The Office of Fair Trading’s (OFT) High Court test case about “unfair” bank overdraft charges has got underway.
Seven high street banks and a building society agreed to participate in the case and will defend OFT claims that the unfairness rules of the Unfair Terms in Consumer Contract Regulations apply to excess charges.
The line up of defending banks includes: Abbey National, Barclays, Clydesdale, HBOS, HSBC, Lloyds TSB, Nationwide, and Royal Bank of Scotland (RBS).
The case was supposed to begin on Wednesday (16 January) after allowing the presiding judge Mr Justice Andrew Smith two days to read admitted evidence from both sides. It was, however, delayed until yesterday (17 January) because Smith J’s previous commitments over ran.
As the case got underway RBS’s counsel, Laurence Rabinowitz QC of One Essex Chambers, said the consumer campaign waged against the charges had stirred up “a hornet’s nest”.
He said the OFT had contributed to the furore by making poorly judged comments following an earlier ruling on the unfairness of credit card charges in 2006.
The case is one of the largest of the last two decades. If the case is lost by the banking industry experts have warned that the days of free banking would be over.
In a unique move the case is being heard in the International Arbitration Centre because the Royal Courts of Justice’s courtrooms are too small.
For a full line up of counsel acting in the case see: