The Dispute Resolution Act 2011 (Cth) and the Meaning of 'Genuine Steps': Formalising the Common Law Requirement of 'Good Faith'
(2012) 23 Australasian Dispute Resolution Journal 249
4 Pages Posted: 24 Apr 2014
Date Written: April 24, 2012
Prior to initiating litigation, parties should negotiate in order to limit the issues in dispute and avoid a costly court process. But what does it mean to negotiate? Historically the common law conditioned negotiation at a good faith standard – requiring parties to turn their minds to the issues in dispute and enter the process honestly and willingly. However, this standard proved difficult to grasp and many jurisdictions have since enacted legislation designed to formalise the process. This article examines the latest enactment – the Commonwealth formulation, which requires parties to “take genuine steps to resolve disputes” and compares it to both the New South Wales formulation, which requires parties “to take reasonable steps” and the common law good faith standard. This analysis will demonstrate that the concept of genuine steps formalises the common law approach, and as opposed to reasonable steps, more accurately achieves the object and purposes of alternative dispute resolution processes.
Keywords: civil procedure, dispute resolution, good faith
JEL Classification: K40, K41
Suggested Citation: Suggested Citation