Bank Charges Test Case Article discussion

krisskross

borgbaiter wrote: »

hi

shame the banks dont manange their finances as well as thier customers then isnt it :-)

Least they dont get penalty charges on top of thier bad choices tho.


Borgbaiter

No they just lose their money forever. I often see posts asking whether bank charges can still be claimed after bankruptcy which saw thousands of pounds owed to the banks written off. And the answer is always yes go for it. This is adding insult to injury I feel.

Whilst I honestly think the charges are too high, far too many people are careless with their accounts and now appear to see bank charges as being in a little savings account waiting to be paid out. Banks are a business. I have always played fair with mine, stuck to their rules and they have been fine with me.

Tozer

krisskross wrote: »

No they just lose their money forever. I often see posts asking whether bank charges can still be claimed after bankruptcy which saw thousands of pounds owed to the banks written off. And the answer is always yes go for it. This is adding insult to injury I feel.

Whilst I honestly think the charges are too high, far too many people are careless with their accounts and now appear to see bank charges as being in a little savings account waiting to be paid out. Banks are a business. I have always played fair with mine, stuck to their rules and they have been fine with me.

Very sensible and balance post in my view.

PhiltheBear

Tozer wrote: »

Utter rubbish. Neither has unlimited resources - government departments are subject to National Audit Office investigation and banks will have budgets.

Lawyers fees will have been benchmarked. They will also be subject to 'taxation' upon conclusion of the litigation. The days of litigation being a money machine for law firms are over since the Woolf Reforms.

I said "almost" unlimited resources. In terms of the costs of this action there will be a LOT of fees paid out. And, to all intents and purposes, the banks at least can spend out as much as they are making in excessive charges without hurting themselves. If they win - they are covered. If they lose it's probably going to be the case that retrospective recovery will be blocked.

The fees are indeed subject to taxation. And you think that either side will risk upsetting their lawyers by asking for the fees to be taxed? (For the benefit of anyone who doesn't know - taxation in this case means getting the fees checked for 'fairness'). Neither side will do that. They have a professional relationship that they won't jeopardise.

City lawyer fees are horrendous. And QCs charge well in excess of £1,000 an hour. Plus their supporting teams - for each bank. The banks will pay out millions to defend this - because they'll lose millions in income if they fail.

Tozer

PhiltheBear wrote: »

I said "almost" unlimited resources. In terms of the costs of this action there will be a LOT of fees paid out. And, to all intents and purposes, the banks at least can spend out as much as they are making in excessive charges without hurting themselves. If they win - they are covered. If they lose it's probably going to be the case that retrospective recovery will be blocked.

The fees are indeed subject to taxation. And you think that either side will risk upsetting their lawyers by asking for the fees to be taxed? (For the benefit of anyone who doesn't know - taxation in this case means getting the fees checked for 'fairness'). Neither side will do that. They have a professional relationship that they won't jeopardise.

City lawyer fees are horrendous. And QCs charge well in excess of £1,000 an hour. Plus their supporting teams - for each bank. The banks will pay out millions to defend this - because they'll lose millions in income if they fail.

Virtually every big case that I have been involved in has gone to cost assessment. Not quite sure why you think that they won't do it for fear of upsetting their lawyers.

PhiltheBear

Tozer wrote: »

Virtually every big case that I have been involved in has gone to cost assessment. Not quite sure why you think that they won't do it for fear of upsetting their lawyers.

Firstly because, in most cases, the bank has its own legal department in which office space is set aside for the external legal team. This is because they are dealing with many of the bank's cases, not just one. So, the bank doesn't want to upset the externals and have to change firms in the middle of others cases.

Secondly, because they will have been told what the potential costs would be. And when it goes over, as it invariably does, an informal lunch takes place over which each side does a bit of give and take.

Thirdly, because in 35 years of working in City banks I never once saw a bank ask for taxation. And, yes, I did a lot of work with the legal people.

Fourthly, I've seen banks pour millions away on useless and wasted projects without batting an eyelid. And those projects weren't necessarily concerned with earning money. In this case the result will affect the bottom line, quite significantly, now and in the future. The banks will pay and pay to try and stop it up to the point where it becomes hopeless for them - if it does. And that point, on the current showing of the OFT, could be a long way away yet.

Tozer

PhiltheBear wrote: »

Firstly because, in most cases, the bank has its own legal department in which office space is set aside for the external legal team. This is because they are dealing with many of the bank's cases, not just one. So, the bank doesn't want to upset the externals and have to change firms in the middle of others cases.

Secondly, because they will have been told what the potential costs would be. And when it goes over, as it invariably does, an informal lunch takes place over which each side does a bit of give and take.

Thirdly, because in 35 years of working in City banks I never once saw a bank ask for taxation. And, yes, I did a lot of work with the legal people.

Fourthly, I've seen banks pour millions away on useless and wasted projects without batting an eyelid. And those projects weren't necessarily concerned with earning money. In this case the result will affect the bottom line, quite significantly, now and in the future. The banks will pay and pay to try and stop it up to the point where it becomes hopeless for them - if it does. And that point, on the current showing of the OFT, could be a long way away yet.

The banks will not use their own internal legal teams as a) they will not have anyone with sufficient litigation experience; b) there are a number of banks involved so it would be too difficult to have various teams involved when there is a joined defendant; c) insurance reasons - on ALL big litigations, you would use an external firm in case of prof neg.

Not sure why you say they would change firms if it went to cost assessment. Generally it is the same firm that continues as they will know the case - and can justify the time spent on aspects of it.

Tozer

PhiltheBear wrote: »

Firstly because, in most cases, the bank has its own legal department in which office space is set aside for the external legal team. This is because they are dealing with many of the bank's cases, not just one. So, the bank doesn't want to upset the externals and have to change firms in the middle of others cases.

Secondly, because they will have been told what the potential costs would be. And when it goes over, as it invariably does, an informal lunch takes place over which each side does a bit of give and take.

Thirdly, because in 35 years of working in City banks I never once saw a bank ask for taxation. And, yes, I did a lot of work with the legal people.

Fourthly, I've seen banks pour millions away on useless and wasted projects without batting an eyelid. And those projects weren't necessarily concerned with earning money. In this case the result will affect the bottom line, quite significantly, now and in the future. The banks will pay and pay to try and stop it up to the point where it becomes hopeless for them - if it does. And that point, on the current showing of the OFT, could be a long way away yet.

Just following up on the above, it seems the firms involved were all Magic Circle City firms. For the banks they are:

Ashurst, Simmons & Simmons, Addleshaw Goddard, Allen & Overy, Freshfields, Lovells, Slaughter and May and Linklaters.

catoxley

well i'm totally lost i dont understand all this legal stuff but i do know my case was stayed way back dont know what happens next or weather small claims will carry on with it wen it all starts again could anyone please explain in laymans terms whats happening and explain lol sorry

Tozer

catoxley wrote: »

well i'm totally lost i dont understand all this legal stuff but i do know my case was stayed way back dont know what happens next or weather small claims will carry on with it wen it all starts again could anyone please explain in laymans terms whats happening and explain lol sorry

Basically, the small claims courts have stayed all of the reclaiming cases until the test case has been heard at the Court of Appeal.

Realistically, this makes sense as the lower courts will be keen not to make inconsistent decisions when a binding precedent or strong guidance one way or the other is (in relative terms) about to be issued.

borgbaiter

catoxley wrote: »

well i'm totally lost i dont understand all this legal stuff but i do know my case was stayed way back dont know what happens next or weather small claims will carry on with it wen it all starts again could anyone please explain in laymans terms whats happening and explain lol sorry

The Judge is due to do something on historical terms and conditions. if he rules that they can be penalties under common law he may advise the county courts. This could potentially lift the stays as most claims are on historical terms and conditions. However nothing may happen and then the next stage is october/november for the appeals on UTCCR.

All of this is now being held up by the OFT not defining what it thinks is a fair charge. When the OFT report what they think is a fair charge is they will then have 3 months of consultation before they decide yet another different higher figure. if the banks then dispute this figure the OFT intends to bring a further court case to get the Courts approval of this fair charge.

so given the above dont expect any refunds before 2010


Borgbaiter