George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

The Civil Dispute Resolution Bill 2010 seeks to encourage parties to a dispute to take what are described as genuine steps to resolve the dispute before commencing civil proceedings in the Federal Magistrates Court or the Federal Court. It is intended to complement the Access to Justice (Civil Litigation Reforms) Act 2009, which imposed a requirement that federal civil procedure be directed towards the just resolution of disputes as quickly, inexpensively and efficiently as possible. It implements the recommendations of the National Alternative Dispute Resolution Advisory Council in its 2009 report The resolve to resolve.

The principal measure in the bill is to require an applicant in proceedings in the Federal Magistrates Court or the Federal Court to file what is described as a ‘genuine steps’ statement at the time of commencement of the proceedings, describing the steps that have been taken in an attempt to resolve the dispute. The requirement does not apply to family law or to native title proceedings, which have their own alternative dispute resolution processes. It also does not apply to criminal or quasi-criminal proceedings; appeals, including appeals from tribunal decisions; where a party has been declared a vexatious litigant; proceedings that relate to warrants or compulsory disclosure notices; and ex parte proceedings. Where proceedings are urgent, or if the safety or security of a person or property would be compromised by taking alternative steps, the statement may specify the reasons that such steps were not taken.

The sanctions applicable to failing to take genuine steps are at the court’s discretion and are in the nature of other failures to comply with the rules of court, such as appropriate interlocutory orders and orders as to costs. Examples of alternative steps include mediation, conciliation, expert appraisal, early neutral evaluation and arbitration. Less formal processes, including simple offers to negotiate and the timely exchange of information and documents, would also be captured by the requirement.

However, there are in the opposition’s view potential problems with the bill in the form in which it is drafted. One problem arises in relation to the obligation imposed upon lawyers to advise clients as to the compliance with the requirement. The bill provides that the lawyer must not only advise but also ‘assist’ clients to comply. Costs may be ordered against legal representatives personally if they are considered to have failed to have complied with that obligation. Lawyers already have a duty to assist their clients and, where the client accepts the advice, restating it adds nothing. The question, however, arises as to the scope of the obligation imposed upon the lawyer to ‘assist’ a party to comply with its duty in circumstances in which a party chooses to conduct the proceeding in a manner which may not be in compliance with the duty imposed upon the client. Disputes of this nature may require inquiries into matters covered by lawyer-client privilege, foment discord between lawyers and their clients, penalise innocent parties and result in further costs and delays while alternative representation is being arranged.

A more fundamental issue arises in relation to the discretion to award costs in respect of a failure to take genuine steps to resolve a dispute. The duty imposed upon a party under clause 12 of the bill expressly applies to the conduct of a party in negotiations for settlement of the matter which is the subject of the dispute. On one view, the application of this provision may permit the court when considering the question of costs to have regard to matters which would ordinarily be the subject of settlement or—without prejudice—privilege. This may amount to the abrogation of the settlement privilege, at least by implication. I understand that the government proposes amendments to ensure that the steps taken by the parties are not to be disclosed.

Finally, clause 4 provides a loose definition of ‘genuine steps’ by way of some examples. These include: 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 any such notification; providing relevant information and documents to the other person to enable the other person to understand the issues involved and how the dispute could be resolved; considering whether the dispute could be resolved by a process facilitated by another person, including an alternative dispute resolution process; if such a process is conducted but does not result in resolution of the dispute, considering a different process; and attempting to negotiate with the other person, with a view to resolving some or all the issues in dispute or authorising a representative to do so. These are commonplace initiatives in litigation and not all are necessarily appropriate in all disputes. Many of them are steps already required under the court’s rules of procedure.

The term ‘genuine steps’ is, in the opposition’s view, itself problematic. The assessment of genuineness necessarily includes a degree of subjectivity. An objective assessment creates more certainty and is more closely aligned with the policy intentions of the bill. What is genuine is not necessarily reasonable but what is reasonable is of necessity genuine. The term ‘reasonable’ is used in Victoria’s Civil Procedure Act 2010 and is proposed for the New South Wales Civil Procedure Act 2005. The Federal Court itself has commented that ‘any difference in terminology’ between acts governing the federal courts—that is, the Federal Magistrates Court and the Federal Court—and state supreme courts is likely to lead to arid disputes in interpreting comparative legislative provisions. Comity matters here.

It was for the consideration of these issues that the bill was referred to the Senate Legal and Constitutional Affairs Legislation Committee. The committee reported on 2 December 2010. I am pleased to note that the concerns I have mentioned were shared by the committee, and I understand that the government proposes to move amendments to reflect some but not all of them. Those amendments will have the opposition’s support. However, I understand the opposition’s concern in relation to the use of the word ‘genuine’ as opposed to the use of the word ‘reasonable’ has not been agreed to by the government. Therefore, at the committee stage, I will be moving amendments to that effect.

The coalition supports sensible legislation that increases the efficiency and accessibility of the federal judicial system. The initiatives in this bill that may hasten settlement of certain cases and reduce the strain on judicial resources are welcome measures. Those results, however, must not be achieved at the expense of the courts’ cardinal duty—that is, to do justice. If the coalition’s concerns can be met by amendments, we will support the bill. As I have foreshadowed, I understand that in all but one respect, that will be so. Subject to the reservation I have made, the coalition supports the bill.

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

I was going to thank all senators for their contribution to the debate on the Civil Dispute Resolution Bill 2010, but I will just thank Senator Brandis; it seems there are no other contributions. In summing up, I will put some remarks on the record. I think Senator Brandis’s assessment of where we are at in terms of amendments is correct. The government will be moving three amendments to respond to the concerns raised as a result of the committee process, but he is right to identify that we still have a disagreement over the terminology about reasonableness. I am hoping that Senator Ludwig will be in the chamber for that debate when we get to it in the committee stage, because for a non-lawyer it seems a little arcane. I will of course support the government’s position, but I do not feel capable of going toe to toe with Senator Brandis about what lawyers do or do not understand by those terms, as interesting as that debate is.

I would like to thank the Senate Standing Committee on Legal and Constitutional Affairs, which delivered their report on the bill on 2 December last year. That committee noted that the introduction of the bill is an important initiative in ensuring that there is a focus on resolving a matter before costly and time-consuming litigation is undertaken. Even when matters are not resolved, there will be a benefit to parties if the issues in dispute are clarified and narrowed. As Senator Brandis made clear, the committee made three specific recommendations. The first was to amend the bill to provide for an inclusive definition of the word ‘genuine’ to better reflect the intention of the National Alternative Dispute Resolution Advisory Council’s report, The resolve to resolve. The second recommendation was to amend the bill so that the court, when taking into consideration the genuine steps that have been taken by a person when it is exercising its powers or performing its functions, also takes into account the circumstances of disadvantaged litigants.

The government has responded to both these recommendations by proposing a definition of ‘genuine steps’, which provides that a person takes genuine steps to resolve a dispute if the steps taken by the person in relation to the dispute constitute a sincere and genuine attempt to resolve the dispute having regard to the person’s circumstances and the nature and circumstances of the dispute. The government believes this new provision gives effect to the committee’s intentions and those of NADRAC. It will clarify for prospective litigants what may constitute genuine steps and will make it clear that it is to be determined in the light of their particular circumstances and those of their dispute. It will make it clearer that it is not the government’s intention to impose onerous or prescriptive obligations.

The third recommendation was to amend the bill so that information disclosed while taking genuine steps to resolve a dispute cannot be used for any other purpose outside the resolution of the dispute at hand. The government has responded to this recommendation by proposing a government amendment to the bill to explicitly provide that nothing in the bill excludes or limits the operation of a law of the Commonwealth, a law of a state or territory or the common law, including the rules of equity, relating to the use or disclosure of information, the production of documents or the admissibility of evidence. The bill is not intended to diminish the effect of any existing provisions or rules that may protect communications made in an attempt to resolve the dispute. This provision will ensure that the status quo is maintained. While this may not fully implement the committee’s recommendation, the government proposes to consider the matter further in the context of NADRAC’s recent report on the integrity of ADR processes, which specifically addresses these issues.

As I said, we will not be supporting the opposition’s amendments. The government considers the term ‘genuine’ provides more meaningful guidance to parties about the types of actions they can include in their genuine step statements, but obviously we will debate that when we get to the amendments at the committee stage. One of the government’s highest priorities is improving access to justice. This bill is an important step in that direction. It complements the strategic framework for access to justice as it encourages the early resolution of disputes at least cost. We appreciate the support around the chamber for the bill and we thank the committee for its work. I commend the bill to the Senate. The government will move three amendments and will also consider the opposition’s amendments during the committee stage.

Question agreed to.

Bill read a second time.