Productivity Commission recommendation regarding model litigant obligations
On 5 September 2014 the Productivity Commission reported to
the Australian Government regarding its inquiry into access to justice
arrangements. The report was publicly released on 3 December 2014.
Recommendation 12.3 of the inquiry was as follows:
The Australian, State and Territory governments (including
local governments) and their agencies and legal representatives should be
subject to model litigant obligations.
Compliance should be monitored and enforced, including by
establishing a formal avenue of complaint to government ombudsmen for parties
who consider model litigant obligations have not been met.
State and Territory Governments should provide appropriate assistance
for local governments to develop programs to meet these obligations.
The Explanatory Memorandum (EM) for the bill states that the bill
'enacts this recommendation as it relates to the Commonwealth'.
As noted in Chapter 1, the Selection of Bills Committee suggested that the
committee may consider whether the bill appropriately responds to the
Productivity Commission's recommendation.
The Productivity Commission's inquiry and the government's response
The Productivity Commission's inquiry considered a broad range of access
to justice issues across states, territories and the Commonwealth, one of which
related to model litigant obligations.
Participants in the Commission's inquiry generally supported model
litigant obligations but expressed various concerns. The Commission grouped
these concerns into three areas—coverage, content and compliance—noting that
compliance was the major source of concern.
The Commission made the following observations:
In comparison to self-represented litigants, parties such as
governments and big businesses carry a substantial degree of bargaining power —
reflecting the economic resources at their disposal and their greater
experience and knowledge of the system as repeat users.
Special power also inheres in the nature of government
itself, so judges expect high standards of competence, candour and civility
from government parties and their lawyers. These expectations are typically
embodied in model litigant rules, which set out acceptable standards and
boundaries for the conduct of litigation with the aim of resolving disputes
efficiently and appropriately. But there are concerns that model litigant rules
lack enforceability, creating weak incentives for governments to comply.
A key point identified by Commission was as follows:
Governments and their lawyers use model litigant rules to
guide their behaviour. Evidence on their effectiveness is mixed. While good in
theory, in practice it appears that they are not always enforced. Compliance
and enforcement need to be more even and transparent.
On 29 April 2016 the Australian Government released its
response to the Productivity Commission's report.
With respect to recommendation 12.3, the government noted that the model litigant
obligation, set out in paragraph 4.2 and Appendix B of the Legal
Services Directions 2005 (now superseded by the Legal Services
Directions 2017), requires the Commonwealth and its agencies to act
honestly and fairly in handling claims and litigation. The government further
While Commonwealth officers owe obligations to the
Commonwealth under the Directions, the Directions are not intended to provide a
remedy, cause of action or any personal rights in addition to those already
available through administrative or judicial review. This was confirmed in Caporale
v Deputy Commissioner of Taxation  FCA 427.
The question of compliance with the Directions, including the
Model Litigant Obligations, is a matter between the Attorney-General and the
relevant Commonwealth agency or Department. Any other approach could give rise
to technical arguments and result in additional costs and delay in litigation
involving the Commonwealth.
The Compliance Framework, introduced in 2013, emphasised
greater agency responsibility for understanding the Directions and ensuring
compliance, with the Office of Legal Services Coordination's role being to
receive alleged breach notifications to identify systemic issues and
deficiencies in understanding or operation of the Directions.
Where an individual is unhappy with the handling of their
complaint by an agency, they may seek a review by the Commonwealth Ombudsman.
The EM takes issue with this response:
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
Issues raised in evidence
Some submitters were of the view that the bill implements the
Productivity Commission's recommendation.
The Rule of Law Institute noted that the Commission's inquiry was
'detailed, thorough and independent'. It also suggested that government
departments, 'being the very targets of the model litigant rules, are
hopelessly conflicted and their claims should be carefully scrutinised'.
Moreover, the Institute took issue with the government's response to the
Commission's inquiry, and submitted that the bill 'faithfully carries out' the
In contrast, the Australian Taxation Office firmly agreed with the
government response to the Productivity Commission's report.
Further, the Department of Human Services and the Attorney‑General's
Department both expressed concern that the bill goes beyond the Productivity
The Attorney‑General's Department posited that while the
recommendation 'focuses on an avenue of complaint to the relevant ombudsmen',
the bill proposes that complaints about the obligation could be raised to
affect substantive court proceedings, and courts would be expected to
A departmental representative explained:
In effect, the Productivity Commission was talking about
access to justice on a national basis—Commonwealth, state and territory—and
talked about ensuring the model litigant obligation was able to be oversighted
by a direct complaint mechanism through to the Ombudsman. In the department's
view the bill goes beyond that recommendation by elevating that complaint to a
substantive issue that can be brought before the court and then it is unclear
in how the court is expected to deal with any report or investigation outcome
of the Ombudsman. In terms of the types of people that it applies to, the
definition of 'Commonwealth litigant' expands the obligation to more former
bodies, former individuals and former Defence Force people as well, which would
then result in the obligation being expanded, which I'm not really sure was
part of the Productivity Commission's recommendation.
The Attorney‑General's Department highlighted that existing
processes, including an avenue of complaint to the Commonwealth Ombudsman,
already exist. As such, 'the key elements of the Productivity Commission's
recommendation are therefore already in place at the Commonwealth level.'
In response to the suggestion that the bill is not inconsistent with the
Commission's recommendation, the department stated that if it was 'looking to implement
that recommendation, we would be limiting it to looking at a role for the
Ombudsman.' The bill, it observed, is 'not necessarily inconsistent' with the
recommendation, but introducing interaction with a court 'brings in a different
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