AFCA begins consultation on plans to accept legacy complaints

21 March 2019

Following the Hayne Royal Commission, both the Government and Opposition outlined their respective plans to expand the remit of AFCA (see our earlier article). Significantly, both major parties agree on empowering AFCA to consider legacy complaints dating back to 1 January 2008.

AFCA has now released a consultation paper and sought feedback on draft amendments to its Rules and Guidelines.

The consultation paper and draft amendments make it clear that:

  1. Legacy complaints involve conduct that occurred on or after 1 January 2008.
  2. Legacy complaints will only be accepted by AFCA for a 12 month period between 1 July 2019 and 30 June 2020.
  3. AFCA will not consider legacy complaints that have previously been determined by a court or tribunal.
  4. AFCA will not consider legacy complaints that have previously been considered and determined by a predecessor scheme, as long as the previous determination related to the merit of the complaint.
  5. Legacy complaints will be determined in accordance with the AFCA Rules in place as at 30 June 2019 (as opposed to any predecessor rules in place at the time of the relevant conduct).
  6. AFCA will usually not consider a legacy complaint that has previously been resolved between the complainant and the relevant financial firm.
  7. Legacy complaints do not include complaints relating solely to a superannuation death benefit or a right/obligation under the Privacy Act.

It is worth noting that complaints determined by predecessor schemes are excluded only insofar as the complaints were dealt with on their merits. That leaves the door open for complaints that were previously dismissed on jurisdictional or time limitation grounds to be resubmitted to AFCA.

AFCA has acknowledged the evidentiary issues inherent in dealing with historical matters. In an attempt to address such issues, AFCA has indicated that it will modify some of its usual processes such as allowing more time for a financial firm to respond to a complaint, conducting a greater number of conciliation conferences and referring complaints more directly to decision.

AFCA has also acknowledged that documents relevant to a legacy complaint may have already been lawfully destroyed. In circumstances where there is insufficient information/documentation to allow a complaint to be considered and resolved fairly, AFCA has indicated that the complaint may be dismissed. However, as you would expect, AFCA has made it clear that such a decision will not be taken lightly.

Submissions in response to the consultation paper are due by 12 April 2019 and AFCA has indicated that any changes to the proposed amendments will be released in June 2019. What impact the intervening Federal election will have on that timeframe remains to be seen, particularly given the more wide-ranging changes proposed by Labor (see earlier article). However, given the bipartisan determination to allow AFCA to consider legacy complaints, it is safe to assume that as of 1 July 2019, regardless of who is Prime Minister, the regime will be in place.

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