Nature of the obligationNature of the obligation

Nature of the obligation

2 The obligation to act as a model litigant requires that the Commonwealth and Commonwealth agencies act honestly and fairly in handling claims and litigation brought by or against the Commonwealth or a Commonwealth agency by: (a) dealing with claims promptly and not causing unnecessary delay in the handling of claims and litigation (aa) making an early assessment of: (i) the Commonwealth’s prospects of success in legal proceedings that may be brought against the Commonwealth; and (ii) the Commonwealth’s potential liability in claims against the Commonwealth (b) 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 (c) acting consistently in the handling of claims and litigation (d) 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 (e) where it is not possible to avoid litigation, keeping the costs of litigation to a minimum, including by: (i) not requiring the other party to prove a matter which the Commonwealth or the agency knows to be true (ii) not contesting liability if the Commonwealth or the agency knows that the dispute is really about quantum (iii) monitoring the progress of the litigation and using methods that it considers appropriate to resolve the litigation, including settlement offers, payments into court or alternative dispute resolution, and (iv) ensuring that arrangements are made so that a person participating in any settlement negotiations on behalf of the Commonwealth or a Commonwealth agency can enter into a settlement of the claim or legal proceedings in the course of the negotiations (f) not taking advantage of a claimant who lacks the resources to litigate a legitimate claim (g) 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 (h) 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 (i) apologising where the Commonwealth or the agency is aware that it or its lawyers have acted wrongfully or improperly.

Note 1: The obligation applies to litigation (including before courts, tribunals, inquiries, and in arbitration and other alternative dispute resolution processes) involving Commonwealth Departments and other Commonwealth 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 Commonwealth agency which has responsibility for the litigation. In addition, lawyers engaged in such litigation, whether AGS, in‑house or private, will need to act in accordance with the obligation and to assist their client agency to do so.