Kelly O'Dwyer (Higgins, Liberal Party, Minister for Revenue and Financial Services) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

It is with great pleasure that today I introduce a package of legislation that will substantially improve the efficiency and effectiveness of the federal courts in dealing with family law disputes. This legislative package will enable a real and positive impact to be made for families navigating the court system during what can be an incredibly stressful and difficult time in their lives.

The Federal Circuit and Family Court of Australia Bill (the bill) brings together the Family Court of Australia and the Federal Circuit Court of Australia under an overarching, unified administrative structure to be known as the Federal Circuit and Family Court of Australia. The Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Provisions) Bill creates, among other things, a new family law appeal division in the Federal Court. The reforms enabled by these bills will ensure that family law disputes are resolved as quickly, inexpensively and efficiently as possible in the best interests of Australian families, especially children.

This legislation has been carefully developed, reflecting extensive consultation with the courts and taking into consideration a large number of inquiries over the last decade, which each related to the efficiency of the federal courts and the family law system, including:

Future governance options for federal family law courts in Australia: striking the right balance

Review of the performance and funding of the Federal Court of Australia, the Family Court of Australia and the Federal Circuit Court of Australia

High level financial analysis of court reform initiatives

A better family law system to support and protect those affected by family violence: recommendations for an accessible, equitable and responsive family law system which better prioritises safety of those affected by family violence

Review of efficiency of the operation of the federal courts

These reviews involved significant consultation with the courts through the heads of relevant jurisdiction and other family law stakeholders, and have in many instances recommended structural reform of the courts to improve outcomes for Australian families.

For example, the Semple review recommended the merger of the family courts within a single administration, and the 2017 House of Representatives Standing Committee on Social Policy and Legal Affairs report noted the complexity of the current family law system and recommended that consideration be given to how the family courts can improve case management of family law matters involving family violence issues (including through the adoption of a single point of entry).

In the interests of transparency and the fulsome consideration of the legislation I introduce today, I table those reports that have not yet been provided to the parliament. Where appropriate, these reports have been redacted to remove information that would not be in the public interest to disclose. Such information includes material pertaining to matters ordinarily within the purview of the courts, material pertaining to the internal operations of the courts that are not publicly available and comments attributable to particular people.

Following extensive analysis and considering all of the evidence, the government has decided it needs to act quickly and decisively to improve the situation for Australian families. As the PwC report highlights, the current court structures and overlapping family law jurisdiction is causing confusion, delays, and significant differences in access to justice for Australian families.

While the number of applications for final orders in family law matters over the past five years has remained close to 22,000 each year, the number of family law matters pending in the federal court system has grown from 17,200 to 21,000. Since 2012-13, the age of pending cases has also increased, with approximately 29 per cent of final order cases pending in the Federal Circuit Court and 42 per cent of cases pending in the Family Court now older than 12 months. The national median time to trial has also increased from 10.8 months to 15.2 months in the FCC, and from 11.5 months to 17 months in the Family Court. For matters that go to trial in the Family Court, party/party costs are estimated to be $110,000 per matter; or up to four times more than an estimated $30,000 per matter in the FCC.

These outcomes are driven by significant differences in the efficiency of the Family Court and the FCC. The Family Court finalises 114 final order applications per judge, or one third of the 338 finalisations per judge in the FCC—a variation that PwC found "cannot be accounted for merely by the level of complexity" of cases between the two courts.

This is not a reflection on any individual judge. It simply demonstrates that the current situation we find ourselves in—with overlapping jurisdiction and significant variations in the application and case management approaches of the Family Court and the FCC; driven by different legislative frameworks, different rules, different processes and practices, and different operational and cultural practices that have evolved over time—is completely unsustainable.

Whilst the government has charged the Australian Law Reform Commission (ALRC) with reviewing the Australian family law system, the structure of the federal courts was not within the scope of the referral. The ALRC is also not due to report until March 2019. If we were to wait to receive the report before acting, many more families would be caught in the family law system as it currently stands and wait times would continue to increase. We would be perpetuating the existence of an inefficient and time-costly, ineffective structure.

The message from Australian families has been received loud and clear: the status quo cannot continue. The time to act on structural reform of the courts is now. Any ALRC recommendations relating to court processes that merit implementation will be more easily implemented in the new, simplified administrative court structure provided for through the legislation I introduce today.

The reforms enabled by the legislation introduced today build on the government's reforms announced in the 2015-16 and 2017-18 budgets. In response to the KMPG and EY reports tabled today, the 2015-16 budget included a package of measures critical to ensuring the courts financial sustainability, including:

The family courts were facing a deficit in the order of $44 million over four years but for the 2015-16 budget rescue package. Without the government's critical intervention, the courts would inevitably have had to cut services substantially.

As part of the package of 2017-18 budget measures aimed at bolstering the family law system, the government provided the following additional funding over four years to the federal courts:

The reforms implemented in the package of legislation introduced today are consistent with the parliament's powers to create and invest federal jurisdiction in courts other than the High Court under chapter III of the Constitution. No existing court is being abolished as a result of this legislation. Under the bill, the Family Court will continue in existence as the FCFC (Division 1) and the FCC will continue in existence as the FCFC (Division 2). Current judicial appointments will continue in the new structure, with no changes to the terms or conditions of employment of existing judges. The bill ensures that the FCFC (Division 1) is considered a superior court of record and a court of law and equity, and the FCFC (Division 2) is considered a court of record and a court of law and equity.

It is the government's intention, enabled by the legislation, that the FCFC would operate under the common leadership of one Chief Justice, supported by one Deputy Chief Justice, who would each respectively hold dual appointments as Chief Justice/Chief Judge and Deputy Chief Justice/Deputy Chief Judge of Division 1 and Division 2. The Chief Justice would be supported in his or her responsibility for the administrative affairs of the court by a single Chief Executive Officer, the Chief Executive Officer of the Federal Court.

The bill confers jurisdiction to hear matters arising under the Family Law Act 1975 on the FCFC (Division 1) and the FCFC (Division 2) so that their jurisdiction is the same. The bill invests the Chief Justice with the power to make court rules for Division 1 and the Chief Judge with the power to make court rules for Division 2. The bill provides that the Chief Justice and Chief Judge must promote the objects of the bill, which include cooperation between Division 1 and Division 2 with the aim of ensuring common rules of court and forms, practice and procedure, and approaches to case management. As the government intends to appoint the one person with a dual commission as Chief Justice and Chief Judge, this will positively ensure users have a simpler, common experience.

The bill therefore creates a framework to ensure, in effect, a single point of entry into the family law jurisdiction of the federal court system and facilitate the ability of the two divisions to operate under a common case management approach, resulting in the more efficient and consistent handling of family law matters.

From 1 January 2019, all new family law matters will be filed in the Federal Circuit and Family Court of Australia. Applications will follow a common case management pathway. It will not matter which division litigants file in as each matter will be directed to the most appropriate division by case management teams led by judges. There will be no wrong door for family law matters.

It is estimated that consolidating first instance family law jurisdiction into a single court entity with a single point of entry could result in finalising up to an additional 3,500 family law matters each and every year, and that through a common structured initial case management process and managed case listing, up to 3,000 additional family law matters will be finalised each year. Any transfer of cases between divisions will be part of the case management process, with the result that families will no longer have to waste time through that process.

Critically, the legislative package provides that the courts and the parties in dispute are focussed on resolving disputes as quickly, inexpensively and efficiently as possible. This includes:

Both Divisions 1 and 2 of the FCFC will largely hear matters in the first instance. Whilst the FCFC will retain jurisdiction to hear family law appeals from state and territory courts of summary jurisdiction, with this appellate jurisdiction being extended to both divisions of the FCFC, the vast majority of appeals will be heard in the new Family Law Appeal Division of the Federal Court.

The removal of most of the appellate jurisdiction of the Family Court will be a fundamental change. It will allow those judges who typically hear appeals to focus on hearing first instance family law matters, so that the Federal Circuit and Family Court of Australia will have greater capacity to deal with trial work. This will reduce the backlog in first instance family law matters and contribute to reducing median case waiting times. It has been estimated that better management of appeals could result in up to 1,500 additional family law matters being finalised each and every year.

Importantly, the legislative package ensures that appropriate expertise and specialisation is retained and better utilised within the new structure. The family law expertise and experience of existing Family Court and FCC judges will continue to be utilised and developed over time.

The bill retains the requirement that a Division 1 judge cannot be appointed unless 'by reason of training, experience and personality, the person is a suitable person to deal with matters of family law' and introduces a new requirement that appointments to the Federal Court (including the Family Law Appeal Division) and the FCFC Division 2 have the 'appropriate knowledge, skills and experience to deal with the kinds of matters' that may come before them.

The reforms are aimed at addressing and reducing risks to families. A more rigorous early assessment of complexity on a range of salient criteria that is conducted in a completely consistent way for all matters filed is a central objective of the proposed reforms. This would allow the best allocation of matters as between the FCFC Division 1 (the continuation of the Family Court) and the FCFC Division 2 (the continuation of the FCC), as well as allocation of specific matters which exhibit specific legal and factual issues with individual judges (whatever division they sit on), who have the specific skills and experience in those particular matters that allow for the most swift and efficient resolution of the matters. The bill allows the Chief Justice/Chief Judge to authorise judges in the FCFC to manage proceedings or classes of proceedings which would enable the specialist management of case lists, such as Magellan, family violence, parenting or property lists.

The government has provided $4 million in funding to the federal courts to review court rules and assist with implementing the reforms. The federal courts will undertake a year-long review of court rules to critically evaluate the operation of differing rules and harmonise them in the family law sphere. This project will be fully informed by the outcomes of the ALRC review into the family law system which is due to report to government in March 2019. While harmonisation will benefit court users, these reforms will also further ensure the financial sustainability of the courts. Importantly, all savings that arise will be invested back into the courts to further improve access to justice for Australian families.

Establishing the Federal Circuit and Family Court of Australia and ensuring both divisions have concurrent family law jurisdiction and common fees, and supported by the implementation of common case management and harmonised rules and procedures over time, will greatly improve Australian families' experience of the family law system.

Whilst estimates of potential improvements seem large, they clearly demonstrate the potential for significant efficiencies to be achieved within the existing system. Even if only a quarter of the estimated efficiency gains were to be realised, this would be enough to allow the courts to finalise more cases than they receive each year and contribute significantly in reducing the backlog of 21,000 pending cases that were before the courts on 30 June 2017.

We have the opportunity to act now and it is imperative that we do. These structural changes are another demonstration of this government's commitment to improving the family law system and provide a secure platform to underpin future reforms to the family law system following receipt of the ALRC report next year. I commend the bill to the House.

Debate adjourned.