Skip to content.

Home

Allens Arthur Robinson

Focus: Commercial Litigation – October 2007

Review of Victoria's civil justice system – part 2

In brief: Following its first set of draft civil justice reform proposals of 28 June 2007, the Victorian Law Reform Commission has now released an additional set of draft proposals in its second exposure draft report of 6 September 2007. Partner Peter O'Donahoo (view CV), Lawyer Susie Stone and Articled Clerk Adam Butt report.

How does it affect you?

  • The VLRC's proposals cover a broad range of topics including:
    • discovery;
    • self-represented and vexatious litigants;
    • costs and fees (incorporating litigation funding and class action issues); and
    • case management.
  • Should the VLRC's proposals become law, they would significantly impact on Victoria's civil justice system, particularly for parties defending large-scale litigation.
  • While the immediate opportunity for comment on the draft proposals has now passed, interested parties may have an opportunity to comment at a later stage of the review.

Background to the VLRC's Second Exposure Draft

In its first exposure draft report of 28 June 2007, the Victorian Law Reform Commission (the VLRC) made a number of proposals that were discussed in the first article in this series. After receiving 30 submissions on the first set of proposals in July 2007, the VLRC then released a second exposure draft report on 6 September 2007, setting out further reform proposals on the following areas:

  • case management;
  • self-represented litigants;
  • vexatious litigants;
  • interpreters;
  • discovery;
  • costs;
  • confidentiality constraints on conferring with potential witnesses; and
  • ongoing review and civil justice reform.

The VLRC's final report to the Victorian Attorney-General is due by 4 March 2008, completing stage one of the review. A longer stage two of the review is likely to follow, although it is not yet clear what the second stage will involve.1

Return to top

Second Exposure Draft

The VLRC's second set of proposals are intended to further the objectives of the civil justice review, namely, to reduce the cost, complexity and inefficiency of civil proceedings, and to ameliorate the justice system's 'adversarial' culture. The VLRC has built on various concepts raised in its earlier draft report, advancing for instance its proposed Civil Justice Council – a body designed to ensure the ongoing review and reform of the civil justice system. However, a number of the new proposals are controversial.

Discovery

Discovery is frequently a contested and expensive area, particularly in complex civil litigation. While the VLRC aims to redress these problems, it is unlikely that its proposals concerning discovery will achieve that aim. For instance, after setting out the arguments for and against the Peruvian Guano2 or 'train of inquiry' test used in Victoria, the VLRC ultimately proposes to retain the test, with reforms proposing to increase judicial case management of the discovery process. The 'train of inquiry' test allows documents to be discovered that are not directly relevant, but that may fairly lead parties to a train of inquiry that would advance their own case, or damage their adversary's case. By not supporting a test for discoverability that is focused on 'direct relevance', the VLRC has arguably missed an opportunity to alleviate the complication, expense, and inefficiency of the current discovery process.

Moreover, the VLRC proposes that the court should be able to order a party to make available for inspection all documents that it has within an identified category or class of documents, regardless of whether they are relevant to the proceeding, where those documents are 'Readily Identifiable Documents' that can be generically described or defined. Such a proposal is problematic, as it may force parties to disclose their private and irrelevant information for the ostensible purpose of reducing costs and delay. While it is proposed that privileged or otherwise confidential documents would be protected, and that disclosure of documents would not give rise to waiver of privilege, this proposal may nonetheless infringe on parties' rights. Discovery is a compulsory process, and should be limited by reference to the matters in issue in a particular proceeding.

The VLRC also proposes, among other things, that:

  • An independent person should be appointed by the court to assist it in the case management of discovery issues in complex cases. 
  • Parties should have to disclose the identity of an insurer or litigation funder that exercises control or influence over the conduct of insured or assisted parties in proceedings, with the court having discretion in appropriate cases to order disclosure of the insurance policy or funding arrangement.
  • The court should have the discretion to require the disclosure of all lists and indexes of documents in a party's possession, custody or control, even if they are privileged, but only to the extent that the lists and indexes contain 'objective' information such as date, author, subject matter etc. 
  • Additional sanctions for abuse of discovery should be introduced.

Importantly, the VLRC is considering whether existing discovery laws or procedural rules should be changed to enable the use of documents produced by a party in one proceeding in other proceedings involving that party, in order to reduce costs and delay. Within this framework, the VLRC proposes that courts should have the power to order the creation of document repositories to be used by parties in multi-party litigation, referring to the US model in this regard. This proposal raises real concerns. As noted above, discovery should be limited to the matters in issue in a particular proceeding. To allow the creation of document repositories may broaden the scope of discovery to an unacceptable extent. It may also raise issues relating to the protection of privileged documents.

Self-represented litigants

The VLRC's proposals on self-represented litigants appear to strike a good balance between allowing defendants to properly defend their cases and improving access to justice for self-represented litigants. The VLRC proposes that the Self-Represented Litigants Co-ordinator program in the Victorian Supreme Court (which provides a primary contact for self-represented litigants, but does not provide legal advice), established as a one-year pilot program in 2006, should be resourced and funded on an ongoing basis. 

Moreover, the VLRC suggests that the proposed Civil Justice Council, in conjunction with the Supreme and County courts, should consider implementing a court-based pro bono referral scheme, to supplement current pro bono schemes. It also proposes, among other things, that the Supreme and County courts should have the option of appointing a 'Special Master' (an independent judicial officer of a lower-tier than a judge or a senior legal practitioner) to case-manage proceedings where one or more of the parties is self-represented.

Vexatious litigants

The VLRC proposes to overcome the major limitation in Victoria that 'vexatious litigant' orders (or 'vexatious proceedings' orders, as they are known in other jurisdictions) can only be made on application by the Attorney-General, broadening the standing requirement so as to include the Victorian Government Solicitor, the Prothonotary of the Supreme Court and the Principal Registrar of the County Court. Further, with the court's leave, standing would also extend to a person against whom another person has instituted or conducted vexatious proceedings, or to a person with a 'sufficient interest' in the matter. This would allow those most affected by the conduct of vexatious litigants to take action. In addition, having the court's leave as a pre-requisite to bringing an application protects against misuse of the process. 

The VLRC's proposals would also, among other things:

  • liberalise the test for obtaining a vexatious litigant order;
  • introduce a statutory definition of 'vexatious proceedings';
  • extend the categories of persons who may be subject to a vexatious litigant order to include a person who acts in concert with a vexatious litigant; and
  • empower all Victorian courts and tribunals (in addition to the Supreme Court) to make vexatious litigant orders.
Costs and fees

In its first exposure draft report, the VLRC did not make any proposals concerning the prohibition on lawyers charging contingency fees. As we have previously noted, to remove that prohibition may have serious consequences, the most significant of which is that a lawyer's independent financial interest in the litigation may conflict with the lawyer's duty to the client and the court. The VLRC again refrains from making any proposals on this issue. 

Furthermore, the VLRC revisits its proposed Justice Fund, which would facilitate the commencement of class actions.3 The VLRC now notes that limiting the liability of the proposed Fund with respect to adverse costs orders would leave the assisted party liable to meet any shortfall, in cases where the defendant is successful and cannot recover all of its costs from the Fund. To address this problem, the VLRC suggests options that include giving the assisted party immunity from liability for adverse costs, and giving the proposed Justice Fund standing to apply to the court for an order limiting the potential liability of the funded party for adverse party-party costs. 

Both of these options may, however, leave successful defendants exposed to the possibility that they will not recover their costs. It seems that a fairer and more balanced approach may be to make the Fund liable for the full amount of any costs order made against the funded party.

Case management

The VLRC's case management proposals aim to assist the courts in their ongoing efforts to reduce costs and delay. Among other things, the VLRC proposes to introduce more proactive judicial case management, impose limits on the conduct of proceedings, trial time, interlocutory hearings and oral and written submissions, and to enhance compliance with court directions and orders.

The VLRC is also considering increasing the use of technology in resolving disputes (including e-litigation and telephone directions hearings) and liberalising the test for summary judgment, to be used more frequently and flexibly to dispose of unmeritorious cases.

Return to top

Conclusion

Like its first set of draft proposals, the VLRC's second exposure draft report raises a number of controversial issues. Accordingly, the VLRC's report to the Attorney-General and the second stage of the inquiry are likely to be the subject of much debate.

Footnotes
  1. See the VLRC website at http://www.lawreform.vic.gov.au/ 
  2. See Compagnie Financiere Commerciale Du Pacifque v Peruvian Guano Co (1882) 11 QBD 55, 63.
  3. We commented on this in our first article in this series. Go to Focus Commercial Litigation – September 2007.

Return to top

For further information, please contact:

Return to top

Bookmark with

What are these?

[Recent publications]

Recent Litigation & Dispute Resolution publications