Class Action KC Joins Harmos in Warning Over CCCFA Law Change
Power Lawyer Rachael Reed KC is calling for a full-blown investigation into the Ministry of Business, Innovation and Employment (MBIE) over what she describes as “serious civil service process failures” relating to the CCCFA law change and a high-stakes banking class action.
Rachael Reed is acting for plaintiffs in the billion-dollar litigation targeting banks for alleged disclosure breaches, has written to both Public Service Commissioner Sir Brian Roche and Attorney-General Judith Collins, raising alarm over how key financial modelling was presented to Parliament.
At the heart of her complaint is a claim that a now-infamous $12.9 billion “exposure” figure cited in relation to the banking sector—sourced from Reserve Bank modelling—was not only “unrealistic,” but mathematically impossible.
“The RBNZ modelling… appears to be a mathematical impossibility,” Reed said bluntly.
“It defies logic and credibility.”
She points out that ANZ and ASB—representing half the market—rejected $300 million settlement offers as excessive. Yet somehow, MBIE and others pushed the line that the broader exposure could be $12.9 billion. Do the math, she says, and it just doesn’t add up.
Reed is particularly concerned that the retrospective provisions in the CCCFA Amendment Bill, currently before select committee, were driven by this flawed risk narrative.
The Bill proposes a major rewrite of consumer credit law to neutralise class actions like the one Reed is spearheading—replacing mandatory refunds for disclosure breaches with a vague “just and equitable” standard decided by the courts.
“Retrospective legislation is an extraordinary use of power… the foundation must be transparently justified and unassailable. MBIE has failed to provide such a foundation,” she wrote.
MBIE’s Defence
MBIE general manager Andrew Hume has responded, stating the ministry is “satisfied” with the advice provided to Cabinet and confirmed its analysis is outlined in the Regulatory Impact Statement. He acknowledged consultation was “constrained” due to commercial sensitivity and active litigation, but stressed the final call rested with ministers.
Still, Reed is not alone in raising the alarm.
The Return of the ‘Scary Numbers’
Former NZX chair Andrew Harmos (pictured) also blasted MBIE’s approach to CCCFA reform, accusing the Ministry of relying on “big scary numbers” to push through politically expedient changes that risked undermining the financial sector.
In a piece covered by LawFuel, Harmos called out MBIE’s “misleading and exaggerated” numbers, warning that rushed legislative fixes based on faulty data set a dangerous precedent.
👉 Read LawFuel’s coverage of Harmos’ CCCFA critique here
Now, with Reed echoing the same concerns—and directly accusing MBIE of pushing flawed and misleading data—there’s growing pressure for public accountability.
Rule of Law on the Line?
Reed’s warning is about both poor policy process and constitutional principles.
She argues MBIE’s flawed analysis directly led to a retrospective legislative change that weakens access to justice for tens of thousands of New Zealanders, all while interfering with the judicial process.
“This matter goes to the heart of our constitutional system – the integrity of the judicial process, the separation of powers, and the rule of law.”
