The Office of Fair Trading’s High Court bid got underway today (27 July) with all the City’s leading litigators participating.
The test case revolves around the claims from tens of thousand of consumers that bank overdraft charges are unfair. The OFT filed High Court proceedings after the Financial Ombudsman Service and the county courts were told that in some cases banks charge as much as £39 for exceeding overdraft limits.
Eight banks, which provide 90 per cent of the UK’s current accounts, agreed to take part in the case and are expected to refute the OFT’s claim that the unfairness rules of the Unfair Terms in Consumer Contract Regulations apply.
The banks up in court are Abbey National, Barclays, Clydesdale, HBOS, HSBC Bank, Lloyds TSB, Royal Bank of Scotland and Nationwide Building Society.
Ashurst is acting for Abbey National; Simmons & Simmons is on for Barclays; Linklaters was instructed by Royal Bank of Scotland; Clifford Chance is representing Clydesdale; Freshfields Bruckhaus Deringer is acting for HSBC; and Lovells is on for Lloyds TSB.
It is understood that Brick Court Chambers, Fountain Court Chambers and 3 Verulam Buildings are representing the majority of the banks.
The test case follows the OFT’s ongoing market study into personal current accounts, which began in March and which aims to address price transparency in the provision of personal current accounts.