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There has been a problem of claimants in Scotland suing for separate years of charges in separate (but never more than one at any one time) small claims actions.   Some banks, including the Clydesdale/Yorkshire Banks had been using the defence of res judicata (the basis of the claim has already been decided in the first action, so any subsequent claim is incompetent) to prevent claimants in Scotland recovering more than £750 (the small claims limit in Scotland). 

In Taylor v Yorkshire Building Society, the Sheriff Principal for Tayside, Central & Fife overturned a decision in favour of the Yorkshire, and held that bank charges were a succession of wrongful acts - each one being actionable. 

So this decision may provide legal support to use the small claims system in Scotland to sue for tranches of bank charges (i.e. several claims x £750 - but remember you cannot have two claims on the go an anyone time); at the very least this should be used by claimants to negotiate with the bank to get offers above £750 in Scotland - by arguing any settlement is for X year only, and failure to increase the offer will result in subsequent small claim(s).  The decision is only binding in Tayside, Central & Fife. The alternative is to pursue a complaint with the Financial Ombudsman.

 

Res judicata - case summary

In Taylor v Yorkshire Building Society 2007 GWD 19-334 Sheriff Principal

Dunlop overturned the sustaining of a plea of res judicata in an action for

recovery of bank charges when a previous action had determined the

position regarding later charges on the same account. The deduction of

charges constituted a succession of wrongful acts each actionable, albeit

the basis of action in each case was the same. The sheriff principal also

questioned whether such actions were better remitted to the ordinary cause, as

extended pleadings might well be of assistance.

 

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