genuine steps

Civil Dispute Resolution [Bill] Act

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Just as the Victorian government has announced its intention to repeal the corresponding obligations for litigation in State courts, the Commonwealth Attorney General has announced that the Civil Dispute Resolution Bill has now been passed by both Houses of Parliament.

The Bill originally lapsed on the dissolution of Parliament last year, but was reintroduced in September.

A key feature of the legislation is the introduction of the new genuine steps statement. According to the General Outline in the EM:

This Bill encourages the resolution of civil disputes outside of the courts and seeks to improve access to justice by focusing parties and their lawyers on the early resolution of disputes.

This Bill seeks to ensure that, as far as possible, parties take ‘genuine steps’ to resolve a civil dispute before proceedings are commenced in the Federal Court or the Federal Magistrates Court.  When commencing proceedings in a court, parties are required to file a statement saying what steps they have taken to resolve their dispute or, if they have not taken any steps, the reasons why.  The Bill gives examples of reasons why steps might not be taken, including urgency, or where the safety of a person or security of property is compromised.  The court can take into account the failure to take steps when exercising its existing case management directions and costs powers.

The Bill does not require parties to take any particular specific step – the most appropriate steps to take depend on the circumstances of the particular dispute.  The Bill is deliberately flexible in allowing parties to tailor the genuine steps they take to the circumstances of the dispute.

The substantive obligations (on litigants and practitioners) under the legislation come into force on the earlier of (a) the date set in a Proclamation or (b) 6 months after Royal Assent.

Some notes on the bill that lapsed.

The Senate Legal and Constitutional Affairs Committee’s report.

The NADRAC report.

Lid dip, Jane.

 

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Taking genuine steps to resolve before going to court -corrected

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The Commonwealth Attorney-General introduced the Civil Dispute Resolution Bill 2010 into Parliament today which, if enacted, will require:

  1. applicants in civil proceedings in the Federal Court and the Federal Magistrates Court to file a genuine steps statement before the hearing date specified in the Application when the application is filed (thanks, Tim);
  2. respondents to file a genuine steps statement before the hearing date stating whether or not they agree with the applicants’ statements; and
  3. lawyers to advise people who are required to file genuine steps statements of the requirement and to assist them in complying with their obligations.

A genuine steps statement will not be required where the proceeding relates wholly to “excluded proceedings”: clauses 15 – 17 provide lists of excluded proceedings and a power for regulations to prescribe further proceedings.

An applicant’s genuine steps statement must set out the steps that have been taken to try to resolve the dispute before commencing proceedings or why no such steps were taken.

The Bill does recognise, however, that what will constitute “genuine steps” in any particular case will depend on the circumstances of that case. The EM states in relation to cl. 4:

The Bill does not prescribe specific steps to be undertaken. Rather, it is intentionally flexible to enable parties to turn their minds to what they can do to attempt to resolve the dispute. This is to ensure that the focus is on resolution and identifying the central issues without incurring unnecessary upfront costs, which has been a criticism of compulsory pre-action protocols.

A failure to provide a genuine steps statement would not automatically invalidate the application or defence/response.  However, in exercising its powers in relation to the proceeding, by cl. 11 the court may have regard to whether a genuine steps statement was filed (when required) and whether genuine steps were in fact taken. In addition to referall of the dispute to ADR, the EM at [45] gives as examples of ways the power may be exercised:

  • setting time limits for the doing of anything, or the completion of any part of the proceeding
  • dismissing the proceeding in whole or in part
  • striking out, amending or limiting any part of a party’s claim or defence
  • disallowing or rejecting any evidence, and
  • ordering a party to produce to it a document in the possession, custody or control of the party.

The NADRAC report contemplated that courts might use this information in various ways such as tailored orders for the provision of necessary information without requiring or fostering costly discovery processes. This, and other measures contemplated, are already within the courts’ powers so, at least this far, the bill seems to be an instrument to encourage cultural change. Indeed, this is made explicit in relation to cl. 12 – the court’s powers to award costs:

The court may also have regard to whether a genuine steps statement was filed (when required) and whether genuine steps were in fact taken when exercising its powers to award costs.

Furthermore, the court may order costs personally against a lawyer who fails to comply with his or her duties.

The EM states that these provisions are intended “to bring about a cultural change in the conduct of litigation so that parties are focused on resolving disputes as early as possible.”

Clause 14 seeks to preserve the “without prejudice” privilege for negotiations to settle.

So far as IP goes, “ex parte” applications are within the definition of “excluded proceedings”, so some Anton Piller and Mareva situations will not be affected. IP litigation is usually preceded by letters of demand. This (and the resulting rejection) may well fall within, if suitably drawn, the first two or three examples given in cl 4:

  1. 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;
  2. responding appropriately to any such notification;
  4. providing relevant information and documents to the other person to enable the other person to understand the issues involved and how the dispute might be resolved.

The discussion of these matters in the NADRAC report identifies a tension perceived in the UK between reducing some court backlogs while imposing onerous costs obligations on parties before the litigation commences.

Civil Dispute Resolution Bill 2010 (html) (pdf)

EM (html) (pdf)

Press release

Some further background and consideration of the thinking behind the legislation may be found in the NADRAC report

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