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The Lay Litigant's Brief and the Respondent's Grief

The Lay Litigant's Brief and the Respondent's Grief

Self-represented consumers in consumer tribunals often leave lawyers having to respond to frivolous cases and inflated requests for compensation, writes Nilay B. Patel.

Self-represented consumers in consumer tribunals often leave lawyers having to respond to frivolous cases and inflated requests for compensation, writes Nilay B. Patel.

State consumer tribunals are alternatives to the complexities of legal process and procrastination of formal proceedings. The tribunals generally allow consumers and the business community to settle complaints and claims which otherwise block the smooth course of business transactions.

But then every person has a constitutional right to represent himself or herself in courts of law and tribunals without the appearance or even assistance of counsel. In fact, many consumer tribunals actually discourage and disallow the use of legal representation. This means that many consumer tribunals are left to the mercy of self-represented consumers in what are often unmeritorious cases against retailers.

Invariably, cases are mounted on the common factual substratum: a product, purchased from a retailer, is not fit for purpose. The retailer, for any number of legitimate reasons, refuses to restore the product or offer other remedies. There may, for example, have been consumer misuse or abuse, consumer ignorance of the product's operation or the consumer had a uniquely undisclosed purpose for the product.

We now have a consumer-turned-prospective "litigant" who approaches their state fair trading department for advice. Usually, the department advises that retailers are primarily liable for the products they sell and that the consumer should put their claim in writing to, or otherwise reapproach, the retailer. The prospective "litigant" then approaches the retailer with statements to the effect that "Fair Trading has advised me I am entitled to my remedy".

This is a mistranslation, an exaggeration, or a deliberate falsehood designed, in most cases, to elicit a favourable and summary outcome for an otherwise unmeritorious case. State fair trading departments are not empowered to render "ex parte" enforceable decisions against the retailer via a telephone conversation with a consumer. The states should ensure that consumers do not assume that their advice confers substantive entitlements. Enter the consumer tribunal.

"Very few, if any, lay litigants understand 'causes of action' and their legal elements that determine their case and, therefore, seldom have realistic views of the merits of their case"

Legal commentators have often stated that the self-represented are disadvantaged in court and consume a significant amount of court resources. They also identify a fundamental truism that they have little understanding of legal concepts.

While this is all true, little attention is given to the respondent's grief in responding to oft-resultant frivolous and vexatious cases and even inflated requests for monetary recompense.

Very few, if any, lay litigants understand "causes of action" and their legal elements that determine their case and, therefore, seldom have realistic views of the merits of their case. Even fewer understand the concept of mitigating costs - rather escalating them and then pleading for recovery before the tribunal. At times, some claims are attempts to secure a profit rather than to seek appropriate restitution. Claims are sometimes made without any corroborating evidence that the losses were in fact sustained.

Even a more elementary consequence of self-representation is misdirecting their claim against the retailer in cases where another party, such as the manufacturer or repairer, was overtly and exclusively responsible for the fault, malfunction or level of repair service. Based on our system of law however, because there is seldom privity of contract between the consumer and the manufacturer, retailers are named in disputes as a party to the contract of sale. Incorporated in that contract of sale are statutorily implied terms of fitness for purpose and merchantability.

Despite the lack of such privity between the consumer and the manufacturer, consumers and state fair trading departments are ignorant or dismissive of, sections 74B and 74D of the Trade Practices Act 1974. Essentially, those provisions hold the manufacturer liable directly to the consumer, despite the presence of an intervening retailer, where goods are not fit for purpose or are of unmerchantable quality. In Peterson v Merck Sharpe & Dohme (Aust) Pty Ltd [2010] FCA 180, Peterson did not pursue the first-instance supplier, the pharmacy, but rather brought action against the drug manufacturer.

Perhaps section 74 is "designed to achieve a large social purpose far beyond...commercial circumstance..." (Qantas Airways Ltd v Aravo (1996) 136 ALR 510 at 516, per Kirby J) and the nature of the facts in Peterson warranted pursuit of the manufacturer as are cases emanating from design or manufacturing issues, but the construction of sections 74B and 74D are unequivocal in subjecting manufacturers to the same conditions of fitness for purpose and merchantability respectively that are applied to retailers. These two conditions clearly transcend issues of pure defect.

But the consumerism-pragmatism hyphenation offers another reason for attacking the retailer: retailers are the easiest, most overt and convenient of targets even if, but for the contract of sale, they are factually and ethically in the clear. The new Trade Practices Amendment (Australian Consumer Law) Act (No. 2) 2010 does little to address the issue and appears, instead, to exacerbate it for the retailer.

Another consequence of self-representation is resorting to emotional theatrics when substantive merits give poor mileage.

While consumer tribunals are designed to exclude legal representation and minimise costs, a respondent, particularly legal or compliance personnel in larger organisations who are not involved in the original sale and who are unlikely to have been intimately involved at the early stages of the dispute or unfolding of the event, is burdened into understanding the full facts of the case, deciphering the consumer's often selected version of events, collecting all relevant data from multiple internal and external sources, assembling a response and ensuring appearance before the tribunal. Immeasurable financial and human resources and time are spent defending the case.

The state governments and tribunals must adopt measures to restore balance and fairness and deter unmeritorious cases before they reach the respondent. Consumer complaint forms are too general to facilitate adequate preparation by the respondent. They should, for example, ensure all claims are fully detailed, justified and substantiated with evidence.

Second, that the application may be dismissed or adjourned may come after the respondent has invested much resource in attempting to respond. Further, in NSW, claims for monetary orders are stated as a global amount and do not require supporting documentation at lodgement - an open opportunity for some to balance the family budget. Victoria's aim to achieve low costs and accessibility to justice by restricting orders for costs also hardly deters unmeritorious cases.

These above comments are directed towards unmeritorious cases and fanciful claims. There are of course victims of a variety of deceptive practices by businesses, or, as various state and federal laws describe them, "suppliers". Still, the falsehood that consumer is always king in cases hardly makes up for the fact that too often we all suffer due to shady deals, the purchase of shoddy commodities or faulty services.

Nilay B. Patel is a barrister & solicitor and the national manager of legal affairs and compliance of a retail chain.

The views here are his own and not necessarily those of his employer.

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The Lay Litigant's Brief and the Respondent's Grief
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