Lawyers warn against rushing new bank laws

The Law Council of Australia has warned rushed banking legislation would fail to deliver justice for thousands of victims.

Law Council president Arthur Moses SC says implementing the royal commission’s 76 recommendations will take careful consideration and any new laws should be referred first to the Australian Law Reform Commission.

The Law Council of Australia has warned against Labor’s call to ­extend parliament in response to the banking royal commission, claiming rushed legislation would fail to deliver justice for thousands of victims who can’t afford to ­legally pursue banks that have ripped them off.

Instead it has called for legal aid to be extended immediately to consumers who had meritorious claims against the banks but were unable to launch often costly legal action in a system that it claimed was in “crisis”.

The Law Council’s official response to the royal commission warned against extending parliament to legislate recommended reforms, claiming rushed laws could have unintended consequences.

It also called for a further $310 million for federal legal ­assistance funding with many consumers unable to access legal representation.

Law Council president Arthur Moses SC told The Australian that implementing the royal commission’s 76 recommendations would take careful consideration and any new laws should be referred first to the Australian Law Reform Commission.

Legislators should also consult the financial sector, regulators, members of the legal profession who will advise clients on these laws and the community, he said.

“Eight additional sitting days in March is not sufficient time for parliament to comprehensively consider the legislative reform recommended by the royal commission,” Mr Moses said.

“Parliament must hasten slowly and should refer these matters today to the Australian Law ­Reform Commission to thoroughly investigate and develop legislative proposals, so all Australians can have faith that the ­solutions being put forward are just, fair and will make a real difference.

“Confusing, convoluted and inaccessible laws have already let down the Australian people. We must take the time to get this right.

“Australians were rightly shocked by the misconduct exposed by the royal commission and the stories of profit being put before people, and in some instances the rule of law.

“We must ensure a real opportunity to set this right through meaningful reform is not lost in the race to the election.

“We note calls this week for the federal parliament to rush legislation through before the election. New laws are pointless if people cannot afford to access justice and pursue a meritorious claim against the banks.

“If parliament is serious about reform, its immediate priorities must be to increase legal assistance and then refer the royal commission’s findings to the Aust­ralian Law Reform Commission to develop considered proposals to change our laws that are the subject of real consultation.

“This reform must be carefully considered and worked through to ensure it does not miss the target and gets the balance right.

“If the parliament is serious about protecting consumers and wants to rush to do something meaningful that will have an immediate impact, they should immediately invest in an annual increase of $310m in commonwealth legal assistance funding.”

The Nationals have rejected the idea of extending legal aid to consumers taking on banks. The Coalition partner claims the Australian Financial Complaints Authority was established for that purpose and ensured that people weren’t tied up in protracted legal battles with banks.

“Many of the cases before the royal commission were well known. The sad fact was that many Australians could not ­afford to pursue the banks ­because of a lack of legal aid,” Mr Moses said. “This meant people lost their homes and bad conduct went undetected.”

Only 8 per cent of Australians meet the legal aid means test.