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17 November 2009

Supreme Court judgment on test case scheduled for 25 November

It now seems to be official that the Supreme Court (formerly the Law Lords of the House of Lords) will deliver its judgment on the test case on 25 November. See Supreme Court website.

I would be fairly confident that this judgment will confirm the earlier decisions by the Court of Appeal and by the High Court that the charges are "subject to the test of fairness". What the judgment will not do is say that the charges are actually unfair.

So I am guessing that the banks and the OFT will find an excuse to take several more months to work out whether charging someone 35 for going 1 overdrawn is actually unfair. Can't rush them, they have only had about 4 years to think about it! And it would be more convenient for all concerned if they could put it off until after the next election when it will then become someone else's headache.

The Courts ought to lift the stays on claims straight away because it is inevitable that at some point the OFT and the banks will have to sort something out and it does not actually matter for existing claimants if they agree that the charge should have been 25 or 15 or 5. Whatever it should have been does not matter because if 35 was unfair, then the charge was unenforceable and there is no provision in the legislation for negotiating retrospectively a different level of charge. If it was unfair and unenforceable then the whole amount has to be paid back. However, the track record of the local courts on this issue leads me to believe that they will probably continue the stays because they really do not like having to make decisions - any excuse to put things off!

I will not be at all surprised if the banks do a publicity blitz saying that they are negotiating with the OFT over the correct level and will make repayments in accordance with that. I will try to stand firm with all my clients and ask for a full refund. Whether I will be able to persuade local judges to read the legislation and act accordingly remains to be seen.

Published and promoted by Bob Egerton, TR2 4RS