On 7 December 2017, the Senate referred the Judiciary
Amendment (Commonwealth Model Litigant Obligations) Bill 2017 (the bill) to the
Legal and Constitutional Affairs Legislation Committee (the committee) for
inquiry and report by 8 May 2018.
The committee's reporting date was extended on four occasions to, in turn,
28 June 2018, 27 July 2018, 19 September 2018, and
7 December 2018.
In recommending the referral of the bill, the Selection of Bills
Committee raised the following issue for consideration:
Whether the bill appropriately responds to the
September 2014 Productivity Commission recommendation, in its Access to
Justice report, that compliance with model litigant obligations should be
Conduct of this inquiry
Details of the inquiry were advertised on the committee's website. The
committee also invited a range of potential submitters to make a written
submission by 28 February 2018, but accepted some submissions after
that date. The committee received 30 submissions, including five confidential
submissions. Submissions received are listed at appendix 1.
The committee held two public hearings for this inquiry, in Sydney on
14 June 2018 and in Canberra on 26 October 2018. Witnesses
appearing at these public hearings are listed at appendix 2
Copies of all public submissions, Hansard transcripts of public
hearings, and responses to questions on notice are available on the committee's
Structure of this report
This report consists of three chapters:
This chapter provides a brief overview of the bill as well as the
administrative details of the inquiry.
Chapter 2 briefly examines a recommendation of the Productivity
Commission regarding model litigant obligations, as highlighted by the
Selection of Bills Committee, and related evidence.
Chapter 3 discusses the key issues raised during the inquiry, and
provides the committee's view and recommendations.
Purpose of the bill
The bill is a private senator's bill. It was introduced into the Senate
by Senator David Leyonhjelm on 15 November 2017.
Senator Leyonhjelm stated that the purpose of the bill is to subject
Commonwealth litigants to enforceable model litigant obligations.
During his second reading speech, Senator Leyonhjelm explained that the
bill 'would compel future Attorneys‑General to maintain the practice of
issuing binding obligations to act as a model litigant, and would make these
obligations enforceable'. He added:
Firstly, the bill establishes a process by which the
Commonwealth Ombudsman can investigate a complaint about a Commonwealth
litigant failing to act in accordance with its obligations as a model litigant.
Secondly, the bill empowers a court to order a stay of
proceedings while the Ombudsman considers a complaint. Thirdly, the bill
provides that, if the court is satisfied that the Commonwealth litigant has
contravened or is likely to contravene the model litigant obligations, the
court may make any order it considers appropriate.
What is the model litigant obligation?
The content and application of model litigant obligations vary between
the Commonwealth, states and territories.
At the Commonwealth level, the model litigant obligation is found in
subordinate legislation and also recognised in the common law.
The Attorney‑General's Department provided a brief history of the
model litigant obligation, in both subordinate legislation and the common law:
The obligation to act as a model litigant has been recognised
as a common‑law obligation upon the Commonwealth since 1912. As espoused
in the well-known Melbourne Steamship High Court case, it requires the
Commonwealth to conduct itself with a standard of fair play.
Until the early 1990s, the Attorney-General's Department was
the sole provider of legal services for the Commonwealth, and this included the
conduct of litigation. From 1 July 1995, competition for the provision of legal
services was introduced by enabling private firms to be engaged directly by
agencies. In anticipation of this change, the first iteration of the [Legal
Services Directions] was issued by the Attorney-General's Department in 1994.
These directions existed to ensure the continuation of a coordinated and
consistent approach to Commonwealth legal work and included reference to the
obligation to act as a model litigant. In 1999 the directions were first issued
by an Attorney-General under the Judiciary Act and introduced the codified
version of the model litigant obligation. The present Legal Services Directions
of 2017 continue to require the Commonwealth to act as a model litigant in
handling claims and litigation, and operate in addition to the common-law
The model litigant obligation in legal
The Attorney‑General is responsible for the maintenance of proper
standards by the Commonwealth in litigation.
Under section 55ZF of the Judiciary Act, the Attorney may issue directions
that apply to Commonwealth legal work. These are the Legal Services Directions
2017 (the Directions).
The Directions cover a broad range of matters relating to Commonwealth legal
work, including the model litigant obligation. The Directions are more than
guidelines; they are legally binding to all Commonwealth agencies and
departments, including with respect to the model litigant obligation.
Paragraph 4.2 of the Directions states that Commonwealth entities are to
handle claims and conduct litigation in accordance with the Commonwealth's
obligation to act as a model litigant, noting that an entity is not to
start legal proceedings unless it is satisfied that litigation is the most
suitable method of dispute resolution.
This obligation is set out in detail at Appendix B of the Directions.
The obligation requires Commonwealth litigants to act honestly and
fairly in handling claims and litigation in a number of listed ways.
This includes, for example, 'not taking advantage of a claimant who lacks the
resources to litigate a legitimate claim', and 'not causing unnecessary delay
in the handling of claims and litigation'.
The obligation sets a high standard, as it:
...may require more than merely acting honestly and in
accordance with the law and court rules. It also goes beyond the requirement
for lawyers to act in accordance with their ethical obligations.
However, the Directions also expressly state that the obligation 'does
not prevent the Commonwealth and Commonwealth agencies from acting firmly and
properly to protect their interests'.
The Directions further state that the obligation:
'...does not therefore preclude all legitimate steps being taken to
pursue claims by the Commonwealth and Commonwealth agencies and testing or
defending claims against them';
'...does not prevent the Commonwealth from enforcing costs orders
or seeking to recover its costs'.
The obligation applies to litigation, including before courts,
tribunals, inquiries, and in arbitration or other alternative dispute
It also applies to the full breadth of litigation in which the Commonwealth
[T]he Commonwealth may find itself engaged in litigation
against a self‑represented litigant who may be challenged to comply with
the court or tribunal processes. However, the Commonwealth also finds itself
engaged with extremely well resourced litigants, such as litigants from the
banking or finance sector, who may seek to take every technical point that they
can construct. In both of these situations the Commonwealth is under the model
The obligation applies across a large volume of litigation, as the
Commonwealth may be engaged in tens of thousands of actions at any one time.
The model litigant obligation in
the common law
In addition to the obligation in the Directions, the courts have
recognised that Commonwealth litigants should act as model litigants.
In the case of Melbourne Steamship Co Ltd v Moorehead in 1912, Griffith
I am sometimes inclined to think that in some parts – not all
– of the Commonwealth, the old-fashioned traditional, and almost instinctive,
standard of fair play to be observed by the Crown in dealing with subjects,
which I learned a very long time ago to regard as elementary, is either not
known or thought out of date. I should be glad to think that I am mistaken.
As the Law Council of Australia submitted, the common law duty is
enforced by the courts, 'pursuant to their inherent powers to control the
judicial processes of the court and to supervise and discipline legal
practitioners as officers of the court'.
In general terms, it appears there is significant overlap between the
obligation in the common law and the obligation in the Directions.
One submitter highlighted the Federal Court decision of ASIC v Rich,
in which the court held that the model litigant obligation in the Directions
can be referred to as an aid to understanding the content of the common law
Another highlighted Qantas Airway Ltd v Transport Workers Union of Australia,
in which the common law obligation was said to be 'broader and more
fundamental' than the obligation in the Directions.
Existing oversight of compliance with the model litigant obligation
Oversight by the Attorney‑General's
The Directions (including the obligation) are administered by the Office
of Legal Services Coordination (OLSC), which is located within the Attorney‑General's
Department. The OLSC's oversight work includes:
educating government agencies about the obligation, either on a
targeted basis or broadly across the Commonwealth;
coordinating platforms—such as the General Counsel Working Group
and the Australian Government Legal Network—to support individual agencies to
seek guidance on complex issues they may be facing, and
working with agencies to address any systemic issues of non‑compliance.
The OLSC oversees compliance with the obligation in line with its
The framework lists the various purposes of the OLSC's compliance activities,
one of which is to:
...monitor compliance with the Directions and, in doing so, (i)
obtain feedback on the operation of the Directions to identify any areas for
development and/or clarification, and (ii) identify common or systemic issues
The OLSC receives notifications of alleged breaches of the obligation in
a number of ways, including from a party in dispute with the Commonwealth or
judicial criticism. In addition, Commonwealth entities are obliged to report as
soon as practicable to the Attorney‑General or the OLSC any possible or
apparent breaches of the Directions by the entity, or allegations of breaches
by the entity of which it is aware. Entities are also obliged to report any
corrective steps that have been taken or are proposed to be taken by the
Notwithstanding these reports to the OLSC, the Directions state that compliance
with the obligation is primarily the responsibility of the Commonwealth agency
responsible for the litigation.
When the OLSC receives a notification about a breach or alleged breach, it
reviews the notification in line with its Compliance Framework.
The framework states, in part:
Consistent with agency responsibility and accountability for
achieving compliance with the Directions, agencies are expected to have
arrangements in place to consider and appropriately respond to allegations of
non-compliance, and to take necessary remedial action to ensure better practice
in compliance with the Directions.
OLSC does not conduct reviews in relation to, or resolve,
complaints from members of the public about agency compliance. Complaints
received from members of the public are forwarded to the relevant agency for
The Attorney‑General's Department submitted that when a complaint
is made to a department, that department will ensure resources are available to
assess the complaint. This may include 'referring the complaint to senior staff
or counsel from the private bar who have no other connection to the matter to
consider the allegations in the complaint'.
In cases where the OLSC considers that an agency may have misunderstood its
obligations under the Directions, the OLSC will work with that agency.
If an individual is unhappy with how a department handled their
complaint, the Attorney‑General's Department noted that that individual
may ask the Commonwealth Ombudsman to undertake an investigation.
Moreover, the Attorney‑General's Department told the committee
that the remedies received by a person complaining to the OLSC about a breach
would depend on the nature of the alleged breach:
If it's a question of not complying with the procedural
orders of the court and we agree that the Commonwealth agency is not complying
with the orders of the court, we would be taking steps to make sure the
Commonwealth agency did comply with the orders of the court. And we'd be asking
them why they hadn't. We wouldn't necessarily be imposing a further penalty,
but we would be seeking to have them comply with the orders of the court. There
are ways in which that can be done, if necessary. The attorney can issue
directions, for example, as to the conduct of an agency in a piece of
The Attorney‑General is also able to impose sanctions for non‑compliance
with the Directions, including non‑compliance with the obligation.
Oversight by the Commonwealth
The Commonwealth Ombudsman, among other things, assists people to
resolve complaints about government administrative action.
The Ombudsman has jurisdiction over all Commonwealth entities and their
contracted service providers, subject to some specific statutory exclusions
(such as the intelligence agencies and Australian Taxation Office).
The Ombudsman currently has the jurisdiction to consider complaints
about perceived breaches by Commonwealth agencies of the Legal Services
Directions, including the model litigant obligation. This jurisdiction exists
under section 5 of the Ombudsman Act, as the Directions are an
administrative instrument and adherence is a matter of administration falling
within the functions of the Ombudsman's office.
Further, the actions of private legal representatives acting on
instructions from Commonwealth agencies are also, in effect, already within
jurisdiction. As the Ombudsman's Office submitted:
My jurisdiction does not extend to considering the actions of
private legal representatives as proposed in the Bill, however private legal
representatives act on the instructions of the Commonwealth agency and
adherence to the model litigation obligation applies to all litigation
undertaken by an agency regardless of representation. Arguably, the proposed
expansion of my functions to include private legal representatives is
unnecessary, as private legal representatives act on instructions from
Commonwealth agencies, who are already within jurisdiction.
In practice, the Ombudsman would typically not involve itself in matters
that are before a court.
In addition, the Ombudsman would likely refer to the OLSC any matters solely concerning
the model litigant obligation, and as the Ombudsman advised the committee, such
referrals happen 'from time to time'.
It should also be noted that the Inspector‑General of Taxation
operates independently of the Commonwealth Ombudsman. The Inspector‑General
is responsible for the handling of all complaints regarding the administrative
actions of the Tax Office and the Tax Practitioners Board. This can include
complaints relating to the model litigant obligation.
Key provisions of the bill
The bill effectively sets out a particular approach that could be taken
in cases where the model litigant obligation may have been breached. The bill
relates directly to the obligation set out in the Legal Services Directions (as
distinct from the common law obligation), and seeks to make it enforceable.
Schedule 1 of the bill would amend the Judiciary Act 1903 (Judiciary
Act). Schedule 2 would amend the Ombudsman Act 1976
(Ombudsman Act). This section outlines the key provisions of the bill in
Amendments to the Judiciary Act
Requiring the Attorney-General to
ensure there is a model litigant obligation
Currently, section 55ZF provides that the Attorney‑General may
issue directions regarding Commonwealth legal work. Proposed subsection
55ZF(2A) would require the Attorney‑General to ensure that there
are Legal Services Directions that contain a model litigant obligation.
The bill would not require the obligation to apply to criminal
prosecutions and related proceedings, which is consistent with the current
A court may stay proceedings if it
is alleged that the obligation was breached
Proposed section 55ZGA states that a court may stay proceedings, or part
of proceedings, for a period the court considers appropriate and subject to any
conditions the court considers appropriate, if a party to the proceeding:
has made a complaint to the Ombudsman that a Commonwealth
litigant has contravened or is likely to contravene the model litigant
has applied for a stay.
A court may make orders if it is
satisfied that the obligation was breached
Proposed section 55ZGB states that a court may make any order it
considers appropriate if:
a party to the proceeding has made a complaint to the Ombudsman
that a Commonwealth litigant 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 transferred the
complaint, has either completed the investigation or advised of a decision not
to investigate, or 60 days have passed since the complaint was made, and
in a proceeding to which the complainant and the Commonwealth
litigant are party (which may not be the proceeding in which the complaint
arose), the court is satisfied, on the application of the complainant, that the
Commonwealth litigant contravened or is likely to contravene the model litigant
obligations as referred to in the complaint.
The Explanatory Memorandum (EM) provides examples of orders that a court
may consider appropriate:
orders to promote future compliance by the Commonwealth litigant
with model litigant obligations, or
orders to 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
Enabling enforcement of the
obligation in accordance with the proposed court powers
Currently, under subsections 55ZG(2) and (3) of the Judiciary Act:
'[c]ompliance with a Legal Services Direction is not enforceable
except by, or upon the application of, the Attorney General', and
'[t]he issue of non-compliance with a Legal Services Direction
may not be raised in any proceeding (whether in a court, tribunal or other
body) except by, or on behalf of, the Commonwealth.'
The bill would amend these provisions to enable the enforcement or
raising of non‑compliance in accordance with the proposed court powers
(at proposed sections 55ZGA and 55ZGB).
In addition, currently a person is not liable to an action or other
proceeding, whether civil or criminal, for or in relation to an action done or
omitted to be done in compliance or 'in good faith in purported compliance' with
a Legal Services Direction.
The bill would reduce this protection by making it subject to the
proposed court powers at proposed sections 55ZGA and 55ZGB.
The EM states that this is to ensure that the protection 'does not prevent the
enforcement of model litigant obligations set out by this Bill'.
Amendments to the Ombudsman Act
The Ombudsman may investigate
complaints that allege breaches of the obligation
The relevant functions of the Ombudsman are set out in existing section
5 of the Ombudsman Act. The EM states that the bill would insert new
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'.
These proposed subsections also contain provisions that seek to ensure
the Ombudsman, rather than the Inspector‑General of
Taxation, will investigate complaints about breaches of the obligation even
where they relate to tax administration action;
the Ombudsman cannot decide not to investigate a complaint on the
basis that it relates to a commercial activity of a department or prescribed
Notwithstanding these proposed amendments, it is worth noting evidence
from the Commonwealth Ombudsman (outlined above) indicating that the Ombudsman
is already able to investigate alleged breaches of the obligation.
It should also be noted that, despite these proposed amendments, it
appears the Ombudsman would retain discretion not to investigate a complaint on
While the bill would remove the ground relating to commercial activity, the
Ombudsman may retain discretion to not investigate a complaint on other grounds
listed in section 6 of the Ombudsman Act. These existing grounds include,
for example, that the Ombudsman may decide not to investigate if it is of the
opinion that investigation 'is not warranted having regard to all the circumstances'.
The Ombudsman must report on
complaints received and action taken
Proposed subsection 5B(3) requires the Ombudsman's annual report to
include details of complaints it received regarding the obligation, as well as action
taken by the Ombudsman, departments or prescribed authorities in relation to
Consideration by other Parliamentary committees
The Parliamentary Joint Committee on Human Rights stated that the bill
does not raise human rights concerns.
The Scrutiny of Bills Committee provided no comment on the bill.
Note on references
In this report, references to Committee Hansard are to proof
transcripts. Page numbers may vary between proof and official transcripts.
The committee thanks all submitters and witnesses for the evidence they
provided to this inquiry.
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