The royal commission into financial services is unlikely to involve an extended parade of victims publicly recounting their bad experiences, leading experts believe.
Given the wide scope and short timeframe of the inquiry to be led by former High Court judge Kenneth Hayne, key issues he will face is what types of misconduct to focus on, and how many victims are given the opportunity to tell their stories.
Professor of law at UNSW, Dimity Kingsford Smith, said Kenneth Hayne's track record suggested he had a traditional or "black letter" approach to the law, and an interest in law and economics.
Unlike the royal commission into institutional responses to child sexual abuse, the Hayne royal commission was unlikely to involve very large numbers of people telling their story, she said.
"You will probably see the commission run a bit like a trial," Professor Kingsford Smith said.
"I think he will interpret the terms of reference strategically and for expedition to get through the wide term of reference in the short reporting time."
"I think that the banks will be encouraged that the government has chosen a commissioner who is not averse to the idea of strict legalism."
Professor Kingsford Smith was until recently National Australia Bank's independent customer advocate for its wealth advice complaints process.
Professor of law at the University of Melbourne, Ian Ramsay, said the royal commission would likely focus on systemic problems that had affected large numbers of people, or led to significant losses.
While the inquiry needed to hear from victims, he said it would also need to investigate how banks had responded to wrongdoing, which could limit how many victim stories were told.
"It's still important to hear from them, but to the extent to which the misconduct is already on the record, there's also an important issue for the commission regarding whether the response to the misconduct has been adequate," Professor Ramsay said.
The royal commission into child abuse ran for several years after hearings began in 2013, but the government has requested the Hayne royal commission report back by early 2019.
With an interim report due in September next year, there is likely to be a period of less than six months to conduct public hearings.
John Berrill, principal at Berrill & Watson, said he had already been approached by victims wanting to appear before the commission.
The draft terms of reference, released last week, suggested the commission would have considerable discretion in what they decided to pursue, and it would be influenced by the tight timeframe and its $75 million budget, he said.
"It's as broad or as narrow as the royal commission wants it to be," Mr Berrill said.
Under the draft terms of reference, the commission must look into misconduct by financial services entities, behaviour that falls short of community expectations, and whether superannuation money is being used in the best interests of members.
This could include looking at areas where there have been well-publicised problems, including bank lending standards, financial advice and life insurance.
Professor Kingsford Smith said that in her opinion, the Hayne royal commission should avoid duplicating the work already done by the Australian Securities and Investments Commission in the many reports they have issued over the last 5 years or so in supervising legal compliance by financial providers in their consumer-facing processes and conduct.
For example, ASIC has conducted inquires into areas including responsible lending in interest-only loans and financial advising. In many of these cases, banks have already been forced to change their internal processes.
"What I think is more important and likely to be more enduring, is to do what APRA is doing with the CBA – to look into the governance, management, accountability and culture of financial services providers, at the middle to upper management below board level," Professor Kingsford Smith said.
This would involve probing how institutions decide what sort of products will be sold to which customers, whether products give the customers they are directed to fair value, and how they are distributed.This article was first published by http://www.smh.com.au/Author: Clancy Yeates