Monday 30 November 2009

Halifax Bank of Scotland new charges 'don't add' up

The Herald reports that HBOS' new charging structure - in force from tomorrow - will cause serious problems for many customers. Being overdrawn for HBOS customers by up to £2,500 will cost £1 a day, and for more than £2,500 it is £2 a day. For unauthorised overdrafts, it will be £5 a day – with no monthly cap.

More than 50% of the UK population use their overdraft facility on a regular basis, and choosing the wrong facility could cost unwitting borrowers hundreds of pounds a year, according to

Its research suggests that 17% of us are permanently overdrawn and 13% use an overdraft more than six times a year. For these customers, an agreed overdraft with no charge except interest rates is likely to be a much better option than the new “simple” daily fees.

GLC's Principal Solicitor said: “The bank says it’s simple – it is, but ultimately the problem is it will only benefit those customers who can bring down their overdraft within a couple of days. If you can bring it down quickly it isn’t going to cost you very much, but the vast amount of people who go into overdrafts and unauthorised overdrafts are in financial difficulties. The reason for that is if you have either lost your job or your partner has, or you have lost your overtime, or you have got ill, and you are in a bit of a sticky position or have fallen on hard times, in that situation you are not in a position to find a lump sum of money to bring yourself back into the black.”

The full story is in today's The Herald here.

Sunday 29 November 2009

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 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.

Saturday 28 November 2009

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.

Friday 27 November 2009

Legal team appointed to fight bank charges 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 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 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 – 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

Tuesday 24 November 2009

'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).

Sunday 22 November 2009

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.

Wednesday 18 November 2009

Suggested improvements to the Home Owner & Debtor Protection Bill

GLC has written to the Minister for Housing and Communities suggesting simple changes which could dramatically improve Part 1 of the Scottish Government's Home Owner and Debtor Protection (Scotland) Bill. A copy of the letter is available on our Scribd page here.

Sunday 15 November 2009

Minute for Recall of Decree case report: GHA Ltd v Duffy

Sheriff Drummond has held that it was competent for a tenant to minute for recall of decree despite the fact she had appeared in person and been represented at previous court callings, and had stated a defence, with a proof and pre-proof hearing being assigned.

The tenant's solicitors withdrew from acting before the pre-proof hearing, and the tenant failed to appear at the pre-proof hearing, at which stage the landlord obtained decree for payment and ejection.

The court held that the pre-proof hearing was truly a continued diet, that decree had been granted under summary cause rule 8.2(5), and that rule 8.2(5) was not restrictive and did not limit the power to grant decree on the calling date as opposed to a continuation of that hearing. It followed that the minute for recall was competent since summary cause rule 24.1(1) permits recall of decree granted under rule 8.2(5).

The full judgment given on 19 October 2009 at Glasgow Sheriff Court is available here (opens as PDF). Alternatively you can read the full case report without Adobe on GLC's Scribd page here.

Friday 13 November 2009

Update: Walker Sandford Public Meeting postponed

The proposed public meeting on property factor problems with Walker Sandford Property Management Ltd next Monday has had to be postponed due to technical event reasons. Our sincere apologies for any inconvenience. GLC hopes to announce the new date and venue for this event shortly. If you want to be automatically updated in that regard, you can subscribe to this blog - details of how to do so are to be found at the bottom of the left hand column of this page.

Tuesday 10 November 2009

Home Owner Bill not fit for purpose

GLC has submitted its views on the Home Owner and Debtor Protection (Scotland) Bill to the Local Government and Communities Committee today.

We believe that the Bill as presently drafted is not fit for purpose. Our detailed drafting comments are available to view on our scribd page here. In our experience if the Bill were passed as drafted it would cause significant detriment to consumers in Scotland. There is no reason why some simple amendments could not be made to the Mortgage Rights (Scotland) Act 2001 (MRA) to achieve the key recommendations of the Repossessions Sub-Group.

Given the fundamental conceptual and drafting flaws in the Bill, we are urging the Local Government and Communities Committee to recommend that the Scottish Parliament reject this Bill at Stage 1. We are urging the Scottish Government to give consideration to introducing a fresh Bill which would amend the MRA by introducing some precise, straight-forward and workable amendments.

Saturday 7 November 2009

Trainee solicitor debate at The Scotsman

The Scotsman has reported on the Scottish Young Lawyers Association (SYLA) debate on the motion that 'this House believes that trainees are there to be exploited'.

It is understood that around 50 trainee solicitors in Scotland have already been made 'redundant', however, Iain Mitchell QC advised the audience that as a trainee was truly an 'apprentice' in law, it followed that they could not be made redundant. Mr Mitchell's Opinion is reported in The Firm magazine.

GLC's Mike Dailly opened for the opposition by claiming that the eager-to-please nature of trainees made them vulnerable. He argued having trainees run personal errands or do excessive photocopying was contrary to the training contract, which compels employers to provide a reasonable standard of training, which "does not mean leaving a trainee to run a branch office unsupervised, shouting or bawling at them because of your inadequacies".

The motion was defeated, and a report of the event is available in The Scotsman here. Mike's full contribution is available on GLC's Scribd page here.