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Magistrates Court (Monetary Limits) Amendment Bill

Adjourned debate on second reading.

(Continued from 24 May 2016.)

The Hon. A.L. McLACHLAN ( 15:59 :31 ): I rise to speak to the Magistrates Court (Monetary Limits) Amendment Bill 2016. This bill seeks to amend the Magistrates Court Act to reduce the upper monetary limit for minor statutory proceedings, small claims in the Magistrates Court from $25,000 to $12,000. With the successful passage of this bill, in smaller minor claims under $12,000, the parties will have the matter dealt with by a magistrate without having to be represented by a lawyer and incurring legal costs, which can, in certain circumstances, be a considerable expense. In effect, it reduces the class of matters that can be dealt with in this manner.

The government asserts that the rationale for introducing this bill is to reduce court delays and the complexity of small claims in the Magistrates Court. It follows from the government’s previous Statutes Amendment (Courts Efficiency Reforms) Bill which was passed in 2012. The 2012 bill sought to increase the threshold for small claims proceedings from $6,000 to $12,000. The stated purpose at that time was to keep South Australia in line with interstate jurisdictions and to improve access to justice by expanding the range of claims that could be made without incurring substantial legal costs.

The amendments to the Magistrates Court small claims and minor statutory threshold commenced on 1 July 2013. Section 28(1) of the courts efficiency act of 2012 required the Attorney-General to conduct a review of the operation and impact of these amendments as soon as practical after the first anniversary of the commencement. Pursuant to this requirement, the Office of Crime Statistics and Research, better known as OSCAR, conducted a review between July 2014 and February 2015.

The results and recommendations of this review were published in a report tabled in the parliament by the Attorney. The genesis of this bill follows from these recommendations. The report states that the review used both quantitative and qualitative forms of data collection and analysis. The qualitative aspect involved the collation and analysis of feedback from parties directly involved in the implementation and operation of the newly implemented changes, such as the judiciary, legal practitioners and representatives from the Courts Administration Authority.

The quantitative aspect involved the analysis of administrative data collected by the Courts Administrative Authority. The report found an increase in the number and complexity of small claim lodgements in 2013-14 is up 7.9 per cent, some indication of an increase in accessibility to the civil justice system, and an increase in the number of days from lodgement to finalisation for small claims since the commencement of the act.

There were also indications that the number of complex claims where parties were unrepresented had increased, requiring the registrar or magistrate to determine relevant issues. Legal practitioners who responded to an online survey considered that the new limit was too high and that changes, such as reducing the limit, excluding specified types of claims and providing more access to simple legal advice, were necessary to ensure a balance between accessibility and efficiency.

The Joint Rules Advisory Committee (JRAC) made a submission. The JRAC was established by the Chief Justice of the Supreme Court and the Chief Judge of the District Court. Its membership consists of nominated judges and masters, representatives of the legal profession, two members of the academic community and a magistrate. The JRAC monitors, reviews and recommends improvements and changes to courts’ procedural rules governing proceedings in those courts.

In its submission to the OSCAR review, it recommended that consideration be given to reducing the upper limits in the definition of a small claim to $12,000. In recommending this course, the JRAC stated that small claims in which the amount in dispute exceeds $12,000 frequently raise factual and legal issues of a complexity equal to the claims in the ordinary jurisdiction of the Magistrates Court involving claims of more than $25,000. The time devoted by magistrates to hearing small claims involving more than $12,000 is greatly increased by the fact that the parties do not have legal representation.

I note that the JRAC recommended in the alternative that consideration be given to magistrates having a general unfettered discretion to direct that a monetary claim for more than $12,000 but less than $25,000 not be treated as a minor civil action, in which event party/party costs could be awarded in accordance with the existing scale of costs for non-minor civil actions.

The Law Society undertook consultation with its committees and also its membership. The comments it received overwhelmingly were in support of the proposed reduction in the limit for minor civil matters. The feedback it received indicated that there were very few claimants who would consider $25,000 to be a minor amount of money and that disputes involving sums of this kind were often complex. The Australian Lawyers Alliance also supported the bill.

The opposition did receive submissions from the Motor Trade Association which opposed the lowering of the monetary limit for minor civil disputes on the basis that it would cause a denial of justice particularly for small businesses. In light of the recommendations contained in the OSCAR review, coupled with wide-ranging support for lowering the threshold that has been expressed by the JRAC, the Law Society and the legal profession, the opposition will support the second reading of this bill.

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