Until June 2020, AFCA can consider certain Legacy Complaints dating back to 1 January 2008 when administering the AFCA external dispute resolution scheme. This may pose evidentiary challenges both in terms of retention of relevant documents and staff recollection of events which occurred over a decade ago. The expansion of AFCA’s jurisdiction also means that AFCA can consider complaints which may otherwise be barred by statutory limitation periods if brought before the courts. Read here to learn more about how the AFCA Rules will apply to Legacy Complaints.
Subject to certain conditions, from 1 July 2019 to 30 June 2020 the Australian Financial Complaints Authority (AFCA) can now consider complaints arising from conduct dating back to 1 January 2008. This follows the commencement of the AFCA Scheme (Additional Condition) Amendment Authorisation 2019 (Cth).
AFCA’s Rules and Operational Guidelines have been amended to reflect this expansion of its jurisdiction.
The AFCA Rules define a Legacy Complaint to mean ‘an expression of dissatisfaction, against a current Compulsory Member of AFCA, about loss arising from conduct by a Financial Firm that occurred on or after 1 January 2008‘ which would be considered by AFCA but for the ordinary time limits set out in the AFCA Rules (see rule B.4).
In order for AFCA to consider a Legacy Complaint, the AFCA Rules require the following:
Of course, this is in addition to the requirement that the complainant must be eligible to submit a complaint.
The AFCA Rules will apply to the Legacy Complaints, as opposed to the rules which governed any predecessor scheme.
Importantly, this means that AFCA may award remedies under the Rules which were not necessarily available under the predecessor schemes.
The onus to provide information/documents in a Legacy Complaint is the same as other complaints, that is:
The Operational Guidelines make clear that AFCA will generally not draw an adverse inference where a party is unable to produce documents or provide information that it is no longer required to hold.
Interestingly where documentary evidence is not available to support a claim, the Operational Guidelines indicate that:
AFCA may exclude a Legacy Complaint on this basis. However, AFCA will not exclude such complaints lightly. This will generally only occur if AFCA considers that it is unable to resolve the complaint fairly in accordance with AFCA’s obligations.
The expansion of AFCA’s jurisdiction to consider Legacy Complaints dating as far back as 2008 seemed inevitable following the Hayne Royal Commission. However, the expansion presents evidentiary challenges for Financial Firms both in terms of retention of relevant documents and employee recollection of relevant events which occurred over a decade ago. The expansion sees AFCA being able to consider complaints which may be barred by statutory limitation periods if brought before a Court.
In addition to understanding the key changes, Financial Firms should consider their information/document retention practices and procedures in order to ensure that they retain, and have available to them, all requisite documentation available to respond to Legacy Complaints.
Kimberley Arden, Partner
Tahlia O’Connor, Associate