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Sydney-based commercial firm Vobis Lawyers is investigating a potential class action against specialist legal finance provider JustFund over interest calculation practices.
Vobis Lawyers, a Sydney-based boutique that practices across multiple areas, from dispute resolution and litigation to personal attorney services, is currently investigating potential claims that could be brought against JustFund, a legal financing platform for family law and estate matters.
The firm is examining JustFund’s method of calculating interest charged to borrowers prior to 2026. It believes, it told Lawyers Weekly, that JustFund “uses the interest rate that was published on their website (9.85 per cent) and calculates its interest charges on the highest drawn amount of a borrower’s facility over the whole period of the loan – not on [the] amount actually drawn from when it is drawn down by the borrower”.
That is, Vobis is of the view that by allegedly charging 9.85 per cent interest on the highest loan balance for the loan’s entirety, instead of the per annum advertised and promoted rate of 9.85 per cent, the funder’s interest calculation practices resulted “in a much higher cost to you”, the firm wrote in a recent newspaper ad published by The Australian Financial Review.
In conversation with Lawyers Weekly, Vobis founding partner Francis Farmakidis said that such alleged practices are significant, “because they may mislead the public and potential borrowers into thinking that the applicable interest rate in relation to a loan is the advertised rate on JustFund’s website. This enables borrowers to compare rates between lenders”.
“However, where the terms of a loan agreement interfere with the apparent loan rate to such a degree that the advertised rate becomes misleading, this needs to be looked into,” he said.
The firm, Farmakidis said, is advocating for fair lending practices, including “charging borrowers what they are told they will be charged and not relying on a complex construction of words in a loan contract to change the way in which interest is calculated”.
“Simply put, we are asking lenders to do what they say they are going to do, which is a basic measure of fairness,” he said.
Farmakidis went on to note that, in a high-interest-rate environment, where mortgages and conventional loan products are more difficult to obtain, litigation funders and secondary lenders “become a larger part of the lending marketplace”.
“This is also important in our area of practice, specifically because family law clients may rely on litigation lenders to obtain access to justice for them. They are very often unable to obtain quality legal advice because they simply do not have the funds to access it,” he said.
“If litigation lenders engage in unfair lending practices when clients are seeking to access the justice system, they are taking advantage of people who are trying to exercise their legal rights.”
“Word salads are fairly innocuous, when they have no legal impact,” Farmakidis said.
“But, where they are deliberately designed to confuse the borrower and the borrower’s legal representatives, to the point where a seemingly simple construction of words has an effect diametrically opposed to that which would ordinarily be anticipated in the marketplace, then this needs to be investigated.”
Vobis is encouraging anyone who had a loan with JustFund prior to this year, where interest on that loan may have been charged at more than 9.85 per cent per annum, to register for the potential class action.
