Part 2: The Year in Review
Federal Court of Australia Annual Report 2015-2016
During the year under review, the Court continued to achieve its objective of promptly, courteously and effectively deciding disputes according to law, in order to fulfil its role as a court exercising the judicial power of the Commonwealth under the Constitution.
The Court's forward thinking approach to managing its work and its commitment to relentless improvement of practices, processes and technology brought continuing recognition of its leading role as a modern and innovative court.
During 2015–16, the Court maintained its commitment to achieving performance goals for its core work, while also developing and implementing a number of key strategic and operational projects. These are discussed separately below.=
Significant issues and developments
National Court Framework
The National Court Framework (NCF) is a fundamental reform to the Court and the way it operates. The Court's entire workload has been reorganised by reference to eight National Practice Areas (NPAs) – allowing it to operate as a truly national and international court.
Since last year, the Court has reorganised itself through three key changes:
- removing certain organisational structures based along registry lines and replacing them with the eight subject area based NPAs. This placed the focus on responding to the needs of the case and the parties rather than a geographically based approach. The previous impediments arising from State boundaries in the Court have been dismantled
- centralising the manner in which judges are allocated cases for their dockets with the creation of the National Operations Registrar role and team. This removed differing approaches in case management between registries, and
- reinvigorating the Court's case management procedures.
The reforms are designed to address the needs of litigants who seek highly skilled, inexpensive and expeditious dispute resolution.
New Practice Notes
A key component of the NCF reform is the review of the Court's practice documents to ensure nationally consistent and simplified practice. Currently, the Court has approximately 60 practice documents guiding how it operates. Under the NCF, there will no longer be administrative State-based notices and practice documents will be integrated and reduced to less than half the number that exists. The new practice notes are a central part of introducing a consistent national approach to case management and making the Court more streamlined and efficient.
The proposed new practice notes fall into three categories: the Central Practice Note, NPA Practice Notes and General Practice Notes.
The Central Practice Note is the core practice note for Court users and addresses the guiding NCF case management principles applicable to all NPAs. One of its main aims is to ensure that case management is not process-driven or prescriptive, but flexible – with parties and practitioners being encouraged and expected to take a commonsense and cooperative approach to litigation to reduce its time and cost.
Interlocking with the Central Practice Note will be new practice notes in each NPA. Amongst other things, the NPA Practice Notes detail NPA-specific case management principles and may offer expedited or truncated hearing processes and tailored or concise pleading processes. Parties may also adopt the processes set out in one NPA Practice Note for use in a different NPA. For example, the flexible and streamlined procedures for the commencement of proceedings, use of concise statements and tailored discovery and evidence procedures set out in the Commercial and Corporations NPA Practice Note may be used in other NPAs.
Also interlocking with the Central Practice Note and NPA Practice Notes will be 18 new or amended General Practice Notes. These General Practice Notes are intended to apply to a number of NPAs or to procedures generally used in the Court.
An extensive external consultation was undertaken during the reporting year to seek feedback on the draft Central Practice Note, NPA Practice Notes and Class Action Practice Note. The Court received many submissions from individuals within the profession, representative associations and public and private agencies. The feedback was very positive about the NCF reforms, as well as the Court's initiatives within the practice notes themselves. The feedback has been considered in the further refining of these practice notes.
The General Practice Notes will be issued at the same time as the Central Practice Note and the NPA Practice Notes, but on a "12 month review" basis, accompanied by an external consultation process similar to that which took place for the Central and NPA Practice Notes. This will allow the General Practice Notes to be fully considered by the legal profession, allowing further feedback to be received and allow any appropriate refinements to be made following the review process.
To support the implementation of the NCF and the introduction of the new practice notes, the Court's website will be updated and enhanced to provide dedicated pages for each NPA. The NPA webpages will be an important resource for a broad audience including Court users, academics, law students as well as international practitioners.
National Allocation of Judicial Matters
A further key component of the implementation of the NCF has been the introduction of the national allocation system for judicial matters. This national system ensures consistent and appropriate allocations of judge-related matters and the effective management of the Court's judicial workload.
National Duty System
An important component of the implementation of the NCF has been the review and reform of the Court's duty arrangements to ensure a nationally consistent duty system that focuses on timely responses to urgent duty matters, with a "direct-to chambers" approach.
The National Duty System commenced on 1 February 2016. The key features of the system are:
- the creation of a Commercial and Corporations NPA Duty Judge system to operate alongside a General Duty Judge system;
- a direct-to-chambers approach that enables practitioners to liaise directly with the chambers of the Duty Judge about an urgent case;
- specialist assistance for self represented litigants provided by the local registry NCF Coordinator or Self Represented Litigant Coordinator;
- daily court lists reflecting the new duty arrangements and including the "direct-to-chambers" contact details of the relevant duty judges.
Practitioners were advised of the new duty arrangements via State Law Society and Bar Association newsletters, various NPA consultation forums and direct notification through the Court's Practice News.
Introduction of Insurance List
The introduction of the NCF reforms is part of the Court's commitment to the provision of commercial dispute resolution mechanisms that emphasise flexibility, efficiency and cost-effectiveness. As part of the reforms, the Court has established an Insurance List within the Commercial Contracts, Banking, Finance and Insurance sub-area of the Commercial and Corporations NPA.
The aim is to provide the insurance commercial community, including underwriters, reinsurers, brokers and insureds with a list that caters for the prompt and efficient resolution of legal issues.
This enables the parties to resolve their disputes without necessitating full-blown hearings where a crucial issue could be decided discretely and swiftly. The List is not intended to deal with all insurance claims, but principally short matters such as the interpretation of an insurance policy or the operation of insurance legislation. The List covers marine as well as non-marine insurance.
Information sessions have been held by the Chief Justice to explain the List, its aims and how it is expected to operate in a number of registries and the sessions were well attended by members of the profession.
Consultation with the legal profession
To ensure engagement and ongoing consultation with the legal profession, the following consultation forums regarding the NCF and NPAs have been conducted in the reporting year:
- Commercial and Corporations NPA: in the Victoria Registry in February 2016 and the NSW Registry in March 2016. These supplemented the nationwide forums held in early 2015.
- Taxation NPA: forums were held in December 2015 across all registries, and
- Employment and Industrial Relations NPA: forums were held in November and December 2015 across all registries.
A national Class Action Users' Group has been established. The aim of this group is to provide a forum for Court representatives and the legal profession to discuss existing and emerging issues, obtain feedback for the Court and act as a reference group. The Court will set up similar user groups in other NPAs following the implementation of the NCF reforms.
Advancing the Court's digital approach
Work progresses on the Digital Hearings (formerly eTrials) project. The project focuses on developing a solution for managing electronic material in hearings for small to medium size matters. A Digital Hearings Committee made up of judges and staff of the Court guides this work. Over the reporting year, this project examined the needs of judges and litigants when working digitally in the courtroom. This process involved shadowing the work undertaken in the courtroom, considering the litigants' prehearing activities and observing the judges preferences when managing the flow of information in the courtroom. Detailed requirements have been completed and the Court is planning the next stage of the project. In conjunction with this work and the National Court Framework reforms, a review of the Court's internationally respected practice note CM 6 Electronic technology in litigation is underway. The intention of the review is to update the practice note to accommodate the acceleration of technology used by litigants and to provide further clarity about the presentation of information used during a hearing. This review work is being undertaken in consultation with the legal profession and other interested parties. Digital Hearings are enabled by the Court's electronic court file.
Registry process reforms continue with a number of planned eServices projects that will expand further how litigants can interact with the Court. Based on the successful uptake of eLodgment, where there is now near universal use of eLodgment as the method to provide the Court with filed documents, the Court will develop additional features to provide a more interactive system. These features will initially focus on high volume, transactional matters where automation will provide a quicker and more convenient service for Court users.
The Court has continued to develop its business intelligence capabilities. Further detailed reports have been created to provide a comprehensive overview of the activities of the Court. The Court has been developing predictive reports that allow the Court to forecast impacts on workload and then respond quickly. The central goal of this work remains to provide the right operational information to the Court at the right time so informed and rapid decision-making can take place.
Performance against time goals
The Court maintains three time goals for the performance of its work, two of which were put in place over fourteen years ago when the majority of the Court's work was less complex. Notwithstanding the increased complexity, the Court has maintained these time goals. The first goal concerns the time taken from filing a case to completion, the second goal concerns the time taken to deliver reserved judgments and the third goal concerns the time taken to complete migration appeals. The goals do not determine how long all cases will take, as some are very long and complex and others will, necessarily, be very short.
Time goal 1: Eighty-five per cent of cases completed within eighteen months of commencement
During the reporting year, the Court completed ninety-two per cent of cases in less than eighteen months, which is a slight increase from the previous year. As shown in Figure A5.5 and Table A5.4 in Appendix 5 on page 148 over the last five years the Court has consistently exceeded its benchmark of eighty-five per cent, with the average over the five years being ninety-two per cent.
Time goal 2: Judgments to be delivered within three months
The Court has a goal of delivering reserved judgments within a period of three months. Success in meeting this goal depends upon the complexity of the case and the pressure of other business upon the Court. During 2015–16, the Court handed down 1776 judgments for 1529 court files (some files involve more than one judgment being delivered e.g. interlocutory decisions and sometimes, one judgment will cover multiple files). This is an increase from last year by 246 judgments due in part to the eighteen per cent increase in judicial filings. The data indicates that eighty-seven per cent of appeals (both full court and single judge) were delivered within three months (no change from 2014–15) and eighty-two per cent of judgments at first instance were delivered within three months of the date of being reserved (a slight increase from 2014–15).
Time goal 3: Disposition of migration appeals and related applications within three months
Most matters commenced in the Court from decisions arising under the Migration Act 1958 (Cth) are appeals and related applications.
The majority of these cases are heard and determined by a single judge exercising the appellate jurisdiction of the Court. The Court's goal for disposing of migration appeals and related applications is three months from the date of commencement. The Court applies a number of initiatives to assist in achieving this goal, including special arrangements to ensure that all appeals and related applications are listed for hearing in the Full Court and Appellate sitting periods as soon as possible after filing. Additional administrative arrangements are also made to streamline the prehearing procedures.
The Court carefully monitors the achievement of the three-month goal in order to ensure that there are no delays in migration appeals and related applications, and that delay is not an incentive to commencing appellate proceedings.
In the reporting period, 722 migration matters (including 682 appeals and related actions, cross appeals and 40 interlocutory applications) from the Federal Circuit Court (FCC) or the Court were finalised. Of these, 418 matters were filed and finalised in the reporting year.
Notwithstanding that in the reporting period the number of appellate non-migration matters filed increased substantially by almost thirty per cent from 263 in 2014–15 to 340 in 2015–16, the Court has continued to dispose of a very significant number of migration matters in a timely and efficient manner.
Of the 722 migration matters finalised, the average time from filing to final disposition was 134 days and the median time from filing to final disposition was 122 days. A significant number of matters have been affected by or are awaiting decisions of the Full Court of the Federal Court or the High Court. Many of these matters were or remain in, abeyance without a hearing. Therefore, the Court's ability to hear and dispose of matters within the time goal, is dependent upon the timing of the outcome of the relevant Full Court or High Court decision.
Performance information is also available in the Court's Annual Performance Statement at Annexure 10 on page 195.
In 2015–16 the total number of filings (including appeals) in the Court increased by thirty-eight per cent to 5992. Filings in the Court's original jurisdiction (excluding appeals) increased by fortyfive per cent. The increase in filings is attributed to an increase in Corporations matters including winding up applications, the majority of which are dealt with by registrars.
Further information about the Court's workload, including the management of appeals is available in Part 3 commencing on page 30.
The Court's registries also undertake registry services for the FCC. The workload for the FCC has again continued to grow over the last five years. It should be noted that Federal Court registrars continue to hear and determine a substantial number of cases in the FCC. In the bankruptcy jurisdiction, filings were up five per cent from the previous financial year. Federal Court registrars dealt with, and disposed of, 3525 FCC bankruptcy matters which equates to ninety-two per cent of the FCC's bankruptcy caseload. Overall, forty-five per cent of the FCC's General Federal Law workload is shared by Federal Court registrars.
Financial management and organisational performance
The financial figures outlined in this report are for the consolidated results of both the Federal Court and the National Native Title Tribunal (NNTT). A summary of the NNTT's expenditure is included in Table 5.4 on page 80.
The Court's budget position continues to be affected by the Government's tight fiscal policy.
During the financial year, expenditure was closely monitored to ensure that savings were realised wherever possible. As a result, the Court achieved an operating surplus before depreciation of $8,267 after providing redundancy payments of $1.324 million associated with the merger of the Corporate Services of the Family Court of Australia (FCoA), Federal Circuit Court of Australia (FCC) and the Court. Notwithstanding the ability to achieve a surplus in 2015–16, in the next three-year budget cycle the Court will continue to manage limited parameter adjustment funding increases together with escalating costs.
From July 2016 the Federal Court has overarching responsibility for the funding of the FCoA, FCC and the Court. The funding for the Court includes funding for the NNTT. The total funding is divided up into four programs, one for each of the courts and one for the provision of Corporate Services to all the courts.
The Court is endeavouring to achieve a balanced budget for 2016–17. However, the fixed nature of sixty per cent of the Court's costs (such as judges and their direct staff) severely limits the Court's ability to reduce overarching costs. These fixed costs also mean that, in effect, the efficiency dividend is primarily applied to the non-fixed costs.
The Department of Finance has authorised the Court to incur a deficit of $5.5 million in 2016–17 to cover expected losses by the FCoA and FCC. Both the FCoA and the FCC are endeavouring to achieve a budget outcome in line with the authorised deficit but are encountering some difficulties in reducing overarching costs.