All the City’s big-hitting litigators have a role in an Office of Fair Trading (OFT) test case that got underway last Friday (27 July).
The OFT filed High Court proceedings in the wake of a deluge of claims that bank overdraft charges are unfair. The Financial Ombudsman Service and the county courts received tens of thousands of complaints regarding the charges, with some consumers claiming 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 test case and are expected to refute the OFT’s claim that the unfairness rules of the Unfair Terms in Consumer Contract Regulations apply.
In a statement the OFT said: “The OFT believes that they do [apply], and is seeking to establish this legal principle clearly in the court.
“The OFT considers that a quick determination of this point of principle will assist in securing a clear, orderly resolution of the fairness of these charges.”
The banks going to court are Abbey, Barclays, Clydesdale, HBOS, HSBC, Lloyds TSB, Royal Bank of Scotland and Nationwide.
Ashurst is acting for Abbey; Clifford Chance is instructed for Barclays; Linklaters is advising Royal Bank of Scotland; Simmons & Simmons is representing Clydesdale; Freshfields Bruckhaus Deringer is acting for HSBC; and Lovells is advising Lloyds TSB.
It is understood that Brick Court Chambers, Fountain Court 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 with the aim of address