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Judges make decisions 14-15 May 2007

High Court Judge warns banks; County Court Judge rules against claimant

Two judges in very different courts came to different conclusions about the banks over penalty charges on two consecutive days in May 2007.

A High Court judge has warned banks to stop behaving unreasonably when customers accuse them of levying unlawful overdraft charges. Judge David Mackie QC issued the warning at the London Mercantile Court, in the Royal Courts of Justice. He said some banks were wasting the time of claimants and the courts by pretending they would defend claims when they had no intention of doing so. He added if banks continued to do this he might award damages against them.

See BBC news 14 May

A day later, in Birmingham, a County Court judge ruled against a claimant and in favour of Lloyds TSB. A claimant had issued a fairly standard claim against Lloyds for recovery of about 2,500 of penalty charges. The hearing was scheduled for mid April. Lloyds had filed a standard defence, but had not settled the case before the hearing date. They did not appear at the hearing. The judge was not prepared to give the claimant default judgment because a defence had been lodged and he heard the case in the absence of Lloyds. Lloyds' defence is based on the fees being for provision of services and not imposed because of contractual default by the customer. In this case, the judge heard the claimant's arguments and then, rather than make up his mind on the day, he reserved his judgment. On 15 May, he issued his written judgment. The judge accepted Lloyds' argument, even though Lloyds had not produced any terms and conditions for operation of their accounts.

Bob's opinion is that, having read the judge's ruling, I think that on a re-run of the case, arguments could be put forward that would overcome the judge's views on the nature of the contract between the customer and the bank. There is no sign that Lloyds expected to win this case – they did not show up in court and put forward their arguments. There is no sign that they are going to act any differently in future cases than they have in the vast majority of cases before, i.e. settle the claim before a court hearing. So the general message is do not panic because of this one case.

See BBC news 15 May


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Published and promoted by Bob Egerton, TR2 4RS