Litigation & Disputes

Federal Court Requirements On Dispute Resolution


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Federal Court Requirements On Dispute Resolution

Lawyers now have to advise clients on how to avoid litigation in court.

A new duty now falls upon lawyers to advise clients to take “genuine steps” to resolve disputes before litigation in federal courts. Lawyers will have a duty to advise clients of the requirement to file a “genuine steps” statement and assist a client to comply with this requirement under proposed new laws. This will apply to litigation in the Federal Court and the Federal Magistrates' Courts. When exercising a discretion to award costs to a party in proceedings, the Court may take account of any failure by a lawyer to comply with the duty imposed. If a lawyer is ordered to bear costs personally because of a failure to comply with the legislation, the lawyer must not recover the costs from the lawyer's client.

Lawyers will be required to become more proactive in terms of exploring alternative forms of dispute resolution before civil proceedings are commenced in federal courts and will need to advise and assist clients in relation to taking “genuine steps” to try and resolve the issues in dispute between the parties before civil proceedings are commenced and then outline these steps in the form of a “genuine steps statement” or be in a position to provide reasons as to why no such steps were taken. When a party commences proceedings, it will need to file a statement saying what steps they have taken to resolve their dispute or, if they have not taken any steps, the reason why.

The proposed legislation doesn't set out specific actions that demonstrate “genuine steps” to resolve a dispute. Instead, the parties are given a wide discretion to attempt to resolve their disputes, and the courts will have regard to these steps filed in the statement to the court before allowing proceedings to commence. It is designed to ensure that the focus is on resolution and identifying the central issues without incurring unnecessary upfront costs and to focus lawyers and the parties on the early resolution of disputes.

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