Australia: The introduction of pre-litigation dispute resolution requirements to the Civil Procedure Act

Last Updated: 7 March 2011
Article by Olivia Dinkha


In Brief

The NSW Parliament has passed amendments to the Civil Procedure Act 2005 (CPA) which will have a significant impact on the conduct of civil litigation in NSW.1


The Courts and Crimes Legislation Further Amendment Act 2010 (Act) contains important amendments to the CPA. The Courts and Crimes Legislation Further Amendment Bill 2010 (Bill) was introduced to Parliament on 24 November 2010 and was passed on 30 November 2010.

The Act introduces a regime of compulsory pre-litigation dispute resolution with an emphasis on resolving, or narrowing the issues in dispute prior to the commencement of civil proceedings. Section 56 of the CPA has been amended to require that a party to a civil dispute or civil proceedings is under a duty to take reasonable steps to resolve or narrow the issues in dispute.2

The Act also introduces a number of important changes to representative proceedings in the Supreme Court which are the subject of Part 2 of this paper.3

The Act

The Act only applies to certain types of civil disputes and proceedings and specifically excludes the following civil proceedings:

  • proceedings in the Dust Diseases Tribunal;
  • proceedings in the Industrial Relations Commission or Industrial Court;
  • proceedings in relation to the payment of workers compensation including claims for compensation or work injury damages under the Workers Compensation Act 1987 or the Workplace Injury Management and Workers Compensation Act 1998;
  • proceedings in relation to the enforcement of a farm mortgage to which the Farm Debt Mediation Act 1994 applies;
  • proceedings in relation to a claim made under the Motor Accidents Act 1988 or the Motor Accidents Compensation Act 1999;
  • proceedings in relation to a claim made under the Motor Accidents (Lifetime Care and Support) Act 2006;
  • proceedings in which a civil penalty is sought;
  • ex parte proceedings; and
  • appeal proceedings.4

The Act introduces a "pre-litigation protocol".5 A pre-litigation protocol sets out what will constitute reasonable steps for the purposes of the pre-litigation requirements of specified civil disputes. The Act does not specify protocols but allows for the rules of the court and regulations to do so.

A pre-litigation protocol may include the following:

  • appropriate notification and communication steps;
  • appropriate responses to notification and communication steps;
  • appropriate correspondence, information and documents for exchange between the parties involved in the dispute;
  • appropriate negotiation and alternative dispute resolution options; and
  • appropriate procedures to be followed in relation to the gathering of evidence (including expert evidence).6

If there is no applicable pre-litigation protocol, parties involved in a civil dispute must comply with the pre-litigation requirements before the commencement of civil proceedings by taking reasonable steps to resolve the dispute, or clarify and narrow the issues in dispute in the event that the dispute cannot be resolved.7

The Act provides that reasonable steps to resolve a dispute can include:

  • notifying the other party of the issues in dispute and offering to discuss them with the view of resolving the dispute;
  • appropriately responding to any such notification by communicating the issues in dispute and offering to discuss them with a view to resolving the dispute;
  • exchanging appropriate pre-litigation correspondence, information and documents critical to the resolution of the dispute;
  • considering and proposing options for resolving the dispute without the need to commence civil proceedings, including resolution through genuine and reasonable negotiations and alternative dispute resolution processes; and
  • participating in alternative dispute resolution processes.8

In considering whether a party has taken reasonable steps to resolve the dispute, the court will take into account the personal situation of each party, the value and complexity of the claim, as well as any applicable pre-litigation protocol.9

A party involved in a civil dispute must not unreasonably refuse to participate in genuine and reasonable negotiations or alternative dispute resolution processes.10

The Act affords protection to information or documents exchanged between parties to a dispute in accordance with the pre-litigation requirements.11 Where the document or information is not otherwise available to the recipient, except in limited circumstances, the recipient is subject to an obligation not to use the information or documents other than to resolve the dispute or any civil proceedings arising out of the dispute. A failure to comply with this requirement may be treated as a contempt of court.

The Act also specifically affords protection to evidence of anything said or any admission made during a mediation conducted as part of the pre-litigation requirements.12 Documents arising from the mediation are also protected and not admissible except in certain circumstances. Publications made during a mediation also attract the usual protection from defamation proceedings that applies to publications made in court.

A plaintiff who commences civil proceedings must file a Dispute Resolution Statement (DSR) at the time the originating process is filed.13 The DSR must set out the steps that have been taken to try to resolve or narrow the issues in dispute. Where no such steps were taken, the DSR must set out the reasons why they were not. Such reasons could include the urgent need to commence proceedings because of the impending expiration of a limitation period.

A defendant who has been served with a DSR must also file a DSR at the time of filing a Defence.14 A DSR filed by a defendant must set out whether the defendant agrees with the DSR filed by the plaintiff. Where the defendant disagrees with the DSR filed by the plaintiff, they must set out the reasons why the defendant disagrees and set out the reasonable steps which could be taken to resolve the dispute.

The Act also imposes certain obligations on legal practitioners, including an obligation to:

  • inform their client about the applicability of the pre-litigation requirements to the dispute; and
  • advise their client of the alternatives to the commencement of civil proceedings, including alternative dispute resolution processes that are reasonably available.15

A court may consider a legal practitioner's failure to comply with these requirements in determining whether a costs order should be made personally against the legal practitioner pursuant to s 99 of the CPA.16

A failure to comply with the pre-litigation requirements does not prevent a person from commencing civil proceedings.17 Similarly non-compliance does not invalidate civil proceedings that have otherwise been properly commenced.18 A failure to file a DSR does not invalidate proceedings that have otherwise been properly commenced.19

Parties involved in a civil dispute or civil proceedings are to bear their own costs of complying with the pre-litigation requirements unless rules of the court otherwise provide.20 However, a court may of its own motion or by application of any party to the proceedings:

  • order that a party pay all, or part, of another party's costs of complying with the pre-litigation requirements if satisfied that it is reasonable to do so having regard to s 56 of the CPA; and
  • make a costs order under s 99 of the CPA against a legal practitioner. In determining whether such an order should be made the court may take into account any conductby the legal practitioner that causes a party to civil proceedings to not comply with the pre-litigation requirements.21

A court may take a party's failure to comply with the pre-litigation requirements into account when determining costs in the proceedings generally.22

In determining whether to take into account a party's failure to comply with the pre-litigation requirements, the court may have regard to:

  • whether or not the persons in dispute were legally represented;
  • whether or not compliance might have resulted in self-incrimination by a person in dispute; and
  • any reasons that have been provided for the failure by the persons in dispute.23


  • The amendments to the CPA essentially extend the overriding purpose of the CPA as embodied in s 56, this being the "just, quick and cheap resolution of the real issues", to civil disputes before they are even commenced in court. In this way the amendments herald a shift towards the resolution of disputes at the pre-litigation stage.
  • It is anticipated that the amendments will increase the chances of settlement prior to the commencement of proceedings, thus containing the costs of a claim.
  • The Bill was assented to on 7 December 2010 and the provisions relating to the introduction of pre-litigation dispute resolution requirements await proclamation before commencement.

1 The amendments are contained in the Courts and Crimes Legislation Further Amendment Act 2010 (Act). All subsequent reference sections are references to the Act unless otherwise specified.
2 See schedule 6.2 of the Act for amendments to s 56.
3 See schedule 6.1.
4 Section 18B
5 Section 18C
6 Ibid.
7 Section 18E
8 Ibid.
9 Ibid.
10 Ibid.
11 Section 18F
12 Section 18O
13 Section 18G
14 Section 18H
15 Section 18J
16 Ibid.
17 Section 18K
18 Ibid.
19 Ibid.
20 Section 18L
21 Section 18M
22 Section 18N
23 Ibid.

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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.

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