The new Vexatious Proceedings Act 2014 (Vic) introduces a new regime to deal with vexatious litigants and provides flexibility in the type of orders Victorian courts and tribunals can make in the future.

Current legislation concerning vexatious litigants is restricted to section 21 of the Supreme Court Act 1986 (Vic) which enables the Court to declare an individual vexatious and prevent them from bringing further litigation without leave of the Court. The limitation with the current regime is that the threshold for making such a declaration is quite high and as a result can only be made after numerous proceedings have been issued by the vexatious litigant (which could mean many years of litigation ensues). As a result the process is not useful as an early intervention remedy or used to combat behaviour that may not reach the high threshold currently set.

A 2008 Parliamentary Committee inquiry into vexatious litigants resulted in 32 recommendations aimed at preventing and managing vexatious litigants in the justice system where possible whilst still restricting access to the courts only in serious cases.

The objective of the Act is to introduce a new regime for the management and prevention of vexatious litigation.  The main benefit will be the ability of Courts and Tribunals to make Litigation Restraint Orders. These Orders will be restrictive to the extent necessary, and in line with the behaviour of the litigant, and can vary in the seriousness of the conditions imposed. This will enable Courts to dispose of unmeritorious litigation and manage vexatious litigants (of varying degrees) ensuring efficiency in the legal process.  A further benefit is that any person who has a sufficient interest in the matter can apply for some types of Litigation Restraint Orders.

The Bill will be met favourably by lenders as they will save on time and costs that currently they must incur in order to defend proceedings brought by vexatious litigants. At times, and in extreme circumstances, defending these frivolous claims can erode any equity the lender may have had recourse to, and as a result the lender can suffer a shortfall.

The Act will be met favourably by lenders as they will save on time and costs that currently they must incur in order to defend proceedings brought by vexatious litigants. At times, and in extreme circumstances, defending these frivolous claims can erode any equity the lender may have had recourse to, and as a result the lender can suffer a shortfall.  The Act will see a new legislative system whereby vexatious litigants can be managed with certainty and at a much earlier stage, allowing the process of debt recovery and finalisation of a matter to occur in a timelier manner, with a more satisfactory outcome to the lender.