There was a lack of scrutiny placed on the big banks and Macquarie Equities Limited over their policy to waive statute of limitations for those participating in advice compensation schemes.
Such is the view of Maurice Blackburn principal, Josh Mennen, who said more pressure should be placed on the banks to freeze the court statute of limitations date for consumers.
There were three different legal courses of action in a finance advice case: breach of contract, negligence, and breach of statutory duties. If the contract breach occurred when the initial advice was given six years ago, the statute of limitations would have expired.
But in respect to negligence and statutory duties, the limitations date would run from the date that losses were suffered, which would mean some customers were still within time, including those who lost money in the fallout from the global financial crisis.
“But that time is fast running out and individuals who don’t know about this stuff and are in good faith participating in internal dispute resolution complaints with the bank or an adviser are unbeknownst to themselves, prejudicing themselves by participating in that process,” Mennen said.
Mennen said the Commonwealth Bank was the only bank that had frozen the court statute of limitations date.
“What the CBA have said is that if you participate in their scheme, then the limitation date is frozen as at July 2014. That remains the case while people remain in the scheme and six months thereafter.”
Mennen also had major concerns about Macquarie Equities about their record keeping procedures, and faced an uphill battle in obtaining copies of client files.
“We have to press our request and we get embroiled in quite silly disputes about the validity of authorities, and the provision of what should be a matter of copying a file and giving it to us,” he said.
“We get sick of that and we take that matter further to the financial ombudsman service or to court.”
