Judge, Jury & Executioner?
The consumer led campaign against unfair bank charges was dealt a surprising set-back last week when a Birmigham district court ruled in favour of Lloyds TSB and refused a claim for a £2k+ refund.Until now the bank charges campaign seemed to be developing an unstoppable momentum. With high profile support from the likes of Martin Lewis and the Consumer Organisation 'Which', the number of claims had been growing at a tremendous pace. 'Which' estimate 3 million people have downloade pre-prepared letter templates from their web-site in order to make a claim. Meanwhile, anyone searching on Google for terms such as 'reclaim bank charges' will have noted a huge increase in the number of paid advertisements from legal firms making a leap for the nearest band-wagon.
Ironically the judgement, though welcomed by the banks, may have been the result of a cock up on their part. Petrified that an unfavourable ruling would open the flood-gates to even more claims, they have typically settled with customers before claims got to court. It may be that this case simply slipped through the net due to the volume of claims being dealt with. Certainly Lloyds TSB did not turn up at court to maximise publicity from the ruling, even though their lawyers would have known the outcome via the judge's draft ruling.
So does this mean a premature end for the campaign?
The banks certainly hope so. Already cases are being reported of them citing the Birmingham verdict to try and dissuade customers from pursuing claims, with one arguing that the judgement meant there were "no grounds in law" for recovering charges.
Guess what? This isn't strictly true.
Whilst the case against reclaiming charges has certainly been dealt a blow, under English law verdicts in district courts cannot be seen as setting precedent for other cases to follow. In other words, a different judge could take an entirely different view on an identical case tomorrow regardless of the Birmingham verdict. Only rulings from the High Court set precedent, and no case has made it that far yet.
Here at TheRateTart our guess is that none of the banks will be willing to take the gamble of pushing a case to the High Court on the basis of one local verdict. If they lost, there would then be a legal precedent against bank charges and a tidal wave of claims would surely follow.
So if you are thinking about making a claim, the odds are still very much in your favour. Expect to get a bit more hassle than previously.
But for the banks it is still very much case of "Do I feel lucky?"
Well, do ya, punks?
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TheRateTart
rate tart noun [C]
1 also card tart, card surfer
someone who continually switches credit card providers in order to get the lowest interest rates available
2 also rate surfer
someone who regularly switches savings or loan accounts in order to get the best interest rates available
rate tarting noun [U]
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