Delay in commencement of New South Wales “reasonable steps” legislation
On 8 September 2011, the New South Wales Parliament passed the Courts and Other Legislation Further Amendment Bill 2011 (Bill). The Bill will bring into effect a lengthy postponement of up to 18 months of new legislation, requiring parties to take reasonable steps to seek to resolve a dispute before court proceedings are commenced.
The new legislation, contained in Part 2A of the Civil Procedure Act 2005 (NSW), was due to apply to proceedings commenced on or after 1 October 2011. It is designed to encourage early resolution of disputes by imposing requirements for parties to take reasonable steps, before they commence court proceedings, to seek to resolve their dispute or to narrow the issues that are in dispute between them.
In his initial announcement of the postponement on 23 August 2011 and during an Agreement in Principle speech regarding the Bill on 26 August 2011, the Attorney General has made it clear that the purpose of the postponement is to enable the NSW Government to monitor and evaluate the success of similar provisions which recently commenced in the Federal Court and Federal Magistrates Court. Those provisions are the genuine steps requirements contained in the Civil Dispute Resolution Act 2011 (Cth).
The Attorney General expects that the evaluation by the NSW Government of the success of the new federal court requirements will take approximately 12 to 18 months, with the Bill allowing for the reforms to commence on 1 April 2013 or on any earlier date the Government sets by proclamation.
Addressing the reason for the postponement in his Agreement in Principle speech regarding the Bill, the Attorney General named “senior members of the judiciary, the legal profession and industry groups” as stakeholders who despite supporting the overall intent of the legislation, have raised concerns since the March 2011 election regarding the potential effects of the new requirements. The Attorney General indicated that the concerns held by these stakeholders are that the reforms will increase costs and delays involved in resolution of disputes for the parties involved in disputes and for the courts.
In relation to the long term future of the reforms, the Attorney General noted that the Government does not propose that Part 2A be repealed at this time and that it “remains supportive of the overarching policy objectives” of the legislation. It is clear that a decision about implementing the reforms will be made within the next 18 months.