MAIN IMAGE: Simon Dippenaar – founder and partner of Simon Dippenaar & Associates
Kerry Dimmer
Four of SA’s major banks – Absa, Nedbank, Standard Bank and FirstRand – are facing an alleged R60-billion class action lawsuit, which alleges that the banks sold repossessed homes for significantly less than market value, thereby “prioritising profit recovery above the rights and dignity of homeowners,” say various sources across media platforms.
The banks, in turn, have countered, stating that they adhere to regulatory and ethical standards and that repossession is always a last resort. Generally, the banks offer distressed homeowners options to avoid a repossession, such as payment plans and loan restructuring
Advocate Douglas Shaw, from Banking Law Advisor, is leading the case, although he may not necessarily be the attorney of record for all class members. He told Business Report that all the main papers in the matter had been filed for 2000/2001 [the dates ], including the founding affidavit and the answering affidavits from the four banks, and his reply to all of them.
“The kind of papers that are being filed now are for additional people who have said they want to be part of this. And they filed supplementary affidavits, many of them confirming,” said Shaw. “There are people all over the country whom you’ve never met before who say, ‘Oh my goodness, is this happening?’ Let me tell you what happened to me. So the main papers are definitely filed. We’ve got dates for the heads of argument to be filed. So that’s still to happen in the next month or two, and then we’ll have the hearing in February next year.”
Attorney Simon Dippenaar, founder and partner of Simon Dippenaar & Associates, provides the background and detail.
What is the background to this case?
The 2017 class action involves a group of former homeowners who claim that South Africa’s major banks sold their repossessed homes for less than their actual market value – in some cases, as little as R1,000. Many of these homes were worth hundreds of thousands of rands or more. The total losses claimed by the plaintiffs are estimated to be around R60 billion.
How are class actions put together?
A small group of individuals with a shared grievance (called “representative plaintiffs”) start a case on behalf of a larger affected cohort. The law allows unrelated people to join together behind one legal action if the court agrees. This helps similarly affected people take collective action. It should also be noted that class actions are not governed by statute but rather grounded in common law and the Constitution.
How do the groups come together to choose legal representation?
Usually, a few affected individuals approach a legal professional. If the lawyer determines there is a widespread issue, they may initiate a class action. In this case, Advocate Douglas Shaw represents the entire group. Individual members of the class action do not need to engage discrete counsel.
Why has it taken eight years even to finalise the date?
Class actions can take a long time. Before the main case starts, the court must decide if the case can be treated as a joint action, called class certification. Eight years is a typical timeline due to certification, complexity, and the pre-trial process. The process of evidence gathering and the preliminary legal procedure also adds time. The case is expected to be heard in February 2026.
What still needs to happen before the case can be heard, and where will it be heard?
The court must grant class certification to allow the lawsuit to proceed. The case will likely be heard in the High Court, which handles major civil disputes in South Africa.
Are repossessed homes always sold just to recover costs, without regard to value? Has the law changed?
Before 2017, banks could sell repossessed homes at auction without setting a minimum price. This sometimes led to homes selling for very low amounts. Since 2017, courts are meant to consider setting a minimum price before the sale. However, the plaintiffs argue that banks still often sell homes for less than their real value and then pursue the previous owners for the remaining loan balance.
What is the expected compensation if the complainants win?
The class is seeking compensation of around R60 billion, reflecting the value lost when homes were sold for less than their market price. However, the court will decide the final amount and how it will be distributed.
What recourse is there for homeowners who are unhappy with the sale of repossessed property?
Homeowners can challenge a sale in court if they believe it was unfair or unlawful. However, this process can be difficult and costly, especially after the sale is complete. For this reason, claimants often collaborate to have their claims heard together in a class-action lawsuit.
