Civil Procedure Amendment Bill 2012 - costs disclosure and expert evidence

The Civil Procedure Amendment Bill 2012 was recently introduced into the Victorian Parliament by Attorney-General Robert Clark and is currently being considered by the lower house. The Civil Procedure Amendment Bill 2012 is an amendment to the Civil Procedure Act 2010.

The explanatory memorandum of the Civil Procedure Amendment Bill 2012 notes that it is being introduced to give additional powers and discretions for the Courts in relation to costs disclosure and expert evidence:

The Civil Procedure Amendment Bill 2012 amends the Civil Procedure Act 2010 to introduce specific powers and discretions for the courts in relation to costs and expert evidence, to amend and create greater flexibility in the overarching obligations and proper basis certification requirements and to make other technical amendments.

The Bill aims to reduce costs and delays for persons involved in civil litigation in Victoria, and improve the effectiveness of the civil justice system. The Bill builds on the foundation established by the Civil Procedure Act 2010 in seeking to give judges and magistrates a clear legislative mandate to proactively manage cases in a manner that will promote the just, efficient, timely and cost-effective resolution of the real issues in dispute in a civil proceeding.

Part 2 of the Civil Procedure Amendment Bill 2012 gives the Court power to require costs disclosure to a lawyer's own client, and expands the type of costs orders which are able to be made:

Disclosure of litigation costs by a lawyer to his or her client is critical for informed decision-making. The Bill gives the courts a discretionary power to order that a lawyer make costs disclosure to the lawyer's own client. The order may be made at any stage of the proceeding. This will allow the courts, in appropriate cases, to increase the parties' access to information in relation to actual and estimated costs and disbursements incurred prior to trial, thereby encouraging more informed decision-making and the settlement of appropriate cases. 

The Bill also clarifies and strengthens the courts' discretionary power to make other costs orders aside from the usual order that the losing party pay the winning party's costs. The Bill provides that the court may make any costs order that it considers appropriate to further the overarching purpose. Specific powers include ordering costs as a lump sum figure instead of taxed costs, ordering a party to pay a proportion of costs or fixing or capping recoverable costs in advance. Such orders avoid or narrow the scope of a taxation of costs. The objective is to increase the use of other costs orders in appropriate cases, thereby reducing the complexity, time and cost associated with taxation. Orders may be made in relation to any aspect of a proceeding, including, but not limited to, any interlocutory proceeding.

Part 3 of the Civil Procedure Amendment Bill 2012 gives the Court greater power to manage expert evidence, including requiring parties to seek directions if the party intends to adduce expert evidence at trial, ordering conferences and joint reports and limiting expert evidence in Court:

Expert evidence plays a critical role in civil litigation and is often essential to the just determination of an issue in dispute between the parties. However, expert evidence can also be a significant source of expense, complexity and delay in civil litigation. For example, the disproportionate use of expert witnesses has the potential to increase costs and delays for parties and reduce the effectiveness of the civil justice system as a whole. The inherent complexity and volume of expert evidence can also limit its usefulness to decision-makers.

The main objective of the expert evidence provisions is to reduce the costs and delays associated with expert evidence by providing clear legislative guidance and encouragement for the courts to actively manage and control expert evidence. The provisions also aim to improve the quality and integrity of expert evidence and enhance its usefulness to judges and magistrates.

Some of the expert evidence provisions consolidate existing powers of the courts, for example in the rules of court and practice directions. Although the existing powers of the court may be sufficient for the court to give directions and impose reasonable limits on any party in respect of expert evidence, clear statutory provisions will have greater impact in encouraging the courts to actively manage and control expert evidence. This will also resolve any argument about the limits of existing rule-making powers and will overcome any constraints on the exercise of powers that exist at common law.

Finally, the Civil Procedure Amendment Bill 2012 amends the certification requirements, including extending certification to any 'substantive document' that a party relies on (with some qualification).

The expert provisions appear to be detailed and, if the Civil Procedure Amendment Bill 2012 is passed and given Royal Assent, practitioners will need to quickly get up to speed with the detail in the bill. The proposed commencement date is 1 May 2012 or on proclamation.

Learned observations on Investec Bank (Australia) Limited v Mann & Anor [2012] VSC 81

On 6 June 2012 I attended the Commercial Court seminar on Investec Bank (Australia) Limited v Mann & Anor [2012] VSC 81 (Investec No. 2).

The decision in Investec No. 2 appears to be quite drastic. That is, the Supreme Court of Victoria dismissed an application for the solicitor to file a notice of solicitor ceasing to act, and required the solicitor to continue to act and be on the Court record in circumstances where the client did not have the available funding or instructions. However Michael McGarvie, the Legal Services Commissioner, noted that Investec had to be put into context which is otherwise not apparent from the judgment.

The context was a preceding decision of Pagone J in Investec Bank  (Australia) Limited v Mann & Anor [2012] VSC 58 (Investec No. 1) in which the defendants' and their solicitor's conduct was brought into question. In Investec No. 1 the defendants made application for leave to file and serve an expert report out of time and by 2 March 2012 (11 days before trial). There was evidence that the defendant's solicitor sent correspondence to the plaintiff suggesting that an expert had already been engaged and that the expert required further time for the preparation of a report. The plaintiff gave evidence that the expert, once contacted by the plaintiff, said that he hadn't been retained at all. Pagone J agreed with the plaintiff, dismissed the application and invited submissions on whether it was appropriate to order costs against the defendant's lawyer (see [13] and [14]). Obviously this sort of background would colour the application for leave in Investec No 2.

Justice Davies, who introduced and summarised Investec No. 2, noted that the procedure used in Investec No. 2 could be a tactic for a party to obtain an adjournment of the trial. The difficulty that I see with a Judge dealing with this sort of application is how to infer that this tactic is being used, when the evidence will never really go to this. Perhaps the notable lack of evidence on certain issues could be used to infer such an intention on the party who was represented by the solicitor seeking leave (e.g., such as the notable lack of evidence on certain matters in Investec No. 2 at [9]).

Solicitor not permitted to cease to act - Investec Bank (Australia) Limited v Mann & Anor [2012] VSC 81

I am attending a Commercial Court seminar tomorrow (6 June 2012) at Monash University Law Chambers on the matter of Investec Bank (Australia) Limited v Mann & Anor [2012] VSC 81. I thought I'd give a brief summary by way of background to bring both myself and my audience up to speed.

Investec was an application before Pagone J for leave to file and serve a notice of solicitor ceasing to act. The trial was listed for 13 March 2012 and it was set down on 9 December 2011. The defendants' solicitor applied for leave to file and serve their notice on 2 March 2012, 11 days before the trial.

The evidence of the defendant's solicitor in support of the application was to the effect that a request for funds was made on 2 March 2012 and the defendants said that they could not provide the funding.

Pagone J held that there were 'special circumstances which render it expedient to retain the solicitor on record', particularly the lateness of the request for funding and the inconvenience to the parties and the Court (at [8]):

8 This is a case where in my view there are “special circumstances which render it expedient to retain the solicitor on the record.” The application was made almost three months after the date was fixed for trial and only eleven days before the trial was due to commence. Madgwicks left their requirement that its clients put them in funds for the trial until 2 March 2012. No explanation was given for the delay (or timing) in imposing or insisting upon funds or for the delay (or timing) in making the application for leave. It is incumbent on solicitors making such applications for leave to satisfy the Court that it is proper and appropriate that leave should be granted. Applications of this kind are likely to be unopposed and that circumstance, coupled with the practitioner’s duty to the Court and to uphold the law, makes it incumbent upon them to be full and frank with the Court asked to grant leave. The removal, or absence, of legal practitioners close to trial is sometimes used as a reason for an adjournment of the hearing with inconvenience to the Court, the other parties and to other litigants. Practitioners ought to guard against the possibility of the Court finding itself with unrepresented litigants close to the hearing date. No evidence was given by Madgwicks of having taken any steps to avoid the inexpedient consequences to the Court, to the plaintiff and to the plaintiff’s solicitors which would arise if the leave Madgwicks seeks were to be granted. Nor, for that matter, have Madgwicks given evidence of any steps to prevent the situation of the defendants finding themselves close to the hearing date without legal representation or having to conduct the trial unrepresented after many months of all concerned knowing of the trial date. The inconvenience to the Court and the additional inconvenience and costs to the plaintiff and its solicitors, that would be occasioned by granting leave at so late a stage, could not be compensated by costs orders and outweigh any burden to Madgwicks of not granting them leave. The requirement in r 20.03(3) of seeking leave is imposed upon legal practitioners for the proper administration of justice. It enables the Court’s work to be performed efficiently and with the confidence of the assistance of practitioners it provides a protection to former clients and serves to protect the position of adversaries.

Pagone J held that the effect of this meant that the solicitors would not necessarily have to conduct the trial for the defendants, but would be required to offer such assistance as the court may require (at [9]):

9 The role Madgwicks may hereafter be required to perform upon my refusal to grant leave is another matter. Their continued role should, as far as possible, be limited to the purpose of the rule requiring leave as explained in Plenty v Gladwin as concerned with the record of the Court and with service of documents. They may be required to continue to receive documents from the plaintiff’s solicitors. It may require Madgwicks to continue to convey to the defendants any documents served for them at Madgwicks. Their status as officers of the Court may conceivably also require them to offer such assistance as the Court may require during the conduct of the trial. Madgwicks may not be required to conduct the trial on behalf of their former clients without funding but may need to give such other assistance as may be required by the Court to lessen or eliminate the adverse impact upon the Court’s record or upon the orderly service of documents upon the defendants as the Court may direct. It is conceivable that greater duties may also arise but they should not be considered in the abstract and without hearing submissions from Madgwicks and others affected.

The decision in Investec has serious implications for litigation legal practitioners as it would appear to require a legal practice to continue working for a client in circumstances where there is no funding available or likely to be available.  With that in mind, I am looking forward to the commentary on Investec from the Bench, Senior Counsel and the Victorian Legal Services Commissioner at the seminar tomorrow night.