Two Scottish bank customers claiming a refund of overdraft charges have been given permission by a sheriff to proceed with their cases, despite the legal freeze on claims south of the border.
The decision by Sheriff Derek Pyle at Inverness Sheriff Court has been hailed by bank charge campaigners as a victory for small claimants in Scotland.
The cases, one against Halifax Bank of Scotland brought by Govan Law Centre on behalf of customer Aaron Thomson, and the other pursued by a party litigant (individual) against Clydesdale Bank, will go ahead after the sheriff ruled that he could not be bound by the test case brought in London by the Office of Fair Trading, and would not sist (suspend) the actions.
Mike Dailly, principal solicitor at Govan Law Centre, said HBOS was represented by an advocate. "I understand the advocate has been doing these cases for the last two months around the country and winning every one (insofar as getting them sisted). So this is a great breakthrough for consumers in Scotland," said Mr Dailly.
He said he now expected HBOS to settle the case when it returns to court next month, following the pattern of cases brought before the OFT's move, and that further cases would soon be brought in Glasgow.
Both HBOS and Clydesdale declined to comment. The British Bankers Association said the "great majority" of cases had been frozen. "A few exceptions to this have occurred because, for instance, the judge wishes to continue hearing evidence following a previous adjournment. The courts systems differ between England and Wales, Scotland and Northern Ireland, but in general we expect the courts to take a similar approach in all three jurisdictions," a spokesman for the association said.
However, the Inverness sheriff agreed with the submissions brought by the campaigners that the London test case did not necessarily address Scots common law, nor could the outcome be binding on a sheriff as regards the common law position. He will issue a written judgment early next week. In the case against HBOS, Mr Thomson was claiming a refund of charges levied as a penalty for breach of contract, rather than claiming unfair terms in a consumer contract - the basis of the OFT's test case.
The Clydesdale case, however, was based on the penalty charge and on the terms of the contract, but was still allowed to proceed.
Hundreds of thousands of customers have been refunded charges after threatening to take banks to court.
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