Speech to the Australian Lawyers Alliance National Cofermence

Queensland

23 October 2009

First, may I acknowledge the traditional owners of the land we meet on – and pay my respects to their elders, both past and present.

One month from tomorrow marks the second anniversary of the election of the Rudd Government. Much has been achieved in that time, yet there is clearly much more to be done as we continue to build a fairer and more inclusive community.

Just two weeks ago, I was pleased to release the report of the National Human Rights Consultation Committee on how we can best protect and promote human rights and responsibilities in Australia.

One of the many issues that the Committee heard about was the importance of access to justice to human rights protection.

The Committee noted:

“Such access is of particular importance to marginalised and disadvantaged individuals, who can face additional barriers in having their rights recognised and enforced.”

Indeed one of the Committee’s recommendations was that the Government develop and implement an access to justice framework.

Access to justice is not only central to the enjoyment of basic human rights, it is an essential ingredient of a well-functioning democracy. 

It’s appropriate therefore that I acknowledge the work of the legal profession in assisting Australians to access their rights. The commitment of Australian lawyers to pro bono services is outstanding. As is the preparedness of many lawyers to defer receipt of payment until the conclusion of a matter.

There is no doubt that this preparedness has enabled thousands of Australians to access their rights, particularly to obtain damages arising from work-related and other injuries. That preparedness is of course facilitated by the prospect of securing a financial outcome for their client.

In a related context, the report of the Access to Justice Taskforce also considered proposals for streamlining and improving the efficiency of class actions.

The report noted that class actions can have a strong regulatory impact, with the potential scale of the pecuniary damages providing a strong incentive to abide by existing laws. But the report found there is considerable complexity in existing processes.

The relevant section of the report states:

"Since the introduction of Part IVA, there have been a number of judicial developments that impact on the extent to which the class action objectives are being achieved. The decision of the Full Federal Court in Philip Morris (Australia) Ltd v Nixon has interpreted the legislation to require that all members of the class must have claims against each of the defendants. This approach can significantly limit the availability and flexibility of class actions to deal with a full group of related claims, and has affected a number of claims.”

In particular, it appears that technicalities are often thwarting class actions. On this the report noted:

“The prevalence of interlocutory disputes in class actions has impacted the efficiency of pursuing matters through a class action.”

Finklestein J has noted in two Federal Court cases that class actions can be ‘bogged down’ by numerous expensive interlocutory applications, and even more expensive appeals from interlocutory orders.

This development it was noted “is at odds with the aim of class actions in assisting individuals who would not readily have access to a remedy to attain justice by pursuing a claim as a group.”

Class actions have been the subject of some considerable controversy. Most relevantly, the report noted that:

“class actions also impact significantly on business due to the scope of disputes involved. The availability of class actions may result in litigation in situations where it would not otherwise have arisen".

Nevertheless on that point the Report observes that:

“Concerns that the introduction of class actions would result in an explosion of ‘US‑style’ litigation have not been borne out. In 2005, it was estimated that 166 class actions had been considered by the Federal Court since the introduction of Part IVA. The cost rules in Australia, where the losing party is generally required to bear the costs of the winner, provides a strong disincentive against unmeritorious actions, unlike in the US where costs are generally borne by the individual parties.”

The topic of class actions is clearly one that would benefit from further consideration and consultation and I would welcome your response to the report’s recommendations.

Other Recommendations

There are of course many other areas where citizens will need to take action to protect their rights in circumstances where they will not have the prospect of obtaining financial recompense.

These matters can be as fundamental as maintaining a tenancy, rectifying a consumer rip-off or resolving family law issues.

There is an understandable tendency for lawyers to say “provide more legal aid so we can commence more cases for these people”. The reality is, however, that that is not feasible in each and every circumstance.

For this reason, the idea of access to justice, has come a long way from being just simply about access to courts.

Access to justice is also about providing practical, affordable and easily understood information to assist people to resolve disputes.

This point is made in the Taskforce report, which sets out 58 recommendations covering information about the law, alternative dispute resolution, the courts, administrative law, legal assistance and building resilience.

Recommendations range from less complex and more accessible dispute resolution through industry ombudsmen and external dispute resolution for consumer disputes to the adoption of a ‘no wrong number, no wrong door’ approach to assisting people deal with Government.

The central recommendation of the report is a ‘Strategic Framework for Access to Justice’ to guide the consideration of future civil justice reforms.

The report looks at the existing allocation of public resources in the justice system – about $1 billion per annum from the Federal Government - and asks how future resources could be deployed to better achieve access to justice.

In terms of impact and coverage of that expenditure, it’s significant to note that each $1 million invested into the system in 2007-08, paid for about 60 cases to be resolved by the Federal Court.

That same amount, however, would enable:

The reality is that many matters can only appropriately be resolved through the courts. But we should acknowledge the resources required every time that occurs. The question is one of proportionality. Trained people of skill and common sense are best placed to make the decision as to when a court action is justified and where practical alternatives exist.

Role of the Legal Profession

In that context, the legal profession is, of course, a key institution. 

I see lawyers as having three duties: to their client, to the Court and to the justice system.

Members of the profession have a strong influence on the way that the law is practiced.

The Access to Justice Report contains several recommendations specifically relevant to the legal profession, including promoting the inclusion of dispute resolution processes and ADR in legal education and encouraging law degrees to include clinical legal education and pro bono work.

On the critical issue of costs, the report notes that increasing transparency in legal fees so that consumers can understand what they are being charged for would go a long way to ensuring that the cost of resolving a legal issue is proportionate to the issue in question. 

Indeed the Report noted that many more people would be prepared to walk through lawyer’s doors if they had that comfort. The Report also noted that the ability of lawyers to advertise actual fees would enhance the effective functioning of the legal services market.

In short, the legal profession has a very important part to play in ensuring the cost of resolving disputes is proportionate to the issues.

Equally, legal billing options that increase certainty for clients and encourage efficiency on the part of lawyers must be a priority.

Ensuring that practitioners provide clients with meaningful estimates of the cost of litigation as it progresses, as well as sharing that information with the court and the other parties would enable people to make better informed decisions about their potential exposure and hence to better assess their options.

Role of the Courts

Like the legal profession, courts are a vital element of the justice system.

They are the arm of Government entrusted with the maintenance of the rule of law.

Only courts have the capacity, through a judge’s decision, to enforce the law irrespective of the power imbalance that might exist between the parties - be that citizen, corporation or Government.

Accordingly, the Access to Justice Framework seeks to ensure that where court litigation is necessary, that processes are accessible, fair, affordable and simple. And that disputes can be resolved at the earliest opportunity.

The Taskforce finds, for example, that the average professional cost to a litigant in the Federal Court is over $100,000. Needless to say, this is well beyond the means of most average Australians.

That is why the Taskforce proposes new requirements for pre-action protocols that set out certain requirements before the commencement of proceedings such as encouraging the exchange of information between the parties.

Parties should approach a court case thinking about the best means of resolution.  Such protocols would need to be reasonable and proportionate to the issues in dispute and not end up creating greater expense by generating more documents or requiring endless mentions or call-overs.

Another proposal is to amend federal court legislation to ensure that the mere expression by a judge of a preliminary view on an issue does not amount to apprehended bias. For example, self-represented litigants could receive an early evaluation of the merits of their case and referral to external advice and assistance if necessary. Equally, a well placed judicial reflection can often open the ears of a litigant to advice they may well have already received from their own counsel.

In short, the sooner we are able to resolve matters the less public and private resources are incurred.

Cost Recovery

While the Courts and other justice services have clear public benefits, the Taskforce explores greater cost recovery in these areas. This is particularly so where so much court time is taken up by substantial organisations that, in turn, can claim tax deductibility of their legal expenses.

To demonstrate this point, the report noted that in 2007-08, fees paid in the Federal Court of Australia amounted to only 9.3 per cent of the Government’s expenditure on the Court.

Yet tax payers have funded the resolution of some incredibly expensive commercial disputes by the court.

In Australia, cost recovery for mega-litigators was suggested some years ago by NSW Chief Justice Spigelman.

His Honour observed that “[companies] are prepared to demand and pay for [access to justice] through their own lawyers but not pay, as it were, the community.”

Government intervention and funding for all aspects of dispute resolution is neither affordable nor reasonable. Persons or corporations accessing services to assist with a civil justice problem are often seeking private gain. It is therefore legitimate to ask to what extent certain users of the courts should contribute for these services.

Extending this argument, it is also legitimate to consider which services are the most efficient, and to price them accordingly.

Having said that, courts clearly play a crucial role in the development of precedent. These rules and principles provide broader and ongoing guidance on how cases of similar fact should be resolved in the future. I agree with Chief Justice French that courts are not “merely providers in a market for dispute resolution services”, they are at the apex of a proper functioning system of the rule of law.

Not every matter, however, raises a new issue or involves a legal principle that requires judicial intervention. Most cases are about the assessment of facts against well-understood laws. And most of these cases do not need court intervention and the expenditure of significant public resources. In other words, court intervention may not be a proportionate response or an efficient way to resolve a dispute where competent lawyers on both sides can or should be in a position to predict the likely outcome.

Greater cost recovery through, for example, the introduction of a sliding scale to provide an incentive for early resolution of matters is something which requires careful and close consideration.

Obviously, the introduction of greater cost recovery would clearly need to occur in a coordinated way across jurisdictions to avoid cases artificially migrating to a lower-cost jurisdiction. It will also be necessary to ensure that the introduction of cost recovery does not create a barrier to justice. This could be achieved through the introduction, for example, of appropriate waivers and exemptions.

It is for this reason that the Taskforce has recommended that the Standing-Committee of Attorneys-General (SCAG) consider options for cost recovery to maximise access to justice. 

A limited system of cost recovery for big litigators could potentially benefit a range of court support services such as duty lawyer schemes and legal assistance services. 

Conclusion

Improving access to justice in our civil justice system is an important, but not a simple exercise.

I hope that the Taskforce report will provoke further debate about what more can be done to improve access to justice for all Australians.

In that context, forums such as this are important as ideas from members of the profession such as yourselves will assist the Government to develop its plans and policies.

Thank you.