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SHERIFFDOM OF GRAMPIAN,
JASON P A COLEMAN, 8 Balconie Steading, Evanton,
AARON HAMISH THOMSON, No1 Croft,
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
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
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
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;
The law on the two issues is very similar in
(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
(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
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
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
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
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
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
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
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
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