Published on 20 October 2000.

Professor David Weisbrot, President, Australian Law Reform Commission, ‘Court Reform and Economic Growth’, Fundación ICO Conference, Madrid, 19 October 2000

[Not for quotation or publication without the permission of the author or the Conference organisers.]

Synopsis

The Australian Law Reform Commission recently completed its four-year inquiry into the federal civil justice system, culminating in the publication of its report Managing Justice (ALRC 89).  A central focus of the inquiry has been on the efficiency and effectiveness of the case management systems, practices and procedures in the federal courts and tribunals.  Among other things, the Commission also looked at aspects of legal and continuing judicial education; judicial accountability; lawyers’ professional practice standards; government legal work, alternative dispute resolution, the costs of litigation; the provision of legal aid and other forms of assistance; and the utilisation of expert evidence and witnesses.

The breadth of these issues provides an indication of the Commission’s approach to reform of the civil justice system – it is not only a matter of focusing on the technical aspects of courts and tribunals, but also on the other actors and systemic factors which contribute to the character of the legal and judicial ‘cultures’ which permeate that system.

In this paper, the author outlines the structure and nature of the Australian legal system (particularly the federal system), and the major themes that underlie the Commission’s detailed findings and recommendations.  Finally, the author looks at a number of issues at the intersection of court reform and economic growth, including the role of the courts in regulating the economy – especially such important aspects of the ‘new economy’ as intellectual property and competition law; the extent of the direct investment in legal services and the courts; the importance of effective case management systems in ensuring the overall efficiency of the legal system; and the need to ensure that courts can cope effectively with highly complex and technical evidence about cutting edge research and development in such vital areas as science, medicine, biotechnology, engineering, economics, and information technology.

Introduction

Earlier this year, the Australian Law Reform Commission completed its major four-year inquiry into Australia’s federal civil justice system.  The 750 page report, entitled Managing Justice [1], covers issues such as legal education, judicial education, legal professional practice standards (codes of ethics), government legal work, alternative dispute resolution, legal aid and other forms of legal assistance, as well as an examination of the efficacy of the practices, procedures and case management systems of the Federal Court of Australia, the Family Court of Australia, and the major federal administrative merits review tribunals.[2]

The breadth of these issues provides an indication of the Commission’s approach to reform of the civil justice system – it is not only a matter of focusing on the technical aspects of courts and tribunals, but also on the other actors and systemic factors which contribute to the character of the legal and judicial ‘cultures’ which permeate that system.

The Australian legal system

A federal system

Before providing an overview of the Commission’s findings and recommendations in the Managing Justice report, I should briefly set the scene for those unfamiliar with the justice system in Australia.  The Australian legal system is based upon the English common law system adopted during colonial times.[3]  As the Australian Law Reform Commission found in its consideration of the federal civil justice system, many Australian lawyers feel strongly about their ‘adversarial’ common law heritage.[4]  (See below, regarding the ‘convergence’ of the common law and civil code systems.)

Australia has a federal system of government.  When the six existing colonies united to form the nation of Australia in January 1901, the new Australian Constitution expressly enumerated[5] the specific areas in which the Commonwealth (or federal/central) government has law-making powers, such as foreign affairs, defence, customs, taxation and interstate trade and commerce.  All residual legislative powers were thus reserved for the States (the former colonies).  The Northern Territory (NT) and the Australian Capital Territory (the ACT) have elected legislative assemblies and a strong measure of self-government, but territorial laws may be over-ridden by the federal Parliament.[6]

Under the Constitution, federal judicial power was vested in the High Court of Australia[7] and in ‘such other federal courts as the Parliament might create’ under chapter III, as well as in State courts specifically vested with federal jurisdiction.

It was not until the mid-1970s, with the establishment of the Federal Court of Australia (the Federal Court), the Family Court of Australia (the Family Court) and the Administrative Review Tribunal (the AAT), that a significant federal judicial system developed below the High Court.  Until that time, for pragmatic reasons as well as political sensibilities about the relative roles of the Commonwealth and the States, heavy reliance was placed upon State courts.  Just this year, a Federal Magistrates Service (FMS) was created by statute, with magistrates appointed as “Chapter III judges” in constitutional terms, to relieve the Federal Court and Family Court of some of their more routine caseload, and to provide a lower cost structure in the interests of litigants.[8]

The Federal Court and the Family Court are independent, of course, insofar as they determine cases ‘without fear or favour’, free from political or bureaucratic interference.  These Courts – as well as the AAT – are also autonomous and self-administering in terms of internal organisation and the management of their annual ‘one line budgets’, as well as having responsibility for determining the procedural rules and orders according to which litigation is conducted.

The federal civil justice system also contains a number of specialist merits review tribunals, established since the mid-1970s, to review administrative decisions made by federal government authorities (such as those responsible for social welfare entitlements, or migration decisions).  The original aim of the ostensibly ‘procedurally informal’ tribunal system was to provide speedier and more cost effective resolution of disputes for those who felt aggrieved by government decisions.  Of course, the underlying intention was to remove the growing numbers of cases from the court system, while providing some alternative independent review mechanism.  As discussed below, this has been only partly successful.

The great majority of litigation was, and notwithstanding the rapid growth of the federal system, still is, conducted in the State (and Territory) justice systems.  It is also still the case that federal jurisdiction is shared and exercised by the various federal and State courts – and while there are some advantages to a federal system, inevitably there are also tensions, overlaps and incoherencies.[9]

For example, there has been much consternation in Australia this year regarding the enforcement of our corporations laws.  Prior to the 1991, each State and Territory had separate laws applying to the establishment and regulation of corporations.  While efforts in the 1970s had ensured that these laws were complementary, the lack of a national scheme meant there were several parallel lines of authority and no single regulatory body.  This approach to corporate regulation resulted from the distribution of powers between federal and state governments under the Australian Constitution.

In the 1980s, State and Territory governments and the Commonwealth worked together to deliver a national solution to this constitutional dilemma.  After an initial attempt was found to be unconstitutional by the High Court of Australia in 1989, another method was implemented.  In essence, each of the States passed template legislation adopting the federal laws regulating companies and the securities and investment sector in the ACT (as amended from time to time).  This had the result of establishing a single regulatory body (now known as the Australian Securities and Investments Commission, or ASIC) and a corporate law regime that was based formally on State law, but in practice only could be amended by one parliament – in effect, a national scheme.

Under this scheme, and combined with another complicated legal and political scheme allowing cross-vesting of jurisdiction between federal and State courts, the Federal Court and the Supreme Courts shared the corporations law jurisdiction.  In practice, the Federal Court was favoured by lawyers and business, and developed high level expertise in this jurisdiction throughout the 1990s.

In 1999, however, the High Court found certain parts of the cross-vesting scheme to constitutionally invalid, removing the Federal Court’s ability to hear corporations law cases.[10]  In essence, the High Court ruled that while State courts may be vested with federal jurisdiction, the Constitution does not permit the converse position; that is, for the States to vest the federal courts with State jurisdiction – thus putting an end to the ‘cooperative federalism’ arrangements widely regarded as sensible and working well in practice.

A decision by the High Court in May this year suggested that the corporations law scheme also was invalid.[11]  This caused much anxiety in the Australian business sector as it debated whether the incorporation of thousands of businesses under the corporations laws in the 1990s were valid, whether prosecutions pursued by the regulator should be discontinued, and whether decisions made by the Federal Court in relation to corporations were valid.  The federal Attorney-General, the Business Council of Australia, the Law Council of Australia, and others expressed serious concern about the adverse message conveyed to the markets and international investors about the stability of the legal system and the ability to regulate corporate activity in an effective manner.[12]

State and Territory governments have acted to remedy some of the irregularities, and to work together with the federal government to devise a new, and constitutionally valid, solution to the a national corporations law scheme.  When there appeared to be ‘political squabbles’ over the most appropriate solution, Australia’s business chiefs issued an appeal to the political leaders to resolve the dispute and reinstate legal certainty, or else risk damaging Australia’s aspirations of becoming a global financial centre.[13]

In late August of this year, a solution was reached whereby the States agreed to ‘refer’[14] some of their powers to the Commonwealth, as is possible under the Constitution, in order to permit the federal Parliament to legislate in this area.  The agreement has a five-year sunset clause, which has caused concern to some analysts looking for long-term stability. It has, however, provided a solution to the immediate legal crisis and provided time to develop a longer-term political and legal strategy.

Ultimately, the best solution is a Constitutional amendment to clarify the situation and provide for national corporate laws and regulation.  However, there is a long and bleak history of failure in Australia to amend the Constitution, as this requires a referendum achieving a total majority vote at the national level, as well as a majority vote in a majority of States (ie, in at least four of the six States).

The concern of business leaders and others in relation to this matter is indicative of the important role played by the legal system in ensuring confidence in the regulation of the economy, and in turn ensuring ongoing economic prosperity in Australia. 

The organisation of legal work

The regulation of the legal profession(s) in Australia traditionally has been a matter for the States, and admission and discipline largely remain organised on a State-by-State basis.  However, great strides have been made in recent years, largely through the efforts of the Law Council of Australia, to move towards a system that effectively delivers mutual recognition and reciprocal practising rights for all Australian lawyers.[15]

There are approximately 30,000 lawyers in Australia, distributed across about 10,000 legal practices.  These practices generated $5.6 billion from the provision of services during the 1995/96 financial year.[16]  In the large Eastern States of New South Wales, Victoria and Queensland, the legal profession is still divided in the English fashion (de jure or de facto), with solicitors forming the bulk of the profession, and a separate Bar comprising roughly 10 per cent of practitioners.  In the other States and the Territories, most practitioners operate as barristers and solicitors (amalgams), although a small ‘voluntary’ Bar operates in each jurisdiction.[17]

Nearly three-quarters of lawyers are located in New South Wales and Victoria, which are the two most populous States, but account for only about 60% of the general population.[18]  New South Wales (including the enclave of the Australian Capital Territory) has 36% of the Australian population, but accounts for 41% of the practices, and generates 45% of the total income and 41% of the total employment for the sector – reflecting the increasing importance of Sydney as a regional financial and commercial centre, with strong links to Asia and the Pacific.[19]

Small practices still dominate the Australian legal profession, with 95% of practices comprised of fewer than 20 lawyers, and most of these operating at the local level.  However, those 95% of practices account for only 54% of employment in the sector, delivering less than half (49%) of the operating profit before tax for the sector.[20]

The most important trend in the legal profession is the emergence of large ‘mega-firms’ with 100 or more partners, engaged in corporate law practice.  While as late as the early 1980s there was not a single major law firm which operated in both Sydney and Melbourne, the major financial and commercial centres, it is now the case that all major firms operate across State – and increasingly across international – boundaries.[21]  The 1% of practices (64 practices) in Australia which employ 100 or more persons account for 21% of sector employment and 30% of operating profit before tax.[22]

For a relatively small country in terms of population (about 19M), Australia has spawned a significant number of mega-firms.  The International Financial Law Review’s 1999 rankings show that of the world’s 40 largest law firms, six are from Australia – with 22 from the US, 9 from the UK, only 3 from continental Europe, and one from Canada (with a population 50% larger than Australia).  In the Asia Pacific region, Australian firms comprised 11 of the top 15 firms in 1996.[23]

Long a leading exporter of primary products (predominantly agricultural and mining), Australia has dramatically increased its trade in professional and technical services in recent times – with legal services (A$156M in 1996-97, up from $74M in 1987-88) second only engineering services (A$205M) in gross earnings, and leading the sector in net balance of trade terms, well ahead of such other areas as management consulting, advertising, surveying, auditing and accounting, and architectural services.[24]

The Commission’s review of the Australian federal civil justice system

The Australian Law Reform Commission undertakes research upon the request of the federal Attorney-General,[25] and our task in looking at the civil justice system was confined to the federal sphere.  However, many of the major themes arising from the Managing Justice report can be applied to the Australian justice system as a whole (and, indeed, to civil justice systems generally). The reasons for undertaking the inquiry were linked to public concerns about the costs of the system and limited access to justice, delay within the courts, and standards of legal professional representation.[26]

In order to address these concerns, the Commission consulted with many hundreds of lawyers,[27] judges and tribunal members (federal and state), court and tribunal staff, litigants and interest groups, to discuss their experiences and their suggestions for change.  The Commission received about 400 written submissions from various organisations and individuals with an interest in the review, as well as countless phone calls from individuals who wished to relate their experiences (usually ‘bad’) of the courts or tribunals.

To support this anecdotal evidence, the Commission engaged in the largest and most comprehensive empirical study of the courts ever undertaken in Australia, involving the coding, examination and statistical analysis of about 4000 case files of Federal Court, Family Court and tribunal matters, with follow-up surveys of the lawyers and parties concerned (see below).

The information taken directly from case files provided the Commission with a detailed snapshot of the federal civil justice system, and solid data relating to:  the types of parties and cases; how and what stage cases were resolved; the duration from commencement to resolution; the outcomes achieved; the number of represented parties and the effect representation had on case processing and case outcomes; and differences among the various registries around the country.

The information gained from the responses to self-administered questionnaires sent to party representatives or to unrepresented parties included details about the cost of proceedings, how these costs were funded, and the changing practices and arrangements associated with them.  Information also was solicited about a range of other issues, including the use of legal representation and other forms of assistance, the dispute resolution processes used (including out-of-court ADR efforts), the factors working for and against settlement, and experience of the pre-trial case management procedures used by the courts and tribunals.

The results of all of this empirical analysis has been published,[28] and has not only strongly influenced the Commission’s own work, but also has aided court reform efforts elsewhere (such as in Hong Kong).

The Commission’s final report makes 138 recommendations for reform (many of which contain multiple proposals), covering a wide range of issues and current problems, aimed at the variety of participants and institutions which influence the general quality, and the particular practices and procedures, of the federal civil justice system.  However, it is possible to identify six broad themes or conclusions emerging from the Commission’s work.  

1.  There is no ‘crisis’ in the federal civil justice system

First, the Commission found is that there was no ‘crisis’ in the Australian federal civil justice system.  While there had been a rise in case loads in some areas, and some case types were becoming more complex and taking longer to resolve, there certainly was no evidence of an ‘explosion’ in litigation which the media – and the courts and the legal profession – frequently assume and decry.[29]

A small proportion of cases take two to three years (or more) to reach a conclusion; however, there was no evidence of systemic, intractable delay in case processing or resolution.  There was evidence of a range of medium to very high legal costs, but also much litigation assistance from lawyers (through pro bono work, for example) and governments (through publicly funded legal aid schemes and community legal centres).  The portrait of litigants that emerged from our empirical survey did not confirm the old adage that ‘the justice system is open only to the very rich and very poor’.

This is not to say that there is reason for smug satisfaction or complacency in relation to the Australian civil justice system.  However, it is difficult to find a civil justice system in the world which does not have problems relating to cost and delay, concerns about levels of access, resourcing and the adequacy of representation, and questions about the management of disputes and litigation.  While significant problems do exist in the Australian federal civil justice system, the Commission’s conclusion was that these are identifiable and reparable – and all the more so if unnecessarily paralysing notions of ‘crisis’ can be avoided.

2.  There are no ‘quick fixes’ or permanent solutions

There have been a number of ‘movements’ in judicial reform this century, all touted by their promoters as the solution to the problems in the courts.  International experience has demonstrated, however, that there are no ‘quick fixes’, easy options, or panaceas.  Some of the usual suggestions may not achieve intended results, or may be too narrowly focussed. 

Not codification nor ‘plain English’

Codification of the scattered common law has it merits in some contexts (as does the Bethamite ideal of ‘each man his own lawyer’).  However, much of the most complex – and thus lengthy and expensive – litigation now takes place in subject areas that are highly codified, such as taxation/revenue law.  Similarly, the rendering of legal documents and legislation in ‘Plain English’ is a laudable objective, and may forestall some disputation, but of itself will not transform the nature or dynamics of litigation.  In most disputes the problem is not identification of the applicable law, but rather the determination of the facts, and the application of these to the law, as interpreted.

Not increased legal aid funding alone

The social justice movements of the 1960s and 1970s promoted greater levels of public funding for legal aid, in an effort to ensure that legal representation was available for all persons before the courts, and not merely the affluent.  Legal aid funding increased dramatically in Australia from the mid-1970s, when responsibility for this was taken over by the federal government.[30]  In common with other western countries (or at least the English-speaking ones), however, the relative level of public expenditure on legal aid has declined markedly in recent years, and Attorneys-General find it ever more difficult to win increased funding in competition with demands for public support for schools, hospitals, housing, and other social programs.[31]

There is no doubt that equality of representation before the courts is an important democratic value that should be maintained.  The Commission’s research also indicated that, as a general matter, legal representation does assist the efficiency and efficacy of the civil justice system – litigants who were represented were more likely to settle their disputes out of court, at an earlier stage, and were more likely to get a ‘better’ results.  For this reason, for example, the Commission recommended that lawyers not be routinely barred from appearing in some tribunals, as is sometimes advocated by those who see in a virtual in ‘informal justice’.

However, simply increasing the level of public funds devoted to legal aid does not of itself address some of the most commonly cited problems with litigation, such as delay.  Indeed, while ‘accessibility’ to the court system is another democratic virtue that cannot be argued against, increased accessibility almost invariably means longer delays and greater pressure on the system.[32]

The Commission found that it is critical to improve the management of cases within the courts and tribunals – with the aim being more efficient use of limited legal aid funds and court and tribunal resources.  Merely increasing resources to courts and tribunals does not address the importance of internal administrative processes that are effective and efficient.  For example, the Commission was told repeatedly, and in strong terms, by lawyers and litigants that the inflexible and inefficient processes of the Family Court of Australia were highly wasteful of scarce legal aid funds – and, of course, of the limited resources of self-funded litigants.[33]

Similarly, focussing upon legal aid alone neglects the fact that many disputes would be better resolved outside of the formal litigation system, through such alternative methods as the development of industry ombudsman schemes (such as those dealing with banking and telecommunications).

Not tribunalisation alone

Another feature of the development of the Australian legal system from the 1970s has been the growth of specialist tribunals.  At the State and Territory level, many tribunals effectively operate as subordinate courts (similar to the magistrates’ courts, but with a more specialised jurisdiction), hearing evidence and making determinations in the first instance.  At the federal level, however, the Australian Constitution (as interpreted) limits the exercise of ‘the judicial power of the Commonwealth’ to federal ‘judges’,[34] and federal tribunals are generally limited to administrative review roles.  Nevertheless, this has not stalled the emergence of a sizable federal tribunal system, established with the express aim of relieving some of the workload of courts, and providing ‘quicker and cheaper justice’.

However, one of the major findings of the Commission’s study of the federal civil justice system was that disputes filed in the AAT took somewhat longer to resolve, and at no less cost, than similar disputes in the federal courts.  Thus, tribunals – generally characterised by high case loads, traditions of informality and lay membership, increasingly complex laws to apply, and unmatched by management processes calculated to promote efficient dispute resolution – are also not the answer in themselves.  

Not Alternative Dispute Resolution (ADR) alone

As a general matter, the Commission is warmly supportive of efforts at encouraging the resolution of disputes through means other than formal adjudication in the courts.  However, the Commission also was cautious about some of the extravagant claims made by those who uncritically promote ‘Alternative Dispute Resolution’ (ADR) as a ‘movement’ capable of providing all of the answers to the problems of the justice system.

It has always been the case that the vast majority of civil matters settle outside of court.[35]  It is clearly a good thing to train lawyers to consider more readily, and to become more effective in their selection and use of, such techniques as conciliation and mediation.

However, there are some disputes that are not susceptible to mediation (because of the complexity of the issues, or the nature of the remedy sought, or the sharply divergent and irreconcilable interests of the parties) and will require judicial determination.  While high ‘settlement rates’ are often suggested as a positive attribute of a good legal system, this is not the case if litigants are settling for the wrong reasons.  For example, many litigants told the Commission that they felt compelled to settle matters in the Family Court out of a sense of frustration with that Court’s rigid processes.

There are other matters that are positively inappropriate for judicially unsupervised ADR – particularly where there is a major imbalance in power between the parties, or where there are threats or violence behind the scenes.  For example, recent research in Australia has indicated that family law cases involving allegations of child abuse are much more likely to proceed to a judicial decision than other family law cases, despite going through the same counselling and mediation processes.[36]  Early identification of these cases, and more rapid progression to judicial determination, can shorten the time to conclude the case, thereby reducing the risk to the child who may remain in a potentially abusive situation for the duration of the case.

Finally, it has to be remembered that the civil justice system encompasses multiple aims and functions beyond the resolution of private disputes.  The natural concern for producing an efficient and effective system for resolving such disputes should not obscure another critical interest in a democratic society – that the courts, especially the superior courts, play an essential role in interpreting and progressively developing the law on the public record, and in regulating the balance and separation of powers.[37]  For example, the Australian Consumer and Competition Commission (ACCC) told our inquiry that it seeks to strike a strategic balance between utilising negotiated settlements and ADR processes to secure compliance by the business community in individual cases, and using litigation in other appropriate cases to attract public attention and to establish important legal precedents.[38]

Not radical legal transplants

The Commission’s early work on this project was focussed, by the initial terms of reference, on the issue of the ‘adversarial’ nature of the Australian civil justice system.  By implication, the Commission was drawn to consider the experience of litigation in the European civil code countries, and to report on the comparative advantages and disadvantages of the common law adversarial system.

This provoked considerable debate in Australia – some submissions to the Commission argued forcefully for the abandonment of the adversary system and its replacement with a European type ‘inquisitorial’ system.  The legal and judicial establishment, on the other hand, were most alarmed by that prospect.

In the Discussion Paper[39] preceding the Commission’s final report, the Commission concluded that an ‘adversarial-non adversarial’ construct was too elusive a basis on which to analyse problems or to formulate effective change to the system. Such debate assumes that transplants from different political and cultural systems will function in similar ways when rooted in our legal system, that such change can be engineered, and that it will improve the system rather than introducing a new host of problems.

The debate on changing adversarial culture or processes is also clouded by definitional questions, as protagonists debate core values and practices in stereotypical legal models – sometimes comparing the perceived shortcomings of one system with an idealised version of the other, and often failing to acknowledge the number of variables in play or the complexity of these inter-relationships.  The terms ‘adversarial’ and ‘inquisitorial’ have no precise or simple meaning, and to a significant extent reflect particular historical developments rather than the practices of modern legal systems.

No country now operates strictly within the prototype models of an adversarial or inquisitorial system. The originators of those systems, England, Spain, France and Germany, have modified and exported different versions of their respective systems.  The Commission noted that there already are examples from the Australian federal civil justice system – particularly in the tribunals – of selective borrowings from procedures in the civil code systems.[40]

Indeed, one of the themes of international and comparative scholarship in this area is the remarkable degree of ‘convergence’ in the way both common law and civil code countries now approach civil disputes.[41]  In the introduction to a recent comparative review of the civil justice systems in both common law and civil code countries, Professor Adrian Zuckerman noted that:

The clearest trend emerging from the different national accounts is a general tendency towards judicial control of the civil process.  Both common law countries and civil law countries display a shift towards the imposition of a stronger control by judges over the progress of civil litigation.  …

…  The USA has been leading the trend amongst common law countries. A culture of managerial judges is now well established there. In England and Australia the move towards judicial control is more recent, but it is equally dramatic.

A similar trend is reported from the great majority of civil law countries. In France, Spain, Portugal, Italy, and even in Japan and in Germany, moves are afoot to strengthen the judicial supervision of the litigation process.[42]

This degree of convergence is also one of the reasons why it is productive for people from such a variety of legal systems to gather at conferences such as this one, to discuss court reform.

3.  Effective case management requires oversight, clout and customisation

An inevitable feature of litigation taken through to a determination, whether in courts or tribunals, is that one side will be disappointed with the result.  However, the international research, and the Commission’s own, make plain that parties can and do distinguish between their relative happiness with the result, and their satisfaction with the process.

Consequently, courts and tribunals must work to ensure that both sides come away feeling that the process was: (a) fair (impartial, as well as delivering ‘individualised justice’); (b) effective and efficient in moving the dispute smoothly and quickly through to settlement or adjudication; and (c) cost effective – whether the parties have limited legal aid funding or are relying on their own resources.

A well-conceived process will ensure that litigants have available to them a range of options for consideration in pursuit of the resolution of their dispute – and that these are intelligently and flexibly deployed according to the nature and urgency of the dispute, and the needs and preferences of the parties.  As discussed immediately above, a ‘one-size-fits-all’ approach to systemic reform that pushes all parties towards ADR or tribunals or ombudsman in a lock-step fashion is no more likely to achieve success than one that relies entirely on formal adjudication in the courts – the best systems will contain a healthy mix of alternatives.

Perhaps the best example of successful innovation in this area is the Federal Court of Australia's introduction in 1997 of a modified Individual Docket System (IDS) of case management, under which judges directly manage cases from initial filing through to final resolution (whether this is by settlement or trial).  The theory is that the judge will be aware of the facts and nuances surrounding the case; will be able to tailor directions, procedures and listings to the individual circumstances of each case; and provide continual monitoring of compliance with orders and directions.

It does involve a change in thinking from the traditional common law judge acting as a ‘neutral umpire’, with the parties largely controlling the management and progress of the litigation.  This initiative was enabled by effective consultation between the Court and the practising profession – since it requires a whole new approach to managing litigation by both judges and lawyers.

The IDS received high praise from virtually all lawyers and litigants.  The system is well adapted to the Federal Court's caseload and case types – a jurisdiction that features complex matters in need of flexible, customised procedures, ranging across migration, native title, trade practices, intellectual property, consumer and competition law, admiralty law, corporations law, bankruptcy, human rights law and large class actions.  (See below, for further discussion of the Federal Court’s case management system.)

By way of contrast, there were high levels of dissatisfaction expressed with the Family Court's processes (even allowing for the difficult and emotional nature of the jurisdiction).  The Commission consistently heard from parties and lawyers that the Family Court's procedures are too inflexible – that cases are processed in a lock-step fashion ‘according to a script’, rather than customised to individual needs and circumstances.  The Commission also heard repeated criticism that there is a lack of consistent oversight of cases (particularly in the larger registries) leading to too many, or inappropriate, case events (each of which costs an average of $700-3,500), and what the Family Court itself described as a ‘culture of non-compliance’ with court orders.  Many of these problems also were apparent in the operations of the federal tribunals.

Having regard to the international literature in this area, as well as what Australian lawyers and litigants describe as best practice, the Commission concluded that, while not all case management systems should be identical (since not all courts have the same mission, caseload, case types, or resources), it is possible to identify the generic attributes of a successful case management system.  These are: 

  • the continuous oversight of matters to ensure satisfactory progress towards resolution within a reasonable (benchmarked) period;
  • by a judge or senior officer with sufficient ‘clout’ to make certain that compliance with court orders and processes;
  • the early identification of issues, problems and settlement prospects; and
  • the willingness and ability (sometimes, creativity) to customise court processes to the circumstances of each case, and to provide a sensible array of dispute resolution options, in order to ensure parties feel they are receiving individualised justice. 

4.  Justice systems require continuous monitoring, and adaptability

At the macro level, justice systems – including any reforms that have been implemented – require constant monitoring and evaluation.  We live in a world of rapid change, and what may be considered to be Best Practice today may not deliver the same results tomorrow.

As an example, the Federal Court of Australia is now facing a change in the type of cases it deals with and its workload.  Of particular note are the increasing number of native title cases – a result of changes in policies and legislation in Australia that provide Aboriginal and Torres Strait Islander people with a legal mechanism to claim (ie, re-assert) their traditional property rights in relation to land (and seas).[43]

Native title cases are extremely complex and time consuming.  The legislation itself is extremely complex, and the litigation usually:  involves many parties, often with sharply contrasting interests, and many of whom have little experience of the formal court system; involves major practical difficulties and logistical exercises in holding hearings, taking oral evidence, and inspecting sites in remote locations, sometimes for long periods; deals with extensive amounts of expert evidence and witnesses, including historical, genealogical and anthropological evidence; and requires a high degree of cultural understanding.

The Federal Court works with the associated National Native Title Tribunal to resolve these cases, requiring close consideration of how the relationship between the two institutions can best be harnessed to provide effective and efficient processes in native title matters.  It has been a challenge for the Federal Court to meet the needs of those involved in native title cases, while ensuring that court resources and appropriate processes continue to be available for the many other types of cases dealt with by that Court.  It is an example of the need for institutions and lawyers to be flexible, adaptable, and innovative.

The Federal Court’s caseload in the area of human rights (eg anti-discrimination, privacy) is also set to grow rapidly, following a decision of the High Court that made clear that only ‘courts’ established under Chapter III of the Constitution could exercise the ‘judicial power of the Commonwealth’ and determine existing rights and duties according to law.[44]

An essential element in effective oversight of the justice system is the establishment of good information management systems within the institutions themselves.  The Commission’s own empirical study for this inquiry (described above) was required because of the absence of good data about how long cases took to be resolved, the number of case events (court appearances) involved in each matter before resolution, whether parties were represented, and the legal costs involved.

Without this data, the Commission would have been unable confidently to make recommendations for reform.  Ongoing reform must be based on evidence of what is happening now and a proper analysis of existing and anticipated problems.  Reforms based on anecdote, impression and notoriously hard or unusual cases (“war stories” in the vernacular of the Australian legal profession) are likely to miss their mark, often creating new problems without relieving those that already exist.

Fortunately, most Australian courts and tribunals have taken great leaps forward in developing more effective information management systems over the past two years.

5.  Effective reform requires a holistic, collaborative approach

In the Commission’s view, it is a mistake to focus reform efforts entirely upon the formal rules and processes of the courts and tribunals.  Justice systems are large, complex, organic creatures.  Effective reform, therefore, requires a holistic approach, and a collaborative effort from all of those actors and stakeholders involved.

Thus, the Commission’s recommendations were directed not only to the federal courts and tribunals under review, but also to: the Attorney-General, the federal Government and Parliament, which make laws and are able to divert government resources to particular kinds of research or programs; federal departments and agencies, which undertake research, administer policies and programs affecting the justice system, and make recommendations to government about new policies and programs; the Standing Committee of Attorneys-General, which coordinates activity in the legal area across the Commonwealth and the various states and territories in the federal system; the Law Council of Australia, the peak body for lawyers, and also the various professional organisations in each state and territory, which set standards, influence and monitor the behaviour of individual lawyers; the legal aid commissions that administer legal aid funds provided by the government; and the institutions that provide legal and judicial education, conduct research, and help to shape the future of the legal profession.  

6.  The critical importance of a healthy legal culture

Perhaps the most significant conclusion drawn by the Commission was that while it is obviously very important to put in place the right structures, rules, practices and procedures, it is absolutely essential to ensure that these are underpinned by a healthy legal culture.

In the Commission’s view, a healthy legal culture is characterised by its:

  • honest, open and self-critical nature;
  • respect for, and effective communication among, stakeholders;
  • willingness to adapt and to experiment (or, put another way, one that is not resistant to change);
  • commitment to lifelong learning as an aspect of professionalism; and
  • deep ethical sense and commitment to professional responsibility. 

The Commission heard a great deal of evidence about the relative health of the legal cultures of the various institutions in the civil justice system.  What became clear to us is that those institutions with strong and positive cultures were able to manage change effectively by bringing together key stakeholders, genuinely listening to what they have to say, brokering through the needed changes (sometimes against immediate self-interest), and then exerting the kind of leadership which engenders the degree of shared commitment necessary to get past the inevitable teething problems and to make the new processes work.  Institutions with healthy cultures can overcome procedural deficiencies, while those with unhealthy cultures regularly defeat good systems and frustrate even well-intentioned efforts at reform.

As a consequence of this, the Commission devoted a great deal more attention, and space in the final report, to matters of legal and judicial education than was originally planned.[45]  Among other things, the Commission recommended the establishment of an Australian Academy of Law, to promote a more active collegial relationship among judges, practising lawyers, legal academics, and law students, in aid of higher standards of conduct and learning.[46]

The Commission also called for the re-articulation of the curriculum in the university law schools, away from the dominant focus on mastering bodies of substantive law, and towards the development of high order professional and problem-solving skills (such as more effective oral and written communications, negotiation, advocacy, client interviewing, and conflict resolution).[47]  

Systemic reform in aid of economic growth

Emerging economic theory now posits that key social and political institutions, including the courts, may be as important to the working economy as the three factors in classical economic theory: money, people and resources.[48]  For example, leading researchers have documented the link between effective judicial management of intellectual property cases and the amount and kinds of technology transfer and direct investment, in both developed and developing countries.[49]

The Commission agrees with Mr Robert Sherwood, our session Chairman, and in Managing Justice cited his research, to the effect that judicial system performance has a significant influence on overall national economic performance and … [research is] beginning to particularize that influence in relation to various sectors of economic activity.  For example, judicial system performance influences private commercial dispute resolution, the security of property, the behaviour of public officials, the quality of legislation, the credibility of broad policy initiatives, and the conduct of informal activity as well as crime.[50]

The role of the federal courts in the regulation of the economy

The prevailing ethos of deregulation and privatisation in the western democracies, and the essential nature of the new information and communications technology, mean the ‘new economy’ is regulated less directly by government, public regulatory agencies or bureaucratic organisations (such as marketing and price stabilisation authorities) than was the case with the mainstays of the old economy (primary production, manufacturing).  Thus, the civil justice system – the courts, tribunals and associated dispute resolution providers) will be more critically involved in individual cases in defining rights, enforcing agreements, setting parameters for acceptable conduct, settling disputes and setting precedents.

As indicated above, the Federal Court is the major ‘business court’ in the Australian federal system.  Absent a defined role in the Constitution (see above), the Federal Court’s jurisdiction is currently derived from over 120 separate federal statutes.  In addition to 8045 bankruptcy applications,[51] the 3940 matters lodged in the Federal Court in 1998-99 included cases relating to:

migration                                                 22%

native title                                                21%

corporations[52]                                       17%

trade practices                                          9%

intellectual property                                   6%

labour law/industrial relations                      5%

judicial review of administrative decisions     5%

taxation                                                    5%

Thus, the Federal Court plays a pivotal role in various aspects of economic activity – including such key aspects of the so-called ‘new economy’ as industrial and intellectual property, as well as such central aspects of the old (indeed, the ancient) economy as the recognition of real property rights based upon native title.

The Federal Court also has an important role in the regulation of markets – capital markets through its enforcement of corporations and competition laws; and labour markets, through its role in industrial law.  Until recently, Australian had an unusual labour law system, in that the terms and conditions of employment were fixed centrally by industrial commissions and tribunals, rather than through collective bargaining.[53]  However, a strong shift over the last decade to collective bargaining (on an enterprise-by-enterprise basis) has meant that the Australian courts – and in particular the Federal Court – are now engaged in enforcing workplace agreements, and arbitrating disputes central to the nature of industrial relations (such as the endeavour by some companies to move outside award conditions through the use of individual contracts, or through outsourcing).

As suggested by Sherwood, the courts also play an important role in scrutinising the behaviour of public officials through judicial review of administrative decisions, as well as through the resolution of disputes in relation to freedom of information (FOI), privacy, anti-discrimination, and human rights.  As noted above, the Federal Court recently has assumed responsibility for a large number of cases in this area that previously were dealt with by commissions or tribunals.

The role of the courts in giving force to private contractual arrangements should not be overlooked in relation to economic function.  This facility not only upholds the integrity of those agreements, but also ensures that future agreements are negotiated and concluded in the ‘shadow of the law’, with the knowledge of possible court scrutiny – thus securing the good faith basis and smooth operation of the market economy.

Direct investment in legal services

According to the latest available ABS figures, Australian businesses spent about A$3 billion on external legal services[54] in 1995-96.  Individuals and not-for-profit companies spent another $1.4 billion.[55]

Australian governments (federal, state and territory) collectively spent $320M during the same year on external legal services.  A study of federal spending on all legal services (in-house and external), conducted for the purposes of facilitating contestability for the provision of legal services to government, put this figure at $198M in 1997 for the federal government alone.[56]

The Commission estimates that, given the subject matter of federal jurisdiction, roughly one-third of annual spending on legal fees may relate to actions in the federal civil justice system.[57]

There have been major reforms in Australia over the past decade serving to put pressure on legal fees.  In particular, the application of competition policy to the delivery of legal services has swept away most of the more egregious old restrictive trade practices (such as the impediments to inter-state practice, bans on advertising, the maintenance of a lawyers’ monopoly over property conveyancing, limits on the rights of appearance in courts of solicitors, and the ‘two counsel rule’ and ‘two-thirds rule’ of the separate Bar[58]).

However, the Commission found that the development of a genuinely competitive market for legal services is still in its infancy, and needs further encouragement.  Governments and big business – especially those companies that are ‘repeat players’ in the justice system, such as insurance companies, are able to drive hard bargains, and can secure reasonably good deals.[59]  The traditional ‘loyalty’ of large corporations – and governments, from local governments through to the federal government – to particular major law firms also has broken down, with formal tendering for legal services and diversification (eg compliance work given to one firm, and tax to another) increasingly common.

Individuals and small businesses are still in something of a bind, however, lacking the size, purchasing power, and the raw information to bargain effectively with providers of legal services.

In Managing Justice, the Commission makes a number of recommendations for reform aimed at improving this situation.[60]  Among other things, the Commission called for: 

  • the development of uniform rules mandating disclosure to consumers of legal fees and costs arrangements, and requiring early and on-going estimates of exposure for such expenses;
  • legal professional associations to develop express ethical obligations regarding the need to charge ‘reasonable’ fees;
  • measures to place more information into the public domain about the costs of legal services, including asking the national Consumer Affairs Advisory Council to play a special role in this regard;  and
  • the federal courts and tribunals to move away from time-based scales of costs[61] for legal fees involved in litigation, in favour of new ‘event-based’ scales, which would provide much greater certainty in this area, promote more efficient practices among lawyers, and allow better planning and control of litigation by parties. 

Given the massive expenditure on and consumption of legal services, and the importance of quality advice to business planning and development, there is good reason for business – and the general community – to take a more active interest in the education, training and regulation of lawyers, in order to promote higher standards of technical, and ethical, practice.

As noted above, the Commission devoted considerable space in Managing Justice to discussion and recommendations[62] aimed at encouraging educational institutions and professional associations to shift the focus of legal education away from a pre-occupation with substantive rules, and towards an increased emphasis on high order professional skills, process, problem-solving, and professional responsibility.

Lawyers also must be trained to be sensitive to the client’s particular environment when providing representation of formulating advice – whether this is the economic and commercial environment in the case of corporate clients, or the cultural background of a family law litigant, or the principled need for governments to operate as ‘model litigants’.

Direct investment in the federal courts

In the financial year 1997-98, the Australian government spent about A$170M on the federal court system (net $144M, after allowing for the receipt of court fees and other income), and about $109M on federal tribunals, including the Australian Industrial Relations Commission (net $107M).[63]

Thus, there is a very clear financial incentive for government to ensure the efficiency of the courts and tribunals – both in terms of the direct public expenditure on the maintenance of the civil justice system, as well as on the public and private expenditure on legal services involved in pursuing individual matters.  Legal expenses by businesses are tax deductible, so there is also a direct public interest in private expenditure, apart from the general desirability of more efficient legal processes.

The Commission noted that surprisingly little research had been conducted or published on case management and other system-wide issues in Australia.  To remedy this, the Commission recommended that universities, courts, tribunals, law firms, legal professional associations, law reform agencies, research centres, legal interest groups and the business community should actively seek opportunities to undertake collaborative, applied research relevant to the operation and working of the federal civil justice system.[64]

The importance of effective case management

Given the scale of the legal system, even small efficiency gains can free up substantial amounts of capital (as well as time and creative energy) for more productive use in the service of economic and social development.

For this reason, the central core of the Commission’s Discussion Paper and final Report focussed on case management, practice and procedure in the federal courts and tribunals.  As noted above, the Commission found that the Federal Court meets the standards of a ‘world class’ civil court,[65] while the Commission expressed concern about the performance of the federal merits review tribunals,[66] and serious concern about the management and performance of the Family Court.[67]

In a number of areas, the Federal Court ‘competes’ with the State and Territory Supreme Courts, which also may have jurisdiction to hear a particular matter.  In some cases, lawyers may frame an action in a particular way depending upon whether they wish to have the matter heard in state or federal jurisdiction.  The Commission’s consultations with lawyers using the parallel court systems revealed a high regard for the Federal Court and its ‘engaged’ judges.  Much of this is as a result of the factors I have already mentioned, and the Federal Court’s utilisation of the modified individual docket system (IDS) to manage its caseload.

The Commission consulted with several hundred practitioners from around Australia experienced in Federal Court litigation, with expert witnesses, some litigants and judges and administrative staff from the Court.  Submissions and consultations were overwhelmingly supportive and complimentary of the IDS, although practitioners did record some areas of potential concern – in particular the problem of drawing a busy docket judge, who becomes sidelined with a lengthy case, and also the possibility of idiosyncratic management practices developing as between individual judges, or between registries.[68]

The IDS is said to deliver benefits flowing from the same judge dealing with a case from start to finish.  The docket judge knows the case and is able to manage and tailor processes for the particular case.  Practitioners strongly supported such judicial management and the individual attention given to cases.  In some busy registries, registrars conduct directions hearings for particular docket judges.  This ‘team’ approach is also said to work well.

One of the stated aims of the IDS is to ‘minimise the number of events and maximise the result of each event’.[69]  Unnecessary court appearances are discouraged.  Parties frequently fax consent orders to the docket judge for approval before listed directions hearings, and directions hearings are often conducted by telephone.  With a judge ‘in charge’, directions hearings are said to be more formal, more productive, and allow earlier exchange of information and narrowing of the issues.

The IDS is said to prompt solicitors to brief counsel (barristers) earlier, and for counsel (rather than instructing solicitors) to attend directions hearings more frequently.  At first blush this would appear to add to the cost of litigation; however, in the long run the IDS is said to ensure that each court appearance becomes a meaningful occasion to advance or resolve the case.  Practitioners noted that such case management also contributes to earlier settlements.  In the nearly 700 Federal Court cases sampled by the Commission, it was evident that a large proportion of settlements (57%) were secured early in the process, and only four per cent of cases settled ‘at the courthouse door’.[70]

Practitioners also commented favourably on the increased flexibility associated with the IDS. Parties have ongoing discussions about substantive and practical management aspects of the case with the judge and speak directly to the docket judge's associate who facilitates flexible listings and ‘trouble shooting’ of case problems as they arise.  This cooperation between judge and practitioners in the management of the case and the monitoring by the judge of compliance with orders gives direct incentives for improved practitioner conduct and compliance.

One of the aims of the IDS was to improve the time taken to resolve cases.  The Federal Court’s annual reports show that there has been a continuing improvement in case duration since the introduction of IDS.[71]  The Commission’s study of the sampled cases showed the median period for cases from commencement to disposition was seven months, 85% of cases were resolved within 20 months, and 95% of cases were resolved within 34.5 months.[72]  Practitioners confirmed to the Commission that case resolution is now more timely and likewise credit the new case management arrangements.  Submissions and consultations also stressed the importance of their fixed trial date for promoting settlements and the effectiveness of processes.

The importance of ensuring appropriate judicial expertise

Specialist panels

The Federal Court’s particular version of the IDS is ‘modified’ to the extent that some specialist panels of judges have been established.  These panels operate in the larger registries of Sydney and Melbourne, in areas such as intellectual property, taxation, trade practices (antitrust/competition law), human rights, admiralty law, and industrial law.  Cases within these areas are randomly allocated to a judge on the specialist panel in the same way other cases are allocated under the IDS.  The panels are said to be self-selecting; that is, judges may (or may elect not to) nominate the panels on which they would like to sit, in consultation with the Chief Justice of the Federal Court.

There are differing views within the Court and the profession on the role and composition of such panels.  Essentially this is a debate about whether common law judges should remain generalists or become specialists.  The contrary argument is that whilst the marshalling of expertise in an area should be encouraged, there is a danger that a panel which is too small and specialised may create a ‘club’ culture, promote a matching mythology of expertise amongst the profession, encourage monopolies and constrain the development of the jurisprudence by minimising the intervention of fresh ideas and perspectives.

However, there is no question that the panel system also has led to the Federal Court being seen by the profession, and the business community, as the intellectual leader in such vitally important areas to the ‘new economy’ as intellectual property and competition law.  No doubt the high level of accumulated experience and expertise of panel judges also assists in the more efficient handling of complex cases and, ideally, promotes better decision making.

There is a desirable balance between expertise and accessibility, between the desire for specialist judges and a restricted club of specialists.  The Federal Court appears to be appropriately sensitive to the competing needs in the formation of panels, and the Commission chose to make no recommendations for change in this area.

Continuing judicial education

Many of the cases now before the Federal Court involve highly complex and technical evidence – sometimes said to be of ‘Nobel Laureate sophistication’ – about cutting edge thinking, research and development in science, medicine, biotechnology, engineering, economics, and information technology.

Whether heard by specialist panel judges or generalists, there is a critical need for the courts to ensure that judges become sufficiently ‘skilled up’ in these areas, at least to the extent of being able to converse with experts, understand the basic concepts and terminology employed, and appraise expert evidence tendered in court.

In our inquiry into the federal civil justice system, the Commission considered at some length the need for a coherent and high quality system of judicial education in Australia.  The Commission adopted the view of the earlier federal Access to Justice Advisory Committee (AJAC) that:

As important as any issue affecting access to justice is the quality of consideration provided by the judiciary during the hearing and determination of a matter.  While it is generally accepted that the quality of judicial decision making in Australia is of a very high standard, there is, no doubt, room for improvement in this area.  Given the inherent costs of litigation, not only to individual litigants but also to the community at large, the fewer first instance decisions that need to be corrected on appeal the cheaper and more efficient the court system will be.  There is clearly a nexus between the quality of decision making and the total cost of the court system, and hence access to justice.[73]

Although years ago there was some controversy attached to the notion of judicial education, this is now well accepted as a natural part of the professional development of judges, and there was very strong support from the judiciary for the Commission’s proposals in this area.  In particular, the Commission recommended the establishment of an Australian Judicial College with ‘formal responsibility for meeting the education and training needs of judicial officers, particularly in relation to induction and orientation courses for new appointees, and programs of continuing judicial studies and professional development’.[74]

It is pleasing that the federal Attorney-General, the Hon Daryl Williams, has expressed strong support for the Commission’s recommendation to establish an Australian Judicial College, and has placed the matter on the agenda of the Standing Committee of Attorneys-General for consideration and action.  The Chief Justice of Australia, the Hon Murray Gleeson, also has strongly endorsed this initiative.

Handling expert witnesses and evidence

Expert witnesses are involved in many cases in the Federal Court, including matters involving breaches of consumer protection or restrictive trade practices provisions of the Trade Practices Act; copyright, designs and other intellectual property cases; and income tax, sales tax and custom duties cases.

In recent years, the Federal Court has actively considered and implemented reforms on the use of experts.  The Court has issued a practice direction providing guidelines for expert witnesses, and promulgated a new rule.[75]

Expert assessors are sometimes appointed in Federal Court proceedings if the judge requires direct assistance in understanding the effect or meaning of expert evidence, due to the novel and technical issues raised.  A Federal Court judge might determine, for example, trade practices cases involving economic evidence as to market definition; copyright cases involving plans; admiralty collision cases on seamanship and navigation; patent cases[76] involving molecular biology; and native title cases turning on (oral and documentary) historical and anthropological evidence.

Some Federal Court judges and practitioners expressed concern about the procedural fairness of contact between judges and experts in chambers.  It was suggested that it may be more appropriate, and just as effective to assist the judge, if there were informal discussions between the assessor and the judge, in the presence of the parties’ representatives.  If judges were able to confer with the parties' expert witnesses in similar circumstances, in order to ask questions, this might obviate the need for an assessor.

In the Genetics Institute case, Justice Heerey of the Federal Court rejected the respondent's arguments that there were Constitutional impediments to the appointment of an assessor, stating that there was no question of an assessor giving a judgment or making an order or otherwise exercising any judicial functions.[77]

Federal Court judges have commented favourably on the usefulness of assessors, particularly in restrictive trade practices and intellectual property cases.  There are some practical problems in the selection and appointment of assessors, including in situations where expert evidence is not confined to one discipline or where there are few available experts, the best of whom may already have been retained by the parties.

In December 1999, the Federal Court promulgated new rules to provide for the appointment, with the consent of the parties, of an ‘expert assistant’ to assist the Court in relation to the determination of any issue or issues.[78]  The order for appointment is contingent upon the consent of both parties and any assistance from an expert assistant must be reduced to writing and communicated to the parties.

The Federal Court is also experimenting with other mechanisms to make more effective use of expert evidence adduced by the parties.[79]  Orders for the exchange of witness statements are now frequently made in the Federal Court in trade practices cases and intellectual property cases.  The most common criticism of early disclosure and exchange of witness statements is their cost.  The ‘front end loading’ of such costs may have an adverse effect on settlement opportunities.  However, the Commission’s consultations with experienced lawyers in this area suggest that these criticisms are unfounded.

These practitioners commented that, overall, witness statements provided a saving in costs and did not inhibit settlement options.  The Commission's data showed that trade practices and intellectual property sample cases either settled early in proceedings or went through to a hearing.  The early exchange of information, and witness statements, in these cases appears to contribute to this high, early settlement rate.

In Managing Justice, the Commission made a number of recommendations aimed at addressing common complaints that the presentation of expert evidence in the courts is the source of ‘unwarranted cost, delay and inconvenience in court and tribunal proceedings’,[80] and that many expert witnesses acted as partisans (depending upon who retained them) rather than as independent experts in the service of the court.  Among other things, the Commission recommended that: 

  • the Australian Council of Professions develop a generic code of ethical practice for expert witnesses, supplemented by discipline-specific provisions where appropriate;[81] 
  • federal courts and tribunals should encourage pre-hearing conferences and other communication and contact among experts;[82] 
  • federal courts and tribunals should encourage parties to agree jointly to instruct to expert witnesses;[83] and 
  • federal courts and tribunals should encourage the adducing of expert evidence in a panel or ‘hot tub’ format, wherever appropriate.[84] 

Conclusion

Corporate lawyers and in-house counsel consulted by the Commission were emphatic in their view that law and legal services are a key export, and that an efficient court and legal system is part of what makes Australia economically competitive in the Asia-Pacific region and beyond.

In summarising our consultations, the Commission reported that there has been consistent praise for the Federal Court as a ‘world class civil court’.  The Court’s excellent performance to date is based upon strong and effective leadership, the high quality of judicial appointees and senior administrative staff, a level of resources reasonably related to the volume and complexity of its workload, effective communication with stakeholders, and a positive approach to and capacity for change.

The respect shown by Australian lawyers for the federal court system can be capitalised upon for broader economic purposes.  Contracts which specify commercial dispute resolution processes involving Australian institutions (public or private) are of benefit to the Australian economy, and in particular to Australian lawyers.  More importantly, the Commission believes that the independence, integrity, and quality of the federal civil justice system are matters of comparative advantage in the region, which government and industry should promote strongly in positioning Australia to attract foreign investment and the location of corporate regional headquarters, as well as the recognition of Sydney as a major regional finance centre.

Over the past four years, the Commission’s work has focused on improving the efficiency and effectiveness of civil justice through systemic reform.  Our experiences and research have highlighted the need to aim reform wider than procedural or substantive law – it must encompass consideration of the way in which institutions manage their resources, the ability for institutions to meet the needs of their users, the culture and education of the legal profession and the judiciary.  When this holistic approach to reform is adopted, an effective and efficient legal system with a high reputation can be achieved.  The legal system and the courts can then play a constructive role in economic growth from a domestic and global perspective. 

 

Footnotes

[1] Australian Law Reform Commission, Managing Justice: A Review of the Federal Civil Justice System (ALRC Report No 89) January 2000 (released and launched by the federal Attorney-General on 17 February 2000).  (Hereafter ALRC 89.) The report may be downloaded free of charge from the Commission’s website at www.alrc.gov.au

[2] Particularly the Administrative Appeals Tribunal (AAT), the Migration Review Tribunal, the Refugee Review Tribunal and the Veteran’s Review Board, all of which are set to be amalgamated into a single federal Administrative Review Tribunal (ART) in 2001.

[3] Apart from general theories of the ‘reception’ of the English common law into the Australian colonies, with colonial settlers said to ‘wear the common law on their backs’, the British Home Office also dispatched formal Letters Patent to the colonial administration, also known as the Charters of Justice’, which made clear that the laws and court systems, and even the organisation of the legal profession, should be created in the English style.  See D Weisbrot, Australian Lawyers (1990) 165-166 and 170. 

[4] See, eg, ALRC 89, para 1.132. 

[5] In section 51. 

[6] This has been a real issue in recent times, with the federal government over-riding the Northern Territory’s voluntary euthanasia law, but refusing to overturn NT laws on mandatory sentencing, which have had a particularly harsh effect on Aboriginal peoples.  The Commonwealth also regulates other territories under s 122 of the Constitution. 

[7] The High Court is at the top of judicial hierarchy in Australia, and is now the ultimate court of appeal.  Until 1986, appeals to the Privy Council in England were possible from the State Supreme Courts.  See the Australia Act 1986 (Cth) and the mirror Australia Act 1986 (UK). 

[8] In general terms, the Federal Court and Family Court are treated as being similar to State Supreme Courts for the purposes of legal costs; the FMS is pegged at about the level of a State District or County Court. 

[9] The Commission has received a reference from the Attorney-General to review the Judiciary Act 1903 (Cth), to determine ‘the most appropriate arrangements for the efficient administration of law and justice in the exercise of the judicial power of the Commonwealth’.  The Commission’s report and recommendations are due in mid-2001. 

[10] Re Wakim; Ex parte McNally (1999) 163 ALR 270.

[11] R v Hughes (2000) 171 ALR 155.

[12] The United States also has divided authority in this area, but its sheer economic power and attractiveness for foreign investors overwhelms concerns about the detail of regulation.  The dominance of the state of Delaware, which accounts for a very large percentage of incorporations, also achieves a certain level of de facto uniformity.  However, as a second tier economic power, with no one dominant state, Australia is in a much different position. 

[13] S Lewis and K Towers ‘CEOs plead for legal certainty’ Australian Financial Review 25 August 2000, 5.

[14] Such referral is not permanent, however - States subsequently may revoke the referral of a power.  States also can still pass on laws on matters referred, but they are subject to federal supremacy, in the event of any inconsistency, under s 109 of the Constitution. 

[15] Each state and territory retains its own professional admitting authority, however, usually dominated by judges. 

[16] According to the latest available figures from the Australian Bureau of Statistics (ABS). 

[17] See D Weisbrot, Australian Lawyers (1990) 59-62, 164-230. 

[18] Ibid, at 63. 

[19] See the report of the International Legal Services Advisory Council (ILSAC), an advisory body to the federal Attorney-General, Australian Legal Services Export Development Strategy Outline 1999-2002 (June 1999), which may be found at http://www.ag.gov.au/aghome/advisory/ilsac/exportreport/exportreport.html

[20] Ibid. 

[21] Weisbrot, at 257-266. 

[22] ILSAC Report. 

[23] Ibid. 

[24] ILSAC, ibid, reporting ABS figures.

[25] Under the Australian Law Reform Commission Act 1996 (Cth), ss 20-21, the Commission works on matters referred by the federal Attorney-General. 

[26] The Commission’s work in this area follows, among other things, that of the ad hoc federal Access to Justice Advisory Committee (AJAC), which reported its concerns and recommendations in Access to Justice: An Action Plan (1994); and the two reports which emerged from 1991 Costs of Justice Inquiry (COJI) conducted by the Australian Senate’s Standing Committee on Leal and Constitutional Affairs. 

[27] Including a good mix of solicitors and barristers, generalists and specialists, large and small firm private practitioners and those employed by legal aid authorities and community legal centres, urban and rural/regional practitioners, and so on, representing the breadth of practice styles and experience. 

[28] The Commission used a number of social science and statistical experts to design and implement the study, analyse the data, and then later analyse the data again.  See ALRC 89, para 1.28. 

[29] As noted, the Commission’s study covered federal civil matters; by definition, we did not look at the criminal justice system, nor civil matters dealt with in the State and Territory courts.  Therefore, some of the areas that commonly attract media and public criticism (whether this is warranted or not), such as criminal sentencing, personal injury litigation, and defamation, were not considered.  Nevertheless, the Commission would stand by its general assessment. 

[30] See D Weisbrot, Australian Lawyers (1990) 239-247. 

[31] See the comments of former Australian Attorney-General Michael Lavarch, in ALRC 89, at para 1.60. 

[32] See the keynote address by the Chief Justice of Australia, the Hon Murray Gleeson, to the Managing Justice Conference, 18 May 2000. 

[33] See ALRC 89, chapter 8. 

[34] Appointed under Chapter III of the Constitution, with all of the associated guarantees of independence and tenure.  As noted above, this includes State and Territory judges when exercising federal jurisdiction. 

[35] And, indeed, the vast majority of criminal prosecutions are concluded by pleas of guilty. 

[36] T Brown et al Violence in families report number one: The management of child abuse allegations in custody and access disputes before the Family Court of Australia Department of Social Work and Human Sciences Monash University Melbourne 1998.

[37] See ALRC 89 at para 1.108, in which the Chief Justice of New South Wales, the Hon JJ Spigelman, is quoted as saying: ‘We must never lose sight of the fact the legal system is the exercise of a governmental function, not the provision of a service to litigants as consumers’. 

[38] See ALRC 89, at para 1.109. 

[39] Australian Law Reform Commission, Review of the Federal Civil Justice System (Discussion Paper 62, August 1999) (hereafter DP 62). 

[40] See ALRC 89, at para 1.130, and the citations in footnote 206. 

[41] See, eg, Basil Markesinis, The Gradual Convergence: Foreign Ideas, Foreign Influences, and English Law on the Eve of the 21st Century (Oxford University Press 1994).  See also ALRC 89, paras 1.111-1.134. 

[42] Adrian Zuckerman (ed), Civil Justice in Crisis: Comparative Perspectives of Civil Procedure (Oxford University Press 1999) 47-48. 

[43] Following the landmark High Court decisions in Mabo v Queensland (No 2) (1992) 175 CLR 1, and The Wik Peoples and Thayorre People v Quend (1996) 187 CLR 1, and according to the processes specified in the Native Title Act 1993 (Cth), as amended.  See G Nettheim, ‘The Search for Certainty and the Native Title Amendment Act 1998 (Cth)’ (1999) 22 University of New South Wales Law Journal 564. 

[44] Brandy v HREOC (1995) 183 CLR 245.  The Human Rights and Equal Opportunity Tribunal (HREOC), and federal tribunals not constituted as Ch III courts – for example, those in which members do not have the status and tenure of judges – are limited to the exercise of an administrative discretion. 

[45] See ALRC 89, chapter 2. 

[46] ALRC 89, Recommendation 6. 

[47] ALRC 89, Recommendation 2. 

[48] Edwin Mansfield, Intellectual property protection, foreign direct investment, and technology transfer Discussion Paper 19, International Finance Corporation of the World Bank Group, 1994; Mansfield, Intellectual property protection direct investment, and technology: Germany, Japan and the United States Discussion Paper 27, International Finance Corporation of the World Bank Group, 1995. 

[49] Ibid, and see Robert M Sherwood, ‘The Economic Importance of Judges’, paper delivered to the International Judges Conference, Washington DC, 1999, at p 7, referring to work of Robert Solow. 

[50] Sherwood, ibid, at p 3, and cited in ALRC 89, at para 1.105. 

[51] Most of which are routine, and handled by the Court’s registrars. 

[52] This survey preceded the High Court decision in Wakim, discussed above, which has threatened the jurisdiction of the Federal Court to hear cases in this area. 

[53] See J Crawford, Australian Courts of Law (Oxford University Press, 1982) 216-237.  Only New Zealand and Singapore, among developed countries, had similar systems. 

[54] This excludes the considerable amounts devoted to maintaining in-house legal departments. 

[55] ALRC DP 62, para 4.43. 

[56] B Logan et al, Report of the review of the Attorney-General’s legal practice (Canberra AGPS, March 1997) 

[57] ALRC DP 62, para 4.40. 

[58] Under these rules, a senior advocate (Queens Counsel or ‘QC’) could not appear in court without a junior barrister, who normally would be paid 2/3 of the fees of the QC – raising the cost to clients. 

[59] Legal aid rates certainly set the low-end benchmarks. 

[60] ALRC 89, chapter 4. 

[61] These are the scales which courts refer to in awarding the ‘party-party costs’ to be paid by unsuccessful litigants to the winning party.  Although these scales are not strictly determinative of the fees lawyers may charge, they are nevertheless influential, and publicly available. 

[62] ALRC 89, chapter 2. 

[63] ALRC DP 62, paras 4.5-4.12. 

[64] Recommendation 1; see ALRC 89, paras 1.27-1.46. 

[65] See ALRC 89, chapter 7. 

[66] See ALRC 89, chapter 9. 

[67] See ALRC 89, chapter 8. 

[68] See ALRC 89, paras 7.11-7.13, and Recommendation 71. 

[69] See the Federal Court’s homepage: <http://www.fedcourt.gov.au/individual.htm>

[70] The Commission’s empirical study found that 35% cases in the Federal Court proceeded to a final hearing and judgement.  This is a lower settlement rate than is found in most courts, but reflects the nature of the caseload.  Matters involving refugee status or migration, for example, are far less susceptible to settlement than claims for monetary damages. 

[71] Additional factors may have contributed to the improvement, including a new power for the Court to order compulsory mediation, a temporary decrease in the number of applications filed in the Court and the changing nature of the case mix.  However, the Court’s own view is that the introduction of the IDS was probably the most significant factor. 

[72] T Matruglio and G McAllister, Empirical information about the Federal Court of Australia: Part One (ALRC, March 1999). 

[73] ALRC 89, para 2.147, quoting the AJAC Report at para 15.80. 

[74] ALRC 89, Recommendation 8, at 175. 

[75] Practice Direction: Guidelines for Expert Witnesses in Proceedings in the Federal Court of Australia (15 September 1998), and Federal Court Rule O 34A, respectively. 

[76] See s 217 of the Patents Act 1990 (Cth). 

[77] Genetics Institute Inc v Kirin-Amgen Inc (1997) 149 ALR 247, 250.  An appeal to the Full Court of the Federal Court upheld Justice Heerey’s view: see (1999) 163 ALR 761.  

[78] Federal Court Rule O 34B. 

[79] See ALRC 89, paras 6.74-6.130, and 7.195-7.198. 

[80] ALRC 89, para 6.75. 

[81] Recommendation 65. 

[82] Recommendation 62. 

[83] Recommendation 66. 

[84] Recommendation 67; see ALRC 89, paras 6.113-6.122, for a discussion of this procedure.