Bank charges update from GLC

GLC has received lots of e-mails and messages from citizens across the UK asking for an update on our bank charges cases.  In Scotland, the banks have deployed the strategy of applying to the court to 'remit' cases from the small claims system to the ordinary court procedure on the grounds of complexity.  This can be a powerful tactic in practice.  The Royal Bank of Scotland used the remit rules to thwart a claim for negligence last year.  Once a case leaves the small claims procedure in Scotland the protection against court expenses flies off, and the claimant would be exposed to unlimited expenses in the event of failure.

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.