The Office of Fair Trading (OFT) has scored a victory in the High Court against some of the City's top law firms regarding the fees charged by banks for unauthorised overdrafts.

Mr Justice Andrew Smith ruled today (24 April) in favour of the OFT, which argued that the charges are subject to the Unfair Terms in Consumer Contracts Regulations 1999.

The competition authority is taking on a clutch of major lenders – Abbey National; Barclays; Clydesdale Bank; HBOS; HSBC; Lloyds TSB; the Royal Bank of Scotland; and Nationwide Building Society – which are now set to appeal.

A case management conference (CMC) has been scheduled for 22 May, by which point the OFT must decide whether to press for the charges to be classed as 'unfair'.

City firms including Ashurst, Simmons & Simmons, Linklaters, Freshfields Bruckhaus Deringer and Slaughter and May are advising banks on the case, as is national giant Addleshaw Goddard. A host of top silks have been instructed as counsel, including 3 Verulam Buildings' Ali Malek QC and Laurence Rabinowitz QC of One Essex Court.

Fountain Court's Brian Doctor QC is representing the OFT.

Davies Arnold Cooper litigation partner Steven Friel commented: "The decision… has been hailed as a victory by consumer organisations and to a large extent it is. [The judge found] that the charges are governed by the fairness requirements of the Unfair Terms in Consumer Contracts Regulations 1999.

"It remains possible that the charges will eventually be held to be unfair and therefore prohibited by the regulations. If that were to happen, it would lead to a fundamental change in what we pay for personal banking services."