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CRIES TO SAVE BANK VICTIMS FROM THEIR LAWYERS

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  • CRIES TO SAVE BANK VICTIMS FROM THEIR LAWYERS

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    In a land where victims with legal claims must pay the defendants' anticipated legal costs into court before a judge will allow their claim to be heard, it makes sense such victims not be allowed to congregate, discover they have similar experiences at the hands of the powerful partisans of the Crown and - God forbid - find a lawyer who will screw them out of their well earned poverty.

    This story begins with the life nurturing bankers and the threat to New Zealand's rule of law posed recently by Sydney-based Litigation Funding Services. Banks have enough to worry about without the nuisance of greedy lawyers prodding their customers to gang up on them over their fee charges. If banks charge us $30 for overdrawing our account, or $100 because our credit card payment arrives late, it is only a fair reflection of the chaos it causes with their bookkeeper.

    On 26 June, insurance lawyer Andrew Hooker, funded by Litigation Funding Services, filed a class action in the Auckland High Court against ANZ Bank on behalf of 15,000 claimants seeking relief from the hefty fees they were charged for deposit account honour and dishonour fees and credit card over limit and late payment fees.
    Before the case was filed, articles in the National Business Review and LawFuel decried the move, arguing the lawyers and the funder were simply looking to exploit, and profit from, the claimants. Under the lead in - "Minter Ellison partner Stacey Shortall has levelled some strong criticisms at the actions commenced against the ANZ bank over the bank fees, and the real motivations and threats to the legal system it presents", Ms Shortall is quoted as saying "The legal system shouldn't be set up for lawyers and funders to be making money. It's set up to ensure people have access to justice."

    But Litigation Funding Services may be doing more to ensure people have access to justice in New Zealand than all our politicians, lawyers and judges put together. Cutbacks to legal aid have compounded a loser pay entry system to guarantee many are denied even a shot at equality in the courts. Where this is overcome, judges rarely allow the average citizen without deep pockets to get to a hearing against a well-resourced defendant. There is no denying that money is the currency of the New Zealand courts, and not truth or justice.

    The irony of the criticism in this case is the lawyers involved are taking the financial risk. Claimants in the ANZ action pay nothing. In return, their lawyers get 25% of the total clawback of charges the Court might eventually award. Unlike in the U.S., class action lawsuits in New Zealand must take on a more representative framework, putting more work on the lawyers to quantify the claim.

    The press may be condemning class actions as the death of justice in New Zealand, but giving victims with no individual hope in the Courts 75% of something hardly seems exploitative. Ms Shortfall's solution to avoid those greedy lawyers from taking 25% of the money you cannot otherwise get is, "Talk to your bank". Hooker says the average claim is between $1,000 and $1,500. Good luck with your talk.

    While class actions may be new to New Zealand, they are far from new law. As far back as 17th century England 'Bills of Peace' was the practice of allowing litigants with similar claims to pursue them together in the Equity Court. In the United States class actions have been used for 100 years.Hooker's team has hired Bruce Gray QC to lead the litigation and has warned all of New Zealand's banks are being targeted for their charging practices.

    Last Wednesday, in an unrelated move, Bank of New Zealand announced it was repaying 90,000 customers $4 million in overcharges after an internal review disclosed it had breached its credit agreements on foreign transactions, saying it was sorry for any inconvenience this may have caused its customers.
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