Gary Humphries (ACT, Liberal Party, Shadow Parliamentary Secretary for Defence Materiel) Share this | Link to this | Hansard source

asked the Minister representing the Attorney-General, upon notice, on 8 November 2011:

In regard to breaches of model litigant rules (MLR):

(1) What processes does the department have to monitor all Commonwealth litigation to ensure that agencies comply with the MLR.

(2) What is the cost of monitoring compliance with the MLR.

(3) When were the MLR last reviewed and by whom.

(4) Can a copy of the review report be provided, if one exists.

(5) Why did the department fail to include key data on breaches of the Legal Services Directions (LSD) in its 2010-11 annual report, and was this:

(a) an administrative oversight and at what level in the department; or

(b) a conscious decision and at what level and for what reason.

(6) In relation to the 2010 and 2011 release of the breaches of the LSD data which the Attorney-General made in August 2011, is the department concerned about any trends that appear to be forming.

(7) Can a breakdown be provided of the data into the breaches of the LSD, including what the breach was for and how many of the breaches related to agencies failing to act as model litigants.

(8) Why did the most recent release of the LSD breaches data not include data on the 'still under investigation' category.

(9) In relation to the criticism in the Denlay v FCT case which was decided in the Court of Appeal, Supreme Court of Queensland in 2010: (a) what lessons have been learnt in relation to taking steps towards bankruptcy against a taxpayer engaged in objecting to an Australian Taxation Office (ATO) assessment; and (b) does the department's area with responsibility for MLR outcomes have an involvement in the prosecution of such cases; if so, did it challenge the course taken by the ATO.

(10) In relation to the decision by Edmonds J in Australian Competition and Consumer Commission (ACCC) and Metcash (August 2011): (a) what action has been taken by the Office of the Legal Services Commissioner and/or the ACCC in relation to the judge's comment that certain government witnesses gave 'unreliable evidence'; and (b) does this comment alone constitute a breach of the MLR; if so: (i) what investigation has occurred and with what results, and (ii) what was the cost of this case to the Commonwealth.

(11) Given that the MLR procedures refer to certain sanctions for breaches of the MLR: (a) what are these sanctions; and (b) how many times have the sanctions been imposed.

(12) For all MLR breaches in the 2010-11 financial year, can a breakdown be provided by agency and/or department, along with the action and/or outcome.

(13) Do departments and agencies each appoint an MLR contact person so that that person can independently assess whether all available evidence has been handed over to the party against whom an agency might be taking legal action; if so, with what effect; if not, has this been considered.

(14) Can a breakdown be provided, by case, of the costs for each of the 20 most expensive pieces of litigation (civil and criminal) finalised during the 2010-11 financial year.

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

The Attorney-General has provided the following answer to the honourable senator's question:

In relation to the question as a whole, the Commonwealth 'Model Litigant Rules' are set out in paragraph 4.2, Appendix B (The Commonwealth's Obligation to Act as a Model Litigant) of the Legal Services Directions 2005 (the Directions). These model litigant obligations exist as part of the overall obligations the Directions impose on Commonwealth agencies in relation to the handling of claims and litigation.

In relation to the Senator's specific questions:

(1) The Directions provide the framework for the way in which the Department monitors the Commonwealth's compliance with model litigant obligations in the handling of civil claims and litigation. In order to ensure compliance with model litigant obligations the Department:

On occasion, judicial officers and tribunal members comment on their expectations of the conduct of a Commonwealth litigant including the obligation to act as a model litigant. In some instances critical comments are made. Generally, these comments are referred to the Department and the conduct of the relevant Department or Agency in the proceedings is reviewed in terms of its compliance with the Directions, including the model litigant obligations.

(2) The cost is not directly measured, as monitoring compliance with the model litigant obligation is performed as part of the functions of the Office of Legal Services Coordination.

(3) The model litigant obligation was last amended in 2008 by the Attorney-General.

(4) The explanatory statement for the 2008 amendments to the Directions is attached.

(5) (a) an administrative oversight and at what level in the department; or

(b) a conscious decision and at what level and for what reason.

The failure to include data on breaches of the Directions in the Department's 2009-10 annual report was an administrative oversight by the Department. The Office of Legal Services Coordination is the area within the Department with relevant responsibility. It is the long standing practice of the Department to publish data about compliance with the Directions in its Annual Report. This practice has not changed. The omission was corrected with the urgent publication of the statistics on the Department's website. The 2009-10 statistics were also included in the 2010-11 Annual Report. The statistics were uploaded to the website in August 2011, and the Annual Report was published in October 2011.

(6) As outlined in (7) below, of the 24 breaches in 2009-10 there was one breach of the model litigant obligations, with the remaining breaches mainly related to tied work (para 2), consultation (para 10) or agency reporting (para 11). Of the 18 breaches in 2010-11, there were no model litigant obligation breaches. One breach related to engagement of counsel, with the remaining breaches being reporting (para 11) breaches.

The Department will continue to monitor agency conduct with a view to requiring all Commonwealth agencies to achieve the highest professional standards in its handling of claims and litigation.

(7)—

(8) The number of breach matters still under investigation is set out in the final column of Table 6 of Page 63 of the Department's 2010-11 Annual Report.

(9) This question is more appropriately directed to the Australian Taxation Office

(a) As noted in the response to question 1, the Department raises issues in relation to compliance with the Legal Services Directions (including the model litigant obligation) with agencies. Consistent with this, the matter of Denlay has been discussed between the Office of Legal Services Coordination and the Australian Taxation Office.

(10) This comment has been taken into account in the Office of Legal Services Coordination investigation.

(a) Judicial comment does not establish a finding of a breach of the Legal Services Directions.

(i) The investigation into this matter is ongoing, so I am unable to comment further at this stage; and

(ii) The cost of individual cases is not reported to the Attorney-General's Department.

(11) The purpose of the Directions is to improve standards and levels of compliance across the Commonwealth in respect of the purchasing of legal services and the conduct of the Commonwealth in civil claims and litigation. Any sanctions in relation to non-compliance of the Directions, and the requirement to report a breach, are intended to encourage a culture of compliance.

The Departments Compliance and Enforcement Strategy is under review.

The Department provides an outreach education program to ensure increased awareness of, and compliance with, the Directions by the Commonwealth and its legal services providers.

In assessing compliance, the Department consults where appropriate with the relevant agency on a case by case basis to ensure appropriate remedial action is taken to avoid recurrence.

The types of sanctions that could be imposed by the Attorney in cases of serious breach include:

No sanctions were imposed in the 2010-11 financial year.

(12) There were no breaches of the model litigant obligation in the 2010-11 financial year.

(13) No. Any arrangement to appoint a model litigant contact person would be made on an agency by agency basis. There is no current requirement for each agency to have a designated model litigant contact person.

(14) No. Each year agencies are required by the Directions (para's 11.1(ba) & 11.1(da)) to make public and report to OLSC on agencies legal services purchasing and expenditure during the preceding financial year in respect of its legal services expenditure. Reporting on expenditure is not required to be done on the basis of a breakdown per individual piece of litigation. Agencies are not required to report on expenditure on legal services expenditure on criminal matters which are not covered by the Directions.

In 2010 the Department released the Commonwealth Legal Services Expenditure Report 2009-10. The report is available on the Attorney-General's Department website at:

http://www.ag.gov.au/www/agd/agd.nsf/Page/CommonwealthLegalServicesExpenditure_CommonwealthLegalServicesExpenditure2009-2010

2009-2010 was the first time the Department had released this report. The Department is in the process of publishing the 2010-11 report.

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Attachment A

EXPLANATORY STATEMENT

ISSUED BY THE AUTHORITY OF THE ATTORNEY-GENERAL

Judiciary Act 1903

Legal Services Directions

Legislative background

Under section 55ZF of the Judiciary Act 1903, the Attorney-General may issue legal services directions applying generally to Commonwealth legal work (as defined in that section) or in relation to Commonwealth legal work performed in relation to a particular matter. The power to issue legal services directions was conferred having regard to the Attorney-General's responsibility, as first law officer, for legal services provided to the Commonwealth and its agencies, including Commonwealth litigation, and for the provision of legal advice to Cabinet.

Legal Services Directions were initially issued under this provision in 1999. They are administered by the Attorney-General with the assistance of the Office of Legal Services Coordination (OLSC) in the Attorney-General's Department. OLSC provides assistance and advice to agencies about the operation of the Directions. OLSC also publishes relevant information about the Directions (such as Guidance Notes on their interpretation and emerging issues) on its website: http://www.ag.gov.au/olsc .

Policy background to the Legal Services Directions

The Directions set out requirements for sound practice in the provision of legal services to the Commonwealth.

The Directions are an important mechanism to manage, in a whole-of-government manner, legal, financial and reputation risks to the Commonwealth's interests. They give agencies the freedom to manage their particular risks, which agencies are in the best position to judge, while providing a supportive framework of good practice.

For example, the rules about the conduct of tied work ensure that the Commonwealth minimises the risk that portfolio-specific approaches to questions of public international law or constitutional law (for instance) will impair the Commonwealth advancing and maintaining a consistent and clear position on such matters.

Another example of how the Directions provide support for good practice can be found in paragraph 10 which sets out requirements for consultation with an agency in relation to a request for advice concerning the interpretation of legislation administered by that agency. Such requirements minimise both the chance for unnecessary and inefficient duplication of work and the chance of inconsistent positions being taken by agencies on the same legislative provisions.

The Directions are a legislative instrument and have the force of law. Sanctions can be imposed for non-compliance. These sanctions may include the issue of a specific Direction by the Attorney-General, in relation to the conduct of a particular matter or the use of a particular legal services provider. They may also include adverse comment on an agency or a provider being made to the Attorney-General or the relevant Minister.

History of the Directions

In 2004, the Attorney-General initiated a review of the Directions of 1999. As a result, a new instrument was issued in 2005.

This Statement explains the provisions of the Directions, and draws attention to aspects of the Directions which differ from those issued in 2005.

Contacting OLSC

Questions about the interpretation and operation of the Directions can be directed to OLSC. Contact details are as follows.

Telephone (02) 6250 6611

Facsimile (02) 6250 5968

Mail: Assistant Secretary

Office of Legal Services Coordination

Attorney-General's Department

Robert Garran Offices

National Circuit

BARTON ACT 2600

Email: olsc@ag.gov.au

Website: http://www.ag.gov.au/olsc

SECTIONS

Section 1

Section 1 of the instrument sets out the name of the instrument.

Section 2

Section 2 specifies that the instrument commences on 1 July 2008.

Section 3

Section 3 provides for the amendment of the previous Directions which were issued to take effect from 1 March 2006.

SCHEDULE 1: LEGAL SERVICES DIRECTIONS

PART 1 FMA Agencies

Paragraph 4 (Claims and litigation by or against the Commonwealth or FMA agencies)

Paragraph 4.2 of the Directions provides that claims are to be handled and litigation is to be conducted by the agency in accordance with The Commonwealth's Obligation to Act as a Model Litigant, at Appendix B to the Directions.

The amendment will extend the provision to note that the agency is not to start legal proceedings unless it is satisfied that litigation is the most suitable method of dispute resolution. This obligation in relation to commencing legal proceedings will be found at new paragraph 5.1 in Appendix B to the Directions.

Paragraph 11 (Agency responsibility)

A new subparagraph 11.1(da) has been added to require Chief Executives of agencies to report to OLSC within 60 days after the end of each financial year about their agency's legal services expenditure and the legal work of the agency, using a template approved by OLSC. The mandatory use of the template will assist in obtaining consistent information that will in turn allow for a better and more accurate analysis of Commonwealth legal services expenditure.

A consequential technical amendment is required to subparagraph 11.2(b) to enable a new subparagraph 11.2(ba) to be inserted into paragraph 11.2.

A new subparagraph 11.2(ba) imposes a responsibility on Chief Executives of agencies to provide specified details to OLSC on an annual basis about aspects of the agency's use of persons appointed by the Attorney-General under section 63 of the Judiciary Act 1903 to receive service in proceedings to which the Commonwealth is a party.

A new set of provisions (paragraphs 11.3, 11.4 and 11.5) introduce a requirement on the Chief Executives of agencies to ensure that in procuring legal services the agency does not adversely discriminate, subject to an actual conflict of interest arising, against legal services providers that have acted, or may act, pro bono for clients in legal proceedings against the Commonwealth or its agencies.

PART 2 Extended or modified application of the Directions

Paragraph 12 (Extended application of Directions to non-FMA bodies)

A new paragraph 12.3A has been included to extend the application of the amendments to the Directions to bodies that are not agencies regulated by the Financial Management and Accountability Act 1997. The extended application of the amendments is designed to protect the legal, financial and reputation interests that underlie the rest of the Directions.

In particular, by requiring agencies regulated by the Commonwealth Authorities and Companies Act 1997 to also report on their legal services expenditure, it will provide OLSC with more comprehensive information about legal services purchasing across whole of government.

Paragraph 12A (Obligations of persons appointed under section 63 of the Judiciary Act 1903 to receive service)

This is a new paragraph that imposes an obligation on persons appointed by the Attorney-General under section 63 of the Judiciary Act 1903 to accept service, to report to the agency on whose behalf service has been accepted, about the receipt of the service using a template approved by OLSC.

The use of a standard Notice will ensure that agencies are aware that, although a particular provider has accepted service, agencies are free (subject to the tied work rules in the Directions) to instruct the legal services provider of their choice to have carriage of the matter.

General notes

The notes provide examples, interpretive assistance and further information on issues concerning or closely relating to the Directions.

Note 2A titled 'Who can receive service in proceedings to which the Commonwealth is a party' clarifies that lawyers providing legal services to the Commonwealth or its agencies who are appointed by the Attorney-General under section 63 of the Judiciary Act are the only persons able to receive service on behalf of the Commonwealth.

Appendix A (Tied areas of Commonwealth legal work)

The technical amendments to paragraph 6 and subparagraph 8(a) are to provide for consistency of language used in the Directions.

Appendix B (The Commonwealth's obligation to act as a model litigant)

This Appendix explains the nature and scope of the Commonwealth's obligation to act as a model litigant, which has received long-standing recognition in Australian common law.

New subparagraph 2(aa) has been inserted to require the Commonwealth and its agencies to make an early assessment of the Commonwealth's or the agency's prospects of success in legal proceedings that may be brought against the Commonwealth or its agencies; and the Commonwealth's potential liability in claims against the Commonwealth or its agencies.

The amendment made to paragraph 2(e)(i) is a technical consequential amendment.

New subparagraphs 2(e)(iii) and 2(e)(iv) are inserted to require the Commonwealth and its agencies to continue to consider other methods for resolving the dispute throughout the course of litigation. This is to make it clear that the consideration of alternate methods of dispute resolution; for example, settlement negotiations or formal alternative dispute resolution; is a continuing obligation.

A new paragraph 5 has been substituted for the previous provision in order to emphasise the importance of agencies doing all they can to resolve disputes without recourse to litigation. The Commonwealth or its agencies are only to start court proceedings if other methods of dispute resolution (eg alternative dispute resolution or settlement negotiations) have been considered.

Paragraph 6 and its note are omitted to ensure consistency in the Directions as the amendments require arrangements to be made so that a person participating in any settlement negotiations on behalf of the Commonwealth or an agency can enter into a settlement.