Conducting civil litigation

7.92       At common law, the capacity test for a person to participate in civil proceedings is the same as the test for a person to enter into legal transactions.[114] There is a presumption of capacity ‘unless and until the contrary is proved’.[115]

7.93       The focus of the test is on the capacity of the person to understand they have a legal problem, to seek legal assistance about the problem, to give clear instructions to their lawyers and to understand and act on the advice which they are given.[116]

7.94       The test is issue-specific. That is, capacity must be considered in relation to the particular proceedings and their nature and complexity. This contrasts with the test of unfitness to stand trial in criminal law.

The civil test takes a functional approach to capacity in that it assesses a person’s ability to make a particular decision at a particular moment in time, and not a person’s ability to make decisions more generally.[117]

7.95       The test is able to take into account the level of legal representation. In particular, the level of capacity required to be a litigant in person is higher than where the person is required to instruct a lawyer because a litigant in person has to manage court proceedings in an unfamiliar and stressful situation. Therefore, ‘a person who does not have the mental capacity to represent themselves may have sufficient capacity to be able to give instructions to a lawyer to represent them’.[118]

Litigation representatives

Recommendation 7–3               The Federal Court of Australia Act 1976 (Cth), Family Law Act 1975 (Cth) and the Federal Circuit Court of Australia Act 1999 (Cth) should provide that a person needs a litigation representative if the person cannot be supported to:

(a)           understand the information relevant to the decisions that they will have to make in conducting proceedings, including in giving instructions to their legal practitioner;

(b)           retain that information to the extent necessary to make those decisions;

(c)           use or weigh that information as part of a decision-making process; or

(d)           communicate the decisions in some way.

7.96       Where a person does not have capacity to conduct litigation, a litigation representative may be appointed. A litigation representative may also be known as a litigation guardian, case guardian, guardian ad litem, next friend, tutor or special representative.[119] The ALRC chose to use the term ‘litigation representative’, which is also used by the Federal Court, because the current duties of people acting in this role are consistent with the use of the term ‘representative’ elsewhere in this Report—notably, in relation to ‘supporters’ and ‘representatives’ in Chapter 4.

7.97       In broad terms, a litigation representative acts in the place of the person and is responsible for the conduct of the proceedings.[120] The circumstances in which a litigation representative must be appointed are established at common law. The rules of federal courts make express provision for litigation representatives. Under these rules, a person may be assessed as needing a litigation representative if the person:

  • is ‘under disability’ (High Court);[121]

  • is ‘under a legal incapacity’ because of being a ‘mentally disabled person’ and ‘not capable of managing the person’s own affairs in a proceeding’ (Federal Court);[122]

  • is ‘with a disability’ and ‘does not understand the nature or possible consequences of the case; or is not capable of adequately conducting, or giving adequate instruction for the conduct of, the case’ (Family Court);[123]

  • ‘does not understand the nature and possible consequences of the proceeding or is not capable of adequately conducting, or giving adequate instruction for the conduct of, the proceeding’ (Federal Circuit Court).[124]

7.98       The rules of federal courts make provision for the appointment, removal and conduct of litigation representatives. In general, a litigation representative is appointed by the court, on the application of a party or an interested person, such as a parent or guardian or, sometimes, the person’s own lawyer.

7.99       Litigation representatives can also be removed or substituted by the court, on the application of a party or on its own motion. There are no other review mechanisms for the conduct of a litigation representative, except to the extent that the representative’s conduct may be reviewed under state and territory guardianship laws, if the representative is also a guardian or administrator.

7.100   The ALRC recommends that—as with the new test in relation to criminal proceedings—the law concerning the appointment of litigation representatives should be consistent with the National Decision-Making Principles and associated Guidelines.

7.101   Leaving aside the question of support, there is little difference between this recommendation and the position that applies at common law in determining whether a person has capacity to conduct civil litigation.[125]

7.102   However, the way in which some federal court rules are drafted appears inappropriate and does not fit with contemporary conceptualisations of capacity and disability. In particular, some rules seem to adopt elements of a ‘status-based’ approach that is inconsistent with the CRPD, and references to incapacity and disability should be removed. The rules should reflect a focus on a person’s ability to conduct litigation in the particular proceedings, rather than whether they have a ‘disability’.

7.103    The Support Guidelines recognise that ability should be assessed by reference to the decision to be made, and that ability may evolve or fluctuate over time. Consistently, orders appointing a litigation representative may be varied—for example, where the court has evidence that a person originally assessed as needing a representative due to mental illness is found to have recovered sufficiently to be able to give instructions.[126]

7.104   Some stakeholders expressed concern at the similar test proposed in the Discussion Paper. The Federal Court of Australia observed that ‘greater participation in proceedings before the Court by litigants with impaired decision-making ability would impose an additional burden on the Court’. The Court stated that:

This could quickly become unmanageable, particularly in an environment of increased participation of self-represented litigants generally, diminishing resources and increasing workload and complexity of litigation.[127]

7.105   The Law Council submitted that the proposed test focused ‘too narrowly on the disabled person’s direct engagement with the legal process, and does not address the capability or otherwise of the disabled person to instruct legal practitioners’.[128] It is implicit that the decisions a person ‘will have to make in the course of the proceedings’ would include decisions about how to instruct legal practitioners, the recommendation now expressly incorporates this element.

7.106   Other stakeholders supported reform along the lines proposed. Justice Connect and Seniors Rights Victoria (Justice Connect), for example, stated that they supported a ‘move away from a status based approach to incapacity which is inconsistent with the CRPD towards a decision specific approach’. However, they counselled that it is important to retain an objective element in the test—that is, it should be necessary for there to be ‘some sort of cognitive or mental impairment’ because otherwise

there is a very real risk that the appointment of a substitute decision maker will be made in circumstances where a person is perceived to be making risky or unwise decisions. It can be difficult to divorce the ‘quality’ of a decision from the process of making the decision, which can have the effect of denying an older person the dignity of risk. This is particularly relevant for older people who receive formal care. In our experience, service providers are often concerned about breaching their duty of care owed to the older person when the older person makes decisions that may be deemed unsafe or unwise.[129]

7.107   The Law Institute of Victoria (LIV) considered that the requirement for evidence of cognitive impairment is an important safeguard, because evidence of a causal link between decision-making ability and some form of cognitive impairment is ‘important to protect the right of individuals with capacity to make unwise or risky decisions’.[130] The ALRC is not convinced that such a threshold is desirable and is concerned that it would leave open a return to status-based approaches to decision-making ability.

7.108   The Federal Circuit Court of Australia suggested that an understanding of the ‘possible consequences’ of the proceedings should be included in the test [131] but, in the ALRC’s view, this is encompassed adequately by the reference to using or weighing information ‘as part of a decision-making process’.

The role of support

7.109   A more significant change than the new test of decision-making ability is to require courts to consider the available decision-making support in determining whether a person needs a litigation representative. The wording of the ALRC’s recommendation concerning the test for eligibility to stand trial now explicitly incorporates the concept of support.

7.110   Existing law does not expressly enable the availability of support to be taken into account in assessing whether a litigation representative should be appointed. However, in some ways this concept can be seen as a manifestation of the current common law approach of assessing capacity in the context of the particular transaction or proceedings.[132]

7.111   Implementation of this recommendation would more likely than not result in more people being involved in civil litigation without having a litigation representative formally appointed—assuming support is available.

7.112   The Law Council’s Family Law Section advised that the requirement to consider available support is ‘likely to result in more protracted and costly litigation for all parties, particularly in family law matters’. The Law Council expressed concern that ‘limited court resourcing, chronic underfunding of legal aid and rising costs of litigation present serious practical barriers to the implementation’ of the recommendation.[133]

7.113   An overarching purpose of federal civil practice and procedure provisions is to facilitate the just resolution of disputes, according to law, and ‘as quickly, inexpensively and efficiently as possible’.[134] From some perspectives this reform may be seen as making the resolution of some disputes less ‘efficient’.

7.114   Arguably, lawyers and courts need to know from whom they should take instructions and applications—that is, for the interests of a party to be represented by one voice. Facilitating and ensuring the participation of litigants with impaired decision-making ability may be considered too complex for lawyers and courts to manage. For example, the Federal Circuit Court observed that, in courts where there is an emphasis on negotiation and the use of alternative dispute resolution,

representatives of other parties may have difficulty in dealing with a person who is unable to understand the nature and possible consequences of the proceeding or any offer of compromise that might be had.[135]

7.115   Another relevant factor is that, under an adversarial system, courts are not easily able to facilitate the participation of persons with impaired decision-making ability in legal proceedings. In this context, there are parallels with the well-documented problems faced by unrepresented litigants in civil justice settings; and the challenges for courts in dealing with such litigants.[136]

7.116   In the ALRC’s view, concerns about efficiency are outweighed by the need to promote the dignity, equality, autonomy, inclusion and participation of all people involved in civil proceedings. As discussed below, additional resources may be needed to enable supported decision-making to operate.

The role of litigation representatives

Recommendation 7–4               The Federal Court of Australia Act 1976 (Cth), Family Law Act 1975 (Cth) and the Federal Circuit Court of Australia Act 1999 (Cth) should provide that litigation representatives must:

(a)           support the person represented to express their will and preferences in making decisions;

(b)           where it is not possible to determine the will and preferences of the person, determine what the person would likely want based on all the information available;

(c)           where (a) and (b) are not possible, consider the person’s human rights relevant to the situation; and

(d)           act in a manner promoting the personal, social, financial and cultural wellbeing of the person represented.

Recommendation 7–5               Federal courts should develop practice notes explaining the duties that litigation representatives have to the person they represent and to the court.

7.117   Under federal court rules, a person who is found to need a litigation representative may only conduct proceedings through that representative. Relevant rules of court provide as follows:

  • ‘A person under disability shall commence or defend a proceeding by litigation guardian’ (High Court);[137]
  • ‘A person under a legal incapacity may start, or defend, a proceeding only by the person’s litigation representative’ (Federal Court);[138]
  • ‘A person with a disability may start, continue, respond to, or seek to intervene in, a case only by a case guardian’ (Family Court);[139]
  • ‘A person who needs a litigation guardian may start, continue, respond to or seek to be included as a party to a proceeding only by his or her litigation guardian’ (Federal Circuit Court).[140]

7.118   There is no obligation under common law or court rules for a litigation representative to make decisions that reflect the will, preferences and rights of the person represented. Rather, at common law, a litigation representative has a ‘duty to see that every proper and legitimate step for that person’s representation is taken’[141]—which seems akin to a ‘best interests’ test.

7.119   At present, a litigation representative has no obligation to consult or facilitate the participation of the person represented, except to the extent that such duties may be imposed by state or territory guardianship legislation (if the person is also a guardian or administrator).

7.120   The Hon Chief Justice Diana Bryant AO of the Family Court of Australia observed that the role of a litigation representative has been described as

an invidious one in the sense that the person is taking on the decision-making responsibilities of the litigant whilst having to ensure that their own interests do not conflict with those of the litigant. That means that the case guardian has to make decisions which are often unpalatable to the individual litigant.[142]

7.121   Clearly, this is a departure from the preferred will and preferences approach to supported decision-making recommended by the ALRC. Further, case law makes it clear that the role of a litigation representative is not only to ‘protect’ the person represented. The Full Court of the Federal Court has held that the purpose of the power to appoint a litigation representative is ‘to protect plaintiffs and defendants who would otherwise be at a disadvantage, as well as to protect the processes of the court’.[143]

7.122   Case law also emphasises concerns about protecting the rights of the other parties in the litigation. It has been said that requiring a litigation representative to conduct litigation helps to ensure, in some cases, that ‘parties to litigation are not pestered by other parties who should be to some extent restrained’ and that a ‘defendant is entitled to expect that he will not be required to defend proceedings brought against him by a person of unsound mind acting without a next friend’.[144]

7.123   In the ALRC’s view, litigation representatives should be required to act, so far as is practicable, in accordance with the National Decision-Making Principles.[145] To this end, legislation should provide that, in making decisions, litigation representatives have a duty to consider the will, preferences and rights of the person represented; and to promote their personal, social and financial wellbeing.

7.124   A number of stakeholders expressly supported the ALRC’s proposal concerning the duties of litigation representatives.[146] NACLC and PWDA observed that the proposal would work to encourage supported decision-making and the shift from ‘best interests’ to ‘will, preferences and rights’ decision-making. The Law Council recognised that the duties promote the optimal participation of represented persons in litigation, but expressed concern that additional duties and responsibilities may act as a disincentive to potential litigation representatives.[147]

7.125   The Federal Circuit Court observed that, in the context of parenting matters, where the best interests of the child are the paramount consideration, ‘it places a considerable burden on the litigation guardian should the wishes of the litigant be clearly contrary’ to those best interests.[148]

7.126   The Law Council agreed that court practice notes explaining the duties of litigation representatives would be desirable, because there is ‘a real likelihood of conflict of interest arising between a lay representative and the person they represent, particularly where they are related to the person they represent’.[149] In particular, in family law proceedings, the likelihood that a litigation representative is also a family member of the person represented means that possible conflicts of interest may arise.

7.127   The Federal Court expressed concern that the proposal may not give adequate weight to the important role litigation representatives have in ‘protecting both other parties to the litigation and the process of the court’.[150] A practice note, as recommended above, could help address issues concerning litigation representatives’ duties to the court.

7.128   The LIV supported clarification of the scope of the role and duties of litigation representatives, noting the ‘complexity arising from numerous court rules which establish different requirements and processes’.[151] At a roundtable hosted by the LIV, participants suggested that guidelines should be developed to assist litigation representatives, with a focus on:

  • What the role of litigation guardian involves;

  • The extent to which the litigation guardian should actively participate in the development of the represented person’s case;

  • Setting out activities which a litigation guardian may undertake, for example, obtaining reports to assist with the case or making contact with service providers;

  • The ability of litigation guardians to challenge their lawyer in ways that any litigant may challenge their lawyer;

  • The authority of a litigation guardian to change their lawyer;

  • Whether the litigation guardian needs to act through a lawyer when the litigation guardian is a lawyer; and

  • Whether settlement or consent orders need to be approved by the presiding Court.[152]

Appointing litigation representatives

7.129   In the ALRC’s view, the availability of support (and supporters and representatives) is central to the aim of encouraging more supported decision-making. Litigation representatives play an important role in providing people with the support necessary to enable them to bring or defend legal proceedings, facilitating their access to the justice system on an equal basis with others.[153]

7.130   In practice, problems relating to the appointment and availability of litigation representatives may be of equal or greater significance than the applicable legal rules and duties which are the focus of the Inquiry. Submissions raised concerns about:

  • the cost and availability of litigation representatives for people who are unable to instruct legal counsel;[154]
  • the lack of funding to meet the legal costs of case guardians in Family Court proceedings;[155]
  • the difficulties in securing the nomination by the Attorney-General of case guardians in Family Court proceedings where another suitable person is not available;[156] and
  • the availability of legal representatives who are independent of guardians appointed by state tribunals.[157]

7.131   A related problem mentioned by a number of stakeholders is the potential legal costs implications for those acting as litigation representatives.[158] Exposure to costs orders may have a deterrent effect on the willingness of individuals and organisations to act as litigation representatives. NACLC and PWDA observed that while a litigation representative should be personally liable for the costs of litigation if they do not act within the scope of their powers, or conduct the litigation appropriately, it is not otherwise in the interests of justice for litigation representatives to bear personal liability in this way.[159]

7.132   Chief Justice Bryant submitted that, given funding and access are acknowledged to be of considerable importance in ‘advancing autonomy and respect in decision-making by people with disabilities’, it was ‘unfortunate’ that the opportunity to make recommendations with respect to the ‘funding and appointment of case guardians was not seized’ by the ALRC.[160]

7.133   The Federal Circuit Court stated that it is not equipped to incorporate the ‘participatory model’ of decision-making proposed by the ALRC; and ‘significant resources’ would need to be made available to overcome existing problems in the availability of litigation representatives.[161]

7.134   There are similar concerns about the adequacy of legal aid funding. The Federal Circuit Court stated that it was ‘disappointing that little weight is given to the significant access to justice impediments currently being encountered by persons with impaired decision making ability when seeking to proceed in the courts’. These difficulties, it said, are ‘compounded in the context of current limitations on the availability of legal aid with litigants who might otherwise have sufficient capacity to instruct a lawyer facing additional impediments’.[162]

7.135   In this context, legal aid funding guidelines could facilitate the provision of litigation representatives, where necessary. The OPA (SA and Vic) also suggested that courts should be under an obligation to seek support for litigants and that, if funding is available to provide litigation representatives, as it currently is by application for some matters, then it should also be extended to the provision of more informal support.[163]

7.136   Some stakeholders commented on the appointment mechanisms for litigation representatives. The LIV noted that, at present, litigation representatives are appointed under court rules for the relevant court in which proceedings take place. Suggestions have been made that, while courts should retain the ability to appoint litigation representatives, they should also have the ability to refer that decision to specialist bodies, such as the Victorian Civil and Administrative Tribunal.[164] Better liaison between courts and guardianship boards and tribunals might enable litigation representatives to be more readily available.

7.137   National Decision-Making Principle 2 (the Support Principle) provides that ‘Persons who may require support in decision-making must be provided with access to the support necessary for them to make, communicate and participate in decisions that affect their lives’.

7.138   Problems concerning the availability of appropriate support have been a recurring theme during the course of the Inquiry—and not just in the context of litigation representatives. While it was appropriate to draw attention to the valid and urgent concerns of leading stakeholders, it was not practicable to address these in any detail within the scope of an inquiry that required a primary focus on laws and legal frameworks.

Solicitors’ duties

Recommendation 7–6               The Law Council of Australia should consider whether the Australian Solicitors’ Conduct Rules and Commentary should be amended to provide for a new exception to solicitors’ duties of confidentiality where:

(a)           the solicitor reasonably believes the client is not capable of giving lawful, proper and competent instructions; and

(b)           the disclosure is for the purpose of: assessing the client’s ability to give instructions; obtaining assistance for the client in giving instructions; informing the court about the client’s ability to instruct; or seeking the appointment of a litigation representative.

7.139   In some circumstances, the barriers to obtaining support necessary to conduct litigation, including the appointment of a litigation representative, may include the duties solicitors owe to their clients.[165]

7.140   Solicitors have a duty to act in the best interests of their clients,[166] and to follow a client’s lawful, proper and competent instructions.[167] A solicitor who has concerns about his or her client’s decision-making ability may be unwilling to act for a client who refuses, or is unable to agree to, investigations in relation to their ability or an application for the appointment of a litigation representative.

7.141   Solicitors must not disclose any information which is confidential to a client and acquired by the solicitor during the client’s engagement, subject to limited exceptions—which do not include seeking decision-making support.[168] However, the duty of solicitors to the court and the administration of justice is paramount.[169] Once proceedings are commenced, solicitors have a clear and unambiguous duty to raise with the court any concerns about a client’s capacity to conduct litigation.[170]

7.142   There is some case law establishing that concerns about a client’s capacity may ground an exception to duties of confidentiality. In R v P, a solicitor had sought the appointment of a public guardian to have control of his client’s estate and existing court proceedings, independently of his client’s wishes. The New South Wales Court of Appeal held that

the solicitor’s concern for the interest of the client, so long as it is reasonably based and so long as it results in no greater disclosure of confidential information than absolutely necessary, can justify the bringing of proceedings and such disclosure of confidential information as is absolutely necessary for the purpose of such proceedings.[171]

7.143   The Court also stated that the bringing of such actions is extremely undesirable because it involves the solicitor in a conflict between the duty to do what the solicitor considers in the client’s best interests and the duty to follow the client’s instructions (and maintain confidentiality).[172]

7.144   It has been suggested that, if there is no clear exception to solicitors’ duties of confidentiality, they may ‘cease acting for disadvantaged clients’ resulting in clients ‘moving from lawyer to lawyer or worse, being left unrepresented’.[173]

7.145   However, there are also arguments against reform, including on the basis that, if a statutory exception were to be introduced,

there may be a risk that lawyers would more readily make applications for the appointment of a substitute decision maker. Applications could potentially be made without the lawyer first trying to adequately support the client to enable the client to provide instructions themselves.[174]

Solicitors’ conduct rules

7.146   One option for reform would be new legal professional rules to make it clear that solicitors may disclose information when there is reason to believe the client lacks the ability to instruct. This would at least ensure that disclosure is not a ground for professional disciplinary action, but would not remove doubts about liability for breach of confidence or other liability under the general law.

7.147   One model is provided by the American Bar Association’s (ABA) Model Rules for Professional Conduct. These rules provide that,

When the lawyer reasonably believes that the client has diminished capacity, is at risk of substantial physical, financial or other harm unless action is taken and cannot adequately act in the client’s own interest, the lawyer may take reasonably necessary protective action, including consulting with individuals or entities … and, in appropriate cases, seeking the appointment of a guardian ad litem, conservator or guardian.[175]

7.148   The Queensland Law Society submitted that such rules could ‘provide greater clarity for practitioners along with professional certainty of being able to act to protect client’s interests’.[176] Other stakeholders also supported changes to solicitors’ conduct rules along the lines proposed by the ALRC.[177]

7.149   Legal Aid NSW, for example, submitted ‘amendments of this type could provide some much needed clarification and guidance to solicitors trying to assist clients who have some degree of diminished capacity’.

The adoption of the proposed rule would provide guidance and encourage solicitors to explore a variety of options prior to making an application to have a substitute decision maker appointed. In the event that it was necessary for the solicitor to make such an application, the proposed amendments to the Rule would make clear that such action is permissible and ethically responsible.[178]

7.150   The LIV advised that, at least in Victoria, while the courts have confirmed that, where proceedings are on foot, lawyers may have a duty to ‘raise the issue of the client’s capacity’,[179] the position is not clear when proceedings have not yet commenced.[180] If a person’s lawyer decides to make an application for the appointment of a substitute decision maker and the client objects, the lawyers may have no choice but to cease to act—leaving ‘the client vulnerable and without a means of meaningfully engaging with the justice system’.[181]

7.151   The LIV suggested amending r 9.2 of the Australian Solicitors’ Conduct Rules to include a further exception based on the ABA rules. That is, so that ‘where the lawyer reasonably believes the client has diminished capacity and is at risk of substantial physical, financial or other harm and the lawyer discloses confidential client information for the purpose of taking reasonably necessary protective action’:

Phrased in this way, the amendment would not prescribe a set approach, but affords the solicitor the discretion to choose the most appropriate course of action in the circumstances. The commentary to the Rules should provide direction as to what protective action might be contemplated.[182]

7.152   The LIV also submitted that the commentary to r 9.2 should be amended to provide that: the new exception should only be used as a last resort where no member of the client’s family is available or willing to act and alternatives have been explored; and in determining what protective action to take, the solicitor should be guided by the wishes and values of the client, the client’s best interests, with the goals of least intrusion, maximizing client capacities and respecting the family and social connections.[183]

7.153   Other stakeholders questioned the necessity or desirability of amendments to the Australian Solicitors’ Conduct Rules. The Law Council advised that, while its Professional Ethics Committee would give further consideration to this issue, ‘at the present time the Law Council would not support weakening the lawyer’s duty of client confidentiality to disabled clients’.[184] The National Mental Health Consumer and Carer Forum expressed concern that the proposed amendments may undermine the relationship between client and solicitor and encourage ‘paternalistic second-guessing’, which is not an ‘appropriate basis for the professional relationship and is not best practice’.[185]

7.154   Similarly, the Australian Research Network on Law and Ageing considered that ‘lawyers might too readily raise capacity issues without the requisite consideration of the supports necessary for a person to exercise their decision making rights’.[186] The Illawarra Forum stated that a new rule ‘could be open to interpretation and possible abuse and seems in conflict with the National Decision-Making Principles’.[187] NACLC and PWDA cautioned that, in the light of the importance and complexity of this issue, further consultation and consideration should occur prior to any ALRC recommendation.

7.155   The ALRC agrees that further, more detailed, consideration of this issue is required, especially given the reservations expressed by stakeholders. It would be appropriate for the Law Council to take the matter forward as part of ongoing review of the Australian Solicitors’ Conduct Rules and associated commentary.