The NSW Attorney General, Greg Smith SC, announced on Tuesday, 23 August 2011, that the Government will postpone the introduction of pre-litigation dispute resolution requirements.
Part 2A of the Civil Procedure Act 2005 requires parties to take reasonable steps to resolve their dispute by mutual agreement or to more narrowly define the contentious issues before commencing legal proceedings.
The provisions were passed in late 2010 and were intended to commence from 1 October 2011.
Clearly the NSW Government is, like their Victorian counterparts, adopting a wait and see approach as to how the new Commonwealth laws play out in the Federal Courts.
The Commonwealth Government’s Civil Dispute Resolution Act 2011 (Cth) came into force on 1 August 2011. This law now requires litigants to, save for certain situations; take genuine steps to resolve their disputes before commencing proceedings in a Federal Court. They are required to file a statement setting out the genuine steps taken. If they fail to comply with these requirements, without a proper basis for doing so, then there can be adverse costs orders made against the party and their lawyers.
A detailed analysis of the legislation reveals it is very much form over substance. The litmus test as to what constitutes “sincere and genuine” steps is vague. Let’s see what the Federal experience is first. In that context, the recent moves by the Governments of NSW and Victoria are sensible.
Whilst it is appropriate to encourage parties to attempt to seek an agreeable resolution to their dispute, the legislation wants parties to be “sincere and genuine” but the fact is the parties are in dispute because one of the parties was exactly the opposite.
This legislation raises a fundamental tension for the Courts, and that is, to what extent should Courts be seen to be obliging parties to resolve their disputes prior to the commencement of proceedings when there are still many issues yet to be distilled let alone tested. Such a position is contrary to the notions of informed consent. A party may prematurely resolve a dispute before they know what rights and entitlements they are giving up.
There should be no hard and fast rules as to when dispute resolution processes take place. They occur at various stages of litigation based on the ebb and flow of the issues as they evolve prior to judgement. There is a cogent argument that parties should be left to decide when and what alternative dispute resolution processes take place.
Certain aspects of the new pre-litigation requirements are a step in the right direction, so I wish to be constructive in my criticism. At the moment though these reforms appear like adjunct justice, like adding a bumper bar to a car.
As a dispute resolution practitioner, we are in an exciting evolutionary phase of development in dispute resolution. Many participants in civil litigation are complaining of the cost, time and effectiveness of the process. People want options.
In a stable democratic society Governments of all persuasion need to hear the message, they need to come to grips with a fundamental question that is important to every Australian – How can our institutions best help people resolve their differences?
Commonwealth, State, Territory Governments need to create a dialogue around reform beyond the like of NADRAC (which is a Commonwealth funded body). One option could be the introduction of Dispute Resolution Centres where courts are one part of that process. Legal officers would be appointed to triage cases, in essence like a triage nurse in the emergency department of a hospital. They would do so based not only on the monetary value of the dispute but also based on the complexity of issues in dispute and other factors such as the volume of documents and other evidence in the dispute. If parties don’t need a Rolls Royce system of justice don’t put them in one that costs too much to drive.
Let us encourage Governments to consider and implement dispute resolution processes for the complexities of modern times.
