On 12 February 2018, the first public hearing of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was held. Directed by previous High Court judge Kenneth Hayne, the aim of the enquiry is to look directly at the actions of banks, insurance companies and superannuation providers. It is focused on alleged financial misconduct and poor financial advice including lending practises and regulatory laws in the financial services sector.
Royal Commission seeks Volunteer Submissions
Since January, the Royal Commission has been seeking volunteer submissions from the public. Volunteers are being encouraged to upload their submissions online, prescribing them to describe the misconduct of the relevant financial body, when the conduct occurred, what steps they had taken to complain about the conduct and what the outcome of their complaint was.
There has currently been 385 voluntary, public submissions which are divided up to be 49% banking, 18% superannuation, 6% general insurance market, 6% life insurance and total permanent disability insurance market.
Mandatory Submissions Protected – Kinda?
The Royal Commission will summon witnesses to give direct evidence on financial misconduct they have been exposed or involved in. Under the Royal Commissions Act 1902 (Cth), s 6DD gives evidential immunity as a way of protection for witnesses who are compelled to disclose information. However evidential immunity doesn’t protect these witnesses against regulators – who can use information derived from these statements against them in subsequent proceedings.
But Volunteers Beware
Individuals wishing to make submissions to the Royal Commission should consider that voluntary submissions have no evidential immunity meaning evidence can be used in subsequent legal proceedings in any court across Australia. Submissions may contain information that is confidential or protected by legal privilege, which means these submissions may have impliedly waived or breached other agreements.
Also volunteers should be aware that the Royal Commission can still refer suspected misconduct or contravention to regulators such as the ASIC or ATO at any time. Those within the financial service sector wanting to make a statement must be cautious to whether this could incriminate themselves or others.
Whilst the Big 4 banks have waived rights to sue staff members who voluntary give evidence, not every financial institution has matched this commitment. Therefore, despite Kenneth Hayne explaining a provision of the Act to the public, which provides that employers may not dismiss or prejudice employees for giving summoned evidence, it must be acknowledged that there lacks general law protections for employees or clients who voluntarily disclose information.
Conclusion
There has been requests for the Commissioner to authorise waiving past confidentiality agreements for everyone to promote an honest enquiry. Despite the initial promise by the banks, this waiver does not extend beyond the Big 4 to the entire finance sector – meaning there may be individuals who will stay silent despite encouragement.
Ultimately, voluntary submissions from the public is a key way the Royal Banking Commission has access to as much information as possible and should still be encouraged. However, those wishing to volunteer information to the Royal Commission should be cautious of the risks or consequences it may present for future action against them.
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