The Federal Court has forced the Financial Industry Complaints Service (FICS) to change the way it hands out compensation, opening the door to higher claims but shutting out many Westpoint investors.
FICS said its lawyers have interpreted comments by Federal Court judge Justice Ray Finkelstein which means it now has to accept higher levels of claims above the old limit of $100,000.
Where there are separate instances of advice or transactions occurring during an ongoing relationship with a financial services provider, the FICS monetary limit of $100,000 will apply separately to each claim rather than the previous arrangement of the complaint as a whole.
This change may result in some complaints being accepted which would previously have been excluded.
Each case will need to assessed individually, FICS chief executive Alison Maynard said.
“We are going to have problems sorting that out [but] thankfully people usually only complain about one thing,” she said.
FICS also has to reject joint claims, which usually occur when husband and wife investors seek compensation together for amounts above the monetary limit.
This will mostly affect people who invested in the collapsed Westpoint property group who are seeking compensation for receiving bad financial advice.
Around 27 of these joint claims before FICS have to be rejected, as well as any future joint claims.
“For the most part, they’ll be told we won’t be able to deal with them,” Maynard said.
“We have no choice about doing this.
“Warts and all, we have to apply what the federal court says the law is.”
Last year Justice Finkelstein rejected an argument by now defunct dealer group Deakin that FICS did not have the jurisdiction to deal with Westpoint complaints.
A separate review of raising the FICS monetary limits is ongoing.
