Banking Royal Commission
The Banking Royal Commission highlighted the knowledge and power asymmetry between banks and borrowers and the critical importance of borrowers having access to legal services if they are to achieve satisfactory outcomes in disputes with banks.
Commissioner Hayne found that the “the legal assistance sector and financial counselling services frequently struggle to meet demand, which is increasing” and that “the desirability of predictable and stable funding for the legal assistance sector and financial counselling services is clear and how this may best be delivered is worthy of careful consideration”.
These findings reinforce the messages I have heard from stakeholders, including Consumer Credit Law Centre South Australia and Community Justice Service SA.
In October 2018, I called for increasing funding to community law centres, so that sole traders, small businesses, farmers and individuals have access to the legal support they need in financial services disputes.
In its response to the Banking Royal Commission, the Government undertook to review the funding arrangements for financial counselling services, but said nothing about funding for the legal assistance sector. I have written to the Treasurer asking why funding for the legal assistance sector was omitted from the review and imploring him to revisit the review’s terms of reference.
In February 2019, the ALP announced it plans boost funding to the financial rights legal assistance sector by $30 million per year. That would be a good start, but given the scale of the misconduct revealed by the Royal Commission, more funding is needed.
Productivity Commission looked closely at this issue in its Access to Justice Arrangements report (2014) and recommended the Commonwealth allocate an additional $200 million per year to address the void of community civil law support.
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