The Commonwealth government is in a unique position when litigating against private citizens.
This is primarily because, as the High Court noted in Thomas v Mowbray (2007) 233 CLR 307 at , “the Commonwealth is the best-resourced litigant in the nation”. This power differential means that, in its dealings with citizens, the Commonwealth is held to higher standards than those of private individuals or corporations.
Indeed, there is an expectation that governments will deal honestly and fairly with their citizens through the litigation process and act as a moral exemplar for other litigants. This stems from the fact that governments have no legitimate private interest in performing their functions and are usually larger and better resourced than private litigants.
It follows that lawyers who represent the interests of the government or work as in-house counsel in government must act in a way that is beyond reproach and must set a standard that others in the profession aim to emulate.
These moral, ethical and professional standards form the basis for the codified Model Litigant Obligations (MLOs).
What is the source of the MLOs?
For Commonwealth entities, the source is in section 55ZF of the Judiciary Act 1903 (Cth). Section 55ZF gives the Commonwealth Attorney-General the power to issue legal services directions that apply to any work that is performed on behalf of the Commonwealth. The legal directions themselves are found in Appendix B of the Legal Services Directions 2017.
What are the MLOs?
At the core of the MLOs is the overarching duty of government entities to adhere to principles of fairness and honesty in the conduct of litigation. Also underpinning these obligations is the need to act with complete propriety and in accordance with the highest ethical standards.
The obligations include:
The Commonwealth MLOs also contains an obligation that specifically extends to the Commonwealth agencies involved in merits review proceedings. This obligation requires such Commonwealth agencies to use their best endeavours to assist the tribunal to make decisions.
Who do the MLOs apply to?
The Commonwealth MLOs, under section 55ZF of the Judiciary Act 1903 (Cth) , are binding on those conducting litigation in the name of the “Commonwealth” – Commonwealth departments, agencies and Commonwealth-controlled corporate entities.
What do the MLOs mean in practice?
The MLOs do not prevent those representing government in litigation from being able to prosecute and act firmly to protect government interests. The MLOs also do not:
As a result of the MLOs and the role of lawyers in protecting their client’s interests, a difficult situation is created where government lawyers must walk a fine line between acting fairly in compliance with the MLOs and firmly pursuing claims or defending actions brought by or against the government.
How are the MLOs enforced?
There are a number of ways the MLOs can be enforced.
1. Enforcement by the Commonwealth Attorney-General
Provision is made for the enforcement of the MLOs by the Commonwealth Attorney-General. The Attorney-General may, under section 55ZG(2) of the Judiciary Act 1903 (Cth), impose sanctions for non-compliance with the Legal Services Direction. However, these provisions do not place an obligation on the Attorney-General to take action to enforce compliance with the rules. Agencies must notify the Office of Legal Services Coordination about actual or possible non-compliance with the Legal Services Directions 2017.
2. Cost orders
There is conflicting legal authority as to whether courts can take conduct falling short of the standard of a model litigant into account when determining the question of costs. In Nelipa v Robertson and Commonwealth of Australia  ATSC 16 at , the Court stated:
“It is not the function of the court to ensure compliance with the Directions or to become the disciplinary tribunal for alleged breaches. Nevertheless it is clear that the obligation to act as a model litigant and the failure to act in that way can be a relevant factor in considering the appropriate order as to costs.”
By contrast, in ACCC v Leahy Petroleum  FCA 1844 at , the Federal Court found that “considerations as to whether there has been compliance with that policy are irrelevant to questions of indemnity costs.”
Notwithstanding this conflicting authority, it is clear that those advising governments need to be aware of the possibility that falling short of compliance with the MLOs may have cost consequences, or at least be a factor that is considered by the court when considering the question of costs.
3. Reputational damage
Arguably one of the most effective compliance tools to ensure compliance with the MLOs and the legal profession’s broader ethical obligations is the potential risk of negative judicial commentary. Due to the high standard placed on governments involved in litigation, courts can be quite scathing in their criticisms of the way governments have handled themselves which can cause serious detriment to both the lawyer’s personal reputation and that of the government client.
For instance, in Scott v Handley  FCA 404 at , Justices Spender, Finn and Weinberg said:
“In the present instance [the Commonwealth] (i) was in a position of obvious advantage in relation to unrepresented litigants; (ii) was significantly in default in complying with procedures designed to secure the fair and orderly preparation of the matter for hearing; (iii) served the affidavits on the appellants at an extremely late date with the consequential likely impairment of their capacity to prepare properly for a final hearing; (iv) did not inform his Honour of the default and of its possible consequences; and (v) took advantage of the inability of the appellants to articulate properly the basis for, and to secure, an adjournment. In our view the conclusion is inescapable that [The Commonwealth] has fallen considerably short of the standard properly to be expected of the Commonwealth.”
4. MLOs and other obligations
There is a significant crossover between MLOs, court requirements and ethical obligations.
Each of the Commonwealth and State courts have obligations written into the rules which require all parties – not just government entities – to conduct litigation fairly and efficiently.1 In Priest v State of New South Wales  NSWSC 41, Justice Johnson held that section 56 of the Civil Procedure Act 2005 (NSW) requires all litigants in civil proceedings in the Supreme Court to act as model litigants. Similarly in LVR (WA) Pty Ltd v Administrative Appeals Tribunal  FCAFC 90, it was explained that all lawyers in complying with their paramount duties to the Court would follow similar duties to the MLO.
Clearly, the MLO’s overarching obligation of fairness and honesty for government litigants overlap with these general court requirements. For example, if there is a delay in the prosecution of a matter, there may be a breach of both the court requirement to proceed expeditiously2, and the MLO to be prompt and not unduly delay proceedings.
The professional ethical obligations of lawyers also overlap with the MLOs. An example of this may be if a lawyer misuses information that has been inadvertently disclosed to them, as this would be a breach of professional ethical rules and the MLO not to take advantage of a position of power.
In saying this, the MLOs, arguably do go beyond the obligations imposed on private litigants. The key additional obligations are to:
The following may be helpful for you to consider to ensure compliance with MLOs:
 See for example section 37M – 37P of the Federal Court of Australia Act 1976 (Cth), section 5 of the Uniform Civil Procedure Rules 1999 (Qld), section 7 of the Civil Procedure Act 2010 (Vic) and section 56 of the Civil Procedure Act 2005 (NSW).
 Bli Bli #1 Pty Ltd v Kimlin Investments Pty Ltd  QCA 136 at .
 Save for in respect of the Queensland MLOs discussed above.
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.