The Australian context

5.44 The possibility of introducing pre-action protocols similar to those suggested by the Woolf Report has attracted attention in reports by:

  • the Access to Justice Taskforce of the Australian Government Attorney-General’s Department in A Strategic Framework for Access to Justice in the Federal Civil Justice System (Access to Justice Report);[62]

  • the National Alternative Dispute Resolution Council in The Resolve to Resolve—Embracing ADR to Improve Access to Justice in the Federal Jurisdiction (NADRAC Report);[63] and

  • the Victorian Law Reform Commission in Civil Justice Review 2008 (VLRC Report).[64]

5.45 These reports have informed a less prescriptive approach in Australia— culminating in recent and proposed reforms—that has instead focused on general pre- litigation steps, rather than specific pre-action protocols. The Civil Procedure Act 2010 (Vic) requires parties to take ‘reasonable steps’ to resolve their disputes before commencing litigation. Similarly, the Civil Dispute Resolution Bill 2010 (Cth) proposes that parties should take ‘genuine steps’ to resolve disputes before commencing litigation.

Civil Dispute Resolution Bill 2010 (Cth)

5.46 The Civil Dispute Resolution Bill 2010 (Cth) was reintroduced into Parliament on 20 September 2010.[65] The overall aims of the Bill are:

  • to change the adversarial culture often associated with disputes;

  • to have people turn their minds to resolution before becoming entrenched in a litigious position; and

  • where a dispute cannot be resolved and the matter proceeds to court, the issues are identified reducing the time required for a court to consider the matter.[66]

5.47 The Bill seeks to achieve these aims by requiring parties to file a ‘genuine steps statement’ at the time of filing the application to commence a civil proceeding.[67] The statement must specify the steps the party has taken to resolve the issues, or if no steps were taken, an explanation as to why no steps were taken.[68] Non-compliance is not a bar to commencing proceedings, but the court may, in the circumstance of non-compliance by any party, award costs in favour of the complying party.[69]

5.48 The ‘genuine steps’ formulation implemented a recommendation made in the NADRAC Report that:

The legislation governing federal courts and tribunals require genuine steps to be taken by prospective parties to resolve the dispute before court or tribunal proceedings are commenced.[70]

5.49 The ‘genuine steps’ formulation was preferred over other formulations, such as ‘genuine effort’ or ‘good faith’ requirements. NADRAC considered that the reference to ‘effort’ was a subjective concept that may be misinterpreted as applying a standard of conduct to some ADR processes that is inappropriate.[71] A further concern was that such formulations might ‘open the door for satellite litigation about the conduct of the parties in costs hearings’.[72]

5.50 The Bill does not define ‘genuine steps’. Rather, the non-prescriptive approach is intended to ‘ensure that the focus is on resolution and identifying the central issue without incurring unnecessary upfront costs, which has been a criticism of pre-action protocols’.[73] As the Australian Government Attorney-General notes in his second reading speech:

The Bill does not introduce a mandatory alternative dispute resolution or prescriptive or onerous pre-action protocols, nor does it prevent a party from commencing litigation. It is deliberately flexible in allowing parties to tailor the genuine steps they take in the circumstances of the dispute.[74]

5.51 While the consideration of ‘genuine steps’ is primarily left to the parties, a number of illustrative examples are given in clause 4, including:

  • notifying the other person of the issues that are, or may be, in dispute, and offering to discuss them, with a view to resolving the dispute;

  • responding appropriately to such notification; and

  • providing relevant information and documents to other persons to enable the other person to understand the issues involved and how the dispute might be resolved.[75]

5.52 Under the proposed law, lawyers will have an obligation to advise their clients about the requirements and assist them to comply.[76]A lawyer may be ordered to bear adverse costs orders personally, for failing to meet this obligation.[77]

5.53 The Bill also provides that the rules of court under the Federal Court of Australia Act 1976 (Cth) or the Federal Magistrates Act 1999 (Cth) may make provisions for or in relation to:

  • the form of genuine steps statements;

  • the matters to be specified in genuine steps statements; and

  • the time limits relating to the provisions of copies of genuine steps statements.[78]

Civil Procedure Act 2010 (Vic)

5.54 The Civil Procedure Act 2010 (Vic) was enacted on 12 August 2010,[79] and adopted recommendations in the VLRC Report that a general pre-action protocol should be implemented in Victoria.[80] The Act requires that ‘each person involved in a civil dispute must comply with the pre-litigation requirements prior to the commencement of any civil proceeding in a court in relation to that dispute’.[81] The requirements are to take ‘reasonable steps’ to resolve the dispute by agreement or to clarify or narrow the issues in dispute.[82]

5.55 As in the Civil Dispute Resolution Bill 2010 (Cth), the meaning of ‘reasonable steps’ is not defined in the Civil Procedure Act. Rather, the Act gives illustrative examples, such as:

  • exchanging appropriate pre-litigation correspondence, information and documents;[83] and

  • considering options for resolving the dispute without recourse to civil proceedings including resolution through genuine and reasonable negotiations or appropriate dispute resolution.[84]

5.56 Similar to the UK pre-action protocols, documents exchanged pursuant to pre-action requirements are subject to protection and their use is limited to resolution of the civil dispute.[85] Further, non-compliance is not a bar to commencing the proceedings, although the court may, on its own motion or by application by any party, take such non-compliance into account in making cost orders or any other orders.[86] The court may also order that the representative of a party, rather than the party itself, is to bear the cost of compliance if the court has determined that the representative’s conduct resulted in another party incurring unnecessary costs.[87]

5.57 Subject to court orders to the contrary, the costs of compliance with pre-action requirements are borne by each party.[88] This is notably different from the costs of discovery, which are typically borne by the party producing the documents (at least, at first instance) and not the requesting party.

5.58 However, the Act is less prescriptive than the VLRC’s recommendations in that it provides no guidance in relation to the content of letters of claims/response and timeframes for response for the purposes of reasonable steps.[89]

New South Wales

5.59 In April 2009, the NSW Department of Justice and Attorney General issued a Discussion Paper raising the introduction of pre-action protocols in the ADR context.[90] In addition to the general pre-action protocol, two further options were canvassed—specific protocols in relation to particular cases and the incorporation of the main elements of pre-action protocols into guidelines that a court could take into account when asked to adjudicate a civil dispute.[91] Serious failure to comply with the guidelines may result in adverse cost orders.[92]

5.60 A Draft Recommendations Report followed in September 2009. It proposed four types of matter that require participation in ADR before proceedings in a court or tribunal can be commenced: tenancy disputes, farm debt mediation, strata disputes and common law work injury claims.[93]

5.61 The draft recommendation would amend or add to the overriding purpose clause in s 56 of the Civil Procedure Act 2005 (NSW) to require the following:

  • people in a civil dispute to take all reasonable steps (such as negotiation, mediation and other ADR processes) to resolve the dispute without litigation; and

  • if litigation is necessary, before proceedings are commenced the parties are to take all reasonable steps to agree to the real issues required to be determined by a court.[94]

Queensland

5.62 In Queensland, the majority of personal injury claims are now governed by pre-action procedures after the Personal Injuries Proceedings Act 2002 (Qld) amended other legislation to provide a framework for pre-action protocols. The legislation is aimed at providing a speedy procedure for the resolution of claims and promoting settlement.[95] Parties are required to—within a certain timeframe—disclose information and documents,[96] join any contributors[97] and provide formal notification of claims.[98] A compulsory conference must be held on completion of the pre-action requirements,[99] and parties are to exchange final offers at the conclusion of the conference.[100]

5.63 In 2003, the Queensland Attorney-General appointed a stakeholder reference group to consider the possibility of common pre-action procedures for personal injury claims. The group issued its report in 2004 and proposed a revised general pre-action protocol that would apply to all cases of personal injury other than dust-related diseases, medical negligence and claims from minors.[101] The ALRC is not aware that these recommendations in relation to a general pre-action protocol have been implemented.

5.64 Some have suggested that, as a result of the specific pre-action procedure being introduced, ‘most personal injury litigation has disappeared’ in Queensland. Statistical data confirms a drop in proceedings initiated, however, it is difficult to confirm that this is attributable to pre-action protocols.[102]

The need for a tailored approach?

5.65 The above issues concerning implementation have led to considerable support for ‘bespoke’ or tailored pre-action protocols for specific types of dispute, recognising that in some instances there should be no applicable protocol.[103] Indeed, the relative success of the specific pre-action protocols compared to the general protocol in the UK suggests that their implementation in Australia warrants further consideration.

5.66 Lord Woolf recognised the importance of targeted protocols, stating that pre-action protocols ‘are not intended to provide a comprehensive code for all pre-action behaviour, but will deal with specific problems in specific areas’.[104] Indeed, Lord Jackson’s review found that general pre-action protocols lead to substantial delay and additional costs, and recommended that the general protocol be repealed, because ‘one size does not fit all’.[105]

5.67 The Hong Kong Chief Justice’s Working Party on Civil Justice Reform considered that pre-action protocols might have a bigger role to play in specialist lists, rather than general litigation in other courts.[106] The Working Party did not make any recommendations for the adoption of a general pre-action protocol, and concluded that any specific pre-action protocols introduced in specialist lists should be at the discretion of the courts.[107]

5.68 Similarly, the Access to Justice Report cautioned that not all matters that appear before courts will be suitable for pre-action protocols. For example:

in the migration jurisdiction, claims have already been through an extensive merits review process, and there is a high volume of relatively simple proceedings ... Introducing additional pre-action steps in this process is likely to extend the process and increase costs.[108]

5.69 Rather, it considered that pre-action protocols might best be targeted at categories identified as complex and time consuming, such as: taxation, competition law, consumer protection law, human rights and intellectual property matters.[109]

5.70 The report cautioned that, in designing pre-action protocols, the challenges identified in the UK had to be taken into account, including: effective enforcement mechanisms/sanctions; avoiding excessive front-loading of costs; and safeguards to avoid their misuse as a litigation strategy to inconvenience or intimidate the other party.[110] The report recommended that the Australian Government Attorney-General’s Department should work with federal courts to determine types of matters suitable for pre-action protocols.[111]

5.71 As Michael Legg and Dorne Boniface note:

The task is to identify the appropriate categories of case and the pre-action steps that will be beneficial. It should also be noted that pre-action protocols may be the victim of their own success. If the role of the protocol in securing more speedy resolution of dispute is not identified then it may be assumed that the dispute would have resolved without the protocol.[112]

ALRC’s views

5.72 While the Australian approaches centred on pre-litigation steps provide a non-prescriptive mechanism encouraging parties to attempt resolution before instituting civil proceedings, there appears to be a strong case for consideration of specific pre-action protocols for particular types of dispute.

5.73 The ALRC considers that the adoption of specific protocols for particular types of dispute should be explored. Given the implications of front-loading of costs, it is imperative that the benefits of pre-action protocols be leveraged efficiently and that the requirements are flexible depending on the size, complexity and nature of the dispute. At the same time, they ought to achieve a measure of efficiency and streamlining of the litigation process. The experience of specific pre-action protocols in the UK suggests that, if tailored properly, they have the potential to be effective in promoting a more cooperative culture based around the early exchange of relevant documents and the narrowing of the issues in dispute. This may have benefits in limiting the overuse of discovery and reducing costs, but also aids in creating ripe conditions for successful ADR.

5.74 The ALRC notes that the genuine/reasonable steps formulation underpinning the Civil Dispute Resolution Bill 2010 (Cth) and the Civil Procedure Act 2010 (Vic) is intended to encourage parties to attempt to resolve their disputes outside the court system. However, in a discovery context, specific pre-action protocols might prescribe more directly the conduct expected of prospective litigants when it comes to information disclosure and document exchange. For example, the ‘genuine steps’ taken by the parties may involve exchanging brief notice of a claim and acceptance and offers to negotiate, rather than turning their minds to the issues in dispute, or ensuring the early disclosure of relevant documents. To achieve the particular objectives of discovery earlier in the dispute-resolution process, specific pre-action protocols that are tailored and prescriptive—operating alongside a genuine/reasonable steps requirement—may impose express requirements to disclose relevant documents and information.

5.75 The ALRC further recognises that the adoption of specific pre-action protocols will need to be coupled with education and support for both the judiciary and the legal profession.

Proposal 5–1 The Australian Government and the Federal Court, in consultation with relevant stakeholders, should work to develop specific pre-action protocols for particular types of civil dispute with a view to incorporating them in Practice Directions of the Court.

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

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

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

[65] The Bill was originally introduced into Parliament on 16 June 2010, and then referred to the Senate Legal and Constitutional Affairs Committee for inquiry and report by 30 July 2010. However, due to the federal election, the Parliament was prorogued, and the Committee ceased its inquiry on 19 July 2010. The Bill was again referred to the Committee on 30 September 2010. The Committee is due to report on 22 November 2010.

[66] Explanatory Memorandum, Civil Dispute Resolution Bill 2010 (Cth), 4.

[67] Civil Dispute Resolution Bill 2010 (Cth) cl 6(1).

[68] Ibid cl 6(2).

[69] Ibid cl 12(1).

[70] National Alternative Dispute Resolution Advisory Council (NADRAC), The Resolve to Resolve: Embracing ADR to Improve Access to Justice in the Federal Jurisdiction (2009), 8, 30–35.

[71] Ibid, 31.

[72] Ibid.

[73] Commonwealth, Parliamentary Debates, House of Representatives, 30 September 2010, 270 (R McClelland—Attorney-General).

[74] Ibid.

[75] Civil Dispute Resolution Bill 2010 (Cth) cl 4(1).

[76] Ibid cl 9.

[77] Ibid cl 12(3).

[78] Ibid cl 18.

[79] The Act is due to commence on 1 January 2011.

[80] Victorian Law Reform Commission, Civil Justice Review, Report 14 (2008), 142.

[81] Civil Procedure Act 2010 (Vic) s 33(1).

[82] Ibid s 34(1).

[83] Ibid s 34(1)(a).

[84] Ibid s 34 (1)(b).

[85] Ibid s 35(1).

[86] Ibid s 39.

[87] Ibid s 38(2). This provisions appears to be wider than the Civil Dispute Resolution Bill 2010 (Cth), under which only a ‘lawyer’ may be ordered to pay costs for non-compliance.

[88] Ibid s 37.

[89] See Victorian Law Reform Commission, Civil Justice Review, Report 14 (2008), 143–144 outlining matters to be included in such letters. It was also recommended that where a person in dispute makes an offer of compromise before any legal proceedings are commended the court may, after the determination of the court proceedings, take that into consideration on the question of costs in any proceedings.

[90] Department of Justice and Attorney General (NSW), ADR Blueprint: Discussion Paper (2009).

[91] Ibid, 16.

[92] Ibid, 16.

[93] Department of Justice and Attorney General (NSW), ADR Blueprint Draft Recommendations Report 1: Pre-action Protocols & Standards (2009), 8–9.

[94] Ibid, 7.

[95] Personal Injuries Proceedings Act 2002 (Qld) s 4(2).

[96] Ibid ss 30–34.

[97] Ibid ss 30–34.

[98] Ibid ss 9–20J.

[99] Ibid ss 36–38.

[100] Ibid s 39.

[101] Stakeholder Reference Group, A Review of the Possibility of a Common Personal Injuries Pre-Proceedings Process for Queensland (2004).

[102] B Cairns, ‘A Review of Some Innovations in Queensland Civil Procedure’ (2005) 26 Australian Bar Review 184. See also, E Wright, National Trends in Personal Injury Litigation: Before and After the IPP (2006), prepared for the Law Council of Australia, 20–21. Figure 10 suggests that the combined number of personal injury actions commenced in Queensland Supreme and District Courts (Brisbane Registries) fell from 1176 to 293 for the period 2002–2003.

[103] M Legg and D Boniface, ‘Pre-action Protocols in Australia’ (2010) 20 Journal of Judicial Administration 39, 50. See also Australian Government Attorney-General’s Department Access to Justice Taskforce, A Strategic Framework for Access to Justice in the Federal Civil Justice System (2009), 104.

[104] Lord Woolf, Access to Justice: Final Report (1996), 111.

[105] R Jackson, Review of Civil Litigation Costs: Final Report (2009), 343.

[106] Chief Justice’s Working Party on Civil Justice Reform (Hong Kong), Civil Justice Reform: Final Report (2004), 68.

[107] Ibid, 73.

[108] Australian Government Attorney-General’s Department Access to Justice Taskforce, A Strategic Framework for Access to Justice in the Federal Civil Justice System (2009), 104.

[109] Ibid, 104.

[110] Ibid, 104.

[111] Ibid, Rec 8.1.

[112] M Legg and D Boniface, ‘Pre-action Protocols in Australia’ (2010) 20 Journal of Judicial Administration 39, 50.