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It's settled, then - our legal system is broken


The legal system is geared to favour settlements, but this often means the weaker party has simply been bullied into submission, writes Adelaide lawyer Patrick McCabe.

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Nobody wants to settle.

Hollywood constantly reminds us we can’t settle for a bearable romantic partner – we must find our one, true soulmate. We can’t settle for a job that’ll pay the bills – we should discover our passion. Usually, the message couldn’t be clearer: settling equals failing.

Except in the law. We lawyers just love settling. If you’ve been wronged and go to see a lawyer, the lawyer will tell you the last thing you want is actually to go to court and have a judge decide who’s right. “No, that’ll be too expensive, too stressful, too risky. Settle for less. Take some money. Walk away. You’ll thank yourself.”

Usually, clients listen.

Here are some figures to prove it from two areas in which I work – unfair dismissal and native title. In the 2015 financial year, about 80 per cent of all Fair Work Commission unfair dismissal claims settled in a conciliation, rather than went to a hearing. And another stat – 88 per cent of all native title claims ever finalised have been settled.

How wonderful, you might think, all those angry people coming together, maturely finding a fair solution they can live with, avoiding a silly stressful fight. That’s what many say. But the stats suggest otherwise.

For example, 21 per cent of those unfair dismissal ‘settlements’ involved the worker receiving precisely zero dollars. And a further 55 per cent involved only cash payments of less than $6000 – about a month’s average wage (at most) for losing your job forever.

In native title settlements, Aboriginal people’s rights are often severely watered down. For example, it’s standard practice for governments negotiating with Aboriginal groups to insist on a clause in agreed native title determinations saying something like: “these native title rights are for personal, domestic, and communal use only”. In other words: ”you can’t use these rights to make any money”. This practice denies Aboriginal people an important opportunity for economic empowerment and development.

Where one side has much more power than the other, negotiations can be grubby, bleak occasions where the weak are bludgeoned into submission.

One of Australia’s top barristers, Bret Walker SC, recently said about this issue (while discussing native title settlements): “As a lawyer, I am trained to say litigation is a bad thing. I actually believe it, more or less. But some litigation should be seen as the just vindication of a right, and the resistance of unprincipled power. Compromise between the just vindication of a right and the unprincipled exertion of power will always lead to a detriment to the right and reward to the power. That is the nature of compromise.”

Walker is right – settlements are often presented as a beautiful epiphany of co-operation and goodwill. But in my experience, there are few renditions of ‘Kumbaya’ to be enjoyed. Where one side has much more power than the other, negotiations can be grubby, bleak occasions where the weak are bludgeoned into submission.

In employment matters, for example, most workers can’t afford to take a dispute to trial. This means workers must accept whatever crumbs the boss throws their way in negotiation. The boss knows this, so offers nothing, or very little. The worker takes it begrudgingly, simply because, in a very real sense, it is their only option.

Of course, the core of the problem is money – and how you need heaps of it to get anywhere near a court. This allows the powerful to bully the poor into unfavourable settlements.

We need to consider solutions. Maybe we could expand legal aid – the current system generally only covers poor criminal defendants. Maybe we could develop a HECS-loan-style system for legal funding, as some thinkers have advocated. Or maybe us lawyers need to answer some hard questions about our industry: why are legal fees so high, so many lawyers so rich, and yet so many law graduates unemployed?

Whatever the solution, we must admit the system isn’t working. It’s reasonable for us to demand a legal system where disputes are actually adjudicated upon, and justice isn’t hopelessly compromised.

Patrick McCabe is a lawyer at Adelaide firm Johnston Withers, specialising in employment law and native title.

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