Lawyer makes history with NZ’s ‘largest settlement’ involving a bank

Wednesday, 8 October 2025

This story was originally published in October.

Lawyer Scott Russell is tired, but happy about ASB agreeing to pay $135.6 million to settle the class action lawsuit he started in 2021.

“It's the largest settlement that's ever happened in New Zealand for a bank,” he told The Post.

In its settlement, ASB didn’t admit any wrongdoing over the allegations, which centred on loan disclosure failures by the bank.

“In the last week, I don't think I've finished work before midnight, including Saturday and Sunday. It's very long hours, and there's a lot of work involved, but it's all worthwhile when you get an outcome like this,” said Russell.

There is still work to be done.

The settlement must be approved in the High Court, which Russell expects to happen in about six weeks’ time.

It is at that point the court will decide how many ASB customers were affected, and what share each will get of the settlement funds, and how much each will get. It will also decide how much the litigation funders will get.

But ANZ has vowed to fight on, and Russell said the case was set down to be heard in March next year.

“That is based off the Commerce Commission findings, where ANZ admitted that it sent incorrect loan variation letters to more than 100,000 customers,” Russell said.

Russell said the case had made class action history.

“There's never been a settlement like this before, and this is the first-ever class action that started on an opt-out basis in New Zealand,” he said.

It meant ASB customers who did not want to be included in the case had to ask to opt out of it, though there was no downside for them, as they didn’t have to chip any money into the legal fighting kitty given litigation funder LPF was funding the case, and would only be paid back their money if the case was successful.

As a result, only very few called Russell to opt out, and most, he thinks, were confused about what was happening.

“It is understandable - partly because class actions have not been a huge part of our legal history,” he said.

It had been an exhausting legal journey to get to this point, in part because a succession of governments have toyed with, but failed, to enact class action legislation.

“We don't actually have any class action legislation in New Zealand whatsoever, and that's part of the reason this case has taken so long,” he said.

Hearings to date had all been to establish the rules of how the case should go forward, Russell said.

“It's taken four years to just agree on the rules of the game,” he said.

All that legal wrangling had set the foundations for future class actions.

“It will be really interesting to see now if this allows better access to justice in the future for class actions,” he said.

Compared with countries like Australia and the United States, New Zealand has relatively few class actions, though they can be transformative, as illustrated by the class action against Southern Response over its failure to pay owners of quake-damaged homes their full insurance entitlements.

But he still thinks the Government should put the rules around class actions into black letter law.

“It just hasn't been a priority for any government to push it through,” he said.

The genesis of the case went back to 2018, when the banks faced action from the Commerce Commission, and Russell didn’t believe they had faced the full extent of the law.

“I guess it trampolined off the back of the Commerce Commission's investigation, and I went around and talked to funders, and talked to various people in the industry, and then got the claim off the ground,” he said.

The law he took the case under was brought in in 2015 under Prime Minister John Key, who went on to become chairman of ANZ in New Zealand.

Under that law, a lender which failed to make all the legal disclosures required by law, had to pay back the fees and interest it earned on loans in any period in which it was in breach of the disclosure requirements.

The law was changed in 2019. But a bill before Parliament proposes to make those changes retrospective, which could reduce the amount ANZ ultimately has to pay, should it lose its case.

Russell would not be drawn on why ASB decided to settle before the law was passed, but the bank’s chief executive said the decision to settle was pragmatic and brought to an end four years of legal proceedings.

Russell has opposed the law change, proposed by Commerce and Consumer Affairs Minister Scott Simpson, saying enacting retrospective legislation undermines the rule of law and sets a “dangerous precedent”.

Comments are moderated during working hours and may not appear immediately.