Pre-litigation Requirements

“I want to litigate. Do I have an obligation to mediate before litigation?”

In some jurisdictions yes you do.

• Federal Court of Australia Act 1976 (Cth), s37N(1), s37N(2)
• Civil Dispute Resolution Act 2010 (Cth)
  • This Act applies to civil proceedings instituted in the Federal Court and the Federal Magistrates’ Court (excluding some proceedings set out in Part 4).
  • It requires parties instituting proceedings in those courts to file a ‘genuine steps statement’ at the time of commencing proceedings.
  • The genuine steps statement must set out the steps taken by the parties to resolve the dispute or to narrow the issues in dispute or the reasons why no such steps were taken.
  • Genuine steps to resolve a dispute are described in section 4 to be steps taken by a person in relation to the dispute which ‘constitute a sincere and genuine attempt to resolve the dispute, having regard to the person’s circumstances and the nature and circumstances of the dispute’.
  • There are also several examples of what may constitute ‘genuine steps’ included in section 4.
  • For more information see In Check Issue 51 (June 2011)

• Superior IP International Pty Ltd v Ahearn Fox Patent and Trade Mark Attorneys ¹⁾
• M & I Samaras Pty Ltd (No 1) v John Holland Pty Ltd ²⁾
  • An example of an optional arbitration clause and delays potentially caused by complying with the agreed dispute resolution procedures

Civil Procedure Act 2010 (Vic), s33 (now repealed) did provide that each person involved in a civil dispute must comply with the pre-litigation requirements prior to the commencement of any civil proceeding in a court in relation to that dispute.

Please note that on 30 March 2011 the Civil Procedure and Legal Profession Amendment Act 2011 (Vic) repealed both Chapter 3 (before a civil proceeding commences) and section 43 of the Civil Procedure Act 2010 (Vic).

The pre-litigation requirements were set out in section 34 (now repealed) and included:

• Taking reasonable steps, having regard to the person's situation and the nature of the dispute
  • to resolve the dispute by agreement; or
  • to clarify and narrow the issues in dispute in the event that civil proceedings are commenced.
• Reasonable steps include, but are not limited to
  • the exchange of appropriate pre-litigation correspondence, information and documents critical to the resolution of the dispute;
  • the consideration of options for resolving the dispute without the need for civil proceedings in a court, including, but not limited to resolution through genuine and reasonable negotiations or appropriate dispute resolution.

Further, each person involved in a civil dispute must not unreasonably refuse to participate in genuine and reasonable negotiations or appropriate dispute resolution which means a process attended, or participated in, by each person involved in a civil dispute for the purposes of negotiating a settlement of the civil dispute or the civil proceeding or resolving or narrowing the issues in dispute, including, but not limited to

• mediation, whether or not referred to a mediator in accordance with rules of court;
• early neutral evaluation;
• judicial resolution conference;
• settlement conference;
• reference of a question, a civil proceeding or part of a civil proceeding to a special referee;
• expert determination;
• conciliation; and
• arbitration