Legal Briefing No. 48

Number 48

(15 July 1999)


Until the mid 1990s, legal services to Commonwealth departments
and agencies were solely provided by the Australian Government
Solicitor as part of the Attorney-General's Department.

In recent years that work has progressively become untied
from AGS and has been opened to private solicitors, in
competition with AGS. Tribunal and advisings work has generally
been untied since
1 July 1995. The final stage of untying is about to occur.

On 1 September 1999, all Commonwealth legal work will
be untied, except:

  • constitutional matters
  • national security matters
  • cabinet matters
  • public international law matters.

It is expected that further details of the extent of the
remaining tied work will be provided in Legal Services
Directions to be issued by the Attorney-General.

Untying will occur in accordance with arrangements made
under amendments to the Judiciary Act 1903.

Implications for Clients

Departments and agencies will be able to instruct external
solicitors of their choice, but in-house lawyers are not
able to conduct litigation in courts without the Attorney-General's

Departments and agencies will be responsible for the proper
conduct of claims and litigation within their areas of
responsibility and, more broadly, will need to make arrangements
to ensure that they receive efficient and effective legal

Departments and agencies will be required to comply with
policies which it is expected will be incorporated in Legal
Services Directions issued by the Attorney-General. Within
the Attorney-General's Department, the Office of Legal
Services Coordination will be responsible on behalf of
the Attorney-General for administering the new arrangements.

Prior to untying of litigation, Commonwealth policies
have already been developed by the Attorney-General in
relation to the Commonwealth's involvement in and handling
of litigation and claims.

Commonwealth Dispute Resolution

The following are summaries of some of the most commonly
applicable Commonwealth policies relating to dispute resolution.
The summaries are necessarily brief and not comprehensive.
AGS would be happy to amplify any of them on request.

Model Litigant Policy

The Commonwealth, through its instructing officers and
lawyers, is required to act as a model litigant. Basically,
this means that the Commonwealth must act fairly, but is
not precluded from acting firmly. For example:

  • acting consistently
  • not taking purely technical points when no prejudice
    has been suffered
  • avoiding undue delay
  • making part payments where appropriate
  • not requiring the other party to prove facts which
    the Commonwealth knows to be true
  • nevertheless, properly testing claims against it
  • not caving in to spurious demands
  • generally pursuing costs awarded in the Commonwealth's

The requirement to act fairly is not met simply by complying
with applicable professional conduct requirements (eg.
Bar Association rules or Law Society rules).

Alternative Dispute Resolution

The Commonwealth should continually consider whether a
dispute is susceptible to ADR (eg. mediation or arbitration)
and should promote or agree to ADR wherever appropriate.

Settling Claims Against the Commonwealth

The fundamental criterion for settling a claim against
the Commonwealth is that the settlement be in accordance
with legal principle and practice. In particular:

  • there must be at least a meaningful prospect of Commonwealth
    liability (ie. clearly spurious claims should not be
    settled merely to avoid the cost of defending them)
  • the amount of the settlement should reflect the prospects
    of the claim succeeding in court, and the prejudice to
    the Commonwealth (by way of costs or otherwise) of continuing
    to defend the claim.

The Chief Executive Officer of the relevant department
or agency, or the CEO's authorised officer, has authority
to settle claims against the Commonwealth within the responsibility
of that department or agency, where settlement is considered
to be in accordance with legal principle and practice.

However, a settlement for more than $10,000 cannot be
made without written advice, from a legal adviser external
to the agency, that the settlement is in accordance with
legal principle and practice.

Settlements should only include non-disclosure provisions
where this is necessary to protect the Commonwealth's interests.
Before imposing or agreeing to such a condition, a department
or agency should satisfy itself, including by raising the
matter with a party requesting the condition, that the
condition is necessary.

The department or agency should also seek to incorporate
an exception to enable voluntary disclosure of the settlement
(in whole or in part) to the Parliament or to a parliamentary

Where practicable, the responsible Minister is to be consulted
before an agency agrees to a settlement inhibiting voluntary
disclosure to the Parliament or to a parliamentary committee.

The other party to a confidential settlement should be
made aware that disclosure may nevertheless be required
by law, in particular, to the Parliament or to a parliamentary
committee which has power to compel disclosure.

Examples of when it could be in the Commonwealth's interests
to agree to a confidential settlement include:

  • a person against whom the Commonwealth has made a
    claim makes an attractive offer of settlement, but only
    on condition that the terms not be disclosed, or
  • the Commonwealth seeks to settle a claim against it
    on condition that the terms of settlement not be disclosed,
    with a view to avoiding prejudice in responding to other
    similar claims against it.

Relying on Statutes of Limitations

The Commonwealth's policy is to rely on a statute of limitations
defence, and to oppose applications for extension of limitations
periods, unless approval not to do so is given by the Attorney-General
or the Attorney-General's delegate. Such approval will
normally be given only in exceptional circumstances or
where it is expected that the application would succeed.

Engagement of Counsel

The Commonwealth's policy for engagement of counsel applies
both to AGS and private solicitors acting for the Commonwealth.
In particular, the policy:

  • requires briefing as widely as practicable
  • provides for limits on amounts payable without approval
    from the Office of Legal Services Coordination in the
    Attorney-General's Department:
    • those amounts being $2250 per day for senior counsel and $1500
      per day for junior counsel
    • approval for amounts above $3200 per day is required from the

Amendments under consideration to the policy would provide
that retainers and cancellation fees should only be agreed
in exceptional circumstances (eg. where a long trial is
cancelled by a settlement shortly before its proposed commencement).

Briefs to counsel should incorporate and require compliance
with the model litigant policy.

Advice on Legislation Administered by another Agency

There is a Commonwealth policy regarding consultation
to be undertaken when a department or agency seeks advice
on the interpretation of legislation administered by another
department or agency.

Acting for Ministers and Officers

There are some circumstances where lawyers (whether AGS
or private lawyers) cannot act for ministers or officers
at Commonwealth expense without certain approval having
been given.

Briefly, specific approval is necessary for the Commonwealth

  • the defence of a present or former Minister or officer
    of a damages claim
  • the participation of a present or former Minister
    or officer in an inquiry
  • the response of a former Minister to a subpoena relating
    to a former ministerial portfolio, and the response of
    a present Minister to a subpoena relating to an earlier
    ministerial portfolio held by that Minister
  • the response of a present or former officer to a subpoena.

The basic criteria for approval are that the matter relates
to official duties and, in the case of litigation, that
the Minister or officer acted reasonably.

The preceding restrictions do not apply to a lawyer acting
at Commonwealth expense for ministers or officers in the
defence of administrative law or other challenges to their
decisions or conduct, where no damages claim is included.

It is contrary to Commonwealth policy for the Commonwealth
to fund a Minister or officer to take or threaten defamation
proceedings. However, Commonwealth funding could be provided
merely to assist in a rebuttal of the allegations or criticism
of concern, provided this was not done in the context of
an express or implied threat of a defamation claim: eg.
a demand for an apology would be understood as an implied
threat of a defamation claim.

AGS Dispute Resolution

AGS has already been administratively separated from the
Attorney-General's Department and will become legally separated
from that department by becoming a statutory authority,
with its own legal identity. AGS will operate in competition
with private solicitors for untied Commonwealth legal work.

AGS' knowledge of and experience with government will
continue to contribute to its ability to provide expert
and comprehensive dispute resolution services to Commonwealth
departments, ministers, officers and agencies.

AGS is a truly national practice and, because the operations
of all its offices are integrated, AGS offers high-level
litigation and dispute services in locations across the

Please contact the lawyers listed below for further information
on AGS dispute resolution services, including:

  • coordination of litigation in courts and tribunals
    across Australia
  • independent, objective litigation advice
  • resolving intra-Commonwealth conflicts
  • achieving consistent, successful outcomes in litigation
    or dispute resolution
  • dealing with ministerial correspondence, ombudsman
    complaints and parliamentary questions relating to litigation
  • using AGS advocates.

ISSN 1448-4803 (Print)
ISSN 2204-6283 (Online)

The material in this briefing is provided
for general information only and should not be relied
upon for the purpose of a particular matter. Please contact
AGS before any action or decision is taken on the basis
of any of the material in this briefing.

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