Mike Hosking: This legal action is David versus Goliath

Opinion

I am conflicted.

The Commerce Commission is going to appeal its loss over their case against a bunch of real estate firms on price fixing. In the original case, they took 13 national and regional firms to court. All but two signed a cheque to make it go away, and in that is the murky part of law.

When someone as big and powerful as the Commerce Commission comes at you, what do you do?

Well you either, if you believe you did nothing wrong, defend yourself, or you write a cheque and make it vanish. Eleven did the latter, to the tune of $20 million. Now, it's important to realise that doesn't always mean you were guilty of anything, it just means (and any lawyer will tell you this) that you weigh up the hassle, the time, the cost and stress of going to court versus handing some money over. After all, just because the Commerce Commission says you did something, doesn't mean they're right. But they have a massively unfair advantage from the start given who they are and who funds them.

Two of those 13 companies did decide to defend themselves, and they won. And having read part of the judgement, they seemed to win convincingly.

Which then raises a few very important questions.

Did the other 11 feel sick about writing $20 million dollars worth of go-away money? Did the Commerce Commission over-play their hand? And if they did, does that make them bullies who need to be pulled into line?

As good as a win might be, these were regional firms, who would have paid a tremendous price to show they didn't actually do anything wrong. So yes, it's a win, but at what price?

Now the Commerce Commission is appealing. To be fair, they're allowed to. That's how the legal system works. But in David and Goliath battles, the potential outcomes could not be more stark.

If the Commerce Commission loses the appeal, yes that's embarrassing, but they don't care. They're not personally paying the bills. They won't lose any sleep. But a couple of regionally based companies are in a completely different league. This must be a nightmare. And as much as you admire their pluck and desire to defend their corner, once again, I ask at what price?

You would have to hope if the two firms defend this successfully, there is a very large cheque coming their way. A very eloquent apology, and hopefully a good look into how the commission operates and whether the rules need an overhaul.