This week, Victorian Attorney-General Rob Hulls has lifted the lid on the scandal that is civil litigation. Mr Hulls has rightly said that the civil justice system — where a common garden variety claim can cost you $40,000 in fees before your case is heard — is now so expensive that it is out of the reach of ordinary people. He is right. And his comments are equally applicable in every Australian state and territory.
Despite the defences being mounted by some in the legal profession, the facts speak for themselves.
One only has to examine the cost scales of the various courts where litigation is initiated and run to see why access to civil justice is seriously expensive.
Take, for example, the County Court in Victoria. This is where you bring commercial claims in excess of $100,000 and where the vast bulk of personal injuries cases are filed. Under the current cost scales it could cost up to $642 just to see a lawyer and get him or her to issue a writ for you in that court. Then there will be fees for your lawyers reading the defence that your opponent files; fees for the issue of a series of steps which essentially get further information about your claim; medical reports or other expert opinions to assist you in your claim; various court appearances as your case moves to trial, and then the cost of the trial itself. Just to get to the front door of the court will have set you back somewhere between $30,000-$40,000 for an average commercial or personal injuries claim – it may in fact be much more.
And because it’s essentially a winner takes all philosophy in our system, if you lose you pay your own legal fees and those of your opponent. Your lawyer, in addition to asking you to deposit a considerable sum of money up front to fund the case, will also take out a caveat or some other form of security over your house so that if you do lose, the lawyer still gets paid.
In short, if it all goes pear shaped and you lose your case, the prospect of losing your house, car and other possessions is a real one.
Can anyone name any other service provider, be it a doctor, accountant or tradesperson, who secures their fees by taking out a caveat over your family home?
It is for this reason that literally hundreds of thousands of low to middle income Australians with justice on their side decide not to sue for injuries caused to them or when they have been ripped off in a business deal. That in itself is scandalous.
Mr Hulls is the first Attorney-General in Australia to take on a system which is well and truly broken and what he now ought to do is to convince his fellow A-Gs to sweep away the 19th century English civil justice system we have inherited and replace it with an affordable and accessible way for individuals to be compensated for wrongs done to them.
It is disgraceful that a person won’t take legal action because they can’t afford to risk being reduced to a state of penury.
It is a complete disgrace that justice is such an expensive commodity. The English adversarial system stuffs everybody except the lawyers who profit from the activity.
I won’t hold my breath waiting a serious reform in this area because politicians of both political persuasions are heavily dominated by lawyers who profit from the system as it is.
The easiest way I can think of is to apply at the Pareto principle and require both parties to put up the 80% of the arguments that occupied 20% of the time by applying a time limit for both sides to present their case.
By providing all evidence to the other party through discovery, and allowing a finite time of say two hours to both parties to present their argument, the judge should be able to make a decision by close of business thereby providing for simple civil justice in one business day.
Of course the administration of criminal justice involved incarceration should have much higher standards of information presentation and defence as personal lliberty is involved. However in civil matters below say under $250,000 I believe the above approach would be quite effective. Perhaps three days for a million dollars and a week for 10 million dollars or more and above would for lawyers to be be cost-effective in their deliverys.
Anybody wishing to have more court time could agree to pay the other parties costs as a precondition.
The ludicrous amount of time spent on some trials involving several months of consideration is a gross waste of resources and works in favour of litigants with deep pockets.
Spot on article.
I note only one other comment on this article…does this mean others do not think this is a problem?
It’s worse than that Greg, Victorian lawyers are not subject to any affordable independent complaints or restitution mechanism in the case of malpractice. A few years back a lawyer messed up the conveyancing on a house I was selling and I was left liable for $7000 as a result of an oversight in the contract. The Law Institute of Victoria investigated and I was offered half the amount I had lost; I was advised that if I took the lawyer to court, although I would likely win I would be liable for all parties expenses as they had made a “reasonable” offer. I was subsequently advised that the Law Institute was responsible for the professional indemnity for lawyers, hardly an independent arbitrator, knowing what they could get away with they saved themselves having to pay me out on the full amount.
Conclusion from all this – by pricing itself out of the reach of the average citizen the legal system offers no protection against mistakes by this powerful group of protected professionals.
When my mother, Lady T, died she left everything-including jewelry- to her fagot, Robert W/d, I consulted an expert who said I could be up for $300,000 if I decided to argue the toss. Robert was fifty when he married her ; she was 99. They didn’t live together, he kept sleeping with his male lovers throughout the whole time of their so-called relationship. She had already thrown money at him for a few years, 3 cars, a house in Fitzroy, etc, etc. All the most expensive clothing -he went from being a school teacher to a failed interior designer-Yet I would have had to risk three hundred thousand dollars, together with the risk of getting cancer-through the stress of it all, certainly my sanity. Plus boasting to his male friends that the old bitch (his words via a mutual friend) tried to give him a few blow-jobs. Just what an only child always wanted to hear about her mother.
With difficulty, I restrained myself. But don’t tell me that our legal system is at all honest. Had I been caught trying to steal some of her baubles and the fag had brained me. I would have won a fortune suing him for damages. Wherein lies the justice?
By way of disclosure up front, I’m a lawyer in private practice, but not a litigator.
As Greg must know, the vast majority of civil disputes in society are resolved directly by the parties involved, without lawyers. Lawyers (through letters of demand, negotiations and settlement agreements) assist to resolve many disputes without going anywhere a court and for far less than $30,000. Most of the remaining disputes that do get filed in court are resolved before the trial either through formal or informal alternate dispute resolution processes.
It is only the very few disputes that cannot be resolved through these processes that end up in court at a trial. These disputes almost always involve factual disputes where the parties simply cannot agree between themselves as to what ‘the plain and simple truth is’ and require a decision to be made by a judge, based on the weighing of the relevant evidence brought into court.
No one who lost a case ever believes its because they were on the wrong side of a well decided case – it’s always “the system’s fault”.
This is not to say the system is not broken and doesn’t need fixing.
In my view the single biggest factor in preventing access to civil justice is the costs system – but not in the way Greg argues.
In reality, the winner only gets about half their actual legal costs paid by the loser. So even if you win you lose. In my experience this is a much bigger deterrent to clients pursuing meritorious cases than the prospect of losing and having to pay the other side’s costs.
Why are actual costs so far ahead of the scale of costs against which costs orders are assessed? Legal salaries are increasing at a rate far ahead of the rate of increase of the CPI, the scale of costs and, incidently, hourly rates charged by law firms.
This is not due to the (albeit well known) generosity of spirit displayed by the partners of commercial law firms.
Rather, in order to attract into the profession highly intelligent people (now about 60% of whom are women), who have skills in high demand in other industries and internationally and then to pursuade them to remain in it despite all of the notorious disincentives, lawyers in private practice are, have to be and generally deserve to be paid very well.
Pay lawyers less and the system will become less efficient and thus more expensive.
Making losers pay the actual costs of civil litigation would result in more efficient litigation, with more unmeritorious cases weeded out and settled and only the most intractable disputes would require adjudication by a judge.