More than a slap on the wrist!

Pre-Action Protocols have been a fixture on the South Australian litigation landscape since May 2020. The consequences of non-compliance are now being dealt with and discussed by the Courts. In the event of a Court finding non-compliance with the requirement for Applicants to provide a Pre-Action Claim, a Court can order indemnity costs to be paid by the Applicants to the Respondents, and for a stay of the Applicants’ proceedings until compliance with this requirement.

In South Australia, prior to May 2020, there was an obligation imposed on all Applicants to formulate their claim and serve the same on Respondents at least 90 days prior to instituting proceedings (or 21 days in the Magistrates Court). Failure to do so resulted in some consequences: namely, in the Magistrates’ Court, the Applicants would not be able to recover their costs of preparing the pre-action notice and in the District and Supreme Courts, the Applicants would not be entitled to recover a portion of their costs of the action. Respondents were required to provide a response within 60 days of receipt of the formulated claim. There was potential for an adverse costs order against Respondents for their non-compliance with this requirement.

Since May 2020, the Uniform Court Rules (“UCR”) have further codified the requirements for provision of a pre-action claim (previously described as the formulated claim) prior to commencement of proceedings in any Court. The Pre-Action Protocols in Chapter 7 were born.

The current Pre-Action Protocols require the following:

1. Applicants have to provide Early Notice of their having suffered personal injury in accordance with UCR61.6(1) and (2) within 6 months of suffering the injury.
   
   Note: There are limited instances for an extension of this timeframe – see UCR61.6(3).
   
   
2. Respondents are required to provide a response to this Early Notice of personal injury within 6 weeks of receipt of this notice (see UCR61.6(4)).
3. UCR61.7(3) requires that prior to instituting proceedings, Applicants must have served a Pre-Action Claim on the Respondents. Note: UCR61.7(1) & (2) set out the required contents of a Pre-Action Claim.
4. In turn, Respondents must serve a Response to Pre-Action Claim on the Applicants (see UCR61.9) within either 30 days (for personal injury matters) or 21 days (for other matters) of receipt of the Pre-Action Claim.
   
   Note: UCR61.9(1), (2) & (3) set out the required contents of a Response to Pre-Action Claim.
   
   
5. UCR61.10 sets out additional pre-action steps to be taken in the event that third parties are to be added to the claim.
6. Parties must engage in a Pre-Action Meeting within 21 days of receipt of the last pre-action document (see UCR61.12(3)) or such later date as agreed by the parties.
7. When commencing proceedings, Applicants must (pursuant to UCR61.13(3)) confirm compliance with the Pre-Action Protocols or explain the reason for non-compliance.
8. In the event of non-compliance with the requirements to provide a Pre-Action Claim and a Response to Pre-Action Claim, the Court will list the claim for a special directions hearing (see UCR61.14(2)) or alternatively, UCR61.15(1) provides a vehicle for a party to bring an application relating to the non-compliance.
9. At such a hearing, by operation of either UCR61.14(3) to (6) and UCR61.15(2), a Court can make orders to facilitate compliance with the Pre-Action Protocols and for a stay of the proceedings pending compliance, as well as orders for the defaulting party to pay the other parties’ costs of the special directions hearing and costs thrown away due to the breach, on an indemnity basis.

Masters of the District Court have recently been called upon to adjudicate some instances of non-compliance with the Pre-Action Protocols.

It has become apparent that the Masters of the District Court will interpret and apply the Pre-Action Protocols as follows:

1. Each step of the Pre-Action Protocol is quite prescriptive as to the information which is to be supplied by either Applicants or Respondents. A Court will require strict compliance in ensuring that all prescribed information is provided before determining that a party has complied with their obligations under the Pre-Action Protocols.
   
   Note: However, UCR61.9(4) requires a compliant Response to Pre-Action Claim even if the Pre-Action Claim contains a defect or omission.
   
   
2. A Court will consider that each step of the Pre-Action Protocol is expressed in absolute terms which require compliance. For example, a Pre-Action Claim must be provided and a Pre-Action Claim Response must also be provided (unless an exemption has been applied for and granted by the Court).
3. A Court will require that any exemptions be specifically and formally applied for, citing detailed reasons/justifications for non-compliance to allow determination of the issue.
4. Given the prescribed form of the Statement of Claim, a Court will likely consider that a failure to check the boxes confirming that the Pre-Action Protocols have been complied with necessarily means that Applicants certify that these Protocols have not been complied with.
5. In the event of non-compliance without reasonable excuse/properly granted exemption, a Court will order that the non-compliant party pay costs on an indemnity basis.
6. A Court will also order a stay of proceedings pending compliance.

Implications for you

Recent decisions of the Masters of the District Court of South Australia confirm the necessity for Applicants and Respondents alike to comply strictly with the Pre-Action Protocols under pain of adverse indemnity costs orders made for non-compliance and a stay of proceedings pending compliance.