Litigation is not the only means available for settling disputes:
Mediation is a structured process of negotiation whereby an independent person helps the parties to arrive at a solution to a dispute. There is no rigid procedure but mediation will usually involve a preliminary conference at which the mediator will arrange for any preliminary steps to be taken which may assist in bringing the parties to a solution such as arrangements for exchange of information or reports.
Mediation. This usually involves the mediator making an opening statement followed by statements by each party. Joint or private sessions may then be held to suggest possible strategies for resolving the dispute.
In simple terms, negotiation is informal discussion between the parties to see whether a settlement can be achieved. Negotiation can occur before litigation is commenced or up until a final determination by a court and it is in this way that many disputes are settled without a decision by a Court.
A conciliator usually works by attempting to negotiate between the parties without necessarily bringing the parties together. In some jurisdictions, such as Workers Compensation, it is compulsory for the parties to attempt conciliation before commencing litigation.
Arbitration is similar to a court hearing in that a person, called an arbitrator, hears the evidence and makes a decisions. It is possible for the parties to agree to submit to the decisions of an arbitrator and in some jurisdictions, the court will have its own arbitration scheme to which it may refer matters.
FACTORS INFLUENCING YOUR CHOICE OF PROCESS
The strength of your case.
Usually your solicitor will start assessing the strength of you case by conducting an initial interview with you. At this initial interview your lawyer should be in a position to give you some preliminary advice about the strength of your case. Sometimes additional investigations are required. Your lawyer will analyse the information you provide and the results of any investigations in terms of the law which might apply and whether there is sufficient evidence to prove all of the elements necessary to be successful in court. Your lawyer may well advise you at this point that you have no case or that your chances of success would not justify the expense of litigation. In analysing the evidence available to prove your case there may be other factors which would adversely affect the presentation of your case in court. For example, if an important witness would not be convincing when giving evidence this might influence your lawyer to advise an alternative method of dispute resolution.
Relationships between the parties.
In some cases where there will be an ongoing personal or business relationship between the parties it may be preferable to attempt a more informal method of dispute resolution in order to preserve the ongoing relationship. It may also be the case that because the parties will have an ongoing relationship that they are more amenable to settling a dispute outside the court system.
Litigation is an expensive exercise. Your lawyer should be able to give you detailed information about how much your case will cost and the risks involved if you lose. The high cost of litigation will be an important factor in your decision as to whether to proceed and if so by what method.
Sometimes your case will involve something that needs the urgent intervention of a court and there is no option but to proceed to litigation.
Although the time taken to reach a hearing has reduced considerably over recent years, many people are surprised by the time it takes to resolve many matters in the court system. Your lawyer will be able to give you an estimate of the time it will take to complete the various steps required in your case.
This refers to the fact that the outcome of some less formal methods of dispute resolution are difficult to enforce against the other party, that is, it may be difficult to get them to do what has been negotiated. In some circumstances it is possible to have the court approve negotiated settlements so that those settlements have the force of a court order.
Most court proceedings are public. There may be reasons why you may wish to have privacy maintained through the use of alternative dispute resolution.
This refers to the principle in our court system that when a decision is made by a higher court it will be binding on lower courts. Sometimes a party will want to set a precedent and this can only be done through litigation. In other circumstances a party may wish to avoid setting a precedent and so will seek to use alternative dispute resolution methods.
It is often the case that a combination of methods is used such as where litigation is commenced but settled by the parties by negotiation prior to a hearing.
This section aims to serve as a guide to what is involved in commencing litigation and the sorts of decisions to be made by and your lawyer.
Preparation of the case
Once your lawyer has conducted an initial interview with you he or she should be in a position to give you preliminary advice about you case.
There are two main factors which your lawyer will consider at this stage:
Cause of Action. This refers to whether the information you have given your lawyer, or which can be gathered later, will give you a case under existing law.
The appropriate jurisdiction. The jurisdiction of a court refers to the authority of the court to hear and determine a matter. Different courts can hear different causes of action and there are different monetary limits in different courts.
Commencing the proceedings
The rules of each court prescribe different methods for commencing different types of proceedings. In many cases the document required is known as a statement of claim. The statement of claim and the defence (the defendant's answer in reply to the statement of claim), together with other documents such as a cross-claim are known as pleadings.
Statement of claim
The statement of claim is the most common form of originating process or document which commences proceedings. A document known as a statement of liquidated claim is used where the claim is for a known amount which does not require the court to make any enquiries or hear any evidence as to the amount of a claim. A statement of liquidated claim would, for example, be used in a simple debt matter whereas an ordinary statement of claim would be used where the claim is for damages in a personal injury matter and the court is required to hear evidence in order to determine the amount of damages to be awarded.
What happens next?
Once an originating process has been filed, the court rules prescribe a time for certain steps to be taken by the defendant. In most courts , failure to carry out the prescribed steps will entitle the plaintiff to have default judgement entered in their favour.
In an attempt to reduce the time involved in litigation some courts have introduced systems of case management. Some of the features of these systems are:
actions must not be commenced until they are ready to meet the requirements of the court's standard timetable as to preparation and hearing
some documents and information have to be made available to the other side at the commencement of the action. For example, in a personal injury action in the District Court the plaintiff must serve with the statement of claim any medical reports available to him and which he intends to rely at hearing.
adjournments and extensions of deadlines are granted only in exceptional circumstances
as many matters as possible are finalised through alternative dispute resolution mechanisms where available.
Settlement / Offers of Compromise
it is always open to the parties to settle their dispute be negotiation prior to the final determination. Courts have developed rules and procedures concerning offers of compromise. The purpose of these rules is to facilitate the early compromise of proceedings by permitting the parties to make formal offers of compromise which, although they cannot be taken into account if the matter proceeds to hearing, will be relevant to the court's orders as to who will pay costs. The importance of this is that a failure to accept an offer which is within a certain range of any award made at hearing will result in a special costs order in favour of the party who made the appropriate offer.
Interlocutory applications are applications to the court before the hearing.Interlocutory applications are usually made by filing what is known as a notice of motion, which is then served on all the affected parties and the presenting an oral argument (a motion) in court. Notices of motion are usually accompanied by affidavits - statements of a person's evidence in support of a motion sworn before a solicitor or a justice of the peace.
Some Common Interlocutory Applications:
If a person wishes to obtain some more specific information about what appears in a statement of claim or a defence or other pleading document and these cannot be obtained from the other party's solicitor by informal means, it is possible to apply to the court for an order that these be supplied.
Discovery refers to a process whereby each party can examine documents held by another party which are relevant to a matter in issue. In some jurisdictions a party can issue a notice to another party requiring inspection of certain documents or application can be made to the court for access to a class of documents. Some documents are protected from examination by another party such as documents which are protected by legal professional privilege, that is documents which have been brought into existence for use in getting or giving legal advice or for use in litigation.
Interrogatories involve serving on another party a list of questions to obtain sworn answers. Such evidence may then be used at the hearing. There are strict rules which apply to the kinds of questions which may be asked in interrogatories. It is possible to object to interrogatories on the grounds that they lack relevance, are vexatious or oppressive or are privileged. A court can order that further answers be supplied. Failure to comply could result in a party's case being struck out.
Where a person's medical status is in issue it will often be the case that both sides will require that the person be examined by their nominated specialist. Usually medical examinations are organised informally between the parties but the court rules also permit a notice to be served requiring medical examination. The party serving the notice must meet the reasonable travel and other expenses of the party undergoing examination. The court can also intervene to order that a person undergo medical examination.
Withdrawal and discontinuance
It is possible for a plaintiff to withdraw and discontinue proceedings at any time before trial with the court's approval.
Setting Aside Default Judgement
One of the most common types of interlocutory applications is an application to have default judgement set aside. A default judgement is one which has been entered where a defendant has failed to take an essential step within the time prescribed by the court rules, such as failing to file a defence within 28 days in the District Court. To have default judgement set aside a defendant applies to the court and provides affidavit evidence which sets out the reason for the default and shows that they have an arguable defence. While it is relatively easy to have default judgement set aside the court will usually order that the defaulting party pay the other side's costs of the motion and the costs thrown away in having default judgement entered.
A subpoena is a court issued document requiring a party to attend the court to produce documents, give evidence or both. A prescribed fee is paid to have the court issue a subpoena and it is also required that conduct money is paid to cover travel and other reasonable expenses which will be incurred in complying with a subpoena. Subpoenas must be served within a reasonable time of the date for compliance and the court rules prescribe specific time limits in some circumstances.
ENFORCEMENT OF JUDGMENTS
Winning in court is only half the battle. Unfortunately it is not always the case that a successful plaintiff is automatically paid any money due to them.
It is always possible, even after judgement has been obtained, to negotiate payment. Whether you are a judgement debtor (the person liable to pay the money)or a judgement creditor (the person owed the money) it may be that payment of some money up front or over time is an acceptable solution.
While not strictly a method for enforcing judgements, bankruptcy (or in the case of companies, winding up) may be an option if the amount of the debt is greater than the threshold required. You should be aware that this is a costly and highly technical legal area and carries the risk that you open the door to all other creditors , some of whom may have priority over you by reason that they have some security over some of the assets of the bankrupt person.
Examination of the Judgement Debtor
This is a procedure whereby the court issues a summons requiring the judgement debtor to attend court to answer questions about their financial situation and to bring specified documents such as tax returns. If the debtor fails to attend the court may issue a warrant for the person's arrest. The procedure does not in itself provide a means of enforcing judgement but it may provide important details which may help determine which step to take next.
Attachment of debts and garnishment of wages
This refers to a procedure whereby the judgement creditor can obtain a court order requiring that a third party who is liable to pay money to the judgement debtor pay it instead to the judgement creditor. The order is known as a garnishee order. It can apply to wages and salary.
Seizure and sale of personal property
Where a judgement creditor knows that the judgement debtor has assets, it is possible to obtain what is known as a writ of execution. This enables the bailiff to seize and sell personal property such as vehicles, furniture and equipment in satisfaction of a judgement debt. There is a similar procedure available in respect of land although it is not often used.
Application to pay by instalments
As suggested earlier the parties can agree to pay by instalments. In the District and Local Courts, it is also possible for a judgement debtor to apply to the court to pay by instalments. This application is in writing and supported by an affidavit as to the judgement debtor's property and means.
COSTS OF LITIGATION
Solicitor/client costs are those paid to a solicitor for work done on the instructions of a client. You will be liable to pay these costs to your solicitor whether you are successful or not, unless your solicitor has agreed to do the work for you on the basis of a conditional costs agreement (costs plus a premium only if your case is successful). It is compulsory for solicitors to disclose certain things about their costs before you instruct to proceed to do legal work on your behalf.
In disclosing costs, your solicitor should also give you information about money to be paid out on your behalf such as for barrister's fees, searches,expert reports and the like. If there is a significant increase in the estimated cost your solicitor is obliged to advise you of this immediately.
Party/party costs are those costs which may be paid to a party to proceedings by another party as a result of an order of the court. The distinction between the two is important because there will usually be a gap between the solicitor/client costs which a party is liable to pay and the costs which may be recovered from the other party if successful.
Courts have the discretion to award costs in proceedings, that is to order that one party pay the other party's costs. Costs are usually awarded to the successful party although there are some exceptions.
It is an important feature of litigation that there are strict limitations on the time within which litigation can be commenced.
Limitation periods are prescribed by legislation which includes the Limitation Act and other statutes dealing with specific types of actions. A few examples:
The Motor Accidents Act provides that actions for damages for personal injuries sustained in motor accidents are to be brought within 3 years of the date of the accident. In addition, the Motor Accidents Act prescribes that other steps must be taken such as reporting to police within 28 days and serving a notice of claim on a third party insurer within 6 months of an accident must be carried out if a person making a claim wishes to commence court proceedings.
Claims under the state Workers Compensation Act are generally required to be commenced within 3 years of the accident.
Contract claims are generally required to be commenced within 6 years of the date on which the cause of action accrued.
Actions under the federal Trade Practices Act must be brought within 3 years of the cause of action. If the cause of action is against a manufacturer for defective goods there is an additional requirement that actions be commenced within 10 years of the date of first supply of the goods by the manufacturer.
It is possible in some limited circumstances to apply to the court for an extension of time for commencing proceedings.
This Information Outline is provided courtesy of Craddock Murray Neumann who are experienced in this area of law. They are located at Level 1, 255 Castlereagh Street Sydney NSW 2000 or call them on (02) 9283 4755 if you would like more information on the legal topic, or you wish to obtain formal advice regarding your situation.
Craddock Murray Neumann believe in the ethical practice of law. This means that we strive to protect and advance the legal rights of our clients, whether they are government departments, large corporations or private individuals. This also means that we will not run cases merely for the sake of running up legal costs at your expertise. We try to find practical, cost effective solutions to your problems. If you need to fight we will be there with you. We have set our fair share of precedents but our clients don't always want to make legal history. We will try to achieve what you want.