The main offending section of Part 2A is section 18E, which provides as follows:
(1) Each person involved in a civil dispute to which this Part applies is to take reasonable steps having regard to the person’s situation, the nature of the dispute (including the value of any claim and complexity of the issues) and any applicable pre-litigation protocol:
(a) to resolve the dispute by agreement, or(b) to clarify and narrow the issues in dispute in the event that civil proceedings are commenced.
(2) For the purposes of this section, reasonable steps include (but are not limited to) the following:
(a) notifying the other person of the issues that are, or may be, in dispute, and offering to discuss them, with a view to resolving the dispute,(b) responding appropriately to any such notification by communicating about what issues are, or may be, in dispute, and offering to discuss them, with a view to resolving the dispute,(c) exchanging appropriate pre-litigation correspondence, information and documents critical to the resolution of the dispute,(d) considering, and where appropriate proposing, options for resolving the dispute without the need for civil proceedings in a court, including (but not limited to) resolution through genuine and reasonable negotiations and alternative dispute resolution processes,(e) taking part in alternative dispute resolution processes.
(3) Each person involved in a civil dispute to which this Part applies is not to unreasonably refuse to participate in genuine and reasonable negotiations or alternative dispute resolution processes.
(4) Nothing in this section requires a person to provide any correspondence, information or document that might tend to incriminate the person.Mr Smith said that while a large number of lawyers were already taking reasonable steps, the remainder needed to be encouraged to do the same. However Mr Smith said that certain stakeholders had raised the possibility of unintended consequences of the new procedures. By this I assume Mr Smith is referring to increased costs as a result of complying with the pre-litigation requirements and satellite disputes over compliance.
Mr Smith said that Part 2A is being postponed for 18 months so that the New South Wales government can observe the Federal Court's recently adopted pre-litigation procedures which commenced on 1 August 2011. See my earlier blog post 'Civil Dispute Resolution Bill - federal pre-litigation procedures' for information on this.
The Victorian government repealed Chapter 3 of the Civil Procedure Act 2010 (Vic), which imposed similar requirements to Part 2A. See my earlier blog post 'Repeal of the pre-litigation requirements from the Civil Procedure Act 2010 (Vic)' for information on this.