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The Commonwealth Bank’s compensation program is a step in the right direction for financial planning victims, but the devil will be in the detail a Slater and Gordon lawyer has warned.
Senior commercial litigation lawyer Ben Hardwick said on balance, the bank’s resolution program was a positive step, but it was still unknown how much financial compensation would be made available.
“Overall it is welcome move, but the unknown is whether compensation offers will actually reflect the type of compensation our clients might be able to achieve through a successful court action,” Mr Hardwick said.
“There are still questions that need to be answered, but it is good to see that the scheme has several important safeguards in place for participants.
“Firstly, the scheme still preserves the rights of participants to pursue legal action through the courts or the Financial Ombudsman Service if they are dissatisfied with the offer they receive under the scheme.
“Secondly, the bank is still bound to honour the offer and will be bound by any determination made by an independent panel to pay compensation. The participant won’t be bound by that outcome.
“Thirdly, while the detail has not yet been provided, it makes clear that the Commonwealth Bank will provide funding to participants to receive independent advice.”
Mr Hardwick said it was also critical that the bank disclose how long the process will take so people can determine what their best avenue of legal redress is.
“In terms of the process, it is vital that our clients have confidence in the independence of those people who are appointed to assess their claims,” he said.
“We would like to know who will appoint the independent panel, independent expert and the independent customer advocate. Will ASIC have input into these appointments? Will victim’s lawyers have input into these appointments?
“We would also like to know if full documentation will be made available.
“Litigation is always the last resort, if our clients can resolve their claims in a timely and cost effective way without resort to litigation, then that is clearly the preferred path.
“The program gives participants an opportunity to hear what the bank has to say and see the colour of the bank’s money before making a decision on litigation.
“If the offers are fair and made in a timely manner, then you’d expect most people should be able to resolve their claims through this process.”