Shake-up proposed to cut civil justice costs

The Rules Committee is asking lawyers and other interested parties for feedback on four proposals that could fundamentally change the way civil cases are dealt with by the courts.

Justice Dobson 3

Justice Robert Dobson

A consultation paper outlining the proposed changes, Improving Access to Civil Justice, was released just before Christmas. It is the result of a year-long project by the Rules Committee, instigated in part by Attorney-General David Parker, an ex officio member of the committee.

Driving the process is Rules Committee chairman Justice Robert Dobson, who is urging lawyers, other court users and “anybody who thinks they have an intelligent comment to make” to have their say. Submissions close on Friday 1 May.

The object of the proposed changes is to cut the cost of bringing civil actions to both the High Court and the District Court. The committee says it has no preferred option/s and is keen to get a broad range of responses.

Justice Dobson says about a year ago “soundings” suggested the civil jurisdiction wasn’t working and there was a gap between matters heard by the Disputes Tribunal and the more complex and high value matters dealt with by the High Court.

The number of civil filings in the District Court is relatively high, but only about 4% are defended and even fewer go to trial. Most claims are undisputed debt recovery actions.

According to the Rules Committee, civil cases should be heard in a way that keeps the costs of going to court proportionate to the complexity and value of the issues in dispute.

But this is often not the case. The cost of bringing a case to trial in the District Court will, more often than not, outweigh any potential remedy.

Arguably, there is enough flexibility in the current District Court Rules to ensure processes and procedures are proportionate to the value and complexity of a claim, but “changes to the culture of litigation may be needed,” the committee says.

There has also been a resource problem in the District Court although the cap on judge numbers was raised from 160 to 182 in June last year and an extra $54 million, to be spent over four years, was allocated in the 2019 Budget.

Late last month the Attorney-General announced the appointment of 21 new District Court judges (see accompanying story on page 4).

But, right now, the District Court’s civil jurisdiction is functioning primarily as a debt collecting agency, Justice Dobson says. “Debt collectors commence proceedings, they’re not opposed, they get judgment and then enforce it.”

Where cases are defended, the statistics show the time taken to resolve the matter “is not that bad”. But these cases are few and far between, and the primary reason is cost.

“There’s a perception that if it’s going to be contested, it has to be worth at least $100,000 before it’s economic to pursue it,” Justice Dobson says.

“I think that’s a potentially misleading generalisation but it’s the sort of thing that captures the attention of the Attorney and he comes to the Rules Committee and asks why we’re not doing something more about facilitating civil proceedings in the District Court.”

Both the Attorney-General and Chief Justice Dame Helen Winkelmann have commented publicly in the past year on the high cost of bringing civil claims to trial. This, they say, has resulted in an unmet need for civil justice, as evidenced by the growing number of unrepresented litigants coming before the courts, often because they cannot afford a lawyer.

This, the Rules Committee says, runs “counter not only to the fundamental right of all to access the courts but also to the strategic goals of the Ministry of Justice and the Attorney-General”.

Radical change

The consultation paper covers four proposed areas of changes, the most radical being the introduction of an inquisitorial approach to certain categories of civil claims, replacing our current adversarial system.

Under an inquisitorial system, the judge would take a more active role in (and control of) the proceeding, including the interviewing of witnesses and experts, and final decision-making. This would mean faster processing of claims but rights of appeal would be limited or non-existent.

The discussion paper outlines how such a system might work, including a model suggested by Court of Appeal President, Justice Stephen Kós, who supports the need to “think outside the square”.

The Rules Committee acknowledges the proposal to curtail appeal rights might be controversial and it could be necessary to consider whether this is appropriate when not all parties have consented to the procedure, and whether appeal rights should be retained.

Justice Dobson says the adversarial method is “deeply ingrained” in common law systems such as New Zealand’s and change won’t be easy.

“Experience suggests the profession is not uniformly supportive of change. [An inquisitorial system] is anathema to traditionally-trained common law lawyers because they think the adversarial process is the best way of getting at the truth and our system has served us very well.

“The problem with that, of course, is the cost and, in some cases, the time it takes to get the answer.”

Statistics he has seen suggest in terms of consumer satisfaction, some civil jurisdictions, such as France, Germany and Italy, where inquisitorial systems are used, measured very well.

What sort of buy-in would be needed for the Rules Committee to recommend such a change?

Justice Dobson notes the NZ Law Society and NZ Bar Association are represented on the committee. “We would never expect uniform support but I think we would be wary of proceeding with change if the feedback from those representatives wasn’t that there would be substantial support for it.

“There will be people who instinctively resist change. We do need a measure of co-operation and any changes we make are not going to achieve the outcome we need unless there is cultural change. That is very important.”

Evidence and discovery

Likely to be almost as controversial are two other Rules Committee proposals: streamlining the standard pre-trial and trial processes by curtailing discovery, and changing the way evidence is given and witness briefs are handled in civil cases.

One proposal would replace detailed briefs of evidence with bullet-point, “will say” statements with counsel then calling the witnesses and leading the evidence orally.

“Originally written briefs were meant to shorten the amount of time you need in court but that hasn’t proved to be the experience,” Justice Dobson says.

“We’ve now got a generation of lawyers who are used to preparing their witnesses’ evidence in witness statements that the lawyer takes ownership of. The upshot is that they get things crafted into lawyers’ words, they dot every ‘i’ and cross every ‘t’, and this costs the litigant a lot of money and generally takes quite a long time.”

Moves about 10 years ago to change from formal written statements to “will say” statements went nowhere.

“There was a significant division of view among the profession, some resisting it quite strongly,” Justice Dobson says. “But I think the nature of the problem is getting more acute as time goes on and one would hope that would make those people at the coalface more receptive to considering change.”

On the issue of discovery, the committee suggests it should be curtailed in all but the most high-value and complex civil claims.

The present system is costly and logistically burdensome, not only in New Zealand but in other common law jurisdictions such as Australia, Canada and the UK.

“We are moving away from the expectation that there will be full disclosure of everything you’ve got in support of, and that damages, your own case,” Justice Dobson says.

“It’s just a question of picking the procedure that’s most appropriate for the particular case or categories of case. In some of the large commercial cases the parties will have spent well over $1 million doing their discovery processes. I’ve had large cases where it’s been multiples of that.

“The reality is that commercial parties are actually leaving increasingly detailed trails of their conduct, especially through email….. and therefore fixing them with knowledge of certain things as a dispute develops. It’s quite exciting but it’s extraordinarily prolonging of the process of getting to the answer.

“There will still be commercial cases where exhaustive discovery will be sought and may well be justified but there’ll be several steps down the ladder where the parties will be better served by the courts saying discovery will be on an ‘absolutely essential’ basis. Otherwise it becomes disproportionate to the amount that’s at issue.

“We need to craft a series of options and get buy-in from the profession and litigants that they’re not going to have completely exhaustive analysis of the other side’s documentation. They’ll have a revelation of what’s most harmful to the party and what’s most helpful to them.”

Among other Rules Committee proposals: including the existing District Court short-form trial format in the High Court Rules and requiring all civil proceedings, with some exceptions, to begin with a summary judgment application.

The committee acknowledges not all claims are suited to summary judgment procedures. The current High Court triage process where cases are classified as complex or ordinary would be extended to identify ordinary proceedings in both the District and High Courts that are suitable for summary judgment.

Plans are also afoot to help cut costs by allowing lawyers to partially assist litigants (for example, in preparing statements of claim) without having to be formally designated as the solicitor on the record.

The vexed issue of civil legal aid is not part of these proposals and outside the Rules Committee’s remit. LawNews understands a Ministry of Justice review of this is underway.

The Rules Committee’s proposals can be viewed here:

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