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".

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".

Response to Scottish Legal Aid Board statement re bank charges

On Wednedsay 8 December 2010 the Scottish Legal Aid Board (SLAB) issued a formal statement in relation to GLC's case of Sharp v. Bank of Scotland and the generally availablity of civil legal aid for Scottish consumers to pursue claims for unfair 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". 

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.".

Property Factors Bill debated before full Scottish Parliament on Wednesday

The Scottish Parliament will debate the Property Factors (Scotland) Bill at Stage 1 on  the afternoon of Wednesday, 8 December 2010.  This is a make or break moment for the Bill.  The Bill, drafted by Govan Law Centre's Parliamentary Unit for Patricia Ferguson MSP, has secured the backing of the Parliament's Local Government and Communities Committee, and also has wide public support across Scotland.  However, the Bill now needs to secure the support of MSPs in the full Chamber on Wednesday in order for it to progress.

Shopworkers back protection bill

The Sunday Herald reports that shopworkers have given their support to proposals to give Scottish workers greater protection from assaults.

The Co-operative Group, Scotmid Co-operative Society and the Scottish Grocers' Federation have announced their support for the Protection of Workers (Scotland) Bill which is being steered through the Scottish Parliament by Labour MSP Hugh Henry.  The Bill and supporting documents were drafted by GLC's Parliamentary Unit.

The Bill, which MSPs are first due to vote on in the next few weeks, will give shopworkers and other public-facing staff the same level of protection given to emergency workers who are assaulted while doing their jobs.

If passed, the Bill would make it clear that it is an offence to assault a shopworker while at work or as a result of them doing their job.  The Bill already has the support of Usdaw, the shopworkers' union.

Major new early intervention service to prevent homelessness in Glasgow's Southside

Govan Law Centre has secured almost £336,000 funding from the Oak Foundation to develop an innovative early intervention service to prevent the most vulnerable and hard to reach citizens in Glasgow's Southside from becoming homeless.

The new project will provide an early intervention and crisis response that fits around the individual service user along with an intensive one to one support service to deal with the underlying causes of homelessness. Headed up by GLC's Alistair Sharp, the project will utilise new technology and innovative approaches to preventing homelessness and will focus on sustainability and long term solutions. 

The project will have a major social policy and law reform remit, with an ambitious strategy to secure transformational change to benefit those threatened with homelessess across Scotland.  

GLC's Mike Dailly said: "The Govan Law Centre Board of Trustees are indebted to the Oak Foundation for backing our innovative new project.  We hope to develop a radical new approach to preventing homelessness on a long term and sustainable basis, working closely with our local partners, Money Matters Money Advice Centre and the South West Glasgow Community Health and Care Partnership, and other agencies".

GLC's Prevention of Homelessness Co-ordinator, Alistair Sharp said: "Our project will provide new hope to vulnerable people at risk of homelessness in the Southside of Glasgow. With the new resources available to us we will be able to intervene to prevent homelessness at a much earlier stage, and avoid the human misery of homelessness".