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Model litigant rules, OK?

Feature Articles

Cite as: March 2011 85(3) LIJ, p.40

Governments in Australia are obliged to act as model litigants. Some have also created their own model litigant rules, which incorporate the use of ADR where appropriate.

By Lynn Buchanan and Dr John Lynch

Australian courts have long recognised that all governments in Australia have a common law responsibility to act as model litigants.

This concept was first articulated by the High Court in 1912 in Melbourne Steamship Co. Ltd v Moorehead1 and has been recognised by other courts since.2 In Hughes Aircraft Systems International v Airservices Australia3 the Federal Court identified three policy reasons for governments to act as model litigants:

  • Citizens have a reasonable expectation that public bodies act honestly and fairly.
  • Public bodies must exercise their powers “for the public good”.
  • Governments and their agencies should act as “moral exemplars”.

Adherence to model litigant rules goes beyond acting in accordance with the law and basic ethical standards. The rules envisage the state and its legal representatives will act in accordance with the highest professional standards, thus enhancing public trust in government.

Model litigant usage in Australia

In addition to their common law duty, the Commonwealth, Victoria, New South Wales, Queensland, the ACT and the Northern Territory have developed their own model litigant rules. Western Australia, Tasmania and South Australia do not have model litigant rules, but follow the principles articulated in common law and the commonwealth rules.

Commonwealth

The commonwealth government was the first in Australia to adopt model litigant rules in 1997.4 The commonwealth rules are a statutory instrument and have the force of law. They are made under Part VIIIC of the Judiciary Act 1903 (Cth) which allows the Attorney-General to issue legal services directions (directions) applying to commonwealth legal work (s55ZF(1)). The Australian Government Solicitor and private lawyers acting for the Commonwealth are required to act in accordance with the directions (s55ZG), which override legal professional privilege (s55ZH).

The Commonwealth has regularly reviewed its model litigant obligations, with the current directions being issued in 2005 and amended in 2008. The directions include obligations such as:

  • dealing with claims promptly;
  • not starting legal proceedings unless satisfied that litigation is the most suitable method of dispute resolution;
  • avoiding litigation where possible by participating in appropriate dispute resolution (ADR) processes; and
  • keeping the costs of any litigation to a minimum by monitoring its progress and using appropriate methods to resolve the dispute, including settlement offers, payments into court or ADR.

States and territories

Unlike the commonwealth statutory approach, the model litigant rules adopted by Victoria, New South Wales, Queensland and the Northern Territory take the form of policy guidelines. The ACT has issued its model litigant rules as a notifiable instrument under s5AA of the Law Officer Act 1992 (ACT).

The Victorian guidelines, which were based on the commonwealth rules, were issued by the former Victorian Attorney-General in 2001. They are incorporated into a schedule of the standard legal services to government panel contract.5

Broadly, the Victorian guidelines provide that the state should act fairly and consistently, avoid litigation where possible, pay legitimate claims without litigation and keep litigation costs to a minimum.

The guidelines apply to litigation involving state government departments and agencies, ministers and officers for whom the state provides full indemnity. The guidelines also extend to all legal advisers acting for the state, including private lawyers, inhouse government lawyers and the Victorian Government Solicitor’s Office.

Model litigant guidelines were adopted by other state and territory governments as follows:

  • ACT – 2004 (subsequently made a notifiable instrument under legislation in 2010).6
  • Northern Territory – 2006.7
  • Queensland – 2006.8
  • New South Wales – 2008.9

Compliance with model litigant rules

Among Australian governments, the Commonwealth has the most well-developed system of monitoring compliance with the model litigant rules. Under s55ZG(2) of the Judiciary Act 1903 (Cth), the Attorney-General has sole power to enforce compliance with the directions.

The Office of Legal Services Coordination in the federal Attorney-General’s Department is responsible for the administration and enforcement of the directions, which is done primarily through remedial action and education rather than sanctions for non-compliance.

Non-compliance with the directions cannot be raised in court proceedings except by the Commonwealth (s55ZG(3)). However, it is open to a court to make an adverse costs order due to a lawyer’s conduct. In one of the Melbourne Voyager cases,10 the judge considered that the behaviour of the Commonwealth in failing to act in a timely manner in relation to whether it required an expert witness for cross-examination was relevant to the question of costs. On the other hand, there is conflicting authority on whether the Commonwealth’s breach of its model litigant obligations should result in an adverse costs order and some judges consider non- compliance irrelevant to indemnity costs.11

The ACT has recently enacted a statutory compliance system for its model litigant guidelines. Under s5AC of the Law Officer Act 1992 (ACT), government agencies must include in their annual report information about their compliance with the model litigant guidelines and any breaches of the guidelines during the financial year. As with the Commonwealth, the ACT Attorney-General has sole power to enforce compliance with the guidelines.

As the Victorian model litigant guidelines are a policy document, there is no statutory enforcement as with the Commonwealth. Nevertheless, under the Panel firms contract, sanctions may be imposed on a Panel firm, including removal from the Panel.

A failure to act as a model litigant can also attract comment and criticism from judges when deciding cases. In the 2007 case of Cracknell,12 Judge Bowman specifically referred to the TAC’s obligation, as a government entity, to follow the government’s model litigant guidelines. In a 2008 case, the Supreme Court of Victoria criticised the state for not taking the position of a model litigant, describing the state’s position towards the appellant as “very aggressive”.13

Model litigant guidelines and ADR

The Commonwealth made significant amendments to its rules in 2008 to strengthen the requirement for the Commonwealth and its agencies to consider alternative methods of dispute resolution, both before and during litigation. These changes were driven by the federal Attorney-General’s commitment to improve access to justice, including by expanding the use of ADR to ensure the justice system is cost-efficient and facilitates the timely resolution of disputes.14

The 2008 changes also followed criticism by the courts of the Commonwealth’s conduct in the Melbourne Voyager litigation, particularly the government’s reluctance to settle or concede an issue, which led to unnecessary delays and consequently a significant cost burden to the taxpayer.15

Victoria, New South Wales and Queensland are reviewing their model litigant policies with a view to adding an explicit obligation to use ADR, which will bring them into line with ADR-specific obligations in the commonwealth rules. The ACT incorporated an ADR obligation into its rules in 2010.

Relationship between model litigant rules and the CPA

The recently enacted Civil Procedure Act 2010 (Vic) (CPA), which commenced on 1 January 2011, aims to change the culture of litigation by encouraging ADR and the early settlement of disputes, facilitating better communication and information exchange and improving standards of conduct of lawyers, parties and others.

Section 7(1) of the CPA establishes an overarching purpose of the courts to “facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute”. While the CPA aims to reduce the cost, delay and complexity of litigation and increase access to justice for all civil court users, it is also consistent with the approach in Victoria’s model litigant policy.

Under the overarching obligations in the CPA, lawyers, parties and others will be subject to specific obligations, including to act honestly; not engage in misleading or deceptive conduct; use reasonable endeavours to resolve the dispute, including the use of ADR where appropriate; where the dispute is unable to be resolved, use reasonable endeavours to narrow the issues in dispute; ensure costs, legal and otherwise, are reasonable and proportionate; and act promptly and minimise delay.

These obligations extend to model litigants, as the CPA expressly binds the Crown (s5).

Significantly, the overarching obligations are enforceable by sanctions, including adverse costs orders (ss28 and 29). The overlap between the principles set out in the overarching obligations and the principles contained in the Victorian model litigant guidelines mean that from 1 January 2011 a breach of the model litigant guidelines may also amount to a breach of the overarching obligations and result in an adverse costs order or other sanction.

The CPA also contains reforms that are consistent with or expand on existing model litigant guidelines. Its pre-litigation requirements in Part 3.1* demand that people in dispute take reasonable steps to resolve or narrow the issues in dispute before starting litigation. These requirements encourage the use of ADR before litigation. The pre-litigation requirements are enforceable against all parties, including model litigants, by costs orders or other sanctions (Part 3.2).

Conclusion

The reviews of model litigant policies to incorporate the use of ADR and the enhancements arising from the CPA have the potential to create a raft of new obligations for government lawyers to consider. These should be welcomed as being consistent with the government’s obligations to act honestly and fairly, to exercise its powers for the public good and to act as a moral exemplar in the field of litigation.



LYNN BUCHANAN is the legal policy officer, Appropriate Resolution Directorate, Victorian Department of Justice. DR JOHN LYNCH is Crown Counsel for Victoria.

*Editor’s note: On 10 February, the Government introduced a Bill to repeal Chapter 3 of the CPA in respect of mandatory pre-litigation requirements consistent with its pre-election policy. If passed, the Bill will remove the general obligation on practitioners in respect of pre- litigation requirements which was to apply to proceedings commenced after 1 July 2011. Practitioners should monitor the LIJ, Friday Facts and Hansard for further developments.

1. (1912) 15 CLR 333, 342.

2. Kenny v State of South Australia (1987) 46 SASR 268, 273; Yong Jun Qin v Minister for Immigration & Multicultural Affairs (1997) 75 FCR 155.

3. (1997) 76 FCR 151, 196-7; see generally Luke Forster, “Is the Commonwealth a model litigant? Assessing the efficacy of the model litigant policy” (2009) 28 Civil Justice Quarterly 551, 555-6.

4. Office of Legislative Drafting and Publishing, Legal Services Directions 2005, January 2010, Appendix B: “The Commonwealth’s obligation to act as a model litigant”; Attorney-General’s Department: www.ag.gov.au/www/agd/agd.nsf/Page/Legalservicesto Government_LegalServicesDirections2005.

5. Guidelines on the State of Victoria’s Obligation to Act as a Model Litigant, Schedule 8, Legal Services to Government Panel Contract; Stephen Lee, Assistant Victorian Government Solicitor, “The state as model litigant”, seminar paper, VGSO Seminar Series, 28 August 2009.

6. Law Officer (Model Litigant) Guidelines 2010 (No 1): www.legislation.act.gov.au/ni/2010-88/current/pdf/2010-88.pdf.

7. Solicitor for the Northern Territory, Model Litigant Policy, emailed advice from NT Department of Justice (16 December 2009).

8. Model Litigant Principles: www.justice.qld.gov.au/__data/assets/pdf_file/0006/43881/20100505095729872.pdf.

9. Model Litigant Policy for Civil Litigation: www.lawlink.nsw.gov.au/lawlink/lms/ll_lms.nsf/pages/lms_important_rules#Model.

10. Galea v Commonwealth of Australia (No 2) [2008] NSWSC 260, [15]-[18].

11. Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd [2007] FCA 1844; see also Forster, note 3 above, p569.

12. Cracknell v TAC (General) [2007] VCAT 1615.

13. Morgan v State of Victoria [2008] VSCA 267.

14. Robert McClelland, “ADR in government forum”, speech delivered at the ADR in Government Forum, Canberra, 4 June 2008: www.attorneygeneral.gov.au/www/ministers/mcclelland.nsf/Page/Speeches_ 2008_SecondQuarter_4June2008-ADRinGovernment Forum.

15. Forster, note 3 above.

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