an applicant who is commencing proceedings to file a
"genuine steps statement" at the time of filing their
originating application, listing the steps taken to try to resolve
the dispute prior to filing, or the reasons why no steps were
the respondent to that application to file a genuine steps
statement in reply prior to the first return date, stating the
respondent's agreement or disagreement with the steps recorded
in the applicant's statement as being taken, and any reasons
"Genuine steps" is flexibly defined under the Act as
steps taken to resolve a dispute that constitute a:
"sincere and genuine attempt to resolve the dispute, having
regard to the person's circumstances and the nature and
circumstances of the dispute".
writing to the other side outlining the dispute and how it
might be resolved;
exchanging relevant documents and information in a timely and
agreeing to participate in discussions about the dispute;
undertaking alternative dispute resolution processes such as
mediation, conciliation or arbitration.
Where parties have failed to take pre-litigation steps to
resolve the dispute, and do not provide a satisfactory excuse, or
simply fail to file a genuine steps statement, proceedings are not,
by that fact, invalidated.
For example, the Federal Court has already indicated that its
registries will accept filing of originating applications whether
they are accompanied by a genuine steps statement or not (this is
also confirmed under section 10(2) of the Act).
However, the Court is likely to take non-compliance into account
when exercising its existing case management powers in relation to
the proceedings, and also in exercising its discretion as to
The Act makes clear that the normal rules of privilege apply to
protect any steps taken, and any associated negotiations attempted,
to resolve the dispute.
The Act obliges lawyers to advise their clients about the
requirements of a genuine steps statement and to assist their
clients in compliance. The court's discretion over costs may
extend to the making of a personal costs order against any lawyer
who fails to appropriately advise or assist his or her client in
relation to the genuine steps statement.
Proceedings that are exempt from the Act
The Act excludes certain types of proceedings, such as appeals,
civil penalty proceedings, ex-parte proceedings, proceedings
arising from certain tribunals or arising under certain Acts.
Relevantly, the Civil Dispute Resolution Regulations 2011 also
exclude proceedings under section 459A of the Corporations Act 2001
to wind up a company in insolvency for failure to comply with a
Where part of a proceeding is excluded, a genuine steps
statement must still be filed, but does not need to relate to that
part of the proceeding which is excluded.
Transition to the Act
The Act applies immediately to all proceedings filed in the
Federal Court or Federal Magistrates Court as from 1 August. For
proceedings commenced immediately after 1 August 2011, the parties
will effectively be required to provide a genuine steps statement
in relation to steps (if any) which were taken prior to the
commencement of the Act. Existing proceedings are exempt from this
Practical impact of the Act
Although the Act makes the genuine steps statement a mandatory
pre-litigation requirement, the practical impact of the Act may be
less onerous where parties are used to negotiating over disputes
before filing. Clearly the extent and nature of the steps taken to
meet the requirements of the Act will depend on the complexity of
the issues in dispute.
The practical change is that the parties are forced to tell the
Court, at the time of filing, whether and what steps they have
taken to try to resolve or narrow the issues in dispute prior to
proceedings being commenced.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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