FEDERAL COURT REFORMS: Introduction of Insurance List and Class Actions Practice Note
Insurance eBulletin - 12 January 2016
2016 will see the Federal Court introduce a specialist insurance list and a Class Actions Practice Note aimed at streamlining the resolution of disputes in these areas. The introduction of the specialist list will be of interest to all insurers; the introduction of the Class Actions Practice Note of particular interest to those working in that area.
This eBulletin summarises the changes, including a preview of what the yet-to-be-released Practice Note is expected to include.
In 2015, the Federal Court began implementing the National Court Framework (NCF), an overhaul of its case management practices intended to increase efficiency and develop expertise within the Federal Court. The NCF reforms have re-organised the case-load of the Federal Court into eight National Practice Areas (NPA).
As part of these reforms, the Federal Court announced its intention to establish a specialist insurance list within the Commercial Contracts, Banking, Finance and Insurance sub-area of the Commercial and Corporations NPA. The list will commence in March 2016.
Also of interest is the draft Class Actions Practice Note, which is expected to be circulated for comment in early 2016.
The stated aim of the insurance list is to provide the insurance community with a streamlined and expeditious means of resolving disputes without the need for full-blown hearings. The list is not intended to deal with all insurance claims but principally "short" matters (the Court says that hearings should take no more than two hours), particularly those involving questions of policy interpretation and the operation of insurance legislation, ie matters which do not involve a significant dispute on the facts. The Court also anticipates that the list will be used to determine questions of policy interpretation relevant to the wording or pricing of policies more generally.
Nobody yet knows how busy the list will be, how frequently matters will be heard or how effective it will prove to be. However, in our view, the introduction of a specialist list to provide for more efficient determination of such issues is welcome. It may even provide a means of countering the worrying trend of recent years where insurers are joined to costly and lengthy disputes between insureds and third parties by allowing insurers to issue pre-emptive applications for early determinations on crucial points.
Additional details about the list and the initial dates on which it will be run are available from the Federal Court's letter to the Australian Insurance Law Association, which can be accessed here.
As part of the NCF reforms, the Court is developing Practice Notes for each of the eight NPAs. It is also developing general practice notes that apply to all or a number of NPAs or to procedures generally in the Court. One of these is the Class Actions Practice Note, which is expected to be released in draft early this year for consultation.
In early December, we attended a briefing at the Federal Court which provided a preview of what the Practice Note is likely to contain. The text of a speech given by Justice Murphy at the briefing can be accessed here.
Key changes are expected to include:
- There will be a Class Actions Registrar, who will assist the judges and parties from an early stage.
- The Class Actions Registrar will work with the parties to identify the main issues in the litigation, such as the value of the claim and the number and identity of the group members. Early mediations may be held in respect of these key, preliminary issues.
- The introduction of a second judge into the docket system. There will be a case management judge, who will deal with interlocutory matters not appropriate for the trial judge to hear (such as disputed claims for privilege), and a trial judge.
- Changes to the requirements regarding the disclosure of funding arrangements will be proposed.
Discussion at the briefing also indicated that the practice of setting early trial dates, or setting trial dates early, which we have seen recently in large, complex proceedings, looks likely to continue.
The Court will invite comment from stakeholders on the proposed changes once the draft Practice Note has been circulated.
All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.