Overarching obligations

What are the Overarching Obligations?

Under the Civil Procedure Act 2010, all parties (i.e., plaintiffs and defendants) to civil proceedings in the Victorian Courts (but not in VCAT) are subject to what are known as the Overarching Obligations.  These obligations apply equally to the parties’ legal representatives and also to any litigation funder or insurer providing financial assistance to a party.

The Overarching Obligations are a set of rules for the way in which parties to litigation must conduct themselves.  They are contained in sections 16 to 26 of the Civil Procedure Act 2010.  In summary, the obligations are:

Paramount Duty – a duty to the Court to further the administration of justice in relation to the proceeding.

Honesty – the obligation to act honestly at all times in relation to the proceeding.

Proper Basis – the obligation not to make a claim (or a response to a claim) in the proceeding that is frivolous, vexatious, an abuse of process or does not have a proper basis on the factual and legal material available at the time.

Necessary Steps Only – the obligation to only take steps in the proceeding that you reasonably believe are necessary to resolve or determine the dispute.

Co-operation – the obligation to co-operate with the other party and the Court in the conduct of the proceeding.

Misleading Conduct – the obligation not to engage in misleading or deceptive conduct (or conduct that is likely to mislead or deceive) in the proceeding.

Endeavours to Resolve – the obligation to use reasonable endeavours to resolve the dispute by agreement, including through mediation or other dispute resolution mechanisms.  There are some very limited exceptions to this obligation, for example where the nature of the dispute means that only a Court determination is appropriate.  However, these exceptions will be very rare and in the absence of advice to the contrary, it should be assumed that the obligation will apply.

Narrowing Dispute – the obligation to use reasonable endeavours to narrow the issues in dispute if the dispute cannot be wholly resolved by agreement.  This obligation is subject to essentially the same very limited exceptions as in the point above.

Proportionate Costs – the obligation to ensure that legal costs are reasonable and proportionate to the complexity of the matter and the amount in dispute.

Delay – the obligation to minimise delay in the proceeding.

Disclosure – the obligation to disclose to the other party at the earliest reasonable time all documents you have (or used to have) that are critical to resolution of the dispute.

Failure to comply with the Overarching Obligations may result in sanctions by the Court, including the making of costs orders or orders for compensation (including penalty interest) against the person failing to comply.

Certificate

Under section 41 of the Civil Procedure Act 2010, it is necessary at the outset of the proceeding for each party to sign a certificate stating that they have read and understood the Overarching Obligations contained in sections 16 to 26 of the Civil Procedure Act 2010 (extracted below).

The certificate must be signed by the party personally, not by the party’s lawyer.  Where the party in question is a company rather than an individual, the certificate will need to be signed by a director of the company.

The certificate is to be signed and filed with the Court at the time that the party files its first substantive document in the proceeding.  In the case of plaintiffs, this will usually be the Statement of Claim that is filed with the Writ by which the proceeding is commenced.  In the case of defendants, this will ordinarily be the Defence which is filed in answer to the Statement of Claim.

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