What does the appeal from the banks mean?
June 11, 2008
The High Court test case into banks charges, which took place in January of this year, received plenty of publicity, and both consumers and industry sectors waited with bated breath for the decision from the presiding judge, Justice Andrew Smith. However, this decision did not come for three months, but in April the judge, having considered all of the facts that had been presented to him, ruled in favour of the Office of Fair Trading, allowing the agency to assess banks’ terms and conditions – including bank charges – for fairness.
However, banks were given the right to appeal against the decision, but a number of reports claimed that if the banks did decide to appeal then the next stage of the proceedings could be delayed for over a year. Following a case meeting on 22nd May the banks did decide to appeal, and the appeal is likely to be heard in the autumn according to reports. However, Justice Andrew Smith has stated that the delay resulting from the appeal will not be as lengthy as some have suggested, stating that the next stage of the proceedings should still go ahead before the end of this year.
Some officials have stated that whilst this may be true there is also the possibility that either party may decide to take the matter to the House of Lords following then the matter may be delayed further – well into 2009. In the meantime the many unauthorised charge claims that were suspended last summer when the decision was made to hold a test case will remain frozen.
An official from the consumer campaign group Which? stated: ‘The judge has indicated he wants the OFT’s investigation to be wrapped up quickly, and that is a very positive move for consumers waiting in the wings. But the banks are appealing and it will be some time before a judgement is issued in that hearing and so consumers are still some way away from getting their money back.’
Initially, following the initial ruling, the Office of Fair Trading had stated that it did not know when the investigation might be completed into what could be considered a fair charge but this is something that the judge was not happy about, and he stated: ‘While the investigation is going on, we are asking the county courts to keep the litigation on hold. How long are they expected to wait?’
However, the OFT has now said that it should be able to complete its assessment and deliver its decision in July of this year. It has been agreed between the banks and the regulator that if they are unable to agree upon the amount that can be considered fair then the matter will go back to court prior to Christmas for a ruling. In the meantime one bank, Barclays, has already reduced its charges, and it is thought that other banks will quickly follow suit.
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