uk.finance

Sheriff gives go-ahead for bank charge cases

The Herald
7 September 2007
12:01am today

/news/news/

Two Scottish bank customers claiming a refund of overdraft charges have
been given permission by a sheriff to proceed with their cases, despite
the legal freeze on claims south of the border.

The decision by Sheriff Derek Pyle at Inverness Sheriff Court has been
hailed by bank charge campaigners as a victory for small claimants in
Scotland.

The cases, one against Halifax Bank of Scotland brought by Govan Law
Centre on behalf of customer Aaron Thomson, and the other pursued by a
party litigant (individual) against Clydesdale Bank, will go ahead after
the sheriff ruled that he could not be bound by the test case brought in
London by the Office of Fair Trading, and would not sist (suspend) the
actions.

Mike Dailly, principal solicitor at Govan Law Centre, said HBOS was
represented by an advocate. "I understand the advocate has been doing
these cases for the last two months around the country and winning every
one (insofar as getting them sisted). So this is a great breakthrough for
consumers in Scotland," said Mr Dailly.

He said he now expected HBOS to settle the case when it returns to court
next month, following the pattern of cases brought before the OFT's move,
and that further cases would soon be brought in Glasgow.

Both HBOS and Clydesdale declined to comment. The British Bankers
Association said the "great majority" of cases had been frozen. "A few
exceptions to this have occurred because, for instance, the judge wishes
to continue hearing evidence following a previous adjournment. The courts
systems differ between England and Wales, Scotland and Northern Ireland,
but in general we expect the courts to take a similar approach in all
three jurisdictions," a spokesman for the association said.

However, the Inverness sheriff agreed with the submissions brought by the
campaigners that the London test case did not necessarily address Scots
common law, nor could the outcome be binding on a sheriff as regards the
common law position. He will issue a written judgment early next week. In
the case against HBOS, Mr Thomson was claiming a refund of charges levied
as a penalty for breach of contract, rather than claiming unfair terms in
a consumer contract - the basis of the OFT's test case.

The Clydesdale case, however, was based on the penalty charge and on the
terms of the contract, but was still allowed to proceed.

Hundreds of thousands of customers have been refunded charges after
threatening to take banks to court.