The Executive Director
Australian Law Reform Commission
GPO Box 3708
SYDNEY NSW 2001  
Sent via email: tina.obrien@alrc.gov.au	Australian Corporate Lawyers Association
ABN 97 003 186 767
102/ 620 Bourke Street
 Melbourne VIC 3000 
T: 1300 558 550
 +61 38616 0197
F: +61 3 8616 0201
E: membership@acla.com.au

2 February 2011

Dear Ms Wynn
ACLA Submission on ALRC Consultation Paper on Discovery in Federal Courts 
ACLA welcomes the opportunity to make a submission to the Australian Law Reform Commission’s Consultation Paper on Discovery in Federal Courts. 
ACLA is the peak professional body for Australian in-house legal counsel, and among other things, we represent the views of our members on legal affairs where their unique combination of legal and business knowledge can provide valuable insights. 
In-house legal practice is a growing segment of the legal profession and today there are approximately 14,000 in-house lawyers in Australia. This growing arm of the legal profession is well placed to provide feedback of a practical nature based on intimate legal and business operations knowledge. 
Our submission is attached. Should you require more information please let us know. 
Yours sincerely,

Trish Hyde
Chief Executive Officer

ACLA SUBMISSION ON ALRC CONSULTATION PAPER ON DISCOVERY IN FEDERAL COURTS
General Observations
ACLA appreciates the opportunity to respond to the Australian Law Reform Commission’s Consultation Paper on Discovery in Federal Courts. Overall, there are some very good suggestions in the paper which provide sensible ways to keep the discovery task within bounds and to reinforce some of the recent changes to the court rules on discovery. However, there are some proposals which may be considered to be over reactive to perceived problems for which there may be little or no evidence – factual or anecdotal – such as the proposal for a special ethical regime to be established under the professional conduct rules.  ACLA has only responded to the matters raised in the list of questions and proposals where they appear relevant to lawyers employed in corporations (in-house counsel).
From a practical point of view, ACLA believes that if parties were required to identify potentially relevant people who hold documents, specify appropriate date ranges and provide key words, a lot of the initial searches could be done relatively easily using today’s available technology.
Discovery is often the single largest cost in any corporate litigation so ACLA would welcome any changes that would reduce costs associated with discovery.
Specific Responses to List of Questions and Proposals
ACLA responds to certain questions and proposals set out in the Consultation Paper as follows:
Question 2-2
From the feedback we have received the requirement for leave of the court does not effectively regulate the use of discovery in civil proceedings in the Federal Court.  
Notwithstanding the requirement of leave, it would appear that litigants have an expectation that leave would in the ordinary course be granted.  Furthermore, the courts often do not enquire into the need for discovery or require any hearing on the issue. 
Question 2-3
We do not believe that the law is sufficiently clear as to when the Federal Court should refuse the grant of leave for discovery.  However, this is likely due to the Court’s recognition of the role of discovery and not wishing to restrict parties from being able to access the benefit of discovery.  It would be preferable, rather than imposing a threshold test for discovery, that the Court more readily takes an active part in assessing the need for the scope of discovery sought by a party or parties. 

Question 2-4
We do not consider it necessary for a narrower threshold test to be implemented.  Discovery is an essential part of the litigation process.  It would be usual that discovery would normally assist the parties in narrowing the issues in dispute.  Therefore, there needs to be greater control over the scope of discovery rather than the entitlement to any discovery. 
Question 2-5
We do not believe that the Federal Court Rules require amendment, as they necessarily require a broad definition to account for a range of litigation.  However, in matters where the extent of the discovery is likely to be voluminous greater care and attention should be given to the categories of documents to be discovered. It is noted that all too often both parties’ lawyers, in a bid to get all relevant documents, seek far too many categories of documents, with fine distinctions between each category meaning that lawyers spend far too long over whether a document meets the categories definition. 
Question 2-6
We believe it is appropriate that Fast Track litigation have a narrower set of discovery requirements to the usual case managed procedure.  It would be assumed that the parties engaged in Fast Track procedures would have a greater willingness to progress issues more swiftly and to narrow down the issues in dispute at an early stage.  This should be encouraged across all civil litigation, but may not always be achievable. 
Question 3-2
From the feedback we have received the amount of money spent on the discovery process results in too much information to facilitate the just and efficient disposal of litigation.  A significant majority of documents discovered are not relied on in evidence at trial.  Due to confidentiality reasons, we are unable to provide specific examples where this has occurred but this would seem to be the general experience. 
However, we note that in many cases discovery is necessary for a party to access material that may otherwise be protected by duties of confidentiality, particularly a statutory duty of confidentiality. In those cases the opposing party may be only able to provide the party with the documents when an order for discovery is made. 
Question 3-4
It is our understanding that the parties have often not sufficiently turned their minds to the issues in dispute at the time that discovery orders are made.  This has the consequence that the parties often seek to obtain any and every relevant document and specify categories accordingly.  The need for parties to turn their minds to the documents actually required by them would be assisted by the parties being required to attend a case management conference at which the parties would be required to discuss the issues in dispute, the categories of documents relevant to each issue and, conversely, the amount of documentation and the costs involved in discovering the documents in their possession, custody or control. 
Proposals 3-1 to 3-3
We agree with proposals 3-1 and 3-2 although we note that introducing a requirement to file and serve a written statement covering the factual issues in dispute will no doubt add further to costs and may create more issues than it resolves. However, we disagree with the requirement at proposal 3-3. Proposal 3-3 regarding filing and serving of witness lists will have the effect of front-endings costs and depending on the complexity of the matter may be very difficult in the early stages of a dispute. It is likely to be too early for any meaningful consideration as to the witnesses to be called at trial, with the parties tendering a witness list of all possible witnesses they may call without the benefit of the documentary evidence. 
Question 3-6 and 3-7
Order 15 rule 10 is, in our view, sufficient to require parties to produce to the other party a key document in its possession.  A key document would usually be one referred to in the pleadings. To do otherwise could give rise to interlocutory disputes as to what constitutes a key document and the methods of enforcing a vague requirement would be unwieldy and lead to further interlocutory costs. 
Question 3-8
We believe that it is vital that judges are heavily involved in making orders for discovery which are targeted and will yield relevant probative documents which will form the basis for evidence which is subsequently adduced by either party. While the concept of a specially trained court appointed case manager with authority to assist the parties in the discovery procedure and process may have merit, we would prefer to see trial judges regarding this as an integral part of their role. If this cannot be achieved, we query whether it would be possible for the Registrar appointed to case manage the matter (with a trial judge) to also manage the discovery process - rather than having to appoint a Master for this purpose.
Question 3-9 
We do not believe that it would assist the administration of justice for a party to be required to pay the estimated costs of discovery in advance unless ordered otherwise.  We anticipate that the cases in which the requirement would be waived are those in which the party is most unlikely to pay (eg. the litigant in person) and so would limit the effectiveness of the requirement.  However, the cost of discovery is a significant factor that the parties and the court should take into account when considering the need for discovery and its scope. 

Question 3-10
Again, we consider this requirement unnecessary.  Limits on costs could be placed through an upfront agreement with the solicitor, rather than through legislation specifically to deal with this issue. 
Proposal 3-6
We believe that firm judicial management of the discovery process is a key to cost effective litigation and therefore strongly support this proposal.
Proposal 3-7
We agree that in theory that it would be useful for an analysis to be undertaken of costs associated with the discovery process. However, we consider it would be virtually impossible to obtain a sufficiently accurate data sample to make any worthwhile conclusions.  Given that a significant majority of matters settle, it is unlikely that a meaningful sampling exercise could be undertaken without significant input from litigants. 
Question 4-9
As a professional association of lawyers, we are not aware of any compelling evidence that lawyers ethics are lacking in relation to discovery. However, there may well be some benefit gained by spending additional time on training junior lawyers and reminding senior lawyers of their ethical obligations regarding discovery. We suggest that this could be part of the CPD program of training in ethics. 
Proposal 4-1 
In the absence of any compelling evidence of wide-spread abuse, we do not agree that professional conduct rules need to specifically deal with ethical obligations in relation to discovery.  There are common law and statutory obligations imposed on practitioners when undertaking discovery so we do not see the need for these obligations to be further reinforced through professional conduct rules. 
Proposal 4-2
Again, it would seem unnecessary for legal profession legislation or professional conduct rules to have to specifically deal with costs relating to discovery. There is sufficient scope for overcharging to be dealt with under the existing disciplinary regimes in the various jurisdictions. In any event, commercial clients (and their in-house counsel) are nowadays far more litigation savvy when it comes to reducing the costs associated with discovery.
Proposal 4-3
For the same reasons as for Question 4-9 and Proposal 4-1 above, we do not see the need for this proposal.
Proposal 4-4
We believe that discovery is one of those legal skills that must be learned by practical experience rather than in a lecture or seminar or out of a text book. As referred to in our response to Question 4-9 above, there may be a case for discovery being a small part of the CPD program of training in ethics. However, we would not support it being part of a law degree or practical legal training.
Proposal 4-5
While we would have no real objection to the issue of such “best practice” notes, we would query how often it would be possible to issue such notes and keep them up-to-date and what the actual impact might be. Certainly any timely note on alleged professional misconduct in this area might serve as a warning/reminder but query whether there is such frequency of problem in this area to warrant the proposal.