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07 July 2017

It's about being different

Litigation
Victoria

Asked

How is an 'arbitration' in Magistrates' Court conducted as opposed to a 'hearing'?

Answered

Thank you for the question.

The following is an extract from our Magistrates’ Court – Acting for the Plaintiff commentary:

Arbitration is conducted by the court constituted by a magistrate. In conducting the arbitration the court:

(a) is not bound by rules of evidence but may inform itself on any matter in such manner as it thinks fit; and

(b) is bound by the rules of natural justice (procedural fairness); and

(c) is not required to conduct any proceedings in a formal manner; and

(d) may exercise any powers that the Court may exercise in hearing and determining a complaint.

See s 103(2) Magistrates’ Court Act 1989.

For example in some arbitrations, particularly motor vehicle accident claims, evidence in chief is given by the legal representative reading out a statement. The witness then swears on oath that the statement as read out was correct and then is cross examined.

Arbitrations are governed by Order 2 of the Magistrates’ Court (Miscellaneous Civil Proceedings) Rules 2010. It sets out some special rules for arbitration.

In an arbitration the parties are not allowed to:

- serve a request for further and better particulars of claim, counterclaim or defence;

- serve and file a reply;

- serve a notice to admit any fact or the authenticity of any document;

- serve a notice for discovery;

- serve interrogatories;

- serve an expert witness statement;

- apply to the court for an order under Order 22 – Summary order.

If your matter is of sufficient complexity to require any of the procedures prohibited by the rule you may need to refer to s 103(3) and apply to have the proceedings determined by the court.

Parties in proceedings for claims in excess of $5000 but under $10,000 must serve a list of documents which identifies each document in the possession of the party that:

- supports the claim, defence or counterclaims; or

- is injurious to that claim, defence or counterclaim.

The list must be served at least 14 days before the pre-hearing conference date and if no date is fixed for a pre-hearing conference, 14 days before the arbitration date.

If your client’s matter is to proceed to arbitration, you must make your client aware that costs in an arbitration are not awarded according to the scale. Section 105 of the Magistrates’ Court Act imposes a cap on the costs the court can award for professional costs in an arbitration, including both solicitor and counsel fees. The amount of the cap is set out in the Magistrates’ Court (Arbitration) Regulations 2010. The cap is very low. Your client should only proceed to arbitration if they are prepared to bear a large proportion of their costs even if successful.

If the claim is worth less than $10,000 and relates to the supply of goods or services, you can also consider whether your claim would be better dealt with in the small claims jurisdiction in VCAT.

Regards

Mentor