Late payment fees - The latest target for class actions. Are you at risk?

Earlier this month the Federal Court gave a boost to several class actions against banks when it ruled late fees charged by ANZ were penalties. It begs the question...which other industries that charge late fees will become targets for class actions?

In Andrews, the High Court changed significantly the accepted understanding of the penalty doctrine in Australia by ruling that a provision can be penal even if it is not triggered by a breach of contract (see Andrews v ANZ - Do all contracts need to be rethought?)

Since then, there has been much uncertainty about how the penalty doctrine operates. Some questions commonly asked are:

• Will courts be willing to strike down as penalties commercial bargains freely made between sophisticated commercial parties?