15/09/2011
Major changes to state and federal laws are now placing additional pressure on litigants to act reasonably in the conduct of their cases.
Under the Civil Procedure Act 2010 (Vic) and the Civil Procedure Resolution Act 2011 (Cth), litigants and their lawyers must make sure they are in a position to show the court that they have made genuine attempts to settle their dispute. The Victorian Act imposes “overarching obligations” on the parties, which are:
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To act honestly at all times;
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To only pursue claims and defences that have a proper basis, on the factual and legal material available at the time;
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To only take steps reasonably believed to be necessary to resolve the dispute;
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To co-operate with the other parties;
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To not mislead or deceive;
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To use reasonable endeavours to resolve a dispute by agreement;
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To ensure costs are reasonable and proportionate to the complexity or importance of the issues and the amount in dispute
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To minimize delay; and
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To disclose critical documents at the earliest reasonable time and on a continuous basis after becoming aware of their existence.
The penalties for failing to do these things will be most sharply felt in the area of costs: orders for costs can be tailored by the judge hearing the matter, to reflect the extent to which each party abided by these principles. In theory at least, the days of costs simply “following the event” and going wholly to the winner, are over.
This was recently illustrated in England in the case of Dunnet v Railtrack, where railway workers were alleged to have caused the escape of Mrs Dunnet’s horses, which were later killed by a train. She sued for negligence but lost. When she appealed, Railtrack’s lawyers refused to mediate with her, despite the court recommending that they do so. When Railtrack went on to win the appeal, the court refused to make an order for their (very considerable) costs, due to their failure to act reasonably