Barnett, Michael --- "The Federal Civil Justice System: the ALRC Review" [1999] ALRCRefJl 30; (1999) 75 Australian Law Reform Commission Reform Journal 53

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Reform Issue 75 Spring 1999

This article appeared on pages 53 – 59 of the original journal.

The federal civil justice system: the ALRC review

The Australian Law Reform Commission’s major inquiry into the federal civil justice system has revealed that despite the common perception that our courts are ‘in crisis and getting worse’, this is not the case — at least not in federal civil courts and tribunals.

Michael Barnett* provides this summary of the recently released discussion paper, which contains the Commission’s current findings and 115 proposals for change.

The federal civil justice review, which began in November 1995, is considering the cost, effectiveness, efficiency and accessibility of the system and is the most comprehensive civil justice inquiry conducted in Australia. Our inquiry is considering the operation of courts and tribunals exercising federal jurisdiction and we have focused on the major elements of that system: the Federal Court, the Family Court of Australia (Family Court) and the Administrative Appeals Tribunal (AAT).

The Commission released its discussion paper, Review of the federal civil justice system (DP 62), in August. The paper builds on a series of issues papers and background papers released over the past three years. We have not yet come to final conclusions and recommendations — these will be provided in our final report to the federal Attorney-General due at the end of the year. We are now engaging in further consultations around Australia and are seeking submissions on the discussion paper.

In preparing the paper, the Commission so far has received 290 submissions and conducted intensive consultations and meetings with hundreds of lawyers, judges, tribunal members and parties. The Commission has also conducted empirical analysis of approximately 4,000 case files and examined a number of overseas systems including the United Kingdom, the United States, Singapore, Canada, New Zealand, France, Germany and Italy.

Assessing overall performance

The inquiry has found there are many aspects of the system that are working well. Federal courts and tribunals have introduced many worthwhile reforms to their practice and procedures. For example, the case management system of the Federal Court is widely commended and the AAT’s conference system, which the Commission considers needs some fine-tuning, is generally approved and works well. However, many successful innovations such as those relating to technology, alternative dispute resolution and case management, tend to be obscured under a widely held but rarely critically analysed view that our legal system is in crisis and getting worse. At its worst this ‘sky is falling’ view can contribute to reform paralysis and the failure to achieve sensible and practical change.

Our investigation of federal courts and tribunals, including our empirical data, does not support the crisis theory. There is no litigation explosion in the federal civil justice system. There is no systemic, intractable delay. Nevertheless, litigation and administrative review can be ex-pensive and we propose changes to reduce costs. However, our research refutes — at least for federal civil matters — the assumption that the justice system is open only to the very rich and very poor. A range of litigants use federal courts and tribunals.

What the Commission has found is a general demand for consistent oversight of individual cases by the same judge and/or registrar to ensure cases are appropriately managed, streamed and allocated to dispute resolution processes. Cases need to be treated on an individual basis within a case management system which provides sufficient flexibility to tailor processes to meet the individual circumstance.

Adversarial or Inquisitorial?

The Commission’s terms of reference refer to the Australian adversarial system of litigation and ask us to examine the systems of so called ‘inquisitorial’ civil code countries (eg France, Germany and Italy) where it is generally considered that judges have more responsibility for managing disputes than in Australia. This has raised the expectation in relation to this inquiry that radical change to our system may be desirable.

However, there is no simple adversarial-inquisitorial dichotomy. Many of the adversarial features of the Australian justice system have been modified by, for example, greater case management, alternative dispute resolution (ADR) processes and discretionary rules of evidence and procedure. Adversarial and inquisitorial systems have borrowed extensively from each other, so legal systems now have many similar features and face similar difficulties.

There is no need for a radical overthrow of the adversarial system. The Commission agrees with Sir Anthony Mason who commented that a wholesale change by Australia to an inquisitorial system of civil justice would be:

“... an extraordinary act of faith. It would be contrary to our traditions and culture; it would generate massive opposition; and it would call for expertise that we do not presently possess. And at the end of the day we would have a new system without a demonstrated certainty that it is superior to our own.”¹

Reducing costs

The Commission’s terms of reference also refer to the need for a simpler, cheaper and more accessible legal system. The Commission set about the task of attempting to estimate the total public cost of the federal civil justice system — a task never formally undertaken before. Information on costs in the discussion paper is drawn from government reports, annual reports and court and tribunal information, and from empirical research undertaken by the Commission. Some interesting and occasionally surprising information emerged:

• The public cost of providing federal courts, tribunals, the Australian Industrial Relations Commission and related organisations such as commissions and ombudsmen, was estimated at $349 million in 1997–98. When the federal government’s funding of legal aid commissions and community legal centres is included, the total expenditure comes to $470 million. Government spending on the federal justice system is thus relatively small compared with other areas of government funding; and

• Federal tribunals were established to be a quicker and cheaper alternative to courts, but now cost the federal government almost as much as the federal courts. Legal fees paid by applicants in tribunal matters are little different from, say, the costs to litigate in the Family Court, which is a superior court.

To improve the accessibility and accuracy of information about costs, the Commission proposes that the Office of Legal Services Coordination within the Attorney-General’s Department should prepare an annual report on the costs of legal services provided to government.

In relation to private costs of the system, the Commission found that many parties in federal litigation and review have limited financial means. In the Federal Court, nine per cent of court fees are waived because the parties are welfare recipients or in financial hardship. Forty-eight per cent of court fees in the Family Court and 53 per cent of fees in the AAT are waived on the same grounds.

However, middle income Australians also are litigating in federal courts and tribunals:

• In the Family Court, the Commission’s case file survey data showed the median estimated property value at issue in proceedings to be $151,059. The median income of parties to Family Court property proceedings is $25,000 to $28,000; and

• In the Federal Court and AAT, lawyers often bear much of the financial risk of an adverse outcome in litigation, recovering their legal fees only if the case is successful. This practice is common in workers’ compensation matters in the AAT, and in migration and refugee cases in the Federal Court.

The median total legal costs for represented parties in the Com-mission’s survey samples were:

• Family Court of Australia: $2,209 (applicants) and $2,090 (respondents);

• AAT: $2,585 (applicants) and $4,006 (respondents).

Consumers who are informed and educated about the cost and time taken for legal services are better able to ‘shop around’ and to negotiate more favourable agreements about legal fees. However, most people, particularly in the family jurisdiction, are ‘one-off’ users of legal services. There is little comparative information publicly available to guide consumers.

Consumers also need to have a greater input into the provision of legal services and the Commission has proposed the establishment of a Federal Legal Services Forum. This forum would highlight expected practice standards and the costs of services, as well as providing independent advice to the federal Attorney-General who would appoint its members. It would not have a regulatory or complaints monitoring function.

The Commission is proposing that legislation require lawyers working in federal jurisdictions to advise clients of comparative fee information (including court scales and information published by the proposed Federal Legal Services Forum). Lawyers’ ethical rules should set down guidelines to determine if fees are reasonable. It is proposed that legal professional associations develop these guidelines on reasonable fees, and make it clear that breach of these guidelines can amount to professional misconduct.

The Commission also is proposing that the Federal Costs Advisory Council calculate benchmark event-based scales for matters in the federal jurisdiction. Those scales should be calculated in consultation with costs assessors, taxing officers, courts, tribunals, legal aid commissions, ‘repeat player’ litigants and the Office of Legal Services Coordination. The fees should be adjusted regularly, with a fundamental reconsideration every three years. This should not be limited to simply making cost-of-living adjustments, but should also take into account any downward pressures caused by more efficient practices and procedures, competition and technological advances. Courts and tribunals should use the bench-marks established by the Council to fix costs recoverable in federal proceedings.

Delay

Court and tribunal delays are generally regarded as a major problem in the justice system. However, the Commission’s empirical work challenges some widely held beliefs about delays in the federal civil litigation system, particularly those in the Family Court.

The empirical research showed that approximately 50 per cent of all contested Family Court cases were resolved in less than six months. About 80 per cent were finalised in less than 12 months and 95 per cent in under two years. The delay of between one and two years can be a particular problem in cases involving children, but this delay relates to only 20 per cent of the cases in the court.

In relation to the Federal Court, the research showed that despite the complexity of many of its cases, the court disposed of 50 per cent of the sample cases within seven months and 85 per cent within 20 months. More than 60 per cent of sample cases were resolved by settlement; 35 per cent went to trial and received judgment. Very few cases were resolved ‘at the door of the court’. The earlier settlement of cases is evidence of the success of the Federal Court’s Individual Docket System (IDS) where a judge has responsibility for the management of a case from commencement to completion.

In the AAT, the research reveals significant variation in the time taken to resolve different types of cases. Fifty per cent of the sample cases were completed in just over eight months and 90 per cent within 18 months. Veterans’ affairs and compensation matters took the longest to resolve while social welfare cases were the quickest. Thirty-four per cent of AAT cases went through to a final hearing. However, a significant proportion of cases in our sample were settled late in the process — before or at the hearing. The AAT has sought to deal with late settlements by holding conciliation conferences in compensation cases. This appears to be working well.

Federal Court case management

The IDS, which requires judges to manage their own docket of cases, on average some 80 cases each, was widely approved in submissions and consultations — although there were suggestions for further fine-tuning. The system provides for a fixed trial date determined early in the proceedings. Close and continuing supervision by judges allows them to deal effectively with the potential trouble areas of litigation, such as defective pleadings, excessive discovery of documents and tactical games by lawyers. Our research and consultations indicate that this system is effective, allowing individualised and cost efficient preparation of cases, and encouraging compliance with court directions and early settlements, in appropriate cases.

The two problems identified for ‘fine-tuning’ include the occasional difficulty in getting a hearing before a busy docket judge, and the variable case management practices evolving as individual judges develop their own management styles and practices. The Commission proposes that the Federal Court’s procedural guides be revised regularly. Registry differences should be kept to a minimum. Better listing practices should be implemented to ensure cases are not delayed by an individual judge’s hearing commitments.

The discussion paper also deals with emerging issues for the court including migration cases, representative proceedings (class actions) and native title proceedings.

Family Court case management

The Commission found widespread and consistent criticism by practitioners and litigants of the Family Court’s case management. These criticisms concerned the way the Family Court views its functions and how it organises its dispute resolution processes and were not directed at the quality of decision making, or at the integrity or professionalism of the judges and court staff. The processes were commonly described as ‘bureaucratic’, ‘inflexible’ and ‘rigid’.

Litigants, practitioners, court officers and judges generally regarded the conciliation, counselling and mediation services provided by the court as beneficial. However, the inflexibility of the case management system was said to add unnecessarily to costs and delays for many cases and to contribute to poor compliance with directions and orders. A lack of continuity in judicial officers managing the cases often forces people to tell their story over and over to different court officers. A further complaint was that there were too many case events in the court and many of these did not help to advance the matter to trial, or to resolve it.

About 95 per cent of cases are resolved by settlement between the parties. Significant numbers of litigants and lawyers indicated to the Commission that parties are settling their cases because of their frustration with the court’s case management process when what they really wanted was a fast track to adjudication. Many litigants and lawyers reported that cases were settling be-cause of frustration with the court’s uniform and standardised processes which can ‘just bully clients into settling’.

In consultations litigants and lawyers also criticised the forms and documentation required in the Family Court, suggesting that these forms often increased the level of paperwork without providing sufficient information to enable the parties to negotiate or prepare for hearing. This can delay settlement of the dispute. Another criticism was the lack of availability of discovery and subpoenas as a routine matter before a conciliation conference.

The Commission proposes that the Family Court improve its forms and initiating documents and provide for greater flexibility in its arrangements for discovery of documents, subpoenas, family reports and its referral of parties to conciliation and counselling. The Family Court should introduce a case management system similar to that in use in the Federal Court, in which each case is allocated to a particular judge and registrar, who take responsibility for the case from commencement to finalisation. Because of the number of contested cases in the Family Court, it is not intended to place judges in charge of routine procedures which may be handled by registrars, but rather to allow difficult or complex cases to referred more easily to a judge for speedy determination.

Tribunal case management

The Commission considers that the legislation and practice of review tribunals should further emphasise the administrative character of tribunals. Tribunal processes can and should be arranged to permit:

• improved investigation by tribunals;

• resolution of certain issues without the need to hear oral evidence; and

• cooperative training and working arrangements between tribunals and the government departments and agencies whose decisions are under review.

Proposals made by the Commission are aimed at supporting the flexible decision making processes available in review tribunals, without threatening their independence. The Commission proposes practice rules, directions, costs incentives and case management to enhance the role of party representatives in preparing and presenting cases and negotiating outcomes.

Case management practices within review tribunals should be made to work more efficiently and effectively. The median duration of cases finalised in the AAT was longer than for cases in the Federal Court. Some submissions suggested that AAT processes could be streamlined, make better use of interlocutory steps, and be more proactive, particularly in the compensation area. The Commission proposes that registrars and members should be given responsibility to manage a particular docket, or group of cases, and trained to be more exacting and effective in progressing cases and enforcing tribunal directions and orders. Decisions on the papers should also be more widely available in review tribunal proceedings.

The government as a litigant

The federal government is a significant litigant and frequent party to proceedings. But despite its position as the major repeat player in the federal civil justice system, there is no strategic or coordinated approach by the federal government to avoid, manage and resolve its disputes. This is in contrast to the position in Canada and the United States which have initiated government-wide facilities and policies for dispute resolution.

The Commission proposes that the federal Attorney-General’s Department develop a ‘best practice’ dispute avoidance and management plan for federal government departments and agencies. Each department and agency should be required to establish a dispute avoidance and management plan, covering all types of disputes and all aspects of dispute avoidance, management and resolution.

Expert evidence

Expert evidence can lead to greatly increased costs and delays in proceedings where:

• parties ‘shop’ for the expert who will give evidence supporting their case;

• it is difficult for an expert accurately to present technical expertise in the formal processes of examination and cross-examination; and

• it is difficult for courts and tribunals to assess a mass of conflicting expert opinions.

The Commission proposes that judges and tribunal members more actively manage expert evidence, have flexible arrangements for the presentation of this evidence, and confirm that the primary responsibility of experts is to the court or tribunal, rather than the party paying them.

Professional skills and communication

Updating and improving professional skills and knowledge are a core requirement for continuing effective participation in the federal civil justice system. Such education also serves to facilitate communication within and between organisations and manage individual and systemic change.

The provision of legal and judicial education in Australia needs greater structure, coordination and quality assurance. While legal education has undergone significant and useful change in recent times, Australian law schools are still anchored by professional admission rules, developed mainly by judges, which cling to the outmoded notion of what lawyers need to know, rather than around what lawyers need to be able to do. Law graduates should be given the opportunity to develop the high level legal professional skills and ethics they will need to practice in changing and challenging professional careers. Such skills should include communication and negotiation skills, dispute resolution and advocacy.

The Commission proposes the establishment of a broadly constituted advisory body, known as the Australian Council on Legal Education, which would develop model standards for legal education and training for lawyers and other key participants in the justice system, including the accreditation of legal educational programs.

Our submissions and consultations overwhelmingly support voluntary judicial education and its continuing development, and the need for continuing education and training for tribunal members. The Commission proposes the establishment of a National Institute for Judicial Education and Administration, which would have formal responsibility for meeting the education and training needs of all federal judges and magistrates. The Commission also proposes a federal Tribunals Council be established, comprised of the heads of the various federal tribunals and presided over by the president of the AAT to promote and facilitate the sharing of professional information and experience among its members, and to assist in education and training for administrative decision makers.

Improving accountability

Accountability and transparency are rightly regarded as fundamental elements of modern government and administration. There is a need to build increased accountability and transparency into the federal civil justice system for judicial officers and the legal profession.

Judicial independence is the cornerstone of our justice system. However, there has been no formal process for lodging or investigating complaints against judicial officers. There is no code of conduct against which behaviour may be measured, nor have sanctions been available, short of removal from office by a vote of both houses of the parliament. The Commission proposes the establishment of an independent federal Judicial Commission — similar to the one in New South Wales — to receive investigate and complaints against federal judges and magistrates.

The Commission also proposes that the legal profession draft clearer, more comprehensive and appropriate national practice standards outlining the responsibilities and ethical duties of lawyers. Many overseas jurisdictions have legal practice standards that state both the rules and provide explanatory commentary, to illustrate the application of the rule in practical circumstances. Such an approach helps to ensure lawyers follow both the spirit and the letter of the law.

Other proposals

Other major proposals outlined in the Commission’s discussion paper include that:

• the federal government consider establishing court network schemes in all Family Court registries to assist parties and other court users;

• federal courts and tribunals should develop rules to harmonise with the Victorian and NSW Supreme Court rules to facilitate the use of technology;

• federal courts and tribunals should develop protocols for the compatible use of technology; and

• the Council of Chief Justices should further develop recommendations for the harmonised rules of court for all civil matters and a standard originating document and process for civil matters in the Federal Court and all state and territory Supreme Courts.

* Michael Barnett is the Team Leader on the inquiry into the federal civil justice system.

Endnotes

1. A Mason ‘The future of adversarial justice’ Paper 17th Annual AIJA Conference Adelaide 7 August 1999, 9.