What does the latest ruling in the High Court test case into bank charges mean?
The presiding judge in the ongoing High Court test case in to banking overdraft charges has recently made an announcement that has pleased the banking industry at a time when many are relieved to finally have some good news. The battle over bank charges began several years ago, when the Office of Fair Trading branded the charges that banks charge when someone goes over their overdraft limit as being unfair and unlawful.
Following this many consumers made claims to get refunds on their bank charges going back up to six years, and whilst banks did repay millions of pounds to customers, in summer of last year all pending claims that were still in the courts were put on hold. This was because the decision was made to hold a High Court test case into the matter, and this case commenced at the start of this year. In the Spring, the presiding judge, Justice Andrew Smith, said that the OFT had the right to assess banks’ terms and conditions for fairness, and this included looking at bank charges and the fairness of them.
However, the case is still ongoing, and recently the judge has announced that having looked at the terms laid out by most banks consumers would not be able to challenge them under common law in order to retrieve their money back for past charges. Whilst this was true for most banks he did say that the terms of Intelligent Finance and NatWest were still being looked at, so the statement did not apply to those two banks. The judge did also indicate that despite this statement the OFT still had the authority to assess banks’ terms and conditions for fairness.
Following the decision an official from the Consumer Action Group said: “Some banks will be breathing a sigh of relief as the judge appears to have decided that these charges were not penalties under common law.”
The banking industry has, of course, welcomed the decision, and an official from the British Banker’s Association said: “The question of penalties was one of the claims made by the OFT which triggered the initial court case. Now we have had this judgement we are keen to move on to the next stage as quickly as possible.”
The decision came as a disappointment to the Office of Fair Trading. However, an official from the watchdog agency stated: “This is another staging post in a complex legal process. We are progressing our investigation as quickly as possible and are in continuing discussion with the banks about our provisional views on the issue of fairness.”
In the meantime pending claims in the courts are to remain frozen, as they have been for over a year now. Officials said that despite the decision consumers could still get their money back, as there are other legal options that could be looked at. Another hearing in the High Court is due to commence in the New Year in relation to bank charges, and consumers will find out where they stand once all of the hearings and any appeals have been concluded.
Tags: oft, past charges, british bankers association, court, bank charges, andrew smith, ongoing high court, someone
