Abbey National Plc & Ors v The Office of Fair Trading [2009] EWCA Civ 116 (26 February 2009)

Abbey National Plc & Ors v The Office of Fair Trading [2009] EWCA Civ 116 (26 February 2009)

The Court held that the relevant bank charges are not exempt from assessment for fairness under regulation 6(2)(b) of the 1999 Regulations because they do not relate to the adequacy of the core price or remuneration for the main services supplied in exchange. The exclusion in regulation 6(2)(b) is to be interpreted restrictively and applies only to the essential bargain, not to ancillary or incidental terms such as the charges in question. Therefore, the Office of Fair Trading is entitled to assess the fairness of these charges.

Citation
[2009] EWCA Civ 116
Parties
Appellant/defendant: Abbey National plc; Appellant/defendant: Barclays Bank plc; Appellant/defendant: Clydesdale Bank plc; Appellant/defendant: HBOS plc; Appellant/defendant: HSBC Bank plc; Appellant/defendant: Lloyds TSB Bank plc; Appellant/defendant: Nationwide Building Society; Appellant/defendant: The Royal Bank of Scotland Group plc; Respondent/claimant: The Office of Fair Trading
Jurisdiction
England and Wales
Judgment Date
26 February 2009
Procedural Posture
Appeal From Commercial Court / Court of Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
Unfair Terms in Consumer Contracts, Interpretation of Consumer Protection Regulations, Bank Charges, Directive 93/13/eec, Regulation 6(2) Unfair Terms in Consumer Contracts Regulations 1999
Consumer Law Banking Law Contract Law European Union Law Unfair Terms in Consumer Contracts Interpretation of Consumer Protection Regulations Bank Charges Directive 93/13/eec +1 more

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Parties

Abbey National plc

Appellant/defendant

Barclays Bank plc

Appellant/defendant

Clydesdale Bank plc

Appellant/defendant

HBOS plc

Appellant/defendant

HSBC Bank plc

Appellant/defendant

Lloyds TSB Bank plc

Appellant/defendant

Nationwide Building Society

Appellant/defendant

The Royal Bank of Scotland Group plc

Appellant/defendant

The Office of Fair Trading

Respondent/claimant

Procedural Posture

Appeal From Commercial Court / Court of Appeal Judgment

Legal Issues

  1. 1 Whether the Office of Fair Trading is entitled to assess the fairness of certain bank charges under the Unfair Terms in Consumer Contracts Regulations 1999, regulation 6(2)(b)
  2. 2 Whether such charges relate to the adequacy of the price or remuneration as against the goods or services supplied in exchange, and are thus exempt from fairness assessment

Ratio Decidendi

The Court held that the relevant bank charges are not exempt from assessment for fairness under regulation 6(2)(b) of the 1999 Regulations because they do not relate to the adequacy of the core price or remuneration for the main services supplied in exchange. The exclusion in regulation 6(2)(b) is to be interpreted restrictively and applies only to the essential bargain, not to ancillary or incidental terms such as the charges in question. Therefore, the Office of Fair Trading is entitled to assess the fairness of these charges.

Court Disposition

Appeal dismissed

Orders

  • Declaration that the assessment of fairness of the specified bank charges is not precluded by regulation 6(2)(b) of the Unfair Terms in Consumer Contracts Regulations 1999.
  • Permission to appeal on the issue of plain intelligible language refused except for HBOS plc and Abbey National plc in respect of specific terms.