DR 19 NSW Young Lawyers 
21 January 2011
Submitted on Friday, January 21, 2011 - 15:36 Submitted by user: younglawyers Submitted values are:

DR.:
First name: Rebecca
Last name: Smith
Email: ylgeneral@lawsociety.com.au
Please treat this submission as: Public
Are you making this submission as an individual, or on behalf of an organisation? Organisation Name of organisation: NSW Young Lawyers Postal address: Level 11, 170 Phillip Street SYDNEY
Postcode: 2000
State or Territory: New South Wales
Contact phone number: 02 9926 0268
--2. Legal Framework for Discovery in Federal Courts-- Question 2-1:
Question 2–2:
The Committee is of the view that the requirement for leave of the court does not always effectively regulate the use of discovery.
Although the need to provide reasons for discovery to the court is a check on the breadth of discovery in the Federal Court (a check sometimes lacking in other jurisdictions), lawyers are often keen to leave no stone unturned in their search for evidence, due to an over-abundance of caution. Judges and other judicial officers are hesitant to refuse to make orders for discovery where representatives for all parties in the proceedings are adamant that it is necessary. Clearer guidance in the rules of court could provide clearer regulation of the use of discovery.

Question 2–3 :
The Committee submits that the law is not sufficiently clear on when the Federal Court should grant leave for discovery of documents in civil proceedings.
Orders for discovery should be based on a principle of proportionality. This could require a consideration of the costs of discovery relative to the potential value of documents to be discovered, and the amount in dispute. The Committee proposes a regime similar to the Fast Track protocol (as discussed in the Consultation Paper at paragraph 2.47), with an added ability for the party requesting discovery to ask the other party to carry out specified searches of electronic documents.
The Committee acknowledges and agrees with the difficulties in measuring proportionality set out in the Consultation Paper at paragraph 3.61. The Committee suggests that any amendment to the law should make explicit reference to the overarching purpose provision in s 37M of the Federal Court of Australia Act 1976 (Cth).
The Committee proposes that O 15 r 1 of the Federal Court Rules be amended so that the text reads as follows:
(1)	A party in a proceeding may, with the leave of the Court and within any  
period fixed by the Court for this purpose, require another party to the proceeding to give discovery by filing and serving on that party a notice for discovery in accordance with Form 21.
(2)	In granting leave the Court must have regard to:
(a)	the requirements of s 37M of the Federal Court of Australia Act 1976;
(b)	the likely probative value of the documents sought to be disclosed; and
(c)	the proportionality of the scope of the discovery sought to:
(i)	the issues in the proceedings; and
(ii)	the amount in dispute.
The scale of discovery could be further reduced by requiring the parties to provide a list of categories of documents with reasons for their relevance to the proceedings and likely probative value to the court at the time of seeking orders for discovery. Both this and the proposed amendment to the Federal Court Rules would be consistent with the guidance set out in Practice Note CM 5 – Discovery.

Question 2–4: The Committee submits that the amendment of the Federal Court of Australia Act 1976 (Cth) to adopt the provisions of s 45 of the Federal Magistrates Act 1999 (Cth) is not necessary. The Committee refers to its response to Question 2–3, and suggests that the proportionality principle proposed would be an appropriate threshold test.
Question 2–5: The Committee refers to its response to Question 2–3 and proposes that the categories for discovery for all Federal Court proceedings could be reduced to those currently identified in the Fast Track protocol.
Question 2–6 : The Committee refers to its response to Question 2–3 and Question 2–5.
Question 2–7 :
Proposal 2–1 :
Other comments in response to Chapter 2. Legal Framework for Discovery in Federal Courts:
--3. Discovery Practice and Procedure in Federal Courts-- Question 3–1:
Question 3–2 :
The Committee submits that the number of discovered documents utilised in the proceedings is not a reliable indicator of the value of the discovery process relative to the costs associated with carrying out the discovery process. The broader value of the discovery process flows from the ability of each party to understand the documents (or lack thereof) that could rationally affect the probability of the existence of a fact or issue in the proceedings. The indirect value of the process is therefore derived, not only from the use of documents in the proceeding, but also any settlement negotiations.
In response to the question as to the level of information generated by the discovery process, the Committee submits that in general, more information is generated than is necessary for the just and efficient disposal of the litigation. The Committee is of the view that this is a product of both the increased level of electronic documents being generated in modern commerce and the considerable onus placed on practitioners and parties to discover all relevant documents in a party’s possession.
Despite these factors, the Committee notes that it is predominantly the junior level employees of law firms that are involved in the process, commonly being paralegals and practitioners in their first two years of practice. Contrary to the comments made in the Consultation Paper at paragraph 3.211, the Committee submits that the primary involvement of staff at this level assists in keeping the costs of the process to a minimum.

Question 3–3 :
The Committee notes the comments made in the Consultation Paper at paragraph
3.69 concerning the high proportion of documents in modern commerce that exist only in electronic form. In particular, the nearly universal use of email creates a range of issues relating to the efficient and cost effective operation of the discovery process.
The Committee submits that, in cases involving electronic discovery, it is common practice for the entire email accounts of relevant persons to be subject to an order for discovery. This approach to the electronic discovery process leads to considerable amounts of irrelevant information being produced, resulting in excessive time and costs associated with reviewing this information. This approach also leads to significant duplication of discovered emails, particularly where several persons are copied into correspondence or where email strings are involved. Holistic searches across several email accounts would be preferable to the discovery of email accounts individually, as this is likely to result in less duplication.

Question 3–4 : The Committee note the submissions previously received by the ALRC, outlined in the Consultation Paper at paragraph 3.86, that most discovery orders in the Federal Court are for general discovery. The Committee agrees that this is common practice and submits that there is minimal intervention by the court to limit the scope of discovery where the parties consent to an order for general discovery. In order to eliminate unnecessary costs in completing discovery, it may be useful for discovery to be limited more often in scope either by the consent of the parties or by an order of the Federal Court.
Question 3–5 :
Proposal 3–1 :
The Committee supports Proposal 3–1 as an effective tool to achieve the overarching purpose of facilitating the just resolution of disputes as quickly, inexpensively and efficiently as possible. In the Committee’s experience, the failure to identify and outline the facts and issues in dispute at an early stage in the proceedings invariably has a significant impact on the ability of parties to achieve a just and timely resolution of the dispute.
As discussed in the Committee’s responses to Questions 3–6 and 3–7, the proposed ‘pre-discovery conference’ is likely to facilitate an environment in which the Federal Court can more effectively and frequently make orders for the production of ‘key’ documents under O 15 r 13 of the Federal Court Rules.
To ensure the ‘pre-discovery conference’ is as productive as possible, the Committee submits that sufficient time be allowed before the conference is scheduled to enable the parties to adequately prepare. In this regard, the Committee submits that no less than seven days is necessary.

Proposal 3–2 :
Although the Committee is of the view that the filing and service of a written statement identifying the legal and factual issues will assist to narrow the issues in dispute at an early stage of the proceedings, in practice this may be difficult to achieve any significant narrowing of the issues at that point.
In the Committee’s opinion, the legal issues in dispute (and in some cases the factual issues) are not apparent or easily identifiable until at least the close of pleadings and the service of evidence by the parties. In addition, further factual or legal issues may arise following the completion of the discovery process and the service of evidence by the parties. The Committee recommends that the written statement be limited to address any factual matters (and related categories of documents for discovery) which are evident from the pleadings.

Proposal 3–3 :
The Committee is concerned that the service of a proposed witness list prior to the pre-discovery conference will create a burden for a party that is not outweighed by its benefit to the parties and the Court in the efficient conduct of the proceedings.
It is usually the case, in the Committee’s experience, that the legal issues (and in some cases the factual issues) do not crystallise until the parties have completed discovery. With that in mind, it may not be possible to identify the names of witnesses let alone provide a summary of their evidence and its relevance to the proceedings. For example, a party may need to brief expert evidence in the proceedings as a result of the discovery process.
As an alternative to the detailed witness list which is proposed, the Committee recommends that a statement be provided which sets out a general summary of the evidence which a party intends to adduce in the proceedings.

Question 3–6 :
The Committee agrees with the preliminary view of the ALRC, as set out in the Consultation Paper at paragraph 3.137, that clearer definition of the real issues in dispute prior to the discovery process will have the most profound impact on reducing the scope and burden of the process. Whilst the Committee acknowledges that disclosure of key documents to the litigation is a critical element of this approach, the Committee agrees with the view of the ALRC set out in the Consultation Paper at paragraph 3.141, that the question of whether certain documents are in fact critical to the proceedings should not be left to the parties themselves.
In this regard, the Committee submits that following the ‘pre-discovery conference’ proposed in Proposal 3–1, the Federal Court will be in a position to make an informed order for production of key documents under O 15 r 13 of the Federal Court Rules. The Committee therefore supports this proposal.

Question 3–7 :
The Committee submits that notices to produce, as provided for pursuant to O
15 r 10 of the Federal Court Rules, are used widely by parties to proceedings. The Committee submits that it is not the disclosure of documents referred to in pleadings and affidavits that is in need of reform. Rather, it is the non-disclosure of ‘key’ documents that are not referred to in pleadings and affidavits that should be remedied.
In particular, the circumstances in and frequency with which the Federal Court makes orders pursuant to O 15 r 13 of the Federal Court Rules ought to be addressed. As discussed in the Committee’s response to Question 3–6, the ‘pre-discovery conference’ proposed in Proposal 3–1 is likely to place the Federal Court in a more informed position to make such orders, and to this end the Committee supports this proposal.

Proposal 3–4 :
The Committee supports Proposal 3–4. In addition, the Committee recommends that the discovery plan specify a timeline for the completion of discovery by the parties.
In the Committee’s view, any orders which the Federal Court is minded to make in relation to the discovery plan should be made as early as possible in the proceedings so as to promote efficiency.

Question 3–8 :
Proposal 3–5 :
The Committee notes the broad yet generalised case management powers currently conferred on the Federal Court. The Committee also notes the comments made in the Consultation Paper at paragraph 3.199 to the effect that Proposal 3–5 will not operate to expand the existing powers of the Federal Court. In this regard, the Committee queries the ability of the proposal to have any real impact on the issues the subject of this inquiry. The Committee submits that, given the Federal Court presently has the power to effectively manage the discovery process, education and increased awareness on the part of the judiciary would serve a similar purpose.
Whether sanctions imposed by the Federal Court flow from Proposal 3–5 or the existing powers of the Federal Court to deal with these matters, the Committee recommends that such sanctions only be available where it can be demonstrated by clear and unambiguous evidence that a party has intentionally failed to comply with its discovery obligations or has intentionally delayed, frustrated or avoided discovery of discoverable documents. Such orders, in the Committee’s view, should only be made by the Federal Court following the filing of an appropriate notice of motion and affidavit in support (in line with the process adopted in other jurisdictions in Australia) and the notice of motion is dealt with by the Federal Court in the same manner as other interlocutory applications.

Question 3–9 : The Committee agrees with the initial views of the ALRC that the proposed requirement will place undue burden on parties and that the potential resulting satellite litigation will offset any consequential cost reduction. The Committee further agrees with the comments made by the ALRC in the Consultation Paper at paragraphs 3.207 and 3.208 that under the current system, the costs of discovery are notoriously difficult to estimate in advance and that judges are ill-equipped to adjudicate the basis of such estimates.
Question 3–10: The Committee strongly agrees with the ALRC’s initial view that the existing practitioner-client framework is adept at handling overcharging by law practices. The Committee submits that, rather than reforming the relationship between practitioner and client, the issues associated with the costs of discovery are best addressed by looking at the way in which process itself can be reformed.
Proposal 3–6 :
Proposal 3–7 :
The Committee endorses Proposal 3–7.
The Committee is of the view that the collection of empirical data is essential to the accurate assessment of the substantive impact of any scheme, and is a useful process in its own right.
The Committee acknowledges the difficulties observed by the consultation paper, but notes that a data collection process could, at the very least, provide useful information on average discovery costs per document reviewed or reviewable. This information could lead to a degree of predictability and cross-comparability in large discoveries. Further, it may be difficult to predict in advance what uses new data may be put to, and it would be imprudent to miss the chance to collect such information.
Question 3–11 :
Question 3–12 :
Other comments in response to Chapter 3. Discovery Practice and Procedure in Federal Courts:
--4. Ensuring Professional Integrity: Ethical Obligations and  Discovery-- Question 4–1 :
A solicitor reviewing potentially discoverable documents does so by reference to the scope of the discovery request or order. The scope of discovery is typically a contested or negotiated legal issue; one consequence is that the reviewing lawyer will regard the application of the scope to a particular document as the primary issue to be determined, rather than evaluating relevance to issues in dispute. If, because of this, the reviewing lawyer excises relevant documents, or discovers a large volume of irrelevant documents, it is not perceived as a failure of the reviewing lawyer to exercise certain discretion but a failure of a party or parties to adequately define the request. It is unlikely (but not impossible) that such an event is malicious or deliberate, despite what a party may believe when, for example, inundated in irrelevant documents.
The Committee notes that, prior to reviewing by a qualified legal practitioner, electronic documents will often be culled by IT professionals using a variety of processes such as de-duplication and keyword searches. The input for these processes is generally based on the phrasing of the scope of the discovery request or order. This indicates that the discovery process will involve decisions relevant to questions 4–1 and 4–2 even before the formal document review by a legal professional.

Question 4–2 :
A solicitor reviewing potentially discoverable documents does so by reference to the scope of the discovery request or order. The scope of discovery is typically a contested or negotiated legal issue; one consequence is that the reviewing lawyer will regard the application of the scope to a particular document as the primary issue to be determined, rather than evaluating relevance to issues in dispute. If, because of this, the reviewing lawyer excises relevant documents, or discovers a large volume of irrelevant documents, it is not perceived as a failure of the reviewing lawyer to exercise certain discretion but a failure of a party or parties to adequately define the request. It is unlikely (but not impossible) that such an event is malicious or deliberate, despite what a party may believe when, for example, inundated in irrelevant documents.
The Committee notes that, prior to reviewing by a qualified legal practitioner, electronic documents will often be culled by IT professionals using a variety of processes such as de-duplication and keyword searches. The input for these processes is generally based on the phrasing of the scope of the discovery request or order. This indicates that the discovery process will involve decisions relevant to questions 4–1 and 4–2 even before the formal document review by a legal professional.

Question 4–3 : The Committee notes that the process of discovery during litigation consumes considerable time and resources, primarily for the respondent, causing considerable delay to all parties involved in litigation.  
With respect to delay, the Committee submits that it is not common practice to use discovery as a strategy to delay proceedings but rather delay is itself a by-product of the arduous process of discovery.
Question 4–4 : The Committee notes that the practice of discovery requests is often used as a means to obtain every piece of information in possession of the opposing party which may assist the requesting party’s case – no matter how slight – in order to act in the best interest of one’s client.  
In recognising that discovery requests are a powerful tool for litigants, the Committee submits that it is often not a practitioner’s intention to increase legal costs unnecessarily. However, more often than not little regard is had to the financial burdens imposed on another party by discovery in light of the potential documents which could be discovered.
Question 4–5 :
Delegation of responsibility for reviewing and categorising documents by a principal solicitor to one or a team of junior lawyers and/or paralegals is standard practice. This is done to:
•	minimise the cost involved;
•	minimise the time required to complete the discovery; and
•	because the majority of discoveries do not require special experience or  
expertise for the majority of documents.
By and large, this process is cost and time effective. If there are certain key documents, categories, phrases or words that a reviewing party is looking for, or knows exist, the reviewing team may be alerted to their existence, with the intention of exercising more intense searches for such documents, categories, phrases or words. Protocols vary from discovery to discovery.
The disadvantage of such a method is that the team of junior lawyers and/or paralegals are often far removed from the legal dispute itself. This is particularly manifest in very large commercial discoveries, where many extra reviewers must be used, and contract lawyers may even be engaged. As a result, a reviewing lawyer is likely to use the scope document in isolation from anything but a shallow understanding of the matters in dispute. This has an obvious impact on how relevance is assessed.
In the Committee’s experience, the solicitor responsible for a discovery will normally review key documents, but will not duplicate the work done by the reviewing team.

Question 4–6 :
Question 4–7 : The Committee notes the fine line between legitimate and malicious document destruction policies employed by potential parties to proceedings in Federal Courts. The Committee submits that the legitimate document destruction policies being applied by corporate entities are adequately protecting documents from being destroyed that may be relevant to future or current proceedings.
Question 4–8 : The Committee agrees with the findings of the ALRC in the Consultation Paper at paragraph 4.91 that the actual nature and extent of discovery abuse in Australia remains unclear. The Committee submits that without specific and known examples provided by members of the profession it is difficult to gauge the extent of discovery abuse before Federal Courts.  
The Committee further submits that a confidential questionnaire/survey in this regard would be beneficial.
Question 4–9 : The Committee notes that the majority of practitioners are examined on their ethical obligations during university and whilst undertaking a Graduate Diploma in Legal Practice (or each state’s
equivalent) in order to be admitted as a practitioner. The Committee also notes that the ethical and legal obligations of practitioners in relation to discovery may not be emphasised within the law firm environment and during the day-to-day practice of law. The Committee submits that best way of ensuring that lawyers and litigants are properly informed about their professional and legal responsibilities in relation to discovery would be to raise greater industry awareness through each state’s law society – either via email or through industry magazines – as well as providing continuing legal education seminars on the issue.
Question 4–10 : The Committee notes that current legal and ethical obligations in professional rules are generally broad and do not specifically address discovery and relevant ethical considerations. The Committee submits that current professional rules sufficiently address issues of a practitioner’s duties to his or her client and the Court; address issues of delay in completing legal work; and therefore are capable of addressing ethical issues in relation to abuse of the discovery process. The Committee further submits that Proposal 4–1 (below) would be beneficial in this regard to raise industry awareness about a practitioner’s ethical obligations in relation to discovery.
Question 4–11 : The Committee notes that current legal and ethical obligations in professional rules are generally broad and do not specifically address discovery and relevant ethical considerations. The Committee submits that current professional rules sufficiently address issues of a practitioner’s duties to his or her client and the Court; address issues of delay in completing legal work; and therefore are capable of addressing ethical issues in relation to abuse of the discovery process. The Committee further submits that Proposal 4–1 (below) would be beneficial in this regard to raise industry awareness about a practitioner’s ethical obligations in relation to discovery.
Proposal 4–1 : The Committee submits that without adding further rules and/or obligations, commentary as part of, or as a supplement to, the professional conduct rules with a particular focus on lawyers’ legal ethical obligations with respect to discovery of documents would act as an excellent point of reference for practitioners and would raise much needed awareness in this regard. The Committee welcomes this proposal.
Proposal 4–2 :
Question 4–12 :
The Committee notes the proposed criteria for whether costs are fair and reasonable under the Draft National Law, extracted in the Consultation Paper at paragraph 4.145. Applying these criteria to the discovery process, the Committee is of the view that a party’s costs of complying with any court order, including an order for discovery, are reasonably incurred. Provided junior level staff are primarily involved in the time-intensive aspects of the process, such as review and collation of documents, the Committee is also of the view that the consequential costs will likely reflect the level of skill concerned.
The Committee submits that the considerable costs of the current discovery process are not generally a product of practitioners charging unfairly and unreasonably. Rather, the costs of discovery are a product of the time-intensive nature of the process which is a result of the onerous obligations placed on both parties and practitioners to discover all relevant documents. In this regard, the Committee repeats its submission above that reform of the discovery process directed at reducing costs is most effectively applied to reducing the scope of the obligations on parties rather than the practitioner-client relationship.

Question 4–13 : The Committee notes that while most practitioners may have a general understanding of their ethical obligations, many do not visit the rules on a day to day basis. The Committee submits that law firms could foster a culture of reasonable and ethical discovery if they developed policies and guidelines as a point of reference for their practitioners involved in discovery litigation. The Committee further submits that law firms could use as a reference for their own guidelines the commentary proposed at proposal 4–1.
Question 4–14 :
Question 4–15 :
Question 4–16 :
Question 4–17 :
Question 4–18 : The Committee submits that existing professional disciplinary structures are sufficient to deal with allegations of discovery abuse.
Question 4–19 : The Committee submits that existing professional disciplinary structures are sufficient to deal with allegations of discovery abuse.
Question 4–20 :
Question 4–21:
Question 4–22 :
Proposal 4–3 :
Question 4–23 :
The Committee endorses Proposal 4–4.
In the Committee’s experience and understanding, law students study the legal and ethical responsibilities of lawyers with respect to discovery as part of the compulsory litigation practice and procedure course. However, law students generally do not leave university with any understanding of what an actual discovery entails, or with any knowledge of how a reviewing lawyer would go about assessing an actual document with proper method (reviewing for relevance, category, privilege and confidentiality). As a result, law students are ill-equipped to put together the individual pieces of law and practice together and perform an actual discovery.
The Committee proposes that a small, practical discovery exercise could be included in the compulsory litigation practice and procedure course. It would be relatively simple to provide the materials for a mock discovery, consisting of a scope document, factual background and a set of potentially discoverable documents. The compulsory litigation practice and procedure course typically incorporates several practical exercises already. This would be a simple solution if the Commission regarding this gap in practical knowledge as significant. Alternatively, such an exercise could be incorporated into the College of Law program, which at present has no equivalent.
As a final comment, the Committee notes that clear and comprehensive education on the role and specifics of electronic discovery is lacking at both tertiary and pre-admission levels. This will assume greater urgency as electronic discovery continues its ascendance.

Question 4–24 :
The Committee endorses Proposal 4–4.
In the Committee’s experience and understanding, law students study the legal and ethical responsibilities of lawyers with respect to discovery as part of the compulsory litigation practice and procedure course. However, law students generally do not leave university with any understanding of what an actual discovery entails, or with any knowledge of how a reviewing lawyer would go about assessing an actual document with proper method (reviewing for relevance, category, privilege and confidentiality). As a result, law students are ill-equipped to put together the individual pieces of law and practice together and perform an actual discovery.
The Committee proposes that a small, practical discovery exercise could be included in the compulsory litigation practice and procedure course. It would be relatively simple to provide the materials for a mock discovery, consisting of a scope document, factual background and a set of potentially discoverable documents. The compulsory litigation practice and procedure course typically incorporates several practical exercises already. This would be a simple solution if the Commission regarding this gap in practical knowledge as significant. Alternatively, such an exercise could be incorporated into the College of Law program, which at present has no equivalent.
As a final comment, the Committee notes that clear and comprehensive education on the role and specifics of electronic discovery is lacking at both tertiary and pre-admission levels. This will assume greater urgency as electronic discovery continues its ascendance.

Question 4–25:
Proposal 4–4 :
The Committee endorses Proposal 4–4.
In the Committee’s experience and understanding, law students study the legal and ethical responsibilities of lawyers with respect to discovery as part of the compulsory litigation practice and procedure course. However, law students generally do not leave university with any understanding of what an actual discovery entails, or with any knowledge of how a reviewing lawyer would go about assessing an actual document with proper method (reviewing for relevance, category, privilege and confidentiality). As a result, law students are ill-equipped to put together the individual pieces of law and practice together and perform an actual discovery.
The Committee proposes that a small, practical discovery exercise could be included in the compulsory litigation practice and procedure course. It would be relatively simple to provide the materials for a mock discovery, consisting of a scope document, factual background and a set of potentially discoverable documents. The compulsory litigation practice and procedure course typically incorporates several practical exercises already. This would be a simple solution if the Commission regarding this gap in practical knowledge as significant. Alternatively, such an exercise could be incorporated into the College of Law program, which at present has no equivalent.
As a final comment, the Committee notes that clear and comprehensive education on the role and specifics of electronic discovery is lacking at both tertiary and pre-admission levels. This will assume greater urgency as electronic discovery continues its ascendance.

Proposal 4–5 :
Other comments in response to Chapter 4. Ensuring Professional Integrity:  
Ethical Obligations and Discovery:
--5. Alternatives to Discovery--
Question 5–1:
In the event that pre-action protocols are to be introduced in the Federal Court, the Committee suggests that the following considerations may reduce the front-loading of costs.

Tailored or ‘bespoke’ approach
As a reflection of Recommendation 5.1 in the Consultation Paper, the Committee is strongly of the view that in order to limit the front-loading of costs, a tailored approach to pre-action protocols is necessary.
The Committee submits that the position adopted by Lord Jackson in the United  
Kingdom	 Costs Review  should be followed in the federal jurisdiction in  
Australia. That would require the introduction of protocols for only those specific types of cases considered suitable for pre-action protocols.
The Committee submits that a framework should be created by legislation, supported by appropriate research, facilitating the adoption of practice notes that contain pre-action protocols for suitable categories of cases. By way of example, where early settlement is the norm for certain categories of cases, a protocol should not apply. Conversely, research indicates that protocols are likely to be more useful and cost-effective for cases with a significant amount of uniformity.
Examination of costs associated with pre-action protocols The Committee considers that pre-action protocols and any associated practice directions must be tailored such that the costs incurred in complying with a protocol should be proportionate to the complexity of the matter and the quantum at stake.
The Committee further submits that the particular steps proposed to constitute a pre-action protocol be carefully examined, as different steps will have different impacts on costs. For example, a requirement that parties swear to the facts in their statement of claim and defence at the time those documents were served may not impose any large additional cost or delay, while the pre-action service of expert material may contribute to the front-loading of costs.

Question 5–2:
The Committee is concerned about the effect of pre-action protocols on self-represented litigants. One potential consequence of a failure to comply with an applicable protocol is that, unless the court orders otherwise, the infringing party would be ordered to pay the costs of the other party on an indemnity basis if unsuccessful. The Committee considers that the risk of an adverse costs order is a significant barrier to access to justice for self-represented litigants (and for financially disadvantaged parties generally).
In the event that pre-action protocols are introduced, the Committee contends that access to justice for individual litigants can best be achieved where the costs of abiding by the protocols are not fixed. The Committee is of the view that there is too much variation within Federal Court matters for fixed costs to provide any reasonable and reliable reimbursement to a party. If fixed costs were to be imposed, it is likely that the paying party would be advantaged at the expense of the party receiving the costs as fixed costs rarely reflect the true costs of litigation. In the Committee’s view, this may act to reduce access to justice.

Question 5–3 :
Question 5–4:
Question 5–5:
The Committee is of the view that the deterrent value of costs sanctions will  
likely be necessary in order to ensure compliance with pre-action protocols.   
As revealed by the United Kingdom Costs Review, there were serious problems of non-compliance with pre-action protocols in England and Wales.
However, the Committee strongly asserts that cost sanctions must only be introduced if federal legislation and practice directions clearly set out the obligations on the parties regarding compliance with the protocol. Moreover, the content and operation of the cost sanctions must be clearly articulated.
The Committee also contends that cost sanctions may not be the only appropriate remedy where a party has failed to comply with its pre-action requirements. As a corollary to s 39 of the Civil Procedure Act 2010 (Vic), the Committee is of the view that any unreasonable failure to comply with pre-action protocols could be remedied by allowing the Federal Court to take such a failure into account in its discretion either in awarding costs or making procedural directions.
Importantly, the Committee does not support the introduction of any requirement that the legal representative of a party, rather than the party itself, will bear the cost of compliance with pre-action protocols.

Proposal  5–1 :
The Committee does not support the introduction of mandatory pre-action protocols generally and particularly in connection with commercial litigation in the Federal Court and Federal Magistrates Court. The Committee is of the view that the introduction of pre-action protocols will add another layer of cost to the litigious process and may delay the onset of litigation.
The Committee is principally concerned by the potential for pre-action protocols to contribute to the ‘front-loading of costs’ by requiring parties to spend more resources at an early stage of the process. The experience in the United Kingdom provides evidence that pre-action protocols front-load costs and in some cases increase the cost of litigation in its entirety.  As noted by Lord Justice Jackson in the United Kingdom Costs Review, ‘the issues surrounding pre-action protocols [were] some of the most intractable questions in the Costs Review’.

Proposal 5–2:
The Committee submits that the introduction of pre-trial oral examination will increase the cost and time spent on litigation in the federal courts. In the Consultation Paper at paragraph 5.93, the ALRC acknowledges that there is scant empirical evidence that the use of depositions in America is effective in the aim of narrowing of the issues in dispute to facilitate settlement.  
The Committee is of the view that the introduction of pre-trial oral examinations is likely to increase the costs of litigation significantly
because:
•	it is an additional step in the litigation process;
•	it forces clients to engage counsel at an earlier stage of the litigation  
process than might otherwise be the case;
•	it forces costs to be incurred in preparing witnesses that would  
otherwise not be incurred until shortly before trial; and
•	pre-trial oral examinations take longer than cross-examinations during a  
hearing because irrelevant questions can be asked.
The use of depositions does not appear to have assisted in the United States of America in the goal of reducing the need for discovery, as the American legal system is frequently criticised for its expensive discovery processes.  
For example, Brad Brian, a past chair of the American Bar Association, has said that pre-trial discovery is where most money is wasted in litigation in America (including depositions).  The International Bar Association has criticised the American discovery system as one of the most expensive and wasteful private litigation systems in the world.

Question 5–6: The Committee submits that pre-trial oral examinations would only be appropriate where the quantum of damages being claimed is large enough to justify the additional cost being incurred by the oral examination.  
Pre-trial oral examinations could also be limited to expert witnesses where the witnesses could be ‘hot-tubbed’ in an effort to narrow the difference of opinion between each party’s expert witness.
Question 5–7:
The Committee submits that a court should require the party seeking an oral examination to explain:
•	how the party expects the oral examination to assist in narrowing the  
dispute and/or narrowing discovery required;
•	that the witness being examined is closely connected to the proceedings;
•	that the costs of the oral examination would be in proportion to the  
probative value of the evidence to be obtained through the oral examination; and
•	that the oral examination will not unduly delay the proceedings.
The Committee also considers that if oral examinations were to be introduced in the federal courts then the number of witnesses who can be examined and the number of hours a witness can be examined should be limited.

Question 5–8:
Question 5–9:
Other comments in response to Chapter 5. Alternatives to Discovery:
--Discovery Costs Questionnaire--
Question 1–1:
Question 1–2:
Question 1–3:
Question 1–4:
Question 1–5:
Question 1–6:
Question 1–7:
Question 1–8:
Other Comments:
--Review & submit--
File 1:  
http://www.alrc.gov.au/sites/default/files/webform/NSWYL%20Civil%20Litigation%20Committee%20-%20submission%20to%20ALRC%20inquiry%20-%20Discovery%20in%20Federal%20Courts%20-%20FINAL.DOC
File 2:

The results of this submission may be viewed at:
http://www.alrc.gov.au/node/3439/submission/200