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Legal news from Wednesday, November 25, 2009 |
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UK high court rules overdraft fees part of banking services cost
Ximena Marinero on November 25, 2009 3:05 PM ET

[JURIST] The UK Supreme Court [official website] on Wednesday ruled [text, PDF; press release] that the Office of Fair Trading (OFT) [official website] may not challenge the fairness of bank overdraft fee charges as a matter of law. The Court ruled in favor of seven major banks and one building society appealing a lower court decision, holding:
[T]he bank charges levied on personal current account customers in respect of unauthorized overdrafts...constitute part of the price of remuneration for the banking services provided and, in so far as the terms giving rise to the charges are in plain intelligible language, no assessment under the [Regulations] of the fairness of those terms may relate to their adequacy as against services provided.
The Court emphasized the limited nature of the decision in that the ruling does not pertain to whether or not the fees are fair, and characterized the fee system as one of cross-subsidies that enables the functioning of free-if-in-credit banking. The Justices wrote in their opinions that the banking fees may be challenged on other grounds and that legislative measures could be enacted to regulate the fees. The OFT considered [press release] the ruling a disappointment and will issue an announcement after determining whether to continue investigating the fees. The British Banker's Association [official website] welcomed the decision, but expressed willingness "to work together with the OFT in connection with its on-going Market study." The decision came as a surprise [Guardian report] to experts and consumers, many of whom had expected the Court to affirm the lower court decision.
In the UK, the OFT may review fairness of consumer contracts outside of the main subject matter, as delineated by the terms of the Unfair Terms in Consumer Contracts Regulations 1999 SI 1999/2083 [text], based on European Council Directive 93/13/EEC. An estimated one-third of UK banks' retail revenue stems from overdraft fees, according to an OFT 2008 market study [press release; report, PDF] on personal current accounts.


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US will not become party to anti-personnel landmine treaty
Hillary Stemple on November 25, 2009 10:19 AM ET

[JURIST] The US State Department (DOS) stated [press release] Tuesday that the US will not be signing the treaty [text; JURIST news archive] to ban the use of anti-personnel landmines. The announcement comes a week before the Second Review Conference [official website] the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on their Destruction is set to be held in Cartagena, Colombia. For the first time, the US will send a delegation of humanitarian landmine observers to the conference. A spokesperson for Human Rights Watch (HRW) [advocacy website] expressed disappointment in the decision not to sign the treaty, but also welcomed [Reuters report] the presence of the observers as a possible sign of progress. To date 156 countries have signed the treaty [advocacy website], while 39, including China, Russia and India, have not.
Last year, the Bush Administration decided against [JURIST report] adopting the Convention on Cluster Munitions (CCM) [text]. More than 100 countries have adopted the convention [JURIST report], but major users of cluster munitions, including Russia and China, have not. While the US did not adopt the ban, claiming it would impede humanitarian efforts [JURIST report]by discouraging cooperation with non-signatories, it did adopt a formal policy [text,PDF] on cluster munitions "intended to minimize the potential unintended harm to civilians and civilian infrastructure."


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Third Circuit upholds school ban on religious holiday song performances
Matt Glenn on November 25, 2009 8:27 AM ET

[JURIST] A US Court of Appeals for the Third Circuit [official website] panel ruled [opinion, PDF] Tuesday that a school district's policy prohibiting the performance of religious holiday songs does not violate the First Amendment Establishment Clause [Cornell LII backgrounder]. Plaintiff Michael Stratechuk argued that the policy of the School District of South Orange and Maplewood [official website] in New Jersey, which prohibits the performance of religious holiday music had the impermissible purpose and effect of condemning religion. In rejecting Stratechuk's claim and affirming the district court's decision [opinion], the Third Circuit held that the policy was neutral toward religion and that it was a permissible way to ensure that the school did not violate the First Amendment by promoting religion.
We note with approval the District Courts observation that the restriction on the performance of holiday music, which changed earlier practices within the School District...[did not] automatically convey a message of disapproval of religion because as the Supreme Court observed in County of Allegheny, '[a] secular state, it must be remembered, is not the same as an atheistic or antireligious state.'"
The court noted that the school district allows the teaching of religious holiday songs, and that its music teachers routinely use them in class, so that the ban merely prohibits the public performance of the songs at related holiday events. Stratechuk's lawyer said Stratechuk will request [NJ Ledger report] that the full court rehear the case.
Last month, the US Supreme Court heard oral arguments [JURIST report] in Salazar v. Bueno, a prominent Establishment Clause case regarding the legality of a cross on government land and whether transferring the land to a private party would cure the violation if one existed. In 2007, the US Court of Appeals for the Ninth Circuit held [opinion, PDF] that the display violated the Establishment Clause and that transferring the land would not cure that violation.


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