Important changes to the conduct of Victorian litigation

4 November 2010

The Civil Procedure Act 2010 (Vic) (Act) will come into effect on 1 June 2011, unless proclaimed earlier.

The Act represents a significant reform to the way civil litigation will be managed in Victoria. While the Act breaks new ground, particularly in the areas of pre-litigation requirements and overarching obligations, it closely follows civil litigation reform trends already implemented in New South Wales, Queensland and the United Kingdom.

Certain aspects of the reforms already exist in certain Australian jurisdictions. Federal courts and courts in New South Wales impose overarching obligations on parties, while certain case management and pre-action procedures exist in New South Wales, Queensland and the Australian Capital Territory.

Similar pre-litigation requirements have been introduced into Federal Parliament with the Civil Dispute Resolution Bill 2010 which, if passed, will apply to proceedings commenced in the Federal Court and the Federal Magistrates' Court.

The Act is the first part of a major Victorian reform program that will continue until 2013, with a second phase that will emphasise reviewing cost rules of litigation and the role of expert witnesses.

What does the Act mean for universities?

For universities involved in disputes litigated in the Supreme, County or Magistrates' Courts of Victoria if not resolved:

  • before litigation is commenced, parties are required to take reasonable steps to resolve disputes, or at a minimum to clarify and narrow the issues in dispute – this is a two-way obligation and needs to be kept in mind when formulating strategy for dealing with disputes
  • overarching obligations (discussed in more detail below) apply as soon as litigation is commenced – the aim being to get to the heart of the dispute in a timely and efficient manner
  • ADR will continue to play a large part in disputes and parties can expect to be referred to mediation as a matter of course
  • for patently weak claims, the option of making a summary judgment application should be considered at an early stage.

Purpose of the Act

The purpose of the Act is to reform and modernise the laws, practice, procedure and process for the resolution of civil disputes in the Supreme, County and Magistrates' Courts of Victoria, but does not extend to tribunals such as VCAT.

The Act seeks to make dispute resolution more accessible, affordable, timely and efficient. It attempts to achieve this by encouraging dispute resolution without court intervention, and by encouraging litigants and their lawyers to use reasonable endeavours to achieve early resolution through alternative dispute resolution (ADR) processes and by narrowing the issues in dispute.

Changes introduced by the Act

To bring about this change, the Act:

  • gives greater power to judges and magistrates to proactively manage cases
  • imposes overarching obligations on parties and others involved in the dispute
  • imposes pre-litigation requirements
  • imposes certification requirements
  • liberalises the test for summary judgment
  • allows the court to order sanctions for discovery abuse, and
  • enhances the capacity of the court to refer disputes to ADR.

Key features

Pre-litigation requirements

Under the Act, parties will be required to take reasonable steps to resolve disputes prior to commencing proceedings, or at a minimum to clarify and narrow the issues in dispute. Reasonable steps include exchanging pre-litigation correspondence, information and documents critical to the resolution of the dispute, and considering dispute resolution options that negate the need for legal proceedings.

Generally, each party to a dispute will bear its own costs of compliance with the pre-litigation requirements. The court may order that a party pay all or part of another party's costs of compliance if it is satisfied that it is reasonable to do so, and may even order a representative of a party to pay the costs if it is satisfied that the representative's conduct resulted in another party unnecessarily incurring costs.

Certification requirements

When commencing proceedings, parties will have to certify that they have read and understood the overarching obligations, and parties (or their lawyers) will have to certify that any allegations or denials have a proper basis and that they have complied with the pre-litigation requirements of the Act.

Parties will not be prevented from commencing proceedings due to a failure to comply with the pre-litigation requirements or certification requirements of the Act, but the failure may be taken into account by the court in awarding costs, making orders about procedural obligations or making any other orders the court considers appropriate.

Overarching obligations

Under the Act, overarching obligations will apply to parties, their legal practitioners and representation, law practices, insurers, litigation funders and – where relevant – expert witnesses.

The overarching obligations include obligations to co-operate with other parties and the court, use reasonable endeavours to narrow issues and resolve the dispute, act promptly to minimise delay, disclose the existence of all critical documents as early as reasonably possible, and ensure there is a proper basis for alleging or denying matters.

The obligations commence as soon as a party files its first document in a proceeding and apply to all aspects of the proceeding. The overarching obligations prevail over any inconsistent obligations including a lawyer's obligation to act in accordance with the client's instructions, but not over duties such as privilege or a lawyer's duty to the court.

Courts will have the power to make any orders they consider appropriate, including cost orders and compensation orders, in response to breaches of these obligations.

Changes to the conduct of civil proceedings

The Act also liberalises the test for summary judgment, allowing the early removal of cases where a party has no real prospect of success. Additionally, the Act gives the court power to order sanctions for abuse of the discovery process and enhances the ability of a court to refer a proceeding (or part of a proceeding) to ADR to resolve or settle the proceeding. This referral can occur without the parties' consent where the ADR outcome is non-binding.

This article is from our November 2010 edition of Higher Education Focus.

Author(s) Michelle Power, Philip Stefanovski