On 26 February 2013, the New South Wales (NSW) Government passed the Courts and Other Legislation Further Amendment Bill 2013 (NSW) (Bill). The Bill was assented to on 28 February 2013, from which time it repeals the pre-litigation protocols contained in Part 2A of the Civil Procedure Act 2005 (NSW) (CPA). Part 2A required parties to take reasonable steps to resolve their disputes or narrow the issues in dispute before they commenced court proceedings in NSW.
Part 2A was scheduled to commence from 1 October 2011. However, in March 2011, when the Coalition Government was elected in NSW, the operation of Part 2A was postponed for a period of 18 months, to allow an assessment of the equivalent federal regime under the Civil Dispute Resolution Act 2011 (Cth) (CDR Act). That 18-month period is almost up and Part 2A was scheduled to commence from 13 March 2013.
On 20 November 2012, the Bill was introduced into the Legislative Assembly. Schedule 1.6 to the Bill repeals the pre-litigation requirements under Part 2A of the CPA and schedule 1.7 makes a consequential amendment to the Civil Procedure Regulation 2012. The Bill was introduced into the Legislative Council on 19 February 2013 and passed by both houses of Parliament on 26 February 2013. On a separate note, the Bill also amends the Court Security Act 2005 (NSW) to prohibit the unauthorised use of devices (including mobile phones) to transmit sounds, images or information from the courtroom.
In his second reading speech, the NSW Attorney-General explained that because the Commonwealth evaluation of the CDR Act has only just started and the evaluation timetable is likely to be lengthy, there is no reliable statistical data yet to inform the likely efficacy of Part 2A and it is therefore inappropriate for Part 2A to automatically commence. He noted that the NSW Government remains open to the possibility of implementing reforms of this type, but is committed to doing so in the knowledge that these sorts of reforms improve, rather than hinder, the process of resolving civil disputes in a way that is just, quick and cheap.
Notwithstanding the repeal of Part 2A, there is no reason why parties and their lawyers should not continue to take reasonable steps to resolve their disputes or narrow the issues before commencing proceedings. Of course, the repeal of Part 2A means that it is unnecessary to file a dispute resolution statement outlining what reasonable steps were taken prior to commencing proceedings.
Furthermore, the CDR Act continues to apply to proceedings brought in the Federal Court and the Federal Magistrates Court. The CDR Act requires the applicant in federal proceedings to file a genuine steps statement at the time of filing its application, setting out the steps that have been taken to try to resolve the issues in dispute or setting out the reasons why no such steps were taken (eg urgency of the proceedings). The respondent must file a genuine steps statement in reply, setting out that they agree with the applicant's statement or the reasons they disagree. For further details, please refer to our previous article.
It is the duty of lawyers to advise clients of these requirements and courts may have regard to genuine steps in exercising powers, performing functions and exercising discretion in awarding costs. For example, in Superior IP Pty Ltd v Ahearn Fox Patent and Trade Mark Attorneys [2012] FCA 282, no genuine steps statements were filed and no attempts had been made by the lawyers to resolve a dispute over a statutory demand. The dispute was for a relatively small amount ($10,706.33), but the legal and filing fees involved approached twice this amount, the parties having filed more than 400 pages of affidavit material in the application to set the statutory demand aside. In considering costs, Reeves J expressed his disapproval of the process that had been followed, and directed that the two lawyers concerned be joined as parties to the proceedings for the purpose of determining costs and advise their clients to seek independent legal advice on the question of the costs. He also directed the Registrar to provide a copy of his reasons to the Queensland Law Society, the Bar Association of Queensland and the Legal Services Commission to consider further appropriate action against the lawyers.
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