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Millions of Barclays Bank customers will be affected by radical changes to the way it charges for going in the red.

The bank claims the changes to its overdraft packages - to be introduced on Monday - will help those who exceed their agreed limits.

Customers who go into unauthorised territory will now be given a "personal reserve", an agreed buffer over and above their authorised overdraft limit (the average buffer is expected to be £250). No interest will be charged on this amount and they will incur no charges or fees for having the service on their account when they are not using it.

This isn't free, of course: if customers use it they get charged £22 for every five days, although payments won't be bounced while you're within the reserve limit. Use it for the entire month and the charge is £88.

At the moment, those who exceed their limits are charged £30 per time up to a maximum of £90 in any one month. If a customer goes beyond their Personal Reserve limit or they do not have a Personal Reserve and have spent beyond their agreed limit then items will be returned unpaid (unless a guaranteed transaction) and a fee of £8 will be charged.

Andy Harris, head of current accounts for Barclays said: "We know from our research that customers appreciate the certainty, simplicity and transparency that Personal Reserve will bring. Most competitors' overdraft charging structures are highly complicated and difficult for customers to understand. The benefit of the new Barclays structure is that a customer knows exactly what payments are going to go through, what they are going to get charged and when."

But Kevin Mountford, head of current accounts at moneysupermarket.com, is unconvinced. He said: "There is real confusion and lack of transparency when it comes to overdraft charges. Several banks have tried to simplify this, the latest being Barclays with its Personal Reserve. However, I don’t think they are making the system any easier for consumers as the Personal Reserve isn’t as clear as Barclays make out, indeed it has had to set up a video blog just to help explain it to customers.

"The truth of the matter is that if overdraft charges were lower banks wouldn’t need to resort to confusing 'reserves' and 'buffer zones' to try and make the charges more palatable.

"Barclays has declared 90 per cent of customers it approached have ‘chosen’ to accept the offer of a Personal Reserve, however as this was a positive opt out I am not sure if the acceptance rate is as much to do with customer apathy or confusion, as much as anything else.

"Time will tell whether Barclays has created a useful current account innovation, or simply added further confusion to an already chaotic market."

The new system will not help those who stay within their agreed limit, as the authorised overdraft rate jumps from 15.6 per cent to 17.9 per cent.

Pundits reckon that the accounts best for people who regularly go into the red but stay within their limits are from Alliance & Leicester (its Premier account is a longstanding favourite), Abbey and Norwich & Peterborough building society.

Each of these institutions has a 0 per cent offer of some description - Norwich & Peterborough on overdrafts of up to £500, and the other three for an introductory period of 12 months.

New customers at Barclays get 0 per cent for the first year too.

Andrew Hagger of Moneynet.co.uk says: "Five days should be sufficient for the majority of people to return their account to order or contact the bank to discuss the possibility of a temporary overdraft increase. A further positive is that Barclays is also reducing the charge for unpaid items from £35 (max one charge per day) to £8 per item from 18 August.

"Whilst the move from Barclays seems to be attracting some unfair criticism surrounding a lack of transparency, the deal is fairer and a big improvement on the previous charging structure."

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Britain's major banks make £2.5 billion a year in profits from unauthorised overdraft charges, the Office of Fair Trading (OFT) is expected to reveal.

After hundreds of thousands of people demanded compensation over the sky-high fees the OFT will, for the first time, put an official figure on how much they have been overcharged in a damning review into the banking system.

The watchdog is due to publish its market study into current accounts and unauthorised overdraft charges later this month. It is also expected to say what a reasonable charge for the service would be, as well as looking at how transparent the charges are and how easy it is for consumers to switch banks.

The £2.5 billion figure has emerged as the test case on penalty charges rumbles on.

After several months of deliberation Judge Mr Justice Andrew Smith ruled in April that the OFT should be allowed to press ahead with an investigation that will establish once and for all whether bank charges are unfair.

The eight banks involved in the case, including Barclays, HSBC and Royal Bank of Scotland, were in court today for a second hearing over whether historical terms and conditions were written in clear and plain language.

The hearing is expected to last three days but the court case is forecast to go on for several more months, at least, after the banks refused to accept the initial ruling and sought permission to appeal.

Consumer groups have accused the banks of trying to draw out the process for as long as possible because the Financial Services Authority (FSA) has granted them permission to put customer claims on hold until the judicial process is completed.

Tens of thousands more cases launched in the county courts or with the Financial Ombudsman Service have also been suspended, pending a final judgment.

The banks are concerned that if the OFT is allowed to proceed, it could cap the fee for bouncing cheques or exceeding overdraft limits at a far lower rate than the £30 typically charged.

It could even force banks to refund the difference between the charges they imposed and a new acceptable rate of penalties set by the regulator.

Analysts estimate that a cap on overdraft charges could cost the banks £10billion in lost revenue at a time when they are alrady under pressure from the credit crunch.

The banks have warned that if there is a change to the model of how they construct their fees for the services they provide this could bring an end to free banking.

A spokeswoman for the British Bankers’ Association, the industry trade body, said: “Banks believe their fee structure is clear and obvious because they make it clear in their terms and conditions when they write to customers."

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Britain's banks make £2.5bn a year in profit from unauthorised overdraft charges, the Office of Fair Trading is expected to reveal later this month.

Hundreds of thousands of consumers have sought refunds on overdraft charges and analysts estimate the banks may have to repay as much as £10bn if the OFT wins the court case it is pursuing against them.

The regulator is also set to publish a damning review of the banks in which it will, for the first time, put an official figure on how much they make from overdraft charges.

It is thought the figure will be just one of several headline-grabbing statistics in the OFT's review of the banking sector, which is also expected to look at whether bank charges are transparent and how easy it is to switch between banks.

A spokesman for the OFT confirmed it is due to publish the review later this month, but declined to comment on its contents.

In a little-noticed part of the most recent court judgment against the banks, Mr Justice Andrew Smith refers to OFT evidence on unauthorised overdrafts, which is likely to be included in the review.

Statistics provided by the banks to the OFT showed the high street banks under investigation received £2.5bn between them in unauthorised overdraft charges in 2006 on an average daily unarranged overdraft balance of just £0.6bn.

The OFT started its court case against the banks last year after being deluged with complaints by consumers.

In April Mr Justice Smith ruled the courts are entitled to assess whether unauthorised overdraft fees - which can be as high as £35 for each bounced payment - are fair.

His judgment is being appealed by the nine banks, who include HSBC, HBOS, Barclays, Lloyds TSB and Royal Bank of Scotland. Some are believed to be ready to take their appeal to the European Court of Justice.

The next hearing in the case starts today when Mr Justice Smith will look at whether overdraft fees going back as far as six years can be challenged.

The Court of Appeal hearing on the main case will not now be heard until after the summer.

None of the banks contacted by The Daily Telegraph would comment publicly on overdraft charges, but one senior banking source at a big five bank said: "In many other countries, people have to pay for their current accounts. We've polled customers and nobody wants to pay a monthly fee for their current account.

"We have costs maintaining the network and overdraft charges are charges for a service. Fees for that service help provide free banking."

A spokeswoman for the British Bankers' Association said: "Banks believe their fee structure is clear and obvious because they make it clear in their terms and conditions when they write to customers.

"It is much better for customers to notify their banks in advance, then they will not be charged."

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Barclays Bank is to slash customer charges for overdrafts, paving the way for a fierce battle between High Street banks for current account customers.
Britain's third largest bank said it would scrap its charging structure for unauthorised overdrafts with a flat fee of £8 per transaction - rather than present charges which can be as high as £35.

But the move is likely to call in question claims within the industry about the cost to banks of processing bounced payments.

The bank said it was able to slash the charges because of technological breakthroughs which have increased the amount of automated handling.

But campaigners have long claimed that fees as high as £35 are unfair and believe the true cost to banks of processing the payments could be as little as £2.50.

The issue of bank charges is currently the subject of a High Court battle after a judge said fees were subject to "unfair contract" rules in April in a case brought by the Office of Fair Trading.

Banks have since lodged an appeal over the ruling which paves the way for a further hearing to decide whether charges are unfair and, if so, what a fair charge should be.

Barclays also announced it would launch two new fee-charging accounts and scrap the interest rate paid on balances in credit, currently worth 2p per week to the average customer.

Its 11 million current account customers will also see an increase in the interest rate charged on authorised overdrafts by almost two per centage points - to almost 18 per cent.

The lower charges are part of a new overdraft service for customers that will also include the launch of "Personal Reserves" on August 18.

These buffer zones, typically of around £250, can be used as often as the customer needs without repeat charges.

But if a customer fails to pay off the additional balance within five working days, they will be liable to pay another £22 fee.

Mark Parsons, managing director of current accounts at Barclays said: "We have listened to our customers and acted on this feedback by completely revamping our unauthorised overdraft service, replacing it with the new Personal Reserve.

"Our customers wanted a simple, clear way of managing payments when they go beyond agreed limits."

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As a High Court judge grants banks leave to appeal earlier ruling, Myra Butterworth looks at what they charge people for, and how we can avoid paying the fees

Bank customers seeking to reclaim unfair charges will have to wait at least another year before getting their money back after the latest twist in litigation this week.

A a High Court judge granted banks leave to appeal against his earlier ruling on the issue. The judge had previously decided that overdraft charges fall under the "unfair terms" in consumer contract legislation.

Which? chief executive, Peter Vicary-Smith, said: "This is a real kick in the teeth for consumers as it just drags out the whole process. It’ll be at least another year before people start to get their money back, during which time the banks will hit us with up to £3.5 billion in overdraft charges.

"The banks should do the right thing now, throw in the towel and start reimbursing the customers they’ve been overcharging all this time."

But customers do not have to wait until the final outcome of the test case to ensure that they get the best possible deal. Those who are fed up with paying expensive charges, or simply want to get the best rate on their current account, should switch to a different bank.

Research by statisticians Moneyfacts reveals how banks are already profiteering by charging customers more and paying savers less. Banks have cut the interest rates they offer those in credit on their current accounts by up to 1.75 per cent while some overdraft rates have been put up.

Michelle Slade, analyst at statisticians Moneyfacts, said: "A lot of the biggest moves have been by the major high street lenders, meaning a large proportion of the population is going to be hit at a time when they can least afford it."

For example, Nationwide Building Society has announced that it is increasing the rate on authorized overdrafts for FlexAccount customers from 9.9 per cent to 12.9 per cent, as of the beginning of June.

At the same time, the rates on many savings accounts have dropped in the last month. Lloyds TSB is just one of the banks that has cut rates on its savings accounts recently – and up to as much as 0.5 per cent on its internet savings account.

Miss Slade said: "Banks are not going to want to lose money and these recent moves show how they are trying to pre-empt the High Court judgment by putting up charges."

Before switching your account, examine the different fees that banks apply as this will help determine which the best deal is for you.

As our table of what banks charge shows, customers at Natwest can end up paying a whopping 29.69 per cent for using an unauthorized overdraft, so this is an account to avoid if you regularly breach your overdraft limit.

Charges to watch out for include "unpaid item fees", which can be as high as £38 if your bank bounces payments such as direct debits, and "paid referral fees" of up to £30, charged, for example, when a bank honours a cheque even though there is not enough money in your account.

Sally Collins, senior investment adviser of independent financial adviser Bestinvest, said: "Bank charges can be a bit of a minefield so it is important to consider what you want from your bank account before finding one that suits you.

"If you are likely to end each month in your overdraft you obviously need to be looking at overdraft fees. Conversely, the cash rich may seek to gain better interest rates by accessing fixed-term bonds or Isas – although the risk here is that you may need to withdraw cash early and incur exit penalties."

She added: "Internet banks tend to have higher interest rates but may charge more if you want paperwork sent out and can be less likely to have a high street presence.

"The credit crisis is showing its effects across the banking industry and the regulators are putting pressure on banks to improve balance sheets after losses. Although it is unlikely this will have a direct effect on explicit bank charges it may impact the interest rates."

Since banks can argue that it costs money to run a current account, if penalty charges are forced down, it could mark the end of free banking, with rising fees for other services. In the meantime, banks claim they are doing all they can to help customers avoid paying extra charges.

Lloyds TSB said the majority of customers do not pay overdraft charges, but added that those customers who find it difficult to keep tabs on their account can opt to register for a "limit alert" text message service, which gives them advance warning if they are about to go overdrawn or are getting near their limit.

In addition, all customers receive a "grace period" during which they can top up their account and avoid paying any charges.

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Bank customers may be forced to wait years to reclaim "rip-off" overdraft fees after lenders confirmed today they will appeal against a High Court test case on penalty charges.

In total, eight high street banks, including Barclays, HSBC and Royal Bank of Scotland, have sought permission to appeal against last month's ruling, which gave the Office of Fair Trading (OFT) legal jurisdiction to determine whether bank charges are unfair.

However, at a case management hearing today, Mr Justice Andrew Smith said he was minded to give the banks leave to appeal.

Consumer groups have accused banks of trying to draw out the court process for as long as possible because the Financial Services Authority (FSA), the City watchdog, has granted lenders permission to put customer claims on hold until the judicial process is completed.

Martin Lewis of Moneysavingexpert.com, a consumer website, said: "Now they have shown intent to appeal, the worry is this will go all the way to the House of Lords and possibly beyond and could take three years.

"We are now in the outrageous situation that banks are still charging the fees. Yet even though we have a binding court ruling, the FSA is still stopping people from trying to reclaim them."

Phil Jones of Which?, the consumer organisation, said: "The banks should stop stringing this out. The charges are seen as unfair by consumers so they should do the decent thing and pay compensation to those who have made a claim and reduce the fees to a fair level."

The test case followed a revolt which saw hundreds of thousands of customers reclaiming millions of pounds from lenders.

Banks are concerned that if the OFT is allowed to proceed, it could cap the fee for bouncing cheques or exceeding overdraft limits at a much lower rate than the £30 typically charged.

It could even force the banks to refund the difference between the charges they imposed and a new acceptable rate of penalties set by the regulator.

Analysts estimate that a cap on overdraft charges could cost the banks £10 billion in lost revenue and force the end of free banking

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Bank customers could be in line for a £1 billion refund after a significant ruling in the High Court over unfair charges.

The charges made for going overdrawn and bouncing a cheque were found to come under “unfair contract” rules, raising the prospect banks will have to repay millions of account holders.

Consumer groups hailed the decision in the first round of a test case as victory against charges of up to £35 each time customers exceed their limit, when they estimate it costs a bank just £2.50.

The Office of Fair Trading and High Street banks bought the case after a widespread consumer campaign saw customers reclaim more than £550 million through the courts.

However, the decision raised concerns banks will now end free current accounts to recoup the estimated £3.5 billion a year they take from charges.

Martin Lewis, of MoneySavingExpert.com, who has led the campaign against charges, said: “This is a real victory for bank charge reclaimers. “Banks currently charge £35 for what is an automated letter printed off the computer.

“What does it really cost? Some generous people say £4, I say around £2.”

Liberal Democrat Shadow Chancellor, Vince Cable added: “This is great news. However, it is only the first step in what will be a very long journey. “The massive penalty charges imposed are yet another example of the major banks taking consumers for a ride.

“The banks can receive unrivalled guarantees and support from taxpayers when things go wrong, but continue to make huge profits at the expense of their customers.”

advertisementThe OFT has argued the charges are unfair and count as penalties, while banks have said they are reasonable fees for setting up an overdraft.

A quarter of current account holders are estimated to receive charges each year and thousands of claims are currently frozen in the courts until a decision on whether charges are unfair and what a fair level would be.

Both the OFT and the British Bankers’ Association (BBA) said they would digest the lengthy ruling before deciding on next steps.

An OFT spokesman said: “This is an important early milestone for the OFT and our investigation into this area of high consumer interest.”

A second hearing is now likely where a judge will finally rule whether the charges are indeed unfair, and what a fair level would be.

But there were warnings a loss by the banks would see an end to free banking, with even customers in credit instead having to pay a monthly fee or a fee for every transaction they carry out.

A spokesman for Which?, the consumer organisation, said: “It wouldn’t be a surprise if they try to recoup any money they might lose from this.”

David Black, a consultant at Defaqto, said: “If, as seems likely, a cap is imposed on unauthorised overdraft charges, I view it as inevitable that the current account options will change for consumers.”

Angela Knight, chief executive of the BBA, said the ruling was only a very early step and people should not prejudge what banks would do.

Individual banks will not say how they face paying back, but analysts have predicted if they lose the next case they may be forced to pay out £1.1 billion in total.

In his ruling, Mr Justice Andrew Smith said the decision did not mean that the charges were necessarily unfair, or that the bank terms were not binding.

He ruled against the OFT’s claim that the charges were unenforceable penalties, but agreed they could not be assessed for “fairness” under the regulations.

The timetable for the next steps of the case will be outlined next month, but analysts predicted the banks and the OFT may both appeal against the parts of the case they lost.

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The battle on bank charges is not over yet, but now is a good time to make sure that you are getting the best from your bank account, says Emma Simon

Bank customers are one step nearer getting their overdraft charges refunded last week, with consumer groups claiming victory in the first round of the High Court battle. The judge in this test case ruled that these charges fall under the "unfair terms" in consumer contract legislation. Consumer groups said this paves the way for the Office of Fair Trading to determine whether these charges are "fair" or not.

But the banks point out that the judge also made it clear that it is legal to apply a charge for this service.

Let's be clear: the court ruling did not state whether the £25 overdraft charge, £35 unpaid item fee or £25 paid referral fee - which are routinely levied when you breach overdraft limits - are excessive or unreasonable. But given that the OFT had previously put pressure on the banking industry to reduce penalty charges on credit cards , consumer groups remain hopeful that at the end of this court battle, banks will come under similar pressure to reduce overdraft charges. However, this is unlikely to happen anytime soon. This is just the first stage: further legal action will clarify aspects of this judgment and then there could also be appeals.

Which? has - optimistically - called for the banks to "concede defeat" and introduce lower charges. But the British Bankers' Association says this is very much "the start of the process".

Says Angela Knight :

"This is the first step of a complex legal process. The judge will decide how the law should be applied, and will set out the next stage of this test case at the end of May."

So what does this mean for those looking to reclaim overdraft charges? Since July last year all refund claims have been frozen, pending the outcome of this case. The Financial Services Authority has yet to give the green light for these claims to proceed. The judge could lift that freeze next month, but it is more likely it will remain in place until the end of the legal action - which could take another two years. This is why bank customers are being urged to get the most from their bank account today.

If you have been hit with overdraft charges then make sure you lodge a claim, even if it cannot proceed at present. The banks still have to register your claim, and when the legal action is finally resolved you may be able to claim for penalties paid over the previous six years, starting from the date the claim was registered. Delay and you could find that fees paid in the past fall outside this timescale.

In the meantime customers should make sure they are not paying unnecessary charges, particularly on overdrafts.

A number of banks have already altered the way they charge for overdrafts. First Direct and HSBC, for example, have done away with many of the contentious unauthorised overdraft charges completely. Anyone with one of these banks who breaches their limit will be charged the same interest rates as they would on an agreed overdraft facility (12.9 per cent at First Direct; a more expensive 18.8 per cent with HSBC).

In comparison, most high street banks charge almost 30 per cent interest on unauthorised borrowing. But far more costly are the associated fees.

HSBC and First Direct do not charge an automatic penalty fee for those breaching limits but other banks charge between £25 and £35, although HSBC and First Direct does charge £25 if they bounce a cheque or a direct debit - but other banks also impose this charge.

If you are the prudent type who rarely breaches your overdraft limit, an HSBC or First Direct account could prove cost-effective as it does not harshly penalise those who inadvertently make a minor mistake.

First Direct is, at first glance, the better option because it has an interest-free overdraft of £250 and then charges a lower rate on agreed overdrafts. But this account is only suitable for those who deposit at least £1,500 a month into their bank account: deposit less and you'll be hit with a monthly fee, wiping out the benefits of the cheaper overdraft charges.

As both banks charge a fee for those who request additional overdraft facilities more than twice a year, it is unlikely to be a particularly good bet for those who breach lending limits on a regular basis, or regularly chop and change their borrowing needs.

Alliance & Leicester has gone one step further and abolished interest charges on overdrafts altogether. It has introduced a 50p charge that is levied every day you spend in the red (up to a maximum of £5 a month). This makes it very cost-efficient for those who have an agreed overdraft limit but only use it for a limited time each month.

For those who exceed their overdraft limit the charges are significantly higher, though: £5 a day, with no cap. A&L also charges fees for paid or bounced payments that take customers beyond their overdraft limit, although at £25 each these are marginally cheaper than the charges levied by its main rivals.

For those who occasionally spend beyond their agreed limits this could prove cheaper, provided they stay in unauthorised borrowing for a very short time. As our table shows, if you stay in the red for just a couple of days, the fees on this A&L account would be considerably less than with Barclays, Lloyds TSB or NatWest. However in this scenario it is not as competitive as HSBC or First Direct.

Of course a flat fee, as opposed to a sliding interest rate, favours those with higher overdraft balances. Overdraft charges are just half of the equation. If you never dip into the red, authorised or not, look instead at the interest paid on credit balances.

A&L again leads the field, paying a rate of 8.5 per cent for those in credit. But don't forget that although the headline rates look tempting, this interest is generally paid on relatively low sums, as money deposited into a bank account is spent during the month.

For many people service is why they pick and stick with a bank. First Direct scores highly on various customer satisfaction surveys, carried out by the likes of Which?, as do some of the other institutions, in particular Nationwide building society.

Andrew Hagger of Moneyfacts says: "Don't wait until this lengthy legal action is resolved before moving your bank account. Lodge a claim if you have been hit with penalty fees, then shop around for a better banking deal. Many banks have overhauled their charging structures so look for an account that best meets your requirements.

"The added pressure on consumer finances means that more people are in danger of exceeding their borrowing limits and being hit with charges they can ill afford. If you are getting near your limit ask for an increased facility to prevent you incurring unnecessary and unwelcome bank charges."

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A High Court test case that could shape the future of the UK retail banking industry finally got underway today when lawyers for eight of Britain's leading banks began defending allegations of charging “rip off” fees.

Lawyers for the banks, which include Royal Bank of Scotland (RBS) Barclays and HSBC, told the court that rules governing what is and is not a “fair” contract do not apply to bank charges for unauthorised overdrafts.

The fees - which can be as high as £40 each and earn UK banks around £10 million a day – are at the centre of a multi-billion pound battle between consumer watchdog the Office of Fair Trading (OFT) and the banks.

One of the most eagerly awaited commercial court cases in recent years began with lawyers for one of the banks saying the OFT itself must bear part of the blame for the “torrent” of court claims that had already been launched by dissatisfied customers.

Laurence Rabinowitz, QC, representing the Royal Bank of Scotland, told Mr Justice Andrew Smith in London that the “flood of claims currently engulfing the court system” was partly a result of “ill-judged comments” made by the OFT.

He said the OFT, following its report on credit card charges, had stated that exactly the same principles applied to current accounts.

The comment was “unfortunate” because it was made before the OFT had even begun its ongoing investigation into current account overdraft charges.

It became obvious that, “a hornet’s nest having been stirred”, the matter should go to court for a decision on the issues, Mr Rabinowitz added.

Around 50,000 legal claims against the banks on the issue have been put on hold pending the outcome of today’s case.

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Britain's leading High Street banks have spent an estimated £10 million assembling a team of more than 100 lawyers - including a team of eminent QCs - to fight a landmark case on whether overdraft fees are illegal.

The Office of Fair Trading is challenging seven leading banks and the Nationwide Building Society over charges that penalise customers who exceed their overdraft limit - and generate billions of pounds a year.

Losing the case, which starts on Wednesday, could result in tens of thousands of compensation claims from customers and change the face of banking forever.

But the banks are hitting back with an overwhelming show of legal force for the biggest commercial case in 20 years.

The defendants - Abbey, Barclays, Clydesdale, HSBC, HBOS, Lloyds TSB, Royal Bank of Scotland and the Nationwide building society - have instructed some of the City's biggest law firms and Queen's Counsel to represent them.

They include Ali Malek, Iain Milligan, Laurence Rabinowitz and Geoffrey Vos, each of whom charge up to £1,000 an hour.

The OFT will be represented by Brian Doctor, QC, who will be assisted by three junior barristers. Banks are estimated to generate profits of around £10 million a day through retails fees, according to OFT estimates.

The case will set a legal precedent by deciding whether the charges fall within the Unfair Terms in Consumer Contracts Regulations 1999.

The OFT must convince the judge that the regulations apply; it will then have to prove at another hearing, probably later in the year, that the charges are unfair.

If successful campaigners would push for the fees to be nearer to the administrative costs involved, estimated to be around £3. Banks say the profits generated are put back into the industry, providing customers with free current accounts, cheques and withdrawals.

Defeat for them could therefore also be bad news for consumers, because it would almost certainly mean the end of "free" current accounts.

One lawyer close to the case said: "If the banks lose this case, the whole free-banking model will disappear."

The case has been moved from the Royal Courts of Justice to a larger venue, the International Dispute Resolution Centre, on Fleet Street in central London. However there are so many lawyers present that less than a dozen spaces will be available in the public gallery.

The law firms that have been instructed by the banks are: Addleshaw Goddard, Allen & Overy, Ashurst, Freshfields Bruckhaus Deringer, Linklaters, Lovells, Simmons & Simmons, and Slaughter and May.

The High Court judge in the long awaited case, Mr Justice Andrew Smith, has begun two days of "reading in" before it opens on Wednesday.

The hearing is expected to last eight days, with a judgment before Easter.

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