TSB Bank is at the High Court this week facing precedent legal action by 350 mortgage customers over allegations it overcharged on its rates.
The bank acquired £3.3bn worth of mortgages from Northern Rock back in 2016 as as part of the government’s disposal of the ‘bad bank’ assets.
The claimants say they have been charged interest on their mortgages at too high a rate and seek damages of the difference.
The preliminary issue the trial will cover three issues: Express term; implied term; and Consumer Credit Act 1974.
The first issue is the claimants’ claim that the express terms of the mortgages obliged TSB to charge them a lower rate rather than the Northern Rock standard variable rate.
On the second issue, the court must address whether the mortgages contained an implied term limiting TSB’s discretion to vary interest rates.
And finally, a matter of general importance in relation to the interpretation of the unfair relationships provisions of the Consumer Credit Act 1974.
According to an order seen by City A.M., the parties set a budget for the entire case which would see the claimants spent near £600,000, while the defendants budget is slightly over £650,000.
The preliminary trial stated today at the High Court in front of Judge Nicholas Thompsell, and will last until Friday.
If the claimants are successful, there is an expected further 2,000 potential claimants waiting in the wings depending on the outcome, meaning this case will be precedent for TSB Bank.
The customers are represented by law firm Harcus Parker partner Matthew Patching, who has instucted Tim Lord KC (Brick Court), Oliver Campbell KC (Henderson), William Hibbert (Henderson) and Ben Woolgar (Brick Court).
While the bank has Hogan Lovells partners Louise Lamb and Whiston Bristow on for defence along with Sonia Tolaney KC (One Essex), James Duffy KC (Fountain Court) and Tim Goldfarb (One Essex).
TSB Bank has been contacted for a comment.