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.

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.

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.

Complaints upheld by FOS doubles in two years

The Herald reports that the proportion of complaints upheld in favour of consumers by the UK Financial Ombudsman Service (FOS) has doubled in the past two years.

FOS upheld 61% of banking-related complaints, 41% of mortgage complaints, 70% of general insurance complaints and 42% of investment-related complaints. Five banking groups accounted for 38,286 cases – over half of all the new complaints received by the ombudsman during this six-month period.

The British Bankers Association (BBA) response to this data was to immediately claim this was a great success as this translated to "less than one upheld complaint for every 10,000 products you can get from your bank".

Of course this may provide little comfort to the 38,286 bank customers who complained to the FOS in the last six months; and if FOS is upholding 61% of these complaints, this is compelling evidence that the banks' complaint handling systems are wholly inadequate and in need of reform.

Clearly, the FOS is providing a practical remedy to UK consumers with financial disputes, and if you want information on how to complain to the FOS please visit here. Although, for a critical 'insiders' take on problems with the FOS see here.

Law Society response on trainee exploitation debate

Last month the Firm published GLC's Principal Solicitor's contribution to the Scotsman debate on the subject of trainee exploitation, which challenged the Law Society's stance on key issues. Nick Taylor of the Law Society's Admissions Committee responds to Mike's points on The Firm online, with reference to the proposed changes to qualifying as a solicitor in Scotland, from September 2011.

Rebel Lawyer: Herald business profile

Simon Bain's profile of GLC's Principal Solicitor in The Herald's Saturday Business Section: 'Mike Dailly is not your typical successful lawyer. He speaks his mind, exudes enthusiasm, earns a very modest salary, and annoys bankers, bureaucrats and politicians'. The full article from The Herald is online here.

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 moneysupermarket.com.

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.

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.

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.

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

'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).

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.

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.

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.

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.

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.

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.

New appointments at GLC

GLC is delighted to announce a number of exciting new appointments.

Jennifer Laughland is joining us to head up our new pan-Ayrshire Homelessness and Prevention Service (AHAP), in partnership with the Ayrshire Community Housing and Advocacy Project.

Jennifer was formerly the Principal Solicitor of Shelter's Scottish Housing Law Service where she specialised in housing and homelessness law. Before taking up her post at Shelter Scotland, Jennifer was Principal Solicitor at Paisley Law Centre.

Sarah-Jane Kissock has joined us from Balfour + Manson LLP as a second year Trainee Solicitor. We have also appointed Christine McKellar and Laura Simpson as Trainee Solicitors. Natile Carlin joins us to provide dedicated clerical support to AHAP.

GLC's Mike Dailly said: 'These important new appointments strengthen our ability to deliver specialist legal services to prevent homelessness in Scotland, and increase our organisational capacity'.

Homeless problems for migrant workers

The Herald reports that migrant workers from eastern Europe, mostly from Poland, make up about 50% of those who visit a crisis drop-in centre for the homeless in Edinburgh.

The charity Streetwork, which runs the centre serving hot food, giving advice and, during the summer, providing a night shelter, says that about half of the 80 to 100 people who come through its doors each week are migrants workers.

Most only need help for a short period while between jobs and quickly move on to new employment and private accommodation. However, homelessness organisations fear that those who do find themselves on the street are often not getting the help they need.

In Glasgow, 1.16% of those presenting as homeless in 2008/09 (118 people) came from A8 countries, up from 0.91% the previous year. The Shieling, run by Glasgow City Mission, which provides hot food, clothing and support to homeless people, reports that about 7% of those coming through the door are eastern European.

Streetwork says that the circumstances of homeless migrant workers vary, but they may have had a job that came with tied accommodation, such as in a hotel, only to find themselves on the street when the job ended. They may have come to the UK having been promised a job only to find that no such job exists; or have had their passports stolen.

The full story is in The Herald here.

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.

Migrant workers' rights conference

Govanhill Law Centre is hosting a major new conference on the UK rights of migrant workers on Friday 27 November 2009 at 10am to 4pm, Langside Halls, Langside Avenue, Glasgow.

Ian Japp, the Gangmaster Licensing Authority's Head of Enforcement for Scotland, will provide a key note speech, and there will be workshops on a range of legal topics including housing, employment, benefits and education.

The delegate cost(including lunch) for statutory agencies is £80, and £40 for voluntary agencies. Govanhill Law Centre is also providing a number of free places for members of the local community and those in financial hardship. The conference programme and booking details are available here.

Govanhill Law Centre launches new site

Govanhill Law Centre has launched a specialist new website for the community of Govanhill. The site - www.govanhilllc.com - provides information on the free legal services available from the centre's team of solicitors and caseworkers, local news and details of educational events held by the law centre.

Govanhill's Lorraine Barrie said, "Our new site will provide advice on housing, employment, benefits, education and consumer matters. We have a publications section with downloadable housing, employment and education law advice leaflets in Slovak and English".

"Govanhill Law Centre can assist anyone living in the Govanhill area, and we have a focus on enforcing the rights of minority ethnic communities and in particularly the Roma community. We can normally arrange free interpreters when required".

The Centre has already provided advice to Scottish, Romanian, Slovak, Asian, Lithuanian, Hungarian, Czech and Irish clients on many topics including unreturned tenancy deposits, illegal evictions by private landlords, tenancies in a seriously dilapidated condition, non-registered A8 national workers, employers noting wrong National Insurance numbers on wage slips, property factoring problems, unpaid wages, problems registering clients children for school, statutory repairs notices, sexual discrimination and redundancy issues.

The benefits matters dealt with for migrant workers include complex tax credits cases, clients who have been refused Income Support because they have failed the “habitual residence test”, housing benefit entitlements, applications for crisis loans, maternity benefit entitlement and Disability Living Allowance claims.

HMIe to investigate school support unit in Portree

An additional support needs unit at a school on Skye is to be investigated by HM Inspectorate of Education (HMIE) following complaints from parents, handled by Govan Law Centre.

Allegations include claims that one pupil was forced to do excessive levels of physical exercise, contrary to medical advice.

Parents of three children attending the unit at Portree High School contacted Govan Law Centre, which notified the Scottish Government through a statutory complaints mechanism. The Scottish Government has asked HMIE to visit the school to investigate the claims.

GLC's Iain Nisbet felt the nature of the complaints was such that they should be referred to the Scottish Government.

He welcomed the action taken by ministers. "The legislation allows Scottish ministers to investigate and intervene in cases where there has been any breach of education law,".

"Because we had been approached by a number of parents from the same school, we felt it was appropriate to alert the Scottish Government to these ongoing concerns.

"I am very pleased to see the prompt and effective response of the government and will await the report by HMIE with interest."

A government spokesman said: "Ministers have asked HMIE to visit the Portree High School special needs unit following concerns raised through the Govan Law Centre.

"HMIE will report back to the Scottish government by the end of November when consideration will be given to whether any further action, if required, should be taken."

Govanlc back online

Apologies to all of our online visitors for being unable to access the Govan Law Centre website this week. All of our files had to be transferred to a new cpanel server which resulted in the site being inaccessible for a few days. This process has now been completed and we now have a much faster and reliable service.

GLC solicitor joins FSA Consumer Panel

GLC's Mike Dailly has been named as one of four new appointments to the Financial Services Authority's (FSA) independent Financial Services Consumer Panel (FSCP).

Mike, who has 15 years experience as a practising civil court solicitor in Scotland, protecting consumers' rights and tackling social disadvantage, will assist the panel in its continuing role of advising the FSA on the interests and concerns of consumers.

Of the other appointments, Kay Blair has been a member of the FSCP since 2006, and has been confirmed in her appointment as vice chairman, taking over from Adam Phillips who was made chairman earlier this year.

Bill Martin is an experienced macroeconomist and was chief economist at the fund management arm of the Swiss bank UBS.

Claire Whyley is a professional researcher, policy analyst, and consumer champion. She was head of consumer futures at the National Consumer Council until the end of 2008.

FSA chairman, Adair Turner said: "The Consumer Panel has an extremely valuable role to play in ensuring the FSA takes the consumer interest into account in its work.

"We are very pleased that, as these latest appointments demonstrate, the panel can call on an extensive range of expertise."

Full details here; Financial Services Consumer Panel website.

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Scottish 'Tesco law' Bill published

The Scottish Government has published its Legal Services (Scotland) Bill, which aims to pave the way for supermarkets, banks and large corporate interests to own and operate Scottish legal firms.

The selling point of this law reform is to create more consumer choice for legal services in Scotland, however, it is equally possible that opening up ownership of previously independent Scottish legal firms, will do exactly the opposite and ultimately restrict choice and legal independence in the longer term.

GLC's Principal Solicitor said: "Access to justice is a constitutional right, not a tin of beans to be bought and sold".

"This Bill promises a future of Scottish 'Tesco law' where multinational supermarkets and banks can own, control and trade shares in solicitors, advocates and the gateways to justice".

"It's a scary thought. Particularly, as the predatory and anti-competitive nature of some multinationals is likely to result in small and medium sized Scottish legal firms being artificially undercut and forced out of business in mainstream areas of legal practice."

"The most curious aspect of the rush to embrace 'Tesco law' in Scotland is the startling fact that neither the OFT nor Which? provided an empirical Scottish case which showed the legal market in Scotland was failing consumers in terms of choice and competitiveness".

Further discussion of this story is on the Scottish Television site, and at Mike's The Firm online blog.

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GLC gets Scribd

GLC has published a selection of our past social policy and law reform reports and documents on Scribd. Scribd is a nifty free website which allows you to view any shape or form of document without Adobe or a word processor - so you can access GLC documents via any internet connection or your mobile phone. GLC will use Scribd to publish documents which we think might be of interest to social welfare law practitioners or the public generally. You can find our Scribd page here.

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Rent Deposit Scheme for Scotland

Scotland's Housing Minister, Alex Neil MSP, has confirmed that the Scottish Government will introduce a new Rent Deposit Scheme for Scotland.

In an answer to a Parliamentary Question asked by Claire Baker MSP, Mr Neil said: "At the last tenancy deposit working group on 1 September the stakeholder members, representing the full range of interests, agreed that a single, national mandatory scheme for safeguarding tenancy deposits was the best way forward. Earlier in the summer the group had defined the criteria for any solution to the issue of unfairly withheld deposits".

"The group will meet again in the next couple of months to consider the details of the scheme, the lessons to learn from schemes running in England and Wales and how best to provide for adjudicating disputes. This will allow the scheme to be defined so that the enabling secondary legislation can be prepared and come to Parliament in the Spring".

The power to introduce a Rent Deposit Scheme is already contained within the Housing (Scotland) Act 2006.

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SYLA debate on trainee solicitors

The Scottish Young Lawyers Association have organised a guest speakers debate, with the support of The Scotsman, on Thursday 29 October 2009 at 7.30pm in Edinburgh. Further details from the SYLA.

The motion to be debated is 'This House believes that trainees are there to be exploited'.

The SYLA are keen to highlight the difficulties facing young lawyers and trainee solicitors in Scotland. Many trainees have had their traineeships cancelled or been made redundant - a grim prospect after five years of university study with associated debt.

GLC's Principal Solicitor will open the debate for the opposition.

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Failure to support free parking bill will fetter access to NHS in Scotland

Govan Law Centre (GLC) is deeply concerned at the lack of cross-party support for the principle of unfettered, free, public access to NHS services in Scotland.

GLC agreed to draft Paul Martin MSP's proposed NHS Parking (Scotland) Bill on behalf of UNISON Scotland because we believe in the principle of universal free health care in Scotland.

GLC's Mike Dailly said: "Patients, visitors and health workers currently cannot access three of Scotland's major hospitals unless they have the money to pay for hospital parking charges. Elsewhere in Scotland there are various forms of 'semi-free' access to hospitals, which are often rendered meaningless in practice as there are inadequate parking spaces".

"If you can't park near a hospital you can't access health care services or support a loved one. It's that simple. Universal free health care has to include universal free access to all NHS services in Scotland. At the very least the principle of unfettered public access to Scottish hospitals deserves to be discussed by the Scottish Parliament. Sadly that won't happen unless there is cross-party support on this important law reform proposal".

Link to UNISON Scotland's Bill campaign page.

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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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Law Awards win for Govan

Govan Law Centre picked up the Chairman's Award for its unique outstanding public service at last night's 2009 Law Awards of Scotland.

The 'Oscars' for Scotland's legal profession took place before a packed audience of lawyers and guests in Glasgow's Hilton hotel.

GLC's Principal Solicitor Mike Dailly said:

"We are very proud that this kind honour was bestowed upon us by the Rt Hon Lord MacLean as Chairman of the judging panel".

"Govan Law Centre is the only firm in Scotland to have won the Chairman's Award twice, and this is a generous acknowledgement to all of our brilliant staff and trustees".

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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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Morning Extra on BBC Radio Scotland

Listen to the programme again on the BBC iPlayer; Watch the BBC's video on this topic again.

Property factors and the practices of Glasgow-based Walker Sandford Property Management Ltd - which were exposed on tonight's BBC Reporting Scotland - will be the subject of discussion on BBC Radio Scotland's Morning Extra tomorrow morning, Friday 11 September 2009 from 9am. If you've had a bad experience with Walker Sandford Property Management Ltd or any other property factor you can call the show live tomorrow morning. Mike Dailly, GLC's Principal Solicitor, will be there to explain what homeowners can do to protect their legal position.

Public meeting concerning Walker Sandford Property Management Ltd

Govan Law Centre and Patricia Ferguson MSP, sponsor of the proposed Property Factors (Scotland) Bill, are hosting a major public meeting to address the concerns of customers of Walker Sandford Property Management Ltd.

We hope to have in attendance local MSPs and local elected members from all of the main political parties, representatives of relevant agencies and authorities, and representatives of other Glasgow law firms who have been involved in Walker Sandford litigation on behalf of consumers.

The public meeting will take place at 6.45pm on Monday 16 November 2009 in McLeod Hall, The Pearce Institute, 840-860 Govan Road, Glasgow, G51 3UU. McLeod Hall has capacity for 250 people, so please come along.

The aims of the meeting are:

1. To provide free consumer rights knowledge and a 'DIY-kit' on how to challenge the legality of default charges imposed as 'reminder letters' and compound monthly interest applied('charges on the charges'),empower customers to defend court actions where unfair charges have been applied, and seek repayment of unfair charges;
2. To identify cases for a test case strategy;
3. Provide a list of Glasgow law firms (including private legal firms)willing to defend cases raised by Walker Sandford, so the public has a pool of suitable solicitors where required and,
4. Ingather further evidence on the practices of Walker Sandford Property Management Ltd; and
5. Provide a campaign platform for a consensus for change.

Directions to the Public Meeting; Multimap of the Public Meeting location.

GLC job advert: Ayrshire Homelessness and Prevention (AHAP) Service

Glasgow's Govan Law Centre (GLC) and Ayrshire's Community Housing Advocacy Project (CHAP)are launching an exciting new project funded by the Scottish Legal Aid Board to prevent mortgage repossession across North, South and East Ayrshire.

GLC requires an experienced solicitor with good civil court and defended mortgage repossession experience; and a part-time legal clerical officer with relevant experience.

Both posts will be based in Glasgow, however the project solicitor will be required to travel to various locations in Ayrshire on a regular basis. All travel expenses will be reimbursed. Competitive salaries are offered for both posts.

Apply in writing with C.V. to Principal Solicitor, Govan Law Centre, 47 Burleigh Street, Glasgow, G51 3LB.

The closing date for posts is Friday 9th October. Both posts are funded until March 2011 by the Scottish Legal Aid Board. GLC is an Equal Opportunities employer.

Visit CHAP's website for AHAP project vacancies for a Money Advisor and Administrative Assistant, based locally.

GLC on Radio Ramadhan

GLC's Mike Dailly will discuss the work of Govanhill Law Centre, on Radio Ramadhan's As-Salamu-Alaikum Glasgow on Tuesday, 7 September 2009 from 8am. Radio Ramadhan is a not for profit radio station serving the local Muslim community in Glasgow during the Holy month of Ramadhan.

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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Free dampness & disrepair surgeries for Pollokshields tenants

Govanhill Law Centre will hold its first free legal surgery for tenants in East Pollokshields whose homes suffer from dampness and serious disrepair.

The first drop-in surgery will take place on Friday 18 September 2009 at 10am to noon in the Pollokshields Community Centre, 15 Kenmure Street, Glasgow.

Scots law gives tenants the right to a warm and dry home; a home that is free from dampness & disrepair; and a home that can be heated to a reasonable temperature without spending a large amount of money on fuel bills.

Solicitors from both Govanhill Law Centre and Govan Law Centre will be on hand to provide tenants in Pollokshields with free legal advice and representation to ensure that their homes are warm, dry and comfortable.

Tenants in East Pollokshields who cannot make it along on the 18th of September, can telephone 0141 433 2665 to arrange an appointment with a solicitor for free.

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Call for more funding for school autism units

The Herald reports that Scottish local authorities are coming under increasing pressure to provide more specialist places for pupils with autism.

The row has come to a head after a court case involving Ross McLaughlin, a 12-year-old Glasgow pupil with autism. Ross was assessed as requiring a specialist place when he moved from Caledonia Primary School, in Baillieston, Glasgow, to nearby Bannerman High School.

He was then told there was no place for him because the unit, which caters for 12 pupils, was full, and that he would have to be supported in a mainstream classroom on a temporary basis.

His parents sought help from Govan Law Centre's Education Law Unit. Glasgow City Council initially contested the action, but, a few days before the court hearing, Ross was offered a place in the unit at Bannerman High.

GLC's Iain Nisbet, said the law was clear that education authorities had a duty to make adequate provision for children with additional support needs - and that costs could not be an easy excuse for failing to do so.

"It is a continuing source of frustration that education authorities have not made the necessary arrangements to accommodate the needs of all of their autistic pupils, leading to an annual lucky dip for parents seeking places," he said.

Headteachers in jobs dispute are praised by inspectors

The Herald, 28 August 2009, reports that Acting headteachers from two primaries in Scotland's largest local authority who were replaced under controversial circumstances have been praised by school inspectors.

The development follows accusations in June that Glasgow City Council had appointed new heads to the schools without consulting parents.

Mike Dailly, principal solicitor with the Glasgow-based Govan Law Centre, which is taking the case, said: "These reports show why parents have been so loyal to the acting headteachers and are a clear demonstration of why the council should have consulted with the parents."

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Contributory negligence no defence in disrepair claims

Sheriff MacKenzie has held that a landlord's defence of contributory negligence is irrelevant in a breach of contract claim by a tenant for damages for dampness and disrepair.

In the unreported GLC case of Deans v. Glasgow Housing Association (Glasgow Sheriff Court, 19 August 2009)the court repelled the defender's contributory negligence defence following a diet of debate on 18 May and 3 July. A contributory negligence defence generally apportions some of the blame on the pursuer, and if successful results in any award of compensation being substantially reduced.

In the present case the defenders' claimed inter alia 'The pursuer ought to have followed the defenders' advice by removing the Calor gas heaters and tape from the vents in the bedroom, and by venting the tumble dryer'.

Sheriff MacKenzie held 'I am in respectful agreement with the analysis of the structure of the Law Reform (Contributory Negligence) Act 1945 set out by Lord Glennie in Stewart and Stewart v. Pure Ltd [2008] CSOH 49 and the consequent rationale of his decision in that case. As Lord Glennie observed, in Reeves v. Commissioners of Police of the Metropolis [2000] 1 A.C. 360 Lord Hope of Craighead identified that there are two limbs to consider in relation to the interpretation of the 'Act'. Considering the second 'limb', referable to the pursuer's conduct, a defence of contributory negligence would not have been open under contract at common law. Applying such a approach to the present case I am satisfied that the defender's pleadings and plea in law regarding contributory negligence should not be remitted to probation'.

Separately, the court deleted the defenders' pleadings which sought to blame the tenant for the cause of the dampness and disrepair. The defenders had averred 'It was the duty of the pursuer to see to it that the subjects were adequately heated and ventilated. Further it was her duty to take and act upon the advice from the defenders as her landlord'. These averments were deleted as the court decided to follow the approach of Lord Johnson in Guy v. Strathkelvin District Council 1997 Hous LR 14.

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Appeals to the Sheriff Principal masterclass

GLC is delighted to announce it will be hosting a masterclass on how to present and conduct appeals before the Sheriff Principal at the Royal Faculty of Procurators Library, Glasgow on Thursday 22 October 2009, 10am to 12.30pm.

The event will include presentations from Sheriff Principal Taylor, the Sheriff Principal for the Sheriffdom of Glasgow & Strathkelvin, and Simon Collins, Advocate, Murray Stable.

This event will be of interest to all civil court practitioners. The cost of this event is £85. To book please contact GLC by e-mail (m@govanlc.com) or tel. 0141 440 2503, fax 0141 445 3934.

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Breaking news: Glasgow education chief resigns

GLC understands that Margaret Doran, Executive Director of Children and Families at Glasgow City Council (GCC) is terminating her employment with GCC and stepping down from her top post from 28 August 2009. Ms Doran presided over Glasgow's controversial and unpopular programme of school and nursery closures, and most recently has been accused of 'parachuting in' new headteachers to schools without consultating parents.

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GHA vice-chairman claims he was forced to quit

The vice-chairman of Scotland's biggest social landlord claims he was forced to quit because he was "hostile to politicians".

Fred Shedden says he had to stand down as vice-chairman of Glasgow Housing Association because Karen Watt, the Scottish Housing Regulator, had made it clear his continued presence on the GHA board would not be acceptable.

Mike Dailly, of Govan Law Centre, who has regular dealings with the GHA on housing issues, said the problem with the GHA was a "fundamental lack of leadership".

"The reason that the GHA has failed is because it has lacked a heart and a soul, which in any community-based housing association comes from the ordinary people on its management committee."

He said Mr Shedden was "part of the problem because he comes from a different world and a different ethos".

Full story in The Herald.

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GHA boss & vice chair quits

THE under-fire boss of Glasgow Housing Association Ltd (GHA) has quit, in a move opponents of the troubled organisation say represents "a clean slate" for the social housing provider.

Taroub Zahran, the £180,000-plus chief executive of GHA, will leave the organisation in September - a decision commentators of Scotland's housing sector believe had been inevitable for some time.

Long-serving vice chairman Fred Shedden, a former corporate lawyer perceived by many as the power behind the throne, is also to stand down. Full story in Glasgow's Evening Times.

GLC believes the departure of Ms Zahran and Mr Shedden is a move in the right direction for the soulless, uber corporate 'community controlled housing association'. For too long the GHA has failed to deliver for Glasgow's most vulnerable tenants and homeowner customers.

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