Lord Jackson’s 2009 Review of Civil Litigation Costs in the UK found that in general pre-action protocols had been successful in encouraging disputes to settle through negotiations between the disputants’ lawyers.  While the rate of settlements had improved, Lord Jackson found that pre-action protocols had significantly increased the costs for those litigants whose cases would previously have settled prior to action being commenced.  In cases where settlements are unlikely to be reached—in certain commercial disputes for example—Lord Jackson found that pre-action protocols had generated additional costs and delays in getting to court for no useful purpose.

Pre-litigation requirements are beginning to emerge in Australian jurisdictions.  However, by comparison to the UK model, the Australian approach discussed below seems less prescriptive.

The recently enacted Civil Procedures Act 2010 (Victoria) requires disputants to take reasonable steps to resolve their differences before commencing litigation in respect of a range of civil disputes.  This is part of a broader scheme of overarching obligations that bind courts, lawyers and litigants to a ‘reasonable’ standard of behaviour.  ‘Reasonable steps’ include, but are not limited to, the exchange of appropriate pre-litigation correspondence, information and documents critical to the resolution of the dispute.  Non-compliance with pre-litigation requirements is not a basis for preventing the commencement of proceedings, but the court may impose sanctions such as costs and procedural orders.

Similarly, the Civil Dispute Resolution Bill 2010 (Commonwealth) proposed to introduce obligations on the parties to certain cases to file a statement of genuine steps taken to resolve the dispute before the proceedings were instituted.  The Bill did not specifically define ‘genuine steps’, but gave examples which included ‘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’.  Failure to file a genuine steps statement would not invalidate the proceeding but the Bill provided that the court may take this into account when performing case management functions and exercising discretion as to costs.

A similar approach was recommended for New South Wales in the ADR Blueprint by the Department of Justice and Attorney General.

A central theme in the Australian response is that pre-litigation requirements are non-specific, and determination of what is reasonable or genuine is a matter for the court.  This may be intended to address the problems experienced in the UK with front loading the civil justice system.

Should the parties to civil proceedings in the federal courts be required to exchange information and documents prior to the commencement of proceedings?  Such requirements are already imposed on the parties to family law matters, where the duty of disclosure under the Family Law Rules 2004 applies from the start of pre-action procedures.  What would be the costs implications be for other types of matters, if prospective litigants were required to disclose documents?  Is a ‘genuine steps’ obligation an appropriate model for the exchange of documents prior to the commencement of proceedings?

Several options have been proposed for achieving a more transparent and focused discovery process.  It might involve a conference between the parties and the court to narrow down the issues in dispute to those critical for the purposes of discovery.  It could extend to the use of oral depositions about the process of discovery, for example, questioning a party’s I.T. administrators about their computer systems and location of stored information.  Some of the burden could be redistributed to the party giving discovery, by requiring disclosure of core documents that will be relied on at trial or, at least, an outline of the evidence that will be adduced.  That party could be required to produce a menu of discoverable documents, in relation to specific issues, of which they are aware – for their opponent to select in an application for discovery.

Second, there are calls for courts to play a stronger role in scrutinising applications for discovery and to refuse unjustified requests – and for judges generally to be more consistent in doing so.  This raises questions about what threshold test the courts should apply to an application for discovery and what particular considerations the court should take into account when determining whether discovery is justified.  Should the benchmark for imposing discovery obligations be as broad as ‘the interests of justice’ or is a specific cost/benefit analysis more appropriate?  Should the fact that documents may be obtained through other means be an automatic bar to discovery or is this a just something for the court to weigh up?

These ideas and issues need careful consideration, and a public consultation document will be available for written submissions.  But at this early stage, there seems to be a broadly held view that the current culture of adversarial ‘discovery’ should move towards a system of judicially managed ‘disclosure’.  Would this kind of cultural change in the federal courts improve access to justice?

While the issue of the costs of discovery of documents can occur in all civil cases, it is certainly the ‘mega-litigation’ that provides the most glaring examples—like the C7 case (Seven Network Ltd v News Ltd [2007] FCA 1062) which involved 120 hearing days and generated a database of 85,653 documents comprising 589,392 pages! Such cases involve, remarked Sackville J, extraordinary demands ‘on the judicial system and on those unfortunate enough to be involved, whether as parties, legal representatives or judicial officers’. They also become ‘notorious’ because: they consume so much court time; the costs incurred are large; and the judgments are very long. And yet, ‘no one has been able to devise a clear and workable solution to the problems created by large and complex litigation’. (‘Mega-Lit: Tangible consequences flow from complex case management’ (2010) 48(5) Law Society Journal 47). Sackville J’s article provides an excellent prompt for the first questions on the blog.

How can we ensure that the costs of discovery in litigation are proportionate to the matters in dispute? Is effective case management the answer, as Sackville J suggests, and, if so, what makes it work effectively?

~ Rosalind Croucher, President Australian Law Reform Commission

We will be undertaking formal consultations with key stakeholders throughout the inquiry, but we intend to use this blog to gather contributions and promote discussion around issues we are considering through the duration of the inquiry.

The Discovery Blog is a place where we will regularly add short posts describing issues we are curently thinking about. We encourage you to tell us what you think. We are also keen to hear about any relevant experiences you might have had.

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