The decision of the Supreme Court on the Office of Fair Trading (OFT) investigation into bank charges could have implications for Foxtons’ dispute with the watchdog over unfair contract terms.
On Wednesday, the OFT lost its two-year fight to investigate overdraft charges by high street banks when the country’s most senior judges ruled that such an investigation was beyond its scope.
The banks contended that their charges formed part of the “core bargain” with their customers and were therefore exempt from investigation for unfairness under consumer law.
The High Court and the Court of Appeal had previously divided charges into “core terms”, which were exempt from consideration, and “ancillary terms”, which were not.
That approach that was also adopted in the Foxtons litigation in July, when the High Court ruled that Foxtons’ so-called “money-for-nothing fees” were unfair.
However, the Supreme Court stated that the banks’ system of charges must be seen as an overall package and it was artificial to separate one charge levied as a part of a contract from other charges and deem some of those charges as “core” and some as “ancillary”.
Landlord and tenant law specialist PainSmith said: “Given that the banks’ charges must now be construed as a package [Foxtons] will no doubt seek to argue that their charging regime must be seen in a similar manner.
“They will have the difficulty of their terms being held not to be in ‘plain and intelligible language’ and this is an issue with which they need to deal.
“No doubt, we will find out shortly if Foxtons will renew its request for permission to appeal or withdraw it.”
A spokesperson for Foxtons said “We have read the judgment with interest but have no further comment as yet.”
