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21 January 2009

A dog's dinner from Mr Justice Smith in test case

A year after the test case opened in the High Court, Mr Justice Andrew Smith has handed down what is presumably his last decision in the test case. Last decision for him, but not the last decision in the test case because we still await the decision of the Court of Appeal.

So what did Justice Smith say in this judgment? Well, it is to do with the issue of common law penalties in the historical terms of some of the banks' contracts. All very confusing, but in his first judgment on current terms back in May 2008, he said that none of the banks' terms could be considered to be common law penalties. Then, in October, he made a decision on the historical terms. He gave Barclays, Clydesdale, HSBC and Nationwide what they wanted and most of what Abbey wanted. He couldn't give Lloyds and RBS/Natwest what they wanted at that point, so he decided to give them more time to see if they could come up with some more arguments. (Not many claimants in court cases get given extra time and clues as to how they can win their cases if they make a cockup on their first appearance in court, but this is what Justice Smith gave these banks.)

Eventually, on 21 January, Justice Smith, in a convoluted argument, has given them what they want almost entirely but with a few minor points not given, none of which are of much use to bank customers in dispute with their banks. He has even given a ruling that Lloyds' terms could not be common law penalties even though Lloyds never published any proper written terms for their personal account holders for years. So, without being able to say what the terms of the contract were, he was able to say that they did not contain penalties.

The full judgment can be downloaded from judgment 21 Jan but I would not recommend bothering to read it. You will get a headache either from trying to understand it, or from banging your head against a wall in frustration at this travesty of justice.

For the BBC's coverage of the story, see New Natwest bank charges ruling.


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Published and promoted by Bob Egerton, TR2 4RS