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Debt recovery legal obligations when commencing legal action

Wednesday, February 20, 2013 - Posted by Philip Harvey

When commencing legal action to collect a debt, you are bound by a number legal obligations. These are common sense that are generally followed as a matter of course by everyone. All jurisdictions in Australia have these obligations (on both Plaintiffs and Defendants), with Victoria being the most explicit and the best example to go through.

The legal obligations in Victoria are called Overarching Obligations. They are as follows;

  • Paramount duty - you have the paramount duty to the court to further the administration of justice.
  • Overarching obligation to act honestly - you must act honestly at all times in relation to your case.
  • Overarching obligation-requirement of proper basis - you must not make claim or response to a claim that is vexatious, frivolous, an abuse of process or does not have proper basis.
  • Overarching obligation to only take steps to resolve or determine the dispute - you must only take steps that will resolve your dispute or case. You must not cause undue delay.
  • Overarching obligation to cooperate in the conduct of civil proceeding - you must cooperate with the other parties.
  • Overarching obligation not to mislead or deceive - you must not engage in conduct which is misleading or deceptive, or is likely to be misleading or deceptive.
  • Overarching obligation to use reasonable endeavours to resolve dispute - you must try to resolve your dispute with the other parties. You must use appropriate dispute resolution processes.
  • Overarching obligation to narrow the issues in dispute - if you are unable to resolve your dispute completely with the other party, you must try and resolve as many issues as you can, to narrow the issues that are in dispute.
  • Overarching obligation to ensure costs are reasonable and proportionate - you must ensure that any legal costs incurred during the case are reasonable and proportionate to the case, having regard to the complexity of the case and the amount in dispute.
  • Overarching obligation to minimise delay - you must ensure that you act promptly and minimise delay at all times during your case.
  • Overarching obligation to disclose existence of documents - you must disclose the existence of any documents that you have which are critical to the resolution of the dispute. Once you are aware you have a critical document, you must disclose its existence to the other party at the earliest opportunity. (Note: if you are given documents you can only use them in connection with your case).

When commencing proceedings, you are agreeing to abide by these obligations. If you do not understand these obligations you should  contact us.

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