A. Pleadings
In relation to civil procedure in the United States I have referred to the pleading, or lack of it. The basic approach is to simplify the pleadings and expand the discovery. It is assumed that issues cannot be defined until a late stage in the proceedings, in particular, until after discovery. For this reason the pleadings are often amended. The pleadings do not define the issues, they merely give notice of the general nature of the claim or defence.63 An explanation for this occurring in some cases is the need for speed due to either a short period of limitation for action or, less acceptably, concern to be the first plaintiff in a class action.
The approach which I take is quite different. I consider that the issues, both as to law and fact, should be defined by the pleadings. New South Wales has a system of law which includes private rights. If a member of the community wishes to enforce such a right, I do not see why he should not state what right he seeks to enforce and the facts on which he relies. I am fortified in my approach not only by the Scottish system which proceeds on the same basis, but also by comments by American lawyers, in particular one of considerable litigious reputation, who felt that accurate pleading could be used with advantage.
There are certain classes of cases which are susceptible of an individual method of pleading. For example, the common money counts which are not only time hallowed but are recognized in the new procedural rules in New South Wales. I seek to isolate one such class of case later in this report, namely, personal injury cases.64
Recent suggestions that pleading be by affidavit should not be allowed to obscure the purpose of pleading, namely to identify the issues. It is one thing to verify the pleadings on oath, or, as I have mentioned,65 require an affidavit, relating to evidence, to demonstrate a triable issue. It is quite another to replace pleadings by affidavits. To do that is to follow the United States system of taking the evidence first and I have referred to the problems which this causes.
It has been said that, if the facts are stated, a good lawyer will know the cause of action or defence relied upon. If that is so, why should not the proponent of the facts state the cause of action or defence on which he relies? It is becoming common to use the summons procedure of the Commercial List to avoid the delay elsewhere in the Common Law Division of the Supreme Court, and thus actions with complicated issues are being conducted without pleadings. If this practice is to continue, there should at least be a requirement that the issues be defined in some way.
I recommend that a pleading should commence by stating the cause of action or defence upon which the party relies. The pleading should then set out the facts relied upon to support the cause of action or defence.
The present system of description of what were once third parties has become confused under the present rules. I suggest that once a party is described, for example “second defendant”, that description should be maintained.
In my view, it is in the interest of the community that litigation should have an end. In particular, if a plaintiff does not proceed with his action, it should be dismissed. In California, an action which does not come on for trial within five years is dismissed.66 I consider a similar provision should apply in New South Wales.
I recommend that, subject to the power of the court to grant an extension, any civil action, the trial of which has not commenced within five years of the date of the filing of the initiating process, should stand dismissed. The court could well, and in fact should, accept the obligation to notify the parties of the approach of the time limit. This is another area where a computer may be useful. Although I do not suggest that this provision should replace the right of a party to apply to strike out the opponent’s pleading for want of prosecution, in practice it would largely make that remedy unnecessary.
B. Pre-trial Discovery
Earlier in this report I have mentioned67 that, in the United States, pleadings have been effectively replaced by pre-trial discovery. The pre-trial discovery involves two aspects:
I have referred68 to the absence of a requirement of relevance.
It is said that the procedure allows a rich defendant to “string out” a poor plaintiff but it is also said that it has enabled poor plaintiffs to find the evidence to make their cases. There are abuses; for example, the procedure can be used to examine the books of a company as a prelude to a takeover. It is used by the government in cases against large corporations to enable the government to assemble its evidence. In such cases, pre-trial discovery is of no use to the defendant.
It seemed to me that the oral deposition was of more significance in small cases, particularly accident cases. There is a benefit in obtaining at an early stage the testimony of a witness to an accident, but it seems to me that a statement made to an investigator may often be just as effective and a great deal cheaper.
The deposition is used a great deal to challenge the evidence of a witness at the trial by reference to inconsistencies. On the other hand, a party or witness is entitled to know what impeachment evidence will be used against him. If the evidence is a movie film, the plaintiffs attorney is entitled to ask if and when the film has been taken, and for its production. Accordingly a witness can tailor his evidence.
The use of interrogatories and the discovery of documents seemed to me to be of more significance in more complex cases. A leading anti-trust lawyer commented that any important discovery will be in the documents, nothing important arises from the oral examination.
In a case concerning the BART (Bay Area Rapid Transit) subway system in San Francisco, eleven million documents have been discovered. One firm of attorneys I visited had more than 20 current cases in each of which more than 20,000 documents had been discovered. A computer company has designed a computer programme to deal with discovery.
In a complex case, discovery is conducted in waves. The first wave is to discover the identity of witnesses and documents. The second wave is to examine the witnesses and documents. The third wave is to deal with any special issues.
Lawyers generally were concerned at the mounting cost of litigation caused mainly by the discovery procedure. Individual comments were that there should be a return to a system of pleading, that the court should exercise more control over the process, that the appellate courts should lay down tighter procedures, that the “fishing” proviso should be removed and that the English system, limited to relevant documents, is preferable.
Some lawyers use the procedures to put pressure on their opponents, so to harass them that a settlement is forced. Apparently some firms of attorneys have standard interrogatories which they administer in all cases. It was suggested to me that disciplinary action should be taken against such firms for abuse of the process of the court.
One reason given for the creation and use of systems of reference to arbitration is that such arbitration proceedings do not have provision for discovery.
There are interlocutory procedures by way of motion to object to, or to enforce, discovery. I observed some of these motions. One which, I think, illustrates the use to which the procedure can be put, took place in New York. The plaintiffs were black prisoners and the defendants were four officers of the prison department. The plaintiffs alleged that the defendants had discriminated against them because they were anti-Ku-Klux-Klan, active NAACP and black. Apparently there had been fires in a number of cells in the prison, not being cells in which the plaintiffs were housed. The cells in which the fires occurred contained both black and white prisoners. The prisons department had conducted an investigation into the fires.
The plaintiffs sought discovery of the results of investigation on the basis that:
(a) it may have mentioned the defendants; and
(b) it may have indicated that the defendants had, on another occasion, and to other people, exhibited anti-black behaviour.
Unfortunately, the defence was conducted by a counsel whose only submission was to complain continually that she could not cope with the plaintiffs’ claims for discovery as she had other matters to deal with. The plaintiffs were represented by a lawyer from NAACP.
One of the matters which concerned the judge, although not argued before him, was the problem of the publicity which would arise if the NAACP obtained the information contained in the results of the investigation. Apparently the litigation arose because the NAACP alleged that the administration of the prisons department was anti-black. Since the litigation had commenced, the city had appointed a black as controller of prisons and that had “defused” the situation to a large extent.
It should be borne in mind that the present practice in New South Wales, of making subpoenas returnable at the directions hearing and allowing access to the material produced, provides a benefit largely co-extensive with the benefit of the United States discovery procedure.
I recommend that the existing pre-trial discovery procedure in New South Wales be retained.
C. Admissions and Dispensing with Formal Proof
It is said that those who framed the present United States pre-trial rules thought that the procedure for admissions would be of greatest value. In fact, it is not greatly used and has turned out to be of little value. It is not the practice in the United States for parties to seek admissions. To some extent the issues are limited by the pre-trial order, where there is one, but, as the parties are usually entitled to have issues of fact determined by a jury, no great help is obtained in this area.
Elsewhere there seems to be little use of admissions, although generally practitioners expressed the view that there should be greater use of them.
If the judge is an inquisitor, he need not be concerned with admissions or formal proof, but if the adversary approach is to be maintained, a properly functioning procedure for admissions and for dispensing with formal proof must be brought into practice. There is little use in New South Wales, at present, of admissions or of dispensations from formal proof. It is hard to suggest that this situation arises because of any lack of power in the court.
The Commercial Causes Act, 1903, was repealed by the Supreme Court Act, 1970. Section 6 (b) and (e) of the former Act provided that a Judge of the Supreme Court might:
dispense with the technical rules of evidence for proving any matter which is not bona fide in dispute, also with such rules as might cause expense and delay arising from commissions to take evidence and otherwise; and without limiting the generality of this power, dispense with the proof of hand-writing, documents, the identity of parties or parcels, or of authority;
and require either party to make admissions with respect to any question of fact involved in the cause.
Before the repeal of the 1903 Act these powers were sparsely invoked.
The matter is now governed by section 82 of the Supreme Court Act, 1970, which provides that:
(1) The Court may at any stage of the proceedings -
(a) dispense with the rules of evidence for proving any matter which is not bona fide in dispute, also with such rules as might cause expense and delay arising from any commission to take evidence or arising otherwise; and, without limiting the generality of this power, dispense with the proof of hand-writing; documents, the identity of parties or parcels, or of authority; and
(b) require any party to the proceedings, not being a minor or person of unsound mind, to make admissions with respect to any document or to any question of fact; and in case of refusal or neglect to make the admissions may, unless the Court is of opinion that the refusal or neglect is reasonable, order that the costs of proof occasioned by the refusal or neglect shall be paid by that party.
(2) An admission made under paragraph (b) of subsection one of this section -
(a) shall be for the purpose of the proceedings in which it is made and for no other purpose;
(b) shall be subject to all just exceptions; and
(c) may, with the leave of the Court, be amended or withdrawn.
(3) The Court may give leave for the purpose of paragraph (c) of subsection two of this section on terms.
With the possible exception of any problem which may arise from the words “bona fide in dispute” there is a clear opportunity for the court to influence an obdurate party to allow matters not in issue to be excluded from the trial. In discussing this area, I was told, “You do not need to amend your rules, you need to amend your judges”. Or, as an American judge said to me, “If the court orders an admission, and it is not made, the court has power to deal with contempt of its orders”.
At present, an issue can be contested for one or more of the following reasons:-
(1) There is a genuine dispute.
(2) There is a hope that the party bearing the onus will not be able to discharge it.
(3) For the purpose of obtaining a tactical advantage such as forcing the other party to call a witness from whom other evidence can be extracted or who will bring discredit upon the party calling him.
(4) The party, or his legal adviser, does not know enough about the issue either because the information is not available or through lack of investigation.
(5) Sheer obstruction.
Clearly a number of these reasons are not acceptable and, to a large extent, the fact that issues are contested for unacceptable reasons must be attributed to a reluctance on the part of the bench to act positively. While the bench is more effective if patient and forceful than if intemperate, in this area it may be necessary for there to be either a few draconian orders or great persistence to enforce acknowledgement that proof of matters about which there is no dispute cannot be allowed to prolong, and increase the cost of, proceedings generally and the trial in particular.
I recommend that there should be greater use of the procedures provided by section 82 of the Supreme Court Act, 1970.
D. Pre-trial Conference
In New South Wales, an attempt is made, at a directions hearing or callover, to define and limit the issues in an action, to estimate its hearing time and to ascertain dates convenient for counsel and witnesses for the hearing. In certain cases, before the directions hearing or callover, the parties complete a schedule which is intended to isolate the factual issues.
In London, the matter is dealt with by summons for directions69 which I felt worked more efficiently than our system. In the United States, the procedure varies. A typical procedure is set out above.70
When I was in Denver, the Denver District Court was considering proposed rules which were aimed at avoiding a formal pre-trial conference y requiring the counsel to meet informally at least six weeks before the trial to:
(a) exchange and number all proposed exhibits;
(b) exchange a list of witnesses;
(c) prepare jury instructions (this is a matter of some importance in the United States, although rarely treated as a formal step in our procedure);
(d) conduct good faith settlement negotiations;
(e) explore matters which can be agreed.
The parties are then required to file a trial data certificate dealing with undisputed facts, disputed issues of fact, points of law, witnesses, exhibits, special damages, settlement negotiations and matters relating to the trial. The rules provide for sanctions for failure to comply with them, as well as the awarding of expenses, including attorneys’ fees, against the party in default or his attorney. This is an interesting example of the growth in the United States of the use of party and party costs.
Behind every system of pre-trial conference or procedure is the objective, described to me by the framers of the proposed Denver District Court rules as utopian, of cases being fully prepared well before the trial date. It is said, and the view is held in New South Wales, that if cases were to be so prepared there would be more settlements generally and less settlements at the door of the court. I accept the view expressed to me in England that you cannot prevent settlements at the door of the court. There are factors, other than the state of preparedness of the lawyers, which operate on settlements.
It seems to me inefficient and tedious to prepare a case for trial twice. I prefer to deal with the problem of court door settlements of, say personal injury cases, not by requiring preparation for trial some six weeks before hearing but by use of a master calendar listing system with a sufficiently large volume of cases to enable use to be made of the statistical rate of settlement. To create a sufficient volume, it may be necessary to sit judges from other divisions in the particular division for say one month, or to use Recorders. This type of allocation of judicial resources can clearly be better handled by a single court using modern administrative methods.
I take the view that, with cases involving simple issues and a short hearing time, there is need for no more pre-trial conference than the present New South Wales District Court callover. In more complex cases, there is a benefit in a more detailed pre-trial conference. This was the experience in California where pre-trial conferences in other than complex cases were discontinued when it was found that they doubled costs. In California judges are elected. It was suggested to me that the federal judges, who are not, can afford to make themselves unpopular with the lawyers who appear before them and insist that things be done.
In complex cases I consider that there is a very real benefit in the judge sitting down with the parties, or on his bench if he prefers, and having a full pre-trial conference. There is not the scope which exists in the United States for making findings on the facts, that is giving summary judgment on a particular issue, as the judge would not have available the depositions of the witnesses although he would have the agreed bundle.71 But he has power to order admissions and to direct methods of proof.
I recommend that in complex cases the judge should hold a pre-trial conference four to six weeks before the hearing.
E. Settlement Conference
The formal settlement conference is something which I encountered only in the United States. I discussed it with a great number of lawyers. Opinions differed as to whether it is effective as a general procedure. Most opinions were that some judges are more effective than others in its use, which, trite though it may seem, is really the key to the use of the procedure.
In the New York Supreme Court, the parties are called before a panel of three judges and asked why the case cannot be settled. If it still does not settle, it is fixed for hearing the next day or at least within the next week. In Denver, where the court has an individual calendar system, a test scheme of sending cases to another judge for a “no holds barred” settlement conference has produced good results. On the other hand, a mandatory settlement conference scheme introduced in California in 1975, produced, in its first six months, fewer settlements than before.
The trial judge in the United States has power to review a verdict. That is, if the jury brings back a verdict with which he disagrees, he has power to substitute a verdict in its place. Where the trial judge conducts the settlement conference, some judges inform the parties that if a verdict outside a particular range is returned, he will alter it. This practice was the subject of criticism, which leads to another role of the settlement conference. If a lawyer cannot convince his client to accept a settlement, he arranges a settlement conference at which the judge’s attitude is hoped to be persuasive.
In relation to the judge’s attitude, in most States, a party can make a peremptory motion for one change of judge, that is, to veto a particular judge for that case. Sometimes it has to be done on cause but the cause is easily made out. In addition, if a lawyer has lodged a complaint about a judge he never has to appear before that judge again.
There are problems where the trial judge holds the settlement conference, which occurs in most federal courts, and the case is not to be heard with a jury.
The opinion which I found most persuasive was that of a court administrator who said that whatever is saved in trial time is lost in pre-trial time. The procedure does not speed things up or dispose of more cases. I do not recommend that such a procedure be instituted in New South Wales.
F. Juries
In the United States, litigants have a right to a jury in criminal cases and in what would have been common law cases as opposed to equity cases. The right, if that is really the appropriate term, operates in a much smaller area in New South Wales.
The abolition or retention of juries is often an emotional issue, a reflection of community views on the one hand and of allegations of inefficiency on the other. I have referred72 to the moves in the United States to eliminate inefficiency by modern technology. The size of the problem in the Unites States is illustrated by the estimate given to me that a small percentage reduction injury panels would save $US50,000,000 a year.
The reflection of community attitudes can be very apparent. A stockbroker suing a client, or a newspaper defending a defamation action, is left in no doubt as to the response of the community. A doctor who had not harmed his patient will not be convicted of illegal abortion by a jury. In the area of damages for personal injuries, juries have not followed the massive verdicts awarded by some judges. Personally, I consider this reflection of community attitudes to be important.
The ability of the jury to express the attitudes and prejudices of its members in its verdict, particularly in a racially mixed country, is significant. I have referred to the demise of the jury in South Africa.73 The composition of juries in New York has been affected by the change in population. It is in this context that the examination of prospective jurors in the United States must be considered. An important element of such examination is to ensure that the juror will accept the judge’s rulings as to law, even if his personal inclination is to find otherwise.
Although it is said that jury trials take longer, an impression of mine was expressed by an American judge. A jury trial need not take longer if properly prepared. On the other hand, if a judge sits alone, he has to give detailed findings of fact which takes time. A jury cannot reserve its decision.
In Los Angeles, and no doubt elsewhere, prospective jurors are given a juror’s handbook. I feel sure that something of this nature would be of assistance to New South Wales jurors and that there are other aids which jurors would appreciate.
From my observation of the jury system at work during my investigation, and from the comments made to me, I am happy with the operation of that system in New South Wales, bearing in mind the balancing of different interests which is involved. I make no recommendation for change.
G. Small Claims
There is a basic social evaluation involved in any investigation of this subject. Should society bear the cost of determining where a small loss should fall? Is the loss of $5, the cost of a cab-fare or a carton of cigarettes, really an injury which the law should protect? If there is persistent cheating of consumers, or of anyone for that matter, is not the criminal law better able to deal with the situation?
A distinguished American judge felt that consumer complaints should be dealt with by the public sector rather than by the private sector. The consumer should be reimbursed by the State which should pursue the defaulting merchant. Such a step involves no great advance in principle on the rationale of a National Compensation Scheme. And it may be that the cost to the community of such a scheme would be less than the provision of courts or other tribunals. I have not seen any figures, but the cost to have, say a Master, sit for an hour must be in the order of $100. In California it costs the court $1,500 for a hearing day.
If the community accepts that it should provide a tribunal for the resolution of small claims, a decision must be made as to whether that tribunal should be within the existing court structure or should be separate. In England, the Lord Chancellor said to the Council of County Court Judges in 1972:74
... a review of County Court Procedure to make it more adaptable to situations where litigants wished to conduct their own cases, and perhaps later by extending once again the jurisdiction of registrars ... [is] a far more practicable approach and a far more economic use of skilled manpower and court accommodation than to man and staff a new range of courts to do part (but not all) the work which County Courts already do very well.
In New Zealand, the Small Claims Tribunals recently introduced will be divisions of Magistrates’ Courts.75
There is a view that the speedy processing of small claims helps debt collectors and that the consumer feels oppressed. I suggest that that stigma will be avoided if debt collecting is confined to a separate default registry. It must be noted that debt collecting is, with few exceptions, excluded from the jurisdiction of the New Zealand Small Claims Tribunals.76
In systems providing voluntary submission of small claims to informal arbitration, the trader has been criticized for refusing to submit, the suggestion being that he has no defence. On the other hand, a trader with a genuine defence could expect to receive a more impartial hearing before the courts and he may wish to take advantage of the normal procedures available to him there.
Whatever tribunal is used to determine small claims, clear information should be available to the public, preferably by way of a short handbook, explaining the workings of the tribunal and how a member of the public brings a claim before it.
H. Arbitration
This section is concerned, not with arbitration of disputes under building contracts, insurance policies and suchlike, but with reference of actions, generally small personal injury actions, already before the court for determination by an arbitrator, usually a practising lawyer.
The Los Angeles Attorneys’ Special Arbitration Plan commenced in 1971. It has handled some 800 cases and it is estimated that it has saved in the order of $10,000,000 in court time. The original limit of recovery was $7,500, it is now $15,000 and it is suggested that it be increased to $25,000.
The plan is sponsored by the association of defence lawyers and the association of plaintiffs’ lawyers. The arbitrators are lawyer volunteers who sit for one morning and one evening each year. The hearings take place at the courthouse.
Arbitration can be sought at any time after filing suit and the average time between the initiation of arbitration and a decision is 35 days compared with a wait of some years for a court trial.
A comprehensive review has been made of arbitration plans in the United States.77
The Los Angeles County Superior Court also has a Personal Injury Short Cause Programme. Cases come under this programme if the parties waive a jury and agree to trial by one of a panel of judges. There are rules simplifying the introduction of evidence. It is said that the trial time is reduced from three days to three hours.
My impression is that the congestion of personal injury cases in the New South Wales District Court is not such as to require use of an arbitration plan. We do not have juries in motor vehicle cases, the great proportion of that category, and we do not have the discovery procedures common in the United States, which the arbitration plans are partly designed to avoid. But note should be taken of an important aspect of such plans. That is the basic premise that these cases should be brought on for trial as swiftly and as simply as possible.
If congestion of trial time for personal injury cases does become a problem, I suggest that consideration be given to the introduction of an assessment procedure along the lines suggested by Mr. R. M. Porter, the General Manager of the Government Insurance Office of New South Wales, at a seminar conducted by the Law Reform Commission in October, 1973. The procedure suggested was that each party submit all relevant material on the issue of damages to a court assessor so that he may assess the quantum of damages. If a party does not accept the figure and wishes to litigate the issue, he may do so but he suffers a penalty if he does not improve his position. Interestingly enough, under the Wayne County, Detroit, Mediation Programme, if a party rejects the mediator’s decision and does not improve his position at the trial by at least 10 per cent, he pays the other party’s costs of the trial.
I. Personal Injury Litigation
In 1968, when the N.S.W. Law Reform Commission was drafting the Bill for the Supreme Court Act, 1970, and the rules thereunder, I submitted certain proposals to the Commission relating to pleading in actions for damages for personal injury. The Commission informed me, with great courtesy, that it was not prepared to give effect to my proposals because they would be a major innovation and because they would involve the prescribing of forms. I have raised these proposals with various bodies on several occasions since with no effect. Nothing daunted, I put them forward again in an expanded form.
I recommend above78 that certain categories of the court’s business be treated separately. In my opinion, actions for damages for personal injury arising from motor vehicle accidents and industrial accidents, come before the courts in such a volume, and involve such issues of fact and law, as to make those actions amenable to be dealt with separately from other actions and in a way which will increase the efficiency of the courts. There is neither magic nor anything new in so treating a category of actions. As Bullen and Leake have said of the common indebitatus counts: “simple contracts, express or implied, resulting in mere debts, are of so frequent occurrence as causes of action, that certain concise forms of counts have been devised for suing upon them.”79 More recently particular forms of pleading and procedure have been adopted for matrimonial causes.
I recommend that actions for damages for personal injuries arising from motor vehicle accidents and industrial accidents, be treated by the court in the following way. After the completion of the pleadings, to which I refer in the next paragraph the parties should exchange all expert and medical reports, hospital and wage records, details of out-of-pocket expenses and affidavits by witnesses to the accident. The action should be placed in the court’s master list. I favour a directions hearing on the English system but that is a matter of detail.
The matters which should be disclosed by the pleadings in such personal injury actions are of limited number and can be enumerated. They are the identity of the parties (also, I suggest, any insurers), details of the accident, the allegations of negligence relied on, any regulation or statute the breach of which is relied on, the injuries, disabilities and economic loss alleged. Similarly the defence and any cross claim. As the rules and forms which I earlier proposed are with the Commission, I shall not set them out in this report.
FOOTNOTES
63. 4 Moore’s Federal Practice 26.02.
64. Heading I pp. 68-69.
65. p. 22.
66. See p. 34.
67. p. 32.
68. p. 31.
69. See p. 22.
70. p. 33.
71. See p. 23
72. p. 48.
73. p. 8.
74. Speech delivered in October 1972.
75. p. 28-29.
76. Small Claim Tribunals Act 1976 (N.Z.), s. 10.
77. John G. Fall, “The Role of Arbitration in the Judicial Process” (1973) Report of the Judicial Council of California, p. 31.
78. p. 42.
79. Precedents of Pleading (3rd ed., 1868), p. 35.
