“The deferral will enable the financial services industry to focus their efforts on planning for the recovery and supporting their customers and their staff during this unprecedented time,” Treasurer Josh Frydenberg said in a statement.

Measures the government had indicated would be introduced to Parliament by 30 June 2020 will now be introduced in December, and related exposure draft legislation issued prior to the pandemic will also be extended by six months.

“This announcement today balances the need to implement the recommendations of the royal commission with the need to ensure our financial institutions are in a position to devote their resources to responding to the significant challenges posed by the coronavirus,” Mr Frydenberg said.

“The changes will also provide certainty and clarity to all stakeholders about the government’s commitment to implementing the recommendations arising out of the royal commission.”

The deferral, according to Herbert Smith Freehills partner Fiona Smedley, should be seen as a “welcome development” by the legal profession.

‘A welcome development’

In conversation with Lawyers Weekly, Ms Smedley said that the uncertainty of whether a delay would be forthcoming on the royal commission’s reforms and other reforms – and, how long the delay would be – has been “preoccupying legal minds and impacting the planning and resourcing for BAU and legal projects”. 

VIEW ALL

“The certainty that this announcement brings allows for more efficient and effective planning for important COVID-19-related priorities and initiatives as well as BAU and regulatory reform implementation,” she explained.

“It provides some valuable ‘thinking time’ to enable lawyers and their clients to implement the RC reforms thoughtfully and to better understand what is needed in order to meet community expectations.”

Fellow HSF partner Michael Vrisakis added that the Hayne royal commission had a major focus on satisfying community expectations and prioritising consumer interests, and the delay in implementing the commitments that flowed from the royal commission “should allow lawyers to focus on the immediate actions required to assist businesses and ultimately individuals who are suffering hardship”.

“These delays will satisfy current community expectations of businesses which are to focus exclusively on addressing hardships caused by the COVID-19 pandemic,” he said.

“Most legal firms will have a large number of COVID-19-related initiatives being worked on such as allowing institutions and employers more flexibility to cut legal red tape to facilitate better consumer outcomes.”

Impact upon lawyers in this space

The deferral will most certainly have an impact, not just on lawyers working in banking and finance and corporate advisory work, but more broadly as well.

It must be remembered, Law Council of Australia president Pauline Wright told Lawyers Weekly, that at present, the legal profession is dealing not just with the impact of a pandemic-induced recession on their own businesses, but also that of their clients’ businesses.

“That impact will be felt far longer than the duration of the current health crisis. Having to grapple with the implementation of the commitments to new and broader regulation and oversight of affected industries will be a considerable additional burden on the legal profession during this critical time,” she said. 

The implementation of the recommendations made by the commission certainly will not be an easing of the regulatory burden on in-house, corporate advisory and financial services lawyers, Ms Wright continued, and as such, “more time to consider, reflect and comment on reforms will be welcome at this point”.

“The emphasis should, as always, be not on more or less regulation, but on better regulation. An independent review of the impact of the changes in three years’ time, as suggested by government when announcing the commitments, is no substitute for doing the best possible job in drafting and implementing the changes in the first place,” she posited.

Mr Vrisakis added: “Most of the delayed measures are designed to protect consumers’ interests, but the needs of consumers during the COVID-19 crisis trump these other interests. The delays should give lawyers time and energy to devote to prioritising the interests and needs of consumers in a COVID-19 content.”

“As lawyers, we must ensure our clients don’t lose sight of the need to address the royal commission changes and not lose momentum for the period of the delay.” 

In-house lawyers are probably typically at least 20 per cent busier than before COVID-19, Mr Vrisakis added, “and without the postponement they would have been even more frenetic and the duality of focus would have been very tough”.

“Trying to focus on both the COVID-19 and royal commission agendas concurrently would inevitably have led to ‘COVID crackfall’, where important matters are not prioritised properly and therefore falling between the cracks,” he hypothesised.

How lawyers can and must respond

When asked how best lawyers working in this space can respond to the delays, in order to best serve their clients at this most unusual of junctures, Ms Wright said: “Lawyers can best serve the interests of their clients working in this space by keeping abreast of all proposed commitments, taking an active role in commenting and providing feedback on proposed changes so that clients will not be left unprepared when the commitments are implemented.”

Mr Vrisakis supported this, noting that lawyers can best respond by focusing on activities and the interests of clients that support them as they emerge from COVID-19.

“If we are able to help them emerge intact from the current crisis, they will be better equipped to meet the requirements of the royal commission. As a result of this delay we now also have more time to reflect on how the royal commission’s required changes could be fine-tuned to be better suited to a post-COVID world,” he advised.

“These changes we’re currently seeing – many of which will be enduring – could impact how the royal commission’s measures are formulated and implemented.”

Ms Smedley added that clients’ needs, priorities and activities “vary significantly”, and as a result, lawyers will need to keep talking to clients to understand where and how value can be added.

“We will need to have a range of services and solutions that we can dial up or down, depending on their needs and preferences. Where clients need to focus their resources and energy into COVID-related priorities and work in the short-term, we may be able to assist them by keeping up their momentum for royal commission reform implementation by keeping those reform workstreams moving,” she outlined.

“This delay provides an important window for legal thinking and planning in relation to implementing the royal commission reforms (and other reforms like the design and distribution reforms, which have also been delayed for six months) which we would hope will deliver tangible compliance and efficiency benefits to industry and consumers over the longer-term.”

Mr Vrisakis said: “It is imperative that the legal community, both law firms and in-house lawyers, press strongly for facilitative legal measures coming out of COVID-19 which, while potentially only intended to be temporary, could become a permanent fixture of the legal landscape.”

“Electronic signatures and execution is a prime example. It is only fitting that out of a generally debilitating phenomenon such productive measures are encouraged to assist businesses and consumers with productivity and efficiency into the future.”

To share how COVID-19 has impacted you and your business, please complete this anonymous, two-minute survey here. For more information, please contact This email address is being protected from spambots. You need JavaScript enabled to view it.