Discussion on Proposed Group Litigation Orders

[Tom Brennan]

Proposed Group Litigation Orders (GLOs)

 

This post is for the discussion of the Proposed Group Litigation Orders. If you wish to register your interest in being a party to a Group Litigation Order, please reply to that separate post: http://www.consumeractiongroup.co.uk/forum/general/173396-proposed-group-litigation-orders.html#post1870713

 

The issue of bank charges, their lawfulness and their continued use has been completely overtaken by the OFT test case proceedings. Attempts by individual consumers to find redress, either through the banks’ own complaints procedures, or through the courts, have now ground to a halt whilst the test case continues and whilst the FSA waiver remains in place.

 

Although the OFT and the FSA are undertaking serious and much needed work through the test-case and the PCA market study, there are legitimate concerns within consumer circles that the interests of the consumer are not being adequately represented or protected.

 

The judgment of Smith J. makes it clear that bank charges are subject to the requirement of fairness, and the OFT has now written to the banks with their preliminary conclusion that these charges are unfair. Nevertheless the banks are still imposing these charges with impunity and routinely ignoring consumer complaints, citing the FSA waiver and the test case as justification. Without any proper redress through the court system, consumers are becoming increasingly frustrated by this apparent unequal treatment, particularly those consumers suffering from financial hardship.

 

Given the current financial crises affecting the UK banking industry, it is unsurprising that the banks are not seeking a quick resolution to the issue of bank charges. There are already in excess of 65,000 “bank charge” claims in the court system, and OFT figures suggest that in excess of 12 million people could have a claim against their bank; the final compensation figure could be well in excess of £10billion.

 

Even when the test case is fully resolved some time in late 2009 or early 2010, there will remain a number of outstanding legal issues, since neither the OFT nor the FSA have any statutory powers to bring proceedings on behalf of consumers. These issues include, but are not limited to:

 

• What can be recovered by consumers? The full charges, the interest on those charges? What about any consequential losses, such as a resulting bankruptcy or the repossession of a family home?
  
• What rate of interest can consumers reclaim: the statutory 8%, compound interest or the contractual interest that the banks have imposed?
  
• Does the Statute of Limitations and the 6-year rule apply to bank-charge claims?
  

 

And whilst the test case continues, there are pressing concerns for many claimants:

 

• Can consumers facing financial difficulty bring an injunction to stop these charges? Can all consumers?
  
• Can the stays on cases involving financial hardship be challenged?
  
• Can the ongoing FSA waiver be challenged in light of recent developments?
  

 

With legitimate concerns that the consumer’s interests are not being properly advanced or protected, it is essential for consumers to be properly represented. Whilst no individual could be expected to have the resources to fund their own legal team, collectively consumers could have a much greater say in how their interests are protected through the use of Group Litigation Orders.

 

A Group Litigation Order (‘GLO’) is an order made by a Court to manage claims which give rise to common or related issues of fact or law (the ‘GLO issues’). Essentially, one claim is used as a test case to deal with the GLO issues, and all claims which are proceeding on related issues of fact or law are attached to that claim by way of a Group Register. Any ruling that is made in respect of the test case will be binding on all other cases on the Group Register. This is sometimes referred to as a “class action”.

 

The benefits of GLOs in these cases against the banks are substantial: a GLO claim is automatically assigned to the multi-track, and so funding can be obtained from the Legal Services Commission if a sufficient number of claimants are eligible for Legal Aid. This would allow for proper representation by solicitors and enable a litigation team to be put together for consumers. Preliminary discussions have taken place with the Legal Services Commission and funding could, in principle, be granted for such GLOs. This would allow consumers to have their own interest advanced properly by a substantial legal team, and ensure that no deals are struck behind closed doors by the banks and the regulators without their involvement.

 

But before more detailed discussions and preparatory steps can be taken, it is important to establish whether there is sufficient interest from claimants for these GLOs to go ahead. There have been indications from the Courts that this may be the most sensible way to deal with the tens of thousands of claims already in the system, and the hundreds of thousands that may well follow. It should be noted that a Court has powers to order such a GLO of its own initiative and can add additional claimants to the Group Register. It may be better, however, for such initiative to come from consumers themselves.

 

This post is for the discussion of the proposed GLOs. A separate post is set up for individuals to register their interest in being a party to a GLO. Once the data from this poll has been collated, a further post will set out progress on the current discussions with solicitors and the Legal Services Commission in respect of GLOs.

 

Thank you for taking the time to read this information. Hopefully, with your support, we can join enough claimants together on GLOs to properly protect the interests of consumers and to ensure a fair result on compensation for these bank charges.

 

 

Thomas Brennan

Barrister

Atlas Chambers

Edited December 15, 2008 by Tom Brennan

[caro]

This seems like a good idea. I think anything that can be done to get things moving on claiming charges has to be a good thing.

 

What sort of timescale are we looking at here Tom to set the ball rolling?

 

How many claims do you need to make this a viable option?

 

If people already have a claim stayed, would they be able to withdraw it and add it to the GLO?

 

Is there any greater risk for claimants than doing their claims individually?

 

I've been putting off doing my hubby's Lloyds claim, but I think we need to have a chat about this. We can't afford to take risks, but I can't really see what we have to lose by trying this.

[yourbank]

This seems like a good idea. I think anything that can be done to get things moving on claiming charges has to be a good thing.

 

What sort of timescale are we looking at here Tom to set the ball rolling?

Very difficult to say. It's a multi-track claim and therefore would be heard in the High Court - probably the Commercial Court. Obviously any judgment would be precedent setting.

How many claims do you need to make this a viable option?

Each GLO will be per bank (11 in total) and the minimum requirement is 2 or more claimants for each GLO - 1 principle claimant + 1 or more signatories on the accompanying Group Register.

If people already have a claim stayed, would they be able to withdraw it and add it to the GLO?

All participants would have to have a claim already in the court system. They would not need to withdraw their claim. Indeed, the legal issues will be much broader than a straight forward claim ie consequential loss, hardship cases, compound or contractual interest, limitations & the 6 year rule. Ideally the GLOs would have enough claimants that covered all these issues for each bank.

 

Is there any greater risk for claimants than doing their claims individually?

 

I'm not sure what you mean by risk - can you elaborate?

I've been putting off doing my hubby's Lloyds claim, but I think we need to have a chat about this. We can't afford to take risks, but I can't really see what we have to lose by trying this.

 

I have been asked to respond to your questions Caro, but please feel free to ask further follow up questions if need to be and I will clarify further points.

[caro]

Asked by whom yourbank?

 

I have to say I'm extremely surprised it takes only 2 people to make a GLO bearing in mind it could potentially be precedent making

 

And as for risk....the risk of losing.

[yourbank]

Asked by whom yourbank?

Caro, I am not going to answer the question, because I do not believe that the whom is really relevant.

I have to say I'm extremely surprised it takes only 2 people to make a GLO bearing in mind it could potentially be precedent making

I will ask for further clarification on this point. I have to admit ignorance on the topic unfortunately.

And as for risk....the risk of losing.

I hope that is OK.

[yourbank]

"I have to say I'm extremely surprised it takes only 2 people to make a GLO bearing in mind it could potentially be precedent making"

 

''Where more than one person has the same interest in a claim....by or against one or more of the persons who have the same interest as representatives of any other persons who have that interest...Any number of claimants or defendants may be joined as parties to a claim.'' - Civil Procedure Rules 19.1, & 19.3.

http://www.justice.gov.uk/civil/proc...pd_part19b.htm

 

''Every claim in a case entered on the Group Register will be automatically allocated, or re-allocated (as the case may be), to the multi-track'' - Practice Direction - Group litigation 7.1. http://www.justice.gov.uk/civil/proc...pd_part19b.htm

 

 

Examples of Group Litigation cases Legal / Professional - Group Litigation Orders

 

"And as for risk....the risk of losing."

 

Generally, a single litigant would not be able to take claims of this nature to the multi-track - one of the key advantages of GLOs - and as such the ''greater risk for claimants than doing their claims individually'' does not apply. Of course, any litigation carries the risk of losing.

 

 

Apologies but cannot multi quote.

[caro]

I don't mean to be rude Yourbank, but to me it is extremely relevant who is answering my questions if I or anyone else is thinking of taking up the suggestion. The suggestion has come from a trained barrister under the auspices of his chambers, and I assumed that he, or someone with detailed knowledge would be answering the questions. I believe that you work for a well known bank.

 

I am concerned that the claims would be multi-track as the issue of costs could be an issue. Would legal aid cover that should the worst happen? This is a different way of dealing wIith claims, and anyone considering doing this needs to be fully aware of the implications.

 

Generally, a single litigant would not be able to take claims of this nature to the multi-track - one of the key advantages of GLOs - and as such the ''greater risk for claimants than doing their claims individually'' does not apply. Of course, any litigation carries the risk of losing.

 

What is the greater risk and why does this not apply when claiming under a GLO? I'm sorry but I don't understand this paragraph.

 

I, for one, would be more comfortable getting responses to my questions from someone who can answer them directly, rather than a third party. I certainly would want a lot more assurance that this is not a high risk strategy.

 

Another question would be who the legal team would be taking their instructions from. When it comes to decision making by claimants, does everyone have to agree the way ahead, or can individuals decide for themselves how they wish to progress their own claim, or is there a majority vote? How would this work?

 

There's a lot to be considered.

[yourbank]

Caro, I will ask Tom to answer your questions when he is able to do so and therefore he will be able to clarify additional points. I am gonna step out of the thread because the whom detracts from the issues at hand and I prefer not to reveal my sources because they would not be that if I breached their confidence. I hope you understand but I am not sure when Tom will be able to respond directly to your post.

[caro]

I can understand you not wanting to break a confidence yourbank, but I hope that you understand that I need confidence too in order to trust my claim with someone else. Caggers are used to dealing with their claims themselves, so if I'm to risk a claim of some £3k by using an alternative method, I need reassurance that my cl aim is in capable hands. I've been successful with my claims so far, so although the test case has delayed things for some time, and is likely to for some time in the future. If I'm to trust my claim with someone else I want to know it's in safe hands.

 

I entirely agree that the campaign against charges is what is important here, and no doubt Tom is enjoying the festivities, so I'm happy to wait for the answers at a more appropriate time.

 

Thanks for the information you've passed on to date though. The theory for getting claims going again, despite the test case is excellent. I'm just trying to understand how it would work in practice.

 

Thanks again for your input.

[flyingdoc]

Tom Brennan is a very capable barrister who took a huge risk taking his own case to court initially.(if he had lost and been made bankrupt, he could have lost his license to practice as a barrister)

Im sorry but if I had a barrister of his experience waiting to take on my case and as an alternative I could run my case personally (and I am not untrained in law) I would bite his hand off.

I would have some questions for him as everyone should have but my confidence would be higher with him running the case than running it alone.

[caro]

I remember Tom's case very well flyingdoc, and the risk that he took which could have affected his livelihood. Although he forced his bank into court though, he did lose his case. I'm not legally trained either, but with CAG's help I got my charges back. I'm afraid I'm not as altruistic as Tom and am not prepared to take potentially expensive risks on behalf of my family.

 

I do not wish to detract from Tom's ability at all by pointing this out, because although he may have lost that particular battle, the war rages on, and doubtless he will have learned from his experience. In fact I believe he is probably one of the of the foremost experts in his profession on the issue of penalty charges, and that inspires confidence to get involved.

 

I'm just rather cautious by nature though, and like to have a full picture before making decisions. This may come across as being negative because I'm asking questions, but I think it's an excellent idea which is why I want to find out as much as I can about it.

[debbbbsy]

I'm also extremely surprised it only takes 2 to go for a GLO.

 

We are currently looking to take our case to county court, against the RBS, which is very similar to Paul Walton's. The bank closed our current accounts without our knowledge or consent, & created "NEW" loan accounts, again without telling us, & then litigated.

We have documented proof that they lied to us, misled there solicitor & the courts.

Paul is struggling to get justice in court, at his last hearing the RBS flew in a barrister from London.

 

Should we be looking to join forces with Paul & consider a GLO against the RBS.We qualify for legal aid.

Debs

[Tom Brennan]

Dear all,

 

Thank you for your discussion of the issues raised by my original post.

 

I will endeavour to answer some of these questions when I have an opportunity to do so at the end of next week.

 

Thomas Brennan

[caro]

Thanks Tom.

[GaryH]

"Very difficult to say. It's a multi-track claim and therefore would be heard in the High Court - probably the Commercial Court. Obviously any judgment would be precedent setting."

 

Not necessarily - a claim can be allocated to the multi track without being heard in the High Court. Multi track matters are heard in the county court before a curcuit judge, whose decisions are of persuasive precedent but not binding.

 

In any event, my understanding is that a GLO application can be made to either a curcuit judge in the county court OR a High Court judge.

 

Good to see your still so actively involved in the campaign, Tom.

[angel_1]

well everyone after the day ive had, just one question where do i sign pls?

 

im interested and will give my support

 

have a good weekend all laters angel x:cool:

[sallysas]

I'm also interested for Halifax and Natwest.

 

I have filled out an N244 for one claim and am also going to do so for the other. Does this make mine ineligible or just not relevant?

[caro]

Hi Sally. Long time no see.

 

The N244 is an application form for all sorts of things. What were you applying for?

 

This thread seems to have gone very quiet so I don't know if this is still something that Tom's considering. I'm hoping he'll be updating peeps soon.

[yourbank]

Will give some people a nudge to give Tom a nudge. I know he did speak about this when I saw him last month so will see if there is any update that he can make for everyone.

[caro]

Thanks.

[caro]

Will give some people a nudge to give Tom a nudge. I know he did speak about this when I saw him last month so will see if there is any update that he can make for everyone.

 

Any update yet?

[yourbank]

There is but will let Tom let you know when things are finalised.

[determindator]

Subbing

[AA99]

I think it is very confusing having these 2 threads on this subject, there is this one, the discussion on and this one, the proposed http://www.consumeractiongroup.co.uk/forum/general/173396-proposed-group-litigation-orders.html#post1870713

 

Are there any updates at all on either:-?

[caro]

I believe that the idea was that one was a discussion thread, and the other was for people to express their interest in being included, but unfortunately Tom hasn't come back to update.