Taking on the banks
Opinion & Analysis
Not long ago North Shore lawyer Andrew Hooker had 150 people lined up to take on their financial advisers. The finance company implosions had ruined them and there seemed a good chance to prove the money men had failed.
Hooker barely got the chance. Only 20 or 30 people went ahead. The rest were too tired, too elderly or lacked the stomach, including some "unbelievably sad" cases, he says.
Undaunted, the insurance company lawyer is fronting a major case over bank fees which he hopes will show New Zealanders collective action can work.
He wants to change our attitudes to suing and, eventually, the legal system.
Hooker isn't saying we should become like the United States where you can, and people often do, sue for almost anything. But he said Kiwis too often shrug their shoulders when shafted.
"If Joe Bloggs in the street has been wronged, he is much more inclined in New Zealand to go ‘bugger it, I'll just move on'."
Technically Hooker is the lawyer for all 22,000 people who have signed up so far to try to win back a slice of their bank fees. But this time the self-described "lone wolf" is hunting with a well-resourced pack.
On his left flank is Australian class action specialist Slater and Gordon, the former law firm of Australian Prime Minister Julia Gillard. On his right is a rare beast in these parts - a litigation funding company stumping up millions.
The case has been heralded as New Zealand's biggest class action but it is not a class action in the sense that other countries use the term. A draft bill that would let lawyers act for a whole class of people, with individuals having a choice to opt out, has been stalled in Parliament since 2008.
This frustrates Hooker immensely.
"For some reason our Government doesn't think it's a priority. There are a number of areas where class actions could work, like potential claims against the trustees of finance companies and the leaky housing debacle," he says.
Hooker was shoulder-tapped for the case after he met the boss of Slater and Gordon four or five years ago, to talk about possible New Zealand class actions. Slater's Ben Hardwick says Hooker's common sense and passion for the underdog impressed them, and he was the logical choice for a tough case.
As it turned out, that early meeting was premature. Because the law has not changed to allow class actions, the bank case will proceed as a representative action naming all 20,000-odd plaintiffs, who have had to actively opt in.
Managing that many people is tricky.
"The only way we've been able to get this off the ground is to use Slater and Gordon, who are massive class-action specialists, and the whole case is being run out of their back room," says Hooker. Somewhere in a legal office in Melbourne "more law grads than you can shake a stick at" are poring over Kiwis' bank fees.
You couldn't blame the finance company victims for not suing.
Some got sizeable out-of-court settlements but others couldn't afford to take a case. Some went ahead and then discovered their advisers' professional indemnity insurance covered legal costs only, not any damages they might win. The advisers were often broke.
Hooker is still seething.
"It absolutely amazed me. [The professional bodies] were saying ‘People feel safe with our members because they have to have professional indemnity insurance'. [But] it was utterly useless."
He has a myriad of theories about the Kiwi aversion to suing. Partly he blames ACC because the "no fault" attitude has spread beyond personal injury and infected the national psyche. A lack of personal injury claims means lawyers get few opportunities to practise in court working specifically for the little guy.
"While I don't agree with the sort of wholesale personal injury litigation you see in America and recently in Australia, [ACC] means there are very few people who can specialise in acting for plaintiffs," he says.
Critics of class action - and personal injury claims for that matter - say it is frequently lawyers and litigation funders who benefit from taking such cases. But Hooker says without class actions it is hard for a big group to share legal costs or attract third-party funding. Many worthy cases never get off the ground.
"The costs of running a case on your own are just too high," he says. "New Zealanders need to stop seeing it as an evil Americanism. It is actually how big corporations are held to account."
The bank fees case has put him on the wrong side of some right-wing commentators and even mild-mannered banking academics, who say people have only themselves to blame if they pay high fees because they can't manage their money.
Other critics have questioned whether the legal system can cope with the case, and why, if the case is so strong, the Commerce Commission hasn't acted.
Hooker sees it differently. Late and bounced payment fees charged by banks are far in excess of what it costs them, he says. He believes banks are extracting punitive fees for bad behaviour, something which is prohibited under the law covering penalty fees.
Hooker's law school mates from 30 years ago might be surprised to see him championing people who can't keep up with their bill payments. He was "slightly to the Right of Genghis Khan" when he first left Auckland University, but the years have made him more socially aware, he says.
He's not really a leftie: he has strong views about the proper role of Government (small) and considers himself an extreme libertarian.
"But wanting to get out there and help down and out people . . . is something I find I can do," he says.
Hooker never really fitted the corporate culture. In 2008, he left Tower Insurance and started acting mostly for plaintiffs.
He describes his career arc by sketching a skate ramp in the air.
The Waikato boy left school after the sixth form for a job as an insurance claims manager. He watched insurance lawyers in court and didn't think it looked too difficult. He went on an OE, married an Australian beauty, then returned to New Zealand to study law with the beauty in tow.
Hooker excelled at law, rising quickly to the rank of partner in a firm of insurance specialists, alongside his mentor Michael Ring (now QC). But he worked too hard.
"I almost fell off the edge, to be honest," he says.
After taking a year's break, he helped start a firm of insurance investigators. Then Tower asked him to start their legal team. For the next nine years he island-hopped in the Pacific, fighting people who wanted Tower to pay for claims for riots, typhoid outbreaks and deadly falling trees.
It was all the more exciting because countries like Samoa and Papua New Guinea have no restrictive personal injury laws.
Now Hooker answers his own phone and shares a small office in an Albany business park with some chartered accountants. He's gently spoken for a litigator but also no wallflower, appearing on Fair Go, writing columns for the financial press and generally agitating for the consumer.
Despite winning work from the Christchurch earthquakes, finance company collapses and bank fees Hooker insists he isn't an ambulance chaser.
"I'm an ambulance chasee!" he says.
Clients come to him. The bank case has heightened his profile, but in ways he is not entirely comfortable with.
"I can cope with it but it's funny when you walk into cafes and hear people whispering ‘That's that guy doing the bank fees case'."
The case won't make him rich, he says. The $3.5 million pay packet one newspaper attributed to him is actually the current budget for the whole case. Most of the money is going to the big boys, including a New Zealand QC, strategy advisers, and an Australian senior counsel.
Litigation funder Litigation Lending Services will take a quarter of any win. Hooker is working for $318 an hour, with a top-up to the equivalent of $425 an hour on completion of the case. Right now it's eating up about 10 hours of his week, but it fluctuates.
Some of his other cases pay better, he says. He also already had enough work and didn't need the profile.
So why take the job?
For the adventure, he says.
Hooker believes group action can work if done right. The banks will have to justify their penalty fees. There's a happy glint in his eye.
"I'm up all night dreaming about stuff and strategising."
- Sunday Star Times