Friday, 16 July 2010

Bank Wins Against Customers' Attempts to Sue

The Scottish Parliament raised the ceiling for small-claims actions from £750 to £3000 three years ago. Justice Secretary Kenny MacAskill explicitly said the move would help those fighting banks over charges through the consumer-friendly small claims courts.

However, in a landmark case on Wednesday, the high-street giant Santander, convinced a Glasgow sheriff that such actions were too complex for small claims courts. The bank's victory means any customer who wishes to fight for their money back will face unlimited costs at a sheriff court - rather than the cheap proceedings of small claims.

The ruling affects about 800 people in Scotland whose cases are currently going through the courts, as well as thousands who are considering action. Santander is being sued for £3000 by NHS worker Allison Walls for what she believes were six years' worth of unwarranted overdraft charges. On Wednesday she said she would have to drop her case after it was switched to the ordinary roll of the sheriff court - where she could face costs of £10,000 in her bid to get her £3000 back.

The sheriff who backed Santander - Andrew Cubie of Glasgow - cited MacAskill's views in his judgment but said, "there could well be exceptional complexity" in the Walls action adding, "I consider that there are difficult questions of law to be resolved in this case."

I consider there are difficult questions of the law to be resolved in this case. Why would the Justice Secretary increase the limit to £3000, specifically citing those who wish to sue banks over unfair charges, then a sheriff decide the small claims court isn't suitable? Kenny MacAskill's duty is to investigate the sheriff's ruling and give the public his opinion. The small claims court is the only access many of us have for suing large multiples without having to worry about massive legal bills. We need to know why this sheriff has moved this action to the ordinary sheriff court. Stating 'it could well be exceptionally complex' is not enough. The public deserve to know Sheriff Cubie's detailed definition of 'exceptionally complex'.


Anonymous said...

Whilst I understand that sometimes senior judges can call into question the legality of a move by the government or an individual minister, I really doubt that a mere sheriff should be allowed to run roughshod through the government's policy to make life easier for little people.

Mr Cubie's reasoning and back story need investigating, if not by the Justice Secretary, at least by a more senior member of the legal profession.

subrosa said...

Very well said Tris. I would suggest the Justice Secretary is the man though, because he specifically upped the claim maximum for this purpose.

Disenfranchised of Buckingham said...

As someone who has never paid extra charges to a bank I fail to understand how anyone can run up £3000 in charges and after the event cla their lack of financial control is somehow the fault of the bank.

The implication is the more responsible customers should subsidise the accounts of those who can't be bothered to control their own money. It is quite simple customers shouldn't try and spend money they don't have.

Dark Lochnagar said...

I wonder how much money changed hands between the two parties?

subrosa said...

Disenfranchised, I think the legalities of bank charges changed and that then allowed customers to sue banks. Perhaps I'm wrong.

Have to admit the few times I've incurred charges I've taken it up with my bank immediately and had them rescinded.

subrosa said...

Which two parties DL? ;)

Dramfineday said...

The public deserve to know Sheriff Cubie's detailed definition of 'exceptionally complex'.

Correct.....let's be having you

wisnaeme said...

Tris, in the Skye Bridge anti toll campaign, Robbie the Pict atempted to use the small claims instrument and found it a very blunt instrument indeed against certain Sheriffs. Not many vested interests involved themselves in the matter,not at all. Money people with clout,their politico pals, institutional organisations and the establishment had absolutely no influence in the decision making process or interfered with same, that would be terrible if that were so.

...Aye right. Like hell they didna.They used every dirty drick in the book to prevent justice for the common folk. Does this Sheriff Cubbie have a funny handshake and possess a wee apron then? Jist asking as a matter of curiousity.

subrosa said...

Will we get it though Dram?

subrosa said...

Funny enough wisnaeme, Sheriff Cubie's name rings a bell but why I don't remember. I did wonder if he rolled up one trouser leg too.

wisnaeme said...

Aye, Subrosa. Maxwell Maclaurin and Morisons are very discreet "old firms", you know.

Private client potfolios of the money people and that sort of thing is a speciality apparently.

subrosa said...

Ah wisnaeme, yer a mine of information. I thank ye.

Anonymous said...

Wisnaeme: You are bang on there...

Why am I not surprised.

I really think that Mr MasAskill needs to call this one in. Parliament makes laws; Sheriffs are there to administer it.

Crinkly & Ragged Arsed Philosophers said...

The logic on this issue has been complicated when the Supreme Court gave a differing finding from all previous courts on bank charges.

Strange, or perhaps not, that this finding should be made when the banks were already on their knees through self inflicted avarice?

In England the small claim limit is £5k; why then should it be lower in Scotland?

And given that SANTANDER are merely using the same techniques accepted by the English Supreme Court say's little for the independence of the Scottish legal system.

Finally the claim for special treatment due to complexities undermines the basic principles of the SCC; which was to allow the resolution of justice to the small individual on small claims.

In England the banks coerced the Office of Fair Trading into a test case and ,surprise, surprise the banks won the right to charge ridiculous amounts on a technicality, just when the banks needed every rip -off they could get.

While we could never challenge HMRC in the courts, it now seems the banks are in the same category.

The limits are set by the amounts, complexities are the banks and the courts problem.

And Disenfranchised, don't be so bloody smug. It's not the poor that will disenfranchise you but the venal corporations.

subrosa said...

RA, I didn't realise Santander had pulled the same stunt in Engerland. That says quite a bit. I'm still trying to find out something about this sheriff...

Crinkly & Ragged Arsed Philosophers said...

Tris has made the point Rosa.

The underlying fact is the banks have been allowed to form a cartel and have corralled everybody into it under the guise of convenience.

Question is whether the price of that 'convenience' is too exploitative and too high?

subrosa said...

I don't see why it should be RA, do you?

Crinkly & Ragged Arsed Philosophers said...

Rosa, its far too boring to list the exploitative methods of the banks related to charges and terms and conditions; but I'll name three.

Only this week I got a letter from the bank with a new terms & conditions pamphlet. This informs me that as of Sept 1st the bank will no longer apply interest to current accounts which are in credit.

Normally I keep my current account balance between £2-3k in credit and interest earned on that struggles to get near the £50 mark per annum.

In the same pamphlet they advise the interest charged on agreed overdrafts are increasing to 1.49% AER - near as dammit 20% for any unlucky sod who needs that facility.

For the same poor sod to have an emergency and invoke an unagreed overdraft the rates are higher and the deficit increased by computer generated letters which cost pennies to produce and are charged in the high £30s. And, because that account is likely to stay in overdraft for some time the charges related to it will not be refunded.

So in my case I'll remove the cushion from the account and fine tune to cover a couple of monthly DDs. The rest I'll keep in cash, on the bases I'd rather take my chances with an opportunistic thief than be ripped off by an organisational one.

subrosa said...

RA, my bank issued a leaflet only around 6 months ago saying the very same, so I worked out my DDs to the nearest £20 and removed the excess. I too am not prepared for them to use my money without even the minimal reward we have received in the past few years.

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