Bank abolishes unfair bank charges

The National Australian Bank (NAB) - owner of the UK's Clydesdale and Yorkshire banks - has announced it will abolish unauthorised overdraft charges for customers in Australia and New Zealand. Last year NAB cut its penalty charges from $50(£25) to $30(£15) and from 1 October 2009 these charges will be scrapped altogether.

The move will not be replicated by the Clydesdale Bank plc, who like other high street banks in the UK have continued to impose excessive and unfair charges on their customers while pursuing a legal strategy of opposition and delay in the OFT's test case litigation.

Two years have now passed since the OFT raised its test case in London's High Court and the group of UK banks have since appealed to the Court of Appeal and the House of Lords after the High Court ruled that the Unfair Terms in Consumer Contract Regulations could apply to overdraft charges. In this period very few UK citizens have had a refund of unfair charges, while UK banks have made around £5 to £6bn from fresh bank charges.

Some banks - like Lloyds TSB - have even introduced more regressive daily rate charging policies despite having agreed with the FSA not to do so pending the OFT test case. The UK taxpayer owns 43% of Lloyds TSB plc.

GLC and other campaigners have called on the UK Government to intervene in the public interest - without prejudice to ongoing litigation - by requiring the UK banks to reduce their future charges to proportionate levels; a measure which would ease the pressure on many hardpressed households up and down the UK during the current difficult economic climate.

So far the UK Government has shown no appetite to act, while the Conservative Party branded bank charges 'unfair' in their white paper on financial regulation, published last week.

Govan Law Centre has been working closely with Glasgow MP, Mohammad Sarwar, on a 10 minute rule bill which proposes a proportionate maximum limit on overdraft and other administrative charges in consumer contracts. The Prevention of Execessive Charges Bill received its first reading on 29 April 2009 with full cross-party support, with a second reading scheduled for 16 October 2009.

The House of Lords judgment in OFT v. Abbey National plc & others is expected shortly. If the UK banks are again unsuccessful there is every prospect that they will appeal this decision to the European Court of Justice, and if so, further delay, and excessive charges will ensue for vulnerable British citizens. The case for UK Government intervention is overwhelming.

A full article on NAB's change of charging policy is available on

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Shortlist for 2009 Law Awards of Scotland announced

The Firm has announced the shortlist of nominees for the independent 2009 Law Awards of Scotland. The awards ceremony will be held in Glasgow on 17th September. Govan Law Centre has been shortlisted in the category of 'Law Firm of the Year' (under 50 solicitors), and our Principal Solicitor, Mike Dailly, has been shortlisted in the poll of solicitors 'individual' category. Full details of the awards are on The Law Awards website.

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British pensions among poorest in EU

Nearly one third of the elderly in the UK are living in poverty according to new European Commission statistics, which place British pensioners among the poorest in the European Union.

The figures, published by Eurostat, compared relative poverty in the 27 member states and showed 30% of UK over-65s were at risk of poverty in 2007, the same proportion as in Lithuania, and put Britain fourth in the poverty league of nations.

While the UK fared better than Cyprus (51%), Latvia (33%) and Estonia (33%), the figures revealed British pensioners were worse off than Romania, where 19% fell below the poverty threshold, Poland (8%) and France (13%). Full story from The Herald.

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Migrant workers contribute to public purse

Eastern European migrants who came to live and work in the UK in the last five years have made a positive contribution to the public purse, research has revealed.

The Polish, Czech and other arrivals who moved to the UK when the European Union expanded in 2004 have paid substantially more in taxes than they have received in benefits, the study by academics at University College London (UCL) found.

Official statistics show that between 2004 and 2008, more than 52,000 people came to Scotland from the new EU countries, including Lithuania and Estonia. The majority of immigrants from Eastern Europe came from Poland. Full report from The Herald.

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Evictions & pre-proof hearings

It is now common practice in Glasgow (and to varying degrees at other Scottish courts) for ‘pre-proof hearings’ to be fixed when diets of proof are being assigned in actions for recovery of heritable property. Generally, these hearings will take place a number of weeks prior to the evidential diet.

GLC believes the issue of pre-proof hearings is procedurally uncertain as neither the summary cause rules nor the Sheriff Courts (Scotland) Act 1971 make provision for the fixing of ‘pre-proof hearings’.

Pre-proof hearings are of course well intended, and are designed to ensure the most expeditious progress of the case. However, if the defender fails to appear or be represented at a pre-proof hearing can the court grant decree by default? This type of decree cannot be recalled by minute for recall of decree.

Likewise, what happens if the defender fails to adhere to one of the conditions attached to the pre-proof hearing, such as lodging particular evidence by a certain time? Can the court grant decree by default for such ‘failure’?

Amendments to the ordinary cause rules in 2006 resolved all of these issues for ordinary actions, but GLC believes the position as regards the summary cause rules lacks certainty. Tenants should of course take their own independent legal advice on these matters.

Until the matter is resolved conclusively, GLC would suggest it is competent to minute for recall of decree where judgment has passed at a pre-proof hearing where the defender has failed to appear. We would also argue that pre-proof hearings are truly continuations and that it may be ultra vires to impose conditions to these hearings of a peremptory nature resulting in decree by default where the tenant failed to comply.

GLC has a forthcoming ‘debate’ scheduled at Glasgow Sheriff Court which will explore all of these issues, and we have also highlighted the relevant administrative issues with the Sheriff Principal. We would be interested to learn of the experience in other sheriff courts, and you can use the comment section below to discuss this issue generally.

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BBC Radio Scotland

News discussion of the G8 accord on climate change, allegations of News of the World mobile phone tapping and hacking, the new UK mobile phone directory, the White Paper on bank regulation, Afghanistan, Diageo job losses in Kilmarnock and Glasgow, and the First Minister; with former First Minister Rt Hon Henry McLeish, Scottish Conservative Business Manager David McLetchie MSP and Govan Law Centre's Mike Dailly, with Derek Bateman. Available to listen here.

Scottish Government change Home Owners' Support Fund rules?

Money advisors in Scotland will be well aware of the new rules for the Mortgage to Rent and Shared Equity schemes (collectively known as the Home Owners' Support Fund). The new rules introduced in March 2009 have created additional hurdles which can make it impossible to access help. One new rule is explained as follows in the official Scheme guidance:

"You must be ineligible for help through other UK Government
support schemes such as Income Support for Mortgage Interest".

Now, money advisors and law centre solicitors will tell you that when someone loses their job (through illness or the economic downturn)they may be eligible for Income Support for Mortgage Interest but this may be impractical, for example, because the Department of Works and Pensions only pays mortgage interest at an average rate, and does not pay anything towards the capital element of a mortgage; so arrears may continue to grow, while repossession looms.

Before the March 2009 changes, the fact someone might be eligible for DWP assistance was irrelevant to eligibility for the Scottish Mortgage to Rent Scheme. The letter below from the Scottish Government to North Lanarkshire CABx is interesting for two main reasons.

First, the Scottish Government have made a policy decision that any help under their schemes can only be considered if no help is available under a UK scheme. Why? Advisors will look at all of the schemes and see what is best for the client's personal circumstances. It makes no sense to force a household in Scotland to use a UK scheme if that cannot provide a sustainable solution.

Secondly, the letter clearly states that the Scottish Government have in fact changed their rule: we are willing to consider applications in exceptional circumstances where people can show that assistance from these UK schemes still is not adequate to stave off the risk of repossession.

Two and half weeks on and the official Scheme guidance does not explain this change of policy. And as we understand it, this significant change has yet to be communicated to money advisors across Scotland, and for that matter to the Scottish public.

If no-one knows about this change, homeowners facing repossession could lose out. Govan Law Centre therefore reproduces the text from the Scottish Government's letter to disseminate this very useful rule change. Thanks to Jim Melvin at North Lanarkshire CABx for raising this issue.

Finally, if the Scottish Government can change Fund rules by a simple letter, GLC would hope they can revise the very low property market value eligibility limits.

Scottish Government
Housing and Regeneration Directorate
Housing Investment Division

Mr Jim Melvin
Project Officer
North Lanarkshire Citizens Advice Bureau
Housing Advice Support Network
Unit 10, The Fountain Business Centre
Ellis Street

23 June 2009

Dear Mr Melvin

Thank you for your letter of 19 May to the Minister for Housing and Communities on the relationship between entitlement to Support for Mortgage Interest and eligibility for assistance through the Home Owners' Support Fund. I am responding on behalf of the Minister.

As you may be aware, the Cabinet Secretary for Health and Wellbeing announced to Parliament on 17 June that the first review of the revised Mortgage to Rent scheme and the new Mortgage to Shared Equity scheme will take place in August. The review will look specifically at the schemes’ eligibility criteria including the relationship to UK Government schemes, such as Support for Mortgage Interest and the Homeowners’ Mortgage Support Scheme.

We continue to believe that it is right that individuals should seek help from UK Government schemes first to ensure that Scottish Government funding goes as far as possible and is the option of last resort. I can confirm however that we are willing to consider applications in exceptional circumstances where people can show that assistance from these UK schemes still is not adequate to stave off the risk of repossession. It is for this reason that we are assessing [your client’s] application to the Home Owners' Support Fund as quickly as possible.

We will write shortly to the organisations that are approved to provide independent money advice to applicants to the Mortgage to Rent and Mortgage to Shared Equity schemes to clarify the above point. We will also ensure that our scheme literature is updated following the review.

I hope this is helpful in the meantime.

Your sincerely

Heather Robertson
Housing Investment Division Manager

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Cabinet Secretaries visit Govanhill Law Centre

Deputy First Minister and Cabinet Secretary for Health & Wellbeing, Nicola Sturgeon MSP, and Cabinet Secretary for Justice, Kenny MacAskill MSP visited Govanhill Law Centre today to discuss the work of the new law centre.

The Scottish Government Ministers heard about the centre's legal casework, public legal education strategy, and public policy work in Glasgow's Govanhill.

Ms Sturgeon noted that the challenges facing Govanhill were practically unique, and that the Scottish Government and Glasgow City Council were looking at a number of solutions and strategies to address the problem of gangmasters, substandard private rented accommodation and slum landlords.

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The Big Issue in Scotland: Law flaw fuels school places war

The Big Issue in Scotland reports: The Scottish Government is being urged to close a class sizes loophole allowing an “explosion” in parents trying to squeeze their children into popular schools.

Parents are forcing local education authorities to ignore Holyrood guidance on class size limits of 25, with more and more catching on to the fact the only legally binding maximum size is 30. One legal expert said he expected the number of parents appealing rejected placement requests to “flourish”.

Solicitor Iain Nisbet, head of education law at the Govan Law Centre, said pressure to cut class sizes is the main reason councils are turning down placement requests. “We’ve certainly seen an increase in calls since last year from parents whose placing request has been refused and are interested in their . The problem is that some councils are trying to achieve the end result of smaller class sizes by effectively keeping the parent in the dark about whether the school is actually full or not.”

Nisbet predicted there would be a “flourish of appeals” from parents willing to take their case all the way to the Sherriff courts in the summer. “Usually we see between five and ten, but I suspect we’ll see a few more this year.”

The problem is not restricted to heavily populated areas. In the Scottish Highlands, Ivan and Shirley Macleod recently won a recent appeal to get their daughter a place a Hillhead Primary in Wick, after the total P1 class size was set at 25. Mrs Macleod said the council had put the family “to hell and back”.

The full story is available on the Big Issue in Scotland website.

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Scots common law materials donated

HBJ Gateley Wareing (Scotland) LLP have very kindly donated a number of significant Scots common law materials and historical legal records relating to the City of Glasgow to Govan Law Centre. We are grateful to HBJ Gately Wareing, and in particular the firm's partner Gordon Cunningham for their kindness.

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Riddoch Questions

GLC's Principal Solicitor is guesting on this Friday's Riddoch Questions. Joining Mike on the panel to discuss this weeks news stories will be former First Minister, Henry McLeish and former leader of the Scottish Conservative Party, David McLetchie MSP. BBC Radio Scotland at 1.05pm, Friday 10 July 2009.

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Regulator highlights prevention of homelessness partnership work as 'positive practice'

The Scottish Housing Regulator has today published its inspection report on Glasgow City Council's homelessness services. The council scored a 'fair' C grade out a possible A to D grading system, with the regulator identifying some very positive examples of good practice, as well as a number of weaknesses in the council's homelessness services.

Govan Law Centre was delighted to note the regulator highlighted the work of our 'section 11' prevention of homelessness partnership work in the South West of the City. Our innovative partnership brings together a range of legal, money advice and social care services to provide a tailor made support package for clients threatened with homelessness. Extracts from the report are included below.

"4.31 The Council has funded an excellent three year section 11 pilot in the south west of the city. This is a partnership between the South West CHCP, Govan Law Centre and Govan Money Matters. RSLs, mortgage lenders and private landlords send notifications to the Council which provided welfare rights advice and made referrals for housing support, legal representation and money advice. The partners have worked together to stop repossession proceedings and evictions against more than 1,300 households. In other areas of the city there are a range of different arrangements in place".

"Appendix 2 -Section 11 of the Homelessness etc. (Scotland) Act 2003
The Council funded a three year pilot in the south west of the city to prepare for the introduction of Section 11 of the Homelessness etc. (Scotland) Act 2003. The South West CHCP, Govan Law Centre and Govan Money Matters Money Advice Centre developed the pilot project in partnership. The Council seconded a member of its staff to be the project co-ordinator. All 18 RSLs in the south west area, five mortgage lenders and a number of local private landlords participated in the pilot. They notified the co-ordinator and CHCP social work team of households in arrears when they were taking legal action against them. The co-ordinator or social work welfare rights officers then assessed the household’s needs and referred them on for advice and support. This ensured that tenants or owner occupiers had good access to quality legal representation and money and welfare rights advice".

The full Inspection Report for Glasgow City Council is available on the Scottish Housing Regulator's website.

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Ho. v. HUD

Chak Man Fung was the owner of an apartment that rented to three individuals one of them was Jennifer Ho. Ho acted as Ho’s agent when choosing renters. When Diana Lin decided to move out before her lease was up she found Meki Brachen to move in. Lin said she would not rent to blacks, additional Fung would also not allow Brachen to move in and barred any attempts. Ho and Meki Brachen filed racial discrimination charges against Fung and Lin.
Several notifications by first class mail and Fed Ex were sent out and neither defendant answered. Finally after a fourth notification, Ho, but not Fung showed up for a hearing on remedies. Ho appeared without counsel and asked for a postponement because she realized that she needed counsel but her attorney was unavailable for the date. Additionally she explained that she had not wanted to read the legal notices and had just opened them days before the hearing. The ALJ denied the motion for a continuance, observing that Ho had only herself to blame for not opening the letters earlier and postponement would waste the time of assembled witnesses. Compensatory damages for mental distress and financial injury were awarded to Bracken for $49,284 and Lin for $25,345.
Ho claimed that that the agency violated the due process clause of the Fifth Amendment by not providing her with adequate notice of the proceedings and not postponing the hearing when she eventually opened the letters. However, the Constitution does not require that an effort to give notice succeed. See, e.g., Dusenbery v. United States, 534 U.S. 161 (2002). If it did, then people could evade knowledge, and avoid responsibility for their conduct, by burning notices on receipt—or just leaving them unopened, as Ho did.
Additionally Ho was ordered to pay the maximum civil penalty of $11,000 in additional compensatory damages. The ALJ concluded that the maximum penalty is appropriate because Ho not only set out to discriminate but also was truculent after being told of the conduct’s illegality. The ALJ deemed Ho’s decision to barricade the door against Bracken an egregious form of discrimination. Ho claimed that the penalty was egregious because they did not look at her finances, one of six factors the agency finds relevant. The agency was never given this information because a person who fails to supply information forfeits any complaint that the decisionmaker was uninformed on some issue.
Fung claimed that the ALJ had to prove a prima facie case of liability for discrimination. However Fung misunderstands how HUD handles defaults. A regulation provides that “failure to file an answer to the complaint shall be deemed an admission of all matters of fact recited therein. The ALJ concluded that the admitted facts do show liability. Fung apparently thinks that a prima facie case of liability depends on live testimony. Not at all; admissions are better evidence than testimony, because admissions are incontestable.
Fung additionally claims that he is entitled to discriminate by 42 U.S.C. §3603(b)(1). However that caption is an exemption which makes it an affirmative defense which must be timely asserted unusual in the answer and certainly at the trial. Fung did not answer or participate in the trial waiving this right. Addionally, Fung rented it to three unrelated persons; that’s not a single family by anyone’s definition. Then there is the fact that Ho acted as Fung’s agent, something that Fung admitted by failing to answer the complaint, which alleged that an agency relation existed.

Public legal education

"Govan Law Centre is seen as an excellent model for successful PLE delivery. The combination of the hard copy leaflets, a strong web strategy and a helpline is seen as a good PLE strategy. Specific needs have been met with the focused work done on bank charges"

Quote from the Scottish Government/Consumer Focus Public Legal Education Seminar Report, Edinbugh 2009. A full article on some of our awareness raising work in Scotland is available on the UK public legal education network site.

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Parents misled on school placing requests

Many of Scotland's local authorities are being accused of deliberately misleading parents over the legal rights on school placement requests.

The Govan Law Centre in Glasgow said councils were turning down requests on the basis that they would breach guidelines on pupil numbers.

This comes in spite of a test case which established that rules on class sizes are not binding in law.

Councils say it is not within their power to change the situation.

Reducing primary class sizes is a flagship policy of the SNP, which has a target of reducing class numbers in P1 to P3 to a maximum of 18.

But the Scottish Government has now said that it would allow the policy to be applied differently in different areas.

The full story is on the BBC's website here.

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