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in causa


JASON P A COLEMAN, 8 Balconie Steading, Evanton, Ross-shire IV16 9XE







CLYDESDALE BANK, 15 Academy Street, Inverness IV1 1JN






AARON HAMISH THOMSON, No1 Croft, Upper Lennie, Drumnadrochit, Inverness IV3 6XF







BANK OF SCOTLAND, The Mound, Edinburgh EH1 1YZ







These are a summary cause action and a small claim action in which the respective pursuers seek recovery of bank charges deducted by the respective defenders from current accounts held by them on behalf of the respective pursuers. The pursuers seek recovery on two grounds: first, that the charges are a penalty and therefore unenforceable and, secondly, that the charges are contrary to The Unfair Terms in Consumer Contracts Regulations 1999.


At the first calling on 5 September 2007, the respective defenders were represented by the same junior counsel who moved applications to sist each cause. That motion was opposed by the pursuers. In the second case, the pursuer was represented by his solicitor. In the first case the pursuer appeared on his own behalf. It was agreed that as the issues raised in both cases were identical the applications to sist should be heard together.


Counsel explained that banks, such as the defenders, have received a large number of claims for the refund of bank charges. The usual grounds for refund are the same as in the present case. In Scotland there have to date been 350 claims, of which 57 are in this sheriffdom. In September 2006, the Office of Fair Trading ("the OFT") began a fact finding inquiry into the issue. In April this year the OFT announced that they had commenced a formal inquiry. This inquiry is still continuing. (I understand that such an inquiry is in terms of the Enterprise Act 2002). In normal circumstances a test case would not be brought until this formal inquiry has been completed. However, due to the number of claims, the OFT had decided that it was undesirable to await the outcome of the inquiry. The banks and the OFT therefore agreed that a test case be brought. It was, in particular, agreed that the OFT should raise an action in the Commercial Division of the High Court in London seeking to determine the legal basis of the claims. The action was raised on 27 July 2007. Included in the named defendants are the respective defenders in the instant actions. A hearing is due to commence on 14 January 2008. Eight days have been set down for it. It is anticipated that a decision will be reached by the middle of February 2008.


Counsel went on to explain that in the normal course of events banks are bound by general rules about how they deal with customer complaints. Due to the increased number of complaints about bank charges the Financial Services Authority had issued a direction relieving the banks from dealing with such complaints for one year from the date of the commencement of the OFT action. One condition, however, of that concession is that all pending or future court actions are sisted (stayed, in English parlance). As at last week, of 120 small claims in Scotland, in which a sist has been sought, in only one was it not granted and a proof fixed.


Counsel submitted that there five reasons why the actions should be sisted:

(1)   There will be a significant overlap between the present cases and the OFT action. The issues are identical. The contractual terms are identical;

(2)   The law on the two issues is very similar in England and Scotland. The regulations are UK wide and there ought to be a universal application across the UK. The obvious means of ensuring that is to wait for the OFT action and to grant appropriate weight to that when a decision in the instant cases is required. If cases like the instant ones are not sisted there is a material risk of a difference of approach across the UK. The common law in point is the same in Scotland as in England. The OFT action will not be binding on Scottish courts but at the very least will be highly persuasive and will be of considerable assistance to this court and other courts;

(3)   Refusal of a sist will cause considerable uncertainty for both the pursuers and the defenders. It is not in the interests of justice or the parties to have a multiplicity of cases and decisions on exactly the same issues. The time, effort and expense of hearing a multitude of cases will be considerable.

(4)   A failure to sist will cause a significant administrative burden on the courts, as well as the parties.

(5)   The waiver granted by the FSA will be lost if the actions are not sisted.


Counsel cited Clydesdale Bank v D&H Cohen 1943 SC 244; Maley v Scottish Ministers, Sheriff Principal Bowen, 31 March 2004, unreported; NG Napier Ltd v Corbett, 1963 Sh Ct Reps 23; and, on my suggestion, Purves v North British Railway Co (1848) 10D 853.



At the end of the hearing, I refused both defenders' applications to sist. I said that I would issue written reasons.


It seems to me that the starting point of any discussion about when and in what circumstances it is appropriate for a cause to be sisted is the passage from Lord Deas' judgment in Connel v Grierson 1865 3M 1166 (at p1167), where he said,


"Prima facie it is a matter of right to either party to insist upon the cause going on, and the onus lies on him who wishes to stop."


A second rule is that in the normal course where a sist is sought to await a decision in another action the sist ought not to be granted until after the Record has been closed (Clydesdale Bank v D & H Cohen). That is, of course, irrelevant in summary cause and small claim actions where the pleadings are brief and not the subject of adjustment. On one view, it might have been more appropriate for the defenders in the instant cases to have lodged a brief statement of their defence, but in the discussion before me it was agreed by the parties what the issues were.


The decision whether to sist a cause is a matter for the discretion of the court and only limited assistance can be gained from previous cases in which the discretion has been exercised. Each case turns upon its own facts. Each authority is likely to contain material differences from the circumstances in the instant cases. For example, in Connell v Grierson, where the court refused the sist, the motion was made by the pursuer, rather than the defender, and the defender was elderly.


I deal in turn with each ground proposed by counsel in support of the applications, albeit the first and second grounds can, I think, usefully be dealt with together.


It is the essence of competent judges that they know their position in the judicial hierarchy. They should not overreach themselves; nor on the other hand should they consider themselves bound when they are under no duty to be so. Counsel submitted that a decision of the Commercial Division of the High Court in England is highly persuasive. He cited no authority in support of that view. My understanding of the law of precedent is that the Commercial Division of the High Court in England ranks equally to an Outer House judge in the Court of Session whose decision is not binding on a sheriff but should be treated with respect. Whether or not that means the same as persuasive or highly persuasive is perhaps an exercise in semantics. Nothing in my view turns on it. It is true that a decision by the High Court in England dealing with the construction of United Kingdom legislation is likely to be followed in the sheriff court, but less so where the decision deals with the common law even accepting as I do that in the instant cases the parties will be applying the famous dictum of Lord Dunedin in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79. What does matter is that whatever respect is given to the Commercial Division's decision, it is not binding on the Scottish courts.


(That the decision of a Lord Ordinary is not binding in the sheriff court derives from the historical collegiate basis of the Court of Session based upon a single court - a College of Justice. (Smith, Judicial Precedent in Scots Law, p19) As I understand it, the position is different in England where a decision of a single High Court judge is binding on inferior courts.)


In my opinion, it is one thing to seek to sist an action pending a decision by a court which is binding on the courts below; it is quite another to seek to sist an action pending a decision in a foreign jurisdiction which does not have that force. Putting to one side for the moment what the defenders will do in the event that they do not achieve the result they seek before the High Court in England, it is in my view unsatisfactory to compel a pursuer to be delayed in the remedy he seeks merely for a decision of a foreign court, which will guarantee no certainty in defining the law which ought to be applied.


The fact of the matter is that the defenders, along with the other banks involved, have chosen with the OFT not to litigate in Scotland. So far as I am aware, it was always open to the OFT and the banks to raise the test case in Scotland - the Commercial Court of the Court of Session is certainly fit for that purpose and at least it is where a Scottish judge would be applying Scots Law. It is not the fault of the pursuers in the instant actions that the OFT and the defenders did not do so.


There is, in any event, a further compelling argument against the defenders. In Clydesdale Bank v D&H Cohen, the defenders in a sheriff court action sought to sist the action pending an action of reduction which they had raised against the pursuers in the Court of Session. The record had not been closed in either action. The sheriff-substitute refused the motion, a decision which was supported by the Inner House on appeal. Lord Justice-Clerk Cooper (as he then was) explained (at p245-246) why the motion to sist was premature:

"It is clear that there are questions foreshadowed in the present open record [in the sheriff court action] to which the Sheriff-substitute may have to apply his mind - I say no more - and on which it would be manifestly improper that we should express any opinion, however provisional, on the basis of the open record. Indeed, it is apparent not merely that we have before us pleadings in an incomplete state but that the defences in the Sheriff Court action... must very largely have been added at adjustment, and for all I know may be withdrawn or altered or expanded to an extent which would make the issue between the parties on litis contestation materially different from the issue as it now appears."


Lord Wark (at p247) agreed:

"The record in the Sheriff Court is only at the stage of the open record. The record in the Court of Session action we have not even seen and we have no information as to what it contains, even at the present stage. In these circumstances it appears to me that we have no material upon which we could interfere with what the Sheriff-substitute has done..."


There are similarities between that case and the instant ones. Counsel showed me the OFT application to the High Court. It was in the briefest of terms and dealt only with the issue of the 1999 Regulations. Counsel told me that the penalty issue would be introduced in the defendants' response. He did not have a copy and did not know if it had been lodged with the court. Nor was he able to say what, if any, adjustment there would be of each party's case as the action progressed to the hearing in January. For aught yet seen, the competing contentions in the action may alter even in subtle ways that would bring into question whether they fully address the issues raised in the instant actions. Accordingly, in my opinion, on any view the applications are premature. I do not have any detailed knowledge of English procedure, but I imagine that, similar to commercial actions in the Scottish courts, the procedure to be adopted will be one suited to the particular circumstances of the case and after discussion and agreement with the parties. I would also assume that there will be an opportunity for parties to refine their submissions in the light of their opponents' ones. It is simply too early to predict what the final pleadings will be and the subject matter they will cover.


Turning to the third and fourth grounds, it seems to me that the administrative burden on the courts per se is not a relevant consideration in deciding whether to sist a cause. It is the responsibility of the court, with the assistance of the Scottish Court Service, to provide proper facilities for litigation to proceed, for rights to be vindicated and remedies provided. It should be no concern of the pursuers in the instant actions that an additional administrative burden may be placed on precious resources simply because others wish to seek the same remedy as they do.


In my view, however, the court should take into account the prospect of the waste of such resources. That was one of the points taken in Maley v Scottish Ministers. It is clear from the authorities that waste per se is an insufficient reason to sist a cause; it is a matter of degree. Thus in Connell v Grierson the court refused a sist where it was possible that the action in which the sist was sought would be unnecessary if a certain result was reached in the related action.


Counsel said that there were 57 similar actions pending in this sheriffdom. Not all of those will be in this court. I can only speak about Inverness, but there will be no difficulty in providing court time for that or a lesser number. As is the practice elsewhere, the sheriff clerk allocates more than one proof or hearing of evidence to a court day. It is common for many cases to be settled in advance; there would be no additional burden upon this court to hear evidence in cases like the present ones. While it would be unfortunate if time and effort was spent on a hearing which might have been avoided if a sist had been granted, it would be unlikely to cause any changes to the court programme which might inconvenience other litigants or call for additional resources to be used. Of course, if every case was then appealed there might be a very considerable burden on the courts above, but it seems to me to be improper to speculate at this stage about whether the unsuccessful parties may wish to appeal - in the same way as it would be improper to anticipate an appeal by the defendants in the OFT action in the event that they do not have the answer they want from the court at first instance.


I accept that a common reason for a party seeking the sist of an action is to avoid unnecessary expense to that party. That must be a legitimate consideration which the court ought to weigh in the balance. The modern trend in the organisation of the Scottish civil courts has been to encourage the early resolution of disputes so as to avoid parties expending valuable resources which could be more usefully used elsewhere. Indeed, that was one of the principal factors in the decision in Inverness recently to set up a Commercial Court for the Highlands.


The issues in dispute in cases such as the instant ones appear to me to be primarily questions of law, but it may well be that at a proof the defenders will be leading evidence from witnesses who will have to travel long distances to Inverness. I also accept that any award of expenses on the summary cause scale, never mind the much lower award available in small claim actions, is unlikely to cover the true cost to the defenders.


It seems to me that I ought to have regard only to the burden on the defenders in each of the instant cases and not in any other similar cases which may arise in this court or in other courts in Scotland. Looking at the matter in this way, I consider that such a burden is insufficient to offset the respective pursuers' right to have their claims adjudicated upon with proper dispatch. Even if I am wrong in that and do have to consider the administrative burden on the defenders in similar actions, I still do not consider that they have discharged the onus upon them, bearing in mind that to date there are only 350 actions or so proceeding in Scotland involving all of the banks who are the defendants in the OFT action. I was not told how many of these actions are against each of the defenders, but it must be only a fraction of that total. For aught yet seen, it may be that the pursuers in many of the actions will for their own reasons not oppose a sist. Indeed, I am advised by a colleague in another court in the sheriffdom that he has already had three cases in which motions to sist were not opposed.


Counsel asserted that it was not in the interests of justice for there to be a multiplicity of decisions on exactly the same issues. I agree that if those decisions were different and contradictory it would not be ideal. But that assumes that the various courts will reach different and contradictory decisions, which is mere speculation at this stage. In any event, it is not unknown for Scottish courts to reach a different conclusion from English courts on the construction of a United Kingdom statute. (In the second case, the pursuer's solicitor told me that he was no longer seeking to argue the statutory case against the imposition of the charges.) This ground for sisting the actions would, it seems to me, have much more force if the OFT action was before the Court of Session with the likelihood of an appeal to the Inner House whose decision would be binding upon the sheriff courts. There is support for that view in the obiter remark of the sheriff-substitute in NG Napier v Corbett (at p25) that the position might be different "if, the record having been closed, the legal issue in a Sheriff Court case was just about to be settled authoritatively [my italics] in a superior Court."


I do not regard the fifth ground as having any relevance. I was not addressed on it, but my understanding is that the code of practice which banks operate under the supervision of the Financial Services Authority does have a statutory basis. The code is doubtless in the interests of the consumer, but if, as I was told, the waiver will last only so long as all actions are sisted then the decisions in the instant cases, if not appealed, may well result in the waiver being withdrawn. That, it seems to me, is a wholly proper recognition by the FSA that any steps they take can have no effect on what decision a court might reach. Doubtless, having to deal with all complaints on the issue of bank charges will result in difficulties for the banks, but that is no concern of the courts. In the absence of such a code, the banks would presumably be in a position simply to deny liability for refund of charges and leave it to the dissatisfied customer to seek his remedy in law, if there be one.



For completeness (although I was not addressed upon it) I should add that I do not consider that a sist would be a breach of Article 6 of the European Convention on Human Rights which entitles a litigant to a hearing within a reasonable time. As I understand it, the date from which the reasonable period of time should be computed is the date of commencement of the action (Reed & Murdoch, A Guide to Human Rights Law in Scotland, para 5.94). Given the timetable proposed by the defenders, it seems to me that a delay until early next year cannot under any circumstances be regarded as unreasonable. Even if the proceedings before the High Court in England go past that date or if any decision is appealed to a higher court, it is always open to a pursuer at any time to apply to recall the sist. That in my view is a sufficient safeguard and ensures that a sist granted now could not be regarded as a breach of Article 6.