Benefits and Burdens of Case Management

Benefits and Burdens of Case Management:
The Victorian Experience with the “Rocket Docket”

A pressing question in civil litigation today is how to recognise the need for swifter, cheaper and more flexible dispensation of justice without simultaneously making unacceptable compromises in terms of accuracy or fairness in an age of ever-increasing complexity.  This was the driving force behind Lord Woolf’s 1998 inquiry in the United Kingdom as well as the more recent Victoria Law Reform Commission report released in May 2008.  A commonly recurring theme in the solutions and recommendations proposed by these and other reform inquiries is that of more proactive judicial case management coupled with a strict dose of proportionality – that is, courts should be both empowered and obligated to ensure, with the cooperation of the parties and at the earliest possible stage, that the amount of time and energy devoted to a particular matter is directly proportional to the nature and value of the interest or sum at issue.

In the Federal Court, the attempt to give concrete shape to this thesis resulted in the introduction in the Victoria Registry of the Fast Track List, known colloquially as the “Rocket Docket”.  As one of the three judges responsible for the management of this list since its inception in May 2007 – the other two are Justices Finkelstein and Middleton – I have been asked to address you on the results to date of the Victorian experience with this approach.  I should first be clear – the views I express are mine only and should not be taken to represent the views of the Federal Court generally or even those of the other Fast Track judges.

My view is that the List has been a success.  It should be more widely used.  Before embarking on a more detailed consideration of the benefits and burdens of the Fast Track List and my reasons for taking the view that I do, it is useful to begin with a brief summary of the genesis of the List and its key features.

I.    History and Overview of the Fast Track List

In describing how the Fast Track List came to be, I doubt I could do better than the short introduction currently found on the Federal Court’s website:

The key features of the List are described in the Federal Court’s Annual Report for 2007-2008 as follows:

To this description I would add two more key elements.  First, the aim is that trial should occur within two to five months of the scheduling conference, depending on the complexity of the case:  Fast Track Directions para 6.6.  Second, at least in my docket, the general presumption is not just that discovery will be limited, but that there will be no discovery unless the parties can identify with specificity particular documents or materials (not simply categories) that they require, the reasons that they require those documents, and why no alternative, cheaper means of obtaining the information is available (such as inspection, a summary created pursuant to s 50 of the Evidence Act 1995 (Cth), a letter or admission from the other side, or an affidavit from a witness with the relevant knowledge). 

This paper is not, however, intended to be confined to a record of the various procedural and substantive reforms that have been implemented in the Fast Track List to date; rather, I intend to devote the remainder of this paper to a discussion of the results of those reforms.  For those seeking more information regarding the content of Fast Track procedures, a copy of the Directions for the Fast Track List is attached together with one example of case summaries filed in a Fast Track matter.

II.    Empirical Analysis:  The Statistics and Their Pitfalls

One obvious place to start is with the statistics.  However, as the saying goes, one should always remember that there are lies, damn lies, and statistics.  That is to say, care must be taken in analysing claims based on statistics, as one can easily postulate multiple and contradictory explanations for any given statistic.

For example, let us take a very basic number. The Federal Court 2007-08 Annual Report, in concluding that the Fast Track List “continues to operate effectively,” states that “[t]he average time to finalisation [of a Fast Track matter] is four months [from the date of filing], and litigation costs have been substantially reduced.”³ At first glance, the figure of “four months” looks quite impressive.  But while I share the Report’s view that the List is operating effectively, that conclusion cannot be drawn from the four month figure alone.  One would first have to know how many cases are filed in the Fast Track list and then withdrawn or settled prior to the first court appearance.  That number would then have to be compared with the settlement rate in non-Fast Track cases.  If the Fast Track rate were greater, we would then have to consider whether cases are being brought in the List that would not have otherwise been brought and for purposes other than achieving a decision on the merits from the court. 

This would not be to say that such cases are being brought improperly if such were the case, but it would affect our evaluation of whether the four-month figure in the Annual Report is adequately representative or is instead skewed as a result of several cases that have been filed and discontinued shortly thereafter.  We might then want to consider whether a weighted average or even a median time to finalisation would provide better insight into the average case running time.

The same considerations would apply in analysing the statement that costs have been reduced.  Is the reduction in costs based on cases that were filed and then disposed of shortly thereafter, either without any significant activity or without orders as to costs?  Has it been taken into account that most Fast Track cases are by definition less complex than ordinary cases, and thus the costs would have been less even if they had been litigated in the general lists?

Two other statistics that might be of interest, particularly to those concerned that the time and costs savings of the Fast Track List are at the expense of fairness and accuracy, would be:  (1) the rate of appeals from Fast Track decisions as compared to the rate of appeals generally; and (2) the rate of reversal on appeal in Fast Track cases as compared to the rate of reversal generally.  Again, however, one could not simply accept the data as proving anything (even assuming that the number of cases to date in Fast Track was enough to constitute an adequate sample size).  With respect to the first figure, one would have to consider the possibility that rate of appeals in Fast Track cases might be lower not because there is less error but because the amount at stake is generally lower (and thus the incentive to continue the battle on appeal is lower even if one is convinced there was error) and because the cases are generally more straightforward, so that it is more often the case in Fast Track than generally that the parties will accept the decision at first instance. 

This in turn has implications for the significance, if any, that can be attached to the second figure.  For example, suppose it was to turn out that, based on a statistically significant sample size, the rate of reversal on appeal is higher in Fast Track cases.  However, if the rate of appeal might be lower for the reasons just given, the corollary is that in the few cases where appeal has been taken, the error at first instance must have been rather obvious (or at least obvious enough to convince a party to risk the costs of appeal where expected recovery is not great).  It would therefore not be surprising to find that the rate of reversal on appeal is higher in Fast Track cases. 

In short, the mere fact that reversal rates are higher in Fast Track cases would not of itself necessarily tell us much about whether Fast Track involves a sacrifice of accuracy.  Of course, even if it did, we would still be left to consider whether that reduction in accuracy was acceptable in light of the gains, however measured, in efficiency due to cost and time savings.

Regrettably, while I have posed a great many questions, I am not in a position to provide the answers to any of them.  The greatest difficulty is that the sample size of the Fast Track cases is not yet large enough to draw any reliable conclusions, particularly in relation to the appellate issues.  As of February 2009, there have been 75 matters filed in the Fast Track list. Of these 75 matters, 49 have been finalised.  Of these 49 matters, 35 were finalised before a hearing and 6 were finalised before any court appearance whatsoever.  15 were the subject of a judgment (interlocutory or otherwise).  This is the sharp-end of any statistics on the reliability of Fast Track.  Of these 15 judgments, there have been 3 appeals, of which 1 decision was reversed.  As I said, this sample size is nowhere near large enough for meaningful conclusions to be reached.  At very best, it provides some tentative indication that there is no great stampede for appeals from Fast Track decisions.  For those empirically-minded scholars in the audience looking for a future research topic, however, I encourage you to keep your eye on this topic and to consider submitting a request for the Court’s cooperation with any such research.  I have no doubt that the Court would give any such request all due consideration.

III.    Anecdotal Experience Regarding Benefits and Burdens

So much for statistical evidence of the benefits and burdens of Fast Track.  I now want to move on to what is, at least for the legal mind, more familiar and comfortable terrain – namely, that of anecdotal evidence.  I have in mind here a discussion responding to comments from practitioners based on my own experience over the last year and a half.  Rather than organising my discussion in terms of a list of benefits and then a list of burdens, however, I propose to express my views in the context of specific comments that have been made by practitioners and the bench.

Is formal adoption of Fast Track necessary?

The Court maintains on its website a list, current as of 24 November 2008, of matters that have been brought or referred to the Fast Track list to date⁴.  A quick look at that list reveals that the majority of cases are in trade practices and intellectual property (“IP”).  Many of the trade practices cases are misleading conduct cases brought by the Australian Competition and Consumer Commission (the “ACCC”).  Often, the respondents are small businesses that would not be able to incur the costs of full-scale Federal Court litigation without risking financial ruin⁵.  Moreover, it is also often the case that liability is not contested and the only question is one of judicial acceptance or determination of the appropriate penalty⁶.  In such straightforward cases, the Fast Track advantages of reduced costs and speedy processing are clear, particularly for respondent businesses, although no doubt the ACCC is also happy to have additional favourable data for its case clearance reports.

The intellectual property cases are mainly trade mark and copyright.  Particularly in relation to the trade mark cases, my sense is that in most of them, liability is not a hard question.  It would seem that many of the IP cases are brought primarily so that the applicant can obtain formal or informal discovery as to the amount of profits made by the respondent.  Once that occurs, the case is either withdrawn or settled.  Again, it goes without saying that to proceed in these cases by making process orders at multiple directions hearings, allowing general discovery, and so forth, would be of little benefit.  By requiring both the parties and the court to cut to the chase (which in these infringement cases is often about the amount of profit made by the respondent) at the beginning, much time and expense is saved.

Notwithstanding these benefits, one comment (or perhaps criticism) that pops up is that while the benefits just described may be accepted, they still do not justify the existence of a formal Fast Track List.  For example, one users’ group in another registry of the Federal Court, after discussing the possible benefits of Fast Track, concluded that “there was no need for the formal adoption of this system …, as there already exists the flexibility to deal with matters very quickly where this is necessary/appropriate”.  This may of course be technically true.  However, in my view, the formal adoption of a Fast Track List would be of benefit even in those jurisdictions, for at least three reasons.

First, the existence of formal, published procedures for expedited proceedings will save the court the time and effort of reinventing the wheel each time a new case arises.  In the absence of standard procedures, the judge would have to explain to the parties (or in some cases counsel might be in the position of explaining to the court) the particular procedures and the reasons why such procedures are in place.  Even in cases where both sides were amenable to such a course, the settling of the abbreviated procedures for that case might require hours of court time.  Moreover, if one side or the other resisted, the fact that there had been no ex ante notice or consent to abbreviated procedures might give rise to concerns were the court to unilaterally abbreviate procedures.

To take a particular example, para 9.2 of the Fast Track Directions states that interlocutory applications will be decided on the papers as a matter of course.  Without a formal rule to this effect known to the parties prior to filing of the case (as opposed to an informal procedure proposed at the first directions hearing), it would be difficult to decide such an application on the papers over the objection of a party without giving rise to an appellable issue.  At the very least, the cost of the additional debate over the procedures to be employed might eat up any cost and time savings obtained from their ultimate implementation.

A second and related benefit arising from formal adoption of a Fast Track-style system instead of ad hoc implementation is the increase in predictability, stability, and certainty to the parties and the efficiency gains that flow.  This necessarily follows from the basic proposition that in any legal system disputes tend to be greater where the substantive and/or procedural rules to be applied in resolving those disputes are uncertain.  Let me explain what I mean.  Where a formal Fast Track exists, any party (but particularly a potential applicant) can study the Fast Track rules and reasonably rely on them to predict that the case will be completed (at least at first instance) within a stated amount of time, that only a given amount of pre-trial discovery and interlocutory disputes will occur, and the terms on which those pre-trial steps will occur.  From this, the party can make a rough but fair calculation of the expected costs of any case that litigant might choose to bring or defend.  That litigant can then, by considering the amount of those costs in relation to the amount of likely recovery and the estimated chances of success, make two important decisions on an informed basis:  first, is it worth bringing or defending the case at all; and second, is it worth compromising the claim prior to filing or defending, and if so, for how much?  These questions are asked by every litigant — what are my risks, when is the trial and when is judgment.  Fast track provides answers to those questions up front.

Now consider what would happen in a jurisdiction where fast-tracking, to the extent it exists there, is wholly informal.  In that case, the party, who presumably does not know which judge the case will be docketed to (if at all), is unlikely to be in a position to predict with confidence whether the case when filed will come before a judge (or be reallocated to a judge) who will fast-track it; much less can that litigant confidently predict the precise form of Fast Track procedure that will be adopted.  Therefore, the calculations as to the expected costs and length of the case will be less accurate and may lead to the bringing of more cases that, in hindsight, ought not to have been brought (because the costs were disproportionate to the recovery) or could have been compromised. 

The third advantage of formal adoption of Fast Track procedures is that it encourages their development and use.  In a jurisdiction where there are no formal Fast Track rules, practitioners and the court, even though they may have some awareness that informal expediting procedures have been or may be used, will be reluctant to adopt them on an ad hoc basis.  This is not just a consequence of reinventing-the-wheel but also a consequence of another basic observation about human behaviour, which is that people are much more reluctant to do something in the absence of formal authority.  This observation is behind the current call for procedural justice reforms in Victoria, the Federal Court, and elsewhere, to give judges more explicit and specific grants of procedural authority even in cases where power probably, if not certainly, already exists.

Is Fast Track procedurally biased against respondents?

The first question I dealt with challenged the need for a formal Fast Track system even in cases where it cannot reasonably be disputed that the benefits of abbreviated and expedited procedures outweigh any burdens.  More common, however, are questions as to whether the burdens of Fast Track may, either in general or in particular cases, outweigh the benefits.  One commentator explained his concern that expedited procedure might inherently favour applicants as follows:

This commentary raises a valid concern – although the person having the first move in litigation can be said to have a certain advantage (whose nature and extent will vary depending on the type of case) regardless of whether it is fast-tracked or not, that advantage may be magnified in systems where time for response is less.  As such, the court should of course remain vigilant to guard against any potential unfairness to respondents arising from tight timelines.  That being said, in my view adequate procedures are in place to meet and mitigate such concerns.

The first and most obvious of these procedures is removal from the list, which is provided for by para 4.4 of the Fast Track Directions.  If a respondent forms the view that it will not be able to meet Fast Track deadlines, it should promptly seek removal from the list.  The way to do this is to make a request to the Court accompanied by material showing good cause for the request.  This material need not be extensive, but it should explain precisely and clearly the difficulties of the respondent’s position.  For example, a respondent might say XYZ documents are critical to their defence but they are archived in Hong Kong and in any event the witnesses all live in Macao.  Or a respondent might say, of the three executives responsible for a transaction and who will be required to give evidence, two are out of the country for the next three months and the third has left the company and cannot be located at present.

But those are easy cases.  More likely the commentator had in mind situations where there is insufficient reason for removing the case from the list but the respondent needs more time to attend to a specific task.  Again, provision for such cases is made by the Fast Track Directions, particularly paras 6.7 and 6.10.  At the outset, the respondent should consider very carefully prior to the initial scheduling conference the amount of time the litigant will need to prepare for trial and the steps that will need to be completed in preparation for that trial; if the litigant thinks a date proposed by the applicant or the court is unfeasible, the litigant should say so and explain why.  Similarly, if it turns out after the conference that, due to unforeseen circumstances, the deadline cannot be met, the respondent can and should promptly inform the court.  If good cause is shown, the court will grant (and in my own experience has granted) an extension, particularly where good faith efforts or substantial compliance has been shown.  I should note here that the worst thing a respondent can do is keep silent, make a late filing, and then belatedly seek the court’s indulgence.

In my view, the short answer to the commentator’s concerns, then, is that (a) procedures to accommodate respondents are in place and provided that there is a reasonable justification for accommodation, it is usually given, and (b) the court can and will work with respondents, and parties generally, to mitigate or eliminate any perceived unfairness arising from tight timelines.

I hasten to emphasise something that follows from what I said at the outset – no respondent in a Fast Track matter (and indeed no applicant) will ever get as much time as they might ideally want (ie that they would get in an ordinary case) in order to complete a certain task.  That is because the fundamental premise of the Fast Track list is that the time to be afforded in a given case should be directly proportional to the interests at stake and complexity of the case.  In other words, a case in the List is usually but not always one that is either not complex, where the issues are relatively narrow or the interest at stake is relatively small.  At the end of the day, a Fast Track respondent, notwithstanding that it might receive certain accommodations or indulgences, simply will not receive the amount of time that would be afforded in a non-Fast Track of case.

How can you run a case without “proper” discovery?

A third type of concern that is raised regarding Fast Track is how you can run a case without “proper” discovery.  When Fast Track was being rolled out, this was perhaps the biggest concern of practitioners⁸.  For instance, one practitioner was quoted as saying that the limits on discovery could dissuade some clients from using Fast Track and, “It’s up to the client to weigh up the advantage of speed versus the risk of not having proper discovery”⁹.  The answer to the question of how you can run a case with limited or no discovery is that in some cases, you cannot.  For example, I doubt you could ever run a Fast-Track shareholder class action, cartel case, or, for that matter, any kind of even mildly complicated fraud or misrepresentation claim without discovery.  The problem is that in all of those cases the applicant’s case will hinge upon evidence that the applicant does not have; evidence that the applicant suspects, but does not know, is in the possession of the respondent.  In many of these cases, the real battle is not the trial on the merits (the occurrence of which is the exception rather than the rule), but the applicant’s quest to verify its suspicions in discovery.  Needless to say, Fast Track is not the place for those kinds of procedural slugfests.

However, there are many cases, even relatively big cases, where the limitation or elimination of discovery is eminently possible.  For instance, in contract disputes, both sides will presumably have the executed contracts as well as the relevant drafts already in their possession.  Similarly, in IP cases, many of the design documents and allegedly infringing products will be publicly available. 

Of course, even in those cases, successful pre-trial management and limitation of discovery requires a lot of up-front preparation by both the court and the parties, as well as a healthy dose of cooperation.

The first point is key.  Fast Track simply does not work unless each of the parties comes to the initial scheduling conference with a firm idea as to (1) the key elements of its cause of action or defence; (2) the evidence not already in its possession that it will need to make its case; and (3) the way that that evidence can be gathered most efficiently.  In some sense, this might be characterised as a “burden” of Fast Track.  That is, the court and the parties must spend significantly more time analysing a case prior to the first directions hearing.  I generally make fairly detailed notes of questions and comments I have regarding the case summaries, and often direct my associate to research particular issues that may not directly have been raised but appear likely in my view to arise.

In the long run, however, I consider that this preparation yields a net benefit.  The reason that general discovery orders are often made in regular cases is that neither the court nor the parties has much idea at the first directions hearing as to what the case is about.  Rather, the view seems to be, “Well, let’s ship some documents back and forth, root around, and see what turns up.  Then we can amend the pleadings or make more refined and further discovery requests as necessary.”  The effect of that approach is that months go by and many dollars are spent to arrive in a place that could have been reached much earlier with a little bit of additional up-front diligence.

The way I manage discovery is therefore as follows.  The first step is to clarify with counsel the basic case for their respective clients, because even in a Fast Track case using narrative case statements there is inevitably still a certain amount of misunderstanding both between the parties and within their own camps as to precisely what kind of case they intend to run.  However, in my experience, with a little judicial prodding, the wheat can be separated from the chaff.  The aim of this prodding has been aptly summarised by the English Mercantile Judge Simon Brown QC as follows:

The next step is to ask each side what documents or materials they will need to make out that case.  For example, in a copyright case, the applicant will need the copyright work, evidence of how and by whom it was created, evidence of sales, samples of the allegedly infringing product, evidence of how the infringing product was created, and evidence of the sales or profits made from the allegedly infringing product.  Much of this evidence will already be in its possession.  To the extent it is not, I ask the applicant what kind of evidence that litigant would like to see.  If counsel asks for “all documents relating to the creation or sale of respondent’s product XYZ,” I ask why.  Usually after a few minutes reflection, counsel will concede that witness statements, supported by exhibits of the materials upon which they rely, from the three employees identified by the respondent as having designed its product will suffice.  Similarly, if a party asks for all documents evidencing sales of the items, I ask them whether a summary prepared pursuant to s 50 of the Evidence Act 1995 (Cth), or perhaps a right to have an accountant inspect the relevant books of the accountant, will do instead.  In still other cases, discovery regarding quantum is postponed pending the outcome of a trial on liability only.

Many of you might be shocked to find out that in most cases, once the request is reduced to specific and limited materials, the other side is willing to provide the material within a very short time frame (without the cost of preparation of a sworn list) or even concede the fact by letter voluntarily.  But perhaps it is not so amazing that parties will be in the mood to make concessions once they find out that they do not have to photocopy boxes and boxes of documents. 

The point about cooperation cannot be emphasised too much.  In my experience, Fast Track has been most successful in cases run by experienced counsel who not only do not see litigation either as a war of attrition to be won by taking every procedural point or as a battle to the death to be won by leveraging superior resources but also recognise the truth of the infection theory of advocacy that taking or maintaining a bad point infects the good.

In my own experience, the lack of so-called “proper” discovery in Fast Track has not proven to be a burden.  While I am willing to concede that I might be biased on this point and that a proper answer to the question posed would require also canvassing the views of counsel who have appeared before me in Fast Track matters, I would nevertheless maintain the view that the only three prerequisites for limiting or even eliminating discovery in most cases suitable for expedited procedure are:  (1) active judicial management, (2) thorough preparation at the initial stages of the case by the Court and the parties, and (3) a modicum of cooperation between the parties.

IV.    Thoughts for the Future and Conclusions

I wish to leave you with a few parting thoughts on expanded use of Fast Track procedures in the future.  I noted earlier that the two main types of Fast Track cases to date have been trade practices and intellectual property.  In the days ahead, however, I look forward to seeing Fast Track expand to a broader range of areas that lend themselves to the expedited nature of the List.

At a dinner to mark the opening of the 2009 legal year, Chief Justice of New South Wales, the Hon. James Spigelman said that the legal community could not ignore the severity of economic conditions¹¹.  His Honour said:

Marginalisation of the legal profession has already started.  More and more people are avoiding the courts to resolve their disputes.  Where the courts were once seen as the primary source of dispute resolution, the public are now turning to external mediation, community dispute resolution centres, arbitration and the like.  Why — because often the legal system is just too expensive and too slow.  This marginalisation has important consequences for the role of the rule of law in this Country and the health of a democratic society.  As a profession, we have a duty to protect both.  Not the only way, but one way, is to provide swifter, cheaper and more flexible dispensation of justice without making unacceptable compromises in terms of accuracy or fairness in an age of ever-increasing complexity.  The Fast Track list is one mechanism in that process.

The Honourable Justice Michelle Gordon

Presentation Material

Notice to Practitioners – Directions for the Fast Track List
Example Case Summary

Footnotes

1. http://www.fedcourt.gov.au/how/fast_track_list.html
2. Federal Court of Australia, Annual Report 2007-2008 at 13, available at http://www.fedcourt.gov.au/pdfsrtfs_a/annual_report_2007/annualreport2007.pdf.  See also http://www.fedcourt.gov.au/how/fast_track_list_key_elements.html
3. Annual Report, above note 2, at 13.
4. See http://www.fedcourt.gov.au/how/fast_track_list_key_matters.html
5. See eg ACCC v Oobi Baby Pty Ltd [2008] FCA 1488; ACCC v Aust Tanning Assoc (VID 420/2008); ACCC v Netti Atom Pty Ltd [2007] FCA 1945; ACCC v Hercules Iron Pty Ltd [2008] FCA 1182.
6. See cases cited above, n 6, as well as ACCC v Audi Australia Pty Ltd [2007] FCA 1990.
7. Gottschall J (Senior Associate, Allens Arthur Robinson), “Litigation – Federal Court Victoria – Rocket Docket Update” AAR Intellectual Property Bulletin (December 2007), available at http://www.aar.com.au/pubs/ip/ipbulldec07.htm (visited 1 February 2009).
8. Ollier P, “Australia’s rocket docket litigation on trial,” Managing Intellectual Property (21 May 2007), available at http://www.managingip.com/Article/1377147/Australias-rocket-docket-litigation-on-trial.html (visited 1 February 2009).
9. Ibid.
10. Dale C, “Rocket Dockets in Australian Case Management” the e-disclosure information project (9 June 2008), available at http://chrisdale.wordpress.com/2008/06/09/rocket-dockets-in-australian-case-management/#more-241 (visited 1 February 2009).
11. The Hon J.J. Spigelman AC ‘Keynote Address’ (Opening of the Law Term Dinner, Sydney, 2 February, 2009).