Page last updated at 22:56 GMT, Tuesday, 29 May 2007 23:56 UK

Banks branded 'vexatious defendants'

By Ian Pollock
Personal finance reporter, BBC News

Maria Dobson
Maria Dobson won nearly 4,000 from the Abbey

People trying to reclaim overdraft charges from their banks have started using a new legal tactic - asking a judge to strike out a bank's defence as an "abuse of process".

In the past few months, tens of thousands of people have reclaimed millions of pounds after accusing their banks of levying illegal charges, going back up to six years.

In some cases, the banks have paid up quickly when presented with a detailed written demand for a refund.

In others, they have stalled, only to give in at the last moment - for instance, by paying up on the day of a court hearing, or by simply not bothering even to attend court to argue their defence.

This last tactic has started to irritate a growing number of judges around the country, who have begun making it known that they are not very happy at the way their time, and that of their courts, is being wasted.

But the example of Maria Dobson, from Newbury in Berkshire, highlights a way in which some claimants may be able to tap into this growing discontent among judges.

Abusing the system

In February, she lodged her claim against the Abbey, for 3,865.86, at Newbury county court.

She then reached what is known in the procedure as the allocation stage.

It is then that a judge, after reading the claim and the bank's defence, will typically set a date for a court hearing.

But knowing that the Abbey, in common with all other banks, was highly unlikely to turn up on the appointed day, she adopted a different tactic.

"I put in a draft order, asking him to say that the Abbey was abusing the system and to throw out the case as an abuse of process," she said.

"I put in a list of cases that the Abbey had settled, and said they had settled so many a few minutes before going into the court room, I felt the bank had no intention of defending itself," she added.

Struck out

The result was swift.

Judge Burgess agreed with Mrs Dobson. On 1 May, he struck out the Abbey's defence in a couple of brisk sentences and awarded her the money.

By this point, extra interest had pushed her claim up to 3,929.61.

This particular judge had, in fact, made a similar decision at Reading county court in March.

Meanwhile, Judge Thomas at Rhyl county court has made a similar order, against Lloyds TSB, without even being asked.

He has demanded that the bank supply, by 5 June, a list of all claims it has defended in court and all those not defended. Otherwise, the bank's defence will be struck out.

The claimant, Ben Manesh, said this was encouraging.

"The judge did this on his own initiative," he said.

"I can't see the bank complying with this request."

Vexatious defendants

The Abbey is one of the banks, along with the Yorkshire/Clydesdale and the Alliance & Leicester, which have been emboldened by two recent cases in which Lloyds TSB successfully defended two refund cases brought by customers.

Quite a few would-be claimants now say they are worried about pursuing their claims, believing that their chances of winning have been damaged.

But campaigners against bank charges believe that persistent, well-organised claimants are still very likely to win.

"You have heard of the concept of the vexatious litigant?" asked Marc Gander of the Consumer Action Group.

"Well the banks are the same, but in reverse - vexatious defendants, and on a massive scale," he said.

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