Big Class Action Win For Small Firm Lawyer
ASB has agreed to pay $135.6 million to settle the four-year old Banking Class Action over alleged disclosure breaches under the Credit Contracts and Consumer Finance Act. The deal needs High Court approval and comes with the usual non-admission of liability. The quick take: ASB writes a large cheque, avoids a longer brawl, and gets back to selling mortgages.
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The settlement is a big win for the plaintiffs – and also the lead lawyer Scott Russell (see below).
The plaintiffs say the settlement ends more than four years of litigation against ASB. The claim always hinged on whether banks properly disclosed key changes in loan terms. ASB chose certainty over trench warfare with the settlement deal, whilst the case against ANZ continues, after they previously labelled a $309 million settlement offer to both banks ‘a stunt’.
Lead solicitor Scott Russell called it a positive outcome for affected customers, noting the deal removes exposure to the Government’s proposed retrospective CCCFA fix. That proposal has been criticised by several leading lawyers like Andrew Harmos (left) for changing the rules mid-match to shield big lenders.
If the Court signs off, the class action will roll on only against ANZ. The plaintiffs point out ANZ previously told the Commerce Commission that between May 2015 and May 2016 it sent loan variation letters with wrong figures to more than 100,000 customers. Numbers like total payable, total interest, instalments, number of payments, even the final payment date, which were not exactly rounding errors.
Backers of the retrospective CCCFA amendment keep invoking “systemic risk” and apocalyptic liability models although Treasury’s own material and sober-minded commentary have treated those scenarios with the caution they deserve. The country will survive without rewriting the past to rescue a single well-capitalised Australian-owned bank.
What happens next
The Court will set the process for contacting ASB class members and confirming distribution mechanics. ASB customers need not do anything currently. The plaintiffs maintain the ANZ claim proceeds and that the CCCFA’s remedies are there to do two jobs. return money not lawfully charged and deter future corner-cutting by lenders that would rather upgrade the profits than the systems.
Who ran the case for the plaintiffs
Scott Russell is a director at Auckland litigation boutique Russell van Hout, a 3 director heavy legal boutique focused on commercial and construction disputes.
Two decades deep in disputes, he trained at Bell Gully, worked at Ashurst in Hong Kong, then ran litigation at Virgin Media in London before returning to New Zealand to the Commerce Commission and then private practice.
His shop fronts class actions and complex commercial fights, and he has been the public face of this litigation since filing in 2021 with a strong focu on the dangers of retrospective legislation.
