From 1 October 2011, parties involved in disputes that have the potential to end up in Court will be required to show that they have attempted to resolve their dispute (or at least attempted to 'narrow' it down) before entering into civil proceedings.
The new requirements are set out under amendments to the Civil Procedure Act 2005 (under the new part 2A, sections 18A to 18O), and matching requirements will operate in the Federal court and Federal Magistrates court as a result of provisions in the Civil Dispute Resolution Bill 2010 (Cth) when it comes into force.
What disputes are covered under the new requirements?
The new requirements apply to civil disputes (disputes between individuals and/or organisations in which compensation may be awarded to the victim), that might eventually lead to the commencement of civil proceedings. Civil disputes are as wide ranging as shareholders/partners' disputes, disputes over commercial contracts and intellectual property disputes, to name a few.
What constitutes an 'attempt to resolve' a civil dispute?
The parties involved in a civil dispute are required to take reasonable steps to resolve the dispute by agreement, or to clarify and narrow the issues in dispute. These reasonable steps may include:
- notifying the other party of the issues in dispute;
- responding constructively to such notification;
- corresponding with the other party;
- considering and proposing alternative options to court.
If a civil dispute is not resolved and the plaintiff commences proceedings, it must file a Dispute Resolution Statement with the Statement of Claim. The Statement must specify the steps that were taken by the Plaintiff to resolve the dispute or narrow the issues; or if no steps were taken, the reason why.
What happens if you don't attempt to resolve the
dispute?
A party is still able to bring proceedings, even if it has not taken all reasonable steps to resolve the matter, however the court will be able to take that failure into consideration when making orders in the proceedings, including costs orders.
Are all civil disputes affected?
The new requirements do not apply to all civil proceedings. Some classes of civil proceedings have been excluded from the requirements, including obvious proceedings such as ex parte proceedings and appeals. Also excluded from these requirements are matters in the Dust Diseases Tribunal, the Industrial Relations Commission and proceedings relating to payment of workers compensation.
When do the requirements apply?
The new requirements will apply to proceedings commenced after 1 October 2011, and Dispute Resolution Statements will have to be filed from that date.
The Dispute Resolution Statements will, however, relate to the steps taken prior to 1 October 2011, so parties involved in a civil dispute should therefore be aware of the requirements, and take reasonable steps to resolve the dispute from August or September 2011.
Protection of information used in a civil dispute
Documents exchanged between the parties to a civil dispute may not be used by either party for any reason except to resolve that particular dispute, or in the proceedings that follow the dispute should it not settle.
What does it mean for you?
The new requirements are an attempt to reduce the number of civil disputes that end up in Court. In a legal system that is struggling to cope with an increasing volume of litigation, it certainly makes sense to try and resolve a matter before taking up the time and resources of the Courts.
At Coleman Greig, our experienced lawyers use litigation as a last resort and will always attempt to resolve a matter before heading to Court – saving you time, money and stress. From 1 October, all solicitors acting for parties involved in a civil dispute must adopt this position and inform their clients of the pre-litigation requirements to attempt to settle the matter or narrow the issues, as well as advising their clients of the alternatives that are available to resolve disputes.
If you, or someone you know, is involved in dispute that looks as though it might end up in Court speak to one of our experienced litigation lawyers. We can advise you on the best course of action to ensure your matter is resolved as quickly and effectively as possible.
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.