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Limelight 06/20

Insurers – don’t trip on the pre-action steps in South Australia – the Uniform Civil Rules 2020 (SA) – Action required by insurance claims handlers – Part 1

The Uniform Civil Rules 2020  (UCR) came into effect in South Australia on 18 May 2020. The UCR are a “one stop shop” for civil procedure rules in South Australia, replacing  a raft of rules that governed the different Courts: Magistrates Court Rules 1992, District Court Civil Rules 2006, Supreme Court Civil Rules 2006, District Court Civil Supplementary Rules 2014 and Supreme Court Civil Supplementary Rules 2014.  

Changes

Amongst other things, the UCR have changed the terminology for parties. A “plaintiff” is now an “applicant”, and a “defendant” is now a “respondent.”

While many procedures have been carried over from the old rules, there have been a number of significant changes. One of the most significant changes has been addition of various “Pre-action steps” .

The following pre-action steps are now required under UCR Chapter 7[1]:

  • Before commencing a claim in the Court, the applicant must have served on the respondent a pre-action claim (UCR 61.7(3)).
  • A pre-action claim is a written notice setting out detailed information about the applicant, the basis for the claim, providing expert reports, in most cases providing an estimate of total costs if the matter proceeds to trial (on the relevant form), making an offer to settle and proposing a date, time and location for a pre-action meeting (UCR 61.7(1)).
  • In most cases, the respondent is then required to provide a pre-action response (UCR 61.9(1)) within 21 days.
  • A pre-action response must respond to the applicant’s claim, indicate if a counter claim will be brought and if so, comply with the requirements under UCR 61.7(1), provide any expert reports already obtained, an estimate of the total costs if the matter proceeds to trial (on the relevant form), an offer to settle the claim and respond to the proposed date, time and location for the pre-action meeting (UCR 61.9(1)).
  • A pre-action meeting must be held within 21 days after the exchange of pre-action documents unless the parties otherwise agree (UCR 61.12(3)).
  • A pre-action meeting should be held in person (although the parties can agree to alternative arrangements, e.g. video link or telephone conference) and must be attended by each party or a person with authority to enter into an agreement settling the dispute involving that party. (UCR 61.12(3) and (4)).
  • Parties at a pre-action meeting must negotiate in good faith with a view to resolving the dispute (UCR 61.12(5)).
  • If the matter is not resolved at the meeting, the parties must draw up and sign a pre-action meeting report (on the relevant form) setting out what occurred at the meeting and any agreement reached about future conduct of the matter (UCR 61.12(6)).

An applicant who initiates an action in the Court must certify on the claim whether the pre-action steps were complied with and, after the filing of a defence, must file copies of any pre-action documents served together with the pre-action meeting report (UCR 61.13(4)).

If the pre-action steps are not complied with, the Court will list the proceedings for a special directions hearing to determine whether orders should be made for any pre-action steps or steps in lieu to be taken (UCR 61.14(2)).

If a party fails to comply with a pre-action step with no reasonable excuse, that party must pay forthwith the non-defaulting parties’ costs of the directions hearing and costs thrown away by reason of the breach on an indemnity basis (UCR 61.14).

The pre-action steps are designed to encourage parties to resolve a dispute before commencing litigation, involve insurers at an early stage and require substantial compliance without emphasis on technical matters or minor departures from the requirements (UCR 61.1).

Action plan on receipt of a South Australian claim

  1. Upon receipt of a South Australian claim, check whether the applicant’s pre-action claim is compliant with UCR 61.7 (even if it is not, a response is still required);
  2. Consider what time limits apply to the applicant commencing a claim;
  3. Diarise your response – a response must be provided to the applicant in most cases within 21 days of receipt of the pre-action claim in accordance with UCR 61.9;
  4. If a counter claim is to be brought, you also need to provide a pre-action notice (as per UCR 61.7) on the proposed respondent and any other relevant party within 21 days of receipt of the applicant’s pre-action claim;
  5. Diarise your pre-action meeting – that must be held between the parties within 21 days after the time for service of the last pre-action document. Put in place set systems to gain agreement to participate via phone or AV link where possible and where your claims units are outside Adelaide;
  6. If the matter is not able to be resolved, a pre-action meeting report must be prepared and signed by the parties; and
  7. Proceedings are then able to be filed with the relevant Court.

As above, the Court will list the matter for a special directions hearing if pre-action steps are not complied with, and the defaulting party can be ordered to pay the other parties’ costs of the special directions hearing and costs thrown away by reason of the breach on an indemnity basis forthwith

Insurance claims units should educate their South Australian claims handlers in relation to these procedural changes, inform their major insureds and publicise the changes to their main South Australian producers. Please contact us if you would like any assistance in doing so.

[1] If the claim relates to a personal injury or is a minor civil claim, the requirements and timeframes are different from those summarised.

 

This publication constitutes a summary of the information of the subject matter covered. This information is not intended to be nor should it be relied upon as legal or any other type of professional advice. For further information in relation to this subject matter please contact the author.