Forced to be Civil – new changes to litigation in Victoria

Has it ever crossed your mind that lawyers enjoy the sound of their own voices, spend too much time fighting, not enough time compromising, and that there far too many cases heading to court that could be solved through negotiation over a bottle of red and a box of chocolates? If you answered yes to any or all of the above you will be pleased with the new reforms that have passed parliament this year.

The Civil Procedure Act 2010 contains a number of new rules that aim to increase the affordability, accessibility, speed and efficiency of litigation. They even limit the time a Barrister can speak for! The changes can be divided into two areas.

Overarching Obligations
Firstly, the Act introduces new requirements on all parties to legal proceedings. Known as overarching obligations, they include acting honestly and promptly, not engaging in any conduct that is likely to mislead or deceive, not making any claims without a proper basis, keeping costs proportionate to the case, and full disclosure of the documents that impact the case as soon as their existence is known.
These rules currently apply to lawyers, but will now apply to others involved in legal proceedings including the parties themselves, their insurers, funders and expert witnesses.

Practically, this should mean greater transparency throughout the whole process and consequently, greater efficiency. It should also create a more just legal system. In some cases, a litigant will seek to drag out a case for as long as possible with unsubstantiated arguments. This requires responses from the other side (and their lawyers) and in doing so, accumulates significant and unnecessary legal costs. This can exhaust the ‘other side’ of financial resources and force them to accept an ‘unfair’ settlement in order to pay their lawyers and in some cases, avoid bankruptcy. There have been cases around Australia where legal costs have exceeded the amount claimed.

With the new laws, vexatious arguments will not be allowed, litigation costs must be proportionate to the circumstances of the case, and critical documents revealed ASAP. This should work to prevent cases like those described above.

Pre-Litigation Requirements (Alternative Dispute Resolution (ADR))
The second area of change concerns pre-litigation requirements. Parties will now be expected to have engaged in correspondence attempting to clarify or resolve the dispute. The legislation emphasises the importance of considering or engaging in arbitration, negotiation and mediation (ADR) before the dispute reaches the courts. Going to court can increase costs exponentially and, therefore, heightened emphasis on settling before court is a positive. In many ways, the industry has increased its focus on Alternative Dispute Resolution over the last few years  and the Act is merely legislating the change.

Since our establishment in 1995, Holley Nethercote has had a specific focus on preventative law – “to try to keep clients out of court.” (hnlaw.com.au) Consequently we have had an array of experience in Alternative Dispute Resolution and are well advised to recommend what course of action for you to take.

The changes will apply to the Magistrates, County and Supreme Courts of Victoria, and the impact of them remain to be seen, as does the introduction date (expected to be released on 1 June 2011 but is yet to be confirmed).  However, they should have a positive role to play in creating a more equitable, efficient and accessible judicial system which will produce better outcomes for Victorians.

Forced to be Civil – new changes to litigation in Victoria by Holley Nethercote Commercial Lawyers is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 2.5 Australia Licence.

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