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Pre action protocols under SA’s new Uniform Civil Court Rules By Margaret Castles, Michelle Hamlyn & Shavin Silva
Pre action protocols under SA’s new Uniform Civil Court Rules
MARGARET CASTLES, MICHELLE HAMLYN & SHAVIN SILVA, CIVIL LITIGATION COMMITTEE
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The Uniform Civil Court Rules introduced in all SA civil court jurisdictions in SA in April 2020 revised the requirements for parties to engage in pre action negotiations before issuing proceedings. The new rules apply to all types of civil claims above the Magistrates Court Minor Civil jurisdiction. This article provides an overview of the key provisions.
SUMMARY AND OVERVIEW
Although the new rules reflect the regime under old rule 33, and the practice directions applying to medical negligence claims, they go significantly further, both in specifying the nature and rationale for offers, requiring a pre action meeting, and the exchange of all relevant experts reports (not just those favourable to a party). The intent of the protocols is to equip the parties with as much cogent information as possible to enable them to make informed decisions about compromise before commencing litigation. The new rules provide greater scope for judicial enforcement of the pre action protocols, including immediate cost consequences for non-compliance (61.14(4), (5) and (6)), and for costs payable forthwith, on an indemnity basis.
The requirement for reasoned explanation of claims, coupled with the exchange of expert and other relevant material, goes some way to avert the concern of lawyers that serious settlement discussions can’t occur until pleadings are exchanged and discovery is completed. There is a perception that these requirements demand front loading in litigation by requiring parties to carefully justify their claims both legally and factually and gather some evidence to support their position. In fact, in the majority of claims this preparation would be done in the normal course of determining if the claim is worth pursuing, and all that is required is for the parties to exchange this information with each other early, rather than waiting for the progress of a case through pleadings and discovery to do so.
General claims
Applicants planning to initiate a claim must provide a pre action claim to the respondent. UCCR 61.7 requires the pre action claim to: • Identify each cause of action in detail • If the claim is a liquidated sum, explain how the sum is calculated and breakdown the calculation of damages • Attach any expert report relevant to the claim • Provide sufficient material to enable the respondent to make an informed response • Provide indication of anticipated costs if the matter goes to trial (Form P3) • Make an offer to settle • Propose a date and time for a pre action meeting to negotiate the claim.
Personal injury claims
Additional details are required for personal injury claims (UCCR 61(7)): • Provide personal details (DOB and occupation) • Explain the conduct of the respondent that caused the injury, including date and occasion and reason the conduct was negligent • Outline any ongoing medical treatment
Personal injury medical negligence claims
If the personal injuries claim is a medical negligence claim, the applicant must also: • Identify the adverse effects of the alleged negligent conduct and the applicant’s current condition • Explain the causal link between the negligent conduct and the adverse effects, including stating the outcome had the negligent conduct not occurred • Identify medical records that the applicant seeks from the respondent • Identify any other medical records held by other providers
TIME LIMIT TO ISSUE PRE ACTION CLAIM OF CLAIM
There are specific time limits for every step in the pre action claim regime, except for issuing the original pre action claim itself. An applicant should issue the claim sufficiently in advance of the expiration of the limitation period OR the proposed date of issue to enable all the timed pre action steps to be completed before issuing proceedings.
In the case of general claims this is at least 42 days, in the case of personal injury claims, at least 51 days. If third parties are likely to be involved, or counter claims raised, the time limit could extend out to at least 63 days for a general claim and 81 days for a personal injury claim. Applicants would be prudent to issue the pre action claim sufficiently in advance of the expiration of the limitation period to cover these eventualities.
Additional requirement: early claim of personal injury including medical negligence
UCCR 61.6 requires claim of an injury to be given within six months of the injury occurring, or, if the person becomes aware of having suffered a personal injury after six months, within one month of becoming aware. Claims must be in writing and consist of: • Names of all potential parties • Details of when where and how the injury occurred • Specifying the reasons for liability • Identifying any medical records that the applicant requires from the other party.
The other party must provide in response: • Address for pre action service • Copy of any medical records requested • For a medical negligence claim, explain why liability is denied including any alternative explanation for the perceived injury
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• Make suggestions for next steps (such as further investigation, expert evidence, ADR).
Potential claimants who have already made a claim within 6 months under the Motor Vehicles Act 1959 or the Return to Work Act 2014 are exempt from this provision.
As potential applicants may not be aware of this requirement, practitioners should check with clients at the first interview whether they have provided notice, and if not, do so promptly.
EXEMPTIONS TO PRE ACTION CLAIM REQUIREMENTS
Rule 61.8 provides for exemption from compliance with the pre action claims if the applicant is seeking a freezing order, a search order or an interim injunction, and does not want to alert the respondent. Applications for pre-action disclosure are also exempt. Parties may seek exemption if an ADR process similar to that proposed in the rules will be undertaken (for example pursuant to a statutory scheme or a binding ADR agreement between the parties). Proceedings commenced by originating application, which will include judicial review, some statutory proceedings, are exempt. Exemption is permitted when seeking recovery of monetary award under the SACAT Act or the Building and Construction Industry Security for Payment scheme, where there is a statutory time limit of 3 months to commence proceedings and in an urgent dust diseases claim, or for criminal injuries compensation.
FINAL CLAIM OF CLAIM IN LIEU OF PRE ACTION CLAIM WHERE ACTION UNCONTESTED
UCCR 62.1 permits an applicant that believes that the claim will be uncontested to serve a Final Notice of Claim upon payment of a fee, giving 21 days’ notice. This provision avoids having to prepare a detailed pre action claim in limited circumstances.
A response to a pre action claim is required. If the respondent does not accept the offer made by the applicant, UCCR 61.9 requires the respondent to: • Respond to each claimed cause of action including any defences • Provide details of any proposed counterclaim in accordance with UCCR 61.7 • In construction claims, identify any dispute about the principal contractual terms or statutory provisions • Attach any relevant expert reports in their possession • Provide sufficient additional material to enable the applicant to respond to the respondents offer • Provide an estimate of the likely costs of pursuing the matter to trial • Make a reasoned offer of settlement • Either agree to the pre action meeting proposed by the applicant or propose an alternative.
In the case of a medical negligence claim, the respondent must also provide all records sought by the applicant or explain why any records provided are not complete.
In construction claims, the respondent must identify any dispute about principal contractual terms or statutory provisions relied upon by the applicant in the response.
THIRD PARTIES AND COUNTERCLAIMS
If this exchange of information discloses any third parties, they must be provided with pre action claims in accordance with this above regime. Issuing third party claims of claims will necessarily prolong the pre action process by at least 21 days (general claims) or 30 days (personal injury) from the date of issue of a claim of claim to a third party. If a counter claim is proposed, the same time limits apply for responses by the Applicant (UCCR 61.10)
PRE ACTION MEETINGS
UCCR 61.12 specifies that the parties must convene a pre action meeting, which must be attended by the parties or someone with authority to settle on their behalf, and their legal representatives. This should be convened within 21 days
of the date for delivery of the last pre action document, but the parties can agree to a longer time frame for this meeting.
The parties are required to negotiate in good faith, focussing on identifying the main issues in dispute, exploring ways to resolve the dispute without proceeding to litigation, identifying whether any third parties need to be brought into the action. Lawyers are required in the presence of the parties, to try to reach consensus about the likely cost and time scale if the matter proceeds to litigation. Parties are strongly encouraged to engage an ADR practitioner or other neutral third party to facilitate these discussions.
If the parties fi nd that they are unable to reach agreement, they should turn their focus to identifying what expert evidence will be needed, agreeing upon documents to be exchanged, and planning the forward steps with a view to minimising costs of litigation.
At the end of the meeting the parties must prepare and sign a report covering attendance, compliance with the protocols, and recording any agreement for future ADR processes (Form P4). This record and all other pre action protocol documents must be fi led in court on a restricted access basis 7 days after the Defence is fi led (UCCR 61.13).
CONSEQUENCES OF NON-COMPLIANCE
Applicants must note compliance with the pre action protocols on the claim when issued, or specify reasons why there has not been compliance. Failure to comply without exemption presumptively precludes recovery by the applicant of any legal costs for preparing fi ling or serving the statement of claim (61.13)
If a claim that is fi led indicates on its face that the protocols were not complied with by one or both parties, the court will convene a special directions hearing to decide if the parties should be required to comply with part or all of the pre action steps (UCCR 61.14). There are costs consequences for parties who fail to comply with part or all of the protocols, including payment forthwith of costs on a lump sum indemnity basis against defaulting applicants or respondents.
If either party asserts that the other party has not complied properly with the protocols, they may apply for an early directions hearing, or seek orders for compliance with pre action protocols at the fi rst normal directions hearing (UCCR 61.15).
In determining costs of a proceeding, the court may: • take into account any failure by parties to comply with the pre action protocol • compare the terms of non-accepted pre action offers with the result of the proceeding • take into account if a party unreasonably failed to accept pre action offers • general conduct of parties in relation to pre action steps. IMPACT OF PRE ACTION PROTOCOLS
Courts have been grappling for years with strategies to get parties to negotiate early in order to avoid the cost and delay of litigation. Traditionally alternative dispute resolution occurs some way through the litigation process, often after pleadings disclosure and some evidence gathering is completed. The pre action protocols seek to require parties to engage in serious negotiations pre action. This is often advantageous to parties, and fi ts with the known statistical observation that 95% of cases settle before reaching trial. The goal of moving settlement events early in process, if not before proceedings start, is consistent with civil court reform throughout Australia and the UK. Lawyers may be understandably, although perhaps unnecessarily, cautious about making compromise before the legal steps of pleadings, disclosure, case preparation and evaluation of risk are fully explored. The intent of the rules is to provide parties with the information they need to make decisions about compromise, against the backdrop of the likely costs of litigation.
The requirement for a pre action meeting is an important advance on the previous Rule 33 that only mandated written communication. The rules are designed to make the meeting productive, requiring good faith, identifi cation of main issues in dispute and the reasons why they are disputed, attempting to reach consensus on the costs of going to trial,
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and emphasises the value of seeking ADR prior to going further. There are robust procedures available to judicial offi cers to require compliance with pre action protocols, and cost penalties for failure to do so.
Whether the protocols will have the desired effect is another matter entirely. A recent study1 into the pre action protocols that preceded the UCCR suggested that compliance was inconsistent, with many practitioners either not knowing about the protocols, or not seeing value in compliance, and some reluctance on the part of judicial offi cers to enforce the requirements. These are key bases for the strengthening of the protocols in the UCCR. The rules provide explicit guidance about the content and process of pre action communication between parties. Although the cost consequences of non-compliance are not signifi cant when compared with the overall cost of litigation, judicial offi cers can make immediate costs orders for failure to comply, there are more robust processes for parties who are keen to attempt early resolution, and an explicit provision judicial offi cers to be asking questions about the potential to utilise these options before progressing too far down the litigation track.
QUESTIONS ABOUT PRE ACTION PROTOCOLS:
Are pre action communications privileged?
UCCR 61.4 makes it clear that all communications between parties aimed at settling disputes are privileged, which includes pre action communications. This is consistent with existing common law negotiation privilege. Whilst these communications cannot be relied upon in determining the substantive dispute, they can be considered in terms of costs when the matter is settled or otherwise disposed of (UCCR 61.16). This is consistent with the approach to settlement privilege already adopted by Australian courts. Any documents fi led pursuant to these rules are sealed except with respect to costs.
Do respondents have to make an offer?
The UCCR require the applicant to make an offer in a pre action claim. Whilst the rules infer that the respondent will make an offer in reply, it is well settled law that a party cannot be forced to make an offer of compromise in litigation. Where a respondent is not in a position to make any offer of compromise, a reasoned response that explained why there was no offer forthcoming in response to a claim of claim would be consistent with this principle.
Who pays the costs of pre action steps?
UCCR 61.5 indicates that the costs are to be in the cause, except to the extent that such costs relate to matters not subsequently litigated.
Service of pre action documents?
UCCR 61.3 provides that all pre action documents can be service in person, in PDF or Word format by email, or by express post. Documents can also be served on an insurer or on a law fi rm in some cases. B
Endnotes 1 Sourdin, T, Muddle, M and Castles, M The
Evaluation of Specifi c Pre-Action Processes in South
Australia (2018). Available at SSRN: https:// ssrn.com/abstract=3269693 or http://dx.doi. org/10.2139/ssrn.3269693
TABLE OF PRE ACTION TIME FRAMES EARLY NOTICE OF PERSONAL INJURY
61.6 (2) Early notice of personal injury including medical Within 6 months of injury or if after 6 months within 1 61.6(3) negligence month of awareness injury sustained 61.6 (4) Response to early notice of personal injury 6 weeks from date of receipt of notice PRE ACTION NOTICES OF CLAIM
Time for notice of claim
61.9 Response to pre action claim/notice of counter claim
At least 42 days (general claims) and 51 days (personal injury) to allow time for response and to convene pre action meeting. 63 and 81 days if multiple parties or counter claim. 21 days 30 days personal injury 61.10 Issue third party pre action claim 21 days from date of original notice of claim 61.2 Response time for all pre action documents 21 days (general claim) 30 days (personal injury)
61.12 Pre action meeting To be convened within 21 days after time for service of last pre action document, longer by agreement of parties
61.12 (6) Pre action meeting report At time of or shortly after meeting completed if matter not settled.
61.13 (4) Filing by applicant of pre action documents and pre action meeting report SPECIAL PROVISION WHERE NO DEFENCE ANTICIPATED
7 days after defence fi led
