In 1991 UK banks introduced a voluntary code of banking practice. There was a considerable incentive to do so, since the government-appointed committee on banking services had recommended a statutory code should the banks fail to act or introduce an inadequate code. The code is addressed to banks dealing with private customers. Its governing principles require that banks act fairly and reasonably in dealings with customers and seek to give customers a good understanding of banking services. In relation to banking services the code obliges banks to express any written terms and conditions in plain language and to provide a fair and balanced description of the relationship. Despite the governing principles, however, there is no general requirement that the written terms and conditions be fair.
The code covers a range of matters from information to be provided to customers to standards of service. These are referred to at various points in the book, and need no repetition here. Two general points, however, are in order. The first is the relationship of the code to the law. Even if the code is not accepted as evidence of trade usage, and thus a basis for implying terms in a bank-customer contract, it is apparent that courts will have regard to its provisions in formulating legal principles.
Secondly, at the level of policy, there must be a genuine concern at the discrepancy between common law protections and some provisions of the code. There is no need for a disquisition on the advantages and disadvantages of self-regulation as a technique for channelling business behaviour. However, there undoubtedly needs to be a greater consumer input into the code's periodic revision. One approach worth emulating is that adopted in the Netherlands, where representatives of consumers negotiate directly with the banks over the Dutch general banking conditions. In Germany consumer groups have successfully challenged the general banking conditions before the courts.
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