Ann: Defence of Class Action, page-37

A lot of FUD cited in recent posts on this topic so I thought it best to recap. This includes the addition of my concerns based on what has been disclosed to date:
- 92% settled. As correctly called out, it is unknown how many merchants have chosen not to use Tyro's remediation process. I would also surmise that the volume of settlements have been with smaller merchants (ie. sole traders) rather than the larger corporates who will have a bigger bone to pick (bigger claim).
- Remediation program. I would doubt that Tyro's remediation program would be perceived as 'independent' and without bias with aggrieved merchants.
- Timing of class action. These things take time so it shouldn't be a surprise that it is filed post incident. given that the litigation funder is happy to spend the money rather than take the settlement being offered should be food for thought before it is dismissed outright. It may be a negotiating tactic but it implies they feel that they can get more than what is being offered and worth spending the money on. They are business people to so they must see a positive EV.
- Beach of contract. Tyro has never said they have not breached their terms and conditions. I don't know what is in their contract but I could image there is wriggle room for interpretation (hence legal action). For instance, Tyro have previously advertised "sub 1.5 second transaction speeds" which obviously was not met. This is clearly caveated on their current webpage but I wonder if they have accidently omitted the appropriate caveats in prior representations.
- Tyro set aside $9m at FY21 to cover remediation. Was this enough? Since Tyro has a duty of continuous disclosure, they must still feel that they have set aside sufficient reserves to cover any claims.
In summary, I believe the downside risk is minimal because even if Tyro doubled the settlement to the remaining holdouts it would cost less than $9m (accounting for settlements since June 21). Legal costs are a huge risk so I do feel that this is just a negotiating tactic to get Tyro to sweeten the offer. However, the risk isn't zero either.
Last thoughts. It is rather curious that shortly after Worldline (Tyro's exclusive terminal provider) announced the sale of its terminal business in October that Tyro's terminal incident occurred. I hope Worldline haven't taken their eye off quality in the interim. Worldline are also directly competing with Tyro now following their partnership with the ANZ