In Brief

The New South Wales Attorney General, Greg Smith SC, announced on 23 August 2011 that the New South Wales Government will postpone the introduction of pre-litigation dispute resolution requirements.1

Background

The Courts and Crimes Legislation Further Amendment Act 2010 made important amendments to the Civil Procedure Act 2005 (CPA). This was the subject of our Industry News Note on 1 March 2011.

In short, the amendments to the CPA introduced a regime of compulsory pre-litigation dispute resolution. The objective of the amendments was to encourage the resolution of disputes, or at the very least narrow the issues in dispute, prior to the commencement of civil proceedings.

Recent Developments

The amendments to the CPA were passed in November 2010. They were due to commence in respect of matters filed in court from 1 October 2011. We, as no doubt most of our clients, were commencing to witness some solicitors making efforts to comply with the new requirements of the CPA, presumably with a view to ultimately commencing proceedings after 1 October 2011.

Yesterday, Attorney General Smith advised that the New South Wales Government would postpone the commencement of the relevant provisions by 18 months. The Attorney General stated that this was to allow the New South Wales Government to monitor the success of similar provisions introduced by the Commonwealth Government which have commenced in respect of proceedings in the Federal courts.

In coming to this decision, the New South Wales Government has noted the concerns of organisations such as the Law Society of New South Wales, Bar Association of New South Wales and the Australian Lawyers Alliance. One of the principal concerns appears to have been that most lawyers and their clients make reasonable efforts to resolve disputes before the commencement of proceedings in any event and therefore the provisions served no purpose. Hand in hand with this was another principal concern which was that by formalising certain steps in the pre-litigation process the costs to both parties could substantially increase. As Attorney General Smith stated in the media release "Compliance with pre-trial obligations should reduce, not add to, the cost of resolving disputes. The purpose of this postponement is to ensure this is the case."

In taking this step, the New South Wales Government is mirroring steps taken in Victoria to wind back similar legislation.

Implications

  • It is our view that after the 18-month postponement, it is likely that a watered down version of the pre-litigation requirements will commence.
  • Prudent insurers and self-insureds, and those representing them, should continue to carefully assess each claim, resolving those which should be resolved and contesting those without merit or where claimants have unrealistic expectations.
  • Prudent insurers and self-insureds should, nonetheless, train their staff to ensure that every step in the pre-litigation dispute resolution process, whether it be requests for information, investigations or attempts at settlement, is documented in anticipation of the ultimate commencement of some formalised pre-litigation procedures in New South Wales.

1. Media Release from NSW Attorney General 23 August 2011.

Ranked No 1 - Australia's fastest growing law firm' (Legal Partnership Survey, The Australian July 2010)

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.