Background

1.1 On 10 May 2010 the Attorney-General of Australia, the Hon Robert McClelland MP, asked the Australian Law Reform Commission (ALRC) to explore options to improve the practical operation and effectiveness of discovery of documents in proceedings in federal courts.

1.2 The Inquiry was initiated following a recommendation in the report of the Australian Government Attorney-General’s Department’s Access to Justice Taskforce, A Strategic Framework for Access to Justice in the Federal Civil Justice System.[1] The underlying premise for this Inquiry is that the costs of discovery, which can be very high, may inhibit access to justice and generate, in addition, an undue public cost.

Access to Justice Taskforce

1.3 The Strategic Framework developed by the Access to Justice Taskforce included the following ‘Access to Justice Principles’: accessibility; appropriateness; equity; efficiency; and effectiveness.[2] A key objective was ‘ensuring that the cost of and method of resolving disputes is proportionate to the issues’:

Cost can be a significant barrier to justice. The cost to disputants and the cost to Government of resolving disputes should be proportionate to the issue in dispute.

Adequate information about costs is essential in assessing proportionality. The provision of greater information regarding the costs of the justice system allows better identification of the most appropriate pathway to resolution and, in particular, whether litigation is the most appropriate course.[3]

1.4 Case management was identified as critical in addressing proportionality of costs: ‘Case management of litigation will help to ensure that costs incurred are directed to resolving the dispute, and limit costs from collateral actions’.[4]

Managing Justice

1.5 In the report, Managing Justice: A Review of the Federal Civil Justice System, ALRC Report 89 (2000), the ALRC had pointed similarly to the importance of control through case management:

In almost all studies of litigation, discovery is singled out as the procedure most open to abuse, the most costly and the most in need of court supervision and control.[5]

1.6 While noting that discovery is ‘an essential litigation tool’, enabling parties to obtain information relevant to their own and the other party’s cases and to request other parties to produce relevant documents,[6] the ALRC considered that discovery has proved problematic in practice, leading to consequential increases in costs:

Problems with discovery result from party responses to discovery requests. Parties may obstruct or subvert disclosure, refusing to provide or destroy or conceal relevant documentation which might have assisted the other side. In some circumstances the party requesting discovery is ‘fishing’—seeking disclosure of significant numbers of documents, perhaps with the intention of creating sufficient aggravation or embarrassment to encourage settlement, or hoping to uncover material which will remedy a weak case or lead to new causes of action. In other instances, parties volunteer vast numbers of documents, not to be helpful and cooperative but as a mechanism to hide a single incriminating document which might now be lost in the detail. The discovery process is used strategically by parties. Such tactics can result in significant costs, involve repeated interlocutory hearings and be very time consuming.[7]

1.7 One law firm contributing to the Managing Justice inquiry submitted that ‘[i]n large scale commercial litigation, it is our experience that there is no interlocutory process more in need of reform than discovery’.[8]

Other inquiries and reports

1.8 Other inquiries that have been of assistance to the ALRC include: the review of the rules and principles governing the costs of civil litigation in England and Wales conducted by Lord Justice Jackson in 2008–2009;[9] the report of the National Alternative Dispute Resolution Advisory Council (NADRAC) in 2009, including consideration of the greater use of alternative dispute resolution (ADR) as an alternative to civil proceedings and during the court or tribunal process;[10] the review of the civil justice system in Victoria by the Victorian Law Reform Commission (VLRC) in 2006–2008;[11] the report of the British Columbia Civil Justice Reform Working Group in 2006;[12] the report for the Chief Justice of Hong Kong in relation to reforms to civil proceedings of the High Court and the District Court of Hong Kong in 2004;[13] and the review and consolidation of civil procedure in England and Wales conducted by Lord Woolf in 1994–1996.[14] The key principles for reform considered in these inquiries are summarised below.

Review of Civil Litigation Costs

1.9 In November 2008, the then Master of the Rolls, Sir Anthony Clarke, appointed Lord Justice Jackson to lead a fundamental review of the rules and principles governing the costs of civil litigation in England and Wales and to make recommendations in order to promote access to justice at proportionate cost.

1.10 Commencing on 1 January 2009, Lord Jackson’s preliminary report was published on 8 May 2009,[15] identifying relevant issues for consideration during an extensive consultation period to follow. Among the topics covered, with some illustrative examples,[16] were:

  • the basic facts—how much civil litigation there is, and what lawyers earn;[17]

  • research and consultation into costs—academic studies, views of court users and stakeholders, and statistical data;[18]

  • the funding of civil litigation—legal aid, before or after the event insurance, third party funding, conditional fee agreements (‘no win, no fee’), and contingency fees;[19]

  • fixed costs—assessing the present regime;[20]

  • personal injuries litigation;[21]

  • other specific types of litigation—such as consumer claims, housing claims, environmental claims, defamation proceedings and collective actions;[22]

  • controlling the costs of litigation—e-disclosure, case management, cost capping and cost management;[23]

  • regimes where there is no cost shifting—small claims and employment tribunals;[24]

  • the assessment of costs by the court;[25] and

  • a review of costs systems in other countries—including Australia.[26]

1.11 The final report was published on 21 December 2009 and set out a coherent package of interlocking reforms, designed to reduce litigation costs and to promote access to justice. The report’s key findings and recommendations[27] include:

  • proportionality—the costs system should be based on legal expenses that reflect the nature and complexity of the case;[28]

  • success fees and after the event insurance premiums to be irrecoverable in ‘no win, no fee’ cases (conditional fee agreements), as these are the greatest contributors to disproportionate costs;[29]

  • to offset the effects of this for claimants, general damages awards for personal injuries and other civil wrongs should be increased by 10%;[30]

  • referral fees—fees paid by lawyers to organisations that ‘sell’ damages claims but offer no real value to the process—should be scrapped;[31]

  • qualified ‘one way costs shifting’—claimants will only make a small contribution to defendant costs if a claim is unsuccessful (as long as they have behaved reasonably), removing the need for after the event insurance;[32]

  • fixed costs to be set for ‘fast track’ cases (those with a claim up to £25,000) to provide certainty of legal costs;[33]

  • establishing a Costs Council to review fixed costs and lawyers’ hourly rates annually, to ensure that they are fair to both lawyers and clients;[34]

  • allowing lawyers to enter into contingency fee agreements, where lawyers are only paid if a claim is successful, normally receiving a percentage of actual damages won;[35] and

  • promotion of ‘before the event’ legal insurance, encouraging people to take out legal expenses insurance, for example as part of household insurance.[36]

The Resolve to Resolve (NADRAC)

1.12 On 13 June 2008, the Australian Government Attorney-General wrote to NADRAC requesting that it enquire into and identify strategies to remove barriers to justice and to provide incentives for greater use of ADR as an alternative to civil proceedings and during the court or tribunal process. The letter of reference asked NADRAC to provide advice on strategies for litigants, the legal profession, tribunals and courts, as well as initiatives the Government might take, including legislative action.[37] In particular, NADRAC was asked to consider:

  • whether mandatory requirements to use ADR should be introduced;

  • changes to cost structures and civil procedures to provide incentives to use ADR more and to remove practical and cultural barriers to the use of ADR both before commencement of litigation and throughout the litigation process;

  • the potential for greater use of ADR processes and techniques by courts and tribunals, including by judicial officers; and

  • whether there should be greater use of private and community-based ADR services and how to ensure that such services meet appropriate standards.[38]

1.13 In response to its Issues Paper, released on 26 March 2009, NADRAC received over 60 submissions from federal and state government departments and agencies, ADR providers, courts, tribunals and individuals. The report, The Resolve to Resolve: Embracing ADR to improve access to justice in the federal jurisdiction, was delivered in September 2009. It identifies strategies to remove barriers to justice and provide incentives for greater use of ADR in the federal civil justice system.

Civil Justice Review (Victorian Law Reform Commission)

1.14 In May 2004, the Victorian Attorney General, the Hon Rob Hulls MP, issued a ‘Justice Statement’ outlining directions for reform of Victoria’s justice system. One objective was the reform of the rules of civil procedure in order to streamline litigation processes, reduce costs and court delays, and achieve greater uniformity between different courts.

1.15 On 4 September 2006 the Attorney General asked the VLRC to provide broad‑ranging advice about civil justice reform. The Terms of Reference asked the commission to identify, among other things, ‘the key factors that influence the operation of the civil justice system, including those factors that influence the timeliness, cost and complexity of litigation’.

1.16 The final report, Civil Justice Review, VLRC Report 14 (2008), was launched on 28 May 2008. The report suggests areas for future law reform and identifies changes which will reduce the cost, complexity and length of civil trials.

Effective and Affordable Civil Justice (British Columbia Justice Review Task Force, Civil Justice Reform Working Group)

1.17 In November 2006, the British Columbia Civil Justice Reform Working Group produced the report, Effective and Affordable Civil Justice. The Working Group was formed to ‘explore fundamental change to British Columbia’s civil justice system from the time a legal problem develops through the entire Supreme Court litigation process’.[39]

1.18 The report provides three key recommendations.[40] The first recommendation involves the establishment of a ‘central hub’ to provide information, advice, guidance and other services required to assist people in solving their own legal problems. The second recommendation is that parties personally attend a case planning conference before they actively engage the civil justice system beyond initiating or responding to a claim. The case planning conference would seek to address settlement possibilities and processes, and also seek to narrow the issues and determine procedural steps and deadlines for the conduct of litigation in the event that settlement is not possible.

1.19 The third recommendation has eight components and proposes a complete rewriting of the Supreme Court Rules. The Working Group recommended that the proposed rules:

  • create an explicit overriding objective that all proceedings are dealt with justly and pursuant to the principles of proportionality;

  • abolish the current pleading process and instead adopt a new case initiation and defence process that requires the parties to accurately and succinctly state the facts and the issues in dispute and to provide a plan for conducting the case and achieving a resolution;

  • limit discovery, while requiring early disclosure of key information;

  • limit the parameters of expert evidence;

  • streamline motion practice;

  • provide the judiciary with power to make orders to streamline the trial process;

  • consolidate all three regulations regarding the Notice to Mediate into one rule under the Supreme Court Rules; and

  • provide opportunities for litigants to quickly resolve issues that create an impasse.[41]

Civil Justice Reform (Hong Kong Chief Justice’s Working Party)

1.20 In February 2000, a Working Party was appointed by the Chief Justice of Hong Kong

to review the civil rules and procedures of the High Court and to recommend changes thereto with a view to ensuring and improving access to justice at reasonable cost and speed.[42]

1.21 After publication of an Interim Report and Consultative Paper in November 2001, a final report, Civil Justice Reform, was released on 3 March 2004.[43] It set out 150 recommendations in respect of the reforms to be introduced to civil proceedings of the High Court and the District Court of Hong Kong. These reforms came into effect on 2 April 2009, the underlying objectives of which are:

(a) to increase the cost-effectiveness of any practice and procedure to be followed in relation to civil proceedings before the Court;

(b) to ensure that a case is dealt with as expeditiously as is reasonably practicable;

(c) to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings;

(d) to ensure fairness between the parties;

(e) to facilitate the settlement of disputes; and

(f) to ensure that the resources of the Court are distributed fairly.[44]

Access to Justice (Lord Woolf’s Report)

1.22 In 1994, the Lord Chancellor of Great Britain instructed the Master of the Rolls, Lord Woolf, to report on options to consolidate the existing rules of civil procedure in England and Wales. On 26 July 1996, Lord Woolf published his Access to Justice Report in which he identified a number of principles which the civil justice system should meet in order to ensure access to justice. According to Lord Woolf’s Report, the system should:

(a) be just in the results it delivers;

(b) be fair in the way it treats litigants;

(c) offer appropriate procedures at a reasonable cost;

(d) deal with cases with reasonable speed;

(e) be understandable to those who use it;

(f) be responsive to the needs of those who use it;

(g) provide as much certainty as the nature of particular cases allows; and

(h) be effective: adequately resourced and organised.[45]

1.23 The report was accompanied by draft rules of practice designed to implement Lord Woolf’s principles by:

  • setting out a detailed fast track procedure for cases up to £10,000, with a maximum timetable of 30 weeks;

  • recommending guideline maximum legal costs at the top of the fast track of £2,500, excluding disbursements;

  • proposing the use of pre-action protocols to encourage a more cooperative approach to dispute resolution and promote fair settlements, avoiding litigation wherever possible; and

  • making detailed proposals to increase access to justice in key areas of litigation (medical negligence, housing, multi-party actions and judicial review).[46]

[1] Australian Government Attorney-General’s Department Access to Justice Taskforce, A Strategic Framework for Access to Justice in the Federal Civil Justice System (2009), Rec 8.2.

[2] Ibid, 62–63.

[3] Ibid, 64.

[4] Ibid, 64.

[5] Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System, Report 89 (2000), [6.67].

[6] Ibid, [6.67].

[7] Ibid, [6.68].

[8] Ibid, [6.68], citing Arthur Robinson & Hedderwicks, Submission 189.

[9] R Jackson, Review of Civil Litigation Costs: Final Report (2009).

[10] National Alternative Dispute Resolution Advisory Council (NADRAC), The Resolve to Resolve: Embracing ADR to Improve Access to Justice in the Federal Jurisdiction (2009).

[11] Victorian Law Reform Commission, Civil Justice Review, Report 14 (2008).

[12] British Columbia Justice Review Task Force, Civil Justice Reform Working Group, Effective and Affordable Civil Justice: Report of the Civil Justice Reform Working Group to the Justice Review Task Force (2006).

[13] Chief Justice’s Working Party on Civil Justice Reform (Hong Kong), Civil Justice Reform: Final Report (2004).

[14] Lord Woolf, Access to Justice: Interim Report to the Lord Chancellor on the Civil Justice System in England and Wales (1995).

[15] R Jackson, Review of Civil Litigation Costs: Preliminary Report (2009).

[16] As summarised in Judicial Communications Office (UK) ‘Lord Justice Jackson publishes preliminary findings of his civil litigation cost review’ (Press Release, 8 May 2009) <www.judiciary.gov.uk>.

[17] R Jackson, Review of Civil Litigation Costs: Preliminary Report (2009), pt 2.

[18] Ibid, pt 3.

[19] Ibid, pt 4.

[20] Ibid, pt 5.

[21] Ibid, pt 6.

[22] Ibid, pt 7.

[23] Ibid, pt 8.

[24] Ibid, pt 9.

[25] Ibid, pt 10.

[26] Ibid, pt 11.

[27] As summarised in Judicial Communications Office (UK) ‘Jackson Review calls for a package of reforms to rein in the costs of civil justice’ (Press Release, 14 January 2010) <www.judiciary.gov.uk>.

[28] R Jackson, Review of Civil Litigation Costs: Final Report (2009), chs 3, 35.

[29] Ibid, chs 9, 10.

[30] Ibid, ch 10.

[31] Ibid, ch 20.

[32] Ibid, chs 9, 19.

[33] Ibid, ch 16.

[34] Ibid, ch 6.

[35] Ibid, ch 12.

[36] Ibid, ch 8.

[37] National Alternative Dispute Resolution Advisory Council, ADR in the Civil Justice System: Issues Paper (2009), [1.3].

[38] Ibid, [1.4].

[39] British Columbia Justice Review Task Force, Civil Justice Reform Working Group, Effective and Affordable Civil Justice: Report of the Civil Justice Reform Working Group to the Justice Review Task Force (2006), Executive Summary.

[40] Ibid, viii.

[41] Ibid, vi.

[42] Chief Justice’s Working Party on Civil Justice Reform (Hong Kong), Civil Justice Reform: Final Report (2004), [1].

[43] Ibid.

[44] Hong Kong Special Administrative Region Government, Civil Justice Reform (2009) <www.civiljustice.gov.hk/eng/home.html> at 5 November 2010.

[45] Lord Woolf, Access to Justice: Final Report (1996), Overview, [1].

[46] Lord Chancellor’s Department (UK), ‘Access to Justice—Lord Woolf’s Final Report’ (Press Release, undated, June 1996).