Litigation and Dispute Management
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1 u ! Intrductry Cncepts: Litigatin and Dispute Management Definitin f Civil Litigatin: A judicial r administrative prcess in which the parties (r their lawyers) present their case in a frmal, adversarial public prceeding t a judicial fficial wh makes a decisin accrding t substantive legal rules. The decisin is reviewable by a higher curt fr errrs f law, and after final review, is binding n all the parties and has precedential effect Interlcutry Prceedings: This curse is cncerned with interlcutry prceedings nly. Interlcutry prceedings are thse nrmally related t matters f practice and prcedure, in which the substantive rights f the parties t the matter are nt finally determined - Butterwrths Australian Legal Dictinary Prcedural Law: The branch f law which creates, defines, and regulates peple s rights, duties, pwers and liabilities: the actual rules and principles administered by the curts, including legislative and cmmn law principles. Substantive law includes mst branches f law, such as the law f trts and cntract law - Butterwrths the mde f prceeding by which a legal right is enfrced, as distinguished frm the law which gives r defines the right Payers v Minrs [1.2.1 Casebk] Bentham prcedural rules are adjectival in the sense that they qualify substantive law Histrical Principles Underpinning Prcedural Law: Pragmatism there has been a recent shift away frm pure adversarialism Judge as umpire eths the sprting thery f justice espused by Rsce Pund Originally all disputes were reduced t a frm f actin, hwever, the rigidity f this apprach led t Judicature Act (JA) refrms The plicy underpinning the JA refrms was that cases shuld nt fail n a technicality and parties shuld nt be surprised at trial Party cntrl f litigatin prspered until the 1980s and n change in the rle f judge (as umpire) until delays in civil litigatin led t the develpment f case management by judges and verriding bjectives t guide rule making Terminlgy: Suit - includes any actin r riginal prceeding between parties f a civil nature Supreme Curt Act Cause generally tw parties and cncerns questin(s) f fact Matter generally cncerns a questin f law and n ppsing party Cause f Actin facts which give rise t an enfrceable claim Originating Prcess methd fr cmmencing prceedings. Either riginating claim r riginating applicatin - r31(1) Mtin - Nw called applicatin, defined r 6006
2 u ! Intrductry Prvisins Surces f Litigatin Rules: 1. Legislatin - Supreme Curt Act 1933 (ACT) ( SCA ); Curt Prcedures Act 2004 (ACT) ( CPA ) 2. Rules Curt Prcedure Rules 2006 (ACT) ( CPRs ) Applicatin Unless a territry law therwise prvides, these rules apply t all prceedings in the Supreme Curt and Magistrates Curt [except Dmestic Vilence Prceedings] r4 Pwer t make rules derives frm schedule 1 f the CPA 2004; there is a rule making cmmittee created under s9 CPA; Schutt Flying Academy v Mbil 3. Judicial Precedent 4. Practice Directins 5. Statutrily enshrined Administratin f Justice Pwers s20 SCA The curt has all riginal and appellate jurisdictin necessary t administer justice in the Territry (s20(1)(a) SCA), jurisdictin cnferred by a Cmmnwealth Act f Territry Law (s20(1)(b) SCA). Unless required under Cmmnwealth r Territry law, the ACT Supreme Curt is nt bund t exercise its pwers if it as cncurrent jurisdictin with anther curt r tribunal (s20(1) SCA). 6. Supreme Curt s Inherent Jurisdictin derives frm status as Superir Curts f Recrd R v Nrwich Crwn Curt ex part Belsham All ER The authrity t adjudicate vested in a curt as a cnsequence f it being a curt f a particular descriptin, ntable a superir curt f unlimited jurisdictin R v Frbers; Ex Parte Bevan Its verall purpse is t allw curts t regulate their wn prcess and t prevent abuse f prcess Riley McKay v Mckay Arguably nt an unlimited reservir frm which new pwers can be fashined at will prcedural revlutins shuld ccur first in statutes r in Rules f Curt, nt in the law reprts Dckray Cuched in rule f law principles and separatin f pwers dctrine.
3 u ! Justice and Efficiency Brad Cncepts t be Integrated int Exam Answer: General Rule: The verriding purpse rule (r 21 CPRs) prvides a yardstick against which interlcutry acts and decisins are measured. It states that the verriding purpse is t facilitate the just reslutin f real issues in civil prceedings with minimum delay and expense (r21(1)), and that the curt prcedure rules are t be applied t achieve a just reslutin f the issues (r21(2)(a)) and a timely dispsal f prceedings at a cst affrdable t the parties (r21(2)(b)). The parties must help the curt t achieve these bjectives (r21(3)). The curt may impse apprpriate sanctins if these rules r an rder f the curt is n cmplied with r21(4) Queensland v JL Hldings Pty Ltd (1997) 189 CLR 146 Facts: Queensland gvernment entered int a cntract with JL hldings. The cntract was breached, and a claim was brught n that basis, as well as fr breach f cpyright and breach f statutry duty. The prceedings had already been n ft fr a number f years, when the Queensland gvernment decided t amend its defence. In the Federal Curt, Kiefel priritised efficiency ver justice by hlding that a party is right t view their access t substantive justice as subject t the requirements f efficiency, and thus did nt allw Queensland t amend the defence and prlnge prceedings further. Held: The HCA reversed the Federal Curt s decisin, finding that it was in the interests f substantive justice that the Queensland gvernment culd amend its pleadings even at such a late stage in the prceedings and after cnsiderable delay. Reversed by! An Risk Services v Australian Natinal University (2009) 239 LR 175 Facts: In 2003 bushfires destryed ANU prperty (an bservatry). An, the ANU s insurance brkers (they decide the types f plicies relevant t ANU, as a highly diverse institutin). The insurance cmpany claimed that ANU s insurance did nt cver bushfire damage. ANU sued the insurance cmpany, claiming the lss was cvered, as well as An fr breaching their cntractual requirement t prcure suitable insurance cver. 1 week befre the trial is due t cmmence, ANU settles with the insurer and seeks t amend its pleadings in its claim against An, the brker. Applying JL Hldings, the ACT Supreme Curt allwed fr the amendment n the literal eve f the trial. Held: The HCA reversed the decisin f the Supreme Curt, finding that matters f efficiency, in this instance, utweighed thse f justice. The Curt held that it is difficult t cmpensate fr the csts f beginning the trial anew, and we must cnsider the effects that this delay wuld have n ther wuld-be litigants and n an already ver-burdened curt system mre generally.
4 u ! Alternative Dispute Reslutin 1. What are the frms f ADR? a. Determinative Prcesses: This ccurs in adjudicatin, arbitratin, expert determinatin and early neutral evaluatin, where a third party makes a determinatin. Apprpriate where a winner/lser reslutin is apprpriate, and where parties t nt have an nging relatinship r dispute. Neutral Evaluatin: A neutral evaluatin is a prcess f evaluatin f a dispute, where the evaluatr identifies and reduces the factual and legal areas f dispute, and seeks t ffer an pinin abut the likely success f parties cases, including findings f liability r the award f damages (r1176(3-4)) b. Facilitative Prcesses: This ccurs in mediatin, lawyer assisted negtiatin and cnciliatin, where a third party assists the parties t reslve the dispute amngst themselves. Apprpriate where parties have an nging relatinship, and perhaps als where parties have equal bargaining pwer. Negtiatin: Negtiatin invlves a cllabrative apprach, invlving mutual agreement and cnsequently mutual gain (rather than maximising individual gain). Mediatin: A mediatin is a negtiatin prcess where a mediatr (a neutral and independent party) assists parities t achieve their wn reslutin f the dispute (r1176(1)). 2. When will ADR ccur? a. When will parties engage in ADR vluntarily? Slicitrs are required t infrm their clients abut ADR (rule 7.2 f the Australian Slicitrs Cnduct Rules). Parties may chse t engage this prcess f their wn discretin where they identify ne r mre f the fllwing benefits: less cstly, private, speed, cnfidential, mre likely t be a satisfactry utcme, mre cntrl ver utcme, remval f curt backlgs b. When are parties cmpelled t engage in ADR? Curt rdered ADR The Curt may rder the referral f a prceeding, r a part f a prceeding, fr mediatin r neutral evaluatin - by a curt appinted mediatr r evaluatr (r1179(3-4))- either n its wn initiative r n the applicatin f a party t the prceeding (r1179(1-2)) (s195 CLWA). The Curt als has the pwer t rder payment f csts fr the prcesses (r1181). The Curt is likely t exercise this discretin where there is a lng-term relatinship between parties (e.g. family relatinship where gd will exists), where the evidentiary base fr the claim is cmplete (Jhnstn v Jhnstn [2004] NSWSC), where mediatin can ccur alngside preparatin fr litigatin (Daya v CAN Reinsurance C Ltd [2004] NSWSC 795), where there are few sphisticated cmmercial issues (Jhnstn v Jhnstn, Mrrw).
5 u ! A curt is unlikely t rder mediatin where a party s unwillingness t pursue mediatin may result in increased delay and expense (Mrrw v chinadtcm [2001] NSWSC 209). Hwever, Hamiltn J in Singh v Singh said a culture shift had ccurred since chinadtcm and curts nw mre willing t cmpel unwilling parties. Family law mandatry ADR In Family Law, ADR is the primary methd fr reslving parenting dispute. There is a mandatry bligatin t attend family dispute reslutin prir t filing an applicatin in a child-related prceedings where there is a threat f child abuse (s601(8)-(10) Family Law Act 1975 (Cth)). Enfrcement f agreements t mediate Enfrcement f agreements t mediate (Sctt v Avery clauses): parties may be cmpelled t engage in dispute reslutin prir t litigatin if a cntractual clause between the parties is drafted in Sctt v Avery frm. That is, it must make dispute reslutin a cnditin precedent t litigatin, and be drafter with the requisite certainty as t the prcedures t be fllwed by the disputants (Hper Bailie, Elizabeth Bay). If the essential terms are nt stipulated, the cntract t mediate will nt be enfrced by a curt, as it will be interpreted as merely an agreement t agree (TA Mellen v Allgas Energy) Essential prcedural steps: N specificatin f the guidelines fr mediatin: Elizabeth Bay Develpments N determinatin what share f the mediatr s csts wuld be brne by each f the parties: Aitn Australia Pty Ltd v Transfield Pty Ltd Didn t specify which expert wuld be appinted t head the mediatin: State f NSW v Banabelle Electrical Pty Ltd The essential terms were nt specific enugh- assumed that all terms culd be imprted frm a dispute reslutin service: Heart Research Institute Limited v Psirn Limited Cmmnwealth disputes There is an bligatin n parties t file a statement that they have taken genuine steps t reslve the dispute prir t the cmmencement f litigatin at the Federal Circuit Curt r the Federal Curt (secs 6-7 Civil Dispute Reslutin Act 2011 (Cth)). Genuine steps include cnsidering whether the dispute culd be reslved by alternative dispute reslutin (s4(1)(d)) 3. What rules guide mediatin and ther frms f ADR?
6 u ! a. Duties f the parties Parties under a duty t participate genuinely and cnstructively (r1180) r genuinely and sincerely (s196 CLWA) in the mediatin. Althugh curts have been reluctant t enfrce as seen as being repugnant t the rights f participants t pursue their wn interest: Walfrd v Miles, have been mre willing when the duty is statutry in nature: Western Australia v Taylr Aitn&v&Transfield!!Einstein!J!applying!s!110K!NSW!SupCt!Act!1970! Held!!Nn<exhaustive! essential!cntent!f!gd!faith!bligatin:! (1) undertake!t!subject!neself!t!prcess;! (2) t!have!an!pen!mind!!in!the!sense!f:! (a) willingness!t!cnsider!apprpriate!ptins!fr!reslutin!put!frward!by! mediatr!r!ppsing!party;! (b) willingness!t!cnsider!putting!frward!wn!ptins!fr!reslutin.! (3) des!nt!blige!party!t:! (a) act!fr!r!in!interests!f!ther!party;! (b) t!act!ther!than!by!regard!t!self<interest.! b. What cmmunicatins remain cnfidential? Cnfidentiality may be prtected by cntract (cnfidentiality clause), privilege, statute, curt rders Cntract Statute Cnfidentiality clause in mediatin agreement will bind parties, but nt the third party mediatr Mediatin material is nt admissible in prceedings except in accrdance with s 131 Evidence Act 2011 (s9 Mediatin Act 1997 (ACT)). S131 prvides that evidence is nt t be adduced f a cmmunicatin r a dcument made between persns in a dispute in cnnectin with an attempt t reslve that dispute. A mediatr shall nt disclse infrmatin btained in mediatin except: as required by law, with cnsent f parties, cnsent f persn wh gave the infrmatin, when there are matters f life r death, when disclsure necessary in rder t reprt cmmissin f an ffence (s10 Mediatin Act 1997 (ACT)) Privilege Mediatin material is prtected by the Withut Prejudice Privilege unless it is being used t sterilise dcuments that shuld have been discvered in the rdinary curse f litigatin (Rlfe J, AWA Ltd v Daniels (later apprved by Lee J in Williamsn v Schmidt)) r where there has been misleading and deceptive cnduct in the mediatin (Quad Cnsulting v Bleakley). Nte: where the matter is referred t mediatin by curt, the scpe f cnfidentiality attaching t the mediatin may be dependent upn a curt rder: Williamsn v Schmidt Prtected by legal prfessinal privilege s118 Evidence Act) - Often waived in a mediatin cntext as legal advice is ften disclsed t ther party Curt rder In neutral evaluatin, cmmunicatins have the same privilege as in relatin t defamatin that exists fr a prceeding in the curt (r1183(1)). c. Wh may be a mediatr/neutral evaluatr? Mediatr must be registered under the Mediatin Act 1997 (ACT) and be curt appinted (r1177(1)-(2))
7 u ! Neutral evaluatr may be the register f the curt, r smene that the curt cnsideres t have the skills and qualificatins f an evaluatr and appints as an evaluatr (r1178(1)). 4. Is the mediatin utcme binding and enfrceable? The Curt may make rders t give effect t an agreement r arrangement between the parties arising ut f a mediatin sessin r neutral evaluatin (CL (W) Act s 198; Rule 1182 CPA (1)) Settlement must actually be reached (lk t the nature f the agreement, purpse fr the meeting and disclsed intentin). Barry v City West Water Final agreements in mediatin are enfrceable by cntract law. They must have the requisite elements f a valid cntract: ffer, acceptance, cnsideratin, intentin t create binding legal relatins. If the agreement is a final agreement then it is immediately binding n the parties. Masters v Camern 5. When mediatin is cncurrent with litigatin The curt may give rders t give effect t the agreement between the parties arising ut f mediatin (r1182(1)). Parties may als wish t effect a deed f settlement and file a ntice f discntinuance with the curt (r1165).
8 u !
9 u ! Pre-Litigatin Preliminary Steps Befre Originating Claim 1. Seeing a lawyer 2. Investigatin, Negtiatin and Ntice Prir t Cmmencing Prceedings 3. Hw will the case be managed by the curt? 4. Is the claim within the relevant Limitatin Perid? 5. Chsing the parties and the causes f actin 6. Chsing a jurisdictin 1. Seeing a Lawyer: Client Interview and taking Instructins lawyers must disclse csts t prspective clients (Legal Prfessin Act 2006 (ACT) pt 3.2) and advise f the risks f litigatin such as csts, psychlgical strain and public scrutiny (s269(1)(d) Legal Prfessin Act). Lawyer shuld develp a psitive and fruitful relatinship with the client a cmmn cmplaint t prfessinal assciatins is that failure f lawyers t cmmunicate adequately with their client. The legal interview is a vital aspect f the lawyer-client cmmunicatin p301 casebk. Lawyers must disclse csts t prspective clients 2. Ntice, Negtiatin and Investigatin Prir t Cmmencing Prceedings: A. Ntice Ntice f Claim Befre a claimant brings prceedings, written ntice must be prvided t the respndent This is mandated in varius pieces f legislatin, depending n the type f claim eg s51(1) CLWA 2002 (ACT) B. Negtiatin Letter f Demand Lawyers are under an ethical bligatin t make their clients aware f the pssibility f using a letter f demand as an alterative t litigatin Rule 7.2 Australian Slicitr Rules Letters f demand are essentially a tactical decisin. They are used by slicitrs prir t instituting prceedings as a way t ptentially bring abut the speedy reslutin f matters. They are als a useful way f putting the ther party n ntice. If a negtiated settlement is desired, the letter may be accmpanied by a withut prejudice ffer t settle. The effect f withut prejudice is that if a settlement is nt reached, admissins made may nt be put int evidence. In sme circumstances, letters f demand are a pr tactical chice - It may result in assets being run dwn (spent) by the defendant, destructin f imprtant evidence r vilent behaviur - p304 casebk Prfessinal Miscnduct misuse f letters f demand may amunt t prfessinal miscnduct In Re X (a Slicitr) " Unethical t threaten criminal prceedings as an alternative t avaialble civil redress- Law Sciety f NSW " It is imprper t demand payment f a debt frm smene with n legal liability t pay the alleged debt - Law Sciety f NSW " It is als imprper t claim csts which are unreasnable in the circumstances - Law Sciety f Victria
10 u ! Failure t answer a letter f demand may amunt t an admissin f its crrectness in certain circumstances Thmas v Hllier C. Investigatin Des the claim have legs? Des the claim have a legal fundatin? If a lawyer cmmences prceedings which have n legal fundatin, the prceedings may cnstitute an abuse f prcess and may be struck ut r permanently stayed by the curt - Williams v Spautz " Csts may als be awarded against the client, and ptentially the lawyer as a means f discipline r1753 CPA Reasnable prspects f success? When ldging a pleading, lawyers must prvide a certificate that a claim (r defence (s188(1) CLWA)) in an actin fr damages has reasnable prspects f success (s188(2) CLWA). Test: The lawyer must, n the prvable facts and reasnably arguable view f the claim, be able t certify that the claim has reasnable prspects f success s186(2) CLWA " [it] turns n whether the slicitr r barrister held a reasnable belief that the prvable facts and a reasnably arguable view f the law meant that the prspects f recvering damages r defeating a claim r btaining a reductin in the damages claimed were fairly arguable. Lemt v Able Technical [at 2] Penalty: Cntraventin f this prvisin is nt an ffence, but can amunt t unsatisfactry prfessinal cnduct r prfessinal miscnduct under the Legal Prfessin Act 2006 s188(3) CLWA Pre-litigatin dispute reslutin: Lawyers are under an ethical bligatin t make their clients aware f the ptin f mediatin, instead f litigatin Rule 7.2 Australian Slicitr Rules Sme jurisdictins r particular claims require that parties engage in pre-trial mediatin and meet a specific participatin standard t satisfy their attendance requirements. Federal Curt and Federal Magistrates Curt genuine steps ( Family Law Parental Custdy Disputes genuine effrt Native Title Act gd faith negtiatins
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