Going through the courts can be a costly and stressful endeavour, especially if you are unsuccessful. So it is important to think carefully and weigh the costs before you go to court.
When should you turn to the courts?
The decision to go to court over your bank charges is a decision that should not be taken lightly, and it should always be your last resort.
Your first port of call should be to contact your bank, explaining exactly what charges you believe have been incorrectly charged, and how much you want back. This letter template will help ensure you don't leave anything out.
If your bank dismisses your claim then you should refer your complaint to the Financial Ombudsman. They will make a ruling one way or the other, and if it's in your favour the bank will need to pay compensation and refund the bank charges owed to.
It's only if the Ombudsman rule in favour of the bank should you consider going to court, and only if you're adamant you have a strong case.
For the low down on reclaiming bank charges, read our guide; How to Reclaim Your Bank Charges.
How much will going to court cost?
The small claims court can cost up to £685 to take a case (£595 online). However, claims are priced in bands so for claims under £5,000 the maximum you'll pay is £205 if you send the form by post and £185 if you complete it online.
If you took a different route, the costs for lawyers and court fees can start to rack up, so think carefully before making any rash decisions. You could easily lose more than you could gain.
However, if you win the case there is the possibility that you may be able to claim back the fees.
Should you use a 'no win, no fee' lawyer?
It may be tempting to use a 'no win, no fee' lawyer. However, because of the difficulty of the argument you may find it hard, if not impossible, to get one of these lawyers to take your case.
If you have reached this stage then the Financial Ombudsman will have ruled in favour of the bank so, and it's likely that the courts will do the same. Therefore 'no win, no fee' lawyers may see no value in taking you on, unless you had a particularly strong case.
If they do accept, then be prepared for a substantial chunk of your compensation to go to their fees. If you are only claiming a relatively small amount it is worth asking yourself; is it worth the hassle?
Should you pay for legal representation?
If a 'no win, no fee' lawyer doesn't take your case it is likely that you'll need to pay for legal representation (unless you are trained yourself). This is something you will need to weigh against the chance of success and the amount you will get in return. If the likely fees outweigh the possible gain then you should consider whether your cause is worth pursuing.
If you are asked to take out an insurance policy to cover the costs up front, then this will mean you dipping into your pocket. You will need to consider whether this is a risk you are willing to take.
Is it worth going to court?
The honest answer to this question is; probably not. It's unlikely that the courts will find in your favour at this stage, especially if the Ombudsman has already found in favour of the bank.
Think carefully about how much you are claiming back and how much going to court will cost you. If you win, would the compensation be worth the time and effort going to court will take?