Gouge away - are banks guilty as charged?

Photo / Hawkes Bay Today

Banks have spent zillions of dollars over the years attempting to bond personally with their existing and potential customers.

This is a waste of money.

People will never love banks - our relationships with financial institutions are necessarily fraught, and tainted by the, not wholly unjustified, suspicion that we're being clipped all over the show for services of dubious value.

But this news just in from Australia about a lawsuit of historic proportions being launched against banks, demonstrates just how deep the vein of bank-hate runs.

The people's comments on the Sydney Morning Herald drip with vitriol and spite, perfect ingredients for legal action.

But it's not all one-way traffic, some of the co-respondents hate lawyers as well.

Mick of Brisbane puts it simply: "I hate banks, but I hate lawyers more.I smell a rat."

IMF, the Perth-based listed litigation firm pursuing the bank charge along with its subsidiary Financial Redress, is an interesting crowd - check out its impressive list of "completed cases" for a sense of its broad ambit.

Also note IMF's intellectual campaign against the ancient laws of 'champerty', which, according to one online definition, is: "an unethical agreement between an attorney and client that the attorney would sue and pay the costs of the client's suit in return for a portion of the damages awarded."

Other champerty definitions are not quite so judgmental with this one noting it is quite legal in many jurisdictions today.

(Please don't confuse champerty with barratry. )

IMF's current bank attack is limited to Australia but the firm has recently turned up in New Zealand, encouraged, as this March 2010 newsletter says (page 6), by a recent High Court decision in the Feltex case.

This is a business, however, not a social welfare exercise. IMF says it will only charge a 25 per cent success fee if it wins its case against the Australian banks.

I'm not sure if that's after IMF costs have been deducted, I'll have to check the fine print.


David Chaplin