41Nature of the obligation

41  Nature of the obligation

  The Commonwealth, and a Commonwealth entity other than a GBE, must act honestly and fairly in handling claims and litigation brought by or against it by doing the following:

 (a) dealing with claims promptly and not causing unnecessary delay in the handling of claims and litigation;

 (b) making an early assessment of:

 (i) its prospects of success in legal proceedings that may be brought against it; and

 (ii) its potential liability in claims against it;

 (c) 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;

 (d) acting consistently in the handling of claims and litigation;

 (e) endeavouring to avoid or prevent legal proceedings wherever possible, or limit their scope, including by:

 (i) giving consideration in all cases to alternative dispute resolution before initiating legal proceedings; and

 (ii) participating in alternative dispute resolution processes where appropriate;

 (f) 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 it knows to be true; and

 (ii) not contesting liability if it knows that the dispute is really about quantum; and

 (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 a person participating in any settlement negotiations on its behalf has the authority to enter into a settlement of the claim or legal proceedings in the course of the negotiations;

 (g) not taking advantage of a claimant who lacks the resources to litigate a legitimate claim;

 (h) not relying on technical defences unless its interests would be prejudiced by the failure to comply with a requirement;

 (i) not appealing a decision unless it believes that the appeal:

 (i) has reasonable prospects of success; or

 (ii) is otherwise justified in the public interest;

 (j) apologising where it 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 the Commonwealth and Commonwealth entities such as Departments, 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 or entity which has responsibility for the litigation. In addition, lawyers engaged in such litigation, whether AGS, in‑house or external, will need to act in accordance with the obligation, and assist their client agency to do so.