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British law lacks a precedent on legal cases dealing with bank charges, a judge has warned.

District court judge Stephen Gerlis told the Today programme that no appellate court decision has been made on the issue, meaning judges are not bound by a definitive view of the law in this area.

The Office of Fair Trading is currently undertaking an investigation into bank charges levied on customers who go overdrawn without permission amid claims that the current regime of charges imposed by banks is unfair.

Its clampdown has led to a number of individuals taking their banks to court. But, at present, Mr Gerlis says judges are able to make their decisions based on the evidence put before them and without feeling bound by any precedent, creating potential inconsistencies in different rulings.

"If cases are to go on, then clearly we need the decision of a higher court that can give guidance to us all."

He said the lack of precedent was due to a reluctance from both banks and customers to go to the appellate courts over the issue.

"This is in a sense very unusual that you have litigation on such a scale with practically all of it being settled. Indeed going to court is something of a last resort - we encourage people to settle rather than go to court," he explained.