Acting for Government in Criminal and Civil Jurisdictions: Expectations and Ethical Obligations

1. Acting for Government in Criminal and Civil Jurisdictions: Expectations and Ethical Obligations By the Honourable Justice Jeffrey Spender of the Federal Court of Australia

2. Expectation and Ethical Obligation The Commonwealth of Australia is required to be a model litigant. • This obligation • Is expressed in the Commonwealth Attorney-General’s Legal Services Directions 2005, a binding legislative instrument; and • Is an accepted principle at Common Law • The obligation on State and Territory governments to be model litigants is the same as the Commonwealth’s

3. Background to the Model Litigant Obligation • Section 64 of the Judiciary Act provides: • In any suit to which the Commonwealth or a State is a party, the rights of parties shall as nearly as possible be the same, and judgment may be given and costs awarded on either side, as in a suit between subject and subject. Notwithstanding substantive equality as a party, additional expectations are imposed on the Commonwealth. The Standard of conduct is higher than that required by Court rules or professional standards.

4. Rationale for the Model Litigant Obligation • The notion that government litigants should be held to a higher standard than private litigants is justified by the nature of the Commonwealth as a litigant; • Government litigants are taxpayer-funded, and are said to represent the public interest – that is, they are funded by, and act on behalf of, all members of the general public; • The Commonwealth is perceived to have superior access to resources and experience. • Thus, primarily because of the public character of their role and the consequent community expectations of their behaviour it is ‘well settled’, as Basten states, that government lawyers • in Australia and other common law countries … are required in civil cases, as well as criminal cases, to meet higher professional standards and to conduct themselves in a manner which advances the interests of justice.

5. Statutory Basis for the Obligation • The Commonwealth Attorney-General has outlined the Commonwealth’s model litigant obligation in Appendix B to Legal Services Directions 2005 (‘the Directions’). • The Directions were made under section 55ZF of the Judiciary Act 1903 (Cth), which empowers the Attorney-General to issue directions applying to ‘Commonwealth legal work’. • The Legal Services Directions 2005 commenced on 1 March 2006 and are an updated version of the Legal Services Directions 1999, which commenced on 1 September 1999. The changes which were made to the Directions are: • New clause 2(d) has been inserted to draw agencies’ attention to the need, in accordance with the obligation, to consider and participate in alternative dispute resolution. • Note 4 has been clarified to include information about the Commonwealth’s obligations and discretions in relation to cases of public interest. • New clauses 3 and 4 and the note following have been inserted to make explicit the requirement that the model litigant obligation extends to agencies involved in merits review processes, and to provide information about the requirement to act as a model litigant in the merits review context. • New clause 5 has been inserted to elaborate on the requirement of the Commonwealth to act as a model litigant in merits review proceedings. These provisions reflect the Government’s commitment to the appropriate use of alternative dispute resolution.

6. What is the Model Litigant Obligation? The obligation to act as a model litigant requires that the Commonwealth and its agencies act honestly and fairly in handling claims and litigation brought by or against the Commonwealth or an agency by: • dealing with claims promptly and not causing unnecessary delay in the handling of claims and litigation • paying legitimate claims without litigation, including making partial settlements of claims or interim payments, where it is clear that liability is at least as much as the amount to be paid • acting consistently in the handling of claims and litigation • endeavouring to avoid, prevent and limit the scope of legal proceedings wherever possible, including by giving consideration in all cases to alternative dispute resolution before initiating legal proceedings and by participating in alternative dispute resolution processes where appropriate • where it is not possible to avoid litigation, keeping the costs of litigation to a minimum, including by: • not requiring the other party to prove a matter which the Commonwealth or the agency knows to be true, and • not contesting liability if the Commonwealth or the agency knows that the dispute is really about quantum • not taking advantage of a claimant who lacks the resources to litigate a legitimate claim • not relying on technical defences unless the Commonwealth’s or the agency’s interests would be prejudiced by the failure to comply with a particular requirement • not undertaking and pursuing appeals unless the Commonwealth or the agency believes that it has reasonable prospects for success or the appeal is otherwise justified in the public interest, and • apologising where the Commonwealth or the agency is aware that it or its lawyers have acted wrongfully or improperly.

7. What is the Model Litigant Obligation (continued) The Notes to the Directions flesh out this content Note One The obligation applies to litigation (including before courts, tribunals, inquiries, and in arbitration and other alternative dispute resolution processes) involving Commonwealth Departments and agencies, as well as Ministers and officers where the Commonwealth provides a full indemnity in respect of an action for damages brought against them personally. Ensuring compliance with the obligation is primarily the responsibility of the agency which has responsibility for the litigation. In addition, lawyers engaged in such litigation, whether Australian Government Solicitor, in‑house or private, will need to act in accordance with the obligation and to assist their client agency to do so.

8. What is the Model Litigant Obligation (continued) Note Two In essence, being a model litigant requires that the Commonwealth and its agencies, as parties to litigation, act with complete propriety, fairly and in accordance with the highest professional standards. The expectation that the Commonwealth and its agencies will act as a model litigant has been recognised by the Courts.

9. What is the Model Litigant Obligation (continued) Note Three The obligation to act as a model litigant may require more than merely acting honestly and in accordance with the law and court rules. It also goes beyond the requirement for lawyers to act in accordance with their ethical obligations.

10. What is the Model Litigant Obligation (continued) Note Four The obligation does not prevent the Commonwealth and its agencies from acting firmly and properly to protect their interests. It does not therefore preclude all legitimate steps being taken to pursue claims by the Commonwealth and its agencies and testing or defending claims against them. It does not preclude pursuing litigation in order to clarify a significant point of law even if the other party wishes to settle the dispute. The commencement of an appeal may be justified in the public interest where it is necessary to avoid prejudice to the interests of the Commonwealth or an agency pending the receipt or proper consideration of legal advice, provided that a decision whether to continue the appeal is made as soon as practicable. In certain circumstances, it will be appropriate for the Commonwealth to pay costs (for example, for a test case in the public interest.)

11. Enforceability The Explanatory Statement to Legal Services Directions 2005 states: The Directions are a legislative instrument and have the force of law. Sanctions can be imposed for non-compliance. These sanctions may include the issue of a specific Direction by the Attorney-General, in relation to the conduct of a particular matter or the use of a particular legal services provider. They may also include adverse comment on an agency or a provider being made to the Attorney-General or the relevant Minister. Section 55ZG(2) of the Judiciary Act provides that only the Attorney-General can enforce the Directions. Further, the issue of non-compliance with a Direction may not be raised in any proceeding (whether in a court, tribunal or other body) except by, or on behalf of, the Commonwealth: s 55ZG(3)

12. Fairness vs Firmness • I have referred to Note Four of the Direction. • As to firmness, the Commonwealth should not cave in to spurious or vexatious claims; or take a ‘soft’ approach. Instead, it should appropriately test all claims; rely on legal professional privilege where appropriate; make public interest privilege claims objecting to disclosure of information; seek security for costs where appropriate (in one case the Commonwealth obtained an order for $4 million security for costs); oppose oppressive subpoenas/discovery; seek to strike out untenable claims; and act properly to protect the Commonwealth’s interests. (Leader B, “The Model Litigant Principle: Can the AGS Stay Competitive?” (1998) 73 Reform 52)

13. The Model Litigant Obligation at Common Law The Model Litigant Obligation has been recognised by the Common Law. The key case in this area is Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333 (‘Moorehead’), in which Griffith CJ observed (at 342-343): • The point is a purely technical point of pleading, and I cannot refrain from expressing my surprise that it should be taken on behalf of the Crown. It used to be regarded as axiomatic that the Crown never takes technical points, even in civil proceedings, and a fortiori not in criminal proceedings. • I am sometimes inclined to think that in some parts – not all – of the Commonwealth, the old-fashioned traditional, and almost instinctive, standard of fair play to be observed by the Crown in dealing with subjects, which I learned a very long time ago to regard as elementary, is either not known or thought out of date. I should be glad to think that I am mistaken The substance of this obligation is recognised in the UK, Canada and the United States. In the US, Chief Judge Mikva of the US Court of Appeal for the District of Columbia Circuit said in Freeport-McMoran Oil and Gas v FERC 962 F2d 45 (DC Cir 1992): … A government lawyer “is the representative not of an ordinary party to a controversy,” the Supreme Court said long ago in a statement chiseled on the walls of the Justice Department, “but of a sovereignty whose obligation ... is not that it shall win a case, but that justice shall be done.” Berger v. United States, 295 U.S. 78, 88, 55 S.Ct. 629, 633, 79 L.Ed. 1314 (1935). The Supreme Court was speaking of government prosecutors in Berger, but no one, to our knowledge (at least prior to oral argument), has suggested that the principle does not apply with equal force to the government's civil lawyers. In fact, the American Bar Association's Model Code of Professional Responsibility expressly holds a “government lawyer in a civil action or administrative proceeding” to higher standards than private lawyers, stating that government lawyers have “the responsibility to seek justice,” and “should refrain from instituting or continuing litigation that is obviously unfair.” Model Code of Professional Responsibility EC 7-14 (1981).

14. The Model Litigant Obligation at Common Law in Australia • Many Australian cases refer to this obligation: • P&C Cantarella Pty Ltd v Egg Marketing Board (NSW) [1973] 2 NSWLR 366 at 384 per Mahoney J • Kenny v South Australia (1987) 46 SASR 268 at 373 per King CJ • SCI Operations Pty Ltd v Commonwealth (1996) 69 FCR 346 at 368 per Beaumont and Einfeld JJ • Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 at 196-7 per Finn J • Yong Jun Qin v Minister for Immigration and Multicultural Affairs (1997) 75 FCR 155 at 167 per Beaumont, Burchett and Goldberg JJ • Scott v Handley (1999) 58 ALD 373 at 383 per Spender, Finn and Weinberg JJ • Wodrow v Commonwealth [2003] FCA 403 at [42], [43] per Stone J • Pacific National (ACT) Ltd v Queensland Rail (2005) 215 ALR 544 at 559-560 per Jacobson J • Federal Commissioner of Taxation v Indooroopilly Children Services (Qld) Pty Ltd [2007] FCAFC 16; (2007) 158 FCR 325 at 326-7 per Allsop J • Australian Competition & Consumer Commission v Leahy Petroleum Pty Ltd [2007] FCA 1844 at [25] per Gray J • Australian Competition and Consumer Commission v Visy Industries Holdings Pty Ltd (No 2) [2007] FCA 444 at [105] per Heerey J

15. The Judge’s View of the Model Litigant Obligation I direct your attention to an extensive discussion of this topic by the Hon Darryl Davies QC in (1999) 92 Canberra Bulletin of Public Administration 36