Rachael Reed KC: lawyer defending claimants in the CCCFA case calls for investigation into multi-billion dollar impact

A top lawyer working with the plaintiffs in a large-scale banking class action is calling for a formal investigation into the 'serious civil service process failures' by MBIE.

Rachael Reed, KC, has outlined her objections in a letter to Public Service Commissioner Sir Brian Roche and Attorney-General Judith Collins, voicing concerns with the Reserve Bank's risk assessment.

She says the $12.9 billion figure is 'fantastical' and says it doesn't have a grasp of reality.

"It just doesn't make sense on that first fundamental level."

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
So to the ongoing question of why it is that
the government is changing the law to stop key we
customers taking class action against two Wosie banks. It's being
speculated that the reason the government's doing that is because
of the size of the potential payout. The government was
told it could be as much as twelve point nine
billion dollars, which seems extraordinary. Rachel read Casey is one
of the lawyers representing the class action plaintiffs, and with us, Hey.

Speaker 2 (00:22):
Rachel, hello, how are you tonight? Quick?

Speaker 1 (00:24):
I'm well, thank you. Twelve point nine is too high?

Speaker 2 (00:26):
Right, Oh, it's fantastical. It's not just too high. It
doesn't have any grasp of reality. And there are several
reasons for that. A and Z at this point claims
in respect of its breaches that only seventeen thousand customers
were affected, and says a claim of three hundred million
against it is too high. But A and Z represents

(00:49):
some thirty percent of the market. Now, if they represent
thirty percent of the market and three hundred million is
too high for their breaches, how on earth would you
ever get to twelve zo point nine billion sector? Right?
It just doesn't make any sense on that first fundamental level.

Speaker 1 (01:06):
Where do you think it actually sits?

Speaker 2 (01:08):
Then well, I couldn't tell you where it actually sits,
because we need more information from the banks in relation
to exactly the number of customers affected and exactly the
interest in fees and paid that would need to be
recouped under the current legislative provisions. But there are all

(01:29):
sorts of other reasons that this model and this figure
just simply doesn't work. It assumes that the planters win
at every point in the litigation, and also ignores the
reality of settlement, and it talks about a sect to
wide liability. But these are claims that could have been
made any time for breaches from twenty fifteen to twenty nineteen,

(01:54):
and there are statutory limitation periods and respect of these
breaches of three or six years. Now. If they had
come to light throughout that time or not long afterwards,
there wouldn't be another claim that would be in existence
that could be pursued. Not only that, it's got to

(02:14):
be financially viable to do so against a smaller lender.
And the fact is, none of these other cases have
been taken. This is the only one that's on foot.

Speaker 1 (02:24):
Okay, so did the Reserve Bank just fail to do
its calculations properly, or did they deliberately and artificially inflate
this number.

Speaker 2 (02:33):
I wouldn't accuse them of deliberately and artificially inflating them.
I wouldn't do that. What we don't have is any
transparency in relation to their modeling. We can see that
it doesn't make sense, but the relevant parts of the
modeling have been obscured through reductions and Official Information Act responses,
so we can't actually pick behind it. And the difficulty

(02:53):
here is that retrospective legislation is extraordinary in itself, and
it's been used here in extraordinary way to deliberately target
litigation that's been on foot for four years. And where
you have got that extraordinary use of power in an
extraordinary way, it's underlying foundation must be unassailable, and it

(03:18):
must be transparent so that someone can contradict it if
it deserves to be contradicted, and we don't have that
at all here, so none of that has occurred.

Speaker 1 (03:27):
How do you rate the chances that Brian Roach actually
gives you what you want what you want, which is
an investigation here, Well, I would.

Speaker 2 (03:33):
Hope that he would undertake his functions in a proper manner,
and I consider that there is a foundation for it,
which was carefully set out in a letter to him,
with the concerns that we have. So I would hope
that he would take that seriously and do what is
right in the circumstances here, because this is quite an
extraordinary position that we found ourselves in.

Speaker 1 (03:55):
It really does seem this way, Hey, Rachel, thank you
very much appreciated. That's Rachel. Read For more from Heather
Duplessy Allen Drive, listen live to News Talk Set B
from four pm weekdays, or follow the podcast on iHeartRadio.