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Litigation update: ‘Genuine steps’ now required in the Federal Courts

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In our previous litigation update, we examined amendments to the Victorian Civil Procedure Act 2010 which repealed pre-litigation requirements in Victoria. Recently, the Federal Parliament has passed the Civil Dispute Resolution Act 2011 (“the Act”), containing similar provisions. The Act, which applies to civil proceedings in the Federal Court and Federal Magistrates Court, aims to encourage potential litigants to resolve disputes without resorting to court action.

The Act will come into effect by 13 October 2011 at the latest. Parties wanting to commence proceedings will be required to take ‘genuine steps’ to resolve their dispute before involving the courts. Interestingly, the Act does not prescribe specific steps, rather it defines ‘genuine steps’ as “a sincere and genuine attempt to resolve the dispute, having regard to the person’s circumstances and the nature and circumstances of the dispute”. The Act does provide examples of ‘genuine steps’, such as:

  1. notifying the other person of the issues and offering to discuss them;
  2. providing relevant information and documents to the other person; and
  3. considering the use of or using alternative dispute resolution processes.

The Act will not apply to certain excluded proceedings which include review of Tribunal decisions, proceedings for contravention of a civil penalty provision, appeals and proceedings under the Citizenship, Migration, Fair Work and Family Law Acts.

Practically, the Act will require applicants to file a “genuine steps statement” when commencing proceedings, while respondents will be required to file a “genuine steps statement in reply”. The statement must detail what steps have been taken in an attempt to resolve the dispute. The respondent’s statement in reply must either agree with applicant’s statement, or specify what the respondent disagrees with and why.

The Act echoes reforms in Victoria, NSW and the United Kingdom, which have also introduced pre-litigation protocols. The Victoria Civil Procedure Act was discussed in previous newsletters.

Please contact our Dispute Resolution & Litigation lawyers who can assist you in resolving any legal dispute, or send an email to Phiip Colman or Mary Nemeth if you need further information on this topic.