Bank charges and small claims: too difficult

The Herald for 15 July 2010 reports a decision by Sheriff Andrew Cubie of Glasgow to remit to the court's ordinary roll a small claims action by a bank customer in respect of what she says were six years' worth of unwarranted charges made by her bank (Santander), on the ground that the legal issues raised were too complex for determination in small claims procedure.

The effect of the decision is to expose the pursuer to the risk of unlimited expenses unless she is eligible for legal aid, whereas in small claims the maximum expenses liability is stated as follows in the official guidance on the Scottish Courts website

If the value of the claim is £200 or less, and the case has been defended, there will normally be no award of expenses. In this situation, any court fees paid will not be recoverable.

If the value of the claim is between £200 and £1500, and the case has been defended, the maximum amount of expenses which can normally be awarded by the court to the successful party is £150.

If the value of the claim is between £1500 and £3000, and the case has been defended, the maximum amount of expenses which can normally be awarded by the court to the successful party is 10% of the value of the claim.

Even the successful legally aided in ordinary actions have to make a contribution to their own expenses which, if it exceeds the sum being sued for, renders the action pointless.

Scots Law News has no information on what may be the pursuer's grounds of challenge to the fairness of the bank charges, although presumably the avenue of attack provided by the Unfair Terms in Consumer Contracts Regulations 1999 has been closed off by last winter's Supreme Court decision in Abbey National v Office of Fair Trading [2009] UKSC 6.  Sheriff Cubie's judgment is not yet available on the Scottish Courts website, nor is there any immediate comment from the Govan Law Centre which is representing the pursuer.  The Centre's website does however contain a good deal of material about its continuing campaign on the bank charges issue.  The Herald quotes Mike Dailly of the Govan Law Centre as saying, "The [banks'] strategy is clearly designed to deliver a death blow to consumers' claims."

Meantime Scots Law News is reminded of the failure of Ian Hamilton QC to persuade a sheriff in Oban that his claim against Royal Bank of Scotland for fraud or negligence was simple enough to be a small claim, noted previously here.

PS Further thoughts on this subject on Gavin Ward's Scots Law Blog here, drawing on personal experience (!), but also highlighting some pertinent comments about the small claims procedure in the Gill Review of Civil Justice.

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