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The high price of justice

By Nicholas Gruen - posted Friday, 29 August 2008


Nazi sex romp!

Now I’ve got your attention I’m going to talk about legal procedure. After the lecture we’ll return to the sex romp.

Attorney General Robert McClelland has joined the chorus of condemnation seeking better access to our courts. In cases both large and small, the cost of litigation is often hugely, absurdly - to quote the Attorney - “totally disproportionate” to the value of the claim.

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No one’s solved the problem - anywhere. We haven’t solved it for the same reasons we’ve not tamed over-regulation. The devil’s in the detail. And as life gets more complex and computerised, the detail just keeps growing.

In our system the opposing sides - generally their lawyers - construct the case by following the rules of a procedural game, each trying to get the upper hand. The judge’s role is to adjudicate this contest; and only indirectly to find the truth. This provides cover for delay, denial and obfuscation.

As High Court Justice Hayne recently put it:

Usually only one side … will be anxious to isolate the determinative issue in the case and have that decided quickly. The other side will have powerful reasons to avoid that being done.

The biggest shakeup of the system occurred where it all began. In the late 1990s, English reforms stemming from Lord Woolf’s comprehensive report introduced much stronger disciplines on parties to solve or narrow disputes before trial and greater judicial powers to manage cases.

The reforms succeeded in clearing the backlog in the courts, but failed to the extent they’ve simply pushed costs back to earlier pre-trial interlocutory proceedings.

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In Australia too, despite bold, Woolf-like, legislative declarations that the “overriding purpose” of civil procedure “is to facilitate the just, quick and cheap resolution of the real issues in the proceedings” (NSW Civil Proceedings Act 2005), huge cultural and structural problems remain. Judges are often uncomfortable managing cases. And as Justice Sackville has argued, sufficiently vigorous refusal to indulge a litigant in putting their opponent to the test on every minor point could lead a case to miscarry on appeal for bias.

Under the leadership of Chief Justice Spigleman, New South Wales has led on civil procedure - sufficiently to become business’ jurisdiction of choice. But it’s no legal nirvana. Spigleman complained recently that the flag fall for discovery of documents for a significant commercial dispute is often $2 million.

To match or better NSW’s legal competitiveness, the Victorian Law Reform Commission has been hard at it, recently publishing a sensible and comprehensive 700-plus page report, its 177 recommendations running over 20,000 words.

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First published by the Australian Financial Review on August 26, 2008.



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About the Author

Dr Nicholas Gruen is CEO of Lateral Economics and Chairman of Peach Refund Mortgage Broker. He is working on a book entitled Reimagining Economic Reform.

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