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Customers hit by ‘death blow’ in bid to sue banks | |||||
| Customers hit by ‘death blow’ in bid to sue banks The following is an adaptation of an article appearing in the Herald today. However, before reading this it may be helpful to consider that there are 3 types of actions taken in the Sheriff Court: small claims, summary cause and ordinary cause. A small claim is a type of summary cause, but in defended cases those that fall within ‘small claims’ have expenses limited to between £150-£200, whereas in ‘summary cause’ the scale of expenses are greater. ‘Death Blow’ Banks are said to have delivered a “death blow” to thousands of Scots attempting to sue them over unfair overdraft charges. In a landmark case, high-street giant Santander yesterday convinced a Glasgow sheriff that such actions were too complex for consumer-friendly small claims courts. The bank’s victory means any customer who wishes to fight for their money back will face unlimited costs – rather than the cheap proceedings of small claims. The ruling affects about 800 people in Scotland whose cases are currently going through the courts, as well as thousands who are considering action. Santander was being sued for £3000 by NHS worker Allison Walls for what she believes were six years’ worth of unwarranted overdraft charges. Walls, a married mother-of-two from Glasgow, was one of some 800 Scots waiting to sue their banks through small claims. Yesterday she said she would have to drop her case after it was switched to the ordinary roll of the sheriff court – where she could face costs of £10,000 in her bid to get her £3000 back. “That is not a risk I can afford to take,” she said. Walls’s lawyer is Mike Dailly of the Govan Law Centre, one of the solicitors at the forefront of a UK-wide bid to reclaim bank charges. Dailly said the Walls case would have huge repercussions for the thousands of other customers who were hoping to get their money back. He said: “I understand that banks across the UK are now trying to get unfair bank charge claims removed from the claims system. I have no doubt this is a premeditated strategy to kill off all such claims before the courts because legal expenses are only capped for small claims.” The effect of leaving the small claims system in Scotland is that consumers become exposed to potentially unlimited expenses in the event of losing. For those eligible for legal aid there will be a contribution to pay that may exceed the value of the dispute, making it pointless. Dailly added: “For those ineligible for legal aid it would be crazy to proceed. The strategy is clearly designed to deliver a death blow to consumers’ claims.” The Scottish Parliament raised the ceiling for small-claims actions from £750 to £3000 just three years ago. Justice Secretary Kenny MacAskill explicitly said that move would help those fighting banks over charges. The sheriff who backed Santander – Andrew Cubie of Glasgow – cited MacAskill’s views in his judgment. But he said “there could well be exceptional complexity” in the Walls action, adding: “I consider that there are difficult questions of law to be resolved in this case.” A spokesman for MacAskill yesterday declined to comment on any individual case, but said: “It was always understood that, if a sheriff deemed the matters under discussion to be complex, such cases could be treated as an ordinary action.” Santander said its lawyers regarded the case as far too complicated to be heard under small-claims procedures. Dailly believes that tens of thousands of Scots – and more people elsewhere in the UK – would have used the small-claims system to sue their banks if they could. Questions? If you have any questions or comments then please do get in touch using the details below. Best regards, Stephen Cowan Managing Partner Yuill + Kyle Debt recovery + Credit control Lawyers, Scotland scowan@yuill-kyle.co.uk W: http://www.debtscotland.com/ T: 0141 331 2332 Debt Recovery Ignited! | |||||
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