' rules available in England since 2000, and unless consumers can come together to pull their resources it will be exceptionally difficult to obtain consumer justice against the banks".

"In Scotland, Govan Law Centre has already started to amend claims to take on board the Supreme Court's decision, and new Consumer Credit Act remedies, and is currently awaiting court dates. The campaign goes on, and we'll be issuing some information on the new legal arguments as soon as possible".

Listen to Mike's discussion on this subject on Radio 4's Today Programme.

Dark day for consumers as OFT drops challenge to unfair charges

OFT to announce whether it will continue bank charges fight

Exchequer Secretary to the Treasury Sarah McCarthy-Fry said this week that the OFT will reveal its decision on whether it will continue its challenge to unfair bank charges, next week, on Tuesday 22 December 2009. See the story on MSE for further details.

OFT to announce whether it will continue bank charges fight

Bank charges update: 'where are we now?'

GLC had instructed a senior team of London barristers with expertise in UK banking law on behalf of Martin Lewis of MoneySavingExpert.com (MSE) with a view to identifying stateable legal routes forward, following the Supreme Court's ruling last month. That initial work is complete. There are two possible ways forward.

First, as the Supreme Court itself noted, it remains open to the OFT (and indeed individual consumers) to challenge the legal fairness of bank charges under regulation 5(1) of the Unfair Terms in Consumer Contract Regulations 1999 (UTCCR). Secondly, some consumers may be able to found upon sections 140A and 140B of the Consumer Credit Act 1974 and argue that the terms of contract which permit their bank to levy charges are an 'unfair relationship'due to excessive cost, among other arguments. The onus of proof under s.140B of the CCA is upon the banks to prove otherwise.

A good summary of these arguments has been posted on MSE here.

No amended template documents have been produced at this stage, because it has become apparent that the best solution in the public interest, is for the OFT to raise fresh proceedings against the banks and take further enforcement action. Why?

There are various reasons, including (a) an estimated 12 million UK consumers have paid bank charges in the past and it is unrealistic, unreasonable and impractical to expect all of them to be able to take personal action to reclaim these charges, (b) if the OFT does not take action, there will be widespread scope for claims management companies and 'claims farmers' who operate in a parasitical, viral way, to make a lot of money (e.g. a 40% take of your award, with upfront costs on top)by exploiting vulnerable members of the public.

And finally,(c)the skill and arguments necessary to present claims in adversarial court proceedings is likely to be beyond most party litigants (we saw this in the Hull strike-out cases, where GLC as part of the UK unfair bank charges legal team had to undertake a huge amount of amendment work, with Mr Raymond Cox QC appearing on our clients behalf, in order to stop 44 cases being struck out - we won, but it was a massive amount of work).

If the OFT did decide to take up the new legal challenge(s), and subsequently won, then consumers would be able to seek a refund without the need to pay anyone at all. Furthermore, if the OFT continued its legal challenge this should prevent one million current claims being rejected. If the OFT ultimately, decide not to take this issue forward then we will need to carefully consider our strategy. The OFT are expected to make a decision in the next few days - so watch this space.

Meantime, in Scotland, GLC has enrolled applications to recall sists (stays) in bank charges cases with a view to obtaining compensation for some of our clients in the South West of Glasgow. This is a completely free service, as we are charitable, community law centre. At this stage, we cannot offer this service to non-existing clients or clients outwith the South of Glasgow given resource implications, and the fact a large proportion of our resources are currently dedicated to preventing homelessness, defending eviction and repossession cases across Scotland.

However, we will report on any progress that we can make, with a view to helping consumers strategically in Scotland and in the UK generally.

Bank charges update: 'where are we now?'

New hope over bank charges for customers

The Sunday Post reports that "Millions of bank customers have been given fresh hope over “unfair” charges. Last week the fight for the refund of unauthorised overdraft fees was dealt a blow by a Supreme Court ruling.

It overturned previous judgments allowing the Office of Fair Trading to investigate the fairness of the charges. But financial expert Martin Lewis, founder of MoneySavingExpert.com and Sunday Post columnist, has found a way to continue the battle.

Now he’s teamed up with campaigning Scots solicitors to mount a fresh legal challenge. They’ve seized on the fact Lord Phillips’ ruling focuses on only one part of the 1999 consumer contract regulations. That leaves the door open to continue the fight under other parts of the regulations.

So court documents, or the refund letter, already submitted by customers seeking reimbursement need only be amended. Martin Lewis and solicitors from the Govan Law Centre in Glasgow have instructed top London financial barrister Ray Cox QC to draft what they hope will be a watertight template letter". The full Sunday Post story is here.

New hope over bank charges for customers

Overdraft fees - what next? BBC Radio 4's MoneyBox

Banks are preparing to write to customers who have requested the return of overdraft fees in the wake of this week's Supreme Court judgement.

Around a million customers have had their claims on hold. But the victory of the banks over the Office Of Fair Trading means almost all of them will fail - as they stand - unless they amend them (on how to do this see here).

But campaigners tell Money Box they think there is still hope.

At stake in the case is an estimated £2.6bn of annual income for the banks. Campaigners say they're disappointed with the decision. Paul Lewis was at the Supreme Court for the judgement to gauge reaction.

The programme will hear from Tony Boorman, Principal Ombudsman, Mike Dailly, principal solicitor at Govan Law Centre, and Angela Knight, chief executive of the British Bankers' Association.

BBC Radio 4, Saturday, 28 November 2009 at 1204 GMT, online & podcast, BBC iPlayer.

Overdraft fees - what next? BBC Radio 4's MoneyBox

Legal team appointed to fight bank charges

MoneySavingExpert.com has today arranged for top banking barrister Ray Cox QC to redraft its bank charges template letters in light of the Supreme Court judgement. The site is doing this via engaging Govan Law Centre, led by campaigning solicitor Mike Dailly, and it will instruct Mr. Ray Cox QC and Mr Giles Wheeler, both barristers at Fountain Courts Chamber, Temple.

Martin Lewis creator of MoneySavingExpert.com said:"There are millions of people with cases on hold, and the OFT won’t be giving its view until December – meanwhile the banks are already starting to apply to have cases kicked out of court. We hope to put the brakes on this by drafting amended documents which people reclaiming can submit to the court based on the latest ruling."

"The Supreme Court itself noted that the question of fairness could still be looked at under the now infamous ‘clause 5’ of the UTCCR regulations and that’s exactly where we will be attacking. It will be interesting to see how the banks react to what we hope will be the Rolls-Royce of template letters – drafted by a QC who has many times led cases for the banks themselves."

GLC's Mike Dailly said: "We're delighted to be working with MoneySavingExpert.com on what is perhaps one the biggest rescue operations in recent UK consumer history. Rumours of the demise of the unfair bank charges campaign have been greatly exaggerated by the banks. The Supreme Court gave a very clear message that bank charges could still be unfair under regulation 5, and so a brand new right to reclaim will shortly be available to consumers on the authority of no less than the Supreme Court itself".

The template letters and legal advice should be available within the next two weeks via www.MoneySavingExpert.com – it will also be made available to other free campaigning sites including the Consumer Action Group, Penalty Charges and Legal Beagles.

Further discussion in The Herald:
In the banking conflict, there is only one side that charges

Legal team appointed to fight bank charges

'Constitutional rights crisis' for UK consumers?

If the Supreme Court upholds the banks' appeal tomorrow it would be an obvious disaster for the rights of UK consumers; but if the appeal is rejected, don't hold your breath as the banks look set to keep on charging while they keep on fighting the Office of Fair Trading (OFT).

Where does this leave ordinary citizens who have been ripped off by unfair and excessive bank charges? Tens of thousands of court actions for bank charge refunds in the English and Scottish legal systems have been 'sisted' (‘stayed’ in England) since the OFT's test case commenced in July 2007.

The British Bankers Association (BBA) is already playing down the significance of an OFT win before the UK Supreme Court, and there is every likelihood that the banks will continue to fight on, whether by pursuing an appeal before the European Court of Justice, or by defending the case on the facts before the High Court in London.

Govan Law Centre (GLC) believes if the OFT wins tomorrow, there is a danger of a ‘constitutional rights’ crisis if tens of thousands of consumer claims remain frozen.

GLC's Mike Dailly said: “It’s a well established rule of law that UK citizens have a constitutional right of unimpeded access to the courts in England and Scotland. Yet tens of thousands of consumers have now had those rights suspended for two and half years”.

“If the court rejects the banks’ appeal, not only does this mean the OFT can assess the fairness of charges, but crucially it means any consumer is now entitled to ask the court to assess the fairness of their overdraft fees”.

“To put it another way, if the Unfair Terms in Consumer Contract Regulations apply to overdraft fees, there is no longer any question of law in dispute, and the reason for freezing claims disappears. Administrative convenience to the banks can be no justification for denying the British public access to the courts”

“Similarly there would be no need for the FSA to continue its waiver on bank charge complaints which expires in January. If the Supreme Court rejects the banks’ appeal, Govan Law Centre will try and re-active bank charges claims in Scotland as a matter of constitutional and human rights law, and we will work with other bank charge campaigners to do likewise across the UK”.

In IR v Lord Chancellor ex p Witham [1998] QB 575 the court held that the no-one can “abrogate the right of access to justice, unless it is specifically so permitted by Parliament”. This principle has been followed in numerous cases including R v Home Secretary ex p Leech (No 2) [1994] QB 198, and Watkins v. Secretary of State for the Home Department and others [2004] EWCA (Civ) 966.

Tomorrow’s judgment from the Supreme Court will remove the reason why bank charges claims were frozen. The only question left in bank charge cases is essentially one of ‘individual fact and circumstance’. Local county courts in England, and sheriff courts in Scotland, are well placed to assess factual disputes, given that the applicable law will have been settled by the Supreme Court.

Any further attempt to deny consumers the right to proceed with their claims will, in Govan Law Centre’s opinion, be unconstitutional, and separately, contrary to Article 6 of the Human Rights Act 1998 (which guarantees individuals the right to have their civil rights determined by an impartial tribunal within a reasonable period of time).

'Constitutional rights crisis' for UK consumers?

Banks face D-Day over unfair charges

The epic fight between the Office of Fair Trading (OFT) and Abbey, Barclays, Clydesdale, HBOS, HSBC, Lloyds, Nationwide BS and RBS/NatWest will finally come to a head on Wednesday. The newly formed UK Supreme Court will decide then on the appeal brought by the bankers against earlier rulings that their overdraft charges can be assessed by the OFT for fairness. For a full analysis see the article in The Independent on Sunday.

Banks face D-Day over unfair charges

Business as usual at HBOS & Lloyds TSB

Halifax and Bank of Scotland (HBOS) current account customers are facing a hike in overdraft charges from this December.

HBOS has confirmed it is moving all of its current account customers to a new daily overdraft charging structure. Agreed overdrafts of up to £2,500 will be charged £1 per day, with those over £2,500 charged £2 a day. All debit and credit interest will be removed, and unauthorised overdrafts will be charged at £5 per day.

GLC's Mike Dailly said: "HBOS claim this new structure is clear and easy to understand, and certainly for those customers who incur an agreed or unauthorised overdraft for a day or two the new charging structure will be cheaper".

"But in our experience most customers in short term financial difficulty are unable to reduce their unauthorised overdrafts quickly, so these changes are going to penalise the bank's most vulnerable customers. It many respects it's a case of 'business as usual' for HBOS and Lloyds TSB change, because that is what their current charging structures already do".

"The fact the UK taxpayer owns 43% of the Lloyds/HBOS group appears to count for little when it comes to treating bank customers fairly. Not all customers will be in a position to switch their accounts'.

As present HBOS charge a standard monthly fee of £28 for an unarranged overdraft, and £35 for paid and unpaid items, with a maximum of 3 charges per day. Under the new charging structure a customer, for example, with an agreed overdraft of £1,000 will be charged £31 per month for that service. However, if they go over their limit by £25, they would be charged £155 per month for their overdraft service. Under the current structure the comparative fee would be £63 plus interest.

Halifax and Bank of Scotland have about 10 million current account holders. The changes – which take effect from December 2009 – do not apply to student account, Easycash and Cardcash customers.

Business as usual at HBOS & Lloyds TSB

Prime Minister intervenes in bank charges dispute

Prime Minister Gordon Brown yesterday called on the UK's banks to resolve the unfair bank charges dispute and negotiate a solution "without further delay". Further details of this story are available in The Guardian.

The decision of the Supreme Court (formerly the House of Lords)on whether the Unfair Terms in Consumer Contract Regulations can apply to overdraft fees is expected within weeks. If the banks were to lose this case (and they have already lost on this preliminary issue before the High Court and the Court of Appeal) there would still need to be a lengthy evidential hearing on the merits of the case i.e. whether the charges were indeed fair or unfair.

Accordingly, GLC believes it is likely that if the banks were to lose before the Supreme Court they may prefer to negotiate a settlement with the OFT - as happened with credit card default charges back in 2006. There have been previous reports that the OFT would be prepared to consider a negotiated settlement. In 2006, the OFT set an intervention figure of over £12, and most credit card companies reduced their default charges to £12.

Could that happen with bank charges? We think so. The fact that RBS/Natwest and HBOS are already reducing their fees is a strong indication that a solution to unfair bank charges may soon be within sight. And if that happens the freeze on seeking a refund will be lifted and millions of citizens will be able to pursue a backdated claim.

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Prime Minister intervenes in bank charges dispute

Breaking news: Bank of Scotland & Halifax to cut bank charges

Bank of Scotland and Halifx(HBOS) are to cut overdraft penalty charges on their current accounts by the end of 2009.

HBOS, both part of the Government-owned Lloyds Banking Group, have confirmed they will axe the current charges structure where you are hit with fees of up to £35 per transaction if you exceed your limit, which could add up to £133 a day.

HBOS customers will instead pay £5 a day for every day they are in an unauthorised overdraft no matter how many transactions are attempted or how deep into an unauthorised overdraft they go.

Further details are available on Martin Lewis's Money Saving Expert site.

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Breaking news: Bank of Scotland & Halifax to cut bank charges

Breaking news: RBS to slash bank charges

From 1 October, RBS and Natwest customers will pay £5 for a bounced cheque and £15 per item on an overdrawn account. Still too much - yes of course, given the true cost of these charges is closer to £2.50 or less. But this is big news as the current RBS charge for a bounced cheque is £38, with £30 being charge per item on an overdrawn account.

What’s going on? The UK's Supreme Court (formerly the House of Lords) will shortly issue its decision in the OFT test case on bank charges. Both the High Court and the Court of Appeal have already found that the 1999 Unfair Terms in Consumer Contract Regulations apply in principle to current account terms which impose fees and charges for going overdrawn without permission.

Many commentators expect the Supreme Court to reach the same conclusion. Even if they do the UK banks could still fight on the merits of the case: they could argue their fees are fair. That said, this is probably the weakest part of their defence, as there is considerable evidence to show that their charging structure is unfair. Charges are targeted at the least able to afford them, and are designed to make an obscene mark-up.

RBS and Natwest are making a smart move. The writing is on the wall for unfair bank charges and they are anticipating this. It’s only a matter of time.

For example, back in 2006 most UK credit card companies were charging £25 or more for failing to make a minimum payment. The OFT estimated this practice was scamming the British public in excess of £300m per annum. The OFT intervened and said any credit card charge in excess of £12 would be treated by it as unfair. What happened? Most credit card companies lowered their charges to £12.

I think RBS is protecting it’s future financial position. It has calculated that when the banks lose the OFT test case they will have to reduce their charges anyway. So better to bite the bullet now.

Of course this still leaves the thorny issue of past unfair charges – and in theory there could be backdated claims worth up to £10bn across the UK, and at the very least we are definitely talking about several billion of pounds in claims.

Effectively, RBS are trying to draw a line in the sand for future claims. Other banks would do well to follow suit. The revolution isn’t far off, and there won’t be any more taxpayer handouts!

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Breaking news: RBS to slash bank charges