31-01-2008, 11:51 PM
EXC's Test Case Day 10 Diary
Again and as always a big thanks to EXC who has given me consent to post this here:
Originally Posted by EXC
Before going through each of the banks terms and conditions Brian Doctor started by clarifying some points from yesterday. He asked the judge to read a section of the court transcript from day 6 where Vos - unlike the rest of the banks - submitted that Nationwide’s contract changed when the customer went in to debit. Doctor began reading extracts from it. After some time the judge impatiently said ‘’we can’t go through pages and pages, what’s your point?
Doctor explained that as the contract ‘’changed fundamentally’’ it would ‘’make the regulations unworkable’’. And that a decision would have to be made by the judge as to which contract - credit or debit - would be considered in the Judge’s findings. After some discussion it was decided to use the credit contract and the judge made lots of notes.
The OFT QC then referred to Rabinowitz’s submission that described the ‘benefit’ to the consumer of having a payment refused as the ‘prospect’ of it being paid. Doctor argued that ‘’everyone has the ‘prospect’ of an overdraft by simply by walking in to a branch and asking’’. The judge reminded Doctor that he’d made that very point yesterday.
A discussion started, initiated by the judge. He asked Doctor that if, in the event of one or some types of charges were ruled not exempt from the regulations, how it would work with the regulations.as ’’We have to look forward’’. Doctor replied ‘’it depends on the nature of the findings’’.
Doctor said that before he went through the T&Cs, he wanted the judge to keep in mind that the regulations required that ‘’payments should be in exchange for something’’.
He started in alphabetical order with Abbey. ‘’These are an attempt to run the ‘services’ argument’’. He made references to the numerous times the word ‘service’ appeared throughout the terms and conditions. ‘’This is a self serving attempt to head off the penalties argument’’. He read from the T&Cs ‘’you may obtain an overdraft’’ and from another page ‘’you may deposit ‘’. He told the judge that Abbey have used the same word ‘may’ in two entirely different ways, May meaning ‘might’ and may meaning ‘can’.
He then quoted from a box in the contract that was marked ‘non-contractual’’. The judge asked him ‘’do you think it is contractual?’’ and Doctor said ‘’well if it says it isn’t I suppose it isn’t’’. The judge joked that he was making ‘’a major concession’’ but said he wanted to know his view. But Doctor said he just didn’t know and nor would the consumer.
He read out a section that said all payments are separate requests. He said standing orders require only the initial request and in the case of direct debit’s the request comes from the supplier. Another section referred to a charge if you ‘use’ an unarranged overdraft but Abbey’s submission is that the charge is for the ‘consideration’ of the overdraft..
He said that the T&Cs stated that if a payment is declined there would an unpaid item charge ‘’but what it doesn’t say is in that situation you would also incur another charge’’. Doctor produced a ready reckoner of how the charges were incurred in various situations that a declined payment ‘’could trigger charges indefinitely .’’ Also the monthly overdraft fee is not linked to any service’’.
On Barclays he read ‘’we expect you to keep your account in credit…..to avoid unnecessary charges’’ and said this was not consistent with the main part of the contract argument. Under the heading ‘Charges on unauthorised overdrafts’’ was the returned item fee. ‘’Why?’’
Again he went through the same points as he made with Abbey’s T&Cs but the judge said he didn’t need to make the same points several times on all 8 banks contracts.
Clydesdale’s, he said, tried to come closer to linking the charges to a service but still ‘’failed miserably’’. On a line that Clydesdales T&Cs referred to about returning a payment, Doctor said that this can only apply to a cheque. ‘’you can’t return a direct debit or standing order. It doesn’t go anywhere’’. On the daily unplanned borrowing fee he said it wasn’t a payment for anything but ‘’a state of affairs’’.
Unfortunately, today I could only make the morning session and missed out the rest of the banks terms and conditions.
Having just read what I’ve written on the mornings proceedings you’d be forgiven for thinking that the OFT QC had a relatively good day judging by the points he raised but it doesn’t tell the real story.
From the moment he started he clearly annoyed the judge by making him read vast extracts of the transcripts needlessly because Doctor had misquoted the page number.
There was no pre-defined order to his submission and the judge repeatedly asked him which of the five areas he was on that Doctor originally listed. He went from Abbeys terms and conditions to Barclays when the judge said ‘’Do you not want to cover Abbey’s price list?’’ Doctor replied ‘’Oh yes!’’.
He seems to have made no attempt to rehe**** his submission and his support team would prompt him by plonking hastily written post-it notes in front of him on dozens of occasions. The contrast in the preparedness and delivery of the banks flawless legal teams was unbelievable.
A legal professional in the feed room who was watching the hearing for the first time today, turned round to me after five minutes and whispered ‘’is he like this all the time?’’
I lost count of the times my eyes met with a Which? lawyer who would stare at me unsure as to what expression she should wear. Although I found it quite distressing at times you couldn’t help but join in the frequent chuckles of the others watching. gaff after gaff. At one point I could clearly hear laughing from the banks legal teams.
What effect this could have on the outcome of the case is impossible to say. It may well not have any, as the judge has clearly got a firm grasp of the issues and is certainly bright enough to base his decision on the facts alone. But whatever happens the case will end up in the House of Lords on appeal and if the OFT don’t replace him, they should certainly be encouraged to.