Abbey National Plc & Ors v The Office of Fair Trading

Abbey National Plc & Ors v The Office of Fair Trading

The Court held that the relevant bank charges are not part of the essential bargain or core terms within the meaning of regulation 6(2)(b) of the 1999 Regulations. The charges are ancillary or incidental, not negotiated, and not recognisable as the price or remuneration by the typical consumer. Therefore, their fairness can be assessed by the OFT. The Court also refused permission to appeal on the issue of plain intelligible language for certain terms, finding no error in the judge's approach.

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
Civil Appeal / Court of Appeal Judgment on Appeal From Commercial Court
Outcome
Appeal dismissed
Legal Topics
Unfair Terms in Consumer Contracts, Interpretation of Consumer Contracts, Bank Charges, Regulation 6(2) Unfair Terms Regulations, Core Terms Exemption
Consumer Protection Law Contract Law Banking Law European Union Law Unfair Terms in Consumer Contracts Interpretation of Consumer Contracts Bank Charges Regulation 6(2) Unfair Terms Regulations +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

Civil Appeal / Court of Appeal Judgment on Appeal From Commercial Court

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 the relevant terms are exempt from assessment as 'core terms' relating to the adequacy of price or remuneration
  3. 3 Whether the terms are in plain intelligible language

Ratio Decidendi

The Court held that the relevant bank charges are not part of the essential bargain or core terms within the meaning of regulation 6(2)(b) of the 1999 Regulations. The charges are ancillary or incidental, not negotiated, and not recognisable as the price or remuneration by the typical consumer. Therefore, their fairness can be assessed by the OFT. The Court also refused permission to appeal on the issue of plain intelligible language for certain terms, finding no error in the judge's approach.

Court Disposition

Appeal dismissed

Orders

  • Assessment of the fairness of the relevant charges is not precluded by regulation 6(2) of the 1999 Regulations.
  • Applications by Abbey and HBOS for permission to appeal on the issue of plain intelligible language refused.