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Monday, 22 June 2009
Page: 6732


Mr McCLELLAND (Attorney-General) (5:19 PM) —by leave—I move:

That this bill be now read a second time.

Introduction

Put simply, without an accessible system of justice, the public’s confidence in the rule of law is compromised. If justice is accessible only to the very wealthy, it loses relevance for the vast bulk of Australians.

However, the great English writer Charles Dickens put it in more eloquent terms. In his savage tale of litigation in the English Court of Chancery he wrote of that 19th century court that it gave ‘to monied might the means abundantly of wearying out the right’.  Australia cannot afford a legal system where the cure of litigation is worse than the affliction of the dispute. Those citizens who have justice on their side, that is ‘right’ as referred to by Dickens, should be entitled to relief against even the better off. We must ensure there exists an effective and accessible system of justice where people are able to resolve their disputes quickly, efficiently and fairly.

It is true that the modern international commerce environment has given rise to difficult matters of law and fact which can lead to complex litigation. However, a number of recent high profile cases have highlighted there is a need to ensure that the use of the public resources of the courts is proportionate to the issues in dispute.

In the case of C7, Justice Sackville went into some detail in his final judgment case to demonstrate the amount of public and private resources that had been expended on the resolution of this dispute. The trial in that case lasted for 120 hearing days, some 85,653 documents were provided through the discovery process, experts’ reports ran to 2,041 pages, transcript to 9,530 pages, and submissions and pleadings to around 15,000 pages. Justice Sackville commented:

It is difficult to understand how the costs incurred by the parties can be said to be proportionate to what is truly at stake, measured in financial terms. In my view, the expenditure of $200 million (and counting) on a single piece of litigation is not only extraordinarily wasteful, but borders on the scandalous.

In addition, the recent bill litigation was of similar proportions. Cost estimates provided by the WA Department of Justice show parties contributed only around $900,000 to the cost of that case. However, the full cost to the taxpayer of the case was around $6.2 million. Of the $3.72 million in hearing fees, actual hearing fees collected totalled only $490,000. Overall, parties to the case paid less than 15 per cent of the actual cost of running the case.

This is money that could have been better used in many other areas of the justice system, not least, of course, the crying need for better resourcing of legal aid and community legal centres.

It is cases like these that show that, if Australia is to have a legal framework that provides fair access to justice for all, reform is essential.

This bill forms a key part of the Rudd government’s agenda to improve access to justice.

The Access to Justice (Civil Litigation Reforms) Amendment Bill 2009 amends the Federal Court of Australia Act so that cases before the Federal Court will be resolved by the simplest means possible.

The amendments in the bill will complement other amendments to the Federal Court act that I introduced last year in the Federal Justice System Amendment (Efficiency Measures) Bill (No. 1) 2008, which is currently before the parliament. That bill allows the court to appoint an appropriately qualified person to inquire into any aspect of the proceeding and provide a report to the court.

Further, on 5 May 2009, I announced the restructure of the federal courts system which will ensure that the courts are better able to deliver an efficient and cost-effective service to the Australian community. This bill is consistent with the bill I intend to bring forward to implement the restructure.

Case management reforms

The proposed reforms will clarify and strengthen some powers already existing in the court rules and also introduce new provisions to complement and strengthen those measures.

By setting out the court’s case management powers it will be clear that the court, litigants and practitioners are expected to conduct litigation efficiently.

The court and parties will be encouraged to narrow the issues in dispute and resolve them in the simplest manner possible.

The bill introduces a new overarching purpose, and that is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.

Parties to a proceeding will have a duty to comply with that overarching purpose and lawyers will need to assist parties to comply. Any conduct by parties or their lawyers that is inconsistent with the purpose can be taken into account by the court when awarding costs. For example, if a party unreasonably refused to participate in alternative dispute resolution opportunities or if a party pursued issues which were manifestly unreasonable, frivolous or vexatious, then the court can consider this conduct when awarding costs. The bill strengthens the court’s existing power to award costs and indicates the type of behaviour which is expected from legal practitioners. As a result, these provisions will also have the effect of encouraging parties to resolve matters through those alternative dispute resolution mechanisms, potentially saving themselves and the taxpayer the expense of a full-blown hearing. Significantly, if a party wishes to prolong litigation as a strategy to increase the costs of the other party to wear them down, as it were, the lawyer will be obliged to explain this behaviour as contrary to the overarching purpose and may have adverse consequences in terms of a cost order against their client. The government is also considering other amendments to further strengthen the court’s mediation powers and focus parties’ minds on resolving disputes by alternative dispute resolution mechanisms. However, we will await the report of the National Alternative Dispute Resolution Advisory Council on the greater use of appropriate dispute resolution in court proceedings before going further down that road.

Use of the case management powers may also require parties to limit the length of submissions, limit the number of witnesses called or adhere to a time limit for the completion of part of a proceeding. This will be particularly useful when the court is dealing with complex commercial litigation, often referred to as ‘mega-litigation’ and also, for instance, in respect of class actions.

With the court, parties and their lawyers all working towards the same purpose, the government is confident there will be an improvement in the early resolution of disputes in the Federal Court. This will in turn free up resources in the court, allowing other matters to be dealt with more quickly and cost effectively.

Appeals amendments

In addition to case management provisions, the bill introduces amendments which will provide for more streamlined and efficient appeals pathways through the Federal Court in civil proceedings. The new appeals framework will be reflected in the arrangements for a restructured Federal Court.

The new appeals measures will assist the court to provide greater flexibility in dealing with appeal proceedings.

Uncertainty surrounding appeal rights in relation to interlocutory judgments will be removed, so that the court’s time will no longer be spent unnecessarily hearing appeals from certain interlocutory decisions.

The court’s power to manage cases will be strengthened. The amendments ensure that a single judge is able to deal with ancillary and interlocutory matters in most circumstances without the need to constitute a full court.

A single judge will be able to refer a difficult question of law to a full court in all circumstances. This is an important safeguard for litigants.

Judicial responsibilities amendments

Amendments will also be made to the Federal Court act, the Family Law Act 1975 and the Federal Magistrates Act 1999 to give the head of each federal court the responsibility to ensure the ‘effective’ discharge of the business of the court, in addition to their current powers to ensure ‘the orderly and expeditious’ discharge of the business of the court.

The amendments will clarify the powers of the chiefs to assign particular caseloads to judicial officers to ensure they can manage workloads and deliver judgments in a timely way. They will also ensure judicial officers have access to periodic health checks and counselling services and appropriate judicial education.

This amendment supports and encourages the education initiatives developed by the federal courts, initiatives which have been enthusiastically embraced by most of the federal judiciary in each of those courts to which I have referred.

I note in particular that the Federal Court has been a pioneer in judicial education in Australia and its judges make a substantial contribution to judicial education both within Australia and overseas, many judges undertaking that training during periods of their own leave.

The bill also provides, in the case of the Federal Court and the Family Court, for the commission or appointment of a judge to a specific location.

Australia has a judiciary of the highest calibre and these amendments will further enhance public confidence in the administration of justice.

Access to Justice Taskforce

Access to justice, as we would appreciate, is more than just reforms to how courts operate. That is why, as part of the government’s broader access to the justice agenda, a task force was established earlier this year in my department.

The Access to Justice Taskforce is working to develop a framework for a more strategic approach and to make recommendations to me on ways to improve civil justice outcomes for all Australians. I will undertake a course of consultation with the opposition and interested groups before introducing reforms arising from those recommendations. This bill is a first step to achieving these outcomes

Conclusion

An effective and affordable civil justice system has even greater importance in the current economic climate.

The global downturn has increased bankruptcies, brought on litigation and triggered complex social issues.

Unnecessary delay and time spent in court also ties up significant capital and managerial time not only from the point of view of the courts but also from the point of view of corporations, businesses and individuals who may be required to appear before the courts. As a result, these pressures are additional financial imposts not only on the companies involved and those involved in the litigation but also on the broader economy.

More than ever before, it is imperative we have a well-functioning justice system better equipped to assist people when they most need assistance, advice and guidance.

In combination with other reforms in this area, the government is confident that the bill will help achieve those goals. Finally, I thank the Federal Court of Australia in particular on its very constructive input to these initiatives.

I commend the bill to the House.

Debate (on motion by Mr Lindsay) adjourned.