Litigation - our policies
The ATO conducts and manages litigation in accordance with its obligations under:
- the law
- the Attorney-General's Legal Services Directions 2005 (Legal Services Directions)
- the relevant court and tribunal rules
- the relevant practice notes or directions
- ATO policies and guidelines.
The ATO strives to have all disputes brought to finality in a fair, timely and equitable manner consistent with the law, and supports the appropriate use of all dispute resolution techniques to minimise litigation and related costs.
Conducting ATO litigation
Our practice statement, PS LA 2009/9 Conduct of Tax Office Litigation, sets out our approach and philosophy to litigation. It provides:
- guidance to tax officers about our obligations to act as a model litigant under the Attorney-General's Legal Services Directions
- the processes tax officers must follow to ensure those obligations are met, including how to engage external legal service providers.
The practice statement also explains our commitment to alternative dispute resolution (ADR) in litigation and discusses the various obligations that are imposed under the different court and tribunal rules.
Find out more
PS LA 2009/9External Link Conduct of ATO litigation and engagement of ATO Dispute Resolution
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Solicitor on the record
The ATO will operate as the solicitor on the record in certain cases. A solicitor on the record, in relation to any party to proceedings, means the solicitor who is, for the time being, named as the party’s legal representative in the documentation for the proceedings.
ATO officers have the same professional and ethical obligations as any other legal practitioner. They must comply with the relevant Legal Profession Act and any related regulations. They must comply with the Solicitors’ Rules and be familiar with the legislation that governs the conduct and obligations of their profession.
Legal services directions
The ATO has obligations under the Legal Service Directions issued by the Attorney-General through the Office of Legal Services Coordination (OLSC). These are a set of binding rules about the performance of Commonwealth legal work - whether it is legal work performed in-house, by the Australian Government Solicitor (AGS), or work performed by external legal providers.
The directions help to ensure that the Australian Government receives consistent and well-coordinated legal services that are of a high standard, uphold the public interest and are sensitive to their context of Commonwealth interests, which are broader than any one agency. In turn, this approach protects the government's legal and financial position.
The ATO takes these obligations seriously and is proactive about initiating reports of potential breaches to OLSC. The ATO also provides regular training to our legal services officers in the model litigant obligations. Taken together, these explain the higher rates of self-reporting of potential breaches and the relatively small number of determined breaches.
The directions cover matters such as:
- briefing the Solicitor-General
- recovery of costs
- reporting on legal services expenditure
- reporting on significant issues
- principles of constitutional litigation involving Commonwealth Authorities and Companies Act 1997 (CTH) bodies
- use of in-house lawyers for court litigation
- model litigant.
Get it done
The directions are available on the Attorney-General Department's website ag.gov.au
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One of the key requirements of the Legal Services Directions is that the government must be a model litigant.
The ATO as a model litigant – its officers, solicitors and counsel – is required to act with complete propriety, fairly and in accordance with the highest professional standards in handling claims and litigation. This also requires that the ATO not start legal proceedings unless it is satisfied that litigation is the most suitable method to resolve a dispute.
Taxpayers and their representatives are advised of our model litigant obligations at the beginning of litigation. External legal service providers and counsel representing the ATO are also informed of their model litigant obligations at the time they are engaged to represent the ATO.
The ATO conducts and manages litigation in accordance with its obligations under the law, the Attorney-General's Legal Services Directions 2005 (Legal Services Directions), the relevant court and tribunal rules, the relevant practice notes or directions, and ATO policies and guidelines.