Can the Unfair Terms in Consumer Contracts be used to challenge high variable rates?

[Sarenco]

When you say "the ability of the bank" are you referring to the term in the contract that reserves this discretion to the bank?

If you are, then your argument is really that the contract term is unfair within the meaning of the regulations implementing the Unfair Contract Terms Directive. That's a legal interpretation and, no, the Courts would not defer to any determination of the FSO in this regard in any appeal.

 

[Sophrosyne]

Yes, obviously, I mean the contract term.

No I do not mean the Unfair Terms Directive.

I refer to the power granted to the FSO by the Central Bank Act, 1942.

See post #58.

 

[Sarenco]

To be frank, I am struggling to understand what you mean at this stage.

The FSO is not a court and “is required to act in an informal manner and according to equity, good conscience and the substantial merits of the complaint without regard to technicality or legal form”.

Determining that a contract term is unfair would be a legal determination, which is subject to appeal to the Courts. And, no, the Courts would not defer to the judgment of the FSO in this regard.

The FSO can't simply ignore any clear, unambiguous contract terms before it, if that's your point. If it did then that would certainly be a legitimate subject of appeal.

 

[Sarenco]

Under what circumstances can the FSO make a finding for a complainant under s 57 CI 2 (2) (c), if the respondent has complied with the law?

In respect of any particular complaint, the FSO is entitled to find that although the conduct complained of was in accordance with a law or an established practice or regulatory standard, the law, practice or standard is, or may be, unreasonable, unjust, oppressive or improperly discriminatory in its application to the complainant. Any decision in this regard is subject to judicial review by the Courts (e.g. because unfair procedures were applied in reaching his determination) but otherwise the Courts will not substitute their own view for that of the FSO on the merits of the case.

However, that it completely different from declaring that a particular term in any consumer contract is unfair and therefore invalid. Ultimately, only a Court can make that declaration.

Does that help?

 

[Sophrosyne]

Clubman’s point that for most people, courts are out of the question is very important. To put it simply:

The Joe Soap, without legal knowledge depends firstly and lastly on the FSO’s findings.

The FSO is not constrained by technicality or legal form, but can - for want of a better term - take a layman’s view of what is just and reasonable.

“Conduct” has many different legal definitions, but if Sarenco’s view is taken, it would mean a completely unreasonably term in a contract could stand up in court.

What I am questioning is that if a court finds that it is lawful, is that of itself, a reason to overturn a finding of the FSO, which did not doubt that it was legal, but found that it was also unreasonable or unjust.

 

[Sarenco]

A Court could certainly find that a particular term in a consumer loan contract was not in and of itself unfair (and therefore invalid) without necessarily quashing a decision of the FSO that the conduct of a lender in exercising a discretion pursuant to that contract term was unreasonable, unjust, oppressive or improperly discriminatory in its application to the complainant.

Is that what you're asking?

 

[todo]

The question therefore is whether the Irish Courts would determine the clause under discussion to be unfair. I think that it highly improbable.

Is that because the clause is actually fair or is it because its not in the interest of the government to have Bank of Ireland straighten this out. Or is it because the courts "like" to side with the banks in cases like this?

 

[Sarenco]

To be fair todo, I have set out my views on the legal position in some detail in earlier posts in this thread and I don't think there is anything to be gained by simply repeating the points.

I certainly don't think that there is any grand conspiracy or that our Courts are unduly disposed to find in favour of our banks in these matters.

 

[todo]

To be fair todo, I have set out my views on the legal position in some detail in earlier posts in this thread and I don't think there is anything to be gained by simply repeating the points.

I certainly don't think that there is any grand conspiracy or that our Courts are unduly disposed to find in favour of our banks in these matters.

Agreed, and I am grateful for your input.

If this is an unfair term, I would like to see it put right. Too many people struggling and allot is being made off their backs.