On 24 March 2011, the Commonwealth Parliament passed the Civil Dispute Resolution Bill 2010 (the Bill). The Bill, which was first tabled to Parliament in June 2010, will take effect from the date of royal assent or an alternate date no later than six months after royal assent, which is likely to be given within the next month. We have briefly outlined the key effect of the legislation, some important points to note for lawyers practising in the Federal courts and a list of the proceedings excluded from the effects of the legislation.

Effect of the legislation

Once in force, the legislation will require civil litigants in the Federal Court of Australia and Federal Magistrates Court of Australia to take "genuine steps" to resolve their disputes prior to filing proceedings in court unless those litigants have sufficient reasons for not doing so or the relevant proceedings are "excluded proceedings".

The Bill does not limit the "genuine steps" that a party may take prior to filing, however section 4 sets out a number of examples, which include:

  • notifying the other person of the issues that are, or may be, in dispute, and offering to discuss them, with a view to resolving the dispute
  • responding appropriately to any such notification
  • providing relevant information and documents to the other person to enable the other person to understand the issues involved and how the dispute might be resolved
  • considering whether the dispute could be resolved by a process facilitated by another person, including an alternative dispute resolution process
  • if such a process is agreed to:
    • agreeing on a particular person to facilitate the process, and
    • attending the process
  • if such a process is conducted but does not result in resolution of the dispute--considering a different process
  • attempting to negotiate with the other person, with a view to resolving some or all the issues in dispute, or authorising a representative to do so

Under section 4(1A) of the Bill, a person will be considered to have taken "genuine steps to resolve a dispute" if the steps taken by the person in relation to the dispute constitute a sincere and genuine attempt to resolve the dispute, having regard to the person’s circumstances and the nature and circumstances of the dispute.

When proceedings are filed, both parties will be required to file a "genuine steps statement". An applicant's statement will need to set out what steps were taken to resolve the dispute or, if no steps were taken, the reasons why. A respondent's statement will need to set out whether the respondent agrees or disagrees with the statement and, if he/she/it disagrees, their reasons for disagreeing.

 Important Points to Note

The Bill states that lawyers acting for persons to whom the Act applies must:

a.advise their client of the genuine steps statement requirement, and

b.assist them to comply with that requirement.

The Bill empowers the court to have regard to a party's compliance with the genuine steps requirements when exercising its general powers and functions and, importantly, when exercising its discretion to award costs.

Excluded Proceedings

Part 4 of the Act excludes a number of proceedings from the genuine steps requirement. These are:

  • proceedings for an order imposing a pecuniary penalty for a contravention of a civil penalty provision
  • proceedings brought by or on behalf of the Commonwealth or a Commonwealth authority for an order connected with:
    • a criminal offence or the possible commission of a criminal offence, or
    • a contravention or possible contravention of a civil penalty provision
  • proceedings that relate to a decision of, or a decision that has been subject to review by:
    • the Administrative Appeals Tribunal
    • the Australian Competition Tribunal
    • the Copyright Tribunal of Australia
    • the Migration Review Tribunal
    • the Refugee Review Tribunal
    • the Social Security Appeals Tribunal
    • the Veterans’ Review Board
    • a body prescribed by the regulations;
  •  proceedings in the appellate jurisdiction of an eligible court
  • proceedings arising from the exercise of a power to compel a person to answer questions, produce documents or appear before a person or body under a law of the Commonwealth
  • proceedings in relation to the exercise of a power to issue a warrant, or the exercise of a power under a warrant
  • proceedings that are, or relate to, proceedings in which the applicant or the respondent has been declared a vexatious litigant under a law relating to vexatious litigants (however described)
  • ex parte proceedings
  • proceedings to enforce an enforceable undertaking
  • any other proceedings excluded under the Regulations, and
  • any proceedings under the following legislation or their subordinate regulations:
    • the Australian Citizenship Act 2007
    • the Child Support (Registration and Collection) Act 1988
    • the Fair Work Act 2009
    • the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
    • the Family Law Act 1975
    • the Migration Act 1958
    • the National Security Information (Criminal and Civil Proceedings) Act 2004
    • the Native Title Act 1993
    • the Proceeds of Crime Act 1987
    • the Proceeds of Crime Act 2002.