The Long Tail of COVID-19: Prevailing trends in civil litigation in 2021 and beyond

18 November 2021 18:04

Michael Kontoudis, Practical Guidance Legal Writer – Dispute Resolution

With the impending rollout of the COVID-19 vaccine in Australia and across much of the world, the business and legal community is beginning to look forward to the resumption of the so-called ‘new normal’. It is clear, however, that the aftershocks of the pandemic will be felt throughout 2021 and beyond, and that law firms will need to adapt to accommodate the lasting impacts of the virus on the legal industry. While these impacts will be felt across the industry, civil litigators should be especially prepared to reckon with several trends that may inform the conduct of litigation and dispute resolution in Australia and around the world.

The following is a list of some of these apparent trends.

  1. An uptick in the volume of civil litigation

    In the first few months of the pandemic, it appeared that there was a prevailing reluctance to litigate new disputes through the courts. This may have been due to an aversion to risk in an uncertain climate or it may have been that dispute resolution was not an immediate priority given the multiplicity of unprecedented issues affecting businesses at the time.

    One year later, and the problems caused by breaches of contract, broken supply chains, defaults and insolvencies will have worsened if they have not resolved. Civil litigators can expect to have a higher case load over the next twelve months in areas including:

    • Employment disputes - civil litigators should anticipate a deluge of workplace-related litigation in 2021. Lawyers will be asked to weigh in on and act in disputes concerning working from home arrangements, redundancies, furloughs and a host of other types of disputes. It is expected that these issues will prevail across multiple sectors and industries and affect SME and big business equally;
    • Insolvency disputes – the temporary measures introduced in March 2020 that have kept a lid on the volume of insolvencies and insolvency-related disputes ceased effect on 1 January 2021. The minimum threshold for issuing a statutory demand on a debtor company has reverted to $2,000 (from $20,000 under the temporary measures) and the time for compliance has reverted to 21 days (from 6 months). Similar reductions in the timeframe for compliance apply to bankruptcy notices served on individuals.

    Similarly, the temporary “safe harbour defence” amendments to the Corporations Act 2001 (Cth) that shielded directors from liability for insolvent trading expired on 31 December 2020.

  2. Growth for ‘new law’ and tech-savvy firms

    In 2021, law firms that do not embrace technology, experimentation and innovation run the risk of losing clients. The pandemic has accelerated the existing demographic shift in the legal industry (and its clients) and law firms that lack agility will be left behind.

    A high volume of litigation work may compel in-house counsel to explore new lawyer-client relationships and allocate work across multiple firms, and it seems likely that ‘new law’ firms with technological know-how, flexible pricing models and the ability to share knowledge will be best placed to grow their client base and forge meaningful bonds with new clients.

  3. The enduring presence of technology in the courtroom

    Australian courts have adapted quickly and confidently to the need for remote hearings and increased usage of technology in the courtroom. The shift to remote hearings has, despite some technical difficulties, been smooth and effective in difficult circumstances and has resulted in benefits such as a reduction of wasted time and unnecessary travel. Given the court’s high caseload, which is likely to increase in 2021, it is anticipated that remote hearings will continue to be used more often than was the case prior to the pandemic, particularly for shorter hearings or those that are merely procedural in nature. Practitioners should prepare accordingly and ensure that their technological capabilities and best practices for remote hearings (and electronic trials) are well-developed.

  4. A resolve to resolve disputes

    A high volume of litigation in 2021 will lead to an increase in legal spending. An understandable appetite to reduce these costs and avoid unnecessary risk will likely result in an increased willingness and desire on the part of litigants to resolve proceedings prior to trial, whether through private negotiation or utilisation of Alternative Dispute Resolution processes, such as mediation. Practitioners should be well-versed in the available mechanisms for achieving settlement and provide advice to clients regarding the most effective avenues for resolution.

All the above trends suggest that law firms that are flexible, technologically savvy and prepared to innovate are best placed to meet client needs and conduct civil litigation in Australia in 2021 and beyond. LexisNexis® suite of proven litigation-focussed analytical content and forthcoming Dispute Resolution Practical Guidance module are designed to give busy practitioners the answers they need to conduct litigation effectively and meet client needs in uncertain times.

Contact your Relationship Manager for more information about the Dispute Resolution module or visit our Practical Guidance website.

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