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Wednesday, 23 March 2011
Page: 1655


Senator BRANDIS (5:44 PM) —The Civil Dispute Resolution Bill 2010 seeks to encourage parties to a dispute to take what are described as genuine steps to resolve the dispute before commencing civil proceedings in the Federal Magistrates Court or the Federal Court. It is intended to complement the Access to Justice (Civil Litigation Reforms) Act 2009, which imposed a requirement that federal civil procedure be directed towards the just resolution of disputes as quickly, inexpensively and efficiently as possible. It implements the recommendations of the National Alternative Dispute Resolution Advisory Council in its 2009 report The resolve to resolve.

The principal measure in the bill is to require an applicant in proceedings in the Federal Magistrates Court or the Federal Court to file what is described as a ‘genuine steps’ statement at the time of commencement of the proceedings, describing the steps that have been taken in an attempt to resolve the dispute. The requirement does not apply to family law or to native title proceedings, which have their own alternative dispute resolution processes. It also does not apply to criminal or quasi-criminal proceedings; appeals, including appeals from tribunal decisions; where a party has been declared a vexatious litigant; proceedings that relate to warrants or compulsory disclosure notices; and ex parte proceedings. Where proceedings are urgent, or if the safety or security of a person or property would be compromised by taking alternative steps, the statement may specify the reasons that such steps were not taken.

The sanctions applicable to failing to take genuine steps are at the court’s discretion and are in the nature of other failures to comply with the rules of court, such as appropriate interlocutory orders and orders as to costs. Examples of alternative steps include mediation, conciliation, expert appraisal, early neutral evaluation and arbitration. Less formal processes, including simple offers to negotiate and the timely exchange of information and documents, would also be captured by the requirement.

However, there are in the opposition’s view potential problems with the bill in the form in which it is drafted. One problem arises in relation to the obligation imposed upon lawyers to advise clients as to the compliance with the requirement. The bill provides that the lawyer must not only advise but also ‘assist’ clients to comply. Costs may be ordered against legal representatives personally if they are considered to have failed to have complied with that obligation. Lawyers already have a duty to assist their clients and, where the client accepts the advice, restating it adds nothing. The question, however, arises as to the scope of the obligation imposed upon the lawyer to ‘assist’ a party to comply with its duty in circumstances in which a party chooses to conduct the proceeding in a manner which may not be in compliance with the duty imposed upon the client. Disputes of this nature may require inquiries into matters covered by lawyer-client privilege, foment discord between lawyers and their clients, penalise innocent parties and result in further costs and delays while alternative representation is being arranged.

A more fundamental issue arises in relation to the discretion to award costs in respect of a failure to take genuine steps to resolve a dispute. The duty imposed upon a party under clause 12 of the bill expressly applies to the conduct of a party in negotiations for settlement of the matter which is the subject of the dispute. On one view, the application of this provision may permit the court when considering the question of costs to have regard to matters which would ordinarily be the subject of settlement or—without prejudice—privilege. This may amount to the abrogation of the settlement privilege, at least by implication. I understand that the government proposes amendments to ensure that the steps taken by the parties are not to be disclosed.

Finally, clause 4 provides a loose definition of ‘genuine steps’ by way of some examples. These include: notifying the other person of the issues that are, or may be, in dispute and offering to discuss them, with a view to resolving the dispute; responding appropriately to any such notification; providing relevant information and documents to the other person to enable the other person to understand the issues involved and how the dispute could be resolved; considering whether the dispute could be resolved by a process facilitated by another person, including an alternative dispute resolution process; if such a process is conducted but does not result in resolution of the dispute, considering a different process; and attempting to negotiate with the other person, with a view to resolving some or all the issues in dispute or authorising a representative to do so. These are commonplace initiatives in litigation and not all are necessarily appropriate in all disputes. Many of them are steps already required under the court’s rules of procedure.

The term ‘genuine steps’ is, in the opposition’s view, itself problematic. The assessment of genuineness necessarily includes a degree of subjectivity. An objective assessment creates more certainty and is more closely aligned with the policy intentions of the bill. What is genuine is not necessarily reasonable but what is reasonable is of necessity genuine. The term ‘reasonable’ is used in Victoria’s Civil Procedure Act 2010 and is proposed for the New South Wales Civil Procedure Act 2005. The Federal Court itself has commented that ‘any difference in terminology’ between acts governing the federal courts—that is, the Federal Magistrates Court and the Federal Court—and state supreme courts is likely to lead to arid disputes in interpreting comparative legislative provisions. Comity matters here.

It was for the consideration of these issues that the bill was referred to the Senate Legal and Constitutional Affairs Legislation Committee. The committee reported on 2 December 2010. I am pleased to note that the concerns I have mentioned were shared by the committee, and I understand that the government proposes to move amendments to reflect some but not all of them. Those amendments will have the opposition’s support. However, I understand the opposition’s concern in relation to the use of the word ‘genuine’ as opposed to the use of the word ‘reasonable’ has not been agreed to by the government. Therefore, at the committee stage, I will be moving amendments to that effect.

The coalition supports sensible legislation that increases the efficiency and accessibility of the federal judicial system. The initiatives in this bill that may hasten settlement of certain cases and reduce the strain on judicial resources are welcome measures. Those results, however, must not be achieved at the expense of the courts’ cardinal duty—that is, to do justice. If the coalition’s concerns can be met by amendments, we will support the bill. As I have foreshadowed, I understand that in all but one respect, that will be so. Subject to the reservation I have made, the coalition supports the bill.