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Showing posts with label Sharp v Bank of Scotland plc. Show all posts
Showing posts with label Sharp v Bank of Scotland plc. Show all posts
Friday, 18 March 2011
Unfair bank charges update from Govan Law Centre
Tuesday, 14 December 2010
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'.
" '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".
Confidence must be restored in Scotland's legal aid system
The Scottish Legal Aid Board has issued its second public statement in relation to its refusal to grant civil legal in the bank charges case of Sharp v. Bank of Scotland plc. According to GLC this statement does nothing to restore public confidence in the Board's ability to provide access to justice for Scots, particulary in relation to their unfair treatment by UK banks.
GLC's Principal Solicitor, Mike Dailly said: "According to the Board a page of an application form for civil legal aid 'is not the application', while not all the form 'may be read by the Board'. Further, we are told any documents or letters provided in relation to the application don't count as they are 'not included in the initial application'. How can Scots have any confidence in a publicly funded body that offers absurd bureaucratic excuses instead of legal aid? Scotland deserves better".
Friday, 10 December 2010
Response to Scottish Legal Aid Board statement re bank charges
SLAB alleged that "Following receipt, the application was considered but refused as it did not meet the reasonableness test for civil legal aid. No mention was made of wider public interest by Govan Law Centre at this time". That assertion was false. The statutory statement at page 19 of the application expressly stated the strong public interest in this case, on the following basis:
"Page 19: Para 5. On the motion of the opponents these proceedings were remitted to the ordinary cause roll due to exceptional complexity. The applicant also seeks an order under the 1974 Act to prohibit any further charges being levied to her account in the future. Approximately 100,000 people in Scotland lodged complaints with their bank seeking a refund of overdraft charges, and therefore, there is a very strong public interest element to this case".
Before SLAB issued its original refusal of legal aid in this case on 12 October 2010, Dundas + Wilson, solicitors for the Bank of Scotland, lodged a 6 page letter of objections to SLAB on 27 August raising exceptionally complex and novel points of consumer credit law, issues around the UK Supreme Court's decision in OFT v. Abbey Nationals and others, and contentious issues around the Unfair Terms in Consumer Contract Regulations 1999, as well as complex issues of fact, in objection to the granting of civil legal aid in this case.
GLC responded to these points on 14 September 2010 with an equally complex and detailed letter. The fact such novel points of law were at stake - from a Scottish and UK perspective - with such a massive public interest to at least 100,000 Scottish consumers (and by implication 900,000 consumers in England, Wales, and Northern Ireland), renders it extremely worrying that SLAB has chosen to falsely claim none of these issues were mentioned to them.
Separately, SLAB had claimed "GLC’s press release suggests that legal aid is unlikely to be obtained for certain cases. This is not accurate". We have just received another refusal of civil legal aid, this time in the case of Reid v. Clydesdale Bank plc, where SLAB once again rely on the 'cost/benefit test'. GLC believes the that ridgid reliance on this test is unreasonable, irrational and unlawful for the reasons set out in our most recent letter to SLAB.
GLC's Principal Solicitor, Mike Dailly, said: "The Scottish Legal Aid Board's statement is fundamentally flawed and represents a failure to accept responsibility. It claims that GLC made 'no mention' of the wider public interest of the case when we lodged our client's application for legal aid. We believe, the Board's CEO should apologise for that false and unfair statement, and take responsibility for the self-evident failure to correctly apply the statutory tests in this case".
Tuesday, 7 December 2010
Access to justice denied: Scottish Legal Aid Board kills off hope of reclaiming unfair bank charges in Scotland
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| 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”.
"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.".
Friday, 18 June 2010
Bank charges update from GLC
In the case of Sharp v. Bank of Scotland, the defender applied to remit the case to the ordinary court procedure. As our client is eligible for civil legal aid this was not a problem (legal aid is not available for small claims in Scotland, but it is for ordinary cause actions). However, we may oppose this in other cases where appropriate, and will disseminate this knowledge if successful. Accordingly, the case of Sharp will proceed to an Options Hearing next month, and it is likely a 'debate' (a court hearing on all of the legal arguments) will take place shortly thereafter. This is necessary because the banks defence to a s.140A Consumer Credit Act (CCA) claim is to argue that the banking contract was not a regulated credit agreement. The banks are also arguing that claims cannot go back before 6 April 2007.
Accordingly, if we can persuade the court that these lines of defence are irrelevant and wrong in law, this would leave claims to be determined on the facts as regards the unfair relationship test and the level of unfairness and consumer detriment. Of course, in many cases the level of unfairness is severe. Because cases depend so much on their own facts under the CCA - whether in terms of the transitional arrangements or the unfair relationship test - there may be little point in cases being sisted or stayed. Each case is different, and under the CCA each case is looked at specifically between the parties, the contract between them and the consequences of the charges on that customer.
GLC will post further updates, but we are unable to make too much detail public at this stage as cases are live, and we cannot prejudice the prospects of our clients.
Friday, 19 February 2010
Sheriff puts Bank of Scotland to proof on bank charges
- Onus of proof now on Scottish bank to show charges were not excessiveTHE 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".
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