If you are planning to rip someone off, target the middle classes or poor and set your ambitions for gain at $50,000 and no higher, but no lower than $7500.
Because, according to former ACT MP and Chapman Tripp lawyer Stephen Frank, the chances of being sued for sums in that range are low indeed.
“We don’t tell our clients to sue for anything under $50,000. It is just absurd how the law has got to that state,” Franks said.
Conversely, rip-offs under $7500 will land you in the easy-to-access Disputes Tribunals.
In Franks’ opinion, successive governments, as representatives of the common person, have lost control of the law, which is now in the hands of lawyers who have things like yachts, second homes and golf memberships to pay for, and bill accordingly.
Franks made his comment when answering my questions about whether securities-style laws and regulations should apply to Blue Chip and their ilk, organisations that basically provide a packed investment vehicle which looks, feels and smells like a security such as a share, debenture, managed fund, contributory mortgage, etc.
The theorem behind my question was this: securities law conditions would have required Blue Chip to adhere to some pretty high standards surrounding things like disclosing related-party charging and activities, and valuations, things about which some pretty serious questions are now being asked by newspapers, investors in Blue Chip, the Commerce Commission and the Serious Fraud Office (In that order. Anybody reading their Sunday Star-Times over the past three years would have been given sufficient pause for thought when dealing with Blue Chip.)
I was asking the wrong question.
We don’t need new laws, he said. We have too many already. What we need is to strictly enforce those already there.
New laws are a way governments are able to fool the public into thinking they are protecting the citizens, according to Franks.
We already have the Fair Trading Act and the Consumer Guarantees Act. What we don’t have is courts that are accessible to the common man and woman, he says.
That’s where the government needs to focus its efforts, not on creating new laws which will be no easier for wronged parties to get justice under.
I can’t help thinking he’s right. Over the past five years I have spoken to many a wronged person who has given up as a bad lot sums running into the tens of thousands of dollars because it is too costly/risky/difficult to get justice against a company or sole trader with aggressive lawyers making unsubstantiated counter-accusations and threatening to fight to the last.
The same will happen to many investors in finance companies, who will ultimately end up realising they are facing legal battles they have no stomach or resources to pursue, and swallowing the bitter medicine of loss.
Oh, and as I am engaged in giving advice to those who wish to pull a fast one on their fellow citizens, I suggest that you adopt an affronted tone when accused of your wrong-doing or shonkiness, claim the action is clearly malicious and defamatory, and threaten your own legal action. Better still, accuse your complainants of harassment, and refer any bills remaining unpaid immediately to debt collectors.
All such action is commonly taken by your peers, and tends to scare common folk into submission.
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