The ANZ 'bank fees class action' is an action run by Maurice Blackburn lawyers in the Federal Court of Australia on behalf of 27,000 ANZ bank customers. Maurice Blackburn has prepared a good summary of the litigation here. The litigation is funder by IMF (Australia) Ltd, a litigation funder.
In the class action the group of customers are suing the ANZ bank for 'exception fees' (e.g. credit card overdrawing fees) which they claim are unlawful because the fee charged for the particular default is not a genuine pre-estimate of ANZ's actual loss on that default. ANZ is being sued for $50million in damages, which presumably is the plaintiffs' estimate of the unlawful fees previously charged. Obviously ANZ has to establish that each fee correlates with the value of the bank's loss on the particular default. So, for instance, if a person is charged $30 for overdrawing a credit card limit of $8,000, the bank needs to demonstrate that it incurred a $30 loss or thereabouts by reason of the customer's action.
Page 12 of the Australian Financial Review dated 8 March 2011 and the Australian have a good summary of what occurred in the latest hearing before Gordon J on 7 March 2011. In that hearing, Mr Archibald QC on behalf of`ANZ submitted that ANZ requires 13 to 14 months to work out how it determined the exception fees for the customer defaults. Basically ANZ's position is that its expert forensic accountant, Deloitte, has to look at each process or "reporting point" that occurs as a result of the customer's default and ascertain the overall loss which flows from that default.
Gordon J was not impressed, saying "this is not how modern litigation is conducted" and she suggested that ANZ "think outside the square" to find a lower cost and more timely solution.
Mr Lee, counsel for the plaintiffs, submitted that the fact that the investigation had to start from scratch meant ANZ had not set fees by reference to their costs. Mr Lee's submission is persuasive - the fact that ANZ is unable to show from the outset how it calculates its fees suggests that the amount charged for a particular default is arbitrary. If the ANZ had this advice when it originally set its fees, then presumably the documents relating to or containing this advice would have been discovered. If these documents are part of the ANZ's discovery, then presumably the need for extensive expert review would be minimised.
I am happy to receive comments and discuss this further.