Matthew Bransgrove is an expert on the External Dispute Resolution regime which applies to Australian lenders. He was commissioned by lenders with combined loan books of $5.3 billion, to draft a petition addressed to the Parliamentary Joint Committee on Corporations entitled “Why the External Dispute Resolution regime is hurting capital availability in Australia”. The 2013 Lexis Nexis textbook The Essential Guide to Mortgage Law in Australia contains a chapter on External Dispute Resolution written by Mr Bransgrove.

Every bank and every lender involved in consumer lending must hold an AFSL. Every holder of an AFSL must be a member of an External Dispute Resolution Scheme (“EDR”). There are two External Dispute Resolution schemes: the Financial Ombudsman Scheme (“FOS”) and the Credit Ombudsman Service Limited (“COSL”).

In April 2011 ASIC brought out Regulatory Guide 139, entitled Approval and oversight of external dispute resolution schemes. In this document ASIC set out certain mandatory requirements for inclusion in the terms of reference of all EDR schemes. RG 139 introduces a revolutionary principle which amounts to a de facto mortgage moratorium. Paragraph 72 states:

The Terms of Reference of an EDR scheme must require that legal proceedings by scheme members should not be commenced where a complaint or dispute has been lodged with the scheme.

Paragraph 77 goes on to state:

Where legal proceedings that relate to debt recovery proceedings have already commenced and a complainant or disputant takes their complaint or dispute to an EDR scheme, the Terms of Reference must require the member not to pursue the legal proceedings beyond the minimum necessary to preserve its legal rights.

Bransgroves Lawyers can assist in resolving these complaints quickly and efficiently utilising our in-depth knowledge of EDR Terms of Reference and jurisdictional issues.