The initial hearing of the royal commission into banking, superannuation and financial services was held in Melbourne yesterday, and commissioner Kenneth Hayne QC had a stark warning for institutions.
All four of the major banks have confirmed they will waive non-disclosure agreements that could stop people from testifying to the royal commission.
But in comments during the hearing, Mr Hayne confirmed that even if they were not waived, confidentiality agreements (or 'non-disparagement' clauses) would not be a "reasonable excuse" to avoid a question in a hearing of the royal commission.
"It seems to me to follow that answering a notice or a summons would not amount to a breach of any confidentiality or non-disparagement clause," Mr Hayne said.
Furthermore, under s6M of the Royal Commission Act 1902, no injury can be done to a person who gives evidence or produces a document under a notice or summons, he said.
"Suing the person would almost certainly fall within that prohibition," Mr Hayne said.
"An institution which sought any form of legal redress against a member of the public or a whistle blower seeking to volunteer information to the commission in anticipation of the possible exercise of the the commission's coercive powers would be taking a step which would very likely provoke two immediate consequences."
First, the commission would be "very likely indeed" to exercise its compulsory powers to secure the information in question, Mr Hayne said.
"Second, the very fact that an institution sought to prohibit or prevent the disclosure of the information would excite the closest attention not only to the lawfulness of that conduct by the institution, but also what were the institution's motives for seeking to prevent the commission from having that information," he said.
Public submissions to the royal commission via the online form on its website are "very important to our work", he said.
Indeed, the royal commission will be closely comparing the industry participant submissions about misconduct with public submissions, Mr Hayne said.
"One of the consequences of our adopting this sequence of action – of first asking industry participants to identity misconduct and conduct falling short of community standards and expectations and then asking the public to make submissions – is that it may help us to identify whether there is a gap between what industry participants now say is relevant conduct and what member of the public see as being relevant," he said.
The royal commission made initial requests for information of industry participants on 15 December 2017, which were delivered on 29 January.
Further requests limited to events of misconduct identified over the past five years were made on 2 February, with answers sought by 13 February.
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