Financial disputes’ tribunal to safeguard farmers from banks

Speaking to Fairfax Agricultural Media, Senator Williams said a joint parliamentary committee inquiry into impaired loans - that handed down a report in May this year - had suggested setting up the tribunal.

Amid escalating calls to hold a Royal Commission into banking practices, Senator Williams is pushing for the tribunal’s establishment along with other committee members, including outspoken Queensland LNP MP Warren Entsch.

“I’ve always backed a Royal Commission into white collar crime and have done for seven years,” Senator Williams said.

“The problem with a Royal Commission is that it will take time and will probably tell us what we already know.

“What I’d like to see is a financial services disputes tribunal established and of course it would have commercial judges.”

Senator Williams said the tribunal’s core aim would be to hear disputes fairly, without the entry barrier of a costly legal challenge.

“In this world today, if you want to seek justice, if you feel you’ve been badly done by, you must have money,” he said.

“You can’t go into a court room without money to pay your legal team; otherwise it’s simply David up against the Goliath of the banks and the financial institutions.”

But Senator Williams said there would be no David and Goliath legal battles if the proposed tribunal model was installed, because it would provide “an equal playing field”.

He said the tribunal would eliminate cases where aggrieved farmers or others appeared on their own to face the bank’s barristers, solicitors and QC’s or their “big Goliath legal team”.

“It’d be a case where you can go in and have your grievances heard without having to pay a fortune for a legal team and have the tribunal listen with an open mind,” he said.

Senator Williams wants the tribunal established to handle bank loans, financial investments, life insurance matters, financial planning and other core areas, including the treatment of whistle-blowers.

He said it could also assess issues with unfair farm foreclosures and the application of hefty penalty rates, despite impacts of natural disasters on production income.

“If a farm is on say 7 per cent interest and then suddenly if harvest is delayed through rain or whatever and the farmer misses a payment and the bank whacks him with a 20pc penalty rate, that sort of dispute could be heard,” he said.

“Or it could also hear disputes where the farm is sold up and the farmer feels as though the bank has breached the loan contract agreement by selling-up at fire-sale prices.

“There will be huge, wide terms of reference where you can take your issues there and have it heard, on a level playing field.”

Senator Williams said he and Mr Entsch and Queensland LNP MP Bert van Manen were pushing the concept along with committee Chair and SA Liberal Senator David Fawcett.

He welcomed early words of support from Prime Minister Malcolm Turnbull, Treasurer Scott Morrison and Nationals leader and Agriculture and Water Resources Minister Barnaby Joyce.

Senator Williams said the tribunal advocates wanted a meeting with Mr Turnbull and the other senior cabinet member to discuss what type of structure could be put out into the public domain, to advance debate and discussions.

He said personally, he wanted the tribunal empowered to initially assess claims then have that argument responded to and ruled on whether mediation was needed “to sort the mess out”.

“If that does not work you return to the tribunal and ask them for a ruling,” he said.

“When a tribunal rules one way or another that ruling is binding, full stop, it must be obeyed.

“People who think they’ve been really screwed over can actually go to the tribunal without money and get justice served one way or the other.

“I think this would also save the banks hundreds of millions of dollars because they must spend a fortune each year on legal fees.”

Senator Williams said currently the Financial Ombudsman Service (FOS) won’t handle disputes over $500,000 and excluded farms that had, for example, a million dollar debt.

He said the FOS also did not issue more than $309,000 in compensation and won’t handle trustees of superannuation, which defeated Labor’s argument that the tribunal proposal was redundant.

“The FOS is irrelevant to many businesses in Australia,” he said.

“We’d have to have a statute of limitations so you can’t say, ‘look 28 years ago they charged me $10 extra on my credit card’.

“It’s a matter of having the discussion now and the consultation for establishing a tribunal on the whole goal that people can seek justice when they do not have any more money, because at the moment they can’t.”

Senator Williams said the expertise of the tribunal’s judges on commercial law matters would allow it to filter any frivolous or vexatious claims and initially rule on whether they required mediation, should be advanced, or thrown out.

Independent Queensland MP Bob Katter said the government’s proposal of another banking tribunal instead of a Royal Commission into the industry was “suspicious”.

“It’s not so much corrupt practices by banks, it is a corrupted system and I don’t believe it can be weeded-out without a Royal Commission

Labor leader Bill Shorten has said anything short of a Royal Commission was “another cop-out” and a tribunal “simply won't cut it”.

“We need something that's good for consumers and will improve the system, not another soft touch for the banks," he said.

Mr Joyce has said he’s open to hearing from Coalition MPs about creating the tribunal – but doesn’t want it to duplicate the existing oversight work of the Australian Securities and Investments Commission.