Legacy Financial Services Claims
In its response to the Hayne Royal Commission the Government has stated that it will require AFCA to consider disputes dating back to 1 January 2008. Without getting into technicalities it is not entirely clear to me what dating back to 1 January 2008 means but I assume that it means that anyone who suffered a loss since 1 January 2008 can make a claim to AFCA.
This development is important for at least 4 reasons.
First – many people who suffered loss but who failed to make a claim for various reasons can now make a claim even though the claim would otherwise be well out of time. It also worth noting that 1 January 2008 was before the GFC – this event being a major generator of claims.
Second – there is particular group of claimants who had good claims but they were too large for the FOS’ jurisdiction and for practical reasons the claimant did not want to pursue them in a Court. These people can now pursue compensation.
Third – the claims will be dealt with under AFCA’s current jurisdiction. AFCA can award compensation that is much higher than the limit that applied under the FOS. In some cases (such as primary producer lending disputes) it has a very high compensation limit (up to $2M) and in other cases its jurisdiction is unlimited (disputes about guarantees that were secured against a family home).
Fourth – AFCA, because it is a cost free jurisdiction, is a very attractive venue to litigate disputes – this factor when combined with the other factors must mean that a lot more complaints will be received by AFCA.
Disputes about guarantees secured against the family home must be going to be a particular issue in the future. The effect of what is being proposed by the Government is that potentially every guarantee that has been enforced against a family home since 1 January 2008 could be the subject of a complaint to AFCA.