Dispute Resolution

The court system in Australia is divided into the federal court system and the state and territory court system, with each hearing different types of commercial disputes.

Federal courts generally deal with disputes arising under federal (Commonwealth) laws typically being disputes about tax matters, patents and trademarks, antitrust and consumer protection issues, corporations regulation and misconduct issues, takeovers and labour laws. Each state and territory of Australia has a Federal Court branch in which a dispute can be commenced, often depending on where the relevant parties to the dispute are based.

State and territory courts deal with non-federal matters for the most part, including the application of state and territory specific laws. Many contractual disputes and negligence claims are dealt with by those courts. There are different levels of state and territory courts depending on the size and nature of the dispute. Large commercial disputes will usually be dealt with in the Supreme Court, which is the highest court of each state or territory.

The Federal Court and each Supreme Court has an appellate division to which an appeal against a decision of a single judge of the Federal or Supreme Court, or a decision of an inferior federal, state or territory court may be made. In limited cases, a further and final appeal may then be made to the High Court of Australia.

Special fast-track services for commercial disputes exist in both the federal and state court systems. The parties to a dispute, and their lawyers, are expected and have a duty at law to co-operate with the court and to assist in facilitating the resolution of disputes as quickly, inexpensively and efficiently as possible. The courts also encourage the parties to exhaust all avenues of settlement prior to trial and, in many instances, the court may order parties to participate in mandatory mediation.

The Federal Court and state and territory Supreme Courts have developed sophisticated methods to deal with complex disputes and are at the forefront internationally in using technology to streamline the conduct of cases. Large trials are often run electronically, with the judge, witnesses and lawyers all working from an electronic set of documents displayed on computer screens around the court room. Technology is also used in other ways to facilitate the efficient conduct of proceedings, for example, it may be possible for evidence from foreign witnesses to be taken by video link, without the need for personal attendance.

Following the advent of the Covid-19 pandemic, the Australian courts have increasingly adopted technology to facilitate proceedings, easing many of its requirements around the in-person conduct of hearings and the witnessing of court documents. However, matters in the Federal Court of Australia have now largely returned to in person hearings (except as the Court directs otherwise) with some degree of pre-Covid normality. The Special Measures Information Notes (SMIN) in Response to Covid-19 (which included, amongst other allowances, greater access to electronic lodgement and signing of court documents, tendering documents to the court via electronic means, and providing access to Microsoft Teams links for participants who cannot attend in person) were revoked on 10 November 2022.

It is well recognised that full-scale court proceedings can involve considerable time and expense and strain relationships between the parties to the dispute. In many cases we recommend that a dispute resolution process outside the court system be considered.

Some contracts require the parties to arbitrate any disputes they have. Commercial parties, particularly in international transactions, may prefer to arbitrate disputes if possible because arbitral awards are more readily enforceable around the world than judgments of national courts. Also, unlike court proceedings, arbitration proceedings are generally private and afford parties a greater degree of confidentiality in respect of their dispute. The arbitration process often involves a semi-formal hearing, and the decision-maker is often appointed by the parties to the dispute.

Other alternative dispute resolution techniques which are often used include:

• mediation, which is a non-binding negotiation facilitated by a mediator. The mediator does not have authority (unlike an arbitrator in an arbitration) to bind the parties to a decision but can assist the parties in coming to a mutually satisfactory settlement; and
• expert determination, which produces a binding decision by an independent expert. The independent expert will usually have particular expertise or technical knowledge in the subject matter of the dispute. Expert determination is usually employed to resolve disputes concerning technical, factual matters rather than complex legal issues.