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2016-2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
JUDICIARY AMENDMENT (COMMONWEALTH MODEL LITIGANT
OBLIGATIONS) BILL 2017
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator Leyonhjelm)
JUDICIARY AMENDMENT (COMMONWEALTH MODEL LITIGANT
OBLIGATIONS) BILL 2017
OUTLINE
The Judiciary Amendment (Commonwealth Model Litigant Obligations) Bill 2017 subjects
Commonwealth litigants to enforceable model litigant obligations.
The Productivity Commission was tasked in June 2013 with conducting an inquiry into
access to justice. The Commission reported on its inquiry in September 2014.
In its report the Commission noted that:
governments should act as model litigants given their power, resources, 'frequent-
player status' and role of acting in the public interest;
model litigant obligations would not prevent governments from acting firmly to
protect their interests;
while the Commonwealth has issued model litigant obligations on Commonwealth
litigants, a number of parties submitted that these obligations are not always complied
with;
ombudsmen are 'ready-made' independent bodies that could receive and review
complaints regarding contraventions of model litigant obligations; and
a number of parties submitted that courts and tribunals should be empowered to
enforce model litigant obligations.
The Commission recommended that:
government, their agencies and legal representatives should be subject to model
litigant obligations; and
compliance with these obligations should be monitored and enforced, including by
establishing formal avenues of complaint to government ombudsmen for parties who
consider that model litigant obligations have not been met.
This Bill enacts this recommendation as it relates to the Commonwealth. It requires the
Attorney-General to oblige Commonwealth litigants to act as model litigants, in line with
current practice. It establishes a process by which the Commonwealth Ombudsman can
investigate complaints regarding contraventions of these obligations, and requires the
Ombudsman to include details of these complaints in annual reports. It empowers a court to
order a stay of proceedings and, if it is satisfied of a contravention, to make any order it
considers appropriate.
In its April 2016 response to the inquiry, the Government rejected the recommendation to
make model litigant obligations enforceable. The Government stated that compliance is a
matter between the Attorney-General and the relevant Commonwealth agency or Department,
and that any other approach could give rise to technical arguments and result in additional
costs and delay in litigation involving the Commonwealth. However, this ignores the reality
that current model litigant obligations include obligations to not rely on unnecessarily
technical arguments, to keep costs to a minimum and to avoid delay, with the consequence
that making these obligations enforceable is likely to reduce costs, delays and the use of
unnecessarily technical arguments.
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NOTES ON CLAUSES
Clause 1: Short Title
1. This clause provides for the Bill, when enacted, to be cited as the Judiciary
Amendment (Commonwealth Model Litigant Obligations) Act 2017.
Clause 2: Commencement
2. This clause provides that the Bill commences on the day after Royal Assent.
Clause 3: Schedules
3. Each Act specified in a Schedule to this Bill is amended or repealed as is set out in
the applicable items in the Schedule. Any other item in a Schedule to this Bill has
effect according to its terms.
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Schedule 1 -- Amendments to the Judiciary Act 1903
Item 1 - Section 2
4. Item 1 defines a Commonwealth litigant as a person or body referred to in subsection
55N(1), not including the Australian Government Solicitor when providing services under
subsection 55N(2).
5. Section 55N(1) refers to:
the Commonwealth, a body established by an Act or regulations or by a law of a
Territory, and past and present officers and employees thereof;
a person suing or being sued on behalf of the Commonwealth;
a Minister, or former Minister, of the Commonwealth;
a person holding office, or who held office, under an Act or a law of a Territory;
a member, or former member, of the Defence Force; and
a company in which the Commonwealth has a controlling interest.
6. The exclusion of the Australian Government Solicitor when providing services under
subsection 55N(2) ensures that the Commonwealth Ombudsman is not tasked with
investigating complaints about State Government litigants not acting as model litigants, even
when the State Government litigant is represented by the Australian Government Solicitor.
7. The application of the Commonwealth Ombudsman's coercive information gathering
powers to State Government litigants would undermine the federation's division of powers
and violate the doctrine of intergovernmental immunities recognised by the High Court.
Whether a State Government imposes enforceable model litigant obligations on itself is a
matter for that State Government.
8. Item 1 also defines model litigant obligations as requirements in Legal Services
Directions relating to acting as a model litigant. This currently relates to the requirements in
paragraph 4.2 (The Model Litigant Obligation) and appendix B (The Commonwealth's
Obligation to Act as a Model Litigant) of Legal Services Directions 2005.
Item 2 - After subsection 55ZF(2)
9. Item 2 establishes a requirement to act as a model litigant by inserting subsection
55ZF(2A).
10. The requirement does not extend to criminal prosecutions and related proceedings.
This approach aligns with Legal Services Directions 2005, which states at Note 4 that the
Directions are not intended to cover the handling of criminal prosecutions and related
proceedings unless expressly referred to.
11. The requirement to act as a model litigant falls on Commonwealth litigants and
persons acting for Commonwealth litigants. The inclusion of persons acting for
Commonwealth litigants aligns with the model litigant obligations of Legal Services
Directions 2005, which states -- at note 1, paragraph 2, appendix B -- that:
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"lawyers engaged in such litigation, whether Australian Government Solicitor,
in-house or private, will need to act in accordance with the obligation and to
assist their client agency to do so."
12. The requirement to act as a model litigant must be contained in Legal Services
Directions applying generally to Commonwealth legal work. Section 55ZF already allows
the Attorney-General to issue Legal Services Directions that are to apply generally to
Commonwealth legal work, and this power has already been used to issue Legal Services
Directions containing model litigant obligations. Item 2 converts the discretion to do this into
an obligation.
13. Item 2 also inserts subsection 55ZF(2B), which confirms that new subsection
55ZF(2A) does not prevent the Attorney-General from using Legal Services Directions for
other purposes.
Item 3 - At the end of subsections 55ZG(2) and (3)
14. Item 3 broadens the circumstances in which compliance with a Legal Services
Direction is enforceable and non-compliance may be raised in a proceeding, to cover the
circumstances set out by this Bill.
Item 4 - After section 55ZG
15. Item 4 inserts section 55ZGA. It allows a court to stay a proceeding or part of a
proceeding for a period the court considers appropriate and subject to any conditions the
court considers appropriate. The court may do so provided that a party to the proceeding:
has made a complaint to the Commonwealth Ombudsman that a Commonwealth
litigant, or a person acting for a Commonwealth litigant, has contravened or is likely
to contravene the model litigant obligations in relation to the proceeding; and
applies for a stay.
16. Item 4 also inserts section 55ZGB. It allows a court to make any order it considers
appropriate, provided that:
a party to a proceeding (hereafter called 'the applicant') has made a complaint to the
Commonwealth Ombudsman that a Commonwealth litigant, or a person acting for a
Commonwealth litigant in relation to that proceeding, has contravened or is likely to
contravene the model litigant obligations in relation to that proceeding;
the Ombudsman, or a person to whom the Ombudsman has transferred the complaint,
has completed an investigation into the complaint or has advised of a decision not to
investigate, or 60 days have passed since the complaint was made; and
in a proceeding to which the applicant and the Commonwealth litigant are party
(which is not necessarily the proceeding in which the complaint arose), the court is
satisfied, on the application of the applicant, that the Commonwealth litigant, or a
person acting for a Commonwealth litigant, contravened or is likely to contravene the
model litigant obligations as referred to in the complaint.
17. A court may consider it appropriate to make an order under section 55ZGB to, for
example:
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promote future compliance by the Commonwealth litigant with model litigant
obligations, or
respond to what the court considers to be a past failure to act as a model litigant, such
as through a costs order against the Commonwealth litigant.
Items 5 - Subsection 55ZI(2)
18. Items 5 and 6 amend section 55ZI, which outlines instances where a person is not
liable to an action or other proceeding, whether civil or criminal, for or in relation to an act
done or omitted to be done.
19. Together Items 5 and 6 ensure that the protection provided by section 55ZI does not
prevent the enforcement of model litigant obligations set out by this Bill. This involves a
two-step process. Item 5 reduces protections more than what this Bill requires, and Item 6
reinserts certain protections in light of this. The overall effect is that protections unrelated to
model litigant obligations continue.
20. Note that Items 5 and 6 do not affect subsection 55ZI(1), which protects the
Attorney-General for acts done in compliance or purported compliance with a Legal Services
Direction. The enforcement of model litigant obligations should involve the parties in
litigation, the Commonwealth Ombudsman and the court. It should not involve the
Attorney-General merely because the Attorney-General issues Legal Services Directions
containing model litigant obligations.
21. Subsection 55ZI(2) currently protects a person other than the Attorney-General for
acts done in compliance, or in good faith in purported compliance, with a Legal Services
Direction. Item 5 removes the protection for acts done 'in good faith in purported
compliance' with a Legal Services Direction, because 'purported compliance' can reflect
non-compliance. If a person were to continue to enjoy a broad protection with respect to
non-compliance with a Legal Services Direction, then the purpose of this Bill would be
thwarted, given that it is concerned with responses to non-compliance with model litigant
obligations in a Legal Services Direction.
Item 6 - At the end of section 55ZI
22. Item 6 inserts a limited protection in light of Item 5's removal of a broad protection.
23. Item 6 adds subsection 55ZI(3). This subsection protects a person other than the
Attorney-General for acts done by the person in good faith in purported compliance with a
Legal Service Direction, subject to the new sections 55ZGA and 55ZGB dealing with model
litigant obligations. By subjecting this subsection to the new provisions dealing with model
litigant obligations, no protection is provided that would override these new provisions.
Item 7 - Application
24. Item 7 is an application provision ensuring that the amendments made by this
Schedule 1 do not apply to contraventions of model litigant obligations occurring prior to or
on the day of Royal Assent. As such, Schedule 1 is wholly prospective.
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Schedule 2 -- Amendments to the Ombudsman Act 1976
Item 1 - Subsection 3(1)
25. Item 1 inserts definitions for Commonwealth litigant and model litigant obligations in
line with the definitions inserted by Item 1 of Schedule 1.
Item 2 - After section 5A
26. Item 2 does a number of things. Firstly, it inserts subsections 5B(1) and 5B(2) to
require the Ombudsman to investigate complaints that a Commonwealth litigant, or a person
acting for a Commonwealth litigant, has contravened or is likely to contravene model litigant
obligations. Secondly, it inserts subsection 5B(3) to require the Ombudsman's annual
reporting to include details of complaints to and action by the Ombudsman in relation to
model litigant obligations. Thirdly, it inserts subsection 5B(4) to confirm that this new
section 5B does not limit or otherwise affect the Ombudsman's other powers, functions or
duties.
27. Further explanation of newly-inserted subsections 5B(1) and 5B(2), regarding a
requirement for the Ombudsman to investigate, is provided below.
28. Subsection 5B(1) and paragraphs 5B(2)(a) and 5B(2)(b) respond to section 5of the
Ombudsman Act 1976. Paragraph 5B(2)(c) responds to the Act's subsection 6(12).
Paragraph responds to Act's section 6D. Each insertion is explained in turn.
29. Section 5(1)(a) of the Ombudsman Act 1976 states that the Ombudsman shall
investigate action that is complained about and that:
relates to a matter of administration; and
is taken by a Department or prescribed authority.
30. Subsection 5B(1) and paragraphs 5B(2)(a) and 5B(2)(b) ensure that section 5 covers
complaints that a Commonwealth litigant, or a person acting for a Commonwealth litigant,
has contravened or is likely to contravene model litigant obligations.
31. Subsection 5B(1) ensures that legal work performed by or for a Commonwealth
litigant that relates to model litigant obligations is always considered to be action that relates
to a matter of administration.
32. Paragraphs 5B(2)(a) and 5B(2)(b) ensure that the legal work performed by or for a
Commonwealth litigant is always considered to be action taken by a Department or
prescribed authority. This is done in a two-step process.
33. Firstly, paragraph 5B(2)(a) ensures that there are four categories of Commonwealth
litigants. It states that, if a Commonwealth litigant is not: (1) a Department, (2) a prescribed
authority, or (3) a person or body whose action is deemed to be taken by a Department or
prescribed authority, then the Commonwealth litigant is (4) deemed to be a prescribed
authority.
34. Secondly, paragraph 5B(2)(b) ensures that, with respect to each of these four
categories, the legal work is considered to be taken by a Department or prescribed authority.
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For categories (1), (2) and (4), sub-paragraph 5B(2)(b)(i) deems the legal work to be
taken by the Commonwealth litigant, even if the action is for the Commonwealth
litigant. Note that for these categories, the Commonwealth litigant is a Department, a
prescribed authority, or is deemed to be a prescribed authority.
For category (3), sub-paragraph 5B(2)(b)(ii) deems the legal work to be taken by the
Department or prescribed authority, even if the action is for the person or body in
category (3).
35. Subsection 6(12) of the Ombudsman Act 1976 allows the Ombudsman to decide to
cease investigating a complaint or to not investigate a complaint if the Ombudsman forms the
opinion that the action complained about relates to a commercial activity of a Department or
prescribed authority. So that the Ombudsman cannot make such a decision when it receives a
complaint about legal work performed by or for a Commonwealth litigant that relates to
model litigant obligations, newly-inserted paragraph 5B(2)(c) deems the legal work to not
relate to a commercial activity of the Commonwealth litigant.
36. Section 6D of the Ombudsman Act 1976, among other things, prohibits the
Ombudsman from investigating tax administration action except in specific circumstances,
and requires the Ombudsman to transfer complaints wholly in respect of tax administration
action to the Inspector-General of Taxation. So that the Ombudsman faces no such
prohibition or requirement when it receives a complaint about legal work performed by or for
a Commonwealth litigant that relates to model litigant obligations, newly-inserted paragraph
5B(2)(d) deems the legal work to not be tax administration action.
Item 3 - Application
37. Item 3 is an application provision ensuring that the amendments made by this
Schedule 2 do not apply to legal work performed prior to or on the day of Royal Assent. As
such, Schedule 2 is wholly prospective.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
JUDICIARY AMENDMENT (COMMONWEALTH MODEL LITIGANT
OBLIGATIONS) BILL 2017
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill
The Bill requires the Attorney-General to oblige Commonwealth litigants to act as model
litigants, in line with current practice. It establishes a process by which the Commonwealth
Ombudsman can investigate complaints regarding contraventions of these obligations, and
requires the Ombudsman to include details of these complaints in annual reports. It
empowers courts to order a stay of proceedings and, if it is satisfied of a contravention, to
make any order it considers appropriate.
Human rights implications
In its report on access to justice, the Productivity Commission stated that:
governments should act as model litigants given their power, resources, 'frequent-
player status' and role of acting in the public interest; and
model litigant obligations do not prevent governments from acting firmly to protect
their interests.
In light of this, this Bill's imposition of enforceable model litigant obligations on
Commonwealth litigants protects the right to a fair trial.
This right is recognised in Article 14 of the International Covenant on Civil and Political
Rights, which states that, in the determination of a person's rights and obligations, everyone
shall be entitled to a fair and public hearing by a competent, independent and impartial
tribunal established by law.
Conclusion
The Bill is compatible with human rights because it protects the right to a fair trial.
Senator Leyonhjelm
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