Civil Litigation (Research Essay) by Ashik J Ibrahim (1919 Words)
“Q. The trial has been the main event of the civil litigation process. It is a single event at which all the
matters to be decided are dealt with in a continuous process. Should trials continue to adopt this format
or should we encourage the development of a system of discontinuous hearings enabling the trial to be
broken up into sequential stages?”
At the centre of modern justice and throughout countless times and places in history is the trial.
It has and does serve as the focal point in both civil and criminal matters and is an invaluable tool in
an increasingly information saturated world. In many ways, the trial has aged gracefully, remaining in
essence unchanged. Whether in Republican Rome or modern-day Australia, the trial still involves a
summons, preliminary hearings, the primary body of the trial, and then the decision. 1 But certain
other aspects have begun to show cracks under the strain of modern caseloads and the complexity
that cases can now reach.
Bifurcation is the process from which a unitary trial becomes sequential. 2 It involves splitting the
trial process into separate, discontinuous hearings, often for the sake of efficiency or creating
incentives that might induce a party to settle, rather than continue their affairs in court. However,
even if one finds a satisfactory answer as to whether or not a system should involve or require
bifurcation; one still only has half the answer. The more important question is how much and how
often to bifurcate as there is a vast difference between a system of bifurcation in which one can
sparingly split liability from damages and one in which the judge can split any number of issues and
questions of law into sequential trials.
The civil justice system should carefully embrace the sequential trial for a number of reasons,
including economic incentives, greater efficiency, and a more egalitarian manner of dealing with the
large amounts of information that can be foisted upon modern day litigants. This does not require
any radical change in the rules of the South Australian Supreme Court, as Rule 211 already permits
the court to “order the separate trial of an issue of fact or law”. 3 It is therefore a matter of assessing
presumptions against separating the trial.
There are a number of issues that need to be addressed when discussing the speculative use of
bifurcation in an Australian context. It is clearly better when elaborating on the hypothetical
Ernest Metzger, 'An Outline of Roman Civil Procedure' (2013) 9 Roman Legal Tradition 1, 21-30.
William M. Landes, 'Sequential versus Unitary Trials: An Economic Analysis' (1993) 22 Journal of Legal Studies 99,
99.
3
Supreme Court Civil Rules 2006 (SA) r 211.
1
2
Civil Litigation (Research Essay) by Ashik J Ibrahim (1919 Words)
benefits of adoption of any policy to use examples that are ‘closer to home’. In this case, ‘closer to
home’ means a common law country that shares ideals and doctrines with us. While there is
certainly benefit in looking at civil law countries such as Germany, it is more analogous to look at the
United Kingdom or even The United States of America. But America, for example, has trial by jury
in civil cases,4 a long-standing tradition that has its roots in the philosophical underpinnings of the
nation’s legal history.5 It also has a different doctrine in allocating costs.6 Lastly, it has widespread use
of punitive damages in the case of civil actions (which are sometimes separated from other issues). 7
All of these things have the effect of augmenting the results of bifurcation which must be considered
before any reform.
There appears to be a general consensus among the academic literature that adopting bifurcation,
creates a more efficient system.8 That is not to say that individual cases always last less time, but
rather, through the alteration of incentives bifurcation brings about higher levels of efficiency. 9 This
comes to light through the way bifurcation incentivises certain actions amongst litigants. There are
two primary economic incentives to consider; the incentive to bring a case to court and the incentive
to settle a case after commencing proceedings. These ‘macrojudicial’ trends can be used by policy
makers and legislators to achieve a number of desirable outcomes. The goals of 'access to justice' and
the 'efficacy of the court system in its ability to handle variable case-loads' is a fine balance to walk.
The incentive to bring less meritorious cases into the court system is a problem that might arise
under increased bifurcation.10 When you break down the civil litigation process into a series of semiindependent phases, the level of risk is lowered, without any analogous lowering of potential benefit
as a party has an increased opportunity to cut losses and settle if earlier issues are decided in the
other parties’ favour.11 That being said, it also could be argued that increases access to justice while
United States Constitution amend VII.
See Ibid; Baltimore & Carolina Line v Redman, 295 US 654, 657 (1913).
6
Jef Mot, 'Sequential trials and the English rule' (2012) 34 European Journal of Law and Economics 32, 32-33.
7
See Simpson v Pittsburgh Corning Corp, 901 F 2d 277, 283 (2d Cir. 1990).
8
See eg Landes, above n 2; Steven S Gensler, 'Bifurcation Unbound' (2000) 75 Washington Law Review 705; Mot, above
n 6; Bradford Cornell, 'The Incentive to Sue: An Option-Pricing Approach' (1990) 19 Journal of Legal Studies 173.
9
Hans Zeisel & Thomas Callahan, 'Split Trials and Time Saving: A Statistical Analysis' (1963) 76 Harvard Law Review
1606, 1619-1621.
10
Bradford Cornell, 'The Incentive to Sue: An Option-Pricing Approach' (1990) 19 Journal of Legal Studies 173, 182183; Douglas Baird, Robert Gertner, and Randal Picker, Game Theory and the Law (Harvard University Press, 1994)
251-253.
11
Cornell, above n 10, 176-186.
4
5
Civil Litigation (Research Essay) by Ashik J Ibrahim (1919 Words)
leaving parties an out in the form of settlement.12 It has been pointed out that even if a sequential
trial might take longer than a unitary one, the increased rate of settlement after part of the trial has
been decided lowers the average time spent in court. 13 This has the effect of the potential to reduce
the strain on the courts, something many advocate. These two incentives, and thus the efficiency
that they promote, are an important argument in favour of more sequential trials.
The argument for efficiency can partially be summed up in the idea that when separating liability
from costs, the large percentage of cases that result in finding of no liability logically negates the
need to carry on with proceedings to find costs, as no costs can be awarded. Between the hacking off
of that substantial amount of unnecessary litigation, there is also the fact that when there is a finding
of liability, the pressure to settle and reduce the costs of litigation rise substantially as the asymmetry
of the parties’ knowledge of the defence’s liability has shifted. 14
The two incentives are inextricably linked to the rule of costs. The law is, in many ways, just
another market (albeit a monopolistic one), and economic considerations (even if not always
named) reign supreme in the minds of parties and governments alike. The English rule of costs
(which Australia uses) and the American rule of costs could result in dramatically different
outcomes under a bifurcated system of civil litigation.
In the English ‘loser-pays’ rule, you heavily incentivise cutting one’s losses and settling if
somebody loses on a particular issue because of the increased pay-out, which might act as an
unfortunate disincentive to meritorious litigation or might have the effect of removing weak cases
from the system at an earlier stage.15
However, when one applies the American ‘each party-pays’ rule, 16 the balance is a little more
equitable. By containing issues and requiring that parties only employ solicitors and barristers the
issues that need to be tried, you can reduce the strain that is felt when a meritorious but unitary trial
begins to drag on without any tangible indicator of whether you are winning or losing. 17 With the
Ibid.
Zeisel & Callahan, above n 9, 1621.
14
See Kong‐Pin Chen, Hung‐Ken Chien, and C Y Cyrus Chu, 'Sequential versus Unitary Trials with Asymmetric
Information' (1997) 26 The Journal of Legal Studies 239.
15
James W Hughes and Edward A Snyder, 'Litigation and Settlement under the English and American Rules: Theory
and Evidence' (1995) 38 Journal of Law and Economics 225, 229-230.
16
Ibid 225.
17
Ibid 227 citing Robert D Cooter & Daniel L Rubinfeld, 'Economic Analysis of Legal Disputes and Their Resolution'
(1989) 27 Journal of Economic Literature 1067.
12
13
Civil Litigation (Research Essay) by Ashik J Ibrahim (1919 Words)
shorter spans of episodic judgements, mounting fees may look less like a wild goose chase and more
like a measured investment that has some form of a pay-off at an earlier stage as judgements are
received over the sequential process. Therefore, sequential trials cannot be looked at in a vacuum
without a firm decision on how it may affect costs, arguably one of the most important aspects in
the civil justice system to those participating in it.
One of the enormous advantages of adopting the sequential trial is that it allows for the human
lack of absolute prescience. In a sufficiently complex trial, in which enormous sums may be at stake,
hundreds are involved, and thousands of documents may be needed to be revealed and analysed in
discovery, a unitary trial may be woefully designed to deal with the enormity. 18 One must discover
absolutely everything, figure out the enormous breadth that must be pleaded, and prepare for
countless issues that may never come up because something else is decided that negates the need to
seek judgement on it.19 Pleadings that could be published in volumes have no place in a sensible civil
justice system (such as the case of State Bank of South Australia v Peat Marwick Mitchell and Others).
So while the rules against trial-ambushing are sensible and well-intentioned, they can have the effect
that in a case where things may not be on the face of it, visible, it can hamper proceedings due to the
prescience that is required of lawyers.
This is where the German advantage comes into its own. It has been characterised as an 'episodic'
system by John H. Langbein,20 which is perhaps the most appropriate term to describe issue-based
bifurcation. Instead of tackling all issues in a semi-simultaneous manner, a new problem can be
addressed, much to the relief of lawyers and clients alike “in another hearing at a later time.” 21 There
is a natural resistance to the idea within the Australian jurisdiction, one emphasised by Hudson J in
George Wimpey & Co Ltd v Territory Enterprises Pty Ltd when he quoted Lord Justice Jenkins on the
“line of demarcation”22 between liability and the quantum of damages,
“It would be highly inconvenient if the parties went before the court for the trial of the issue of liability and
there ensued a difference … in their respective views as to where the judge's jurisdiction was to end for the
Gensler above n 8, 725-728.
John H Langbein, 'The German Advantage in Civil Procedure' (1985) 52 (4) The University of Chicago Law Review
823, 830.
20
Ibid.
21
Ibid 831.
22
George Wimpey & Co Ltd v Territory Enterprises Pty Ltd [1966] VR 312, 317 quoting Polskie, etc v Electric Furnace Co
Ltd [1956] 2 All ER 306, 311.
18
19
Civil Litigation (Research Essay) by Ashik J Ibrahim (1919 Words)
purposes of that particular hearing.”23
Therefore, a conservative touch as to where bifurcation applies would be sensible in most cases, as
the same evidence and witnesses may be needed for liability and damages, making two trials
wasteful.24 This, if tempered without prejudice against bifurcation as a practice at large, would be a
sensible midpoint to strike in the balancing of interests.
This is not to say that bifurcation is an untested idea within the common law, as the American
Federal Rules already allow (on the discretion of the presiding judge) to separate the question of
liability from damages,25 though its use is variable at best.26 This has its own sets of advantages and
disadvantages, some of which must be viewed in a uniquely American context in light of their
increased reliance on the jury. However, in Australia we do not use juries in civil litigation and thus
certain advantages derived from stage-based bifurcation are not applicable, such as the factor of
eliminating jury sympathy over a party’s ability to pay damages which may their decisions on
liability.27
Similarly, in the late fifties and early sixties, in Illinois, bifurcation took brief hold before falling
under fire from opponents of the change.28 Not aimed at the efficacy of bifurcation, it was rooted in
the American philosophical mind-set that places the trial by jury at the moral centre of their legal
system.29 However, this bubble of bifurcation lived only a brief seven years before the words
“separation of issues was not to be routinely ordered”30 was added into the section, slowly drying up
the rate at which bifurcation occurred as the presumption was now heavily against it occurring. 31 In
the context of Australia, however, the problem of the “sanctity of the civil jury system” 32 is irrelevant
because we do not rely upon a civil jury system. Adoption of the sequential trial, then, is not a wild
experiment without any foundation in practical application, as it has seen use in several jurisdictions
Ibid.
Stephen Colbran, Greg Reinhart, Peta Spender, Sheryl Jackson and Roger Douglas, Civil Procedure: Commentary and
Materials (Lexis Nexis Butterworths, 4th ed, 2009) 1006.
25
Federal Rules of Civil Procedure 2014 r 42(b).
26
Gensler above n 8, 722-723.
27
Lewis Mayers, 'The Severance for Trial of Liability from Damage', (1938) 86 The University of Pennsylvania Law
Review 389, 394.
28
Gensler above n 8, 717.
29
Ibid 718 citing Jack B Weinstein, 'Routine Bifurcation of Jury Negligence Trials: An Example of the Questionable Use
of Rule Making Power' (1961) 14 Vanderbilt Law Review 831, 833.
30
Federal Rules of Civil Procedure 2014 r 42(b) advisory committees note (1966).
31
See Gensler above n 8, 721 citing Federal Practice and Procedure § 2388 (3d ed, 1995).
32
Gensler above n 8, 724-725 quoting Kimberly Clark Corp v James River Corp, 131 FRD 607, 608 (ND Ga, 1989).
23
24
Civil Litigation (Research Essay) by Ashik J Ibrahim (1919 Words)
without leading to disastrous results, even if opposition to it on grounds less relevant to Australia
managed to severely limit its use in certain cases.
The sequential trial has numerous advantages that could benefit the Australian civil justice
system. However, it should not be a necessity for all (or even most) trials in all areas of civil
litigation. As certain cases may be interconnected enough that creating additional trials would only
have the effect of creating public waste. Ultimately, it should be up to the discretion of the presiding
judge to structure and bifurcate the case upon the demarcation of issues and facts at hand with the
caveat that any presumption against bifurcation could damage its potential to grow and be more
widely adopted.
Civil Litigation (Research Essay) by Ashik J Ibrahim (1919 Words)
BIBLIOGRAPHY
A1. Journal Articles
Chen, Kong‐Pin, Hung‐Ken Chien, and C Y Cyrus Chu, 'Sequential versus Unitary Trials with Asymmetric
Information' (1997) 26 The Journal of Legal Studies 239
Cooter, Robert D and Daniel L Rubinfeld, 'Economic Analysis of Legal Disputes and Their Resolution' (1989) 27
Journal of Economic Literature 1067
Cornell, Bradford, 'The Incentive to Sue: An Option-Pricing Approach' (1990) 19 Journal of Legal Studies 173
Gensler, Steven S, 'Bifurcation Unbound' (2000) 75 Washington Law Review 705
Hughes, James W and Edward A Snyder, 'Litigation and Settlement under the English and American Rules: Theory and
Evidence' (1995) 38 Journal of Law and Economics 225
Landes, William M, 'Sequential versus Unitary Trials: An Economic Analysis' (1993) 22 Journal of Legal Studies 99
Langbein, John H, 'The German Advantage in Civil Procedure' (1985) 52 (4) The University of Chicago Law Review
823
Mayers, Lewis, 'The Severance for Trial of Liability from Damage', (1938) 86 The University of Pennsylvania Law
Review 389
Metzger, Ernest, 'An Outline of Roman Civil Procedure' (2013) 9 Roman Legal Tradition 1
Mot, Jef, 'Sequential trials and the English rule' (2012) 34 European Journal of Law and Economics 32
Weinstein, Jack B 'Routine Bifurcation of Jury Negligence Trials: An Example of the Questionable Use of Rule Making
Power' (1961) 14 Vanderbilt Law Review 831
Zeisel, Hans & Thomas Callahan, 'Split Trials and Time Saving: A Statistical Analysis' (1963) 76 Harvard Law Review
1606
A2. Books
Baird, Douglas, Robert Gertner, and Randal Picker, Game Theory and the Law (Harvard University Press, 1994)
Colbran, Stephen, Greg Reinhart, Peta Spender, Sheryl Jackson and Roger Douglas, Civil Procedure: Commentary and
Materials (Lexis Nexis Butterworths, 4th ed, 2009)
Civil Litigation (Research Essay) by Ashik J Ibrahim (1919 Words)
B1. Cases (Australia)
George Wimpey & Co Ltd v Territory Enterprises Pty Ltd [1966] VR 312
B2. Cases (International)
Baltimore & Carolina Line v Redman, 295 US 654 (1913)
Kimberly Clark Corp v James River Corp, 131 FRD 607, 608 (ND Ga, 1989)
Polskie, etc v Electric Furnace Co Ltd [1956] 2 All ER 306
Simpson v Pittsburgh Corning Corp, 901 F 2d 277, 283 (2d Cir. 1990)
C1. Legislation (Australia)
Supreme Court Civil Rules 2006 (SA)
C2. Legislation (United States of America)
Federal Practice and Procedure (3d ed, 1995)
Federal Rules of Civil Procedure 2014
United States Constitution