Parliament House, Canberra
Wednesday, 4 November 2009
First, may I acknowledge the traditional owners of the land we meet on - and pay my respects to their elders, both past and present.
- Murray Kellam AO, Chair of NADRAC
- NADRAC Members
- Distinguished guests
- Ladies and Gentlemen
Last year, I asked NADRAC to identify strategies to remove barriers and provide incentives to promote the greater use of alternative dispute resolution (ADR) in the civil justice system.
In its report, which I am pleased to release today, NADRAC has focussed on the needs of consumers of legal services, as well as the public interest in the efficient delivery of civil justice at the federal level.
The report’s findings demonstrate that people should not expect - to quote Lord Philips - “that there is only one just result of every dispute, which only the court can deliver.”[1]
In fact, the report notes that matters that are resolved through ADR processes usually cost less to the consumer and less to the tax payer. Also, the process is generally regarded as significantly less stressful, provides greater flexibility and can obtain outcomes that may go beyond those which a court could formally order.
Despite this, NADRAC finds that ADR remains significantly underutilised and that a significant barrier is a lack of knowledge and understanding of ADR. This lack of understanding still exists among the profession, litigants and the general public.
The report contains a number of important recommendations aimed at improving the ADR system and encouraging its greater use.
I warmly welcome this contribution.
The report advances a number of proposals that are capable of immediate action. And more broadly, NADRAC’s research and engagement will assist in developing a less adversarial cultural change.
Legislative Response
A key recommendation of the report is for new legislation requiring prospective litigants to have taken genuine steps to resolve their disputes before they go to court.
There was some debate within NADRAC as to whether such legislation should be of general application or contained in specific legislation tailored to the relevant Court or Tribunal. While the difference of opinion is understandable, the Government is now entrusted with the responsibility of working through the alternative suggestions before considering what approach we will take.
In that respect, the report noted the importance of national consistency. Clearly, it is a topic that will benefit from consultation with State and Territory governments.
The report noted that the essential thrust of ADR legislation would provide for,
“pre- and post-filing requirements requiring disputants, legal representatives, courts and tribunals to take genuine steps to resolve disputes, using ADR whenever appropriate”.
Again, reflecting the desirability of national consistency the report noted that an ADR Act could also propose a number of core procedural matters, as well as “nationally consistent admission requirements for lawyers and other professionals who may be trained in ADR.”
NADRAC has also referred to international models that could usefully be drawn on in framing appropriate Australian legislation.
The Report noted the complexities in properly defining and describing the pre-action requirement of good faith consultation and refers to examples that have been used elsewhere - such as in the Family Law Act, the Native Title Act and the Fair Work Act.
By adopting a common sense approach, I am confident that the practice of effective pre-trial consultation and negotiation can be developed without the danger of “front loading” as cautioned in the report.
In other words, if done correctly we can avoid some of the ritualistic procedures that unnecessarily add to costs and delay access to justice rather than assist the quick, fair and effective resolution of disputes. Again, the report refers to a number of successful examples where this has been achieved.
In furthering the object of promoting ADR the report notes suggested obligations that could appropriately be placed on both lawyers and litigants. Obligations that could be placed on lawyers, for example, include informing their clients about:
- the requirement to take genuine steps to resolve a dispute before commencing court or tribunal proceedings;
- private and community based services that may help dispute resolution;
- the advantages of resolving their dispute voluntarily, if possible, and the benefits of ADR;
- likely costs to them and other parties for which the client may be liable if unsuccessful; and
- the likely timeframe for any legal proceedings.
The report also suggests that parties could appropriately be obliged to file a statement setting out that they:
- have taken genuine steps to resolve their dispute before commencing proceedings;
- have considered services available outside the court which may assist them to resolve their dispute;
- understand the benefits of various ADR processes; and
- have obtained advice about estimated costs, cost exposures and timeframes for the proposed proceedings.
The goal of such processes, NADRAC concludes, is to develop pre-action requirements that limit early costs and still encourage prospective litigants to take genuine steps to resolve their disputes before commencing court or tribunal proceedings:
“The important consideration is that the disputant has attended the process and has shown their commitment by staying for a reasonable period to listen to the other participant and to put their own view”.
The report also notes the controversy as to whether mediation should be mandated.
In that respect, the NSW case of Remuneration Planning Corp Pty Ltd v Fitton; Fitton v Costello [2001] NWSC 1208 is important, where one of the parties refused to participate in mediation. In ordering mediation, Justice Hamilton remarked on recent cases in which mediation had succeeded despite an initial absence of consent:
“It has become plain that there are circumstances in which parties insist on taking the stance that they will not go to mediation, perhaps from a fear that to show a willingness to do so may appear a sign of weakness, yet engage in successful mediation when mediation is ordered.”
Reflecting that sentiment, NADRAC observes that “contrary to early fears about the impact of the loss of voluntariness, compulsion to attend does not seem to damage or necessarily deter the participants from engaging in it.”
In other words, NADRAC encourages boldness in any reforms.
The report does, however, note that there should be appropriate exemptions from compulsion to include consideration of “urgency, undue prejudice, safety, security, the subject matter of the dispute, public interest factors, and whether the dispute is essentially the same as has been previously before the same court or tribunal.”
The concepts that I have discussed are usefully expanded upon in a proposed national ADR “protocol” that NADRAC has recommended.
Case Management
In addition to legislative reforms, the report advocates effective case management in courts and tribunals to achieve faster and more efficient results for litigants.
This trend towards more efficiency and a less adversarial system is clearly already underway.
Indeed, much of the reform has been driven by the Courts themselves.
This is reflected in the High Court’s recent Aon decision. In that case Chief Justice French observed that,
“the adversarial system has been qualified by changing practices in the courts directed to the reduction of costs and delay and the realisation that the courts are concerned not only with justice between the parties, which remains their priority, but also with the public interest in the proper and efficient use of public resources.”[2]
I have previously also congratulated the Judges of the Federal Court of Australia for innovations in this area.
Their input was vital in the development of new case management powers that are contained within the Access to Justice (Civil Litigation Reform) Bill 2009 , which I hope will be passed by Parliament later this year.
Conclusion
As many of you would be aware, the Government is currently consulting on recommendations contained in the Access to Justice Report, which I released in September.
The recommendations of NADRAC very much complement those of the Access to Justice Report and I look forward to responding to both these in a comprehensive manner in the coming months.
In addition, I have asked NADRAC to undertake further work flowing from the recommendations of this report, including:
- preparation of a statement of key national ADR principles together with a supporting guide for users of different ADR services;
- investigation of the issues of confidentiality, non-admissibility and conduct obligations for participants and practitioners in different ADR processes; and
- preparation of a model dispute management plan for use by government agencies.
Finally, I also intend to write to the Council of Chief Justices, the Law Council of Australia and State and Territory legal professional bodies urging that admission, practicing certificates and continuing legal education requirements for lawyers include dispute resolution skills and knowledge.
I congratulate NADRAC on this comprehensive report.
It provides a framework for future work by Government to increase the use of ADR in Australia. I am also confident that it will inform discussions about, and the development of, ADR for years to come.
It is now my great pleasure to officially launch the report: The Resolve to Resolve - Embracing ADR to improve access to justice in the Federal jurisdiction.
Thank you.
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