Litigation | Your ultimate guide
At Lazarus Legal, we’ve been practising law in Australia for over 30 years, so we’ve seen and worked on numerous litigious matters throughout this time. In our experience, most people have little detailed knowledge about what litigation is – until the unfortunate time comes where they either have to initiate proceedings or respond to a claim that has been brought against them.
For that reason, we have created this guide to be your ultimate resource on everything you need to know about litigation. Here is what we’ll cover:
- What is litigation?
- A brief history of litigation
- Litigation law in Australia
- Types of litigation
- The cost of dealing with litigation
- What does a litigation lawyer do?
- How do you find and pick the right litigation lawyer?
- The difference between disputes and litigations
- The DO’s of dealing with litigation
- The DON’Ts of dealing with litigation
1. What is litigation?
Litigation is the formal process of resolving disputes through the courts. Essentially, it is a means by which one party can attempt to enforce or defend its legal rights against another party. Litigation is often misunderstood as another term for ‘lawsuit’, but a lawsuit is typically only one part of a litigation case. In fact, many other activities can be included before, during or after a lawsuit to enforce a party’s legal rights.
Litigation can be very long, complex, and expensive but must follow certain steps. Generally speaking, for a matter to proceed through the courts or tribunal process, it needs to start with one party filing either a statement of claim or an originating process. Whether the case is heard in a court or tribunal is determined by the proposed cause of action, relevant statutes and the monetary limits applied to the courts and tribunals in each jurisdiction.
More specifically, civil litigation is a type of legal dispute between parties that typically seek outcomes that are not criminal sanctions. The expected outcomes can be financial or in the form of a court order that dictates certain benefits favouring the party initiating the litigation. Civil litigation mostly arises out of disagreements and disputes between two or more legal entities. These entities may be individuals or organisations, or both.
Lawyers specialising in civil or commercial litigation are commonly referred to as ‘litigators’, and they can represent their clients in federal, state and local courts, as well as tribunals, arbitrations and mediations.
2. A brief history of litigation
Keen historians will know that the first real litigation, as we know it, came about as early as the Roman Empire, although it was quite some time before it began to take a more Australian shape.
The Australian legal system developed from British law brought here as part of Britain’s creation of a colony in the 1770s. In the second half of the nineteenth century, the British Parliament granted each of the colonies within Australia the right to set up a limited form of ‘responsible government’. This enabled each of these colonies to develop its laws and legal systems.
In parallel with these developments came a movement towards greater centralisation. As a result, each of the six colonies met at a series of conventions during the 1890s to work on a constitution. The Australian Constitution was passed as an Act of the British Parliament, and took effect on 1 January 1901, marking the beginning of an independent Australian legal system that is still at the heart of our system of government.
The matter of litigation and the correct framework for dealing with litigation was considered at each stage in this long evolution. The dispute resolution process has therefore become much more sophisticated and complex than the loose concept that first appeared centuries ago.
In more recent decades, there has been a general trend in Australia towards increased litigation and court cases, with people attributing this to many factors, including the easing of advertising regulations for law firms and the introduction of “No Win, No Fees” policies. Such a trend has had significant impacts on the way people and businesses operate. No matter whether increased litigiousness is considered a positive or negative thing, it seems unlikely this trend will reverse in the near future.
3. Litigation law in Australia
Australia’s legal system is undoubtedly complex – and this makes expert guidance when you are dealing with litigation even more essential.
Australia has a federal Government, where powers are divided between a central Government and individual States. Each State and Territory has its separate jurisdiction and within that its hierarchy of courts. The High Court of Australia is the body that unites these various court hierarchies and forms the ultimate court of appeal.
State and Territory Supreme Courts typically hear monetary claims above an agreed threshold (typically A$750,000 or more). Most States have two further levels of inferior courts. Also, some States have established specialist courts of limited jurisdiction for some categories of dispute or litigation.
The Federal Court of Australia covers almost all civil matters arising under Australian Federal law. All civil cases are heard by a single judge, while appeals will appear in front of three Federal Court judges.
For anyone dealing with large commercial disputes, there are two relevant systems – a combination of court-based litigation and alternative dispute resolution (or ‘ADR’) processes.
Unlike in many other countries, advocacy in tribunals and courts is not limited to barristers in Australia. Any lawyer who is admitted to practice in the applicable jurisdiction is authorised to appear on behalf of their client(s).
4. Types of litigation
There are essentially three categories of litigation: business/commercial, civil, and public interest. Under these large umbrellas, terms are an extensive range of litigation matters that vary significantly in scope and speciality. While litigation matters vary, more firms continue to diversify their practice areas to keep up with the changing landscape of clients’ needs.
Here are some of the most common types of litigation.
- Antitrust and competition
- Banking and finance disputes
- Bankruptcy, financial restructuring, and insolvency
- Class actions
- Construction and engineering
- Data protection, privacy, and cybersecurity
- Employment and labour
- Environmental law
- Fraud and asset recovery
- Intellectual property
- International arbitration
- Product liability, including automotive, pharmaceuticals and medical devices
- Professional negligence
- Public and administrative law
- Regulation and investigations, including compliance, regulatory and enforcement
- Securities litigation, regulation, and enforcement
- Shareholder disputes and activism
- Transport, including aviation, rail, admiralty, and shipping
- White-collar crime
- Property & real estate
- Torts & breach of contracts
5. The cost of dealing with litigation
Just as litigation now comes in infinite varieties, the cost of dealing with litigation can vary significantly too. With increasing numbers of cases failing to reach an outcome within the desired timeframe, a growing number of individuals and organisations are facing higher legal fees and even making national news with their cases.
Typically, there are two main types of cost involved in litigation, and no hard rule about which will be more expensive. Firstly, there are those which are governed by a contract, such as legal fees between solicitors and their clients. The second is those which are ordered by the court, such as financial compensation awarded against a party or on an indemnity basis.
Of course, ‘No Win, No Fee’ agreements are also offered to those unable to cover legal fees. In these situations, the client is only required to pay when there is a successful outcome and the firm simply receives an ‘uplift fee’ in addition to the usual professional costs. This has increased the number of litigation many businesses face, as there is a lower bar to entry.
6. What does a litigation lawyer do?
A litigation lawyer, or ‘litigator’, is a legal expert who represents and protects their client’s interests when there is a dispute. Their main roles are to advise their client on the most appropriate strategy to resolve or avoid disputes and conduct litigation on behalf of their client effectively. A litigation lawyer must advocate for their client’s best interest, including all activities within the litigation process, from the examination and pleadings to trial, settlement, and appeal proceedings.
A litigation lawyer can be the legal representative for either the applicant (the ‘plaintiff’) or the respondent (the ‘defendant’) in the matter. Regardless of who they represent, they are responsible for initiating or responding to claims, appearing in interlocutory applications, advocating before courts or tribunals, negotiating to avoid the need for court proceedings, and enforcing judgements.
7. How do you find and pick the right litigation lawyer?
Deciding on the right litigation lawyer is much like choosing any other service or product – research is the key to making an informed decision. Ascertain what practice area your litigation case sits within and utilise online resources to find firms who focus on that area. Begin compiling a list and consider asking for personal referrals from friends, family, and business associates – ideally, this list will reflect those recommendations.
Many firms offer free consultations that provide an opportunity to meet with a lawyer and; assess their experience, determine potential costs, ask questions relating to their legal team, and establish whether the relationship is ‘a good fit’. Given the substantial changes to communication and support offered by lawyers through the COVID-19 pandemic, it’s essential for clients to feel comfortable with the systems their chosen representative has in place.
8. The difference between disputes and litigations
Litigation is the method of resolving a dispute through a court or tribunal where a judge decides the outcome of the case, whereas disputes are traditionally more informal and don’t carry the weight of a judge’s decision (or the enormous cost!). Mediation, Arbitration and Expert Determination are all forms of ‘Alternative Dispute Resolution’ (or ‘ADR’). ADRs can be entered into voluntarily or as a result of a court order.
Mediation is a process that focuses on negotiation between the two parties, assisted by an impartial third party or ‘mediator’ who facilitates the communication. The mediator is either chosen and agreed privately by the two parties or appointed by a court if a decision cannot be reached. While the mediator can share views to support the negotiation process, they are unable to make binding decisions on the case. Most court rules will typically include a requirement for compulsory mediation at one stage during the proceedings.
Arbitration is a referral of the dispute to one or more impartial third parties who determine the case’s outcome. Unlike mediators, arbitrators have the power to make interim and final awards. Arbitration is typically either a pre-existing contractual condition stated in an existing agreement or a process that requires both parties’ agreement. Arbitration proceedings are similar to that of litigation – the key difference is the formal hearing of the case and determination of the outcome is strictly managed in a private setting.
Expert determination is a referral of a dispute to a subject matter expert who has the knowledge and experience to support the dispute negotiation process. The process of expert determination is not dissimilar to arbitration but is often the chosen method in disputes involving technical and particularly complex issues.
9. The DOs of dealing with litigation
Whether you are the initiator or the responder, there are ‘DOs’ and ‘DON’Ts’ for both parties when handling a litigation process.
Below are five key DOs;
- DO your research and hire the right lawyer for your case
- DO identify your goals and develop a strategy
- DO be proactive and perform due diligence to mitigate legal risks
- DO begin the process with an open mind and consider a collaborative approach
- DO gather evidence immediately and preserve it appropriately
10. The DON’Ts of dealing with litigation
Below are five key DON’Ts;
- DON’T hire just any lawyer and risk an unfavourable outcome
- DON’T discuss the case with others without first checking with your lawyer
- DON’T over-communicate with the other party or reach out to them directly
- DON’T be deceptive by overstating or understating the facts
- DON’T waste time or ignore risks raised by your lawyer