Changes made to the Australian Financial Complaints Authority (AFCA) following the Hayne Royal Commission are ‘flawed’, according to legal firm Creevey Russell Lawyers, as they leave larger businesses at risk.
The Royal Commission has extended the six-year limitation period for AFCA to commence litigation to 1 January, 2008 from 1 July, 2019.
But principal Dan Creevey said this extension was limited to credit facilities not exceeding $5 million so those businesses and farmers with facilities greater than $5 million would be worse off under the new rules as they would be unable to seek compensation.
He said he felt it was ‘inconsistent and inequitable’ by AFCA not to provide the same extension to these larger firms.
“Aggrieved businesses and farmers with facilities over $5 million are likely to have suffered greater losses. They may well now be in a worse financial position than parties with credit facilities under $5 million who are able to seek compensation through AFCA.”
“Additionally, these parties would need to fund their own actions so that there would be no cost to Government. We think this matter needs to be raised with politicians by aggrieved farmers and on their behalf by bodies such as the National Farmers Federation to ensure this unfair and unjust gap is closed.”
Creevey said he had already raised his concerns with the Department of Treasury and National Farmers Federation.