5.26 The Consultation Paper discussed the possibility of prescribing a specific threshold test for the granting of leave for discovery in Federal Court proceedings.31 This would be one way to ensure that judges scrutinise more thoroughly and consistently whether discovery is necessary in proceedings. The Consultation Paper outlined two precedents where stricter controls are placed over the use of discovery mechanisms in litigation:
• Federal Magistrates Act 1999 (Cth) s 45, which provides that discovery is not allowed unless the Court declares that it is appropriate, in the interests of the administration of justice; and
• Federal Rules of Civil Procedure 2009 (US) r 26(b)(2)(C), which requires the court to limit the frequency or extent of discovery if it determines that the burden or expense of the discovery outweighs its likely benefit.
5.27 The latter option was proposed for adoption in the Federal Court by Justice Finkelstein, who suggested that ‘good cause’—based on a cost-benefit analysis—
should be ‘a bedrock principle and condition precedent’ for the granting of any leave for discovery.32 Justice Finkelstein noted that:
it seems difficult to avoid the conclusion that the current discovery regime is defective because it does not explicitly force litigants to justify discovery requests (by reference to the costs and benefits) nor does it constrain the trial judge to reject requests not so justified.33
Submissions and consultations
5.28 The Consultation Paper asked whether s 45 of the Federal Magistrates Act should be adopted in the Federal Court—so that discovery would not be allowed unless the Court declared it was appropriate in the interests of the administration of justice—
or whether another threshold test should be adopted, and what that should be.34
5.29 A number of submissions expressed ‘in principle’ support for the idea of a specific threshold test to regulate the use of discovery in the Federal Court—on the grounds that it would ensure the Court made a positive decision on whether discovery was necessary and, if so, for what purpose.35 However, submissions expressed
31 Australian Law Reform Commission, Discovery in Federal Courts, Consultation Paper 2 (2010), Ch 2.
32 R Finkelstein, Discovery Reform: Options and Implementation (2008), prepared for the Federal Court of Australia, [20].
33 Ibid, [10].
34 Australian Law Reform Commission, Discovery in Federal Courts, Consultation Paper 2 (2010), Question 2–4.
35 Contributors from the Large Law Firm Group, Submission DR 21, 25 January 2011; Australian Lawyers Alliance, Submission DR 11, 19 January 2011; Allens Arthur Robinson, Submission DR 10, 19 January 2011; M Legg, Submission DR 07, 17 January 2011; The Commercial Bar Association of Victoria, Submission DR 04, 13 January 2011.
differing views as to what would be an appropriate threshold test. Some suggested that—if any threshold test were to be introduced at all—‘the interests of justice’ should be the benchmark for scrutinising discovery applications, along the lines of s 45 of the Federal Magistrates Act.36 Others supported Justice Finkelstein’s proposal for the introduction of a ‘good cause’ standard including, in particular, a cost/benefit analysis of the proposed discovery.37
5.30 The Commercial Bar Association of Victoria submitted that, while there would be additional cost incurred in meeting a threshold test for discovery, ‘avoiding the need for discovery in some cases and significantly limiting it in others would substantially outweigh any added expense’.38
5.31 On the other hand, some expressed the view that discovery is a vital part of civil litigation in the Federal Court and, as such, additional restrictions on access to discovery would impede the just determination of disputes.39 Others argued that leave for discovery is already appropriately limited by the requirements of s 37M of the Federal Court of Australia Act, effective from 1 January 2010.40
ALRC’s views
5.32 Consistent with s 37M of the Federal Court of Australia Act, the proposed r 20.11 of the Federal Court Rules 2010 provides that ‘a party may apply for discovery only if it is necessary for the just determination of the issues in the proceeding’.41 The ALRC supports the introduction of this proposed rule.
5.33 In the ALRC’s view, this provision would impose a clear obligation on litigants to justify an application for discovery orders—even when those orders are sought by consent of the parties—by explaining to the Court why discovery is necessary for the just determination of issues in the proceedings. In turn, this provision would ensure that the Court scrutinises the need for discovery and makes a conscious decision as to whether discovery is necessary in each case.
36 Public Interest Law Clearing House (Vic), Submission DR 20, 25 January 2011; The Federation of Community Legal Centres (Vic), Submission DR 17, 20 January 2011; Public Interest Advocacy Centre, Submission DR 15, 20 January 2011; Allens Arthur Robinson, Submission DR 10, 19 January 2011.
37 Department of Immigration and Citizenship, Submission DR 13, 20 January 2011; The Commercial Bar Association of Victoria, Submission DR 04, 13 January 2011.
38 The Commercial Bar Association of Victoria, Submission DR 04, 13 January 2011.
39 Queensland Law Society, Submission DR 28, 11 February 2011; Australian Government Solicitor, Submission DR 27, 11 February 2011; Law Society of Western Australia, Submission DR 26, 11 February 2011; Law Council of Australia, Submission DR 25, 31 January 2011; Australian Corporate Lawyers Association, Submission DR 24, 31 January 2011; Public Interest Law Clearing House (Vic), Submission DR 20, 25 January 2011; The Federation of Community Legal Centres (Vic), Submission DR 17, 20 January 2011; Public Interest Advocacy Centre, Submission DR 15, 20 January 2011; Just Leadership Program, Submission DR 01, 7 October 2010.
40 Australian Government Solicitor, Submission DR 27, 11 February 2011; Law Society of Western Australia, Submission DR 26, 11 February 2011; Public Interest Law Clearing House (Vic), Submission DR 20, 25 January 2011; The Federation of Community Legal Centres (Vic), Submission DR 17, 20 January 2011; Public Interest Advocacy Centre, Submission DR 15, 20 January 2011; M Legg, Submission DR 07, 17 January 2011.
41 Federal Court Rules (Cth) [Draft 2010] r 20.11.
5. Access to Discovery and General Discovery 107 5.34 Such reform would not further restrict litigants’ access to discovery procedures, any more than the requirements of s 37M of the Federal Court of Australia Act already limit leave for discovery. The ALRC considers that the inclusive definition of the overarching purpose of civil practice and procedure in s 37M of the Act is reflected in the proposed r 20.11, and will inform judges’ consideration of parties’ applications for discovery orders under the proposed Rules.
5.35 In particular, the legislative intent for the Court to resolve disputes ‘at a cost that is proportionate to the importance and complexity of the matters in dispute’,42 should be taken into account when the Court considers the requirements of the proposed r 20.11. The Explanatory Memorandum to the Access to Justice (Civil Litigation Reforms) Amendment Bill 2009, which introduced s 37M, provides that:
This provision is intended to be a reminder to litigants that costs should be proportionate to the matter in dispute. It is not only the cost to the parties that is relevant. The efficient use of the Court’s resources needs to be taken into account.
However, at the same time, due process will be observed so that justice may be done in the individual case. These objectives will support the intention that both the Court’s and the litigant’s resources are spent efficiently.43
5.36 Any additional resources required of the parties and the Court, in complying with and enforcing the requirements of the proposed r 20.11, would be proportionate to the importance and complexity of each application for discovery orders. For example, where discovery orders are clearly necessary for the determination of issues in proceedings and the orders sought are fashioned to suit the issues in dispute, the amount of time and money invested by the parties and the Court in addressing the requirements of proposed r 20.11 would reflect these circumstances. Equally, where a party seeks orders for discovery that may be considered unnecessary or overly burdensome, greater effort would be required of the party to justify the need for such orders and more detailed consideration would be required of the Court before making such orders. In dealing with the requirements of the proposed r 20.11, the new Federal Court Rules would provide that:
(1) The Court may in making any order in the proceeding have regard to the nature and complexity of the proceeding;
(2) The Court may deal with the proceeding in a manner that is proportionate to the nature and complexity of that proceeding.44
5.37 In any event, the proposed r 20.11 would require all applications for discovery orders specifically to address the need for the orders sought and require the Court in all cases to make a determination as to whether discovery was necessary. In this way, imposing discovery obligations in Federal Court proceedings should be the result of conscious judicial decision making.
42 Federal Court of Australia Act 1976 (Cth) s 37M(2)(e).
43 Access to Justice (Civil Litigation Reforms) Amendment Act 2009 (Cth), Explanatory Memorandum, [18].
44 Federal Court Rules (Cth) [Draft 2010] r 1.31.
5.38 Restricting the use of discovery to cases where it is necessary for the just determination of issues is consistent with the principle of appropriateness—that the justice system should be structured to create incentives to encourage people to resolve disputes at the most appropriate level.45 The proposed r 20.11 of the Federal Court Rules intends that parties who may litigate their case in the Federal Court appropriately without the use of discovery mechanisms do not apply for discovery orders. This rule should draw attention to cases where discovery obligations could be minimised or avoided all together, by requiring the parties and the Court to consider whether discovery is necessary in each case.