The Commonwealth Government will introduce a new law forcing parties to undertake alternative dispute resolution before going to court from August 1, but it is unlikely to have a noticeable impact on legal practitioners.

The Civil Dispute Resolution Act 2011 is aimed at increasing the number of disputes resolved out of court by requiring parties to lodge a statement about the steps they have taken to try and resolve their dispute when commencing proceedings in the Federal Court of Australia or in the Federal Magistrates Court.

Gilbert + Tobin litigation partner Steven Glass says any good litigation lawyer would already be doing this and that the Commonwealth is simply codifying it. “The law will require an additional piece of paper to be completed at a cost of a couple of hundred dollars to clients,” he said.  The real impact of the law will be on what Glass describes as bad or unethical lawyers who seek to take clients to court without exploring other options. “The question will be whether it is effective at making those lawyers settle disputes before going to court,” he said.

However, he emphasised that he knew of very few such lawyers and that they were on the fringe of the industry. Under the new law judges will be able to make personal cost orders against lawyers whom they think have failed to undertake reasonable proceedings before going to court on behalf of their clients. Whether the judges used these new powers would be the ultimate test of the law, said Glass.

Blake Dawson litigation and dispute resolution partner Sonia Tame says the law will have a marked impacted in the class action space. “In most commercial disputes clients, and we as legal counsel, are already trying to resolve disputes beforehand,” she said. However, defendants in class actions will find it useful, because it will mean they are not finding out about an action for the first time through a served notice, she said. “It will require the claimants and their legal advisers to undertake meaningful discussion first,” she added