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By Terje Solsvik
OSLO, Feb 28 (Reuters) - Norwegian banking group DNB’s asset management arm overcharged fund investors and must pay compensation to about 180,000 customers, the country’s supreme court ruled on Friday in a landmark case for the industry.
DNB had denied claims in a class action by customers and the Norwegian Consumer Council that it had charged for actively managing funds when in reality the asset manager was tracking a stock market index - a much cheaper service to provide.
“This verdict has importance for how to interpret fund-management contracts between financial institutions and private investors,” the supreme court said in a statement accompanying the verdict.
“The management of the fund was not in accordance with the agreement made with customers,” it added.
The supreme court upheld the decision of a lower court in Norway’s biggest ever class action lawsuit.
The bank must pay 349 million Norwegian crowns ($37.3 million) in compensation, the court said, and legal fees of 4 million crowns.
The consumer council said the case has implications beyond the specific claim against DNB and could help to protect people’s savings and pensions from overcharging in the future.
“This is a full and complete victory for the council’s view,” the consumer council’s director general, Inger Lise Blyverket, told Reuters.
“This sets an important principle ... we would expect banks that have received similar criticism to also act on this verdict.”
The case concerned people who invested in three separate DNB funds between January 2010 and December 2014.
“We have to acknowledge that we’ve not done a good enough job, for which we apologise,” said DNB spokesman Even Westerveld.
Since the lawsuit was first brought in 2015, DNB has cut fees and won more fund customers, he added.
DNB has already made provisions in its accounts for the payout.
The bank’s shares were down 4% at 0953 GMT, underperforming a 2.5% drop in Norway’s benchmark index. ($1 = 9.3633 Norwegian crowns) (Additional reporting by Victoria Klesty Editing by Gwladys Fouche and David Goodman)