Reforms to extend AFCA’s jurisdiction are “inequitable” and “inconsistent”, according to a Queensland-based law firm.
Creevey Russell Lawyers has called for revisions to the banking royal commission’s recommendation to extend the normal six-year limitation period to commence litigation by permitting the Australian Financial Complaints Authority (AFCA) to deal with matters arising after 1 January 2008.
Creevey Russell principal Dan Creevey urged Treasury to broaden the scope of the reforms, which are currently limited to matters involving credit facilities of less than $5 million.
Mr Creevey also called on policymakers to extend the reforms to businesses and farmers with facilities greater than $5 million, which he said are “worse off” under existing arrangements.
“We have raised this matter with the Department of Treasury which is dealing with this area of post-Hayne reforms and they have advised they are considering whether and how they will deal with this gap,” Mr Creevey said.
“Our view is that, as a matter of common sense, it would be inconsistent to not implement an extension of the normal six-year limitation period similar to the extensions of time in relation to credit facilities under $5 million under the AFCA.
“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.”
Mr Creevey claimed that it would be “inconsistent” and “inequitable” not to provide a similar extension to businesses and farmers.
“These parties would need to fund their own actions so that there would be no cost to government,” he said.
“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 (NFF) to ensure this unfair and unjust gap is closed.
“We have notified the NFF of this issue of concern.”
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