Wednesday 5 March 2014

New laws may make discovery less awful!

The discovery process in litigation has broken many a litigation lawyer's heart, and horror stories of junior lawyers spending endless months reviewing documents abound.

The Australian Law Reform Commission recently noted that discovery is often the single largest cost in commercial litigation. It can amount to huge public cost and represents a barrier to justice reducing the effectiveness of the court system.

Indeed, in the Supreme Court matter of Matthews v SPI Electricity Pty Ltd & Ors, Associate Justice Zammit stated:
discovery is a topic that attracts a great deal of attention due primarily to the exorbitant costs that are incurred by the parties and the delay caused in litigation. The Court has long recognised that discovery disputes, large scale unfocussed discovery exercises and the resulting costs, work against the interests of the parties to the litigation, the operation of the civil justice system and ultimately the interest of the community.

Fortunately, the Government has introduced legislation granting courts greater discretionary case management powers to simplify and reduce the costs of discovery and disclosure of documents for parties in civil litigation.

The Justice Legislation Amendment (Discovery, Disclosure and Other Matters) Bill 2014 (the Bill) amends the Civil Procedure Act 2010 (the Act) to give the courts additional powers to better manage the discovery process.

Under the amendments, the courts could order that parties discuss the preparation of a statement of the main issues in the proceeding. This statement would be used in pre-trial processes to narrow the issues in dispute. This approach is consistent with the overarching obligation in s 23(b) of the Act which states that a party must use reasonable endeavours to narrow the scope of the remaining issues in dispute. Traditionally, the purpose of pleadings is to outline the issues in dispute, but they can be long and difficult documents which sometimes fail to adequately do this. The statement will not replace pleadings but will give the courts and litigants a new tool to help litigation run more efficiently and cost effectively.

To ease the costs burden, the court will also be able to order that the party who requested discovery pay some or all of the costs where appropriate. In other words, a court will be able to say to a party, ‘if you want it, you pay for it’.

To further reduce the cost burden on the providing party, the Bill also allows the court, if the parties consent, to order a party to provide to another party all documents within their possession or control that are related to the issues in the proceedings, subject to safeguards to ensure that a party is not prejudiced. This will mean that the requesting party rather than the providing party is responsible for the time and cost of reviewing the documents, again encouraging parties to minimise the cost of discovery. This is a significant amendment and one which it will be interesting to see if it is taken up by commercial litigants and their lawyers, anxious not to forego privilege despite the amendments providing safeguards to ensure that privilege is safeguarded.

Problems can arise when companies use different systems and databases to store their business records. This can cause delay and increase costs as discoverable documents are difficult to identify. The Bill aims to remedy this by providing courts with the power to order that parties give an affidavit which sets out information regarding a party’s document management systems, volume, manner of arrangement, and location of documents. If required the deponent of an affidavit or other suitable person can be orally examined on those matters dealt with in the affidavit.

This will allow parties to more easily identify documents, particularly in the context of complex document storage and other IT systems, and minimise disputes about discovery.

So the new Bill won't go so far as to make discovery enjoyable, but it will hopefully encourage a cultural shift in Victorian litigation to make the process less painful for lawyers and clients alike.


The take home points

  • The Bill builds on last year's rule changes which also aimed to reduce the costs of discovery
  • Clients will need to be able to readily identify their data storage systems
  • Victorian Government parties should seek advice before disclosing documents subject to public interest immunity or state secrecy obligations under the new regime. Remember: the State bears the burden of establishing that production would not be in the public interest.
For more information about discovery or this Bill, please contact:

Andrew Suddick
General Counsel
t 8684 0458

Antonio Mazzone
Managing Principal Solicitor
t 8684 0418

Gabriella Mazzone
Seasonal Clerk

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