|
Your bank
is in Scotland or
Northern
Ireland,
but you
live in England or Wales? Or perhaps you live in Scotland or
Northern Ireland but your bank has its registered office in
London? Which part of the UK are you entitled to raise proceedings?
There are
several reasons why this issue could matter. In general, most
people will want to raise proceedings at their local court. It
is much easier to attend hearings at your local court. However,
if your claim for bank charges is in excess of £750 (the small
claims limit in Scotland) or £2,000 (the small claims limit in
Northern Ireland), then the ability to sue in England & Wales may
be attractive as the small claims limit in England & Wales is £5,000.
Using the
small claims procedure is important because it is the only court
procedure that caps legal expenses in the event of loss. In
other words, the small claims procedure enables you to raise
litigation without the fear of massive legal expenses in the event of failure.
The rules on
where you can raise proceedings - known as 'jurisdiction' -
are set out in the Civil Jurisdiction and Judgments Act 1982, as
amended by the Civil
Juridiction and Judgments Order 2001. Schedule 4 of
the 1982 Act (as amended) regulates the court's jurisdiction over
consumer contracts. This includes a consumer's bank or building
society account.
Importantly, para
8 of schedule 4 provides that a customer is entitled to sue
their bank where they live (where they are 'domiciled') or where the
bank is domiciled - the relevant parts of Schedule 4 are reproduced
below. In contrast, a bank can only sue you (as a consumer)
where you live.
So, for
example, if you bank with the Royal Bank of Scotland but live in
London, you can raise a small claims action either in London or
Edinburgh. Alternatively, if you live in Glasgow, but bank with
the NatWest, you can raise a small claims action either in Glasgow or
London. Likewise if you live in Aberdeen and bank with
the Halifax plc, you can raise a small claims action either in
Aberdeen or Halifax (cf. the Bank of Scotland's 'domicile' is
Edinburgh; however, many other bank & credit card companies will
have their registered office in England).
A company 's
domicile is usually established from where it has its 'seat',
that is usually its 'registered office' or the place where its
central management and control is exercised: section
42, 1982 Act. Thus some consumers may have a choice where
to sue.
Where
proceedings arise from the operation of a particular branch, agency
or establishment, proceedings can be raised where that 'branch,
agency or establishment' is situated - from section
44 of the 1982 Act.
It is
understood that the England & Wales Money Claim Online service
requires a claimant to have an address in England or Wales, and
therefore, if you are raising proceedings in England you would have
to forward your claim to a particular County Court by post.
While raising proceedings in England will entitle you to sue for a
maximum of £5,000 under English small claims procedure, if the
claim is defended you must be prepared to travel to England to
present your defence. Accordingly, you should think very
carefully about this issue, weighing up all of the pros and cons.
Can my bank's
terms &
conditions determine where proceedings are raised?
Paragraph 9 of
Schedule 4 (see below) allows parties (the bank
& you, the customer) to agree that one part of the UK has 'exclusive
jurisdiction'. That is known as 'prorogation' of
jurisdiction. In other words, that proceedings must be
raised either in England, Scotland or Northern Ireland.
In general,
paragraph 9 can only apply if both you and your bank were domiciled
in the same part of the UK when the account was opened (i.e. either
both in England/Wales, or both in Scotland, or both in NI) and
the contract contains a clause conferring exclusive jurisdiction to
one part of the UK.
You should
therefore check your bank's terms and conditions.
A clause
which states:
"If
your address is in Scotland, Scottish law applies to the contract
between you and us. If you live elsewhere, English Law applies
between you and us" (Abbey National plc T&Cs) or
"This
agreement is governed by the law in Scotland" (Bank of
Scotland/HBOS T&Cs)
is unlikely
to confer exclusive jurisdiction.
Firstly, such
clauses do not deal with exclusive jurisdiction - they simply deal
with the application of common law rules. The courts have held
that such clauses do not go far enough to confer exclusive jurisdiction.
For example,
in the case of McGowan v. Summit at Lloyds 2002 SC 638, 2002 SLT 1258,
an insurance policy contained a clause which said: 'this Document
shall be governed by the laws of England, whose courts shall have
jurisdiction in any dispute arising hereunder'. An action
was raised in Scotland and Lloyds defence was the case was
incompetent as the Scottish courts had no jurisdiction in light of
the clause. However, the Inner House of the Court of Session
(Scotland's highest court) held (applying the English case of S&W
Berisford plc v. New Hampshire Insurance Co Ltd [1990] 2 QB 631)
that the clause did not create exclusive jurisdiction in England, and
only created concurrent jurisdiction i.e. proceedings could be raised
in either Scotland or England in terms of the clause and the 1982 Act.
In the English
High Court case of S&W Berisford plc (cited above) a
clause in an insurance policy stated that 'This insurance is
subject to English jurisdiction'. Justice Hobhouse (as he
then was) held that those words 'were inept' to create an exclusive
jurisdiction clause.
I have
checked my bank's terms & conditions are there appears to be an
exclusive jurisdiction clause for Scotland/NI?
If this
appears to be the case (and your bank is domiciled in England) you
may wish to consider arguing that this clause is an unfair term of
contract in terms of UTCC
Regulations 1999. Paragraph 1(q) of Schedule 2 to the 1999
Regulations provides as follows:
SCHEDULE 2
INDICATIVE AND
NON-EXHAUSTIVE LIST OF TERMS WHICH MAY BE REGARDED AS UNFAIR
1(q) excluding
or hindering the consumer's right to take legal action or exercise
any other legal remedy, particularly by requiring the consumer to
take disputes exclusively to arbitration not covered by legal
provisions, unduly restricting the evidence available to him or
imposing on him a burden of proof which, according to the applicable
law, should lie with another party to the contract.
>
CIVIL
JURISDICTION AND JUDGMENTS ACT 1982 AS AMENDED
SCHEDULE 4
AS AMENDED BY CIVIL JURISDICTION AND JUDGMENTS ORDER 2001
Jurisdiction
over consumer contracts
7. - (1) In matters relating to a contract concluded by a
person, the consumer, for a purpose which can be regarded as being
outside his trade or profession, jurisdiction shall be determined by
this rule and rules 8 and 9, without prejudice to rule 3(e) and
(h)(ii), if -
(a) it is a
contract for the sale of goods on instalment credit terms; or
(b) it is a
contract for a loan repayable by instalments, or for any other form
of credit, made to finance the sale of goods; or
(c) in all
other cases, the contract has been concluded with a person who
pursues commercial or professional activities in the part of the
United Kingdom in which the consumer is domiciled or, by any means,
directs such activities to that part or to other parts of the United
Kingdom including that part, and the contract falls within the scope
of such activities.
(2) This rule shall not apply to a contract of transport other than
a contract which, for an inclusive price, provides for a combination
of travel and accommodation, or to a contract of insurance.
8. - (1) A consumer may bring proceedings against the other
party to a contract either in the courts of the part of the United
Kingdom in which that party is domiciled or in the courts of the part
of the United Kingdom in which the consumer is domiciled.
(2) Proceedings may be brought against a consumer by the other party
to the contract only in the courts of the part of the United Kingdom
in which the consumer is domiciled.
(3) The provisions of this rule shall not affect the right to bring
a counter-claim in the court in which, in accordance with this rule
and rules 7 and 9, the original claim is pending.
9. The provisions of rules 7 and 8 may be
departed from only by an agreement -
(a) which is
entered into after the dispute has arisen; or
(b) which
allows the consumer to bring proceedings in courts other than those
indicated in those rules; or
(c) which is
entered into by the consumer and the other party to the contract,
both of whom are at the time of conclusion of the contract domiciled
or habitually resident in the same part of the United Kingdom, and
which confers jurisdiction on the courts of that part, provided that
such an agreement is not contrary to the law of that part.
<<
Navigate the links to find out how to get
a refund.
Your
comments &
e-mails |
