October 21, 2013

Mitigating the Costs and Pain of Litigation/Disputes

This article is a reminder to parties about their obligations under the Civil Disputes Resolution Act 2011(CDR Act) to take genuine steps to resolve a dispute before commencing certain proceedings.

At Rouse Lawyers, we encourage and assist companies and individuals in mitigating the substantial costs associated with court proceedings by advising and assisting them in resolving their disputes in a cost effective and efficient way.

The need to take genuine steps to resolve a dispute

The CDR Act commenced on 1 August 2011 and requires that parties to a dispute take “genuine steps” to resolve a dispute before commencing legal proceedings in the Federal Court or the Federal Magistrates Court (together the “Federal Court”).

An applicant who intends to file a claim with the Federal Court must file a ‘genuine steps statement’ outlining the steps undertaken to try to resolve the dispute before initiating his/her claim with the Federal Court.  Similarly, a respondent is also required to file a ‘genuine steps statement in reply’ stating whether the respondent agrees or disagrees with the applicant’s genuine steps statement.

The CDR Act also places obligations on lawyers to advise their clients of the requirement to comply with the Act, the pre-litigation requirements, and in particular the requirement to file their respective genuine steps statements.

The requirement that parties take genuine steps to resolve a dispute recognises the substantial costs and energy involved in most legal disputes, and is aimed at encouraging parties in mitigating or avoiding those costs.

While the CDR Act only applies to claims initiated in the Federal Court, it follows an emerging trend whereby alternative dispute resolution bodies (such as state based Tribunals) require parties to partake in mediations, conciliation or resolution talks before being able to commence a formal claim in the respective dispute resolution body.  By way of example, before being able to commence a claim in relation to a residential tenancy dispute in the Queensland Civil and Administrative Tribunal, parties are required to try and resolve the dispute by participating in conciliation with the Residential Tenancies Authority.

It is important that any party who intends to file a claim in the Federal Court is aware of their obligation to take genuine steps to resolve their dispute before being able to commence their claim, and that they comply with that obligation.

In light of the success in resolving disputes and the substantial costs savings to companies and individuals, Rouse Lawyers encourages and assists parties to disputes in engaging in private dispute resolution processes before formally commencing proceedings and committing to the substantial costs of litigation.