Victoria has a new Civil Procedure Act ("the Act") which will come into operation on either 1 June 2011 or an earlier date (possibly 1 January 2011) if the Government decides that it should start earlier. The Act is aimed at promoting the just, efficient, timely and cost-effective resolution of disputes and applies to all Victorian courts, but not to VCAT or other Tribunals.

The Act has important practical ramifications for insurers, lawyers and others for civil claims in Victoria both before proceedings are issued and after, as listed in the table below. For example, the Court may scrutinise and criticise parties if they cause delay through the late disclosure of their case and/or provision of documents.

This is the first time, in Victoria, that pre-litigation steps in civil claims have been legislated. However similar provisions exist in the NSW Civil Procedure Act and many of the steps to be adopted in Victoria are already operating in NSW.

Important terms in the Act:

Civil Dispute – means a dispute which may result in the commencement of a civil proceeding.

Civil Proceeding – means any proceeding in a court other than a criminal proceeding or quasicriminal proceeding.

Critical Documents – means documents that are, or have been, in that person's possession, custody or control:

  1. Of which the person is aware; and
  2. Which the person considers, or ought reasonably consider, are critical to the resolution of the dispute.

Overarching Purpose

The Act defines an overarching purpose of the legislation. The Courts must have regard to the overarching purpose when making orders and giving directions in a civil proceeding (s.7). The Act sets out a list of objectives that include:

  1. The just determination of the civil proceeding;
  2. The public interest in the early settlement of disputes by agreement between parties;
  3. The efficient conduct of the business of the court;
  4. The efficient use of judicial and administrative resources;
  5. Minimising any delay between the commencement of a civil proceeding and its listing for trial;
  6. The timely determination of the civil proceeding;
  7. Dealing with a civil proceeding in a manner proportionate to the complexity or importance of the issues in dispute and the amount in dispute.

Overarching Obligations

The Act also sets out "overarching obligations". Overarching obligations apply to insurers, insureds, lawyers and certain others (s.10). A person to whom the overarching obligations apply must act honestly at all times in relation to a civil proceeding (s.17). Therefore, the overarching obligations do not apply to civil disputes (pre-litigation).

The Act imposes a series of obligations including:

  1. Overarching obligation to act honestly;
  2. Overarching obligation to not make any claim or make a response to any claim in a civil proceeding that is frivolous, vexatious or an abuse of process, or which the person does not have a proper basis to make;
  3. Overarching obligation to avoid undue delay and expense, by not taking any step in connection with any claim or response to any claim in a civil proceeding unless the person reasonably believes that the step is necessary to facilitate the resolution or determination of the proceeding.
  4. Overarching obligation to cooperate in the conduct of civil proceeding
  5. Overarching obligation not to mislead or deceive
  6. Overarching obligation to use reasonable endeavours to resolve dispute
  7. Overarching obligation to narrow the issues in dispute
  8. Overarching obligation to ensure costs are reasonable and proportionate
  9. Overarching obligation to minimise delay
  10. Overarching obligation to disclose existence of critical documents

Importantly, lawyers must comply with the overarching obligations despite any obligation the lawyer has to act in accordance with the instructions or wishes of their client (s.13(2)).

Paramount Duty

Each person to whom the overarching obligations apply (including insurers) has a paramount duty to the court to further the administration of justice in relation to any civil proceeding in which that person is involved, including, but not limited to:

  1. Any interlocutory application or interlocutory proceeding;
  2. Any appeal from an order or a judgment in a civil proceeding;
  3. Any appropriate dispute resolution undertaken in relation to a civil proceeding.

Historically, only lawyers have owed such a duty to the court.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.