Legal Assistance To Victims Of Financial Services Wrongdoing Needs Boost
Collectively, our services assist thousands of Australians subjected to poor bank and insurer behaviour every year. However we are only ever able to serve a fraction of the demand. Free and independent legal assistance for people experiencing financial hardship, stress and other difficulties has been crucial to expose and subsequently address the wrongdoing found during the Banking Royal Commission.
Commissioner Hayne in his Final Report of the Banking Royal Commission made it clear that:
the desirability of predictable and stable funding for the legal assistance sector and financial counselling services is clear and how this may best be delivered is worthy of careful consideration.[i]
In its response the Government:
agree[d] with the suggestion by Commissioner Hayne that there is a need for predictable and stable funding for the legal assistance sector and for counselling services.[ii]
While funding for financial counselling services was subsequently reviewed, and is likely to be bolstered (if the Government accepts the recommendations from the review), stable funding for the legal assistance sector has not been considered at all. The Sylvan report into financial counselling funding has recommended the government consider the impact on the provision of legal assistance that will flow from significantly increased provision of financial counselling[iii], but this too has yet to be acted on by Government.
Commissioner Hayne was clear in his assessment of the value that legal assistance has to consumers in financial stress:
Aggrieved customers can try to negotiate directly with an entity, they can commence legal proceedings, or they can go to alternative dispute resolution. In each case, the existing asymmetry means that legal assistance is often of critical importance to the customer’s position….The legal assistance sector and financial counselling bodies are also recognised by ASIC as playing an important broader role in the financial services sector, for example by bringing issues to the attention of the regulator or providing a balancing consumer voice in policy development.[iv]
Consumer groups call on the Government to call for a national review of legal assistance funding for financial services consumers to establish predictable and stable funding to the financial services legal assistance sector.
Financial Rights Legal Centre
Consumer Action Law Centre
Public Interest Advocacy Centre
Financial Counselling Australia
Consumer Credit Legal Service (WA) Inc
[i] Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Final Report, February 2019, page 489
[ii] Government response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, February 2019, page 39
[iii] Louise Sylvan, The Countervailing Power: Review of the coordination and funding for financial counselling services across Australia, March 2019. Page v
[iv] Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Final Report, February 2019, page 486, available at: https://www.royalcommission.gov.au/sites/default/files/2019-02/fsrc-volume-1-final-report.pdf