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Litigation update: Pre-litigation requirements repealed in Victoria

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The Civil Procedure Act 2010 (“the Act”), which was enacted by the previous State Government and commenced on 1 January 2011, contained rigorous pre-litigation requirements to apply from 1 July 2011. Those requirements included compelling parties to make genuine attempts to resolve their disputes and narrow the issues in dispute prior to the commencement of legal proceedings.

On 30 March 2011, the Baillieu government enacted the Civil Procedure and Legal Profession Amendments Act 2011. This legislation repeals the compulsory pre-litigation requirements but effectively provides Victorian Courts with the power to determine whether any voluntary or mandatory pre-litigation processes should be adopted by the parties.

The Bailleu government’s amendments are contrary to the Commonwealth legislation enacted on 24 March 2011, the Civil Dispute Resolution Act 2011, which imposes pre-litigation requirements requiring parties to take genuine steps to resolve disputes prior to proceedings being instituted in Federal Courts.

The Victorian reform acknowledges that whilst there are clearly benefits in parties engaging in alternative dispute resolution (“ADR”) such as mediation between the parties prior to the commencement of legal proceedings, such steps should be considered by the parties and the relevant Court having regard to the circumstances of the case, rather than being mandated by legislation and imposed on parties.

ADR will be particularly important in circumstances where there is an ongoing relationship between the disputing parties and/or where a dispute has arisen over a specific industry issue, in which case it is important for the parties to engage an independent third party referee (“mediator”) who has practical knowledge and understanding of that specific industry.

Unlike a determination made by a Judge, ADR enables parties to be responsible for settling their own dispute rather than having a decision imposed on them by a Judge . It also provides parties with an assurance that the outcome will not be based purely on legal grounds, but will take commercial practicalities into account .

Whilst ADR is not always the most appropriate course of action, in many cases there are clearly advantages in engaging in ADR prior to the commencement of legal proceedings. In an attempt to avoid time consuming and costly litigation, we recommend that all our commercial clients take advantage of the ADR processes available by reviewing and/or making provision for ADR processes in their commercial contracts and agreements.

Our litigation lawyers regularly represent their clients in relation to various ADR processes, with the objective of achieving the best possible outcome, having regard to the legal position and the client’s commercial imperatives. A number of our lawyers are also qualified to act as mediators.

Author: Kristy Parker

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