AFCA Legacy Complaints – (Some) guidance released on Compensation Scheme of Last Resort

The Commonwealth Treasury released a roadmap this week for its intended implementation of the recommendations made by the Financial Services Royal Commission.

The roadmap reveals that:

• The Government intends for a compensation scheme of last resort to be established.
• The scheme will apply to determinations made by AFCA after 1 November 2018.
• It is intended for the scheme to be established by no later than December 2020.
• The Government intends to give strengthened powers to enforce remediation by giving additional powers to ASIC and AFCA.

If the scheme is implemented in December 2020, this will be after the deadline to make an AFCA Legacy Complaint (i.e. a claim relating to financial misconduct dating back to 1 January 2008) has passed.

The deadline to make an AFCA Legacy Complaint is 30 June 2020.

However, compensation should still be available, as any determination would necessarily be made after 1 November 2018. This helpfully confirms that is it is the date of AFCA’s determination, not the time that the conduct occurred, that will dictate whether access to the scheme of last resort is available.

The Government intends to consult on the legislation to implement the scheme and introduce it by the end of 2020. As we have previously noted, the scheme will be industry funded, so there are likely to be more hurdles put in place during this process to access compensation before the scheme becomes operative.

Notwithstanding the delay in establishing a compensation scheme, we recommend getting in early with any complaint.

Click here for a link to the Treasury’s Implementation Roadmap.

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