Latest / Best of Business / Jenee Tibshraeny: NZ Herald Wellington business editor on ANZ declining offer to settle class action lawsuit

Transcript

Jenee Tibshraeny: NZ Herald Wellington business editor on ANZ declining offer to settle class action lawsuit · Best of Business

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  Speaker 2: Am Z has said no thanks to an offer to
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  Speaker 2: settle a class action lawsuit for the core price of
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  Speaker 2: three hundred million New Zealand dollars. Plaintiffs offered a deal
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  Speaker 2: to both am Z and ASB. ASB Z to respond
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  Speaker 2: to the proposal, but ain Z has said that janetip
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  Speaker 2: Training is The Herald's Wellington business editor and is with
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  Speaker 2: me now, Hi, Jena, Hey Ryan, So how would this
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  Speaker 2: deal work exactly? Am Z and ASB would both individually
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  Speaker 2: be on the hook for three hundred million or is
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  Speaker 2: it together?
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  Speaker 3: It's three hundred million each. So A and Z has
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  Speaker 3: said no thanks, ASB is still considering it. Basically, under
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  Speaker 3: the current law they could actually be liable for much
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  Speaker 3: more than that. It could be more than six hundred
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  Speaker 3: million combined. But the controversial thing here is that the
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  Speaker 3: government is changing the law in such a way that
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  Speaker 3: the banks, you know, could be liable for much less,
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  Speaker 3: much less than even six hundred million. So that's the
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  Speaker 3: big issue here because normally when governments change the law,
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  Speaker 3: it's changing the law for the future. But the thing
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  Speaker 3: here is that they're wanting to change the law to
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  Speaker 3: the way it's applied to the past, specifically to a
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  Speaker 3: period between twenty fifteen and twenty nineteen, so that's when
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  Speaker 3: the breaches around this court case happened.
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  Speaker 2: Yes, so retrospective law that could completely put the kibosh
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  Speaker 2: on this case that they're taking right.
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  Speaker 3: Well kind of. So under the current law, if banks
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  Speaker 3: just disclose the wrong information about your loan, the starting
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  Speaker 3: point for the penalty is that they have to repay
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  Speaker 3: you all your borrowing costs for the time of the breach.
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  Speaker 3: So you know, in this case there could be about
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  Speaker 3: one hundred and fifty thousand people involved I think of
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  Speaker 3: all the interests they've paid over the time of a breach.
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  Speaker 3: But you know that that could really mount up. The
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  Speaker 3: way the government wants to change the law is to
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  Speaker 3: say that the judge has can have discretion to have
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  Speaker 3: a proportionate penalty, so to have a fair penalty. So
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  Speaker 3: you know, in this case, if under the proposed new law,
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  Speaker 3: for the judge looks at it and says, oh, actually
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  Speaker 3: this was really bad, the banks could still face a
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  Speaker 3: really big penalty, or the judge could go, oh, it's
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  Speaker 3: not that bad. Actually, you know what, we're sure a
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  Speaker 3: smaller penalty. Now. The banks have already actually reimbursed customers
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  Speaker 3: for the losses because of the mistakes, sort of in
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  Speaker 3: the order of about forty million dollars, so you know,
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  Speaker 3: the amount that it could be under the existing law
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  Speaker 3: is much larger than the forty million.
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  Speaker 2: The Government's obviously trying to get these changes through the
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  Speaker 2: at the moment being heard in Select committee this week.
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  Speaker 2: Act in New Zealand First on board with the retrospective
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  Speaker 2: part of it.
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  Speaker 3: Well, they have their reservations. I spoke to New Zealand
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  Speaker 3: First Shane Jones today and he said, you know, he
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  Speaker 3: wouldn't judge jump to conclusions, but it's very very bad
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  Speaker 3: practice to change something retrospective. He said that New Zealand
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  Speaker 3: First would you know, still have a think about whether
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  Speaker 3: it would support the bill, you know, further down the
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  Speaker 3: parliamentary process Acts David Seymour, he said he actually wrote
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  Speaker 3: to Scott Simpson, the Minister, and raised his concerns, but
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  Speaker 3: David Seymour said, he's part of the government and you
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  Speaker 3: know we'll kind of go along with you know, he's
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  Speaker 3: not going to kick up a stint necessarily so I
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  Speaker 3: think there's still you know, some uncertainty there. It's interesting
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  Speaker 3: here because there's so much money at stake, you know, banks,
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  Speaker 3: massive players. They're lobbing hard. The lawyers who are bringing
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  Speaker 3: the class action forward, there's a lot for them to
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  Speaker 3: gain as well. The funders of the class action. They
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  Speaker 3: are pushing really hard. It's going to be interesting to
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  Speaker 3: see which way the politicians end up end up going, yeah,
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  Speaker 3: what have.
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  Speaker 2: You made the submission so far in this committee?
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  Speaker 3: Well, sitting in select committee today and they're pretty passionate. Again,
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  Speaker 3: I think it's because there's a lot of honey at steak.
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  Speaker 1: You know.
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  Speaker 3: On the one hand, it's fair that they're large penalties
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  Speaker 3: for banks, because you know, if you're just a person,
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  Speaker 3: you meant to go through your mortgage contract with a
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  Speaker 3: fine tooth comb and make sure all the details are correct.
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  Speaker 3: So that's a fair, fair argument. But then you know,
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  Speaker 3: the banks say if the penalties are too heavy handed,
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  Speaker 3: that could cripple them, like it won't cripple A and
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  Speaker 3: Z and ASB, but it could cripple some smaller lenders.
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  Speaker 3: So there are some pretty strong arguments I think being made.
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  Speaker 3: And the retrospectivity element is it's just not good. No,
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  Speaker 3: you can't pull the rug out from beneath people.
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  Speaker 2: That doesn't seem Fear does that, But that's obviously what
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  Speaker 2: they're what they're trying to weigh up at the moment. Janay,
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  Speaker 2: I appreciate your time tonight. Janet to Trainey, the Herald's
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  Speaker 2: Wellington Business editor, with us for.
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