COURT-ANNEXED CIVIL ARBITRATIONS
Mr BLACKMORE: My question without notice is addressed to the Minister for Justice. Has the system of court-annexed civil arbitration been introduced to the Local Court in Sydney? If so, what benefits will this new system provide for parties to civil cases?
Mr SPEAKER: Order! I call the honourable member for Port Stephens to order.
Mr GRIFFITHS: The success of court-annexed civil arbitration should not go
unmarked. The new system is widely known as the Philadelphia system of arbitration because it is based on a system which was developed in that city and which still operates quite successfully there. The system involves a number of arbitrators sitting in court premises to hear civil cases referred to them by the court. The major advantage of the Philadelphia system over the referral of actions for hearing in arbitrators' offices is the flexibility it lends to the listing process. More actions can be listed and disposed of because arbitrators can take cases from one another; and while parties are negotiating settlement in some actions, other actions are able to be heard. The system brings to the court most of the options that would come with having the same number of additional judges or magistrates available. Philadelphia arbitration commenced in the Local Court on 6th August. An average of three arbitrators sit each day in specially modified premises, and actions are being referred from the Downing Centre and from Balmain, North Sydney and Waverley. A total of 36 defended civil cases are now being listed before these arbitrators every week. The Philadelphia scheme has been operating in the Local Court for only a short time, but it seems it will prove to be every bit as successful as the similar scheme operating in the District Court. Philadelphia arbitration commenced in the District Court on 1st April, 1990. The system is used to hear personal injury actions, which constitute most of the court's workload.
After a quiet start, the system was expanded to the point where five arbitrators now sit each day in specially designed rooms in court premises. These arbitrators have heard and determined 1,750 actions, and a further 1,450 cases listed before them settled without need of a hearing. A substantial amount of judge time could have been required to achieve the same result if the scheme had not been available. The parties in cases which have been arbitrated have a right to a complete rehearing if they disagree with the arbitrator's decision. The rehearing rate is an important criterion when assessing the worth of the arbitration system. If the rate of rehearing is too high, the quality of arbitrators' decisions would be a concern and we might be merely forcing litigants into an additional, costly step before their cases are finally decided. In the Sydney District
Court, the rate of applications for rehearing under the Philadelphia system is about 12 per cent of the total actions disposed of, including settlements.
Less than half of the rehearing applications filed are actually proceeded with, so that the rate of actual rehearings is about 5 per cent of all cases disposed of by arbitrators. A diversion system which disposes finally of 95 per cent of all the cases referred to it can be justly claimed as a major success, particularly as the Sydney figures are better than those generally achieved in the United States of America. Court-annexed arbitration is a co-operative exercise involving the courts, the Government and the legal profession. Barristers and solicitors are paid for sitting as arbitrators, but at a rate well below the party-and-party rate set by the Legal Fees and Costs Board. Lawyers who volunteer to participate in the arbitration scheme are making an important contribution to the reduction in case backlogs and therefore to the general community. I am pleased to pay tribute to the arbitrators and to everyone else involved in this impressive example of what co-operation can achieve.