Earlier on in this blog I discussed the Federal Civil Dispute Resolution Bill 2010. This Bill, if enacted by Federal Parliament, will see Federal law take a new step forward in civil dispute resolution. This new step is using statutory law to encourage the resolution of civil disputes outside of the courts and to improve access to justice by focusing parties and their lawyers on the early resolution of disputes.
The new law will ensure that, as far as possible, parties take “genuine steps” to resolve civil disputes before proceedings are commenced in the Federal Court or the Federal Magistrates Court.
When commencing proceedings in court, parties will be 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 court can take into account the failure to take steps when exercising its existing case management directions and costs powers.
This new approach will bring more focus on practitioners using ALTERNATIVE DISPUTE RESOLUTION STRATEGIES (ADR) before they bring the case into court. This means the possible use of:
> Negotiation
> Neutral Expert Appraisal or Determination
> Conciliation
> Mediation
> Arbitration
This, in turn, highlights the increasing need for legal practitioners to become more conversant with ADR philosophy and methodology and more skilled in making effective use of ADR strategies.
Now, New South Wales, seems to have beaten the Federal Government to the gate by just recently passing amendments to the Civil Procedure Act by its assent to the Courts and Crimes Legislation Further Amendment Act 2010.
These new laws enact new pre-litigation requirements.
The major changes are these:
1. Parties in a civil dispute must taken “reasonable steps” (not “genuine steps” as in the Federal Bill), to resolve the dispute, or narrow the issues, before they file in court. This means that they must pay regard to the client’s situation, the nature of the dispute (e.g. value of the claim and complexity of the issues) and any applicable pre-litigation protocol to resolve the dispute before commencing litigation.
2. “Reasonable steps” include notification to the other party of the issues, exchanging information and documents critical to the resolution of the dispute, and considering negotiation or alternative dispute resolution (ADR);
3. Lawyers must inform their clients about the new law and advise on ADR;
4. Parties must not unreasonably refuse to participate in genuine and reasonable negotiations or ADR;
5. If proceedings are commenced in court the plaintiff must file a dispute resolution statement identifying what steps have been taken to avoid litigation;
6. Failure to comply can have implications for costs in any subsequent litigation.
What will be interesting to keep an eye on is what protocols evolve to satisfy these new statutory requirements and what practitioners and the court work out to be “reasonable steps” and how the courts deal with non-compliance.
It could be a new era for ADR and ADR specialists – but time will tell.
Christopher Whitelaw
Dispute Resolution Specialist
Lane Cove Dispute Resolution Centre
02 94208213
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