Bank charges case opens at last

By Ian Pollock
Personal finance reporter, BBC News

International Dispute Resolution Centre, scene of the hearing

One of the most important cases affecting consumer rights has now started at the High Court in London.

The Office of Fair Trading (OFT) is challenging seven leading banks and the Nationwide building society over the fairness of overdraft charges.

Anyone expecting the banks to be held up against a wall and beaten until they confess to overcharging their customers will be sorely disappointed.

A straightforward consideration of whether or not their overdraft charges are too high is not on the cards.

Instead, more than 60 barristers and solicitors have gathered on behalf of their clients to do what lawyers like doing most - discussing the meaning of words, especially words in directives, regulations and contracts.

Expense

With many of the lawyers charging hundreds of pounds an hour, this case may be running up the most expensive collective hourly bill yet seen at the High Court.

There are so many lawyers acting on behalf of the OFT and the eight lenders that the case has been moved to larger accommodation just down the road from the Royal Courts of Justice.

At an office building in Fleet Street called the International Dispute Resolution Centre, the lawyers sit at ordinary desks in a large open-plan office.

The emblem of the High Court is propped up against the Judge's desk to give the proceedings the necessary authority.

But with so many people there, it is rather cramped. They are surrounded by ring binders, with boxes of files and case documents on shelves or stacked on the floor.

Fine detail

One high-tech feature of the hearing is that the verbatim transcript typed by the court stenographer is displayed instantly on laptop screens on some of the lawyers' desks.

Judge Andrew Smith will have much to digest

They will need this, as the discussion has already plunged headlong into fine detail.

Early on the judge, Mr Justice Andrew Smith, who is hearing the case, was asked to ponder the merits of concepts such as "excluded terms" and "excluded assessments".

The Royal Bank of Scotland barrister Laurence Rabinowitz QC got into his stride and embarked on a discussion of what sort of terms in a contract might "specify" or "fix" a price.

This is important, as one of the legal issues to be decided is the extent to which the regulations can be used to catch charges that are not the main price paid for having a current account provided by a bank.

But at one point a seemingly abstract debate about the concept of "price" gripped the court room.

The word to describe all this is "dry".

Murder

Halfway through the first morning the number of journalists taking an interest had dwindled as one by one they realised this case will not, at least initially, provide front-page news.

"It is extremely subtle stuff, " Mr Rabinowitz said at one point.

He is not kidding.

All this is a world away from the previous case heard by Mr Justice Smith.

He is a circuit judge in the North West as well as being a High Court judge in London.

For the past few days he has been presiding over the case against the three youths who were found guilty of the murder of Garry Newlove in Warrington in August last year.

The jury in Chester took longer than expected to reach its verdict and he told the bank charges hearing that this meant he had yet to read some of the documents submitted.

He was warned that there will be much more to digest.

"My Lord is going to have so much submission from the banks," said Mr Rabinowitz, without a hint of glee.