Financial services clients who miss out on being compensated via class actions should be allowed a second bite at the cherry via external dispute resolution (EDR), according to the Consumer Action Law Centre (CALC).
In a submission filed with the Joint Parliamentary Committee on Corporations and Financial Services review of litigation funding and the regulation of the class action industry, the CALC specifically recommended that any new legislation not extinguish the rights of people who had been party to class actions but not received any compensation.
In doing so, it specifically referenced licensed credit providers and financial services providers.
The CALC recommended that class action settlement distribution schemes remain open for longer to allow people who might benefit don’t miss out.
“Moreover, we recommend those responsible for contacting class members (particularly the wrongdoer who in many cases will have records which indicate how to contact class members) be required to take additional and proactive steps to identify and communicate effectively with class members. This should include liaising with consumer advocates, financial counsellors or appropriate community groups where appropriate to assist,” it said.
“We also encourage consideration of whether, particularly where the wrongdoer is a regulated firm (e.g. a licensed credit provider or financial services provider), that class members, whose rights have been extinguished but have not received compensation, continue to nevertheless be able to raise disputes with external dispute resolution schemes to seek compensation separately.”
The submission said this would help reduce the risk that vulnerable Australians might be left without compensation, and their other rights extinguished.