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Last Updated: Friday, 27 April 2007, 11:31 GMT 12:31 UK
Judge attacks 'time-wasting' bank
By Ian Pollock
Personal finance reporter, BBC News

Vivien Lloyd
Vivien Lloyd is ecstatic at winning her case - and costs as well
A judge has ordered Lloyds TSB to pay the costs of a customer who sued for the return of overdraft fees, because the bank had wasted the court's time.

Judge Andrew Kearney, at Bristol County Court, ordered the bank to pay 85.41 for "acting unreasonably".

He said the bank had had no intention of defending in court the claim, by Vivien Lloyd, for the refund of 655.

It is thought to be only the second time that a court has awarded costs in these circumstances.

Vivien, who lives in Bristol, had been outraged that her bank had procrastinated for nearly a year before offering to pay her, so she wrote to Judge Andrew Kearney to complain.

The defendant acted unreasonably in defending the claim without any intention of allowing the matter to trial
Judge Andrew Kearney

He agreed and awarded her some of her costs for preparing her case.

"The terrible stress it put me through - it was driving me mad," said Vivien.

"I'm absolutely ecstatic - it was our living money, our food money," she added.


The costs were mainly run up by Vivien's son Gary, who spent many hours in the past year writing to Lloyds TSB, researching the law in his spare time using the internet, and preparing to sue the bank in Bristol County Court.

Court order from Judge Kearney
The court order said Lloyds bank had behaved "unreasonably"

His mother had first written to the bank in March 2006, simply asking for her money back.

It refused, arguing all along that its overdraft charges were fair and transparent, and in line with the standard agreement it has with its customers for running their current accounts.

But in February this year, with one week to go before the scheduled court hearing, Lloyds bank caved in and paid the 655 that Vivien was claiming.

"It was very daunting - but perseverance and encouragement has made it all worthwhile," said Gary.

"It is such a step in the right direction."

Vivien and Gary then claimed for 30 hours of preparatory work, but in the end the judge allowed them just five hours costs, amounting to 85.41.

Even that was paid late, arriving in Vivien's bank account on Monday 21 April, rather than by Friday 18 April as ordered by the court.

A spokeswoman for Lloyds bank said: "We are surprised by this judgement as we firmly believe we have the right to lodge a defence in any legal action brought against us.

"We have been unable to trace any notification from the court about this application for a further payment of 85 and so did not have an opportunity to challenge it before it was made," she said.


It has become standard practice for banks to cave in and settle any legal claims for the refund of excessive overdraft charges, just days before the claims are due to be heard in court.

A spectacular example of this came on Thursday of this week at the Leeds Mercantile Court.

Originally, 77 claims were listed for trial, all involving people reclaiming overdraft charges from their banks.

By the start of the day some had been settled, with 43 remaining to be heard.

But as the day wore on, and with the judge being forced to announce several adjournments, all the cases were eventually settled in favour of the claimants - including one for 12,000.

Wasted costs order

All this has been annoying some members of the judiciary.

In January, a district judge in Lincoln threatened to strike out the defences put forward by banks in the future, unless they could prove they would actually turn up to contest the cases.

The judge said at the time that he thought some banks were abusing the legal process.

The Consumer Action Group, which has been leading the campaign against the banks' overdraft fees, has now posted Vivien and Gary Lloyd's costs claim on its website to encourage other successful claimants to gain a court order for wasted time as well.

In March, a 37-year-old man from Norfolk, Andrew Banner, had to threaten to call in bailiffs before the Abbey bank would pay him 30 in court costs.

He had run up the expense because he had been forced to go to court just to make the bank supply him with account statements going back over 18 months, so he could then calculate exactly how much the Abbey had been over charging him.

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