This is a story about the culture
within a big 4 bank having an all pervasive internal ethos of – ‘right’.
Thousands of employees believed
they were right in everything they did because their chief executive told them
so and defended their actions even though they often bent the law. Indeed, this bank believed it was above the
law because it was big and controlled money and they knew that money was
everyone’s lifeblood. It was superior
and knew it was superior because everyone was always nice to
them.
'You need our money' preached the
bank and people queued up to borrow their dream. After all, this was its job, to enable
dreams. Or so it
said.
Their real job was to buy and
sell money at a profit - perfectly commendable and natural for any big public
company. Indeed, most of us sell our
time for a profit as do all the employees of the big public company /
bank.
Unfortunately, some of the
employees of the bank were sick the day ethics were handed out and they did
things to advance their own career at the expense of reason and often ignored
lawful requirements. After all, it
wasn’t their money or dreams and they knew they were right because their senior
managers supported them and even encouraged them to act in bad faith. Why be a nice guy when you can make lots of
money by selling the dream then ripping the dream away – for a
profit?
One day, one of the more
ethically challenged employees decided, without cross checking, that a client had failed
to pay a mortgage payment of circa $2,400 on his home months before. If the employee had checked he would have
realised that it was the bank that had made the blunder but fact checking was
not in his mindset so he knee jerked into pious action in the absolute knowledge
he could do nothing wrong - because he was a part of the bank and was always –
right.
He rang the client with the
opening statement, ‘We are going to sell your home in 30 days’. Needless to say the client was somewhat taken
aback, confused and indeed scared because the bank had aggressively threatened
his dream without cause or reason or even humanity.
Still, this client had a life’s
ethos in that it wasn’t the problem that was important it was how you dealt with
it. He knew he was outgunned by the bank
that was constantly increasing its feverous attack and sought support from the
Ombudsman. This stopped the drivel and
the insane fervour by the bank because the Ombudsman sported a protective
umbrella shielding the client whilst they investigated as an independent
authority.
That independent authority found
the bank was wrong on all counts and awarded damages, compensation et alia to
the much relieved client. However, the
issue now was that the client had lost a lot of money, time and opportunities as
a direct result of actions by the bank but the Ombudsman was powerless to award
anywhere near the quantum of loss.
The client was confused. Would he accept the determination and accept
losses whilst the bank rolled onto their next victim or would or even could he take it further.
At this point he discovered that
the employee who had acted illegally threatening to sell his home had been
promoted within the bank. They were content within themselves that they
were right and above the law as they had just promoted the dissident with not
one syllable of apology to the client for their unlawful acts causing a great
deal of stress and loss.
The client was determined to
address the issue and pointed out to the bank they were found to have acted
unlawfully by the Ombudsman and should compensate him for sustained
losses.
The bank always seeing themselves
as – right – refused.
So the client took them to VCAT
where a higher level of jurisdiction could right some of the
wrongs.
Now, the bank was incensed that a
lowly client had the temerity to take them on even though they knew the client
was the innocent and the somewhat aggrieved party. After all, they were always right and
strutted and pontificated that fact at every chance. 'How dare he!'
As a power play and not so subtle
threat to the lone unrepresented client they engaged multiple lawyers,
barristers and employees to defend their position in court. Cost was irrelevant because it was
shareholders money and they knew they were always right.
However, this client had done
some homework and blocked every legal ‘trick’ the bank threw at him. The client was not driven by career or
personal gain but by mitigating personal loss.
Big difference and somewhat focus inducing. At that time the bank was respected as a
leader with enormous market power which did intimidate the client somewhat and
that reality eventually forced a compromise.
How long could he hold out against dozens of lawyers and million dollar
bank employees who were always right?
After 5 years he settled because
of a huge power imbalance and the self promoted invulnerability of the
bank
That settlement saw the bank lose
quite a few thousand dollars to the client but with a full cost to the bank of
over a million dollars. All for a
alleged debt of $2,400. But that’s
alright because it’s only shareholders money.
The client had mitigated some
small part of his losses and the bank pontificated on as the all powerful trying
to gag any public response by the client. But now, enter the Royal Commission where Christian Porter –
Attorney General said, “The royal commission has noted is that its standing
powers enable it, in effect, to override the existence of any non-disclosure
agreements.“ The same logically applies
to settlements especially where and when there is a huge imbalance of market
power forcing outcomes.
The big public company / bank now had nowhere to hide
and its culture was for the first time on show for all to see, and it was found
wanting. It turned out that the bank was
not superior, not right and that the chief executive had failed to act in good
faith by presiding over a ‘toxic’ culture enabling many and various unlawful acts by various
ethically challenged employees. Indeed,
in our client’s case the chief executive knew and sanctioned the events leading
to a million dollar plus loss of shareholders money.
That revelation cost the jobs of
the Chair and chief executive but still left our client in a loss
situation. A loss situation caused by
and through a toxic culture supporting unlawful dysfunction. Note that fault lies with the office as well
as the incumbent executive. You can’t just change the executive and expect that
all is now well. The bank must take
responsibility as an entity.
So, now our client has a
determination by the Royal Commission which says the bank is indeed responsible
for their ‘toxic culture’ causing dysfunction and client losses. The bank is no longer invulnerable with
pontificating executives self elevated above the law and past settlements can be
revisited especially where bullying or coercion through size dominance was a
factor in the signing.
Our client is now able to pursue
losses caused by the bank and will.
The bank must decide if it will
do the right thing and take responsibility for its actions or just continue on
with an air of invincibility throwing and wasting even more shareholders funds
at can’t win legal bills.
The story
continues.
