Wednesday, 28 November 2018
My Oh My - can it get any worse?
Judge tears up $35m settlement between ASIC and Westpac in lending case It just doesn't seem to be getting any better for ASIC at the moment, with Justice Perram refusing to sign off on the proposed $35m settlement with Westpac for breaches of the National Consumer Credit Protection Act (NCCPA). Perram has rejected the settlement on the basis that ASIC did not particularise the nature and number of Westpac's alleged contraventions. However, it is not too clear whether Perram thinks the penalty is too low or too high. On the one hand, ASIC proposed a total penalty of $35m which would be twice as much as the previous largest penalty under the legislation. However, ASIC then described Westpac's conduct as being due to an innocent mistake, which is never a good way of getting a big penalty. On the other hand, there were a total of 5041 alleged contraventions of section 128 of the NCPAA at $420,000 each which means a maximum penalty of about $2.1 billion. This makes $35m sound very much on the low side. It seems to me that Perram's concern is that he thinks that the proposed penalty of $35m was just plucked out of thin air and there was no principled basis for arriving at that number.