BBC - Charges case madness says bank

A legal attempt to force the NatWest bank to justify its overdraft charges will continue for a third day.
Barrister Tom Brennan told the resumed hearing on Monday that the charges left him so poor he could not even afford a pint of beer on his 30th birthday.

But Ben Pilling, the barrister for the NatWest, dismissed Brennan's legal arguments as "unsustainable, madness, and ridiculous".

The hearing at the City of London County Court will continue on Tuesday.

Circumventing the law?

Newly-qualified barrister Tom Brennan is asking the court for permission to sue the NatWest for exemplary and aggravated damages, over what he claims are its unfair and unlawful charges for unauthorised overdrafts.

He also accuses the bank of deliberately harming him by unlawful means, because the overdraft charges on his current account drove him into the red, thus damaging his credit rating.

Brennan is claiming a total of £3,393, including court fees and interest.

The NatWest has already refunded £2,548 and offered to pay him a further £1,600.

But arguing his own case before Judge Peter Simpson, Mr Brennan claimed these payments amounted to an abuse of power by the bank.

He said the bank had simply forced the money into his account before closing it, and argued that this should be seen as an attempt to circumvent consumer law.

"What the defendants have sought to do is buy their way of out this claim," Brennan told the court.

He said that if this tactic by the bank was allowed then there was "no way to prevent the continued use of unfair terms" in its contacts with customers.

Bank victory

A victory for Mr Brennan would lead to a full hearing of his case, possibly in the Mercantile court, a division of the High Court, and this in turn might force the NatWest to justify the level of overdraft fees its charges.

It could also open the way for other customers to claim extra damages in relation to the bank charges issue.

But if NatWest wins, it would damage the hopes of thousands of bank customers currently suing their banks over charges.

Last week, Lloyds TSB became the first bank to defeat a court challenge by a customer for recovery of charges.

District Judge Cooke, at Birmingham County Court, dismissed a claim for £2,545 from Kevin Berwick.

Judge Cooke decided the bank's charges were not illegal contractual penalties but legitimate fees for servicing an overdrawn account.

Legal argument

Brennan started his case last month by asking for permission to launch his novel legal arguments, rather than just claiming that the fees levied by NatWest were excessive.

On Monday he added to his armoury of legal points by claiming that a breach of the regulations on unfair terms in consumer contracts meant the NatWest was in breach a legal duty to treat its customers fairly.

Brennan also claimed that the bank had deliberately acted in an illegal manner by continuing to levy its charges, despite knowing they were now being investigated by the Office of Fair Trading (OFT) and despite knowing he was launching legal action over them.

"The bank knew the charges were disproportionate and therefore unlawful," he claimed.

"It consciously acted in an unlawful manner," he added.

Uphill struggle

Ben Pilling, acting for the NatWest, replied that the "claim for causing loss by unlawful means was unsustainable" and that citing European legislation was of "no relevance".

Mr Brennan also appeared to have an uphill struggle in convincing the judge of some of the merits of his case.

Judge Simpson repeated his earlier suggestion that Mr Brennan might consider waiting until the OFT had completed its enquiry in bank charges.

Suggesting that Mr Brennan, who argued that the country was crying out for a test case on the bank charges issue, might appear to be setting himself up as a consumer crusader, the judge said:

"I am not concerned with thousands of other cases - only this one."

At one point, Judge Simpson also said he did not see "any basis" for a claim for aggravated damages as this part of the claim - effectively for stress or hurt feelings - was usually not relevant to disputes over commercial contracts.

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