Thursday, April 23, 2009

Fast Track Cases

The Federal Court has just announced the commencement of a fast track case management system. It is expected that cases under fast track can be finalised within 5 to 8 months from the date of filing.

The positives are quite compelling. Commercial parties could now have a more reliable estimate as to the length of any litigation. Because of compressed time and regulated procedures minimising delays and pre-trial skirmishes, estimate of legal costs will be much more accurate. Certainty, or at least a reduction of uncertainty, will be very welcomed by commercial clients. My view is that every commercial dispute should be fast-tracked, or at least very closely case-managed. From my experience, the dynamics of commercial litigation is such that more often than not, one party benefits from delays, and that party is more often, but not always, the defendant. Think insurance companies, debtors, etc. I was recently in proceedings in the Supreme Court where my calculations arrived at the compelling conclusion that the defendant had a clear economic incentive to delay and fight without settling, since the legal costs (plus adverse costs orders) and interests on the amount claimed from the defendant does not exceed the funding costs of the defendant if that amount should be sourced externally from a bank (if any were available, such was the financing bottleneck during the subprime crisis). Therefore my client unwittingly became a financier!!

On an investment note, there are clear benefits to litigation funders, since one of the risks of litigation funding is that funds are tied up for such a long time waiting for a matter to go to trial.