While Natwest is quite happy to have the threat of a bankrupting costs order hang over Tom Brennan (see below), it appears that the bank can come over all coy and confused about costs when it means settling a claim.
According to this BBC story (via CharonQC and Martin), Natwest settled a claim for charges (overdraft, bounced cheques and direct debits) for £24K and £12K interest with a cheque for £35,987.94.
What is interesting is that the letter accompanying this cheque denied any liability, expressed confidence in victory at trial, but said the settlement was offered because
“Although our client is confident that it will be successful at a final hearing, its legal fees will almost certainly outweigh the value of the claim.
“As such our client must take a commercial approach to such claims…Without admission of liability our client is prepared to settle this matter in full to prevent incurring any further legal fees”.
Errm. Unlike Mr Brennan’s case, this is not small claims, but fast track. Costs would be to the winner and the claimant apparently has a business with a £1 million per annum turnover, so costs wouldn’t appear to be an issue if the bank is so convinced that the
challenge to its charges would fail in court.
Uh Huh. We’ll settle in full because otherwise we’ll incur costs that we are, of course, confident that we will be awarded when (not if, oh no) we win and also that you can pay, but really it’s a bit of a faff and we can be bothered to pay the lawyers in the meantime because it would dent our £3.26 billion or so operating profit.
I regularly run very similar arguments against sub prime (sic) mortgage companies in respect of the fees, charges and costs provisions of their mortgages. To date, not one has fought because they’re always settled, rather than risk a trial on the point. The most recent one (last week) settled for £1k, to discharge the mortgage in full, and walked away from an additional £54k in fees and charges.
From their point of view, I understand the economic argument for settling, particularly where someone is legally aided (or, in the bank charge cases, on the small claims track), but I’d love to see the point properly tested!
As the case I mentioned suggests, they walk away even when the viability of enforcing a costs order doesn’t appear to be in doubt. It must be infuriating.