Banks continue to settle claims out of court, but we'll be lucky if we get a test case for bank charges.
It's time for an update on bank charges.
The huge, vast majority of claimants who stick to their guns continue to win their claims. So what else isn't new and how is it old in a new way?
Banks still settling out of court
Banks often get as far as submitting a scary-looking defence to our County Court claims, but the majority settle before the claim goes to court. The rest of the time, the banks often don't bother turning up to defend themselves, in which case the judges have mostly been awarding in favour of us claimants.
Hull claims settled in claimants' favour
You may be aware that one judge in Hull County Court took a different view to the majority of judges across the country. He struck out 44 claims by bank customers -- meaning he cancelled them -- because he believed there was no prospect for success.
However, a legal team took on these claims to challenge the strike-out order, so that the claims could be heard. 37 of those 44 claims have now been settled out of court in the claimants' favour.
Three of the remaining seven claims are with the Alliance & Leicester, which hasn't bothered to respond. If it continues to ignore the claims it's likely the claimants will win by default.
Yorkshire Bank's bluff?
Yorkshire Bank has the remaining four claims. Unlike Alliance & Leicester, it has responded and it's sticking to its guns.
I believe that this is a bluff, although a very strange one, because it must know that the claimants won't back down, not with a free legal team supporting them. Thus, dragging out the claim costs the bank more in legal fees, but to no gain.
However, the Consumer Action Group, which helped to fund the legal team on behalf of the claimants, reports that the senior solicitor for Yorkshire Bank was 'out of his depth', so perhaps this solicitor is over-confident of success, and truly intends to pursue the claim.
What happens if we get test cases?
In the event that Yorkshire Bank does intend to turn up and defend itself, it will have to provide evidence to show that its charges are justified. It has agreed to a deadline of 28 September for this.
However, Yorkshire Bank may argue that its charges are not penalties, but the cost of a service. If it successfully argues this, which I consider to be unlikely, then it will not need to justify its charges.
If these claims are defended in court it will set a precedent although the judgment won't be binding on other county court judges. It simply means that a judge can consider these claims when judging similar cases.
Because I believe Yorkshire Bank, and Alliance & Leicester, will not defend these claims in court, I think we'll be lucky if we get a test case and that, in any event, any test case would apply to claimants from the same banks only.
Tom Brennan vs. NatWest
I'm still interested in Tom Brennan's hearing, which, the court tells me, will be decided on 30 July. The result of this peculiar hearing will have no effect on regular claims, but I'm sure it will interest many of you as much as me, so I'll write about it when judgment is handed down.
For more on reclaiming bank charges, read our guide and visit the excellent Consumer Action Group website.
> Get a parachute account ready, just in case your bank tries to shut you down! First Direct and Halifax will pay £100 to switch (subject to terms and conditions) and Alliance & Leicester has a table-topping 6.5% AER credit interest and a low overdraft interest rate.