The New South Wales Government announced on 23 August 2011 that it will postpone operation of the laws requiring potential litigants to take reasonable steps to resolve their disputes before initiating court proceedings.
The legislative requirements in Part 2A of the Civil Procedure Act 2005 (NSW) requiring parties to take a range of measures aimed at resolving the dispute or narrowing the issues before commencing proceedings are not yet in operation and have been postponed for 18 months. The steps range from pre-litigation exchange of documents to participation in alternative dispute resolution procedures such as mediation, expert determination or arbitration. The delay reflects the concerns among
practitioners that the new requirements could require parties to disclose commercially sensitive information outside the court-ordered discovery process and may be too costly and time consuming.
Similar pre-litigation requirements came into operation in the Federal Court on 1 August 2011 (Civil Dispute Resolution Act 2011 (Cth)). They require parties to take genuine steps to resolve their disputes before commencing proceedings and a failure to comply with these requirements can lead to adverse costs consequences.
The delay casts doubt on the utility of mandatory pre-litigation requirements and may encourage litigants to commence proceedings in the Supreme Court rather than the Federal Court to avoid the pre-action requirements.