A refresher of the model litigant obligations under the Legal Services Directions 2025

The MLO apply to the Commonwealth, and a Commonwealth entity (other than a Government Business Enterprise within the scope of the Public Governance, Performance and Accountability Act 2013). Broadly, this includes:

• a Department of State (for example, Department of Finance);

• a Parliamentary Department (for example, Department of Parliamentary Services);

• a listed entity (for example, Australian Fisheries Management Authority);

• a body corporate established by a law of the Commonwealth; and

• a body corporate that is established under a law of the Commonwealth (other than a Commonwealth company) and is prescribed by an Act or rules to be a Commonwealth entity.

There may be some situations where other entities may also be compelled by the Attorney-General to comply with the model litigant obligations. These situations may arise where the proposed conduct of a matter may be inconsistent with the Attorney-General’s responsibility for ensuring the Commonwealth act as a model litigant. 

Division 2 of Part 6 sets out the standards of honesty and fairness that the Commonwealth, and certain Commonwealth entities, must comply with when handling claims and conducting litigation. These standards extend to proceedings before courts, tribunals, enquiries, in arbitration and other dispute resolution processes, and the preparations for such proceedings:

• acting honestly and fairly;
• dealing with claims promptly and not causing unnecessary delay;
• making an early assessment of prospects and liability;
• paying legitimate claims and partial settlements without litigation;
• acting consistency in the handling of claims and litigation;
• endeavouring to avoid or prevent or limit scope of proceedings;
• keeping costs to a minimum;
• not taking advantage of a claimant who lacks resources;
• broadly not relying on technical defences;
• not appealing unless reasonable prospects of otherwise justified in the public interest; and
• apologising where aware that it or its lawyers have acted wrongfully or improperly.

When participating in alternative dispute resolution (such as conciliation conferences), there is an obligation that representatives participate fully and effectively and have authority to settle the matter so as to facilitate appropriate and timely resolution of a dispute. In practice, this requires ensuring instructors with appropriate delegation are available and ready to attend alternative dispute resolution events. 

In merits review proceedings, the obligations extend to using best endeavours to assist the Tribunal to make its decision. This includes paying close attention to the legislation under which the Tribunal is established, and any practice directions issued by the Tribunal. Whether a specific action may constitute a breach of the model litigant obligations is extremely fact specific and the mere fact that a breach may be unintentional does not displace the underlying obligations. 

In merits review proceedings, the obligations may extend to alerting the Tribunal to issues of jurisdiction and standing at an early stage, as well as ensuring compliance with orders and directions of the tribunal to facilitate a timely resolution of proceedings.

Compliance with the Legal Services Directions is not enforceable except by, or on the application of, the Attorney-General. Where a person or body does not comply with the Legal Services Directions, they must comply with any instructions given by the Attorney-General in relation to that non-compliance. 

While the issue of non-compliance should not be raised in any proceeding, except by, or on behalf of, the Commonwealth (see subsection 55ZG(3) of the Judiciary Act 1903 (Cth)), Courts have considered alleged breaches as a consideration in costs and interlocutory contexts (see for example: ACCC v Australia and New Zealand Banking Group Ltd (No.2) [2010] FCA 567 and Deputy Commissioner of Taxation v Clear Blue Developments Pty Ltd (No 2) [2010] FCA 1124). 

In these contexts, courts are more likely to criticise conduct that causes unnecessary delay, proliferates issues, or withholds clearly relevant documents without justification. By contrast, assertions that the Commonwealth must litigate less vigorously or avoid legitimate forensic steps are generally rejected and firm pursuit of arguable positions, including appeals, remain consistent with the model litigant obligations.

Compliance with the Legal Services Directions is mandated by subsection 55ZG(1) of the Judiciary Act 1903. Entities are required to notify the Office of Legal Services or the Attorney-General as soon as practicable of any possible, alleged or apparent non-compliance with the Legal Services Directions they become aware of, and the corrective steps taken or are proposed.