The Australian Securities and Investments Commission and Westpac have returned to court to try and resolve a A$35 million responsible lending settlement that was thrown out of court last year. ASIC has amended its claim.In Australian Securities and Investments Commission v Westpac Banking Corporation, the parties made a joint application to the Federal Court for declarations of contravention and penalty by consent.In a ruling last November, Justice Perram refused to approve a $35 million penalty, despite a statement of agreed facts  in which Westpac admitted it should not have automatically approved more than 10,000 home loans and that the loan applications should have been referred for manual assessment to determine whether the loans were unsuitable.Perram said the parties needed to point to a loss to which the proposed penalty related. His ruling said: "Were the contraventions technical and harmless because the loans were suitable? Or has significant harm been done to some or all of the borrowers by the making of unsuitable loans? How can the court be expected to assess the reasonableness of the proposed penalty if it be left in the dark about what the actual problem is?"According to David Jacobson, a commercial and financial lawyer at Bright Law, ASIC has amended its claim to focus on the general obligation to assess unsuitability under section 128 of the National Credit Act, rather than to examine whether particular loans were unsuitable.Jacobson said: "ASIC alleges that under Westpac's automated decision system the serviceability assessment included in the calculation of the required minimum monthly surplus a figure derived solely from a HEM benchmark, and did not have regard to the consumer declared living expenses."