ECHR application following Walls v. Santander

An application to the European Court of Human Rights (ECHR) has been made following the decision in Walls v. Santander UK plc, a copy of the 15 page judgment is available here (opens as a PDF).

Part of the pursuer's objection to the bank's application to remit from the small claims court to the ordinary sheriff court centered on article 6(1) of the Human Rights Act 1998, and relevant caselaw from the ECHR.  The court was not persuaded on this head of objection, and section 37(3) of the Sheriff Courts (Scotland) Act 1971 prohibits any review of the sheriff's decision. 

Accordingly, the pursuer now seeks to bring proceedings against the United Kingdom under article 6(1) of the European Convention on Human Rights.  The Scottish Government has responsibility for access to civil justice in Scotland as a devolved matter in terms of the Scotland Act 1998.  It is hoped that the Cabinet Secretary for Justice will reconsider his refusal to look at a law reform solution to prevent a class of persons, such as the pursuer, being limited in their ability to determine their civil rights before the Scottish courts.

ECHR application following Walls v. Santander

Priced out of justice?

The Herald has reported on the GLC case of Walls v. Santander UK plc, where Sheriff Cubie granted the defender's application for a bank charges claim to be remitted from small claims to ordinary cause procedure.

The effect of leaving the small claims system in Scotland, and indeed the UK, is that consumers lose the 'fixed limit' protection against an award of expenses in the event of failure. For example, you can sue for £3,000 and if unsuccessful your opponent would only recover £300 under small claims procedure in Scotland. However, expenses can quickly mount up in the ordinary court and as banks are using counsel to conduct their defences, litigation in the ordinary court will expose consumers to potential levels of expenses many times the value of their claim. 

For those on a low income civil legal aid may be available and GLC is in the process of applying for legal aid in some bank charges litigation which is proceeding under ordinary cause procedure. For those of modest means eligible for legal aid there will be a contribution to pay which may exceed the value of the dispute, making the dispute pointless. While for those ineligible for legal aid it may be equally impossible to proceed.

The Herald has called for greater competition in Scotland's banking sector, and we agree that is much needed in the consumer interest. However, the case of Walls illustrates a major flaw at the heart of Scotland's civil justice system. What's the point in having an accessible simplified tier of civil justice for low level claims if any powerful opponent can come along, up the ante, and 'price' you out of justice?  There is no right to appeal or review a decision to remit under the Sheriff Courts (Scotland) Act 1971.

Access to justice requires citizens to be able to access the courts at a cost proportionate to the value of their monetary claim. The small claims system help fulfils our state's article 6(1) requirement under the European Convention on Human Rights. But there is now a 'class of litigants' who are priced out of justice. GLC believes there is an obvious solution. The small claims fixed limit on expenses should 'travel' with the case.   This would ensure that the costs of resolving the dispute remained proportionate and fair having regard to the monetary value of the dispute.  This could be achieved by a minor statutory amendment.

GLC has made this law reform call in today's The Herald.  Unfortunately, the Cabinet Secretary for Justice in Scotland appears to have rejected our call without understanding the current legal position.  Kenny MacAskill said: "People are still able to raise bank charge cases in the small-claims court – this ruling does nothing to stop that".  Yes, but this ruling makes it crystal clear that all bank charge claims are susceptible to be removed from the small claims court.  This has already happened in other cases; in Walls we tried to stop it, and were unable to do so.  Unless the Scottish Government acts, many citizens in Scotland will be priced out of justice.

We are reminded of the parable from The Trial: “Before the Law stands a doorkeeper. . . . The doorkeeper sees that the man is nearing his end, and in order to reach his failing hearing, he roars to him: ‘No one else could gain admittance here, because this entrance was meant solely for you. I’m going to go and shut it now.’”

Priced out of justice?

Bank charges update: remit from small claims to the ordinary court

One of the current strategies of UK banks in Scotland is to ask the court to remit cases from the small claims procedure (where expenses are capped) to ordinary cause procedure (where expenses are potentially unlimited).  Remit between different court procedures, or to a senior court, can be granted where there are difficult questions of law, or exceptionally complicated factual issues. 

From the consumer's point of view having a claim removed from the small claims system means either instructing a solicitor in the hope of obtaining civil legal aid, or dropping the claim unless you were prepared to risk court expenses several times the value of your claim in the event of failure. Legal aid is not straight-forward either, one has to pass all of the qualifying hurdles, and for those on a modest to good income, you may have to pay a financial contribution to the legal aid board in excess of the value of your claim; and if you win, it is not necessarily straight-forward that you won't have 'contra' expenses, or be required to pay some of your award back to the legal aid board. Things can get complicated with expenses.

The practical result of remit will be that some consumers will drop their claims as it becomes uneconomical or financially imprudent to pursue a case.  If that happens, access to justice will have been thwarted.  This raises fundamental questions about the proportionality of our justice system in relation to expenses, and whether bank charge claimants of modest means have the right to a 'fair hearing' before our courts, as guaranteed by Article 6(1) of the European Convention on Human Rights.

In the case of Walls v. Santander UK plc, counsel for the defender sought remit from small claims to the ordinary cause. Govan Law Centre opposed this application on behalf of the pursuer.  After lengthy submissions, Sheriff Cubie at Glasgow Sheriff Court made 'avizandum' (which means he will reflect upon the issues and provide a written judgment). Sheriff Cubie's Opinion is expected later this month. GLC will provide a further update in due course.

Bank charges update: remit from small claims to the ordinary court