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Victoria takes high-TEC approach to IT disputes

Victoria takes high-TEC approach to IT disputes

The Technology, Engineering and Construction List (TEC List) was introduced into the Victorian Supreme Court last Friday, replacing the Building and Construction List and providing a new…

The Technology, Engineering and Construction List (TEC List) was introduced into the Victorian Supreme Court last Friday, replacing the Building and Construction List and providing a new platform for the resolution of highly technical disputes. Laura MacIntyre reports

The constantly changing world of information technology translates into a challenging and highly specialised field of law. In many respects, IT law is still finding its place within the wider legal framework. It is a constantly evolving mix of legal and non-legal elements such as intellectual property, licensing, disputes resolution and project management.

The permutations of IT disputes have posed a number of challenges to the courts. The level of technical fluency demanded of judges, as well as the time-critical nature of many disputes, has made litigation a risky affair for all involved.

In response to this challenge, the Victorian Supreme Court launched a review project called the TEC project in mid-2008, with the aim of gathering under a single umbrella disputes in the areas of technology, engineering and construction.

Under the TEC List rules, "technology" expressly includes telecommunications equipment and networks, computers and computer software, electrical circuits, machines and processing facilities.

On 26 March 2009, the Council of Judges of the Supreme Court approved the new rules, and the list commenced operation on Friday 19 June. The judge-managed list in the Supreme Court will be run under the supervision of Justice Peter Vickery, who has stipulated a series of protocols to ensure that parties focus solely on the central issues in the case.

"A TEC case should be approached like any technical, engineering or construction project - with time and cost budgeting," Vickery said in his introduction to the list.

"The trial Judge will have access to a 'smorgasboard' of procedures designed to promote a cost-effective mechanism which is tailor-made for the management of the individual dispute."

The heads of Mallesons Stephen Jaques' dispute resolution team, partners Robert Cooper and Mark Weber, welcomed the introduction of the TEC list and its inclusive approach towards technology issues.

"I think it's certainly a positive development," Cooper says, "I think it's great to see the court taking a proactive view and actually shaping their own procedures to more efficiently bring disputes which cannot be resolved to the court."

Cooper says the new Supreme Court forum will put the onus back on parties and their lawyers to run their cases with maximum efficiency (and with one eye on the chess clock).

He points to the first of Justice Vickery's guidelines, which specifies that parties must have engaged in "serious settlement discussions" before the commencement of the proceeding.

This requirement may seem like common sense, but is a step often bypassed by parties caught up in the momentum of litigation.

"The court expects parties to engage in serious settlement discussions before the commencement of proceedings, well, of course they should be doing that, but often it doesn't happen - people fire off to court, threaten to sue people and they go in with fists flying," Cooper says.

"Judge Vickery is saying 'Look, before you even issue proceedings you need to sit down and seriously not just make some attempt, but seriously try and resolve it'."

Procedural innovation

Several of the informal and innovative features of IT dispute resolution will be integrated into the formal court process as part of the TEC List approach.

A resources conference will be mandatory after pleadings have closed, with the purpose of establishing a resources budget for both the parties and the court. The conference, conducted by the associate judge, will be informal and allow for consultation with both parties, and will also identify issues suitable for mediation or those requiring further information and investigation.

Another key development is the appointment of assessors, who will be on hand to provide technical expertise. This measure seeks to overcome the difficulties faced by judges presiding over highly technical matters, which can blow out the time and cost of a case to the detriment of all parties involved.

"It gets dramatically expensive. And there's always the concern with any high-tech issue that the judge doesn't actually get it [the technical side of the dispute], then the chances of a party being successful go down markedly," Cooper says.

Other measures will include a power for the court to order a limited time trial (or "chess clock procedure"), a facility to provide electronic rulings on proposed evidence, directions for the delivery of witness statements and e-discovery and directions that that some or all of the issues raised in the pleadings be reduced to a Statement of Issues, which may be settled by the judge in consultation with the parties.

Culture clash

It is difficult to assess the wider impact of the TEC List because currently the litigious approach to IT disputes is the exception rather than the norm.

"Litigation is a way of life in the construction industry and is shunned and avoided in IT", Mallesons' Weber says.

"I think that's in part due to the long history of the construction industry, and it's also about the fact that there's a far more mature specialisation in project management in the construction industry - they regard litigation and disputation as just part of the armoury of everyday life."

This culture stands in stark contrast to that of the IT industry, Weber says, but predicts all that may be about to change.

"There's been a terrible culture, quite frankly, over many years, of leaving the contract in the bottom drawer and [trying] to work it out all at a relationship level, which has played, quite frankly, only into the hands of the vendors, and I think there's, generally speaking, a new sheriff in town when it comes to that attitude.

"I think what's fascinating is to see how it's going to go from here and whether it becomes more like construction, or whether we simply start to see more and more sophisticated uses of the informal and innovative approaches to dispute resolution that have been characteristic of the IT industry to date."

However, he says, the cut and thrust of court proceedings is not for everyone, particularly where long-standing customer-vendor relationships are at stake. When millions of dollars and reputations on both sides are on the line, often the best outcome for both parties is to get the relationship back on track.

"[In many of these cases] what would highly likely kill the relationship and the credibility is if the head of the vendor and the chief information officer of the customer ending up in the witness box being cross-examined by QCs, and having their stories potentially ripped to shreds," Cooper says.

"That's not going to potentially assist anybody to sit down the next day and say 'You were right and we were wrong, let's get on and carry on with the next project'."

The TEC Case Management Information Sheet is now available to download from the Supreme Court of Victoria website: http://www.supremecourt.vic.gov.au

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