Settlement offer made in ANZ/ASB class action, lawyer tells MPs

Wednesday, 16 July 2025

Plaintiffs in the ANZ/ASB class action lawsuit injected drama into a Finance and Expenditure select committee with an offer to settle their lawsuit for just over $600 million.

The move was dismissed by ANZ, which said: “We view the timing of the settlement offer … as a stunt intended to influence members of Parliament.”

On Wednesday, the Finance and Expenditure Select Committee was holding hearings into the Government’s controversial plan to make retrospective changes to lending laws.

The changes being debated would protect ANZ and ASB from the risk that should they lose the class action, they might have to pay back all the fees and interest on tens of thousands of loans on which they were in breach of disclosure obligations between 2015 and 2019.

The controversial proposed law changes, which banks have lobbied for, would give the courts the power to set awards at a lower level depending on whether consumer harm had taken place. They have provoked protests from the class action plaintiffs for interfering with an ongoing court case.

Davey Salmon, senior counsel for the plaintiffs in the class action, said it was “almost unprecedented to close down rights” in an ongoing case, and he disputed claims that not making the law change retrospective would threaten the financial system.

“There is not a menace here,” Salmon said.

“The sums sought will not affect the viability, or the balance sheets, materially of either of defendant bank, and the plaintiffs have in recent times sent an indicative proposal for a settlement in the order of $306 million and $309 million,” he told MPs.

However, a public relations agency working for the plaintiffs said after the hearings that the actual indicative offers to settle made by the plaintiffs were $317m for ANZ, and $300m for ASB.

ANZ said: “The proposed settlement appears to be primarily driven by the financial interests of the litigation funders and the proposed resolution does not reflect the nature or scale of the underlying issue.

“We have rejected the settlement offer, which if we had accepted, would likely have been worth around $50 million to the litigation funders,” the bank said in a statement to The Post.

Salmon said in 2019, lending laws had been changed but Parliament had decided not to make them retrospective, and asked what had changed since then to justify making them retrospective.

“The only answer, the elephant in the room is that a claim has been brought against two large banks, and they don’t like it, and they don’t like the consequences of the law as it was,” Salmon said.

“The answer might be there has been lobbying,” he said.

Roger Beaumont, chief executive of the Banking Association, told the select committee that between 2015 and 2019 any lender making any mistake in the information they provided to borrowers “like getting their phone number wrong” could be subject to a draconian provision in the law that “on one interpretation” could require the lender to repay them all the fees and interest they had charged until the mistake was fixed.

“The idea that simple disclosure failures could result in hundreds of billions of dollars being paid in free loans, that is not merely a harsh penalty. That’s a grossly disproportionate penalty, and one that creates financial stability risks,” said legal academic James Every-Palmer KC, appearing for the association.

Beaumont said modelling from the Reserve Bank Te Pūtea Matua showed a potential “ongoing and enormous” risk to the finance system of $12.9 billion.

There had been 18 lenders that had made settlements and could face legal action, the association claimed in its presentation to the select committee.

Salmon told the select committee that the $12.9b claim was not “remotely right”. There was a three-year limitation period under the Credit Contracts and Consumer Finance Act, and almost all cases would be “out of time”.

Labour’s Arena Williams probed bank lobbying at the hearing.

She asked Beaumont, who said banks had lobbied for law change since 2015: “If the banks can come to Government and ask for a special change, doesn’t that tell New Zealanders that they won’t have recourse when banks mess up?”

She said in June the Government favoured changing the law but not making it retrospective and then in September, after meeting with the Banking Association in July, it decided to make the law changes retrospective.

She asked whether at the July meeting the association had asked for the proposed change to be made retrospective for ANZ and ASB, but did not get an answer that satisfied her.

“Is it fair that the NZBA can lobby a minister on the public record and not tell the select committee what was asked for from that minister?” she asked.

Beaumont said the lobbying had been transparent.

That was challenged by Salmon. He said the plaintiffs had sought to use the Official Information Act to find out what was said in lobbying meetings with the association, but said the minutes of that meeting have been withheld.

“The plaintiffs remain in the dark about what was said then,” he said.

He said banks had been consulted on the retrospective law changes, while the plaintiffs had not.

“There’s an unpalatable flavour to how this was done,“ he said.

Salmon said it was bad law-making to pass retrospective legislation. There were many plaintiffs who had put their faith in the legal system and law, he said.

“These are real people, and there are a lot of them,“ he said.

The big banks, including ANZ and ASB will speak to the committee on Monday.

Russell said the plaintiffs were frustrated and angry, and feel like they were having the rug pulled out from under their feet.

Plaintiff and ASB customer, Anthony Simons said it felt like banks were about profits, and hiding their mistakes.

He said he had had a previous mortgage with ASB.

“I went through a really difficult time, and I had to pay a $10,000-plus break fee, or penalty, which was the bank’s rules. There was no sympathy. There was no, how do they put it? Fair and reasonable response. I had to pay the full amount,” he said.

“But now that the banks are in breach, they think, ‘No worries. We will just change it after the fact.’ That’s not fair,” he said.

He said ordinary people didn’t get to go back to Government and ask for laws to be changed after they had broken them,

“The fact that banks can lobby and influence Government to such an extent that they will retrospectively change the law is scary to me,” he said.

“It’s not democracy, and in my eyes, it’s not fair to everyday Kiwis, so please don’t let that happen,” he told MPs.