In brief – Proposed amendments postponed for 18
The proposed amendments to Part 2A of the Civil Procedure
Act 2005 (NSW), requiring parties to take reasonable steps to
resolve their disputes before they commence court proceedings, have
been postponed for 18 months.
NSW to monitor results of parallel federal regime
These amendments were scheduled to commence from 1 October 2011,
with the exception of the Supreme Court of NSW, which was exempt
from these laws. The amendments have been postponed in order to
enable NSW to monitor the success of similar provisions that
commenced in the federal courts on 1 August 2011.
Requirement to take reasonable steps to resolve a dispute
The amendments to the Civil Procedure Act 2005 required
parties to engage with one another in order to narrow or resolve a
dispute before either party would commence court proceedings.
The new laws contained examples of "reasonable steps"
that could be taken by the parties before commencing proceedings.
However, there was not a single specific step that must be taken
prescribed by these laws, such as a requirement of mediation.
Concerns about unintended consequences of legislation
Since the amendments were introduced, there have been many
concerns raised about the examples of reasonable steps and the
unintended consequences of the new provisions.
While the spirit of the policy received general support from the
legal community and other stakeholders, many concerns were raised
about the increased cost of litigation if the laws were to be
Clearly, the overall intention of the proposed legislation was
that the obligation to try to resolve a dispute before commencement
of legal proceedings should reduce the cost of resolving disputes,
rather than add to them.
Given the uncertainty around this central imperative, the NSW
government has been prudent to delay commencement of the
legislation for 18 months in anticipation of measurable results
from the federal counterpart.
Pre-litigation steps postponed, not shelved
What is known is that the NSW Government does not propose to
repeal the amendments, which is what happened in Victoria after a
change of government some months after the laws were
Rather, it is proposed that the application of the laws be
postponed until the equivalent provisions now operational in the
federal courts are assessed.
This story is far from over. Litigators, advocates and parties
involved in disputes and alternative dispute resolution are
encouraged to be on the lookout for new developments.
While these and other new laws continue to develop, what has
remained unchanged for centuries is the fundamental principle of
best practice in dispute resolution: try to resolve any dispute
which has arisen before commencing legal action.
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