Principles of dispute resolution [Second edition.] 9780455237992, 0455237999

Table of contents :
Title page
Copyright
Dedication
Preface
Table of Contents
Table of Cases
Table of Statutes
1 What is Dispute Resolution?
2 Negotiation
3 Mediation
4 Arbitration
5 Additional Dispute Resolution Processes
6
Dispute Resolution Hybrids
7 Statutory Dispute Resolution Schemes
8 Legal Issues
9 Ethics and Standards
10 The Future of Dispute Resolution
Appendix 1: Guidelines for Legal Practitioners who act as Mediators
Appendix 2: Professional Standards for Legal Practitioners in Mediation
Appendix 3: The Law Society of New South Wales Charter on Mediation Practice
Appendix 4: The Agreement to Mediate (Including a Confidentiality Agreement)
Appendix 5: The Model Clause
Appendix 6: Mediation Guidelines
Index

Citation preview

Principles of Dispute Resolution

Thomson Reuters (Professional) Australia Limited 19 Harris Street Pyrmont NSW 2009 Tel: (02) 8587 7000 Fax: (02) 8587 7100 [email protected] legal.thomsonreuters.com.au For all customer inquiries please ring 1300 304 195 (for calls within Australia only)

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Principles of Dispute Resolution

DAVID SPENCER BA(Macq), LLB(Syd), GDLP(UTS), LLM(Hons)(UTS), AIAMA

Professor and Deputy Provost Australian Catholic University

SECOND EDITION

LAWBOOK CO. 2016

Published in Sydney by Thomson Reuters (Professional) Australia Limited ABN 64 058 914 668 19 Harris Street, Pyrmont, NSW, 2009 National Library of Australia Cataloguing-in-Publication entry Spencer, David, 1961Principles of dispute resolution / David Spencer. Second ed. ISBN 978 0 455 23798 5 (pbk.) Includes index. Dispute resolution (Law)—Australia. Arbitration and award—Australia. Mediation—Australia. 347.9409 © 2016 Thomson Reuters (Professional) Australia Limited This publication is copyright. Other than for the purposes of and subject to the conditions prescribed under the Copyright Act, no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Inquiries should be addressed to the publishers. Editor: Lara Weeks Product Developer: Lucas Frederick Publisher: Robert Wilson Printed by Ligare Pty Ltd, Riverwood, NSW This book has been printed on paper certified by the Programme for the Endorsement of Forest Certification (PEFC). PEFC is committed to sustainable forest management through third party forest certification of responsibly managed forests. For more info: http://www.pefc.org

To my mate, the muso and the magician,

Dispute resolution is like a card game. Success knows the value of the cards in your own and your opponent’s hand. DS.

Preface Principles of Dispute Resolution is a text designed to explain the ever increasing number of dispute resolution processes present and evolving in our legal, business and social settings. It discusses well-known processes such as negotiation, mediation and arbitration and details more modern processes that have evolved such as dispute review boards, collaborative law and conflict coaching. These latter processes have developed through the community’s desire to tackle difference between people and organisations before it escalates to full-scale disputation. In other words, there is a thirst to move beyond dispute resolution to coaching and managing conflict, thereby preventing disputes occurring at all. The second edition of Principles of Dispute Resolution features a new chapter on hybrid dispute resolution processes and a more logical order of updated chapters. Chapter 4 on arbitration features the updated Uniform Commercial Arbitration Acts now passed into law by all States in Australia. Chapter 7 on statutory dispute resolution features a new format with the latest legislation that accounts for the major dispute resolution schemes in the various courts, tribunals and other statutory authorities. Chapter 8 on legal issues also features new material on the continually developing law surrounding dispute resolution. Chapter 10 on the future of dispute resolution features more recent commentary on the “vanishing trial phenomenon” and conflict coaching. It also takes account of the latest instalment from one of the co-authors of the landmark text, Getting to Yes, which deals with the greatest obstacle of all to resolving conflict – ourselves. In addition to the above mentioned update highlights, each chapter has been reviewed and updated where appropriate to include the latest developments in the theory, philosophy and practice of dispute resolution. Principles of Dispute Resolution is for students and practitioners of dispute resolution. It is a text that records the progress of dispute resolution to date and predicts a bright future for its practice and its practitioners. It is a testament to the ability of dispute resolution to re-invent itself according to the needs of its users while still maintaining its core theory, philosophy and best practice. Best endeavours have been made to ensure that the law is current as of January 2016. I hope you will find this text a valuable addition to your library and of assistance as you practice the various dispute resolution processes you will encounter in your professional and private life. PROFESSOR DAVID SPENCER Melbourne, 2016

Table of Contents Preface ................................................................................................................................... vii Table of Cases ........................................................................................................................ xi Table of Statutes ................................................................................................................... xv Chapter 1: What is Dispute Resolution? ........................................................................... 1 Chapter 2: Negotiation ....................................................................................................... 27 Chapter 3: Mediation ......................................................................................................... 59 Chapter 4: Arbitration ..................................................................................................... 103 Chapter 5: Additional Dispute Resolution Processes ................................................... 143 Chapter 6: Dispute Resolution Hybrids ......................................................................... 167 Chapter 7: Statutory Dispute Resolution Schemes ....................................................... 197 Chapter 8: Legal Issues .................................................................................................... 249 Chapter 9: Ethics and Standards ................................................................................... 295 Chapter 10: The Future of Dispute Resolution ............................................................ 315 Appendix 1: Revised Guidelines for Solicitors Who Act as Mediators ........................... 333 Appendix 2: Professional Standards for Legal Representatives in a Mediation .............. 339 Appendix 3: Charter on Mediation Practice: A Guide to the Rights and Responsibilities of Participants ............................................................................................................ 341 Appendix 4: Agreement to Mediate (Including a Confidentiality Agreement to be Signed by Third Parties) ........................................................................................................ 345 Appendix 5: Model Clause Making Mediation Mandatory .............................................. 351 Appendix 6: Mediation Guidelines .................................................................................... 353 Index .................................................................................................................................... 357

Table of Cases A

AWA Ltd v Daniels (t/as Deloitte Haskins & Sells) (1992) 7 ACSR 463 ................................................................................................................... 3.190 AWA Ltd v Daniels (t/a Deloitte Haskins and Sells) (unreported, Rolfe J, 18 March 1992) ............................................................................................ 3.210 Aiton Australia Pty Ltd v Transfield Pty Ltd (1999) 153 FLR 236 ........................................................................................................ 8.270, 8.330, 8.390 Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 ............................................ 8.390 Alexander v Cambridge Credit Corporation (1987) 9 NSWLR 310 ............................................................................................................................... 8.410 Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129 ............................................................................................... 1.50 Australian Boot Trade Employees Federation v Whybrow & Co (No 1) (1910) 10 CLR 266 ................................................................................. 1.50, 4.40

B BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 .................................................................................................. 8.330 Balfour Beatty Power Construction Australia Pty Ltd v Kidston Goldmines Ltd [1989] 2 Qd R 105 ........................................................................... 4.150 Baulkham Hills Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 .............................................................................................. 3.140 Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1; [1968] RPC 30 ................................................................ 4.170 Beswick v Beswick [1968] AC 58 .................................................................................. 8.460 Betfair Ltd v Racing New South Wales (No 7) (2009) 181 FCR 66 ................................................................................................................................. 8.100 Bloss Holdings Ltd v Brackley Industries Pty Ltd [2005] NSWSC 756 ................................................................................................................. 8.80 Boyd v Ryan (1947) 48 SR (NSW) 163 ........................................................................ 8.460 Bremer Handelsgesellschaft MBH v Ets Soules et Cie [1985] 1 Lloyd’s Rep 160 ......................................................................................................... 4.130 Bremer Handelsgesellschaft mbH v Westzucker GmbH (No 2) [1981] 2 Lloyd’s Rep 130 .......................................................................................... 4.320 British Westinghouse Electric Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673 ............................................................................................................................... 8.410

xii Table of Cases

C Capolingua v Phylum Pty Ltd (As Trustee for the Gennoe Family Trust & Ors) (1989) 5 WAR 137 ........................................... 3.150, 8.390, 8.420 Chilton v Saga Holidays plc [1986] 1 ALL ER 841 ...................................................... 4.280 Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 ......................................................................................................... 8.520 Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1981) 149 CLR 337 .................................................................................................. 8.330 Commonwealth v Tasmania; Attorney-General (Tas) v Commonwealth (1983) 158 CLR 1 ........................................................................... 3.250 Commonwealth of Australia v Amann Aviation Pry Ltd (1991) 174 CLR 64 ................................................................................................................ 8.410 Computershare Ltd v Perpetual Registrars Ltd (No 2) [2000] VSC 223 .......................................................................................................... 8.340, 8.350

E E Johnson & Co (Barbados) Ltd v NSR Ltd [1997] AC 400 ....................................... Elizabeth Bay Developments Pty Ltd v Boral Building Services Pty Ltd (1995) 36 NSWLR 709 ..................................................................... 8.320, Esso Australia Resources Ltd v The Commissioner of Taxation (1999) 201 CLR 49 .................................................................................................... Esso Australia Resources Ltd v Plowman [1995] HCA 19; (1995) 183 CLR 10 ............................................................................. 8.130, 8.140,

8.460 8.390 8.110 8.150

F Field v Commissioner for Railways (NSW) (1957) 99 CLR 285 ....................... 3.180, 8.90

G Gao Haiyan v Keeneye Holdings Ltd [2011] 3 HKC 157 ............................................ 4.300 Gao Haiyan v Keeneye Holdings Ltd [2011] HKCA 459; [2012] 1 HKLRD 627; [2012] 1 HKC 335; CACV 79/2011 (2 December 2011) .......................................................................................................... 4.300 Gordian Runoff Ltd v Westport Insurance Corporation [2010] NSWCA 57 ................................................................................................................. 4.320

H Hadley v Baxendale (1854) 156 ER 145 ........................................................................ 8.410 Heart Research Institute Ltd v Psiron [2002] NSWSC 646 ............................................ 5.80 Hillas and Co Ltd v Arcos Ltd (1932) 147 LT 503 ....................................................... 3.180 Hopcraft v Hickman (1824) 57 ER 295 ......................................................................... 4.240

L Laing O’Rourke v Transport Infrastructure [2007] NSWSC 723 .................................. 8.370 Lange v Marshall 622 SW 2d 237 Mo Ct App (1981) .................................................. 8.200

Table of Cases xiii

Lukies v Ripley (No 2) (1994) 35 NSWLR 283 .................................................... 8.30, 8.40

M Masters v Cameron (1954) 91 CLR 353 ........................................................................ 3.140 McKenzie v McKenzie (1970) 3 WLR 472 ..................................................................... 3.50 Mond v Berger [2004] VSC 45 ...................................................................................... 4.320

N Neale v Richardson [1938] 1 All ER 753 ...................................................................... Network Ten Ltd v Capital Television Holdings Ltd (1995) 36 NSWLR 275 ............................................................................................................... Norton v Angus (1926) 38 CLR 523 .............................................................................. Norwest Holst Construction Ltd v Co-Operative Wholesale Society Ltd [1998] EWHC Tech 339 ........................................................................

4.220 8.120 8.460 4.370

O Owners Corporation Strata Plan 62285 v Betona Corporation (NSW) Pty Ltd [2006] NSWSC 216 ......................................................................... 8.180

P Patrick Stevedores Operations No 2 Proprietary Ltd v Maritime Union of Australia (1998) 195 CLR 1 ........................................................... 8.460, 8.520 Phoenix v Pope [1974] 1 All ER 512 ............................................................................. 4.200 Pittorino v Meynert [2002] WASC 76 ............................................................................ 8.260 Posner v Scott-Lewis [1986] 3 All ER 513 .................................................................... 8.460

R Ruddock v Vadarlis (2001) [2001] FCA 1329 ............................................................... 3.250 Ruffles v Chilman (unreported WASC FUL120 of 1996) .................................. 1.190, 1.200 Rush & Tompkins Ltd v Greater London Council [1989] 1 AC 1280 ............................................................................................................................... 8.50

S Scott v Avery (1856) 5 HL Cas 811; 10 ER 1121 .............................................. 8.270, 8.290 Silver Fox Company Pty Ltd as Trustee for the Baker Family Trust, The v Lenards Pty Ltd [2004] FCA 1570 ........................................................ 8.70 State Bank of NSW v Freeman (unreported, Badgery-Parker J, 1996) ........................................................................................................................... 8.390

T Tapoohi v Lewenberg (No 2) [2003] VSC 410 .............................................................. 8.220 Tiki International Ltd, Re [1994] 2 Qd R 674 ............................................................... 4.350 Transfield Philippines Inc v Pacific Hydro Ltd [2006] VSC 175 .................................. 8.150

xiv Table of Cases

U United Group Rail Services Ltd v Rail Corporation NSW [2009] NSWCA 177 .................................................................................................... 8.360, 8.370

V Verge v Devere Holdings Pty Ltd (2009) 258 ALR 464 ................................................. 8.80 Von Schultz v Attorney-General of Queensland [2000] QCA 406 ................................ 8.240

W WFA v Hobart City Council [2000] NSWCA 43 ........................................................... 4.260 Walford v Miles [1992] 2 AC 128 .................................................................................. 8.390 Wentworth v Rogers [2004] NSWCA 109 .......................................................... 8.170, 8.180 Western Australia v Taylor (Njamal People) (1996) 67 FCR 366 ................................. 8.390 Westport Insurance Corporation v Gordian Runoff Ltd (2011) 244 CLR 239 .............................................................................................................. 4.320

Table of Statutes Commonwealth Administrative Appeals Tribunal Act 1975 s s s s s s s s s

3(1): 7.20 34A: 1.160 34A(1): 7.20 34A(3): 7.20 34C(5): 7.20 34D: 7.20 34E: 7.20 34F: 7.20 34H: 7.20

Age Discrimination Act 2004: 5.30 Australian Consumer Law s 18: 8.80

Australian Human Rights Commission Act 1986: 5.30 s s s s s s s

46PD: 5.30 46PH(1): 5.30 46PJ: 5.30 46PK: 5.30 46PL: 5.30 46PM: 5.30 46PS: 5.30

Civil Dispute Resolution Act 2011: 7.30 s 3: 7.30 s 4(1): 7.30 s 4(1A): 7.30 s 5: 7.30 s 6: 7.30 s 7: 7.30 s 9: 7.50 s 10: 7.30 s 11: 7.30 s 12: 7.30 s 15: 7.30 s 16: 7.30 s 17A: 7.30 s 27: 7.50 s 32: 7.50 s 34: 7.50 Pt 2: 7.50

Commonwealth of Australia Constitution Act 1901 s 51: 4.40 s 51(xx): 3.250 s 51(xxix): 3.250

s 51(xxxv): 1.50, 4.40, 4.50 s 92: 8.100

Competition and Consumer Act 2010: 5.40 s 152BBA: 7.90 Sch 2: 8.80

Conciliation and Arbitration Act 1904: 1.50, 4.10, 4.40, 5.20 Corporations (Aboriginal and Torres Strait Islander) Act 2006 s 169.25: 7.90

Corporations Act 2001 s 241: 7.90

Courts (Mediation and Arbitration) Act 1991: 1.160 Disability Discrimination Act 1992: 5.30 Evidence Act 1995 s 131(1): 8.60 s 131(2): 8.60 s 131(2)(h): 8.70

Fair Work Act 2009: 1.50 Fair Work Commission by the Fair Work Amendment Act 2012: 1.50 Fair Work Regulations 2009 Sch 6.1 Item (5): 4.60

Family Law Act 1975: 1.160, 7.50, 7.60 s s s s s s s s s s s s s s s s s s s s s s

10A: 7.70 10F: 1.160 10G(1): 9.100 10G(2): 9.100 10H(1): 7.70 10H(3): 7.70 10H(4): 7.70 10J(1): 7.70 10J(2): 7.70 11A: 7.60 11E: 7.60 11G: 7.60 12A: 7.60 13A: 7.60 13C: 7.60 13D: 7.60 13E: 4.60 13F: 4.60 60I(7): 7.60 60I(9): 7.60 62B: 7.60 68L: 7.60

xvi Table of Statutes Family Law Act 1975 — cont Pt IIIB: 7.60 Pt VII: 7.60

Family Law (Family Dispute Resolution Practitioners) Regulations 2008 reg 5: 7.70, 9.100 reg 6: 7.70 reg 25: 7.70 reg 25(2): 7.70 reg 25(4): 7.70 reg 28: 7.70 reg 30: 7.70 Pt 7: 7.70

Family Law Reform Act 1995: 7.60 Family Law Regulations 1984 reg 67D: 4.60

Family Law Rules 2004 r 10.14: 4.60 Sch 1 Pt 1 cl 6(1): 7.60

Federal Circuit Court Rules 2001 r 4.09: 7.50 r 4.10: 7.50

Federal Circuit Court of Australia Act 1999 s 21: 7.50 s 22: 7.50 s 23: 7.50 s 24: 7.50 s 35: 4.60 s 43: 7.50 Pt 4: 7.50

Federal Court Rules 2011 r 28.01: 7.40 r 28.02: 7.40 r 28.04: 7.40 r 28.05: 7.40 r 28.11: 7.40 r 28.21: 7.40 r 28.22: 7.40 r 28.24: 7.40 r 28.25: 7.40 r 28.31: 7.40 Sch 1: 7.40

Federal Court of Australia Act 1976: 1.160, 7.40, 7.50 s s s s s

53A: 1.160, 3.210, 7.40 53A(1A): 4.60 53B: 7.40, 8.160 53C: 7.40, 8.230 54A: 5.100

Industrial Relations Act 1988: 1.50 International Arbitration Act 1974: 4.10, 4.50, 4.90 s 16: 4.30 Sch 1: 4.30

Migration Act 1958 s 318: 7.90

National Electricity Law Pt 10: 5.40

National Electricity Rules Ch 8: 5.40

National Gas Rules s 135(G)(2): 5.40 s 135HD: 5.40 Pt 15C: 5.40

Native Title Act 1993: 8.390 s s s s s s s s s s

86A: 7.80 86B: 7.80 86B(2A): 7.80 86B(5C): 7.80 86B(2): 7.80 86B(3): 7.80 86B(4): 7.80 86C(1): 7.80 86C(3): 7.80 86E: 7.80

Racial Discrimination Act 1975: 5.30 Road Safety Remuneration Act 2012 s 44: 7.90

Sex Discrimination Act 1984: 5.30 Trade Practices Act 1974 s 52: 8.70

Trade Practices (Industry Codes – Oil Code) Regulations 2006: 5.40 Uniform Commercial Arbitration Acts: 4.20, 4.50, 4.70, 4.80, 4.90 s s s s s s s s s s s s s s s s s s s s s s s s

1(1): 4.90 1(3): 4.90 1(3)(c): 4.90 1C: 4.10, 4.80 7: 4.100 7(1): 1.50 8: 4.100 11: 4.110 12: 4.120 16: 4.140 16(4): 4.140 17: 4.160 17A: 4.160 19: 4.10, 4.180 19(3): 4.10, 4.250 26: 4.230 27D: 4.290, 6.120 27D(2): 6.120 28: 4.310 28(3): 4.310 31: 4.320 31(3): 4.20, 4.320 32: 4.330 33: 4.330

Table of Statutes xvii Uniform Commercial Arbitration Acts — cont s 34: 4.340 s 34(4): 4.330, 4.340 s 34A: 4.360 s 34A(7): 4.320 Pt 5: 4.180, 4.210

Water Act 2007 s 73: 7.90

Work Health and Safety Act 2011 s 142: 7.90

Workplace Relations and other Legislation Amendment Act 1996: 1.50

Australian Capital Territory ACT Civil and Administrative Appeals Tribunal Act 2008 s 31: 7.100 s 35: 7.100

Building and Construction Industry (Security of Payment) Act 2009: 5.110 Children and Young People Act 2008 s 79: 7.120

Civil Law (Wrongs) Act 2002 ss 192 to 201: 7.120

Cooperatives Act 2002 s 99: 7.120

Court Procedure Rules 2006 r r r r r r r r r r r r r

1175: 6.110 1176: 6.110 1177: 6.110 1178: 6.110 1179: 6.110 1180: 6.110 1181: 6.110 1182: 6.110 1183: 6.110, 8.160 1184: 6.110 1185: 6.110 1531: 5.100 3252: 4.60

Domestic Relationships Act 1994 ss 6 to 9: 7.120

Domestic Violence and Protection Orders Act 2008 s 25: 7.120 s 89: 7.120

Health Act 1993 s 106: 7.120

Legal Profession Act 2006 s s s s

157: 286: 297: 395:

7.120 7.120 7.120 7.120

ss 401 to 406: 7.120

Mediation Act 1997: 6.110 s 9: 8.160 s 10: 8.160

Retirement Villages Act 2012 ss 176-178: 7.120

Road Transport (Third-Party Insurance) Act 2008 ss 130 to 133: 7.120 ss 136 to 140: 7.120

Uniform Commercial Arbitration Acts: 4.20, 4.50, 4.70, 4.80, 4.90 s 1(1): 4.90 s 1(3): 4.90 s 1(3)(c): 4.90 s 1C: 4.10, 4.80 s 7: 4.100 s 7(1): 1.50 s 8: 4.100 s 11: 4.110 s 12: 4.120 s 16: 4.140 s 16(4): 4.140 s 17: 4.160 s 17A: 4.160 s 19: 4.10, 4.180 s 19(3): 4.10, 4.250 s 26: 4.230 s 27D: 4.290, 6.120 s 27D(2): 6.120 s 28: 4.310 s 28(3): 4.310 s 31: 4.320 s 31(3): 4.20, 4.320 s 32: 4.330 s 33: 4.330 s 34: 4.340 s 34(4): 4.330, 4.340 s 34A: 4.360 s 34A(7): 4.320 Pt 5: 4.180, 4.210

Work Health and Safety Act 2011 ss 141 to 143: 7.120

New South Wales Aboriginal Land Rights Act 1983 ss 238 to 241: 7.190

Anti-Discrimination Act 1977 s 93A: 1.160 s 95: 1.160

Building and Construction Industry Security of Payment Act 1999: 5.110

xviii Table of Statutes

Children and Young Persons (Care and Protection) Act 1998: 7.190 s 114: 7.190

Civil Procedure Act 2005: 1.160, 7.130 s 26: 1.160, 7.130 s 27: 7.140 s 28: 7.140 s 29: 7.140 s 29(1): 8.180 s 29(2): 7.140, 8.180 s 30: 7.140, 8.160 s 31: 7.140, 8.160, 8.170 s 32: 7.140 s 33: 7.140, 8.230 s 38: 1.160 s 38(1): 4.60 s 56: 10.10 s 56(1): 7.130 s 56(2) to (4): 7.130 Pt 4: 7.130, 7.140 Pt 6: 10.20

Civil and Administrative Tribunal Act 2013 s 5(1): 4.60

Commercial Arbitration Act 1984 s 42(1)(a): 4.350

Commercial Arbitration Act 2010: 1.50, 4.50, 4.70 s 8: 4.60

Commercial Arbitration (Amendment) Act 1990: 4.290 Community Justice Centres Act 1983: 1.80, 7.130, 7.270 s s s s s s s s s s s s

3: 1.80, 7.150 5: 7.150 20: 7.150 20A: 7.150 21: 7.150 22: 7.150 23: 7.150 24: 7.150 27: 7.150 28: 7.150 29: 7.150 29(2): 7.150

Community Justice Centres (Pilot Project) Act 1980: 1.80 Community Land Management Act 1989 ss 62 to 70A: 7.190

Courts Legislation Amendment Act 2003: 5.90

Courts Legislation (Mediation and Early Neutral Evaluation) Amendment Act 1994: 1.160, 5.90 s 38D(1): 1.160

Crimes (Domestic and Personal Violence) Act 2007 s 21: 7.190 s 24A: 7.190

Dust Diseases Tribunal Act 1989: 7.190 s 32H: 7.190 ss 38 to 39: 7.190

Dust Diseases Tribunal Regulation 2013: 7.190

Evidence Act 1995 s 131(1): 8.60

Farm Debt Mediation Act 1994 s s s s s s s s s s s s s s s s s s s s s s s s

3: 1.160, 7.160 4(1): 7.160 8: 7.160 9: 7.160 9(1A): 7.160 9A(2): 7.160 9B: 7.160 10: 7.160 11: 7.160, 7.170 11(1): 7.160 11(5): 7.160 11A: 7.170 11B: 7.170 11C: 7.170 11AA: 7.170 12: 7.180 12A: 7.180 13: 7.180 14: 7.180 15: 7.180 16: 7.180 17: 7.180 18: 7.180 18A: 7.170, 7.180

Land and Environment Court Act 1979: 1.160

Local Government Act 1993: 7.190 s 440I: 7.190

National Parks and Wildlife Act 1974: 7.190 s 71K: 7.190

Racing Administration Act 1998: 8.100 Residential (Land Lease) Communities Act 2013: 7.190 s s s s

69: 7.190 71: 7.190 158: 7.190 s 145 to 155: 7.190

Retail Leases Act 1994: 7.190 ss 64 to 69: 7.190

Retirement Villages Act 1999: 7.190 ss 121 to 123: 7.190

Table of Statutes xix Retirement Villages Act 1999 — cont s 125: 7.190

Small Business Commissioner Act 2013: 7.190 ss 13 to 24: 7.190

Strata Schemes Management Act 2015 ss 216 to 225: 7.190 s 227: 7.190

Succession Act 2006: 7.190 s 98: 7.190 s 99: 7.190

Supreme Court Act 1970: 5.90 s 110K: 1.160 s 110P: 8.170

s 34(4): 4.330, 4.340 s 34A: 4.360 s 34A(7): 4.320 Pt 5: 4.180, 4.210

Water Management Act 2000 s 62: 7.190 s 93: 7.190 s 368: 7.190

Work Health and Safety Act 2011 ss 141 to 143: 7.190

Workplace Injury Management and Workers Compensation Act 1998 ss 318A to 318G: 7.190

Thoroughbred Racing Act 1996: 7.190

Northern Territory

s 98: 7.190

Uniform Civil Procedure Rules 2005: 7.130 r 13.4: 8.270 rr 20.1 to 20.7: 7.130 r 20.2: 7.140 r 20.3: 7.140 r 20.4: 7.140 r 20.5: 7.140 r 20.6: 7.140 r 20.7: 7.140 r 20.14: 5.100 r 20.20: 5.100 r 20.24: 5.100

Uniform Commercial Arbitration Acts: 4.20, 4.50, 4.70, 4.80, 4.90 s s s s s s s s s s s s s s s s s s s s s s s s s

1(1): 4.90 1(3): 4.90 1(3)(c): 4.90 1C: 4.10, 4.80 7: 4.100 7(1): 1.50 8: 4.100 11: 4.110 12: 4.120 16: 4.140 16(4): 4.140 17: 4.160 17A: 4.160 19: 4.10, 4.180 19(3): 4.10, 4.250 26: 4.230 27D: 4.290, 6.120 27D(2): 6.120 28: 4.310 28(3): 4.310 31: 4.320 31(3): 4.20, 4.320 32: 4.330 33: 4.330 34: 4.340

Adoption of Children Act s 86: 7.230

Building Act s 54FA: 7.230

Business Tenancies (Fair Dealings) Act ss 90 to 97: 7.230

Care and Protection of Children Act s 48 to 49: 7.230 s 127 to 128: 7.230

Commercial Arbitration (National Uniform Legislation) Act: 4.50 s 8: 4.60

Community Justice Centre Act s s s s s s s s s s s s

3(b): 7.200 10: 7.200 13: 7.200 14: 7.200 15: 7.200 16: 7.200 17: 7.200 24: 7.200 25: 7.200 33: 7.200 34: 7.200 37: 7.200

Construction Contracts (Security of Payments) Act: 5.110, 7.200 Local Court Act s 16: 7.210 s 17: 7.210 s 21: 7.210

Local Court Rules s 32.07: 7.210 s 32.09: 7.210 s 32.10: 7.210 s 32.11: 7.210 r 32.06: 7.210

Supreme Court Rules: 7.220

xx Table of Statutes Supreme Court Rules — cont s 48.12: 7.220 s 48.13: 7.220 r 48.13(8): 8.160 r 50.01: 5.100

Uniform Commercial Arbitration Acts: 4.20, 4.50, 4.70, 4.80, 4.90 s 1(1): 4.90 s 1(3): 4.90 s 1(3)(c): 4.90 s 1C: 4.10, 4.80 s 7: 4.100 s 7(1): 1.50 s 8: 4.100 s 11: 4.110 s 12: 4.120 s 16: 4.140 s 16(4): 4.140 s 17: 4.160 s 17A: 4.160 s 19: 4.10, 4.180 s 19(3): 4.10, 4.250 s 26: 4.230 s 27D: 4.290, 6.120 s 27D(2): 6.120 s 28: 4.310 s 28(3): 4.310 s 31: 4.320 s 31(3): 4.20, 4.320 s 32: 4.330 s 33: 4.330 s 34: 4.340 s 34(4): 4.330, 4.340 s 34A: 4.360 s 34A(7): 4.320 Pt 5: 4.180, 4.210

Queensland Aboriginal Cultural Heritage Act 2003 s 106: 7.280 s 112: 7.280 s 116: 7.280

Building Act 1975 ss 192 to 194: 7.280 s 246CM: 7.280 s 246CN: 7.280 s 246CO: 7.280

Building and Construction Industry Payments Act 2004 s s s s s

7: 5.110 8: 5.110 21: 5.110 23: 5.110 25: 5.110

s 26: 5.110 s 30: 5.110 s 31: 5.110

City of Brisbane Act 2010 s 183: 7.280

Civil Proceedings Act 2011: 1.160, 7.250 s s s s s s s s s s s s s s

36: 39: 40: 41: 42: 43: 44: 47: 48: 49: 50: 52: 53: 54:

8.160 7.250 7.250 7.250 7.250 7.250 7.250 7.250 7.250 7.250 7.250 7.250, 8.230 7.250 7.250

Commercial Arbitration Act 2013: 1.50, 4.50 s 8: 4.60

Cooperatives Act 1997: 7.280 s 98: 7.280

Courts Legislation Amendment Act 1995: 1.160

Courts of Conciliation Act 1892: 1.160 Dispute Resolution Centres Act 1990: 7.240 s 27AB: 7.270 s 28: 7.270 s 29: 7.270 s 30: 7.270 s 31: 7.270 s 32: 7.270 s 33: 7.270 s 35: 7.270 s 36: 7.270 s 37: 7.270 s 37(2): 7.270 Pt 3: 7.270

Electricity Act 1994: 7.280 ss 217 to 218: 7.280

Energy and Water Ombudsman Act 2006 s 11: 7.280 ss 28: 7.280

Environmental Protection Act 1994 s 189: 7.280 s 526: 7.280

Geothermal Energy Act 2010 ss 250 to 255: 7.280

Greenhouse Gas Storage Act 2009 ss 323 to 325AB: 7.280

Table of Statutes xxi

Industrial Relations Act 1999 ss 230 to 234: 7.280

Information Privacy Act 2009 s 103: 7.280 ss 171 to 174: 7.280

Justices Act 1886 ss 53A to 53B: 7.280

Land Act 1994 ss 339A to 339B: 7.280

Legal Profession Act 2007 s 167: 7.280 ss 440 to 442: 7.280

Local Government Act 2009 s 180: 7.280

Mineral Resources Act 1989 s 194A: 7.280 s 278: 7.280

Motor Accident Insurance Act 1994 s 51: 7.280 s 51D: 7.280

Peace and Good Behaviour Act 1982 s 4: 7.280

Peaceful Assembly Act 1992 s 13: 7.280 s 15: 7.280

Personal Injuries Proceedings Act 2002 ss 36 to 42: 7.280

Petroleum Act 1923 ss 79T to 79VAB: 7.280

Petroleum and Gas (Production and Safety) Act 2004 ss 535 to 537AB: 7.280

Queensland Civil and Administrative Appeals Tribunal Act 2009 s s s s s s s s s s

75: 7.240 76: 7.240 77: 7.240 78: 7.240 79: 7.240 80: 7.240 81: 7.240 82: 7.240 83: 7.240 85(2): 7.240

Queensland Civil and Administrative Appeals Tribunal Rules 2009 r r r r

71: 72: 73: 74:

7.240 7.240 7.240 7.240

Queensland Competition Authority Act 1997 s 112: 7.280 s 113: 7.280

s 115: 7.280 s 187: 7.280

Right to Information Act 2009 s 90: 7.280

Sugar Industry Act 1999 ss 36 to 37: 7.280

Supreme Court of Queensland Act 1991 s 43: 1.160

Torres Strait Islander Cultural Heritage Act 2003 s 106: 7.280 s 112: 7.280 s 116: 7.280

Uniform Civil Procedure Rules 1999: 1.160, 7.250 s 501: 5.100 r 319: 7.250 r 320: 7.250 r 323: 7.260 r 324: 7.260 r 325: 7.260 r 326: 7.260 r 327: 7.260 r 328: 7.260 r 330: 7.260 r 332: 7.260 r 333: 7.260 Ch 9 Pt 4 Div 3: 7.260 Ch 9 Pt 4 Div 4: 7.260 Ch 9 Pt 4 Div 5: 7.260

Uniform Commercial Arbitration Acts: 4.20, 4.50, 4.70, 4.80, 4.90 s s s s s s s s s s s s s s s s s s s s s s s

1(1): 4.90 1(3): 4.90 1(3)(c): 4.90 1C: 4.10, 4.80 7: 4.100 7(1): 1.50 8: 4.100 11: 4.110 12: 4.120 16: 4.140 16(4): 4.140 17: 4.160 17A: 4.160 19: 4.10, 4.180 19(3): 4.10, 4.250 26: 4.230 27D: 4.290, 6.120 27D(2): 6.120 28: 4.310 28(3): 4.310 31: 4.320 31(3): 4.20, 4.320 32: 4.330

xxii Table of Statutes Uniform Commercial Arbitration Acts — cont s 33: 4.330 s 34: 4.340 s 34(4): 4.330, 4.340 s 34A: 4.360 s 34A(7): 4.320 Pt 5: 4.180, 4.210

Petroleum and Geothermal Energy Act 2000

Water Act 2000

South Australian Civil and Administrative Tribunal Act 2013

ss 425 to 437: 7.280

Water Supply (Safety and Reliability) Act 2008 ss 315 to 317: 7.280

Work Health and Safety Act 2011 ss 141 to 143: 7.280

Workers’ Compensation and Rehabilitation Act 2003 ss 288 to 292: 7.280

South Australia Aboriginal Lands Trust Act 2013 ss 58 to 60: 7.310

Building and Construction Industry Security of Payment Act 2009: 5.110 Commercial Arbitration Act 2011: 1.50, 4.50 Conciliation Act 1929: 1.160 Consent to Medical Treatment and Palliative Care Act 1995: 7.310 ss 18A to 18H: 7.310

District Court Act 1991 s 32: 7.300 s 33: 7.300 s 34: 7.300

Electricity Act 1996 s 55N: 7.310

Environment, Resources and Development Court Act 1993 s 28B: 7.310

Fair Work Act 1994: 7.310 ss 197 to 205: 7.310

Health and Community Services Complaints Act 2004 s 30: 7.310

Intervention Orders (Prevention of Abuse) Act 2009 s 21: 7.310

Local Government Act 1999 s 271: 7.310

Magistrates Court Act 1991 s 27: 7.300 s 28: 7.300 s 29: 7.300

s 62: 7.310

Retail and Commercial Leases Act 1995 ss 63 to 66: 7.310

Small Business Commissioners Act 2011 s 5: 7.310

s 8(1)(c): 7.290 s 50: 7.290 s 51: 7.290

Statutes Amendment (Mediation, Arbitration and Referral) Act 1996: 1.160

Supreme Court Act 1935: 1.160, 7.300 s s s s s s

8: 4.60 65: 1.160, 7.300 65(2): 8.230 65(3), (6): 8.160 66: 4.60, 7.300 67: 5.100, 7.300

Supreme Court Practice Directions 2006 Ch 9: 7.300

Uniform Commercial Arbitration Acts: 4.20, 4.50, 4.70, 4.80, 4.90 s 1(1): 4.90 s 1(3): 4.90 s 1(3)(c): 4.90 s 1C: 4.10, 4.80 s 7: 4.100 s 7(1): 1.50 s 8: 4.100 s 11: 4.110 s 12: 4.120 s 16: 4.140 s 16(4): 4.140 s 17: 4.160 s 17A: 4.160 s 19: 4.10, 4.180 s 19(3): 4.10, 4.250 s 26: 4.230 s 27D: 4.290, 6.120 s 27D(2): 6.120 s 28: 4.310 s 28(3): 4.310 s 31: 4.320 s 31(3): 4.20, 4.320 s 32: 4.330 s 33: 4.330 s 34: 4.340 s 34(4): 4.330, 4.340 s 34A: 4.360 s 34A(7): 4.320 Pt 5: 4.180, 4.210

Table of Statutes xxiii

Work Health and Safety Act 2012 ss 141 to 142: 7.310

Tasmania Alternative Dispute Resolution Act 2001: 7.320 s 3: 5.90 s 4: 7.320 s 5: 7.320 s 6: 7.320 s 7: 7.320 s 8: 7.320 s 9: 7.320 s 10: 7.320 s 11: 7.320 s 12: 7.320, 8.230

Building and Construction Industry Security of Payment Act 2009: 5.110 Civil Procedure Act 2005 s 10: 8.160 s 11: 8.160

Commercial Arbitration Act 2011: 1.50, 4.50 s 8: 4.60

Electricity Supply Industry Act 1995 s 45: 7.330 s 98: 7.330 s 100: 7.330

Fair Work Act 1994 ss 197 to 205: 7.330 Gas Act 2000: 7.330 s 49: 7.330 s 107: 7.330 s 109: 7.330

s 1(3): 4.90 s 1(3)(c): 4.90 s 1C: 4.10, 4.80 s 7: 4.100 s 7(1): 1.50 s 8: 4.100 s 11: 4.110 s 12: 4.120 s 16: 4.140 s 16(4): 4.140 s 17: 4.160 s 17A: 4.160 s 19: 4.10, 4.180 s 19(3): 4.10, 4.250 s 26: 4.230 s 27D: 4.290, 6.120 s 27D(2): 6.120 s 28: 4.310 s 28(3): 4.310 s 31: 4.320 s 31(3): 4.20, 4.320 s 32: 4.330 s 33: 4.330 s 34: 4.340 s 34(4): 4.330, 4.340 s 34A: 4.360 s 34A(7): 4.320 Pt 5: 4.180, 4.210

Work Health and Safety Act 2012 s 62: 7.330

Workers Rehabilitation and Compensation Act 1988 s 143C: 7.330

Victoria

Health Complaints Act 1995 s 25A: 7.330 ss 31 to 39: 7.330

Land Use Planning and Approvals Act 1993 s 57A: 7.330

Legal Profession Act 2007 s 30: 7.330

Resource Management and Planning Appeal Tribunal Act 1993 ss 16 to 17: 7.330

Sentencing Act 1997 s 80: 7.330 s 84: 7.330 s 88: 7.330

Supreme Court Rules 2000 s 574: 5.100

Uniform Commercial Arbitration Acts: 4.20, 4.50, 4.70, 4.80, 4.90 s 1(1): 4.90

Aboriginal Heritage Act 2006 ss 111 to 129: 7.380

Architects Act 1991 s 18(A): 7.380 s 18(E) to (J): 7.380

Australian Consumer Law and Fair Trading Act 2012 ss 113 to 118: 7.380

Building and Construction Industry Security of Payment Act 2002: 5.110 Commercial Arbitration Act 2011: 1.50, 4.50 s 8: 4.60

County Court Act 1958 s 46(1): 4.60 s 47A: 4.60, 7.350 s 48C: 7.350

County Court Civil Procedure Rules 2008 r 50.01: 7.350

xxiv Table of Statutes County Court Civil Procedure Rules 2008 — cont r 50.08: 4.50

Equal Opportunity Act 2010 ss 111 to 126: 7.380

Evidence (Miscellaneous Provisions) Act 1958 s 21K: 7.350

Farm Debt Mediation Act 2011 s s s s s s s s s s s s s s s s s s s s s

1: 7.360 4: 7.360 6: 7.360 8: 7.360 9: 7.360 10: 7.360 12: 7.360 13: 7.360 14: 7.360 15: 7.360 16: 7.360 17: 7.370 18: 7.360 19: 7.370 21: 7.370 23: 7.370 25: 7.370 26: 7.370 27: 7.370 28: 7.370 29: 7.370

Grain Handling and Storage Act 1995 s 24B: 7.380

Legal Profession Uniform Law Application Act 2014 s 60: 7.380 s 61: 7.380 Sch 1 Ch 5: 7.380 Sch 3 Pt 4: 7.380

Magistrates’ Court Act 1989 s s s s

102(3): 4.60 103: 4.50 106: 4.50 108: 7.350

Magistrates’ Court General Civil Procedure Rules 2010 r 50.05: 7.350

Owner Drivers and Forestry Contractors Act 2005 ss 33 to 40: 7.380

Owners Corporations Act 2006 s 61: 7.380

Personal Safety Intervention Orders Act 2010 ss 24 to 34: 7.380 s 66: 7.380

Retirement Villages Act 1986 ss 38E to 38H: 7.380

Supreme Court Act 1986 s 24A: 7.350, 8.160 s 27A: 8.230

Supreme Court (General Civil Procedure) Rules 1996 r 50.01: 5.100

Supreme Court (General Civil Procedure) Rules 2005 r r r r r r r r r

50.01: 7.350 50.04: 7.350 50.06: 7.350 50.07: 7.350 50.08: 4.50, 7.350 50.08(1): 4.60 50.09: 7.350 50.10: 7.350 50.11: 7.350

Supreme Court Rules r 50.07: 1.160 O 50, r 9: 1.160

Transport (Compliance and Miscellaneous) Act 1983 s s s s s

162N: 7.380 162P: 7.380 162U: 7.380 162PA: 7.380 162PB: 7.380

Uniform Commercial Arbitration Acts: 4.20, 4.50, 4.70, 4.80, 4.90 s s s s s s s s s s s s s s s s s s s s s s s s

1(1): 4.90 1(3): 4.90 1(3)(c): 4.90 1C: 4.10, 4.80 7: 4.100 7(1): 1.50 8: 4.100 11: 4.110 12: 4.120 16: 4.140 16(4): 4.140 17: 4.160 17A: 4.160 19: 4.10, 4.180 19(3): 4.10, 4.250 26: 4.230 27D: 4.290, 6.120 27D(2): 6.120 28: 4.310 28(3): 4.310 31: 4.320 31(3): 4.20, 4.320 32: 4.330 33: 4.330

Table of Statutes xxv Uniform Commercial Arbitration Acts — cont s 34: 4.340 s 34(4): 4.330, 4.340 s 34A: 4.360 s 34A(7): 4.320 Pt 5: 4.180, 4.210

Rules of the Supreme Court 1971

Victorian Civil and Administrative Tribunal Act 1998

Small Business Development Corporation Act 1983

s s s s s s s s s

83: 7.340 84: 7.340 85: 7.340 86: 7.340 88: 7.340 89: 7.340 92: 7.340 93: 7.340 93A: 7.340

Western Australia Adoption Act 1994 s s s s s s

47: 7.440 72: 7.440 76: 7.440 106: 7.440 127: 7.440 131: 7.440

Civil Procedure Act 2005 s 71: 8.160 s 72: 8.160

Commercial Arbitration Act 2012: 1.50 s 8: 4.60

Construction Contracts Act 2004: 5.110 Employment Dispute Resolution Act 2008 s s s s s s s

6: 6.430 7: 6.430 8: 6.430 9: 6.430 11: 6.430 24: 6.430 25: 6.430

Industrial Relations Act 1979: 6.430 s 32(6)(b): 4.60

Inheritance (Family and Dependents Provisions) Act 1972: 8.260 Legal Profession Act 2008 ss 417 to 420: 7.440 s 591: 7.440

Magistrates Court (Civil Proceedings) Act 2004 s 23: 6.420 s 37: 6.420 s 38: 6.420

O 1 r 4B: 6.400 O 35: 6.400

Sentencing Act 1995 s 16: 7.440 ss 27 to 30: 7.440

ss 15A to 15I: 7.440

State Administrative Tribunal Act 2004 s 55: 7.390

Supreme Court Act 1935 s 50: 5.100 s 51: 4.60 s 69: 6.400 s 70: 6.400, 8.230 s 71: 6.400 s 72: 6.400 s 167(1)(q)(i): 6.400 Pt IV: 6.400

Uniform Commercial Arbitration Acts: 4.20, 4.50, 4.70, 4.80, 4.90 s 1(1): 4.90 s 1(3): 4.90 s 1(3)(c): 4.90 s 1C: 4.10, 4.80 s 7: 4.100 s 7(1): 1.50 s 8: 4.100 s 11: 4.110 s 12: 4.120 s 16: 4.140 s 16(4): 4.140 s 17: 4.160 s 17A: 4.160 s 19: 4.10, 4.180 s 19(3): 4.10, 4.250 s 26: 4.230 s 27D: 4.290, 6.120 s 27D(2): 6.120 s 28: 4.310 s 28(3): 4.310 s 31: 4.320 s 31(3): 4.20, 4.320 s 32: 4.330 s 33: 4.330 s 34: 4.340 s 34(4): 4.330, 4.340 s 34A: 4.360 s 34A(7): 4.320 Pt 5: 4.180, 4.210

Workers’ Compensation and Injury Management Act 1981 s 157B: 7.440

xxvi Table of Statutes

China Arbitration Rules art 37: 4.300

United Kingdom Judicature Act 1873: 5.100

Treaties and Conventions Convention on the Recognition and Enforcement of Foreign Arbitral Awards: 4.30 Model Law on International Commercial Arbitration 1985: 1.50, 4.30, 4.50, 4.90, 4.290 Art 1: 4.90 Art 7: 4.100 Art 28: 4.310 Art 32: 4.330

1

What is Dispute Resolution? INTRODUCTION “Launching into litigation is not always the best approach. Parties can benefit from exchanging information, narrowing the issues in dispute and exploring options for resolution that will lead to more matters being settled by agreement earlier on, before significant costs have been incurred and positions become entrenched. Even if matters do progress to court, costs will be saved as the issues in dispute will be better understood and, hopefully narrowed. The bill is also a further step to moving from the adversarial culture of litigation to one where resolution is actively sought.” (The Hon R McClelland, Commonwealth Attorney-General, at the second reading of the Civil Dispute Resolution Bill 2010 (Cth). Commonwealth, Parliamentary Debates, House of Representatives, 30 September 2010, p 270 (The Hon R McClelland, Attorney-General), at http://parlinfo.aph.gov.au/parlInfo/ download/chamber/hansardr/2010-09-30/toc_pdf/7770-6.pdf;fileType= application%2Fpdf#search=%22chamber/ hansardr/2010-09-30/0027%22.)

[1.10] Dispute resolution has a long history as a way of dealing with differences in society. Humans have been negotiating formally and informally well before historical journals recorded our endeavours in the field of dispute resolution. Consensual problem solving is not a new concept. The inherent desire of humans to resolve difference or conflict means that dispute resolution is one of the oldest activities known to humankind. But what is “dispute resolution” both in terms of it being a discrete discipline and as to how has it evolved from an informal to a formal process recognised by the law and other disciplines? The former National Alternative Dispute Resolution Advisory Council (NADRAC) defined “dispute resolution” as: all processes that are used to resolve disputes, whether within or outside court proceedings. Dispute resolution processes may be facilitative, advisory or determinative (see descriptions elsewhere in this glossary). Dispute resolution processes other than judicial determination are often referred to as ADR. (See the Dispute Resolution Terms, available at the Commonwealth AttorneyGeneral’s website, https://www.ag.gov.au/LegalSystem/AlternateDispute Resolution/Documents/NADRAC%20Publications/Dispute%20Resolution %20Terms.PDF

This definition casts the role of dispute resolution widely, and includes consensual processes such as negotiation, conciliation and mediation as

2

Principles of Dispute Resolution

well as determinative processes such as early neutral evaluation, referencing out and arbitration. It is arguable whether this latter group of processes are rightly listed under the umbrella definition of “dispute resolution”. However, if another definition of “dispute resolution” is accepted, being, the “curial versus non curial processes”, the determinative processes can then fit within NADRAC’s definition. Ultimately, it probably does not matter which definition is chosen providing that it results in an efficient, quick and cost effective resolution of disputes, thereby preventing matters unnecessarily ending up in an already over-burdened judicial system. When parties decide to use a non-curial dispute resolution process, they may make a selection based on the desired level of: • informality; • disputant involvement; • consensuality; and • intervention by a third party. A wide ranging definition of dispute resolution gives parties the flexibility to choose a process that will best suit their needs. Those needs may revolve around the level of informality available to the parties to explore a wide variety of materials pertaining to the dispute, which, in a court of law, may be prevented by the rules of evidence. Further, a party may enjoy a more informal setting in which they can explore options for settlement rather than get bogged down in facts and the history of the dispute. They may prefer a level of involvement in the process that requires them, for example, to advocate their own case, or to have a person, perhaps a lawyer or other professional, advocate their case for them. Many dispute resolution processes have no pre-determined levels of involvement required by the disputants. Disputants may also prefer a process that is more consensual in its approach to resolution, that is, a process that seeks agreement between the parties as the basis of resolution as opposed to having a solution imposed on them. Finally, parties may prefer a process that features less intervention from a dispute resolution professional and which seeks to ensure that the parties themselves drive the process and the outcome. Conversely, they may prefer a process that ensures a higher level of intervention, which will not require of the parties an onerous amount of participation. Figure 1.1 sets out the degree of informality, consensuality and intervention in the most popularly practised dispute resolution processes in Australia.

1 What is Dispute Resolution?

3

Figure 1.1 The degree of informality, involvement, consensuality and intervention of the various dispute resolution processes

One of the rationales for the evolutionary rise of dispute resolution is its flexible nature and therefore, its ability to adapt to different circumstances. Once a person understands the basics of negotiation and understands the procedural mechanisms of some of the formal types of dispute resolution, the process of resolving a dispute can develop and change in form to suit the type of dispute seeking to be resolved. While the flexible nature of dispute resolution encourages the development of hybrid forms of dispute resolution processes, there are a number of recognised traditional methods of dispute resolution employed by dispute resolution practitioners. This book will discuss most of those methods.

“ALTERNATIVE” OR “ADDITIONAL” DISPUTE RESOLUTION? [1.20] Some discussion has taken place within dispute resolution circles about the use of the word “alternative”. Whilst litigators may see the word “alternative” as being the correct term, because it is a real alternative to the process of litigation, many lawyers and non-lawyers, and for that matter litigators and non-litigators, see the word as being inappropriate and inaccurate. They consider that disputants have a choice over how they resolve disputes – litigation being one of those choices. Over the years, some have suggested that the “A” could refer to “assisted” or “appropriate” or “additional” dispute resolution. Whichever choice of words is used, certainly the traditional “alternative” is a misnomer. The reason behind this proposition is so logical that the popularity of the use of the word “alternative” defies common sense. When a person first becomes embroiled in a dispute, of whatever type, she or he has many different ways of resolving the dispute. Some of those ways may include assisted or unassisted dispute resolution that may include negotiation, mediation, arbitration and litigation. None of these options act

4

Principles of Dispute Resolution

as an alternative to another. One does not choose, for example, mediation as an alternative to litigation. In fact, a person may not have the choice to preclude litigation if the other party is motivated to have his or her day in court regardless of the merits of the case. So these options for dispute resolution, including litigation, are not “alternatives” as such, because one does not choose to attempt one method at the exclusion of another. All methods of dispute resolution and the process of litigation are complementary and more than one process may be employed to ultimately resolve a dispute. Of the matters that end up being heard by a court, most disputants have tried at least one method of dispute resolution before having the dispute finalised either by agreement or adjudication. Today, most commonly because of the large number of statutory schemes imposed on litigants, disputants are subjected to either mediation and litigation or arbitration and litigation as a way to resolve their dispute. In these cases, parties and the courts do not view, for example, mediation as being an alternative to litigation. On the contrary, parties and courts view mediation and arbitration schemes as being additional to the potential final resolution of a curial decision. A better phrase to describe alternative dispute resolution is simply to describe it as “dispute resolution” that includes both nonadjudicatory and adjudicatory forms of resolution. In this respect, these forms of dispute resolution are not alternatives to each other, rather they are additional forms of dispute resolution that complement traditional curial methods.

WHERE DID IT ALL BEGIN? [1.30] The question of how dispute resolution processes evolved, from the ad hoc processes of resolving differences or conflicts between humans to its present day more formalistic form, is an interesting story involving certain landmark events. The formalisation of dispute resolution, its naming and adoption as a branch of the law was arguably brought about by an American litigation lawyer called Eric Green. Green first used the term “alternative dispute resolution” in an article entitled “Settling Large Case Litigation: An Alternative Approach” (1978) 11 Loyola of Los Angeles L Rev 493. While practising as a lawyer for the Los Angeles firm of Munger, Tolles and Rickershauser, Green was instructed on a large scale commercial dispute involving alleged infringements of certain patents relating to computerised charge-authorisation and credit-verification devices. Legal proceedings had been commenced and pre-hearing discovery was well underway. Green estimated that both parties had spent several hundred thousand dollars during the two and a half years of preparation for the hearing, for which a date had not been set. In the meantime the parties investigated an alternative method of resolving the dispute, without recourse to litigation.

1 What is Dispute Resolution?

5

The parties agreed to run a “mini-trial” that involved the parties attending a two day “information exchange” chaired by a neutral third party advisor, who was a former civil judge. The information exchange was designed purely to present each party’s version of the dispute to senior management from both sides. The senior management would then seek to resolve the dispute. The dispute resolution professional’s role was to moderate proceedings and not to effect a compromise of the dispute. Certain rules as to process were agreed upon, such as the postponement of further discovery, the free exchange of documents without prejudice and the inapplicability of the rules of evidence. During the information exchange, parties were free to present any material they wished and limited time was allocated for that purpose. After two days of material being presented, senior management met for merely half an hour before reaching a settlement that saved the parties in excess of US $1 million in estimated further litigation costs and months, possibly years, of anxiety waiting for a hearing and judgment. Green’s “alternative” approach went on to become what we now know as dispute resolution, and Green himself went on to become Professor of Law at Boston University. Since writing the article, Professor Green has become known as a leader in the American dispute resolution movement and is the founder of two Boston firms specialising in dispute resolution. By Professor Green’s own admission, the process used was a hybrid derivation of a combination of mediation, conciliation and negotiation, although the process most resembled early neutral evaluation (a process discussed at [5.90]). Professor Green foreshadowed the rise of dispute resolution and rationalised it by blaming the legal profession for not being more imaginative when thinking about resolving disputes between clients and the general unwillingness of the law to take risks outside the traditional methods of curial adjudication. Further, the corporate world had a lot to answer for in relation to insulating themselves from the litigation process and leaving it to the legal profession, mistakenly believing that the complexities of the law are for lawyers only. In other words, the corporate world needed to take charge of disputation and be proactive in resolving disputes sooner rather than later by adversarial means.

THE RISE OF DISPUTE RESOLUTION [1.40] Formal dispute resolution has had a meteoric rise in a short space of time. Its rise in Australia can be attributed to a number of landmark events that have led to the formal recognition of it as part of the array of methods used by various professions to resolve disputes between parties. The most significant landmarks have been the establishment of organisations which have taken on the role of promoting the use of dispute resolution through training, education, accreditation and the practice of dispute resolution techniques. Further, the embracing of dispute resolution as part of the case management systems within the courts and tribunals of Australia and overseas jurisdictions has significantly contributed to its

6

Principles of Dispute Resolution

acceptance as a discipline to be practised in a variety of circumstances. The following account of the rise of dispute resolution is in rough chronological order of development but not in order of importance and does not pretend to be an exhaustive account – it merely provides a “Cook’s tour” of some of the significant events in the formal development of dispute resolution in Australia.

Arbitration [1.50] Arbitration was the first type of formalised non-curial dispute resolution process to develop in Australia. It grew from the industrial relations sphere where conciliation and collective bargaining were methods of dispute resolution employed before curial resolution of disputes between employers and employees. The Conciliation and Arbitration Act 1904 (Cth) established the Commonwealth Court of Conciliation and Arbitration to hear applications for the making of awards between employers and employees as well as the resolution of disputes between said parties. The court was constituted to exercise judicial and arbitral powers. The court was split into two separate organisations in 1956 (the Commonwealth Conciliation and Arbitration Commission and the Commonwealth Industrial Court) following the decision in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129. In this case the High Court of Australia found, amongst other things, that it was unconstitutional for an arbitral body to exercise judicial power. Thereafter, the arbitral functions of making awards and settling industrial disputes fell to the commission, and the judicial function of prosecuting under the Conciliation and Arbitration Act 1904 (Cth) fell to the court. In 1973 the name of the Commission was changed to the Australian Conciliation and Arbitration Commission, and the Commonwealth Industrial Court became the Australian Industrial Court. Otherwise, there were no changes to the functions of either body. However, in 1978 the judicial functions of the Australian Industrial Court were transferred to the Industrial Division of the Federal Court of Australia. Under the Industrial Relations Act 1988 (Cth) the newly created Australian Industrial Relations Commission replaced the Australian Conciliation and Arbitration Commission. As before, the arbitral functions of the new body are essentially the same as the old. The Industrial Relations Act 1988 (Cth) was amended to create the Industrial Relations Court of Australia, whose jurisdiction was transferred to the Federal Court of Australia under the Commonwealth Workplace Relations and other Legislation Amendment Act 1996. Despite the rearrangement of the jurisdiction of the original commission and the numerous name changes and transfers of jurisdiction, the the court and commission have developed robust systems of conciliation and arbitration that have served both entities well over a prolonged period of time. Most recently the Commonwealth parliament passed the Fair Work

1 What is Dispute Resolution?

7

Act 2009 (Cth) and pursuant to that Act established Fair Work Australia, then renamed the Fair Work Commission by the Fair Work Amendment Act 2012 (Cth). Chapter 4 in this book is devoted to arbitration, but before finishing this section on arbitration, mention must be made of the introduction, from 1984 onwards, of uniform legislation across all States and Territories of Australia in the form of the Commercial Arbitration Acts. The reason that the Commonwealth, States and Territories adopted uniform legislation was that the Commonwealth Constitution did not give the Commonwealth Government the power to legislate for arbitration or the settlement of disputes, save for its power over conciliation and arbitration for the prevention and settlement of industrial disputes beyond State borders granted to it under s 51(xxxv) of the Commonwealth Constitution (see Australian Boot Trade Employees Federation v Whybrow & Co (No 1) (1910) 10 CLR 266). Despite its title, the Act applies to arbitrations both commercial and non-commercial in nature. The definition of an arbitration agreement under s 7(1) of the Act is “An agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not”. Therefore, any type of matter may be referred to arbitration, not just commercial matters, providing the parties agree to be bound by arbitration. In April 2009, the Standing Committee of Attorneys-General agreed to draft a new Uniform Commercial Arbitration Act for domestic arbitration in Australia. The new Acts seek to apply the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration 1985 (including the 2006 amendments) thereby aligning some features of international arbitration to the domestic application of arbitration. The following States have enacted the new uniform legislation in the following order: • New South Wales – Commercial Arbitration Act 2010 • Victoria – Commercial Arbitration Act 2011 • South Australia – Commercial Arbitration Act 2011 • Tasmania – Commercial Arbitration Act 2011 • Western Australia – Commercial Arbitration Act 2012 • Queensland – Commercial Arbitration Act 2013 Arbitration is essentially a determination or adjudication by a dispute resolution professional and it is arguable whether it can be classed as being part of the world of dispute resolution. However, given the growing informalisation of arbitration it has been argued that it is becoming more like mediation, particularly evaluative mediation, and therefore should be considered part of the suite of dispute resolution processes available to disputants (see L Nottage, “Is (International Commercial) Arbitration

8

Principles of Dispute Resolution

ADR” (2002) (Winter) Bar News 27 at 39). Whilst arbitration is strictly an adjudicative process, it is its classification as being non-curial per se that brings it into the field of interest of this book. However, where this book refers to dispute resolution, it generally means a non-adjudicative and/or non-curial means of dispute resolution unless otherwise stated.

Institute of Arbitrators and Mediators [1.60] The Institute of Arbitrators was established in 1975 as a not-for-profit company limited by guarantee. More recently it changed its name to the Institute of Arbitrators and Mediators Australia (IAMA). IAMA aims to serve the community, commerce and industry by promoting and facilitating efficient dispute resolution methods including mediation, arbitration and conciliation. It is a national organisation with chapters in each State and Territory of Australia. As well as promoting the use of dispute resolution, IAMA administers the accreditation of mediators and arbitrators; conducts professional development and training programmes; leading to accreditation as a mediator or arbitrator; and, facilitates mediation and arbitration through an efficient case management system. According to IAMA, its objectives are to: • promote, encourage and facilitate the practice of settlement of disputes by arbitration and other forms of non-curial dispute resolution. • serve the community, commerce and industry by facilitating efficient dispute resolution. • afford means of communicating between professional arbitrators, mediators and other dispute resolvers on matters affecting their various interests. • support and protect the character, status and interests of the dispute resolution profession generally. • promote study of the law and practice relating to arbitration and dispute resolution. • disseminate information amongst Members on all matters affecting dispute resolution practice and procedure. • print, publish and circulate such journals, papers and other literary undertakings and to contribute articles to magazines as may seem conducive to any of these objects. • form a library for the use of Members and to provide suitable rooms for the holding of hearings, conferences, lectures and meetings. • provide means for training and testing the qualifications of candidates for admission to professional membership of the Institute by examination and for such purposes to award certificates, establish scholarships, rewards and prizes. • establish branches in important centres of the States and Territories of the Commonwealth. (See https://www.iama.org.au/about-us.)

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IAMA are leaders in the provision and promotion of dispute resolution in all its manifestations and, in particular, are the leading organisation for the training and accreditation of arbitrators, mediators and adjudicators, the latter being required for court appointed referees. On 1 January 2015, IAMA and LEADR (see [1.110]) merged to become one organisation and on 4 September 2015 changed its name to Resolution Institute (see [1.150]).

Australian Disputes Centre [1.70] Formerly known as the Australian Commercial Disputes Centre (ACDC), ACDC changed its name to the Australian Disputes Centre (ADC) in 2015. However, ADC still holds its place as the first organisation to formally facilitate education in and the practice of dispute resolution in Australia. The New South Wales Government was motivated by two events to establish a ADC in 1986. First, a survey commissioned by the New South Wales State Government on the dispute resolution needs of the business community in Sydney. Secondly, a suggestion by the then Chief Justice of New South Wales, Sir Laurence Street, to the then New South Wales Attorney-General, the Honourable Terry Sheahan, that a centre be opened that could develop a speedier method of resolving disputes outside of the court system that would be cheaper than the ever increasing cost of arbitration. According to its website, the “ADC is an independent, not-for-profit organisation, dedicated to advancing ADR across Australia and internationally to deliver the benefits of world-class Alternative Dispute Resolution to businesses, professionals, governments and communities” (see https://disputescentre.com.au/). It achieves this through the promotion of dispute resolution in a number of ways, including the training of mediators, the supply of accredited mediators for commercial disputes and the production of literature providing advice on, amongst other things, the process and practice of a variety of dispute resolution processes. The ADC is also involved in designing dispute resolution systems for public and private organisations and primarily promotes dispute resolution operating in the private sector as opposed to court-annexed or public sector programmes. It has training programs and accreditation procedures for special purpose mediation in the areas of: commercial mediation; building and development application mediation; and grievance and industrial mediation.

Community Justice Centres (CJCs) [1.80] After seeing how community-based dispute resolution operated in America, the New South Wales State Government passed the Community Justice Centres (Pilot Project) Act 1980 (NSW) and ran a pilot programme establishing a mediation programme at community level in Bankstown, Surry Hills and Wollongong. The pilot project was independently assessed and was deemed to be successful enough for the New South Wales

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Government to back the project as an ongoing one. Subsequently it passed the Community Justice Centres Act 1983 (NSW), establishing centres in suburban Sydney and regional areas of New South Wales. According to s 3 of the Community Justice Centres Act 1983, NSW Community Justice Centres (CJC) are established for the purpose of: (a) providing dispute resolution and conflict management services, including the mediation of disputes, and (b) training persons to be mediators, and (c) promoting alternative dispute resolution, and (d) contributing to the development of alternative dispute resolution in New South Wales by entering into connections and partnerships with the legal profession, courts, tribunals, the academic sector and other providers of alternative dispute resolution services, and (e) undertaking other matters incidental to the provision of dispute resolution and conflict management services.

According to their most recent Year in Review Report, for the period 2011/12, the CJC opened 5,079 files in relation to reported disputes and of these 1,803 (36%) matters proceeded to mediation where 1,437 (80%) ended in an agreement being reached. Of the total number of files opened, the majority of disputes were referred from: courts 1,882 (37%); self 1,023 (20%); local government 705 (14%); previous case 440 (9%); State government 204 (4%); law access 185 (4%); police 139 (3%); and legal aid 78 (2%). Of the total number of files opened, the nature of the majority of disputes managed by the CJC in 2011/12 were: neighbours 2,686 (59%); business 779 (15%); spouse 474 (9%); social 401 (8%); family 230 (5%); work 143 (3%); and, parent/child 114 (2%). All mediations conducted by the CJCs are mediated by accredited community mediators and selected and supervised by the CJCs. The CJCs use a solo and co-mediation model, the latter being where two mediators conduct each session. CJC mediators are specifically selected for each dispute from a panel of people composed of many different ages, backgrounds, social, cultural and ethnic groups. Before being considered for appointment as a CJC mediator, an applicant must be accredited, or eligible for accreditation, under the National Mediator Accreditation System and demonstrate an understanding of and commitment to the philosophy of mediation as practised by CJC. Victoria and Queensland established CJCs, or equivalent programmes under different names, in 1987 and 1990 respectively. In Victoria, legal aid solicitors first mooted the idea of neighbourhood mediation centres as a way to curb the increase in neighbourhood disputes. Meetings of stakeholders were held that included community groups, ethnic and indigenous groups, police and lawyers from local and State government who, using existing research on the success of such schemes, opened four mediation centres in the Melbourne suburbs of Heidelberg, Preston,

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Geelong and in the regional centre of Bendigo. Funding for the centres was provided by the Victorian State Government through the Victorian Legal Aid Commission. The impact of the CJCs should not be underestimated. They have provided a fertile ground for the dissemination of the philosophy and practice of dispute resolution and are a shining example of the successes of mediation programmes that are well organised and where only well trained mediators are allowed to mediate disputes.

State and Territory law societies and institutes [1.90] The NSW Law Society formed its dispute resolution committee in 1986. The committee advises the Council of the NSW Law Society on dispute resolution policy development, which ensures that members are kept up-to-date with the latest developments in the law regarding dispute resolution. The committee is also a forum for the discussion of issues affecting the practice of dispute resolution by legal practitioners. Areas such as the philosophy, process and practice of dispute resolution are regularly reported on by the committee, as well as it being a consultative body for new legislation and the making of recommendations to investigative bodies, such as the various State and Federal law reform commissions. One of the NSW Law Society committee’s many successes has been the development of the NSW Law Society’s “Settlement Weeks”, which identified matters languishing in court lists that were appropriate for mediation. The first settlement week was conducted in 1991, then successively in 1992 and 1993. Under the scheme, matters were listed for mediation by a solicitor for one of the disputing parties either referring matters in response to an invitation issued by the NSW Law Society or by simply volunteering matters to be mediated. All parties to the dispute had to agree to have the matter mediated and accredited mediators were brought in to mediate matters in an expedited fashion. From 1994, Settlement Week was promoted as being an “Ongoing Mediation Programme”, a year-round service funded by the Law Foundation of NSW and the NSW Department of Courts Administration. Between 1991 and 1995, the NSW Law Society was responsible for attracting some 900 cases for mediation with a settlement rate of approximately 70%. The Queensland Bar Association and Law Society of Queensland conducted their first Settlement Week in 1992 and achieved a settlement rate of approximately 86%. Most State and Territory law societies and bar associations have dispute resolution committees that advise various State-based bodies such as courts and government. They also conduct programs for the training, accreditation and the practise of dispute resolution.

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Australian Dispute Resolution Association (ADRA) [1.100]

One of the most influential events contributing to the rise of dispute resolution in Australia was the organisation of the first Australia Mediation Conference, hosted by the Australian Institute of Criminology and held in Canberra in 1986. Not only was it important from the point of view of having a forum for shared ideas, but it was also the genesis for the idea of forming a community of practice for dispute resolution practitioners. The idea gathered momentum and the Alternative Dispute Resolution Association of Australia Inc was established in 1987. Two years later, the name was changed to the Australian Dispute Resolution Association Inc (ADRA). The key stakeholders in ADRA, reflective in its first organising committee, consisted of academics and legal and dispute resolution practitioners who viewed ADRA as not only a support group but a way to promote the responsible use and development of dispute resolution in the community. ADRA was arguably the first organisation to give a national voice to dispute resolution in Australia and its establishment of State-based chapters has contributed greatly to the rise of dispute resolution in Australia. ADRA is a volunteer-based organisation whose objectives are stated in its constitution as being: 1) to promote alternative dispute resolution throughout Australia; 2) to co-operate with other organisations in order to achieve the objects of the Association; 3) to affiliate with other organisations in order to achieve the objects of the Association; 4) to encourage and provide for the exchange and dissemination of ideas, information and experience in alternative dispute resolution; 5) to develop and promote alternative dispute resolution standards; 6) to consider and develop national standards of alternative dispute resolution that meet the diverse needs of members; 7) to provide and support education and research in the theory and practice of alternative dispute resolution; 8) to print, publish and circulate information about alternative dispute resolution; 9) to advocate the enhancement of professional skills of mediators, conciliators, arbitrators, facilitators and other practitioners in alternative dispute resolution and of administrators of dispute resolution services; 10) to make representations in the interests of all members of the Association in all matters affecting or concerning the Association and the resolution of disputes by alternative dispute resolution 11) to acquire by way of gift, testamentary disposition or purchase or in any other manner approved by the Board any estate or interest in any property; 12) to invest the moneys of the Association from time to time in such manner as approved by law and the Board of the Association; 13) to engage and/or employ and/or dismiss staff and/or employees on behalf of the Association; 14) to foster the continued development of its objectives on a national basis; and 15) to do all such other things as may be incidental to pursue the above objects.

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(See http://adra.net.au/about/constitution.)

At one time there were State chapters of ADRA in South Australia (SADRA), Queensland (QADRA), Victoria (VADRA) and Western Australia (WADRA), although these organisations were independent of ADRA. However, it now appears that Victoria has the only remaining State chapter.

Leading Edge Alternative Dispute Resolvers (LEADR) [1.110]

Lawyers in New South Wales organised themselves into an interest group, in 1989, called “Lawyers Engaged in Alternative Dispute Resolution” (LEADR). This group gave a voice to lawyers who had been practising dispute resolution for many years without recognition of the skill being a formal part of legal practice and those who wished to practise dispute resolution in the future. The organisation has grown and in 2000 changed its name, albeit using the same acronym, to “Leading Edge Alternative Dispute Resolvers” to reflect the involvement of the broader community in dispute resolution (for an account of the rationale behind the change, see A Limbury, “Recollections of LEADR’s Beginnings” (2013) 24 Australasian Dispute Resolution Journal 133). LEADR is a not-for-profit membership-based organisation that promotes and facilitates the use of dispute resolution and whilst its head office is still in Sydney, it has chapters in every State and Territory of Australia and New Zealand. Prior to its amalgamation with IAMA, LEADR listed its aims as being to: • serve the community by promoting and facilitating the development, acceptance and usage of Alternative Dispute Resolution (ADR); • promote education and research in ADR; • disseminate information for the benefit of its members and the community; • provide simple and effective access to dispute resolution professionals; • assist organisation in developing effective grievance handling procedures; and, • ensure excellence in the delivery of ADR solutions to our region through training, accreditation and development of a national standard for practitioners.

On 1 January 2015, LEADR and IAMA (see [1.60]) merged to become one organisation and on 4 September 2015 changed its name to Resolution Institute (see [1.150]).

Dispute Resolution Centre – Bond University [1.120]

The Dispute Resolution Centre was established in 1989 and is part of the Faculty of Law at Bond University. Its role is to facilitate best practice in the practice of dispute resolution for its students and the wider community. Its impact on the national development of dispute resolution practice in Australia was not only its contribution to the intellectual debate but the extensive education and training of past, present and future dispute resolution practitioners both at home and abroad. The Centre’s aims and objectives are:

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• To promote a better understanding of the need for, dynamics of and advantages of consensus-oriented dispute resolution procedures. • To develop modules in negotiation, mediation, arbitration and other forms of alternative dispute resolution in the Law School programs. • To provide training in dispute resolution methods for lawyers and other professionals involved in this field. • To encourage and facilitate research and publications relating to different dispute resolution matters. • To provide an umbrella organisation for individuals and groups working in dispute resolution. (See https://bond.edu.au/about-bond/academia/faculty-law /dispute-resolution-centre.)

Since 1999 the Centre has published the Dispute Resolution News (formerly known as the ADR Bulletin), featuring topical articles on applied dispute resolution as well as reports on current research being conducted in the area of dispute resolution.

Australasian Dispute Resolution Journal (ADRJ) [1.130]

A dedicated scholarly refereed journal commenced plublication in 1990, dealing directly with the discipline of dispute resolution. Back then the journal was called the Australian Dispute Resolution Journal and in 1999 it changed its name to the Australasian Dispute Resolution Journal (ADRJ). The name change recognised the authority of the journal and the recognition and growth of dispute resolution as a domestic and international discipline. To a certain extent it also recognised the “coming of age” of dispute resolution in Australia. The idea of a journal dedicated to dispute resolution issues came from members of the first ADRA Board in 1989. Since its inception, the ADRJ has maintained a high standard of publication in a wide variety of areas associated with dispute resolution, including articles on: education and training; the various types of dispute resolution; statutory schemes both in and outside Australia; the theory and practice of dispute resolution in its many forms; and, substantive law articles and case notes reporting the latest common law developments in dispute resolution. It is published by Thomson Reuters and lawyer and mediator Ms Ruth Charlton has been its editor from its first edition.

National Alternative Dispute Resolution Advisory Council (NADRAC) [1.140]

The Access to Justice Committee chaired by the Honourable Justice Ronald Sackville delivered to the Commonwealth Attorney-General its report entitled Access to Justice – An Action Plan in 1994. The report recommended, amongst other things, the establishment of a national body to advise the Commonwealth Government and Federal courts and tribunals on issues involving dispute resolution. The aim of such a body was to ensure the maintenance of consistently high standards in the provision of dispute resolution services, to ensure accessibility to dispute

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resolution programmes and to ensure appropriate integration of those programmes across the wide range of judicial services being provided by the Commonwealth. The recommendations of the report in respect of establishing such a body were implemented and the National Alternative Dispute Resolution Advisory Council (NADRAC) was born the following year. It is a non-statutory body appointed by the Commonwealth Attorney-General with funding provided through the Commonwealth Attorney-General’s Department. On 8 November 2013, the Abbott federal government closed NADRAC without notice and consultation with any dispute resolution organisations. The government’s rationale for the closure was to simplify and streamline the business of government. Primarily it was about cost cutting. Fortunately much of NADRAC’s work has been saved for posterity and use by the dispute resolution community and can be found on the Commonwealth Attorney-General’s website. The site makes clear that: The Legal Services Directions 2005 are a set of binding rules issued by the Attorney-General about Commonwealth legal work. The directions are relevant to ADR because they require agencies to act as ’model litigants’ by: • Considering other methods of dispute resolution (such as alternative dispute resolution processes like mediation) before commencing legal proceedings. • Not commencing legal proceedings unless satisfied it is the most appropriate method of dispute resolution. (See https://www.ag.gov.au/LegalSystem/AlternateDisputeResolution/ Pages/default.aspx.)

The establishment of NADRAC was a major step forward for the promotion of dispute resolution within Australia. It has achieved some its charter aims already with the National Mediator Accreditation System and standards for the accreditation of mediators commencing operation on 1 January 2008.

Resolution Institute [1.150]

As previously stated, on 1 January 2015, IAMA merged with LEADR and on 4 September the merged organisation assumed the new name Resolution Institute. The merging of the two peak bodies brings strength to the professional practice of dispute resolution in Australia. The Resolution Institute is a non-for-profit organisation of volunteers with a 4,000 strong membership in Australia, New Zealand and the Asia-Pacific region. The merged organisation: • Keeps members informed – website, newsletter and events provide up-todate news and information. • Develops the skills of ADR practitioners –many CPD offerings. • Establishes and supports State and regional chapters and special interest groups – ADR practitioners come together to connect, network and learn. • Provides high quality mediation training and accreditation.

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• Promotes the use of mediation and ADR – ADR can help prevent, manage and resolve conflict and disputes in business, workplaces, families and communities. • Provides a voice for ADR practitioners in public discussion about ADR – gathering and representing members’ views. • Provides an up-to-date listing of mediators and other ADR practitioners – on the Resolution Institute look for these lists in “Resolving a Dispute”. • Administers building and construction industry payment disputes and domain name disputes in Queensland, New South Wales, Victoria and Tasmania. • Assists organisations to develop effective dispute resolution processes. (See http://www.resolution.institute/about-us/about.)

The Resolution Institute has a wide collection of training opportunities including: arbitration; expert determination; mediation; conflict coaching; and many others. Further, the Institute runs accredited courses in arbitration and mediation. The Institute is a Registered Mediator Accreditation Body meaning they can train and accredit mediators for use in mediation schemes (largely court-annexed schemes) that require an accredited mediator.

Legislation [1.160]

Each State and Territory government of Australia, as well as the federal government, has their own success stories in relation to the establishment of statutory or court-annexed dispute resolution schemes. These statutory schemes will be discussed in more detail in Chapter 7. However, it is beneficial to chart, in brief, some of the landmark statutes that have established dispute resolution services, particularly within the various court systems, because these legislative landmarks have made a vital contribution to the rise of dispute resolution in Australia.

It is difficult to accurately chart the first pieces of legislation that introduced dispute resolution into what is now a plethora of statutory dispute resolution schemes. However, one of the very early attempts was the Queensland Courts of Conciliation Act 1892 (Qld). Now repealed, the Act sought to resolve disputes between neighbours by reference to noncompulsory conciliation. In 1929, South Australia passed the Conciliation Act 1929 (SA) that sought to provide conciliation for both civil and criminal matters that had been brought before a court. The Act, in its criminal jurisdiction, only sought to conciliate compensation for the victims of crime. Conciliation under the Act took place in open court by a judicial officer. New South Wales in 1977 the Anti-Discrimination Act 1977 (NSW) was passed. This Act provided for the President of the Anti-Discrimination Board to conciliate complaints brought before the Board on a very wide range of discrimination issues. Further, now under ss 93A and 95 of the Act, the President of the Anti-Discrimination Board may refer a complaint

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of discrimination to the NSW Civil and Administrative Tribunal, and that Tribunal may conciliate the complaint. In 1979, the Land and Environment Court Act 1979 (NSW) was passed. This Act provided for Assessors to conduct conferences where litigants were encouraged to seek a resolution of their dispute. Under amendments to the Act in 1998, the Assessors are now called Commissioners and the training received by these officers is generally in negotiation and mediation. The NSW government further pioneered mediation when it passed the Farm Debt Mediation Act 1994 (NSW) which, pursuant to s 3 of the Act, “provides for the efficient and equitable resolution of farm debt disputes” and requires mediation before a creditor can take possession of property or other enforcement action under a farm mortgage. In short, a creditor owed money under a farm mortgage must not take enforcement action against a farmer until at least 21 days elapse after the creditor gives a notice advising the farmer of the creditor’s intention to take enforcement action and the availability of mediation in respect of farm debts. Once a farmer has been given a notice, the farmer may request or refuse to mediate and if the farmer chooses to mediate, the creditor cannot take enforcement action in respect of the farm mortgage unless the court allows such enforcement action to take place. Looking at the Commonwealth’s involvement in the development of dispute resolution in Australia, one has to take the commitment of the Labour Government prior to the 1990 Federal election as a good starting point. The then Prime Minister, the Honourable Bob Hawke, gave an assurance upon re-election, to introduce statutory schemes that would see the introduction of dispute resolution into all Federal courts. The Labour Government was re-elected and in 1991, the Commonwealth of Australia passed the Courts (Mediation and Arbitration) Act 1991 (Cth) which amended the Federal Court of Australia Act 1976 (Cth) and the Family Law Act 1975 (Cth). In relation to the Federal Court of Australia Act 1976 (Cth), s 53A was inserted to provide that the court could order mediation or arbitration with the consent of the parties. Six years later, the Commonwealth Parliament passed an amendment to the Act that made such an order mandatory, that is, the court can now order parties to mediation or arbitration without their consent. That same year, a mediation program commenced at the Commonwealth Administrative Appeals Tribunal. The President of the Tribunal has mandatory powers pursuant to s 34A of the Administrative Appeals Tribunal Act 1975 (Cth) to order proceedings or parts of proceedings to dispute resolution. In relation to the Family Law Act 1975 (Cth), under the 1991 and subsequent amendments, the Family Court can order parties to proceedings before the court to family dispute resolution, defined as, “a process (other than a judicial process) in which a family dispute resolution practitioner helps people affected, or likely to be affected, by separation or divorce to resolve

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some or all of their disputes with each other and in which the practitioner is independent of all of the parties involved in the process” (see s 10F Family Law Act 1975 (Cth)). One of the first States to establish legislation to provide for mediation was Victoria, when in 1992 it amended its Supreme Court Rules (now known as the Supreme Court (General Civil Procedure) Rules 2005 (Vic)) to include O 50 r 9 that allowed the Supreme Court of Victoria to refer matters to mediation. Order 50 r 9 was replaced in 1996 by r 50.07, which stated that the court can order mediation without the consent of the parties. New South Wales followed the lead of the Commonwealth and Victoria in 1994 when the New South Wales Parliament passed the Courts Legislation (Mediation and Neutral Evaluation) Amendment Act 1994 (NSW). New South Wales chose to establish statutory schemes for mediation and neutral evaluation at every level of the court structure within the State in a single piece of legislation. The Act amended the establishing Acts of the various courts in New South Wales and gave each court the power to refer a matter arising in proceedings before the court (other than criminal proceedings) for mediation or neutral evaluation. Prior to a court referral being made, s 38D(1) of the Act prescribed that the court consider whether: (a) the Court consider[s] the circumstances appropriate; and (b) the parties to proceedings consent to the referral; and (c) the parties to the proceedings agree as to who is to be the mediator or evaluator for the matter. The Act stated that attendance at and participation in mediation or neutral evaluation sessions was voluntary and allowed a party to withdraw from a mediation or neutral evaluation session at any time. The voluntary nature of referrals to mediation or neutral evaluation was changed by an amendment to the Supreme Court Act 1970 (NSW) via s 110K, to provide the Supreme Court of New South Wales with the power to order parties into mediation or neutral evaluation with or without their consent. The Civil Procedure Act 2005 (NSW) has overtaken all of the historical steps the New South Wales parliament has previously taken by further embedding mediation and arbitration into civil proceedings (see ss 26 and 38). The next State to pass legislation establishing a statutory dispute resolution scheme was Queensland, which in 1995 passed the Courts Legislation Amendment Act 1995 (Qld) that amended, among other things, the Supreme Court of Queensland Act 1991 (Qld) and thereafter allowed the Supreme Court of Queensland to order matters before the court to mediation or case appraisal. The legislation provided that if the court ordered mediation or case appraisal, then the parties to the dispute were required to attend. It also provided for parties to agree to submit their matter to mediation or case appraisal providing consent orders were filed with the court’s registrar. The Civil Proceedings Act 2011 (Qld) and the Uniform Civil

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Procedure Rules 1999 (Qld) have overtaken the aforementioned changes and now provide, pursuant to s 43 of the Act, that the relevant court may order parties to mediation or case appraisal without their consent. Further, s 43 of the Act states: Without limiting the court’s discretion, the court may take the following matters into account when deciding whether to refer a dispute to case appraisal— (a) whether the costs of litigating the dispute to the end are likely to be disproportionate to the benefit gained; (b) the likelihood of an appraisal producing a compromise or an abandonment of a claim or defence;

Finally, South Australia joined the other States and the Commonwealth in 1996, by passing the Statutes Amendment (Mediation, Arbitration and Referral) Act 1996 (SA), which amended the Supreme Court Act 1935 (SA) providing a new s 65 that allows a judge, with or without the consent of the parties, and a Master or Registrar, with the consent of the parties, to appoint a mediator and refer any civil proceeding for mediation. This discussion has been a non-exhaustive review of the development of some of the statutory schemes that must be considered to be landmark developments that have contributed to the rise of dispute resolution in Australia. These schemes and others will be discussed in more detail in Chapter 7.

Legal education [1.170]

Another important factor in the development of dispute resolution in Australia is the contribution of universities to the education of graduates in conflict and dispute resolution. Many universities in Australia, primarily through their humanities, business and law faculties, teach conflict and/or dispute resolution to their graduates as part of their core education. In a general sense, law schools are charged with the responsibility of, among other things, ensuring that graduates enter the legal profession with a thorough understanding of the doctrinal foundations of law. Practical legal training and the profession itself teaches law graduates to become lawyers by instructing them in a procedural sense how to apply the doctrinal foundations to clients’ disputes. There exists a valid argument that dispute resolution is more a procedural type skill taught after the acquisition of the doctrinal foundations. However, many law schools in Australia have embedded into their curriculum, particularly through subjects on civil procedure, the opportunity for students to learn about dispute resolution, as opposed to it being purely a skill developed after admission as a lawyer. This adoption of dispute resolution as part of the doctrinal learning is a landmark achievement as it means that nearly all lawyers admitted in their respective States and Territories will enter the profession with some understanding of dispute resolution. So entrenched in the curriculum of undergraduate law is dispute resolution, that at some

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university law schools, Chairs of Law have been created that include a recognition of the discipline of dispute resolution. In the non-law disciplines, conflict resolution and peace studies programmes have been advocating, educating and researching the importance of consensual problem-solving probably longer than most law schools. There are studies going on in many universities that relate directly to the legal application of dispute resolution that are contributing to the awareness and usage of dispute resolution in Australia. In addition to the growth of undergraduate courses on dispute resolution has been the burgeoning field of postgraduate studies in dispute resolution. Several Australian universities have developed a specialisation in the delivery of postgraduate studies in dispute resolution. This development has led to the study of subject specific dispute resolution and the teaching of many specialist areas of dispute resolution including, but not limited to: • commercial dispute resolution • business dispute resolution • victim-offender dispute resolution • health complaints dispute resolution • crisis-management dispute resolution • industrial relations dispute resolution • family law dispute resolution • collaborative law • court annexed dispute resolution • Chinese negotiation • dispute systems design. These and other specialist dispute resolution courses can be studied as part of: master’s programmes, including those specialising in dispute resolution or as part of general master’s degrees in law, business or management; graduate certificates or diplomas in dispute resolution and other disciplines; doctor of juridical science coursework and research degrees; and doctor of philosophy research degrees. The development of such a wide range of postgraduate courses has contributed to the rise of dispute resolution by providing students with the opportunity to continue their interests in the area and, through the interdisciplinary nature of university degrees, certificates and diplomas, to learn more about a particular area of dispute resolution without necessarily having to major in it. All of this contributes to a broadening of the knowledge base and acceptance of dispute resolution within society.

In summary ... [1.180]

What has been attempted here is a brief overview of the landmarks contributing to the rise of dispute resolution in Australia. Readers may choose to agree or disagree with some or all of the above

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landmark events that have shaped dispute resolution in Australia, although chances are they would probably want to add to the discussions recorded above. According to well-known Melbourne lawyer and dispute resolution practitioner, Dr Peter Condliffe, in his book Conflict Management: A Practical Guide (4th ed, LexisNexis Buterworths, 2012, pp 115-116) the key developments in Australian dispute resolution can be summarised as: • 1892 – Courts of Conciliation Act (Qld) is proclaimed. • 1904 – Arbitration and Conciliation Court (Cth) provides for informal conferences. • 1929 – Conciliation Act (SA) provides for pre-trial interviews. • 1931 – Courts of Conciliation Act (Qld) amended to streamline procedures. • 1974 – Consumer Claims Tribunal (NSW) adopted neutral third party referees. • 1975 – Family Law Act (Cth) provides for counselling and conferences. • 1975 – Institute of Arbitrators and Mediators (IAMA) is established. • 1977 – Anti-Discrimination Act provides for conciliation. • 1979 – Land and Environment Court (NSW) provides for conferences. • 1980 – Community Justice Centres (NSW Pilot Project) Act is proclaimed. • 1983 – Community Justice Centres Act (NSW) provides for community-based services. • 1983 – Victorian County Court Building Cases List makes provision for referral to mediation. • 1984 – Norwood (SA) Community Mediation Service is established. • 1985 – Noble Park (Vic) Family Mediation Centre established. • 1985 – Australian Commercial Dispute Centre (ACDC) is established. • 1987 – Neighbourhood Mediation Centres are established by Legal Aid Dept (Vic). • 1987 – Formation of the Australian Dispute Resolution Association (ADRA), the first State-based ADR association, based in Sydney. • 1987 – Federal Court pilot ADR program begins in the NSW District Registry. • 1988 – ACT Conflict Resolution Service is established. • 1989 – Establishment of Lawyers Engaged in ADR (LEADR), now known as Leading Edge ADR – not-for-profit lobby, professional and service organisation. • 1990 – Dispute Resolution Centres Act is proclaimed (Qld) establishing Community Justice Program now known as Dispute Resolution Centres. • 1991 – Courts (Mediation and Arbitration) Act introduced voluntary (since 1997 mandatory) mediation to the Federal Court. • 1991 – Canberra Mediation Service is established. • 1992 – ‘Spring Offensive’ is initiated by Supreme Court of Victoria with review of waiting cases, many of which were referred to mediation. Equivalent ‘Settlement Week’ occurs in NSW. • 1993 – Administrative Appeals Tribunal (Cth) introduces mediation conferences. • 1994 – Farm Debt Mediation Act (NSW) is proclaimed.

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• 1995 – Establishment of the National Alternative Dispute Resolution Advisory Council (NADRAC) by the Commonwealth Attorney-General to monitor and promote the use of ADR. • 1995 – Family Law Reform Act (Cth) establishes centrality of “Primary Dispute Resolution”. • 1996 – Native Title Act amendments gave increased emphasis to mediation before the Native Title Tribunal. • 1996 – Workplace Relations Act is referred to mediation for the first time in industrial disputes. • 2000 – NADRAC discussion paper, The Development of Standards for ADR. • 2004 – NADRAC discussion paper, Who says you are a Mediator? Towards a National System of Accrediting Mediators, outlines the need for mediator accreditation and standards. • 2005 – National Mediator Conference appoints sub-committee to consider accreditation and standards for mediators. • 2006 – Family Law Amendment (Shared Parental Responsibility) Act (Cth) is implemented, mandating mediation in cases seeking parenting orders. • 2007 – Introduction of new accreditation scheme for family mediators under the Family Law Amendment (Shared Parent Responsibility) Act 2006 (Cth). • 2008 – Implementation (1 January 2008) of National Mediation Accreditation Standards through a committee convened by NADRAC. • 2010 – Civil Dispute Resolution Act (Cth). Leading example of a statutory attempt to improve timeliness and party responsibility to settle disputes before litigation commences.

THE REGULATION OF DISPUTE RESOLUTION [1.190]

The increase of regulation of dispute resolution has played a part in its evolution. As will be observed throughout this book, in the case of negotiation and mediation, the procedures described should be viewed as being fluid and disputant driven. That is, the disputants themselves have control over the procedures to be adopted when negotiating or mediating. This is one of the strengths of dispute resolution. Further, dispute resolution processes are known for their informality and as such parties should enjoy the opportunity to negotiate in an informal atmosphere that encourages discussion as opposed to preoccupation with rules and regulations. Even the usual informal attributes of the physical settings of dispute resolution are an attractive factor of it. For example, parties are not required to dress up or use formal language and be forced to acknowledge any sort of hierarchy. Dispute resolution is usually conducted in informal settings on neutral ground and because of this it works at breaking down power imbalances brought about by all manner of elements, such as the physicality of the process itself. However, in more recent times, there is a concern that dispute resolution has become, and is continuing to become, over-regulated and more formal. The number of statutory schemes that have developed and continue to develop at a fast rate contribute to this view. These schemes, sometimes described as court-annexed schemes, seek to regulate the behaviour of

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parties so that proceedings fall within the court’s own agenda for case management. The simple proposition is that if some elements of curial practice and procedure are codified, manifest in practice directions and rules of court, then so too should the non-curial court-annexed elements of the system of justice, and for that matter, private dispute resolution. The rise of such regulation and formalisation is manifest, for example, in the rise of court-annexed schemes and the new mediator accreditation scheme imposed on some mediators operating within those schemes – subjects to be discussed in Chapters 7 and 9. The involvement of the court system in dispute resolution has been criticised by Sir Laurence Street in an article entitled “The Court System and Alternative Dispute Resolution Procedures” (1990) 1 Australasian Dispute Resolution Journal 5. The central argument of Sir Laurence’s paper is that the court’s sovereignty should not be compromised by alternative methods of dispute resolution. The judiciary is charged with the responsibility of being the custodian of the rule of law and to apply it in the adjudication of cases brought before the courts. It does not exist to solve every problem society throws up. In this respect the courts risk compromising their role in the community by embarking upon methods of dispute resolution that are inconsistent with their core role – that of deciding cases according to law. Other concerns include the blurring of the line between judicial officers and dispute resolvers. Judicial officers are selected for a specific duty and they are well trained both prior to and during their appointment to the bench. To attempt to introduce another method of resolution may well blur the line between the two roles to a point where the role of the judicial officer is as confusing to the holder of the role as it is to the public. This in turn may diminish the quality of judicial officers and cause confusion about the very role of the judiciary. Another concern about the court annexation of dispute resolution is the dangerous assumption that the court is the provider of a variety of non-curial forms of dispute resolution. Once again, the danger is the blurring of the role of the court. For some disputants, this blurring is counter-productive to the resolution of the dispute and the resumption of business or the disputant’s life. Some disputants desire a court decision in the first place. Some disputants do not wish to take an active role in the resolution of their own dispute and seek a curial solution. This has now become more problematic with the rise of mandatory court-annexed schemes. Notwithstanding this, credit should be given to the judicial system in seeking better case management procedures in order to keep cases out of court that do not deserve to be there in the first place. Costs mean that the state cannot afford to let everyone have their day in court and unless new law will be created by a trial, judges are keen to keep the courts free from matters that are ripe for settlement. The dangers of having judicial officers involved in dispute resolution were raised in the case of Ruffles v Chilman (1996).

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CASE NOTE: Ruffles v Chilman [1.200]

Ruffles v Chilman (unreported WASC FUL120 of 1996)

Facts: Ruffles was involved in two car accidents where he sustained injuries. Both defendants admitted liability but disputed the extent of the injuries claimed. At the conclusion of the lay evidence for all parties and before the commencement of the expert evidence the trial judge suggested that the parties might like to pursue settlement and adjourned the matter. The Deputy Registrar of the court conducted mediation which was unsuccessful. When the trial resumed Ruffles moved to have the judge disqualify himself for bias claiming that the Deputy Registrar had stated during mediation that he was of the view that the judge had formed a negative view of Ruffles’ credit. Decision: The Full Court of the Supreme Court of Western Australia upheld the appeal on the basis that: [page 13] “In the circumstances, his Honour’s approach to the issue was such as to be likely to increase, rather than to diminish, the appellant’s apprehension as to his Honour’s having already reached a conclusion on the appellant’s credibility before having heard all the evidence, and, in particular, the medical evidence. [page 14] In this case, I consider that the appellant would have been left with a reasonable apprehension of bias. He was given no reassurance when the subject was raised by his counsel”.

The Court took the opportunity to make an authoritative statement about the role of mediation in the court system [page 14] “Mediation is now a significant feature of litigation in this State. The integrity of that process is of critical importance. This requires that there should be no communication between the mediator on the one hand and the Judge who either will be hearing, or is hearing, the action. If this requirement is not observed, confidence in the process of mediation is likely to be seriously compromised.”

[1.210]

This sort of blurring of the roles of courts is to be avoided if possible, as it affects the integrity of the court and the process of dispute resolution being employed by the court. Some might say that this sort of blurring is inevitable if the courts are involved processes that are non-adjudicative in nature. However, courts can still be involved in non-adjudicative dispute resolution providing the personnel and processes are run separately to adjudication and there is no chance of breaches of procedural fairness arising because of information gleaned at dispute resolution influencing the presiding judicial officer at a hearing or vice versa.

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Conclusion [1.220]

While the regulation of dispute resolution through the various court-annexed or statutory schemes has its critics, it must also be said that its regulation has elevated the level of professionalism within the ranks of dispute resolvers and contributed to a rise in the accessibility of such methods to people who otherwise may not have had access to dispute resolution processes. A good example of increased accessibility due to regulation is the New South Wales farm debt mediation scheme where farmers in financial difficulties have a statutorily enforced opportunity to negotiate with their bank prior to any debt recovery proceedings being commenced. However, a clear line between curial adjudication and consensual resolution needs to be drawn and adhered to by the stakeholders in both court and dispute resolution providers. The formalisation of dispute resolution is not all bad news. If dispute resolution has to be formalised through court-annexed schemes then that may be a small price to pay for a more cost efficient judiciary that paves the way for a more efficient disposal of those cases that deserve to be in court. Further, one of the benefits of dispute resolution is its ability to educate disputants to resolve their disputes in a more consensual manner that may assist them to avoid disputes in the future. While there is little research available to support this contention, it can be assumed that the participation by disputants in dispute resolution processes is educative. The formalisation of dispute resolution is an issue worthy of discussion as State and Territory Attorneys-General seek to find methods that ensure a quick and cheap method to resolve disputes between parties. The United States has dealt with the problem by most States accepting the “multi-door court house” approach that sees disputes mandatorily referred to dispute resolution before they get to see the inside of a court room. In Australia, in some respects, the debate has just begun.

2

Negotiation INTRODUCTION [2.10] Many people struggle to negotiate effectively. This is because negotiation, like any other skill, is something that needs to be learned and practiced. In the case of legal negotiation the adversarial system of justice both practiced and taught at law schools encourages lawyers not to negotiate well. Instead, lawyers are trained to pursue their clients’ rights no matter how frail at times the evidence is to support those rights. Lawyers argue their client’s rights by interpreting the law in a way that will secure victory for their client thereby placing them in an adversarial position to the other party to the dispute. It is the prosecution or defence of those rights that drives each lawyer to phrase documents in a certain manner and to deal with each other in a certain way. It is often the promotion of clients’ rights that encourages lawyers to recommend curial adjudication to their client and it is usually the advocating of those same rights that leaves many a litigant, even those successful in court, feeling dissatisfied after participating in a process that places greater emphasis on the rules of evidence, instead of the parties’ own interests. This commentary is not a criticism of the system of adversarial justice adopted in Australia. The justice system we have is important to the maintenance of the rule of law and has served us well for over two centuries. The community should feel comfortable in the knowledge that the law will be there to protect them and that the adversarial nature of proceedings ensures a thorough prosecution of criminal or civil allegations brought before the courts. The process of adversarial justice will always exist and should always exist in order to maintain the rule of law. The above discussion merely asks the reader to note that the system of justice and for the most part legal education does not encourage people in dispute to negotiate prior to asserting their rights in court. If negotiation can help avoid unnecessary litigation, thereby saving substantial resources, and at the same time educate parties in how to resolve disputes, then its use should be encouraged. It is important to note that most jurisdictions in Australia now require clients and counsel as part of case management procedures to ensure that if a dispute has settlement potential then dispute resolution procedures should be attempted in good faith before they are entitled to their day in court. This is a marked shift in the practice of law, particularly over the last 20 years.

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It is encouraging to note that most business, law and some humanities schools at universities now teach dispute or conflict resolution as either part of the core or elective curriculum. Negotiation is a different skill to be learned by lawyers because a good negotiator will not just confine her or his mind to their client’s legal rights but will consider equally their client’s needs, which may conflict with their own rights. In fact, some would say that the issue of a party’s legal rights has no place in negotiation. However, whether a party’s rights are asserted as part of a negotiation strategy is dependent on the type of model of negotiation being employed. This chapter will deal with the following four models of negotiation: 1) adversarial negotiation; 2) integrative negotiation; 3) distributive negotiation; 4) principled negotiation. While it is true that the most popularly practised models of negotiation are those of adversarial and principled negotiation, the other two models discussed in this chapter can be equally as effective. It is important to understand that whilst this chapter can provide some useful hints on how to negotiate, no literature can substitute for experience. It is only through practice that negotiators can become better negotiators. Armed with the various bodies of theory on negotiation, negotiators can improve with each negotiation to a point where he or she can achieve high rates of settlement. There is no rulebook for negotiation – only theory and practice. Negotiations tend to display their own individual attributes and may leave the negotiator with the feeling that he or she could have done something different so that a better outcome could have been achieved. Reading about negotiation is nothing more than supplying students of negotiation with a negotiator’s “tool bag” full of negotiating techniques or tools. During any given negotiation, a negotiator will almost certainly need to reach into the tool bag and take out a negotiating tool. The benefit of dealing with a skilled negotiator is that he or she will have many tools in the negotiation tool bag. If one tool does not work, then there are others just waiting to be tried. It is rare that a skilled negotiator will not have some form of success using the vast array of negotiating aids available. In this respect, negotiation is best characterised as a process conducted “by the seat of one’s pants”. That is, there are many unexpected twists and turns in any negotiation and a skilled negotiator is generally prepared to deal with anything that can happen.

The fundamentals of negotiation [2.20] Unlike some other methods of dispute resolution which are often governed by complex rules, such as litigation, arbitration and sometimes even mediation, negotiation is a simple concept and fundamental to our lives, hence its common practice amongst the community. M Anstey in Negotiating Conflict: Insights and Skills for Negotiators and Peacemakers (Juta &

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Co, South Africa, 1991, pp 91-92) describes negotiation as: A verbal interactive process involving two or more parties who are seeking to reach agreement over a problem or conflict of interest between them and in which they seek as far as possible to preserve their interests, but to adjust their views and positions in the joint effort to achieve agreement.

From Anstey’s definition, we can state the general attributes of negotiation as being that it: • involves more than one party; • involves a joint agreement on the outcome; • usually requires movement of a party’s position and interests; • usually empowers its users by providing self-determination; • is non-interventionary (there is often no third party involved); • is often less expensive than other forms of dispute resolution; and, • allows parties themselves to control the process and the outcome. While there are many theories on the various models of negotiations, many display similar characteristics in that they classify negotiations according to the relationships of the parties, that is, whether: the parties have a relationship prior to the negotiation or whether they seek a relationship after the negotiation; whether the relationship has deteriorated and they seek dissolution or reconciliation of it; or whether they seek to renegotiate the parameters of their relationship. Using relationships as the basis of determining a suitable model of negotiation is acceptable from a theoretical and practical viewpoint. People learning the skill of effective negotiation sometimes ask whether there are any issues that cannot be negotiated. The answer to such a question is generally in the negative providing the parties are willing to negotiate, although see the discussion in Chapter 3 on matters not suitable for mediation. However, the willingness of parties to negotiate often comes down to the relationship between them. If the relationship can bear negotiation then there is a chance of resolution.

The advantages of negotiation [2.30] While a negotiated outcome may not always be appropriate or achievable, the advantages of embarking upon a negotiation, as opposed to proceeding directly to litigation, include the following: • parties are in the best position to assess the impact of any proposed solution upon them. • parties “own” the process and can define its terms in any way they choose. This is not the case in litigation where court rules define the type of evidence and procedures that must be adhered to. • parties create their own solution and therefore are more committed to ensuring that the agreed settlement works. In litigation a solution is imposed on the parties. • parties have a chance of getting part of what they want. A court can only judge that one party wins and the other loses based on the pleadings.

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• according to statistics collected by the Civil Justice Research Centre (“The Costs of Civil Litigation”, December 1993) approximately 80-90% of civil matters entering the court lists are settled before hearing or judgment (a more recent confirmation of this appears in Merritt C, “Fewer Cases, Less Cash for Courts”, The Australian (Sydney, 21 June 2013), p 29). If this were not the case, the court system would soon grind to a halt overloaded with cases. This is why many jurisdictions now insist that litigants have a pre-trial conference to see if the matter can be settled before embarking on litigation. Given the high proportion of settlements naturally occurring in matters before courts, negotiation is always worth a try at some strategic point throughout the life of any dispute. • even if the dispute is not resolved, parties have an opportunity to narrow the issues prior to a court hearing or further negotiation. This can reduce the time, cost, emotion and stress of litigation to the parties.

COMMUNICATION SKILLS [2.40] A negotiator can be of little use if he or she has poor communication skills. Therefore, skilled negotiators are generally good communicators or at least, they should be! There have been many worthwhile texts written on communication skills and this chapter does not seek to be definitive by any means. However, there are a few basic skills that negotiators may adopt which may assist the effectiveness of a negotiation. Reframing [2.50] The skill of reframing is one of the most important skills of a negotiator and mediator. Reframing is the skill of being able to capture the essence of what has been said by the parties and communicate it back to the party who communicated it in the first place. It is important for a number of reasons. First, it shows the party that the negotiator listened to what was communicated. Secondly, it shows that the negotiator understood or did not understand what was communicated – if it was the latter then the misunderstanding can be corrected. Thirdly, it turns what at first instance may have been subjective language into objective language which can assist a consensual problem-solving process like negotiation. In this way the issues being communicated are seen as being objective because the negotiator is stating them in neutral language absent any accusation or judgment. Reframing is useful at various times throughout a negotiation. Displaying an understanding of the dispute and its elements is an important factor of all dispute resolution processes. Most inexperienced negotiators make the common mistake of thinking that negotiation is about “changing the other side’s mind”. On the contrary, negotiation is not about changing the other side’s mind because in reality, rarely can one party in a dispute change the other party’s mind, particularly if parties have become entrenched due to a

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deterioration in their relationship or the effluxion of time. Negotiation is most successful when the parties merely gain an understanding of the other side’s point of view on the issues in dispute. In this respect parties do not have to accept the other side’s point of view, so long as they understand it. In turn, this means that time does not need to be wasted in a negotiation with one party trying to change the mind of the other party. Reframing is an excellent way to help a party see the other side’s point of view. However, reframing is not just about regurgitating what was just said. It is about reframing what was just said in a way that focuses the parties’ attention on the motivation behind the statement. For example, if a party to a dispute states, “I think you are deliberately making my life difficult because you won’t let me use the photocopier”, a skilled negotiator may reframe this back to the party as, “So you need access to the photocopier to efficiently perform your job?” Reframing should seek to take the negative and confrontationist language out of the dispute. Another benefit of reframing is that it allows the speaker to listen to the problem in another contextual framework. If the problem is expressed differently, then the speaker may begin to view it differently. Reframing also focuses the parties on what the problem is, rather than becoming lost in a maze of abuse and irrelevant material as can often happen in a dispute. In this respect, reframing helps separate the people from the problem (to be discussed in more detail at [2.240]). Another valuable skill when reframing is to attempt to reframe by crafting the reframed statement as a question. Most people, when they see a question, intellectually attempt to answer it. If negotiators reframe issues as questions to be answered, then the natural instinct of the parties is to seek an answer to the question or solution to the problem. This sort of intellectual willingness to solve the dispute provides a productive atmosphere for negotiation. This sort of skill needs practice and does not come naturally to all negotiators. However, once competency in the skill has been achieved, its effects can be quite impressive. As stated above, reframing shows the speaker that the negotiator has actively listened. It is quite impressive to have the problem reframed back in a clear and concise fashion by the listener. It also prevents reiteration of the dispute. Some parties retell elements of the dispute repeatedly. A skilled negotiator will politely ask the speaker to wait before retelling the story, then reframe it, thereby allowing the speaker to realise that there is no need to retell the story again because the listener has heard and clearly understands the issue or issues. Finally, reframing places the statement in an objective frame of reference. Negotiators who are skilled in the art of reframing do not add opinion to the reframe, nor do they add anything that was not stated by the speaker. For example, a skilled negotiator will not reframe emotion to the speaker if the speaker did not originally express an emotion. Parties generally do not

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like being told what their emotions were at a particular time in the dispute when they did not express such emotions.

Open and closed-ended questions [2.60] Questions are one of the negotiator’s most useful tools. It does not matter whether a negotiator is seeking information from a party or being an advocate for the party in a multitude of ways that may include court, company meetings or in a negotiation – the negotiator is continually questioning those around her or him for information that will assist in achieving a solution or resolution. Much has been much written about questioning techniques, but given the limited space of this book, only open and closed-ended questioning will be discussed. An open-ended question seeks to elicit information from the receiver of the question. On many occasions, particularly early in the dispute cycle, the skilled negotiator is a seeker of information that he or she will use to generate options that ultimately lead to settlement. The best way to receive the vital information needed to settle a dispute is not to ask questions which elicit a limited or suggested response, that is, those questions generally known as being closed-ended. Although, closed-ended questions can be very valuable approaching the end of a negotiation when options for settlement should be reality tested – a process to be discussed in more detail in Chapter 3, “Mediation”. An example of an open-ended question would be, “Tell me more about the reason you are on strike?” An example of a closed-ended question would be, “Have you gone on strike because of wages?” The open-ended question will elicit the maximum amount of information. Closed-ended questions will generally elicit a “yes” or “no” response and often suggest the answer in the question thereby making a “yes” or “no” response appropriate. In the example just given, there may be a multitude of reasons why workers have gone on strike, such as hours, health and safety reasons, security of entitlements and more. The open-ended question is more likely to get at all the reasons for a person to commence a dispute whereas the closed-ended question is only likely to disclose the issue already raised in the question – in our example, the issue of wages. Negotiators need as much information as they can get, particularly in the formative stages of a negotiation, in order to find out what is motivating the other side to conduct the dispute; therefore, the use of open-ended questions is vital to that fact-finding role, which the negotiator plays at the start of any negotiation.

Silence [2.70] Negotiations tend to be physically draining because skilled negotiators listen, frame thoughts and questions, manage the process of negotiation, seek options and outcomes, and promote their own or their client’s interests – often they do all of this contemporaneously! The communication skill of silence can assist in reducing the exhaustion as well

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as assist in the efficient running of the negotiation. In some cultures, silence is an important element of negotiation. It allows time for reflection and the framing of an appropriate response. Many negotiators say things in the heat of the moment that they often regret. The strategic use of silence can, on occasions, overcome this problem. During a negotiation it is not out of place, despite being unusual in Western culture, to ask for a moment to think about a proposition, or to take a recess to consider the proposition or consult with others. Silence can be used effectively for all sides of the dispute to reflect on the progress to date of a negotiation and should not be avoided for fear of lack of progress.

Active listening [2.80] The word “active” means that skilled negotiators treat listening as an active, rather than passive, activity. Like any skill, active listening needs to be practised. There are a number of helpful hints that can be practised to improve a negotiator’s ability to listen: • clear your desk so that there is nothing diverting your attention from the speaker. • hold your phone calls so that other matters do not divert your attention from the negotiation. • learn the skill of taking minimal, but relevant notes. You will minimise the impact of negative non-verbal communication if you do not have your head buried in a pad taking convoluted notes. • face the other party and make constant eye contact. • only interrupt to clarify something you do not understand. • reframe to check your own active listening and to ensure the speaker has the opportunity to correct any misheard or understood communications. It is important not only to actively listen for the benefit of the negotiator, but to display active listening skills throughout the negotiation as this will assist in the progress of the negotiation. When a person is displaying signs that they have not listened to a proposition, the other party will often spend further time explaining the proposition a second or third time in order to ensure that the receiver of the communication has understood it. Apart from a waste of time, it can be frustrating for the party sending the communication and may block progress in the negotiation. There are two notable ways to display active listening skills. First, use positive non-verbal skills such as nodding your head to show you understand. Secondly, use verbal skills such as verbal affirmations and reframing to show that you understand. Some negotiators take notes and reframe from those notes. Note taking is a good way to record the negotiation, but negotiators should not become too obsessed by note taking. It can detract from the substance of the negotiation. Also, it is not conducive to effective communication because of the lack of eye contact. Quite simply, there is nothing worse than trying to negotiate with a person who has his or her eyes constantly fixed

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on the drafting of accurate notes. The skilled negotiator will take minimal but effective notes that record only the key issues.

Sponging [2.90] Sponging is a technique used selectively by negotiators. There may be times in a negotiation where emotions run high and the other party wants to “vent their spleen”, that is, tell you all about the dispute through an emotional frame of reference. While the information gathered during this process may be largely irrelevant to a substantive outcome (although it may be relevant to influencing an outcome), a party prevented from speaking about the emotional aspects of the dispute may block a solution to the dispute. In other words, negotiation can sometimes be about a party or parties “being heard” – particularly by each other. Once having been heard, parties are often emotionally free to pursue a substantive solution to the dispute. Skilled negotiators use the technique of “sponging” to deal with the latent or patent emotions at play in the dispute. Sponging means that the negotiator will need to sponge, or absorb, some of the emotional issues if those issues are acting as a barrier to constructive negotiation. This does not mean that the negotiator counsels the party with the emotional issues; on the contrary – counselling is a recognised formal discipline within the health sciences and requires extensive training. Most negotiators are not trained counsellors and therefore they should not seek to counsel parties. The use of sponging in a negotiation contributes to an atmosphere where emotions may be expressed. This allows the negotiator to empathise with the disclosing party where appropriate, and then enable the parties to move forward so they may deal with the substantive issues of the dispute. This process can be challenging but should not be seen as a sign of weakness; rather, sponging should be seen as a means to better understanding the issues surrounding the dispute that will ultimately assist its resolution. It should be noted that there is a limit on the amount of sponging to be performed during a negotiation. Clearly a negotiator cannot spend vast amounts of time listening to lengthy accounts of the emotional elements of the dispute. Therefore, sponging comes with time limitations. A useful tool for ending the sponging process is the communication tool discussed at [2.50] – reframing. By reframing, the negotiator can send a message to the disclosing party that the emotions are understood, empathised with, and that the party can move on to substantive issues that will hopefully lead to resolution.

Body language [2.100]

There are many comprehensive texts on body language, and whilst skilled negotiators do not have to be experts in this subject, they can make simple observations that will assist in the assessment of the progress

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of the negotiation. The following comments are directed at negotiations generally involving parties from Western cultures only. Specific reference should be made to texts that deal with negotiations involving other cultural groups where the reading of body language differs from that in Western society. The most important hint is to observe. For example, note the posture of the other party. If one party sits facing away from the negotiator or creates a barrier, with objects such as books or furniture, then that party may be nervous or defensive. In a negotiation, this means that it may be difficult to discover the real issues driving the dispute or that some other issue, possibly an emotional issue, is preventing a party from being comfortable with the process and the people involved. This valuable piece of observational information means that the negotiator needs to work harder to find out what is really causing the dispute and whether there are any emotional issues that need to be dealt with before meaningful progress can be achieved. If one party sits with their legs crossed or has their arms folded across their body, then an artificial wall has been set up that may be challenging for the negotiator to breach. Once again, the party displaying such body language may be uncomfortable with the way that the negotiation is proceeding. The problem may be one of substance, as discussed above, or it may be a problem as to the form of the negotiation. Attention to the physical elements of the negotiation is also an important element for the negotiator to consider. For example, a party may feel poorly treated because he or she was not offered a glass of water or was forced to sit in an uncomfortable chair or under a cold air conditioning duct. Whilst these excuses sound trivial, a skilled negotiator will not allow anything, whether it is a matter going to the substance, form or physical nature of the negotiation, to prevent resolution of the dispute. A skilled negotiator will be alert to these non-verbal communications and act to neutralise them so that the negotiation can proceed. Eye contact may disclose an interest in and a willingness to negotiate, whereas a lack of eye contact may disclose a lack of confidence in the process and/or the negotiator. In such cases the negotiator must reassure the party who has lost confidence in the process that negotiation can achieve a good result providing he or she participates and contributes. Eye contact, or lack thereof, may also disclose honesty or lack of honesty respectively. In such cases, the negotiator needs to thoroughly check the information being presented and reality test any resolution thoroughly. This will require detailed questioning and proof of certain key elements of the representations being made by the party. Only in this way will the truth be forthcoming and assist the negotiators to fashion a lasting settlement. Irregular breathing patterns or sweaty palms may disclose nervousness or little confidence in that party’s own ability to negotiate, or suggest that the party is not being as forthright as she or he could be. If a party is displaying a lack of confidence in their own ability to negotiate, then the

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negotiator should not take advantage of this situation, rather, the negotiator should assist such a party to accept the fairness of the process and that the party will not be forced into agreement. Taking advantage of such a situation will only lead to an unsatisfactory settlement that risks falling over at some later stage. Become an observer of body language and it will reveal truths about people that may assist you in negotiating.

ADVERSARIAL NEGOTIATION [2.110]

Adversarial negotiation is characterised by parties seeking to maximise victory that is, one party is declared the winner over the other party. Because of this adversarial negotiation is often referred to as a “zero-sum game”. This means that what one party gains, the other loses. For example, in a negotiation over money, zero-sum negotiations produce the result that for every dollar Party A gains from the negotiation, Party B loses that dollar. Adversarial negotiation tends to treat options for settlement in a negotiation as being a limited resource that must be distributed amongst the parties to the negotiation. This is very different from the principled negotiation model (discussed at [2.140]) which views options for settlement as an expanding, and not a limited, resource. Lawyers tend to be natural proponents of adversarial negotiation given their training in adversarial justice. In particular, those lawyers not trained in principled negotiation take the view that negotiations are essentially rights based and the assertion of a client’s rights are best expressed in an adversarial forum. Adversarial negotiation should not be viewed as being of no use to a negotiator because of its rights based nature, rather it should be viewed as a useful model of negotiation that has a role to play in the overall strategy employed by experienced negotiators. Therefore, a greater understanding of how adversarial negotiation operates is essential to students of negotiation. One of the best expositions of adversarial negotiation comes from Professor Carrie Menkel-Meadow, Professor of Law at Georgetown University Law Centre in an article entitled “Toward Another View of Legal Negotiation: The Structure of Problem Solving” (1984) 31 University of California Law Review 755. In her seminal paper, Menkel-Meadow sets out, amongst other things, to deconstruct adversarial negotiation and allow readers to understand the parameters of adversarial negotiation. Menkel-Meadow commenced her article by suggesting that in adversarial negotiation parties set out to obtain as much as they can get of the thing or things under negotiation. From there she analysed the structure of adversarial negotiation and determined that its structure consists of four essential elements: (i) The setting of target points that reflect the aspirations of the parties. In other words the setting of a point where a party would settle the dispute which is reflective of what that party would like to achieve from

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the negotiation. It is important to note that a target point might be an initial demand that may change as the negotiation proceeds. (ii) The setting of resistance points that reflect the point at which a party will not go below in order to reach agreement. (iii) The ritual of offer and demand which are the substantive elements of the adversarial negotiation process. This ritual is the to-ing and fro-ing of negotiation that sees parties making offers and concessions in order to find the point at which the parties are willing to agree to settle the dispute. (iv) The compromise solution which is a point between the target and resistance points of the parties that overlap. Menkel-Meadow elegantly mapped the structural elements of adversarial negotiation in the following way. Figure 2.1 The structural elements of adversarial negotiation

Menkel-Meadow is critical of the linear nature of the structure of adversarial negotiation which does not allow compromise or creative option generation. She notes that this structural analysis of adversarial negotiation probably works best in single-issue negotiations where there are no dependencies to settlement. For example, where in a dispute over workplace conditions and pay, the pay claim may be dependent on the type of settlement reached on the workplace conditions, the linear structural analysis may not work very efficiently because the target and resistance points for the pay issue may be dependent on the outcome of the negotiation over conditions. In this respect Menkel-Meadow notes (p 772), it may be impossible to represent graphically the negotiation of a complex, multi-issue transaction as a two dimensional structure, without imagining a many-planed axis with hundreds of potential coordinates ... .

Menkel-Meadow suggests that the outcomes of adversarial negotiation are limited given that parties become locked in competitive strategies which stifle the ability to arrive at creative options for settlement. Further, because of the nature of the zero-sum game, parties tend to arrive at solutions that resemble the types of solutions handed out by courts. For example, where parties are arguing over money, the competitive nature of adversarial negotiation where a dollar gained by Party A is a dollar lost by Party B

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focuses the parties on the monetary solution only, like a court’s assessment of damages, as opposed to more creative non-monetary solutions. Further, Menkel-Meadow criticised the ritualised offer/response, counteroffer/counter-response strategies that are the hallmarks of adversarial negotiation. Again, she believes that such a ritual encourages the parties to participate in offensive and defensive negotiation strategies which inhibit creative option generation. Ultimately Menkel-Meadow states (p 778) that adversarial negotiation is predicated on the assumption that at least one party can be “bullied, manipulated or deceived”. This creates the potential for agreements reached through adversarial negotiation to ultimately fail given the resentment created by the process itself. Menkel-Meadow’s article raises the consciousness of parties participating in adversarial negotiation to a level that allows them to participate in the process in a more productive way. The strength of having an understanding of the structure of adversarial negotiation is that parties can use it in a way that may benefit their strategy whilst at the same time being mindful of its limitations. For example, if one were to participate in a multi-issue principled negotiation that required by consensus some form of monetary compensation and the quantum of such compensation was left until the end of the negotiation all other issues having been resolved, then a short adversarial negotiation over the compensation quantum may complement the principled negotiation and lead to a settlement that all parties are satisfied with. The benefit of adversarial negotiation is when it acts to complement other negotiation techniques, or as stated by Menkel-Meadow, in a single-issue negotiation.

INTEGRATIVE NEGOTIATION [2.120]

Integrative negotiation, or bargaining, is characterised by its adversarial nature but is distinguishable from adversarial negotiation on the basis of its use of concessions and trade-offs. The onus is on the parties to find enough items of different value in order to trade them off against items of lesser or equivalent value. It is the differing value of items traded that are “integrated” into the ultimate resolution. One of the seminal texts on negotiation is by Howard Raiffa and titled, The Art and Science of Negotiation (Harvard University Press, Massachusetts, 1982). In this text Raiffa discusses what integrative negotiation is and how trade-offs allow the parties to embark upon integrative negotiation with the potential for settlement. Raiffa (p 149) gives the following example of the basis of an integrative negotiation. For example, in a negotiation between a manufacturer of goods and a wholesaler, the manufacturer may include some free product if the first order from the wholesaler is above a certain sum or quantity. The free product is cheap for the manufacturer because it only costs the amount of the constituents of the product and the wear and tear on the production machinery. The factory is already tooled up for production and the infrastructure already exists to produce

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the product and have it delivered to wholesalers. However, the free product has a higher value for the wholesaler, who can ascribe to it a retail price and hence make a profit. Thus, the value of the product is different for the two parties and may constitute a legitimate negotiating chip in the negotiation over a supply contract.

While integrative negotiation is defined by Raiffa as being characterised by two or more parties negotiating over more than one issue or issues and is therefore similar to principled negotiation, it is distinguishable in its methodology or how it seeks to arrive at a resolution. Therefore, while it is conceded that some commentators use the terms “principled negotiation” and “integrative negotiation” as being interchangeable, it is suggested that, while the nature of the transaction may be the same, the method of arriving at resolution is different. In this respect it is important to note that if the parties to an integrative negotiation can discover enough items within the negotiation of differing or equal value to each of them then by participating in a series of structured trade-offs, there may be no need for the parties to compromise on any issue the subject of the negotiation. Raiffa’s version of integrative negotiation relies on existing options which, by virtue of trade-offs and concessions, leave the parties with a resolution. In this respect, Raiffa prefers a mathematical scoring system, which he calls “additive scoring”, based upon substantive considerations such as cost, time and quality as the determinants of whether one option outweighs another. His suggestion that options should be ranked in order to arrive at a resolution distinguishes it from the principled negotiation model that seeks only to consider options that satisfy interests. While one could argue that Raiffa’s additive scoring system is based on the satisfaction of interests, it is not quite apparent that satisfaction of interests is the primary goal. Susskind and Cruikshank, in Breaking the Impasse: Consensual Approaches to Resolving Public Disputes (Harper Collins, USA, 1987), have suggested that integrative negotiation is a method of crafting resolution by moving zero-sum or distributive negotiators to become integrative negotiators. They define zero-sum negotiation as an approach that assumes that there are only limited gains available in any given negotiation. Interestingly, as in principled negotiation (discussed at [2.140]), the central requirement for such a move is consideration of a party’s interests, although again, the approach to satisfying those interests is distinguishable from principled negotiation, as will be seen.

DISTRIBUTIVE NEGOTIATION [2.130]

Distributive negotiation or bargaining is based on the notion that the parties to a negotiation are generally seeking the same goals, items or values. In other words, in a negotiation, the parties are negotiating for the same scarce item or items. Each party wants as much of the item being bargained for as he or she can get, and the more one party receives, the less the other party receives. The “winner” is determined by which party

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receives the most. Distributive negotiation is similar to adversarial negotiation in that it is a zero-sum transaction that produces a win/lose result. In this respect, the terms “distributive” and “adversarial” in regard to negotiation are often interchanged. Mark Anstey in his text titled, Negotiating Conflict (Juta & Co Ltd, Cape Town, 1991) sets out the following four phases of distributive negotiation: 1. Preparation – collecting information that will assist the negotiator; understanding the issues from all sides; and, process preparation such as venues and facilities. 2. Opening – the establishment of bargaining boundaries; setting the bargaining climate; arguing; defending; motivating; justifying; clarifying positions; and, manipulating expectations of the process. 3. Bargaining – signalling, proposing; packaging; and, bargaining. 4. Closure and agreement – making of offers (using “either … or” offers (alternatives) and/or “or else …” offers (threats); testing offers; committing offers to writing; final agreement; and, determining future actions. In his book, Anstey makes the important point that given the rise in the popularity of principled or interest-based negotiation, distributive negotiation has been relegated to a less than constructive form of negotiation. This he surmises is because of the emphasis on substantive gains that is different from an interest-based model. He also suggests (p 127), that: Positional bargaining represents the worst face of competitive exchanges and here the critique has relevance, but to discard more constructive approaches with the same brushstroke, reflects a failure to recognise the complexities of the process and the fact that tactics may fall along a broad continuum with widely divergent consequences for relationships and settlement potentials.

In other words, despite that nature of distributive negotiation, a constructive and polite negotiating climate can still be maintained. Anstey (p 127) suggests that distributive negotiation is not an anathema to principled negotiation, when he states: Once interests have been explored and understood, and once parties have considered ways to meet each other’s needs, scarce resources or differing perspectives may still reduce the engagement to one of competition. Not all conditions lend themselves to cooperative problem solving, however desirable the process may be.

How the four models of negotiation relate to each other is a topic to be discussed at the end of this chapter.

PRINCIPLED NEGOTIATION [2.140]

The Harvard Negotiation Project, based at Harvard University Law School in the United States, has developed an internationally renowned model of negotiation, called “principled negotiation”, also

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known as “interest-based negotiation”. The model is explained in the landmark book entitled, Getting to Yes, by authors Roger Fisher, William Ury and Bruce Patton (Random Century, London, 1991). Fisher et al, essentially define their model of negotiation as a method of deciding issues in dispute by looking for mutual gains and independent fair standards. They distinguish “positions” from “interests” – the former being the things people “want” rather than the latter being the things they “need”. This will be explained further below but for the moment Fisher et al contend that a skilled negotiator will discover what their client’s interests or needs are and negotiate a solution based on those interests or needs. This is because settling a dispute that takes into account a person’s interests has a better chance of being successful and of lasting as opposed to a settlement that merely satisfies the position of a party.

The seven elements of negotiation [2.145]

The late Professor Roger Fisher identified seven elements flowing from his work with the co-authors of Getting to Yes that should be a part of every negotiation in a second book entitled Getting Ready to Negotiate, co-authored with Danny Ertel (Penguin, New York, 1995). The following discussion is an explanation of the seven elements and how they can assist negotiators in achieving successful principled negotiated outcomes.

Interests

[2.150]

Parties often argue positions rather than interests when they attempt to negotiate. The definition of a position is simply “what you want”. People usually arrive at a position very early on in a dispute and it often reflects a knee-jerk reaction to the dispute. In other words, a position is what a person wants when they first signal that a dispute exists between that person and another person. The definition of an interest is “why you want it”. In other words, an interest is often the motivating factor behind a position. Another way of saying this is that the position satisfies the desire while the interest satisfies the need. Positions are generally the outward manifestations of interests. For example, an employee who has done a good job on a big project may put the position that he or she wants a pay rise. However, upon further investigation, the interest behind the position may not be the need for extra money, but the need for recognition within the organisation. Settling such a dispute may involve working out ways to give the employee more recognition within the workplace that may or may not involve a pay rise. So the settlement would be based on the interest of the employee as opposed to the employee’s position. Under the principled negotiation model, it is important that negotiators have a clear understanding of their own interests, in order to fashion a settlement that suits interests as opposed to positions or possibly satisfy both. Further, it is important to have some idea of the other side’s interests for similar reasons.

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Principled negotiators should go through the intellectual exercise of delineating between positions and interests in order to be certain that negotiations are proceeding on the right footing. It is generally acknowledged that a settlement based on positions will not last if the interests of both sides have not been satisfied. This is because the negotiation has failed to satisfy why the party created the dispute in the first place. Finding the underlying interests is the challenging part of negotiation. A negotiator’s own interests can be easily discovered by the negotiator asking her or himself or their client, what is actually driving the dispute and what the negotiator or the client wants out of the negotiation. More challenging is considering what the other side’s positions and interests are. To achieve this, it is necessary to ask open-ended and probing questions pertaining to the reasons behind the dispute and what the other side wants out of any settlement and why. It is a trial and error process, and after probing the other side for a negotiator should begin to recognise and understand what the interests of the parties are, after which it starts to become obvious what sort of solution will be necessary to resolve the dispute. Options

[2.160]

Often considered the most important of the seven elements, option generation becomes particularly important when there are only one or two solutions to the dispute on the negotiating table at the commencement of the negotiation. The central idea behind option generation is to increase the number of options, rather than try and distribute the existing options that may have caused the dispute in the first place. In other words, do not ask, “How can I divide up existing options?” Rather, ask, “How might we create more options?” If it is possible to create more options which satisfy the parties’ interests, then the original options being argued about may be reduced in importance to the point that agreement is reached. The other benefit to option generation is that it allows the negotiation to develop and not prematurely conclude. If there is only one option at the start of the dispute and either you or the other side dislikes that option, then the negotiation could conclude before it has a chance to succeed. Multiple options assist the negotiators and make selecting a package of options that may form the ultimate resolution of the dispute so much easier to arrive at. In principled negotiation there is only one golden rule when it comes to generating options – make sure those options are consistent with the interests of the parties. If they are not, then the negotiators may be wasting everybody’s time because the dispute may not settle or may not be fully implemented. Clearly, options must satisfy the interests of the parties. However, it is inevitable that some options will satisfy one party’s interests more adequately than the other’s interests. The skill of the negotiator is to

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tailor options that fit both parties’ interests. In this respect, negotiators should educate parties to the fact that interests may change or adapt to the available options. In a negotiation there are several ways to generate options. One of the most effective ways is through an option generation session (sometimes known as “brainstorming”). Such a session needs to be conducted carefully and with great patience. The only way to become skilled in option generation sessions is to run them as often as is needed during negotiations. Negotiators should consider running an option generation session when any of the following events occur: • the negotiation is failing to achieve any agreement; • there is only one option for settlement on the negotiating table; or, • the parties have run out of ideas on any one issue in dispute. Running an option generation session is not difficult. At the appropriate time mention to the other side that it may be a good time to hold such a session. Explain the rules of option generation, which are: (a) Create a non-judgmental atmosphere. The idea is to get as many options tabled as possible. It is important to try and get a momentum of ideas going. Do not stop and discuss the merits of each idea – that will come later. People will be afraid to come forward with ideas if they know that each idea is going to be subjected to scrutiny by the other parties. Ideas are more prolific in a non-judgmental atmosphere. (b) Options, not solutions. The aim of the exercise is not to generate solutions, rather, options that may be fashioned into solutions at a later time. Therefore, only seek ideas without any discussion on how any given idea will become a solution. Ensure that the parties understand that options not solutions are being sought. (c) Seek multiple options. If a party comes to a negotiation with one option and the other side hates it, then the negotiation is a waste of time. The more options there are available, the more chance that some combination of those options will satisfy the parties. (d) Encourage the use of zany ideas. Sometimes the craziest ideas spawn the winning idea. Therefore, encourage such ideas as they may provide the impetus for a workable solution. Option generation sessions can be made more productive by “going visual”. That is, by using white boards or similar visual aids, parties are encouraged to contribute when they see ideas going up on a white board for all to see. A momentum starts to build and ideas encourage other ideas, to create a melting pot of options. One important factor in running successful option generation sessions is to ensure that everyone present is included and encouraged to contribute. Therefore, it is apparent that the success or failure of an option generation session comes down to the skill of the negotiator or negotiators to ensure all the parties are engaged in the process and making contributions. This also assists later on when moving

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from options to solutions as the parties will feel committed to any resolution as they have all contributed to it through the option generation session. Alternatives

[2.170]

Negotiators should always be aware of the course of action to be taken if the negotiation is unsuccessful. In principled negotiation parlance, this is generally referred to as the “best alternative to a negotiated agreement” (BATNA). It is essential for the negotiator to have considered her or his own, or their client’s BATNA before entering the negotiation, otherwise, how will the negotiator know when a settlement proposal is better than terminating the negotiation? In this respect, the BATNA is generally the outcome of the negotiator walking away from the negotiation. Fisher and Ertel (pp 45-46) describe this in the following way: If you get pushed to your bottom line, should you walk away? You should do so only if your bottom line is based on what you could get elsewhere, your alternatives; and only if the best of those, your BATNA, is better than what is on the table.

Negotiators should use their BATNA to determine when a proposed settlement is a better alternative to walking away from the negotiation, and to focus on the interests motivating the negotiation. However, do not let BATNA rest there; rather, consider the other side’s BATNA for the same reasons. It is particularly important to clearly understand the other side’s BATNA in order to be able to make some assessment of when a settlement proposal should become attractive to that party. It also saves some time in making outrageous settlement proposals when you know such a proposal is far worse than the other side’s BATNA. In such a case, the other side would be better off walking away from the negotiation and living with their BATNA. Discovering the BATNA is relatively simple. From the negotiator’s own point of view, it is a matter of assessing what options are open should the negotiation fail. In other words, what will happen tomorrow morning if today’s negotiation fails to produce a result? The challenging task for negotiators is to discover the other side’s BATNA. This can generally only be done with some careful questioning about what the other side hopes to achieve from the negotiation and what they will do if the negotiation fails. Some common examples of BATNAs are: • • • • • • •

going to court; accepting the loss; discontinuing business or personal relations with the other side; keeping deposits or goods held; facing a disciplinary tribunal; ignoring the dispute and letting it drag on; and, seeking another dispute resolution process.

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Another useful element to understanding the other party’s BATNA is the opportunity that presents itself to deflate the other side’s BATNA. The other party may feel in a stronger position because her or his BATNA is stronger than that of the negotiator’s. For example, negotiator A’s BATNA may be going to court to recover money owed under a contract, whereas negotiator B’s BATNA may be to continue not to pay the outstanding amount under the contract. If A is in some difficulty regarding cash flow, then B’s BATNA is somewhat stronger than A’s – A cannot really afford to go to court to recover the outstanding amount. Therefore, as a negotiating tactic, A may need to deflate B’s BATNA in order to motivate B to settle the dispute. Some reliable methods of deflating BATNAs are to discuss with the other party: • adverse publicity – if the dispute continues or litigation is commenced the adverse publicity of the dispute continues until the dispute is resolved; • costs – including management and administration costs to run the dispute, legal costs, opportunity cost (the cost of missing potential business whilst running the dispute), net present value of a settlement ($100,000 today may be better than $150,000 in three years’ time, being the time it might take to achieve resolution of the dispute); • lost time waiting for a hearing date and attending court and/or arbitration; • uncertainty of a judicial or arbitral decision; and, • loss of relationship with the other party (in many relationships there may be a desire by one or more parties to maintain a relationship after the resolution of the dispute). Deflating BATNAs is about creating doubts about a party’s course of action should the negotiation fail. In the above example, A may like to ask B whether they have considered the adverse publicity should the dispute continue and it becomes known that B does not pay its bills. Further, whether there are other suppliers of the goods or services and the difference in quality and service that another supplier would provide. Another commonly used BATNA is in cases where parties obtain legal advice stating that they have a strong case, but in reality it is a fact that for every court decision there is a losing party who thought they had a strong case. Therefore, the best legal advice can still produce a losing case. Parties often do not understand the uncertainty of curial decision making and, once this is explored, that party’s BATNA may not look as good as it may have first appeared. The costs of court action and the time it takes to get a decision is another incentive to settle the dispute out of court and can be used successfully to deflate a party’s BATNA. Legitimacy

[2.180]

Before a negotiator agrees to the settlement of a dispute, he or she needs the comfort of knowing that they have not been taken advantage of. Nobody likes to feel “ripped off”. An example of providing legitimacy

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in a negotiation is the case of negotiating the price of a new car – it is easy to check whether you have paid a fair price accessing one of the many online car sales web sites to check the price or ringing other dealers to compare the price you have or are just about to agree upon. This is referred to in negotiation circles as using an “external objective standard” to provide legitimacy to the negotiated agreement. Fisher and Ertel (p 61) describe this in the following way: If I am going to persuade myself and the other side that a given agreement is fair, I will want to have on hand some external standards, precedents, or other objective criteria of legitimacy. Such principles and standards help negotiators choose among the options they have generated and give both sides something to point to when explaining why they accepted a negotiated settlement.

Another good example of external objective criteria is legal precedent, scientific fact or, a price benchmark, that is the price other tradespeople or professionals charge as a benchmark that may be used to legitimate a negotiated agreement. Lawyers should be particularly comfortable with the notion of using legal precedent to provide legitimacy in a negotiation as they spend a large part of their professional lives referring to common law precedents as way to advise clients. Other examples of external objective criteria include: • • • • • • • •

moral standards professional standards scientific standards company practice market value tradition costs charged by external organisations or associations, and seeking an objective expert opinion (for example, a valuer, engineer, accountant, etc).

The act of legitimating a negotiated agreement is a matter of comparing the agreement with the external standard and determining whether the parties are still willing to settle the dispute based on the agreed package of options that form the final resolution. The process of providing legitimacy to the negotiated resolution is important in the case of settlements that will be performed over a period of time after the negotiated resolution. In order to ensure that the parties stick to their agreement over the period of the settlement it is important that the parties feel that the negotiated resolution is legitimate. Communication

[2.190]

Many disputes exist because of mistaken, or a total absence of, communication between the parties. Therefore, when it comes to negotiation, it is important to have in place a system of communication that will allow the parties to conduct the negotiation in an efficient and

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transparent manner and that will not give rise to further disputation. Further, it is important for each party to the dispute to have a clear understanding of what each other thinks about the dispute and how best to resolve it. Many people who are in dispute believe that simply arguing strongly will change the other party’s mind and an agreement will be reached. Those people have sadly missed the point when it comes to negotiation. Negotiation is about compromise, not about one person being right and the other being wrong. In other words trying to change the other side’s mind is a waste of time because chances are they will not change their mind. They may have been living with the dispute for weeks, months or even years and if you think you can change their mind in one or more negotiation sessions then you are sadly mistaken. In a negotiation, parties should not seek to change the other side’s mind; rather, parties should seek to ensure that they understand the other party’s interests and fashion a resolution based on those interests. Generally, the best way of achieving this effectively is by agreeing on a method of communication that will allow a free flow of information without the usual subjective criticisms into which disputes often deteriorate. In relation to setting in place an effective method of communication, parties should address their minds to: • clearly defined contact points; • clearly defined levels of delegated authority; • systems for the flow of information such as email, fax, surface mail and others; • reporting mechanisms; • clearly defined meeting agendas and templates for minutes and other key documents; • perhaps a neutral venue for meetings; • an agreement not to speak about the negotiation to others including the media; • clearly defined action lists for tasks to be completed during the negotiation and for implementation of any resulting settlement; and, • any other simple but effective systems that will ensure that the parties have a workable level of communication that will enable the negotiation to proceed and for any settlement to be properly implemented. Encouraging parties to communicate their own interests effectively in a negotiation is probably the most difficult task of all the seven elements. One way of successfully achieving a free flow of communication is via the use of role reversals. This is the method of setting up an artificial situation whereby, for example, Party A accepts the positions and interests of Party B and considers and argues those positions and interests back to Party B. In other words, you adopt the other party’s argument and argue it to the other party thereby giving you a greater understanding of the other party’s view of the dispute. After both parties participate in the role reversal they

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should have a greater understanding of the other party’s view of the dispute. Like most elements of negotiation, role reversals require practice to be successful. Relationship

[2.200]

As well as trying to force the other side to change their mind, negotiators often make the mistake of believing that at the end of the negotiation, the parties should be friends. In most disputes this is clearly unrealistic. The aim, in terms of relationships, is to build trust that any negotiated settlement will be adhered to and, should there be a desire to have a future relationship, an attempt to lay the foundations for that future relationship. It could be as simple as a verbal statement of trust and honesty throughout the negotiation or it could be something more tangible such as stating in detail the expected behavior of the parties as part of a written agreement to negotiate. Another common mistake is that negotiators confuse the people who are involved in the dispute with the actual problem that has caused the dispute. The only method preventing this is to clearly understand the difference between a people issue (rudeness, arrogance, etc) and a problem issue (terms, conditions, timing, cost, etc). In this way, should negotiations go off the track and degenerate into personal abuse, the skilled negotiator can put negotiations back on track by referring to the actual substantive problem giving rise to the dispute. However, negotiators should not ignore relationships, as they may be critical to the success or failure of the negotiation. At the end of the day, what matters in terms of a resolution to the dispute is that there exists a sufficiently adequate relationship between the parties that will allow the negotiation to proceed and, should a resolution be reached, a sufficiently satisfactory relationship that will allow any settlement plan to be fully implemented. Whether the relationship will only last as long as any proposed settlement option or whether there is a desire for a longer relationship, the issue is best raised early in the negotiation and for intentions to be clearly stated. Treating each of the parties with some respect is a good starting point and will hopefully build the right sort of foundations for a trusting relationship, even if it only lasts until the end of the successful resolution of the dispute. Negotiators may have to consider being empathetic towards the other side and using some of the sponging techniques discussed at [2.90] in order to achieve a useful relationship between the parties. Usually any investment that builds a better relationship between the parties in dispute is a good investment that will bear fruit throughout and at the conclusion of the negotiation.

Commitment

[2.210]

Commitment refers to the negotiators having a clear understanding of what the process looks like at its various stages. For

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example, a skilled negotiator should have a firm understanding of the potential outcome of any negotiation phase. This does not mean predicting the substantive outcome of negotiations, rather, it means being able to accurately describe at what stage the process is at and what outcome they can expect at that stage. The outcome could be: a document; more research; an analysis of certain information; or, a first offer to settle. According to Fisher and Ertel (pp 98-99) to achieve this, negotiators may employ the “three Ps” approach: (a) Purpose – plan the purpose of the meeting or negotiation phase by knowing what product you hope to have in your hand at the conclusion of the meeting or phase. For example, it may be a document or a white board full of options, which at the next phase of negotiation can be transformed into solutions. (b) Product – define the product adequately so that participants know what they need to achieve and when they have fallen short of, or exceeded, the desired product. (c) Process – plan the process for achieving the purpose and the product. For example, an agenda or set of guidelines may assist in achieving the process and producing the product.

The above should come as no surprise to anyone involved in managing people in an organisation and forms the basis of competent management techniques. Like attending a business meeting, a negotiation session should have a clear understanding of the purpose, product and process, and the parties need to agree on these matters before each phase of the negotiation process. Further, parties should plan for commitment. In other words, decide how best to achieve commitment from the other party. It may be by drafting a document that forms the basis of the final agreement, or it may be by each party committing to return to the next meeting having completed some “homework”. It does not really matter what the commitment is, as long as there is some mechanism for building commitment into the final resolution.

PRINCIPLED NEGOTIATION – HOW TO DO IT? [2.220]

People tend to negotiate based on their positions rather than their interests. In other words, people are naturally adversarial negotiators. They tend to do this either consciously or subconsciously. Chances are adversarial or positional bargaining is the way they have negotiated all their life and the way they are most comfortable negotiating. The reason they tend to do this is because arguing positions is easier than arguing interests. It is easier to simply argue what you want from the other side as opposed to why you want it. Also, some people think that disclosing their interests will weaken their chance of winning. Both reasons are flawed in their logic however, often in a negotiation one party is concerned that they have no control over the other party’s positional bargaining tactics. Or do they? When it comes to a negotiation, negotiators have clear choices. They can both negotiate based on positions and hope they can negotiate more

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convincingly than each other or they can change the negotiating game and negotiate based on interests. Negotiators who choose the former will probably need good luck! For a negotiator to commit him or herself to negotiate positions better than the other party is very brave indeed. Remember, the other party has probably been negotiating the same way all their life, and if they negotiate for a living, they are probably very good at it. Also, as previously stated, settlements based on positions have a poor chance of successful implementation. The best advice is not to attempt to negotiate based on positions. The other choice is to change the rules and negotiate based on interests. Change the dynamic of the negotiation by ensuring that the negotiation is interest-based as opposed to being adversarial or positional. Fisher and Ury have developed four very simple techniques based on the above seven elements of principled negotiation which allow a negotiator to expertly move another negotiator from being adversarial to being principled.

Objective criteria [2.230]

Negotiations often become stalled because of extreme positions that divert each party away from discussing their interests. This is the classic negotiating technique of an adversarial or positional negotiator. In such situations, negotiators should call on any extreme positions to be justified by the party making them. Asking a person, who has just made a statement that promotes an extreme position, to justify the position, has a profound effect on that person and changes the dynamic of the negotiation significantly. First, it prevents any points being won on what is likely to be false information or just an extreme view of the outcome of the negotiation. Secondly, it can embarrass the advocate of an extreme position, because the chances are that he or she cannot justify the position, and therefore it assists in neutralising any power imbalance present in the negotiation. Finally, it prevents future outbursts as the other party will begin to think twice before making any statements that contain extreme positions, knowing that a skilled negotiator will ask them to justify the statement. Another way to move an adversarial negotiator to be a principled one is to call for the use of objective criteria. This is a simple technique that involves testing the other party’s exaggeration or demand with external objective criteria. For example, if the other side argues that the quantum of a claim is to be assessed at no less than $250,000, then, before accepting that price, the skilled negotiator would check that estimate based on objective criteria, such as having the quantum checked by a valuer or quantity surveyor. Perhaps, to get a cross-section of objective criteria, if the money and the time are available, have two or more valuations and present an average as the objective value of the quantum claim. Here an external objective criterion has been used to challenge the other party’s claim. Objective criteria are often hard to argue against. In this respect, they are a useful tool in ensuring that principled negotiation triumphs over positional bargaining.

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Other examples of objective criteria have already been discussed above but may include the acceptance of an industry wide standard, legal precedent or previous agreements between the parties. When raising the issue of objective criteria it is often best to phrase it as a question, for example, using the above quantum scenario. One party may wish to ask another: “Given that the quantum, based on a number of independent valuations, appears to average out at $200,000, persuade me why I should settle the dispute for the $250,000 you are currently insisting upon?” In using objective criteria, Fisher and Ury (pp 91-98) suggest a three step approach. First, frame each issue as a joint search for objective criteria. In other words, if possible, do not approach the search for objective criteria as the negotiator’s own idea otherwise the other party may reject it on that basis alone. If the negotiator has objective criteria in mind, do not present them as a fait accompli, rather phrase it in such a way that will lead the other party to believe it was their idea. Also, seek out the other party’s theory on finding objective criteria and then agree on what principles should govern such criteria. A series of questions governing these principles could be as follows. If one were to exist, would you consider some sort of objective criteria? What criteria do you think would constitute such objective criteria? So we agree that a market value based on recent sales is an appropriate criterion? I believe that the Australian Institute of Valuers and Land Economists would be able to provide such information – would you like to request it?

Secondly, it is important to be reasonable and open to other suggestions. Objective criteria will only guide the parties in reaching a resolution. They are not a panacea of negotiation. For example, in our dispute over the quantum of a claim scenario, an independent valuation may provide a figure of between $200,000 and $210,000 for the subject claim. But the party claiming compensation may argue that the goods were of a better quality than comparative goods, therefore, they were worth more. In this case, even though the other party did not necessarily want goods of such high quality, he or she may have to be prepared to reason that given the quality of the goods, the additional value of the goods may be justified to a certain extent. Objective criteria will not always produce the final result that the negotiator seeks, but usually they will help to provide an objective foundation for the negotiators to build on. Thirdly, negotiators should never yield to pressure. Any negotiated settlement should satisfy the interests of the parties. Certainly negotiation is about compromise, but it is not about accepting something under pressure or duress. Leaving aside the legal ramifications of settling a dispute under duress, if put in a position of duress or pressure, a skilled negotiator may wish to conclude the negotiation without agreement or adjourn the negotiation to an occasion where the other party does not need to rely on pressure or duress.

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Separate the people from the problem [2.240]

Some negotiators often focus their attention on the parties rather than the substance of the dispute. As with most negotiating styles, this occurs either consciously or subconsciously. Once again, the problem with this sort of a focus in a negotiation is that the parties will not really discover each other’s interests because they are so focused on trying to establish liability, that is, whose fault it is. Whilst establishing liability is a necessary function of court hearings, it is largely a waste of time and energy in a negotiation. Negotiation clearly focuses on the future of the parties and how the dispute will be resolved, as opposed to looking at the past in order to establish liability. Generally there is little point in establishing liability in a negotiation. It will generally have no influence on the outcome of a dispute. A negotiator who focuses on the parties as a method of resolving the dispute will find it very unnerving to put aside the people and start discussing the problem and the interests that are driving the dispute. Fisher and Ury call this “separating the people from the problem”. So another way of moving an adversarial negotiator to become a principled negotiator is to separate the people from the problem and focus on the interests, not on the positions. However, some people often mistake separating the people from the problem as an indication that they should ignore the people totally. This is not true. As discussed above, negotiators will need to deal with the “people” issues in a negotiation if they are blocking a resolution. The communication skills of “sponging” and “reframing” discussed earlier in this chapter ([2.90] and [2.50] respectively) will be of assistance to the negotiator experiencing people problems in a negotiation. People issues should not be swept under the carpet in the hope that they will go away. If the negotiator and the other party feel it is important, people issues should be addressed. In this respect, negotiators may have to listen and empathise with the other party. However, after having dealt with the emotions or relationships of the people involved, it is more constructive to move on to the substantive problem. The point is simply this, do not allow the people issues to dominate the substantive outcome of the negotiation – deal with them and move on to the substance of the negotiation. There are a number of techniques for separating the people from the problem. First, do not assign blame. When negotiators start blaming each other, it becomes a classic example of not being able to separate the people from the problem. Blaming is counterproductive. It matters little what has transpired prior to the day of the negotiation. Skilled negotiators look to what will happen tomorrow, not what happened yesterday or six months ago. Blaming is an exercise in history – negotiation is an exercise in the future. Secondly, recognise and legitimise the emotions. Contrary to popular belief, it is not only family law disputes that have emotions at play. Even large scale commercial disputes can have emotions blocking the

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negotiation process. Often the dispute has escalated simply because of the emotions. As already foreshadowed, relationships and emotions cannot be ignored, however, if applicable they need to be acknowledged and respected. Only then can the substantive dispute be tackled. Thirdly, try role reversals in order to have the other party understand the contrary point of view. It is better to warn the other party of the role reversal rather than just springing it on them by taking the approach that you are having trouble understanding the other party’s interests in the dispute. Therefore, ask the other party if it would be suitable to try to advocate the other party’s position in the dispute, and after doing so, have the other party explain where you have misunderstood. Then have the other party advocate your position in the dispute and try to distil the interests accurately. In a negotiation the other side does not want to feel on the defensive all the time, therefore, be prepared to be the first party to reverse roles. In fact, many skilled negotiators start off a role reversal by first reversing roles themselves, after which it does not seem too awkward for the other party to play along. An example of the type of wording to use may be: Let me step into your shoes for a moment. I would be very upset if my constant requests for payment of a debt were ignored and I would consider sending a statement of claim from my lawyer via a process server without any further notice. So I understand why you did it. However, if you now step into my shoes with the knowledge that I tried to reach you on several occasions to resolve the outstanding debt and the mistaken deliveries but was told on each occasion by your accounts clerk that your terms were 14 days and you would be taking court action, how would you feel?

Role reversals are challenging to run properly and novice negotiators may experience several disasters before perfecting the art of the role reversal. However, when a role reversal works, it usually has a dramatic effect, because for the first time the other party sees and understands the problem through a different set of eyes – in other words they see the other side of the dispute through their own eyes. Remember, the role reversal does not seek to change the other party’s mind, it only seeks to have the other party understand your interests and vice versa. Finally, try to give the other party a stake in the outcome. When people feel a sense of ownership in a resolution, they are more motivated to ensure that it is successfully implemented. This generally means that settlements should be the result of a joint approach to option generation and a joint settlement fashioned from those options. Also, try to fashion settlements to be consistent with both parties’ values and perceptions. People will agree to the familiar far more quickly than the unfamiliar.

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Positions versus interests [2.250]

Positions are usually the first reaction to a dispute. Interests are what drive the positions. Therefore, it is important to find out the nature of the existing interests in order to understand the reason for the dispute and more importantly how a resolution may be reached. We all tend to be comfortable arguing the positions, believing these to be the key to resolving the dispute. Discovering the interests behind a dispute can be achieved by questioning the other party to determine what is motivating them to maintain the dispute and what their needs are in terms of an acceptable outcome. Using open-ended questions will return information on what is behind the positions first espoused. Referring to our quantum scenario above, we may find that the plaintiff would consider reducing their claim to $200,000 because, for example, they have an annual interest repayment due on a loan. Their position is that if they can make that payment, then they will save $10,000 in carrying over the payment into the next financial year. Using some open-ended questions, such as “Are you in a hurry for the payment of any money agreed upon at this negotiation?” may reveal the interest of the bank payment that is due by a certain date. Further questioning may result in discovering the fact that the bank may call in the loan if the payment is not met by the due date and that this would create a problem for that party’s cash flow. Once the interests are exposed, the negotiation can canvass options to satisfy the interest, which may not necessarily involve the payment of $250,000 as per the original claim. In order to move an adversarial negotiator to being a principled negotiator you must ensure that the negotiation centres on discovering the interests of the parties and then negotiating a resolution based on those interests. Do not allow the focus of the negotiation to be on the positions of the parties or you risk an adversarial style negotiation that never achieves discovering why the dispute occurred in the first place.

Option generation [2.260]

Option generation has already been discussed (at [2.160]); however, Fisher and Ury suggest certain prescriptive measures other than option generation sessions to assist the process. First, look for mutual gains. People see things differently based on their experiences in life and the angle from which they approach the dispute. They see blame differently. They may have a different understanding of the facts. They may have a different perception of the outcome of the dispute. Negotiators should try to develop, with the other party, a single approach to the solution using mutual gains. For example, the first element in developing mutual gains is to identify shared interests. In nearly every dispute it is possible to discover and to develop shared interests. Even if it is only a desire to resolve the dispute, negotiators can build on that shared interest and use it as a

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foundation for resolution. Other shared interests may be a common desire to have a continuing relationship; to recommence the supply of goods or services; to have some form of payment made; or, to stay out of each other’s way. Once mutual gains and common interests have been explored, option generation becomes a little easier, because both parties are theoretically thinking along similar lines. Common interests also assist in making decisions easier and at the end of the day option generation is about creating as many options as possible, then agreeing on which package of options will be suitable in order to end the dispute.

SELECTING A MODEL OF NEGOTIATION [2.270]

The four models of negotiation discussed in this chapter each have their strengths and weaknesses. They also have their own unique approach to resolution as well as having elements that are complementary to each other. The models are unique in that: • adversarial negotiation is characterised by its lack of a consensual outcome and being zero-sum; • integrative negotiation is characterised by its reliance on trade-offs and concessions; • distributive negotiation is characterised by the limited distribution of a finite resource; and, • principled negotiation is characterised by the generation of options that satisfy the interests of the parties. These four models of negotiation can be used in isolation to each other depending on the facts of the dispute or the personalities of the parties involved in the dispute. However, while these models can be operated independently of each other, they also have features that allow them to be used in conjunction with each other to great effect. Figure 2.1 sets out the relationship between the four models of negotiation discussed in this chapter. Distributive and integrative negotiations are generally respectively employed where the dispute contains a single issue or multiple issues. However, it is possible to participate in distributive negotiation and adversarial negotiation at the same time. That is, a party can negotiate in an adversarial way that ultimately leads to the distribution of a finite set of existing items or resources. This merely requires parties to preserve self-interest while distributing the finite resource or existing item. It is also possible to participate in distributive negotiation while observing principled negotiation. In such a case, a party can distribute an existing option along interest-based lines. A party simply seeks to negotiate their share of the finite resource or existing option while at the same time seeking to base that distribution on satisfying their own (and the other side’s) interests. Admittedly, the other crucial element of principled negotiation would not be satisfied in such a scenario, that is, the generation

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of options. However, it is possible to satisfy the core element of interest-based or principled negotiation while still participating in distributive negotiation. Integrative negotiation requires parties to reach an outcome based on trading options and making concessions. As in the above description of how principled negotiation relates to distributive negotiation, parties can participate in integrative negotiation while at the same time adopting principled negotiation. This means basing trade-offs and concessions on interests. Given the multi-issue nature of integrative negotiation, it also means partially satisfying the other important element of principled negotiation, that is, option generation. While it can be said that under the integrative model new options are not necessarily generated, existing issues traded off against each other can be a substitute for the generation of options. The process of making concessions is akin to the process of developing a settlement based on the generation of options, that is, option generation does not seek to ensure that every option is part of the ultimate settlement. Rather, concessions are constantly made in principled negotiation to create a package of options that ultimately forms the settlement. The most problematic link between the four models is that between adversarial and integrative negotiation. Clearly, trading options and making concessions is an anathema to adversarial negotiation. If a party is adversarial in negotiation, then it is presumed that they would not be trading any options and making any concessions. Adversarial negotiation relies on the acceptance of a zero-sum negotiation. In this respect, it is difficult to argue that a party can participate in adversarial negotiation while at the same time participating in integrative negotiation. However, it is feasible for parties to generate options then negotiate for them in an adversarial way where every gain is at the expense of or loss to the other side. One of the most common questions asked by negotiators is, “What is the most successful model of negotiation”? or “Which model should I employ?” There is no standard answer to these questions. However, negotiators should consider the following issues when seeking to answer those questions. Which model will the parties to the dispute respond to better? Do the parties have experience successfully using one model over another? What are the issues to the dispute and are they susceptible to one model over another? Are there multiple issues or a single issue that suggests one model over another? What is the time and cost to be invested in the negotiation?

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As a general observation, principled negotiation will generally satisfy parties more often than adversarial negotiation. The interest based nature of principled negotiation means more satisfying and long lasting resolutions are generally yielded from such a process. However, negotiators should not reject adversarial negotiation for no reason. It has its uses. For example, in a small scale dispute where the issue is a simple disagreement as to the value of a good or service, adversarial negotiation can be quick and cheap. For example, in the case of the sale of real property or a car, parties are best placed to simply negotiate in an adversarial way over the price. Generally there is neither the time nor the necessity to delve into the interests of the parties. A simple “Dutch auction” can take place that will achieve the desired outcome for all involved. Further, price may be the only issue and such a quick model of negotiation will be more appropriate in such cases. Figure 2.2 The relationship between the models of negotiation

Another use of adversarial negotiation is after a lengthy principled negotiation where the only outstanding issue is that of quantum and the parties are not very far apart in terms of amount. It may be easier to “split the difference” and bring the negotiation to a rapid close, than to try and establish an amount based on interests. At the end of the day it is up to the parties as to what they will accept or reject in terms of a potential settlement. Therefore, if the parties can live with a “Dutch auction” or a “split the difference” result, then so be it. One should not become sycophantic over the use of one model over the other at the expense of the parties’ needs. Negotiators need to understand the four models of negotiation and to employ them on a “needs” basis. In other words, assess the issues raised

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above to determine the most suitable model to be employed and then be prepared to move into a different model of negotiation should the situation demand. Flexibility, knowledge and the ability for the negotiator to read the situation are critical elements to a successful negotiated outcome.

3

Mediation DEFINING MEDIATION

[3.10] Mediation as a formal process has been described by NADRAC as being: a process in which the parties to a dispute, with the assistance of a dispute resolution practitioner (the mediator), identify the disputed issues, develop options, consider alternatives and endeavour to reach an agreement. The mediator has no advisory or determinative role in regard to the content of the dispute or the outcome of its resolution, but may advise on or determine the process of mediation whereby resolution is attempted. Mediation may be undertaken voluntarily, under a court order, or subject to an existing contractual agreement. An alternative is a process in which the parties to a dispute, with the assistance of a dispute resolution practitioner (the mediator) negotiate in an endeavour to resolve their dispute. (See the Dispute Resolution Terms at the Commonwealth Attorney-General’s website, https://www.ag.gov.au/LegalSystem/ AlternateDisputeResolution /Documents/NADRAC%20Publications/Dispute%20Resolution%20Terms.PDF.)

The key elements of the above definition are: • that the parties to the dispute are assisted by a mediator; • issues are identified; • options are developed; • there is an effort to reach agreement; • the mediator is not an advisor; • the mediator does not make a determination; • the mediator may advise on the process that will lead the parties to resolution; • mediation may or may not be voluntary. As will be seen in this chapter, some of these elements of mediation change depending on the type of mediation being practiced, a factor largely determined by the mediator and the desire of the parties to have the mediator move the mediation in a different direction to what may be described as a “classical mediation model”.

HOW MEDIATIONS ARE NEGOTIATED [3.20] Chapter 2 discussed four models of negotiation. This chapter will discuss the “classical mediation model”, by which is meant a series of

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procedural steps that are universally accepted as constituting mediation. It also means that the mediator remains neutral as to the process and parties by not giving advice or making a determination. But how do the negotiation models and the mediation model fit together? The negotiation models describe “what to do”, while the mediation model describes “how to do it”. Perhaps another way of stating this is to say that negotiation is the “substance” whilst mediation is the “form”, that is, the time spent in mediation is spent negotiating but the structure of the negotiation is the process of mediation. The process of mediation most commonly requires mediators to discuss issues, options and settlements with the parties under the umbrella of principled negotiation. Most mediators, therefore, are trained to conduct principled negotiation within the procedural parameters of mediation. However, any of the four models of negotiation can be used within the procedures of mediation. Using principled negotiation, mediators will try and focus on discovering the interests of the parties. When the mediator is trying to generate options for settlement, he or she will adopt the option generation skills of the principled negotiation model as well as ensuring that people are kept separate from the problem. Also, the mediator may use external objective criteria to assist in order to test extreme positions and provide some element of legitimacy to the options being used to fashion the settlement. When the mediator is helping the parties fashion a settlement proposal, she or he will generally ensure that the seven elements of negotiation have been addressed. So, while the mediation model sets out a procedural framework for the conduct of mediation, the negotiation model sets out how to get the parties to negotiate during the mediation. Chapter 2 discussed adversarial negotiation. It should be noted that mediation is premised on the idea of discovering a party’s interests and option generating based on those interests, until a suitable settlement is achieved that all of the parties to the dispute can live with. The idea of conducting separate sessions, a procedural issue to be dealt with at [3.110], is to investigate beyond positions enabling the mediator and the parties to discover the real interests that are driving the dispute. Therefore, it can be said that mediation is based on parties negotiating in a principled way as opposed to an adversarial way. However, it is important to understand that at some point in mediation it may be appropriate to employ adversarial negotiation. For example, at the conclusion of mediation where other issues have been resolved based on satisfying the interests of the parties to the dispute and where the only remaining issue is the quantum of an amount agreed upon to be paid by one party to the other. In such circumstances, it may be appropriate to use adversarial negotiation to settle the question of quantum on that final issue. In this respect it is possible for principled and adversarial negotiation to be used in a complementary way in any given mediation.

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THE MEDIATION PROCESS – FOUR MODELS OF MEDIATION [3.30] What follows is a description of the “classical mediation model” generally accepted as being the basic mediation model used in Australia and around the world. However, it is important to understand that one of the hallmarks of dispute resolution is its flexible nature. That is, dispute resolution is adaptable to the type of dispute being mediated and the personalities involved. In some respects, one of the great strengths of dispute resolution is that the parties themselves are empowered to create a dispute resolution process that will assist them to resolve the dispute. Therefore, mediation is not rigid in terms of its ability to change to the needs of the parties. So, while the classical model will be discussed below, dispute resolution practitioners should feel free to adapt the model to suit the needs of the parties. It is, of course, essential that the parties themselves drive any process of adaptation and mediators should also be sensitive to the fact that some parties prefer the mediator to almost impose a procedure on them and police it during the mediation. The flexible nature of the process is what makes it so successful and ensures that the parties are actively involved in the outcome – an opportunity they do not receive in curial adjudication. In recent times mediation has begun to be classified in different ways that are hybrids of the classical model of mediation. For example, Professor Laurence Boulle (pp 43-48) describes four different models of mediation in his text Mediation: Principles, Process, Practice (3rd ed, LexisNexis, Sydney, 2011): i) Settlement mediation – where parties are encouraged to negotiate towards compromise at a central point between the parties’ original positional demands. ii) Facilitative mediation – where parties are encouraged to negotiate based on their needs and interests instead of their strict legal rights. iii) Transformative mediation – where parties are encouraged to deal with the underlying cause(s) of their problem(s) with a view to repairing their relationship through recognition and empowerment as a basis for resolution. iv) Evaluative mediation – where parties are encouraged to reach settlement according to their legal rights and entitlements within the anticipated range of court or tribunal remedies or industry outcomes.

These different mediation models are divergent in terms of the basic principles of mediation being applied to all four models. Where they differ is in the emphasis the mediator and the parties place on how they arrive at an outcome and the actual outcome of the mediation. For example, a mediator who subscribes to the transformative model of mediation may emphasize the repair and/or improvement of relationships as being the optimal outcome and will focus the parties on this issue as a way to help them reach settlement. On the other hand a mediator who subscribes to the evaluative mediation model will attempt to assist the parties in a more robust fashion to settle based on the substantive issues in the mediation by encouraging them to consider more rights based solutions. As you read through the process of mediation below keep these four different models in

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mind and consider where the classical mediation model fits one of the four hybrid models and where it will need to be modified in order to accommodate the type of mediation model being utilised.

PREPARING FOR MEDIATION [3.40] Some statutory schemes have intake or screening procedures where disputes and disputants are assessed for their suitability for mediation. Generally, most mediation programs, other than, for example, victim-offender mediation, will not accept for mediation matters where there is any evidence of violence (domestic or otherwise), or child abuse. The view of most mediation programs is that these sorts of matters are best placed before the courts where State imposed punishment and rehabilitation is the appropriate action. For other disputes, screening procedures for mediation generally involve some, or a combination of, the following considerations. • Motivation of the parties to attend and participate in mediation in good faith. • Desire to mediate after the parties have been advised of what the mediation process involves. Some parties shy away from mediation once they know that generally they have to take an active role in the process. • The availability of the parties and whether they have authority to settle the dispute. This is particularly difficult in the case where a party is a corporation, and a Board of Directors have the ultimate decision making power for compromising a dispute. If it is not possible to have all the decision makers at the mediation, then alternative arrangements may need to be considered, such as, a special briefing session for external constituencies in order for final agreement to be achieved. • The availability of information and stakeholders in the dispute affecting the outcome, but only as it affects the implementation of potential settlements. If there are people and information that will be required to assist in the implementation of any agreed settlement, then the mediation will benefit by access to those people and information and their acquiescence to any proposed settlement that involves them. • There are no insurmountable power imbalance issues. That is, are the parties willing to negotiate in an environment free from intimidation? In a commercial context, is there a power imbalance in relation to legal, financial and commercial resources that could be used destructively in mediation? In a domestic context, is there a power imbalance in relation to, for example, intellectual or emotional intimidation? If the mediator detects any insurmountable power imbalances, then it may be better not to proceed with a process that could make matters worse between the parties. Apart from the necessary process of assessing a dispute for its suitability for mediation, it is also useful to have some idea of the nature of the dispute and whether a particular type of mediator would be beneficial. For example, mediation of a complex technical matter may benefit from having

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a person with some understanding of those technical issues. In this respect, an intake or screening process can also begin to canvass agreement on the identity of the mediator. The selection of a mediator is an important step in the process, not only from the procedural view of moving the mediation forward, but from the philosophical view of empowering the parties to determine for themselves who should act as the third party intermediary. This reinforces the philosophical cornerstone of mediation that the parties are responsible for the substance of the mediation that commences with the selection of the mediator. Where an agency is involved in arranging the mediation, such as the Australian Disputes Centre in Sydney, parties are usually asked either to suggest two or more mediators or to select say three mediators from a choice of five or so submitted by the agency. The closest match will usually be asked to conduct the mediation. In considering mediators, parties will usually have for their perusal: the mediators’ resumes and curriculum vitas; the fees charged by the mediator; her or his availability; and her or his level of expertise in mediating, and in mediating certain types of disputes. If an agency is involved in arranging mediation, should the parties not agree on a mediator, then the agency will generally select one based on the parties’ needs. Where there is a dispute resolution clause in a contract, a common way to resolve a deadlock over the identity of the mediator is for the President of the respective State or Territory Law Society or Institute to select a suitable mediator, again, usually based on the needs of the parties and the type of dispute. As suggested above, the selection of the mediator is vital from the point of view of instilling in the parties confidence in the mediation process. Once the dispute has passed through any intake or screening procedure and a mediator has been selected, the mediator will usually require a statement of issues from each party at least 14 days prior to commencement of mediation. Where lawyers are acting for clients and the dispute is listed before a court, the temptation is to merely send the pleadings to the mediator as filed in court. This is not advisable. A mediator usually does not want to read the lawyer’s version of events as drafted in the pleadings. The mediator would much rather read the parties’ views of the issues in their own plain language. The reason for this is that the parties’ versions of events is likely to be uncluttered by legal jargon that focuses on factual accounts that promotes their own case in court. Further, it is unlikely to express facts relating to liability issues. Liability is somewhat irrelevant in mediation because mediation seeks to address what will happen in the future, unlike litigation that seeks to determine liability by evidence of past events. Therefore, when mediators seek a statement of issues, they generally do not seek a statement setting out one party’s version of the liability issue supported by evidence intended for use in court.

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Prior to the commencement of mediation, most mediators will require the parties to enter some form of mediation appointment agreement that covers, among other things: • how the mediator is to be determined and a mechanism should the parties not agree or the name of the selected mediator; • the amount and method of payment of the mediator’s fee; • the basic procedures to be observed in the mediation; • confidentiality of the contents of the mediation; • an exclusion clause excluding the mediator from liability; • an indemnity, indemnifying the mediator against any claim relating to the mediator’s performance and the outcome of mediation; • the requirement that parties send a person with the authority to settle the dispute; and, • a commitment that any settlement will be recorded in writing. Parties would be required to sign such an agreement and, given the confidentiality agreement contained within most mediation appointment agreements, any outside party attending the mediation would also be required to sign the agreement or a separate confidentiality agreement to ensure proceedings are likewise kept confidential as between the parties and any outsiders including court proceedings. A copy of the NSW Law Society’s Agreement to Mediate appears as Appendix 4 to this book. Once these preliminary matters have been dealt with, the parties. Some mediators require the parties and/or their representatives to attend a pre-mediation or preliminary meeting prior to mediation so that: the mediator can meet the parties; discuss the process and any concerns the parties may have; finalise administrative details such as venue and catering etc; and, to take the opportunity to start educating the parties, if they need to be educated, about effective ways to negotiate a settlement. This preliminary meeting can take place via telephone as is common in the Commonwealth Government’s Administrative Appeals Tribunal conferencing process or it may take place face-to-face. With the emergence of better technologies, there is no reason why such preliminary meetings could not take place via Skype or video conference.

THE PROCEDURAL STEPS OF MEDIATION [3.50] Once the parties have committed or been ordered to mediation, the mediator has been selected, the parties have given the mediator a statement of issues on the subject of the mediation, and the appointment agreement has been signed – the mediation can proceed. Because of the need for neutrality (an issue to be discussed at [3.230] in more detail), a neutral venue should be chosen for mediation, the exception being where there is some reason to conduct mediation at a specific site related to the dispute, such as being able to understand the dispute more easily by

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reference to certain equipment on site or, for example, because of the significance of a site in an indigenous land claim dispute. Mediators are largely responsible for the process, whilst the parties are largely responsible for the outcome. It is often said that mediators are guardians of the process while the parties are the guardians of the settlement. Therefore, the mediator should arrange suitable facilities, such as chairs, tables, whiteboards, audio-visual equipment and refreshments. Once the parties arrive, the mediator should introduce her or himself and ensure that the parties are acquainted with each other if they have not previously met, and with other people attending mediation such as lawyers, accountants, other experts and McKenzie friends (a person who may assist an unrepresented person in court by giving advice not representation, see McKenzie v McKenzie (1970) 3 WLR 472). After making the parties comfortable in the venue, the mediator should commence mediation by making an opening statement. Appendix 6 to this text sets out the NSW Law Society’s Mediation Guidelines as an example of one organisation’s view on how the mediation process should be conducted.

The mediator’s opening statement [3.60] The mediator’s opening statement is an important step. It is a time for the parties to check their understanding of the mediation process and ask any questions about how mediation will operate and their role in it. Also, it is a time for the mediator to reinforce with the parties that there is a process to be followed that will give them the opportunity to resolve the dispute, and that the mediator is a competent person who understands the mediation process and can help them achieve a successful outcome. The elements of the opening statement may vary from mediator to mediator, however, the following list of items are commonly discussed in a mediator’s opening statement. • If not previously introduced at a preliminary meeting to discuss admininstrative issues, the mediator should introduce him or herself, welcome the parties and their support teams and make them comfortable so they are ready to mediate. • The mediator should check the contact details of all the parties attending mediation and their roles. It is important for all parties attending mediation to know why each person is present and what role they intend to play. The parties themselves should be comfortable with other stakeholders attending and such attendance should be discussed prior to the process commencing so there are no embarrassing moments at mediation. The mediator should check that everyone present has signed a confidentiality agreement whether as part of the mediation agreement or a separate confidentiality agreement, usually signed by third parties to the dispute to ensure mediation remains confidential. • The mediator should check that the parties and/or their support team have the authority to settle the dispute. There is nothing worse for

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parties attending mediation than to discover, after having worked for many hours negotiating a settlement, that one or more parties do not have the authority to settle the dispute. For example, where one or more parties are corporations, mediators should always check if the Board of Directors have authorised the representative attending mediation to settle. Similarly, in a claim involving quantum, check if there is a maximum amount of money that a representative can go up to before having to receive the Board’s or other authorised body’s approval. If a representative is only authorised to go up to a certain amount of money in order to settle the dispute, then the representative should not be pressed to disclose that amount early in the mediation process rather, the representative should be asked to advise the parties during mediation when the proposed settlement has exceeded the representative’s authority. Where a party or representative does not have the authority to settle without the approval of an external constituency, mediation may still continue. However, all parties need to be aware of this so that mediation can proceed on the basis that authority needs to be sought before final agreement is reached. Another way to handle this situation is if there is a person or persons capable of instantly settling the dispute, then perhaps the parties to mediation should consider adjourning it until such time as those persons can be present or to have those people available by telephone at the conclusion of mediation for final approval of any settlement reached. It does not matter which of the above methods is employed to handle the issue of authority, as long as all parties are aware of the issue and all parties agree as to how to deal with it. • For parties attending mediation who were not privy to the selection of the mediator, it might be a good idea for the mediator to briefly introduce her or himself by canvassing their qualifications, training and experience. • The mediator should make it clear that he or she does not have any connections with any of the parties to the dispute thereby vitiating any possibility of bias. This tells the parties that he or she is impartial as to the outcome of the dispute. This is an important step in the opening statement, because it relates to the confidence and trust that the parties need to have in the mediator and the process. Even small issues like membership or being a shareholder of one of the organisations a party to the dispute is important to declare during the opening statement (or hopefully at a preliminary meeting or correspondence) in order to dispel any possible accusation of bias against the mediator. Should there be a connection between the mediator and one of the parties that becomes apparent during mediation, the mediator should always seek the parties’ approval in writing for the mediator and mediation to continue. Once again, the power to decide who should mediate must always rest with the parties – they must have confidence and trust in the mediator’s ability to help them resolve the dispute. • The mediator should explain the procedural steps of the mediation that will include: – the parties making an opening statement; – the discussion of any common ground;

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– separate sessions or meetings (caucuses) with parties; – shuttle negotiating between the separated parties; – final joint meeting; – committing the settlement to paper; and, – practical implementation of the settlement. Each of these procedural steps will be explained in more detail below. • The mediator should point out to the parties two of the philosophical hallmarks of mediation. First, that mediation is a voluntary process (except where court ordered and in such a case must still be conducted in good faith) and the parties may withdraw at any time if they do not feel comfortable with the process or that they cannot achieve an outcome. Should this occur the mediator ought to discuss with the party considering withdrawing that such an action requires serious consideration and discussion and in that respect the mediator can assist a party in considering the ramifications of withdrawing from mediation. Secondly, that the mediation process is confidential and generally conducted on a “without prejudice” basis, meaning that any admission or disclosure of facts made during the course of mediation is protected from admission into evidence in a court hearing or any subsequent dispute resolution process. Further, parties are prevented from discussing matters arising in mediation with anybody or publishing them in any way with the exception of answering a subpoena issued by a court. • Penultimately, the mediator should check the availability of all parties in terms of how much time they have at any given session. Further, a discussion should be had on whether to continue mediation past any agreed finishing time if the parties agree it would be worthwhile to continue mediating, past any such stated time. • Finally, although the mediator should always accommodate questions arising along the way, it is important to offer the parties the opportunity to ask any questions about the process before commencing mediation.

The parties’ opening statements [3.70] One of the key areas in which dispute resolution differs from curial resolution is in the parties’ involvement in the process of resolution. This is exemplified in the very early stages of mediation where the parties themselves make an opening statement. While the other party or the mediator rarely interrupts the party who is making his or her opening statement, mediators should be mindful of one of the critical elements of principled negotiation that requires people being separated from the problem. In other words, mediators should be mindful of the fact that personal abuse and too much emphasis on liability issues will be counterproductive to mediation. In this respect mediators should control any personal abuse or an over emphasis on blaming the other side. Some mediators will set the parameters of the parties’ opening statements by suggesting that they stick to certain areas such as how they see the dispute and what outcome they seek through mediation which assists parties to focus on the future and not the past by wasting time on issues of liability.

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Mediators often find that when it comes time for the parties’ opening statement it can be awkward determining who should speak first. This can be resolved in a number of ways. Firstly, the mediator can explain to the parties that it does not matter who speaks first as both parties will get as much time as they wish to speak, after which the mediator asks for a volunteer. Secondly, if the dispute has got to the point where it is in the court list, the mediator may ask the plaintiff to speak first, given that the plaintiff is the person who initiated the action. Other methods include tossing a coin or allowing whoever arrived at the mediation first to speak, but while the issue itself is seemingly insignificant, mediators should be on the look-out for parties who will take offence at not having some say in who speaks first or be satisfied by a logical approach, such as allowing the plaintiff to speak first. At the end of the day, the mediator is the guardian of the process and should determine a simple way to resolve this issue. As discussed above, the parties should have supplied the mediator with a short statement of issues, so that the mediator will have a basic understanding of the dispute. A party’s opening statement is a time to inform the other party of matters that may be unknown to her or him and to give the mediator a fuller version of events than that supplied in the statement of issues. It is also a time for the other party and the mediator to ask questions, which will help fill out the details of the dispute. These sorts of questions should be encouraged, particularly questions that open a constructive dialogue between the parties. If such a dialogue can be achieved early on mediation, then the mediator’s job is made a little bit easier and the parties may have a better chance to settle the dispute. However, mediators should be wary of a party’s natural tendency to defend her or himself during the other party’s opening statement and to start the ‘blame game’ (an over emphasis on liability issues). This is counterproductive to the process of creating a healthy dialogue and achieving a workable level of communication. Therefore, this sort of behaviour must be controlled. Should this happen, mediators should politely point out to the party interrupting that he or she will have ample opportunity to rebut anything said when it is his or her turn to make an opening statement. As stated above, mediators should be reticent about interrupting the flow of a party during this crucial opening step in mediation. It is important for the parties to feel comfortable within the process of mediation and to be able to speak their mind in a constructive way. However, mediators should attempt to establish the interests of the parties at an early stage, so questioning techniques that target the interests can be of value. Also, if emotions are an element to the mediation, then an early expression of those emotions may help to remove any animosity between the parties. Depending on the nature of the dispute, some parties will not be comfortable speaking on the real interests behind the dispute or their emotions at this early stage of mediation. Therefore, mediators need to look

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for signs that a party is uncomfortable on these subjects and be prepared to raise them in a separate session where the party will probably be more comfortable speaking about them without the other party present. The mediator should impose no time limit on the parties’ opening statements, unless the parties have agreed on strict time limits because of other commitments. After one party has made an opening statement, the mediator should allow the other party to make her or his opening statement. The other important element for the mediator in this opening stage of mediation is to start understanding the positions and interests of each party. This will prove invaluable for the next step in the mediation process. If the mediator is not clear about the positions and interests of the parties, then the mediator should question the parties until he or she understands them. Before moving to the next step of the mediation model, mediators should reframe the parties’ opening statements to ensure that the mediator has understood the issues and that the parties are satisfied that the correct issues are to be discussed at the mediation.

Identifying issues and interests [3.80] After the parties have made their opening statements and replied to any issues raised, and both the parties and the mediator have asked any questions relevant to the opening statements, it is time to identify the issues to be mediated. Despite the fact that the parties have already stated their view of the issues to the mediator prior to the commencement of the mediation, other issues may have surfaced during the opening statements or subsequent questions. The mediator should identify the issues with the assistance of a visual aid such as a white board or even large pieces of paper that can be hung up on a wall. The reason for “going visual” is that it helps parties to see what issues are to be discussed at mediation and in that respect it helps create an agenda for the mediation session, thus satisfying the “commitment” element of the seven elements of negotiation as discussed in the previous chapter. Further, seeing the issues displayed visually can often have a comforting effect on parties as they see that the issues have been validated, are not insurmountable, rather, they can be easily and simply expressed on a white board; therefore, they should be easily and simply resolved with some thought and co-operation. At this early stage of mediation, the parties will be cognisant of their own and the other party’s positions, but they will have little appreciation, or understanding, of the difference between a position and an interest. Therefore, it falls to the mediator to try and draw out the interests of the parties. In this respect, the mediator not only acts as mediator but as an educator. That is, the mediator educates the parties in principled negotiation by explaining the difference between positions and interests and asks them to consider their interests at this stage of mediation. The communication skill of “reframing”, as discussed in Chapter 2, is a very useful method of encouraging the parties to recognise their own interests

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and help the mediator commit those interests to the agenda of issues to be discussed. In other words, the mediator reframes the issues by drawing out the interests at play in the dispute. Whilst different mediators have different approaches to handling this stage of the mediation, one popular approach is for the mediator, with the help of the parties, to list the issues on the white board by phrasing those issues in the form of a question that discloses the interest of one or more parties. For example, in a simple contract dispute over the delivery of and payment for goods, the plaintiff’s issue might be receiving payment for the goods from the defendant. However, if the defendant was one of the plaintiff’s largest customers, the interest may well be securing future business from the defendant. In which case the issue between the parties could be reframed as the following question: “How can the parties agree on a payment schedule that will allow party A to continue trading with party B?” The other elegant feature of this method of identifying the interests and then posing them as questions is the reliance that once a question is posed, human nature dictates that we want to answer it. Seeing a question posed on a white board in mediation whets the parties’ appetites to answer it. In mediation the motivation of the parties is vital in order to achieve resolution therefore motivating parties to answer questions is a valuable tool in achieving resolution. Hopefully at the end of this process the mediator, with the assistance of the parties, has identified the issues and interests, and has committed them to a white board or similar visual tool in the form of questions, addressing the interests of the parties. The final element to this step in mediation is to prioritise the questions to be answered. Like any meeting agenda, items are numbered in some form of priority or logical sequence. Likewise in mediation, the questions should create an agenda and be prioritised or be in an order that is logical where some issues are dependent on the resolution of other issues. There are several ways of doing this, but one of the most successful ways is to select the easiest questions to find resolution on and list those early in the agenda. If the parties see some success early on in mediation, it will have a positive influence on them for the later, more difficult, questions. Once again, the skill of the mediator comes to the fore in suggesting to the parties an appropriate order for the questions to be dealt with, bringing forward the easier issues. It is important that the mediator always involves the parties in any such process, as it is the parties that determine the substance of any mediation and whilst prioritising questions may seem a procedural issue, it has an impact on the substantive discussions in mediation and the chances of success in finding a resolution to the dispute.

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Identifying common ground [3.90] Once the mediator has identified the parties’ interests it is worthwhile spending a small amount of time identifying any common ground between them. Sometimes, simple interests can be satisfied without much effort by the mediator and the parties. On occasions, a party will make a concession just by virtue of the fact that the interest has been identified and written up on a white board. Mediators should always enthusiastically grasp a concession made by a party and use it as a basis for reaching further consensus. That is why it is sometimes useful to try and seek some common ground early in the mediation. The mediator should only seek common ground on small issues where the mediator believes some simple solution can be brokered. That means confining the discovery of common ground generally to issues that appear at the top of the prioritised list of questions developed from the previous step. Avoiding more complex issues at this point is critical as first, the complexity may have interests behind them that need investigation and the mediator does not want to risk settling on positions alone and secondly, the level of complexity may make resolution difficult and the mediator does not want to risk allowing the parties to further entrench themselves in their positions. Where a mediator has parties that are reluctant to find common ground so early on in the process, the mediator should seek obvious common ground where he or she knows the parties will generally agree. Three examples of obvious common ground may be: • Agree to end the dispute. Parties will generally want to see an end to the dispute for a number of reasons. Perhaps the dispute has been in existence for too long and this may have caused expensive legal fees or a loss in business or just worry over the outcome. Whatever the reason is, the parties agreed to and attended the mediation with a view to settling the dispute and there is a good chance that they must be motivated to see an end to the dispute. The simple question, “Do you both wish to see an end to this dispute?” will generally elicit an affirmative response that provides the mediator with the first piece of common ground between the parties. Even at such an early stage of mediation, the parties have agreed on one thing – they want to see an end to the dispute. • Agree to keep the dispute out of court. Once again, for a variety of reasons (excluding court ordered mediation), the parties have chosen to mediate in the hope of resolving the dispute and avoiding lengthy and expensive litigation. Therefore, it is likely that another area of common ground is the desire to keep the matter out of court or if the dispute is already on the trial trail, to resolve it thereby preventing a hearing. • Agree to keep the relationship on foot. The parties may wish to keep the relationship that they had prior to the dispute in place rather than let it collapse because of the dispute. Simple questioning of the parties during the opening statements can establish this. Therefore, another issue on

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which there could be some common ground is whether the parties wish to continue their relationship after resolution of the dispute. The psychological impact of reaching agreement on areas of common ground should not be understated. The mediator should attempt to commit the agreement of common ground to the white board, to remind the parties that they have already reached agreement on some issues, thereby proving it can be done and providing further motivation to mediate. Further, agreement on the above three suggested areas of obvious common ground can serve as good reminders when an impasse is reached during negotiations.

Identifying early options for agreement [3.100]

There may be some issues that are suitable for early discussion of options that will lead the parties to agree without further investigation and option generation. If the mediator can identify those issues early on in mediation and seek a resolution on them, then the parties have saved some time and effort as well as providing some important motivation for the remainder of mediation. In both this and the previous step in the mediation process, mediators should understand that they will not always be able to find common ground and identify early options for agreement. However, success in these early stages of the process can often mean a good start to mediation and on this basis mediators should attempt to reach agreement on them. There is an old saying that mediators should “throw parties” on every concession and an early successful set of options that has generated agreement on one or more issues is worthy of such a party and lays the foundation for a productive and constructive mediation that often results in settlement. Once again, mediators should reality check (a concept to be discussed at [3.120]) early options for agreement to make sure they satisfy interests and will be implemented successfully. Some mediators disagree with an early exploration of options for agreement rather they opt for a better understanding of the positions and interests and seek to build better relationships between the disputants, before embarking on matters of agreement. Their caution is well justified and mediators should approach early options for settlement cautiously as it can be counter-productive to further entrench parties through the creation of a reason to argue and blame each other. Therefore, be mindful of when early discussion of options for agreement is generating too much friction between the parties and be prepared to move on quickly to the next step in the process.

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Separate sessions (or caucusing) [3.110]

The conduct of separate sessions means splitting the parties up into different rooms and having the mediator shuttle between them in order to conduct private discussions about issues, interests and options for resolution. Before examining this process in detail it should be mentioned that opinion is divided on whether separate sessions should be a compulsory part of mediation or whether they should be employed only as a tactic, for example, where parties have reached an impasse. This book does not seek to argue one way or the other, rather, it seeks to describe the process and leave it to the mediator to determine their use. The one thing that can be said with some confidence is that in nearly every piece of commentary on mediation authored by practitioners and academics, separate sessions are noted and described. This means that separate sessions are a recognised step of the classical mediation model and much has been written about and experienced on their utility. As suggested above, the purpose of separate sessions is to further explore issues, interests and options for resolution. Speaking privately to the parties will allow the mediator to discuss issues that the parties may be uncomfortable talking about in front of each other early on in the process. On many occasions parties will not be comfortable disclosing their interests or divulging certain pieces of information in front of the other party as they feel this would be a sign of weakness or spoil their chances of settlement. The separate session can alleviate this concern and at the same time give the mediator an understanding of what is really driving the dispute and what options could realistically resolve it. While a mediator would never disclose information discussed in separate session with the other party, unless the disclosing party had authorised the mediator to do so, the mediator can use such information to assist both parties in settling on options that will satisfy interests. Separate sessions also allow the mediator to test information. During separate sessions, detailed questioning can take place which, if conducted in joint session, may embarrass one party. Separate sessions also prevent parties losing face. That is, if there is information that would indicate liability and therefore create a false onus to settle, then it is better that that information be disclosed in separate session. If such information were to be disclosed in joint session, then the disclosing party may lose face and feel they are in a weaker position for the rest of the mediation. Finally, there may just be information that, for various reasons, one party does not wish to share with the other party, in which case a separate session is the place to discuss such information. The information may be of embarrassment to the disclosing party or it may disclose private information of a personal or corporate or commercial nature. This latter category is particularly important if the parties are competitors in the market place. During the early stages of the first and possibly subsequent separate sessions, the mediator will be asking open-ended questions with a view to

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seeking more information than was disclosed in the first joint session. The mediator may narrow the questioning through the use of close-ended questions as the separate sessions progress with a view of testing information and fashioning options for settlement. Another important use of separate sessions is the discovery of BATNAs. As discussed in Chapter 2 when describing principled negotiation, BATNAs are a vital piece of information for the mediator as they disclose when a settlement is better or worse than the parties’ best alternative to a negotiated agreement. If the options being proposed as a settlement are worse than a party’s BATNA, then chances are that the party will not settle – they would be better off walking away from mediation and living with their BATNA. The converse is also true, in that if the options being proposed as a settlement are better than a party’s BATNA, then chances are the party will agree to accept the settlement. Sometimes, parties will disclose their BATNAs during the first joint session, but on most occasions they will keep that information secret until in separate session with the mediator. The reason this generally occurs is that parties view this information as weakening their negotiating position should the other party discover the first party’s next move in the dispute. Once again, the mediator would never disclose this information to the other party unless given permission by the disclosing party, however, the value to the mediator of such information is that, armed with such information, the mediator can suggest when options may or may not be attractive to the other party. However, if parties are encouraged to disclose their BATNAs to each other, it can have a positive effect on reaching resolution, because each party will begin to understand the ramifications of not settling the dispute at mediation. Another valuable use of the separate session is when there are heightened emotions at play in the dispute. In such cases it is better to separate the parties sooner rather than later. This will diffuse any tensions that threaten to destabilise mediation. In some mediations, where parties are displaying high levels of animosity towards each other, it may be appropriate to have a very short first joint session and then virtually break off into separate sessions as soon as the mediator has explained the process of mediation – of course this should only be done in extreme circumstances. The converse is also true. Where parties are happy to discuss the dispute in its entirety in joint session, then the mediator should not stop that process by breaking off into a separate session. Remember, mediation is really a process owned by the parties and they should be allowed to dictate the procedure for reaching agreement. One word of warning though – where principled negotiation is being employed, the mediator must make sure that the interests have been disclosed to a point where any settlement will be based upon interests and not positions. The dangers of settling on positions as opposed to interests have been discussed in Chapter 2.

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Once the mediator is satisfied that he or she has all the relevant information and has correctly identified the interests of the parties, above those disclosed in the first joint session, the mediator moves the parties to commence option generation. In other words, each issue is raised in separate session and options are generated that may be acceptable to both parties in the final resolution of the dispute. One of the cornerstones of mediation is that the mediator does not decide the options on behalf of a party. The key to the success of mediation is to allow the parties to design the settlement themselves so that it satisfies their interests as well as ensuring the parties are more motivated to ensure that the settlement is fully implemented. Therefore, the mediator should not be making suggestions as to what sort of options should constitute the settlement. However, if that rule were strictly adhered to, there would be fewer settlements in mediation than currently exist. In truth, the mediator may need to take an active role in encouraging option generation by parties. This may involve the mediator in separate session encouraging a party to make suggestions. This in turn means that sometimes mediators may have to contribute ideas themselves in order to “get the ball rolling”. Mediators need to be proactive when it comes to option generation. They should employ visual aids to help motivate the parties. For example, the mediator needs to list the issues and encourage parties to contribute options that may contribute to the ultimate settlement. Being very active, in the physical and intellectual senses, during this step in mediation can motivate the parties to join in and contribute ideas. Ultimately, the mediator is looking for multiple options in order to present a package of ideas in the separate session to the other party and vice-versa in the hope that some of the options may be suitable to resolve the dispute. Once the mediator has had one or more separate sessions with one party to settle the issues and interests and to generate the first set of options, they should conduct the next separate session with the other party and follow the same process of option generation with that party. After completing this first option generation session with each party, chances are that the sessions have produced some common options. Logically, these are the options that are most likely to be agreed upon by both parties as constituting the basis for settlement. The mediator should go back to the first party with the good news that the other party has accepted some of the options first suggested. The mediator goes back and forth seeking agreement on the various options being suggested by the parties for the various issues at stake. As the mediator works between the rooms a common package of options develops to the point where the parties have almost agreed to settle the dispute. Once again we find that mediation can differ from mediator to mediator in that the abovementioned process, often called “shuttle diplomacy”, is not the favoured way of some mediators for generating options. Some mediators use separate sessions only to gather more information and to

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discover interests and BATNAs. Further, they find that the separate session is an opportunity to discuss relationships and set the foundations to repair fractured relationships. They prefer that option generation is conducted in joint session with both parties contributing to the resolution together. This is a perfectly acceptable method and has yielded great success for many mediators. Using this approach the mediator needs to control the process to ensure parties do to not allow mediation to deteriorate into abuse and blame. The joint session approach to option generation does create a more collegiate feeling for the parties and when conducted well leads to lasting resolutions. However, always be guided by what the parties want in terms of moving the process forward

Reality testing [3.120]

As the mediator moves from option generation to fashioning a settlement on behalf of the parties (whether in separate or joint session), he or she should reality test the options as they move from just being an option to being part of the settlement. Reality testing means testing the option for its potential to actually work as a settlement option. In other words, will the option practically work if the parties agree on it? Further, how will the option work if the parties agree on it? A good example, in disputes involving an issue of quantum, is where a party agrees to settle a dispute in part for an agreed sum of money. Reality testing would include discussing with the parties issues such as: 1. When is the money going to be paid? 2. How it will affect the cash flow of the paying party? 3. If the parties agree on instalment payments: (a) When will the payments be made? (b) Is interest to be paid on the outstanding amount? (c) How will the payments be made? (d) How will payments be receipted and whether there is any additional charge for such administration? 4. Whether any litigation on foot will be discontinued or adjourned pending the successful implementation of the settlement agreement? These questions on how the settlement is to be practically implemented are important questions that the mediator has to raise with the parties as they are the sort of issues that, if left unaddressed, can cause a settlement not to be honoured by one or more of the parties after or even before final agreement. Mediators should not leave the reality testing of settlements until too late in the mediation process. In fact, reality testing is best done in separate session as, once the parties feel as if they have agreed on a package of options that will form the settlement of the dispute, they dislike being asked to revisit those options in order to adjust them in light of the reality testing.

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Figure 3.1 is a diagrammatical representation of the progression from identifying interests through the stages of separate sessions to settlement. The apex of the triangle indicates settlement, whereas the base of the triangle represents the opening stages of the mediation where issues and interests are discovered. As the mediation moves upwards from its base: interests are clarified; BATNAs are discovered and tested; options are generated, refined and reality tested; and settlement takes place. In other words, the bottom of the triangle represents a large collection of options being considered, which are gradually refined as the parties move into further separate sessions that seek to eliminate the options that are less attractive or are eliminated due to reality testing. The result at the apex is settlement. Translating this into the procedural aspects of mediation means the mediator will continue to fashion a settlement from the options and move the parties towards settlement only reconvening the final joint session when the parties are in the final stages of agreement and to write up the settlement. Figure 3.1 Using separate sessions to reach resolution

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Final joint session [3.130]

When the mediator has negotiated with the parties to the point of agreement on a range of options that will constitute the settlement and has reality tested those options so that the parties are ready to formalise their agreement, the mediator will convene a final joint session. At this session the parties will finalise the settlement and discuss any outstanding small issues yet to be canvassed in the separate sessions. While negotiation can still continue, it would be anticipated that at this stage of mediation most of the big issues have been resolved through the use of option generation during the separate sessions. However, again noting the strictly classical view adopted by some mediators, where separate sessions are only used to discover interests and BATNAs, the subsequent joint session would be used to generate options and craft a potential settlement. Mediators adopting a more classical approach may commence such a session by recounting information, gleaned during the separate sessions with the permission of the disclosing party, in an effort to allow each party to gain a better understanding of their opponent’s interests. This could be followed by an option generation session to get as many ideas for settlement on the white board. Once this has been achieved the parties will sort through the options and negotiate the package of options that satisfies their interests. The final joint session also gives the parties the opportunity to discuss implementation of the settlement and set timelines for the achievement of certain elements of the settlement agreement. This is also a good opportunity to reality test suggested options for settlement. As stated above, it is important to reality test suggested settlements to ensure that everyone understands the practicalities of implementing the settlement. In other words, who will do what and by when and if there is a cost attached, how much will it cost and who will pay? Further, the parties will determine whether they need to meet again and, if so, set a schedule of meetings to ensure the proper implementation of the settlement. This session may be used to draft the final agreement if the parties and the mediator have agreed to draft the agreement themselves at the conclusion of mediation.

Writing up the settlement [3.140]

Once agreement has been reached, it should be committed to paper and signed by the parties. This is to ensure that the parties can recall the terms of the settlement in the future and can properly implement it. Some people see it as a symbol of mediation and an achievement of the parties to reach a consensual outcome. There are some jurisdictions where court or tribunal ordered mediation requires a written report. In most jurisdictions this does not mean a detailed report of why mediation settled, or failed to settle, the dispute,

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rather, the report acts as a simple notification to the court or tribunal so that it knows whether to list the matter for further directions or a trial. In some jurisdictions a settlement agreement can also be embodied in consent orders of the court or tribunal in order to bring the matter to finality and ensure the parties implement the agreed settlement. Where consent orders can be initiated, parties will most likely need a lawyer to draft them, and in some cases, unrepresented parties can receive assistance to do so from the court or tribunal which the matter is listed in. In relation to a settlement agreement (not consent orders), it may not matter to the parties whether the settlement is embodied in a deed or a contract. If the parties wish to avoid paying consideration (usually a monetary amount to show an intention to be bound by the promise) and state imposed ad valorem stamp duty (in proportion to the value of the agreement) on the agreement, then a deed may be more appropriate. However, parties should always remember that equity will not assist a volunteer, meaning, for example, that should the deed not be complied with by one party, the innocent party’s remedies may be limited to that provided by the common law. In such cases, effective equitable remedies such as specific performance of the agreement may not be available to force the non-complying party to implement the deed of settlement. Therefore, the parties may be better off embodying the settlement in a contract, thereby accepting the payment of some form of consideration and ad valorem stamp duty. If possible, parties should seek legal advice on this issue. Parties may wish for a lawyer to draft the settlement agreement into a formal document. Whilst this is sometimes advisable, parties should instruct their lawyers with some attention to detail about how the document is to be drafted. Many a settlement has fallen over because of overzealous lawyers trying to protect their client’s interests. Whilst lawyers should not be criticised for trying to protect their client’s interests, chances are that the lawyers were not privy to the mediation and, therefore, will not understand how the discussions and the negotiation that led to the settlement being proposed. Another area of concern at this critical stage of mediation is where lawyers seek to add further terms to the settlement that will benefit their own client. Again, whilst the lawyer is probably acting with good intentions, parties should be wary that this sort of postmediation tactic can ruin the entire mediation and cause the dispute to flare up again. If parties can live with the settlement, then so should their lawyers – in this sense, parties need to firmly instruct their lawyers accordingly when drafting a settlement agreement Further, parties and their lawyers should be aware of the requirement that an agreement will only be enforceable if the parties intended to create legal relations when resolution was reached at mediation. If they lacked the intention to be bound by their proposed settlement then the court will not enforce the agreement. But that does not mean that a party must have

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thought through the legal implications of a contract prior to being bound to it. The test of intention is an objective one. That is, the court will look at what the parties agreed and factors evidencing such agreement will include the words the parties used, the facts surrounding the agreement and whether there has been any performance of the agreement suggesting affirmative intention. The court will make these determinations on the basis of what “the reasonable person” would conclude the words and surrounding circumstances mean rather than what an expert business person or contract manager would take the meaning of the words and circumstances to mean (the objective test). In Masters v Cameron (1954) 91 CLR 353, the High Court of Australia recognised three situations where the results of negotiations may lead to agreements that can be interpreted differently in terms of the parties’ intentions. The three situations are: (a) The parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms but at the same time intend to have the terms restated in a form which will be fuller or more precise but not different in effect. In this case there is a binding contract between the parties. (b) The parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. In this case there is a binding contract between the parties. (c) The intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract. In this case, there is no binding contract between the parties. In Baulkham Hills Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622, the court added a fourth category of agreement, namely where the parties are content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms. There is a rebuttable presumption that in commercial agreements, such as agreements struck at mediation, the parties have always intended to create legal relations. The onus of establishing that there are no legal relations rests with the person asserting it. However, parties may expressly exclude an intention to create legal relations, but the words used must be clear and unambiguous (not uncertain). So when reaching a resolution at mediation and then seeking to have it embodied in a document, parties need to be clear about their intentions to be bound by the agreement struck that will be the ultimate resolution of the dispute. There are numerous cases going to courts in Australia on the basis of a misunderstanding between parties at the conclusion of mediation as to whether they are bound by the settlement struck at mediation (see D Spencer, “Landing in the Right Class of Subject to Contract Agreements” (2015) 26 Australasian Dispute Resolution Journal 75).

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Once the document has been drafted and approved by both parties, it should be signed and copies distributed to the parties so that the implementation can commence. If the settlement is in deed form, then the deed should be witnessed. If the settlement is in the form of a contract, then no witnesses will be required but consideration (a small monetary amount) and stamp duty will need to be paid. One thing that should be agreed upon and embodied in the document is who is to pay any stamp duty on the document, should such duty be payable in the jurisdiction the document is signed in. A fair way to resolve this issue is to have the parties pay an equal share of the duty given the dispute (it is customary in most transactions for the purchaser to pay stamp duty but a dispute settlement agreement is a little different and one party may be offended at having to pay the duty without a contribution from the other side). One of the parties should take the responsibility to ensure that the relevant government authority validly stamps the document and its duplicate and then the duplicate sent to the other party.

WHAT IF THE PARTIES DO NOT SETTLE? [3.150]

Not every mediation manages to settle. Should a party or parties decide to terminate mediation for lack of settlement, the mediator should take two steps before allowing them to leave mediation. First, the mediator should discuss the reasons for terminating the mediation. Perhaps, as a final effort to salvage the mediation, the parties and the mediator can solve the issue or issues causing the mediation to fail. If the problem is merely the failure to resolve an issue to the satisfaction of one or more parties, then the mediator should suggest moving on to other issues and discussing the issue causing the potential termination at a later time. If the parties are having personality clashes, then the mediator should try helping them to separate the people from the problem (as discussed in Chapter 2). A good way to do this is to use separate sessions to ensure that the people do not get mixed up in the problem. There is nothing wrong with finishing a successful mediation in separate session, although it is always desirable to finish with a joint session. To summarise, the first thing a mediator should do when termination is suggested is to try and save the mediation by speaking with the parties about the progress that has been made, their BATNAs and the potential for success. Termination should only occur after the mediator has tried to save the mediation. Finally, if termination is agreed upon by the parties, try and allow the parties to leave mediation with something constructive in the way of resolving the dispute in the future. This is best understood in light of the judgment of Ipp J in Capolingua v Phylum Pty Ltd (As Trustee for the Gennoe Family Trust) (1989) 5 WAR 137 where his Honour (at 140) stated: In my view where, at a mediation conference, a party to an Expedited Proceeding under O 31A adopts an obstructive or unco-operative attitude in regard to attempts to narrow the issues, and where it is subsequently shown that, but for such conduct, the issues would probably have been reduced, the

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extent to which the trial is in consequence unnecessarily extended is a relevant factor when deciding upon an appropriate award of costs.

In other words, one of the benefits of mediation is that it can promote the process of narrowing issues for resolution either by curial or non-curial means. In Capolingua the court deprived the winning party of their costs because of their obstructive conduct during mediation. The judge opined that even if mediation is unsuccessful, by participating in good faith parties could still narrow the issues ultimately for trial and therefore save time and costs. It is generally accepted that one of the benefits of mediation is its ability to assist parties to narrow issues and identify which of the issues identified should be mediated. In this respect, it would be a shame, should the mediation not settle, for any achievements on the narrowing of issues to be lost merely because the dispute was to continue or be listed for hearing. The mediator can serve a vital role in helping the parties identify those issues that may ultimately be arbitrated, litigated or the subject of any other form of dispute resolution. The mediator should help the parties’ document any narrowing of issues and any issues that parties’ agreed upon during mediation so that it may assist in the further resolution of the dispute in some other forum. Should it be appropriate, the mediator may refer parties to other agencies that may assist in the resolution of the dispute, such as counsellors or community or family mediators.

MEDIATION – A MOVEABLE FEAST! [3.160]

The classical mediation model sets out a step-by-step process of conducting mediation. However, it should not be viewed as being a rigid model that must be adhered to at all costs. The beauty of dispute resolution is its flexible nature and in this respect the classical model should be applied flexibly. For example, the running of separate sessions is at the discretion of the mediator and the parties, as is the reconvening of joint sessions throughout the mediation. Mediators should reconvene a joint session if there is an issue that needs joint discussion or where a joint option generation session would be of value. Sometimes the dynamic of having the parties in the same room can provide the impetuous for a more fruitful option generation session. Another reason to reconvene joint or separate sessions is if the parties request it – remember, even though the advancement of the process is the responsibility of the mediator, the parties are responsible for the outcome and whether the mediation proceeds in joint or separate session could certainly affect the outcome. Figure 3.2 is a diagrammatic representation of the classical mediation model that not only sets out the steps of mediation, but also suggests that mediation can be split into two phases. First, steps 1-4 list the investigation phase that requires the mediator and the parties to seek a better understanding of the dispute by using questioning techniques to discover the issues, positions and interests of each party.

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Figure 3.2 The classical mediation model

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Not only do the mediator and the parties probe each other for information, they also check information by closed ended and circular questioning techniques. At the end of this first phase the mediator and the parties should have a greater understanding of what is driving the dispute in terms of the parties’ interests and BATNAs. Further, any potential common ground should have been established and agreed upon by the parties. Once the mediator is satisfied as to the adequacy of the investigation and that there is a threshold of information available to begin working on a resolution of the dispute, the mediator should move to steps 5-9, that is, the option generation and settlement or resolution phase. In this phase the mediator and the parties proceed to generate options based on their understanding of the interests at play in the dispute. Just because the mediator has moved to the option generation phase of the mediation does not mean that the investigation of issues and interests ceases. Often new issues will emerge or interests may change during the option generation phase of the mediation. Mediators have to be prepared to address new issues and interests in these circumstances and be able to jump back into the investigation phase should circumstances dictate.

THE HALLMARKS OF MEDIATION [3.170]

The philosophy of mediation revolves around five hallmarks that have set mediation apart from any other form of dispute resolution. When mediation was recognised as a formal method of dispute resolution it was distinguished on the basis of these hallmarks. However, today it appears that some of these hallmarks have been compromised and may have fallen by the wayside. These hallmarks have been the subject of great debate and whilst this book advocates the flexible nature of dispute resolution, it is submitted that mediation probably works best if these hallmarks are allowed to exert their influence on the process. Notwithstanding this, the process belongs to the parties and if hybrid forms of mediation assist in resolving their dispute, then adherence to the hallmarks becomes somewhat insignificant.

Confidentiality [3.180]

The importance of confidentiality is best summed up by the High Court of Australia in Field v Commissioner for Railways (NSW) (1957) 99 CLR 285, where Dixon CJ, Webb, Kitto and Taylor JJ (at 291) stated: As a matter of policy the law has long excluded from evidence admissions by words or conduct made by parties in the course of negotiations to settle litigation. The purpose is to enable parties engaged in an attempt to compromise litigation to communicate with one another freely and without the embarrassment which the liability of their communications to be put in evidence subsequently might impose upon them. The law relieves them of this embarrassment so that their negotiations to avoid litigation or to settle it may go on unhampered.

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The courts in Australia and around the world have long recognised that it is important for parties to be able to negotiate and mediate in an effort to resolve disputes in an atmosphere where parties are not fearful that what is said is able to be used against the disclosing party in later court proceedings. As the High Court opined in Field, this protection allows for a free and frank exchange between parties that facilitates resolution without recourse to the courts. Mediations are generally conducted behind closed doors with no observers from the public unless the parties agree to such a presence. Generally there is no transcript of proceedings and any notes taken by the mediator are generally destroyed at the conclusion of mediation. Confidentiality is a hallmark of the classical mediation model and is seen as a major incentive for people to participate in this form of dispute resolution in the first place. Confidentiality arises in a number of ways in mediation. It can arise throughout the course of the mediation where a party may discuss certain issues in separate session with the mediator that may not to be revealed to the other party. The only exception to this is where the disclosing party gives permission for the mediator to divulge such information. If mediators divulge such confidential information without permission, they risk losing the confidence of the parties as well as having committed a major breach of their ethical duty towards the disclosing party. If there was no guarantee of confidentiality in mediation, then parties may not be willing to discuss certain information that could assist in the discovery of interests, BATNAs and options leading to settlement. This in turn would seriously undermine the prospects of resolution and therefore the value of mediation. The scope of statutory confidentiality will be discussed in Chapter 8, so the remainder of this discussion will deal with contractually prescribed confidentiality and common law confidentiality. Dealing with the former first, it can be said that the most common form of confidentiality arises by virtue of the parties and others signing an agreement to mediate that prohibits the parties and the mediator disclosing any communications in the lead up to and conduct of mediation. The NSW Law Society’s Agreement to Mediate appears as Appendix 4 to this book. Clauses 15 and 16 of that agreement set out the parameters of confidentiality that contractually bind the parties and the mediator. In addition, the NSW Law Society’s Mediation Guidelines (Appendix 6) clause 16 sets the parameters of confidentiality that parties can agree to in a contractually binding mediation clause. Further, the NSW Law Society’s Guidelines for Legal Practitioners who act as Mediators (Appendix 1 in this book) clause 6 covers the extent of confidentiality required by legal practitioners acting as mediators. Finally, clause 3.4 of the NSW Law Society’s Charter on Mediation Practice – A Guide to the Rights and Responsibilities of Participants (Appendix 3) states: What is discussed in mediation is confidential unless disclosure is required by law. This means that in nearly all cases, confidentiality will be maintained.

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Mediators cannot be called as witnesses in any court proceedings which may take place in the future. The mediator will not mention anything discussed by you during a private session to other parties during the mediation (unless you request the mediator to let the other parties know), or to anyone else following the mediation.

What the above terms, conditions and guidelines seek to do is to ensure confidentiality between the parties to mediation including the mediator, thus preserving one of the philosophical hallmarks of mediation. Australian courts have prevented evidence being introduced of matters discussed at mediation pursuant to confidentiality agreements in contracts and confidentiality provisions in statutes. Conversely, there have been several cases where a court has admitted evidence of the proceedings at a mediation to adjudicate on applications to have settlement agreements set aside on the basis of duress and capacity. A valid exception to confidentiality in this respect is where a settlement agreement is being challenged and a court must be able to hear evidence of what happened at mediation that led to the agreement that is being challenged in order to determine if the agreement/contract was validly formed between the parties. As a matter of public policy, the courts want to encourage the use of dispute resolution and by not enforcing confidentiality clauses a court would be discouraging a full and frank discussion of the issues that could lead to resolution. Further, the courts accept the view espoused by the House of Lords (at 512) in Hillas and Co Ltd v Arcos Ltd (1932) 147 LT 503 that, “the problem for a court of construction must always be so to balance matters, that without violation of essential principle the dealings of men may as far as possible be treated as effective, and that the law may not incur the reproach of being the destroyers of bargains”. In other words, the courts will try to encourage parties to be bound by their own agreements, and the courts will not destroy those bargains that parties have contractually agreed upon unless the contract has not been validly formed or it is defective in some way. Therefore, if parties have agreed by contract to keep mediation confidential then the court will not be the destroyer of that bargain. Even if parties have not signed a mediation agreement providing for confidentiality between them the common law may still seek to preserve confidentiality between them. It must be remembered that confidentiality operates to the benefit of the parties. The mediator has no interest in compromising the confidentiality of the mediation. It is the parties who may wish to prevent certain information from being disclosed into the public domain or from being admitted into evidence in curial proceedings that may flow from a failed mediation or a breach of a settlement agreement. Once again, to encourage parties to resolve their own disputes, the common law provides some protection over the confidentiality of those negotiations. The common law protection is generally known as the “without prejudice privilege”. Providing three basic conditions are complied

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with, the common law will protect certain communications and prevent them from being adduced into evidence. First, there must be a dispute between the parties. Secondly, the communication must have been made with a view to resolve the dispute. Finally, there must be some offer or some prospects of an offer to settle emanating from the communication. This last step is to prevent “fishing trips” by overzealous litigators being disguised as without prejudice negotiations. Providing the above three requirements are met, the law will generally apply without prejudice privilege thereby protecting the confidentiality of such communications. However, to be clear about its operation, parties should expressly establish confidentiality which is why the heading “without prejudice” often appears at the top of correspondence seeking to resolve disputes between parties. CASE NOTE: AWA Ltd v Daniels (t/as Deloitte Haskins & Sells) [3.190] AWA Ltd v Daniels (t/as Deloitte Haskins & Sells) (1992) 7 ACSR 463 Facts: AWA sued its former auditors for breach of duty. In mediation, AWA disclosed the existence of deeds of release and indemnity entered into between the parties in which AWA accepted the denial of each director that they were negligent in carrying out their duties in relation to the action commenced by the plaintiff, and indemnified each director in respect of any claim which they may become obligated to pay in relation to the dispute before the court. When mediation was unsuccessful the defendants issued notices to produce the deeds. AWA claimed that the mediation was conducted without prejudice and on a confidential basis. Decision: The Supreme Court of NSW (Commercial Division) accepted the defendants’ argument that their solicitors knew of the existence of the deeds prior to the mediation and that their production should have occurred at the discovery stage of the interlocutory proceedings prior to hearing. On that basis the court admitted the deeds into evidence pending their relevance to proceedings. His Honour Rogers CJ Comm Div (at 468) stated: First, as a matter of principle it would be entirely too easy to sterilise otherwise admissible, objective, evidence simply by saying something about it in the course of the mediation, even if the subject be irrelevant to the mediation discussion. That of course is not to be contemplated. However it would be more than somewhat unfortunate if already expensive and lengthy hearings had to be interrupted to determine the bona fides of a disclosure made in the course of mediation. The difficult situation I have in mind is where, but for the happenstance that a statement is made, in the belief that it and everything it might lead to would remain confidential, the objective facts and evidence of them

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would remain unknown to the other party. That of course would be a rare case indeed. If the objective evidence were in a documentary form, in the possession of the party making a statement about a matter referred to in it, then, if the subject was relevant the document would be discoverable. It is where the evidence, if documentary, is not in the control, or possession, of the party seeking to protect its contents, or, if not documentary, the material will remain unknown to the other party but for the disclosure at the mediation that the problem may arise. In the present case the deeds would have been discoverable if relevant to any issue. Accordingly, the problem should not have arisen. Conversely if the deeds are not relevant the whole question is moot.

[3.200]

This judgment provides a stern warning for parties that documents referred to in mediation, providing they are admissible under general law, will not be protected by the confidentiality of the mediation process. Parties are thereby prevented from using mediation as a way to quarantine damaging documents that may be discoverable in subsequent court proceedings.

Voluntariness [3.210]

Another of the hallmarks of mediation is its voluntary nature. Parties should come to mediation voluntarily and not be forced into participating in the process. The reason voluntariness is important is if the parties come to mediation of their own volition, then they tend to be more committed to the process of seeking a non-curial resolution of their dispute. In this respect they will be more committed to participate in good faith and to find and implement a settlement of their dispute. Further, voluntary participation means parties are more inclined to engage in interest-based negotiation because they have a genuine need to satisfy their interests and not just argue their positions. As stated in Chapter 2, this means that if settlement is reached then there is a better chance of it being implemented, and of it not falling over as is often the case when parties settle based on satisfying their positions. However, while private mediation still requires the parties to attempt mediation on a voluntary basis, the voluntary nature of mediation has been made redundant by the advent of court annexed mediation schemes. In every State, Territory and federal jurisdiction of Australia, courts can order mediation if they consider the circumstances appropriate with or without the consent of the parties to the proceedings. Two positions flow from this. First, mediation purists may say that the imposition of mandatory mediation is a retrograde step in the establishment of a culture of dispute resolution. Secondly, mediation rationalists may say that the voluntary nature of mediation has been so convincingly compromised over the past decade by legislation in Australia that voluntariness is now not a hallmark of mediation. One of the reasons legislators have embraced mediation is that it allegedly reduces court delays and the costs of litigation. Upon the

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introduction of mandatory mediation legislation in New South Wales on 8 June 2000, the then Attorney-General, the Honourable Jeff Shaw MLC, stated in the NSW Legislative Council: The Bill reflects the current view that many matters are better dealt with by alternative dispute resolution forms rather than the expense and formality of litigation. That does not deprive the parties – the plaintiffs or the defendants – of their ultimate rights to have matters determined by a court. I would adhere to that as a matter of principle. The bill provides alternative, less formal and less expensive modes of resolution of controversies between citizens, and I believe makes a significant contribution to that process. (NSW, Parliamentary Debates, Legislative Council, 8 June 2000, 6847, The Hon Jeff Shaw, Attorney-General)

In an article by the late Professor Jennifer David entitled “Designing a Dispute Resolution System” (1994) 1 Commercial Dispute Resolution Journal 26, David (at 32-33) discusses the “willingness factor” of ADR and how a desire to settle is the hallmark of most dispute resolution: Experience has shown that willingness to negotiate and to bargain in good faith is the decisive factor in whether a case is suitable for conferencing or mediation. The experience of the Commonwealth Administrative Appeal Tribunal is that: “No dispute whether before the Tribunal or elsewhere is incapable of resolution if all the parties want to resolve and want to participate in the process of exchange of information permitting the generation of settlement options.” All cases are suitable so long as parties are committed to finding a solution to their problem.

Mandatory mediation may in some circumstances remove the “willingness” element of the process and may not give the parties the appropriate motivation to settle. Not only does this factor affect the rate of settlements but also, some would say more importantly, the rate of the effectiveness of settlements. That is, whether settlements last through implementation to finalisation – a point not lost on David (at 34-35): Experience is that settlement rates are lower when mediation is compulsory. It is possible to coerce parties into mediation, but it is not possible to give them the desire to settle. When parties choose mediation voluntarily it is because they really desire to settle, whereas when they are coerced they are usually not so willing to look for possible solutions.

Lawyer, Michael Dawson, stated the disadvantages of mandatory ADR as being essentially twofold, in an article entitled “Non-consensual Alternative Dispute Resolution: Pros and Cons” (1993) 4 Australasian Dispute Resolution Journal 173. First, a mandatory scheme disadvantaged poorer litigants. Dawson’s reasoning was that, given that about 90% of civil disputes settle before final hearing, the imposition of a mandatory ADR process placed an additional financial burden upon parties who may have settled anyway. He stated (at 176), “Encouraging settlement by necessity disadvantages poorer disputants. The poorer litigant is generally more susceptible to an early settlement which may be significantly less than that to which he or she is entitled”. Secondly, Dawson (at 176) alleged that mandatory ADR

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compromised personal rights, when he stated: Encouraging settlement also promotes the dominance of State rights over those of the individual. The informal nature of settlements inhibits change and, therefore, developments. Legitimate grievances and rights are compromised and suppressed. Individual rights will not expand and develop under mandated ADR.

As well as this notion of inhibiting rights comes the argument that the State plays a larger role in the lives of its citizens as opposed to the independent judiciary, a situation that in the United States has raised some concerns over constitutional rights, such as the right to trial by jury and the separation of powers. Another argument against mandatory mediation centres on the spirit and ethics of the process. In order to achieve settlement that satisfies the interests of the parties, they must attend and participate in the spirit required by the process. This spirit has been referred to above as the “willingness” to seek a settlement that more often than not will include compromise. In an article entitled “Court-ordered ADR: Sanctions for the Recalcitrant Lawyer and Party” (2000) 11 Australasian Dispute Resolution Journal 12, lawyer Grant Dearlove (at 16) stated: In a process that is voluntary, parties enter it cognisant of the spirit that is required to achieve the primary objective of resolution. With court-annexed mediation the involuntary nature of the exercise requires the court to remind the parties of the spirit in which it should be conducted.

In other words, a party which is forced to attend mediation may not possess the spirit to seek settlement and the job of the court will be to continually remind that party to participate in good faith. This once again proves the point of mediation purists who suggest that the voluntary nature of mediation is an important hallmark that prevents the mediator from being intrusive by continually reminding the parties of the spirit of the process. Balancing the negatives of mandatory mediation with its positives, David (at 35) stated her views on the positive effects of mandatory ADR programs. She quoted the National Standards for Court-Connected Mediation Programs of the US Institute of Judicial Administration, which suggested that mandatory mediation should be imposed if it was more likely to serve the interests of the parties, the justice system and the public than would voluntary attendance. Some Australian courts have endorsed this view when making orders pursuant to mandatory mediation powers. Further, mandatory mediation should: be publicly funded; ensure there is no pressure to settle exerted on the parties; ensure high quality programs; be easy to access; permit party participation; allow legal representation if desired; and provide clear and complete information about the process and procedures to be followed. David highlighted the Law and Policy Committee of SPIDR’s report on mandatory mediation, which listed the positive effects of mandatory mediation as being that parties frequently

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respond positively to face to face meetings and that mandatory programs improved the low rates of voluntary usage. Dawson listed the advantages of mandatory dispute resolution as being: (a) The parties frequently respond favourably to mandated dispute resolutions. Some are glad to have the court control the procedures. (b) Because parties or their lawyers may be more accustomed to the litigation process, rates of voluntary usage are often low. Mandating the use of such processes may increase substantially the total number of cases settled through their use. (c) Effective dispute resolution programs require adequate administrative support. By increasing the caseload, mandated participation allows the administration to be provided on a cost-effective basis. (d) The expanded use of these processes as a result of mandating participation will serve to educate parties and their lawyers, resulting in an increased bond for use of dispute resolution programs outside the court processes … (e) The many general advantages of dispute resolution are becoming institutionalised. (f) The timing and type of dispute resolution can be controlled in order to save court and litigants’ expenses, for example, enforcing dispute resolution at a stage immediately before a significant expense is to be undertaken. (g) Lawyers and participants are becoming educated to consider settlement even before litigation. (h) Corporations are being forced to make decisions or involve themselves in dispute resolution. Litigation is often the path of least resistance particularly when corporations are involved. Junior executives can explain bad results by blaming it on the court. The result of an dispute resolution process is much more confrontational and, therefore, avoidable unless compulsory. A common theme running through the above arguments in favour of mandatory mediation is that participation in mediation might do the parties some good despite their original reticence. In an article entitled “The Courts, Tribunals and ADR: Assisted Dispute Resolution in the Federal Court of Australia” (1996) 7 Australasian Dispute Resolution Journal 138, the then Chief Justice of the Federal Court of Australia, the Honourable Justice Black, foreshadowing recommendations that resulted in amendments to s 53A of the Federal Court of Australia Act 1976 (Cth) changing participation in mediation from consensual to mandatory, stated (at 144) his view on the advantages of mandatory participation in court-annexed mediation: The proposal that there should be power to direct mediation even when the parties do not consent recognises that there may be some cases in which, despite the initial opposition of one or more parties, mediation can be valuable. This is not to say, of course, that if the power was available, it should be exercised frequently; clearly, the desirability of ordering mediation will depend upon all

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circumstances of a particular case. As in all cases, but especially in the context of a compulsory referral to mediation, care should be taken to guard against a party being disadvantaged by the mediation process.

Once again, we see some guidance on the use of the power of a court to order mandatory participation in mediation. In short, such power should be used in consideration of the impact that mediation will have on the parties. Continuing on the theme of mediation being “good for” the parties, Justice Rogers, the then Chief Judge of the Commercial Division of the Supreme Court of New South Wales, stated (at 8) in AWA Ltd v Daniels t/a Deloitte Haskins and Sells & Others (unreported, Rolfe J, 18 March 1992): the question is whether there is any utility in requiring parties, who are clearly bent on being difficult, to submit to conciliation processes. In my view there is. An independent third party can bring a different perspective into such procedures and can bring about a settlement even between parties who are evidently bent on litigation.

The arguments for and against mandatory mediation are compelling. It seems that forcing parties to participate in such processes may do damage to the philosophical base of mediation which in turn impacts on the outcome of mediation. Yet forcing parties into mediation may benefit them in the short term should they reach a settlement or, at the very least, define more narrowly the issues for litigation. Revisiting the two propositions stated at the beginning of this section: first, from mediation purists, who may take the view that the imposition of mandatory mediation is a retrograde step in the establishment of a non-curial dispute resolution culture in society. To this it can be said that in terms of the philosophical base, the proposition is probably correct. There is no doubt, that making mediation mandatory compromises its consensual nature, said to be one of its hallmarks. Secondly, from the mediation rationalists, the proposition that the voluntary nature of mediation has already become so compromised by its rise in popularity in our courts, by making it mandatory is therefore of little or no consequence. To this end it can be said that mandatory mediation would probably not do any irreparable harm to the philosophy and practice of mediation in Australia. The one compelling factor is that whilst forcing parties to participate in mediation will probably not do them any harm, and may in fact surprise them in relation to what may be achieved, it may also assist them to resolve or narrow issues that will be of benefit should the matter proceed to litigation. Also, whilst parties may be forced to participate in mediation, at the end of the day, they still control whether they choose to settle or not – no mandatory scheme can force a party to settle, at least not yet.

Empowerment [3.220]

There is a popular belief amongst those involved in mediation that it is a process that empowers parties by allowing them to control the process and the outcome. In an article by A Davis and R Salem entitled

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“Dealing with Power Imbalances in the Mediation of Interpersonal Disputes” (1984) 6 Mediation Quarterly 17-26, the authors (at 17) state that “mediation is empowering because it is a voluntary process and that the fact that the parties are in mediation means that they have chosen to take responsibility for working on their own solutions”. In this respect, mediation is said to return to the parties the power to deal with the dispute on their own terms as opposed to having a resolution imposed on them by a third party. On one level this may be true. That is, mediation allows parties to become involved in the resolution of their own dispute by crafting and controlling the outcome. However, while empowerment is said to be one of the hallmarks of mediation, its ability to empower its users is gradually being whittled away, mainly by state control, as is its use as a tool to depoliticise conflict and stabilise power within society. Disputes are a valuable commodity and like any object of value in capitalist society, it is susceptible to being stolen. The value of disputation is best judged by the money spent in litigation each year both in court and out of court by a plethora of professionals who owe their professional existence to resolving or assisting in the adjudication of disputes. The larceny of disputation is perpetrated by the state through its instrumentalities such as: police; courts, tribunals and commissions; government departments; and publicly funded advocacy groups. In the private sphere, dispute thieves are generally: psychologists; psychiatrists; social workers; and lawyers. Most of these dispute thieves, whether employed by the state or by the private capitalist owners of production, owe their very existence to the theft of disputation. In an article by Nils Christie entitled “Conflicts as Property” (1977) 17 British Journal of Criminology 1, disputation or conflict thieves are described (at 7) as being: particularly good at stealing conflicts. They are trained for it. They are trained to prevent and solve conflicts. They are socialised into a sub-culture with a surprisingly high agreement concerning interpretation of norms, and regarding what sort of information can be accepted as relevant in each case.

The theft of disputes is no accident. Dispute thieves encourage society to leave their disputes available for theft. They create a system that is user unfriendly. For example, the legal system consists of courts that are situated in administrative centres away from where individuals live within their communities. The courts themselves are complex and formal to the point of intimidating any party brave enough to enter with or without a lawyer. Courts discourage lack of representation and involvement directly by the parties by creating a plethora of complex rules, regulations, procedures, forms and court dress that shows you are either in “the club” or outside it. In criminal matters, the state assumes the role of one of the parties, almost always the victim, and does not allow that party to be engaged in the resolution of the conflict. The result of disputation theft is that society comes to accept the role of the thieves. So accepting is it that it allows the thieves to: encourage the theft

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through advertising; organise themselves into co-operatives, unions or professional bodies; charge fees for the handling of disputes (sometimes at exorbitant rates); lobby governments that they are the only members of society capable of handling disputation; and continue to encourage the complexity of dispute management in order to perpetuate the larceny. Society’s response to disputation becomes simply to hand their dispute to the nearest, cheapest or most convincing thief. They become fearful of moving without professional advice and precedent. It is because of the commercialisation of dispute handling that professional thieves have appropriated disputation as their own. In the law, this is evidenced by the professional organisations that have evolved since the formal advent of mediation, some of which have encouraged formal accreditation for their members. In an article entitled “Social Work and Mediation: Hemlock is the Flavour of the Month” (1992) 45 Australian Social Work 17, W De Maria argued (at 18) that the appropriation of mediation by lawyers is a cause for concern. The belief stems from the fact that because lawyers are task-monopolists and largely conservative, mediation will become, if it has not already become, “professional artefacts, copyrighted income, locked up within the lawyering role, not to be shared, but to be given down at a fee”. Dispute thieves are also responsible for the loss of local resolution strategies which are outside of the State’s control. Not only have the thieves deprived society of a solution to any given dispute, they have also prevented long term mediation strategies from being instituted because society no longer understands how to handle disputation, or to even follow a mediation precedent. This runs counter to the notion that mediation educates people to deal with future disputes. In most mediation processes, the education is centred on the dispute thief assisting the parties. The parties themselves leave the process understanding that the dispute thief is knowledgeable about mediation and that they themselves are not – otherwise, why would they have participated in mediation in the first place? The parties rely heavily on the dispute thief to solve the problem for them by invoking mediation. Given the growth of a multi-million dollar mediation industry and the polarisation of society in handling disputes brought about largely because of the dispute thieves, Christie suggests that perhaps it is time society reclaimed its own disputes, or at least begins to take preventative measures to stop the theft. The rise of mediation can be explained alongside the change in the nature and domination of state power that, as will be shown, is the very antithesis of empowerment. In the area of mediation, for example, we have seen a growth in community advocacy services. This places increased pressure on the state and its ability to deal equitably with the needs of those grassroots movements. The state usually responds by introducing rights-based legislation and financing of advocacy groups. Access to justice to solve disputation has become more available through state-funded mechanisms,

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which attempt to control the increased demand brought about by the heightened activity of grassroots movements. Examples of such state funded mechanisms are the various State Legal Aid Commissions; nationwide community legal centres; State branches of the Environmental Defenders Office; and, other organisations that act as advocates for grassroots movements. Whilst the state attempts to stem the increased demand on its services by diverting disputes through state funded advocacy services, ultimately, upon those services failing to reduce the increased demand, the disputes revert to formal court-annexed mediation. If the state cannot adequately respond to the increased demand on mediation, it must either spend more money on increased resources or find other methods of resolving disputes. To this end, the cost of mediation is generally said to be less than that of curial dispute resolution. Mediation is seen, particularly by those with a vested interest in reducing the demand placed on state controlled mechanisms of dispute resolution, as a cost efficient alternative to the formal processes already available. In an article entitled “Law and Community: The Changing Nature of State Power in Late Capitalism” (1980) International Journal of the Sociology of Law 379 at 389, B Santos argued that informal methods of dispute resolution stabilised power relations in society. Informal methods of dispute resolution mean that the users remain powerless and the balance between social relations in society will be restored since “no dramatic changes can be expected from institutions or settings which, due to the limits of their coercive powers, will be orientated to consensus and harmony” (at 389). Santos has touched upon two central issues. First, social balance is restored because mediation is informal and does not carry the same impact as the formal systems of dispute resolution. This means that the parties are not empowered, because the process they are participating in will not create a precedent or effect any worthwhile change in society. Secondly, it is argued that there can be no empowerment through a system that is consensus orientated. Whilst a balance of power may occur, one or more parties will always have to give up power in order for the balance to exist. Thus, a consensual outcome may actually disempower some parties. The result of the changing role of the state in mediation is the increase in state control over social relations. Not only does the state remain in control of court referred mediation, it now has control over other disputes through, for example community justice centres and tribunals, whose parties may not have come to the attention of the state, had it not been for the non-court annexed processes. Nowhere is this more prevalent than in the area of community mediation. In New South Wales, Victoria and Queensland, the CJCs and their equivalents operate within the state-controlled AttorneyGeneral’s Department. Between half and three quarters of all matters mediated by the CJCs are referrals from magistrates and judges, solicitors, police, local and State government. Therefore, not only are up to three quarters of the referrals coming from state-controlled instrumentalities, but

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up to three quarters of the disputes experienced by society are being brought into the purview of the state under the guise of empowering parties to deal with their own disputes. The state has achieved the dual task of better distributing its resources and controlling a greater share of disputation thereby increasing its social control. The legislation creating the CJCs or their equivalents is directive pieces of legislation which allow the state to exercise greater control over society’s ability to deal with disputation. In this respect they do little to empower parties, rather they allow the state to become the controller of disputes on behalf of society. The power of the state under the legislation is best exemplified by the fact that it may refuse to mediate any dispute. In other words, the state has discretion to accept or reject any dispute it chooses. The power to use state-run mediation services is removed from the very society it seeks to empower. Further, the legislation gives the state, through the state employed mediator or official, the power to terminate any mediation session. According to De Maria (at 23), given the legislation, the CJCs or their equivalents are: nothing more than decentralised government agencies. The relationship a disputant has with one of these centres is the same as the traditional citizen-bureaucracy relationship. Similarly, the relationship mediators have with their centre is the same as any public servant has with their employing authority.

The legislation is a good example of a state strategy to control conflict. So bureaucratised are the state-run mediation programs, that they are now just a part of the state-run bureaucracy that makes dispute resolution informal and ensures the privatisation of justice. A by-product of state control over mediation is that it becomes an over-regulated process, as opposed to the philosophical concept of it being a process determined by the parties, thereby empowering them through control over the procedures and the outcome. Mediation can thus be categorised as a process governed by a distinct set of rules. Any process governed by rules enshrined in legislation begs the question: how can such a process possibly be construed as empowering parties? In most statutory mediation schemes, the state determines the procedures for commencing and conducting a mediation session. The power to determine the procedures for resolving the dispute are removed from the parties and placed under the control of the state. Similarly, most statutory mediation schemes exclude the public from the mediation process, and prevent friends, family members or supporters of a party from attending, unless with the permission of the state. The state now has control over who can bear witness to disputation and its resolution. It is suggested that mediation does not necessarily empower its users, thereby casting into doubt the idea that the empowerment of parties is a central hallmark of mediation. Logic tells us that if a third party is brought into a dispute, then the group dynamics are changed significantly enough to render a different distribution of power between the parties to the

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dispute. Given this intervention, while it must surely be conceded that mediation does not restore absolute power to the parties, it can be stated that it provides a better distribution of power than, for example, the absolute power of state sanctions or forcing disputes into court. The juxtaposition of a state imposed decision compared to, for example, a mediated resolution, is profoundly different in terms of the restoration of power to the parties. Perhaps it may be said that there are different levels of empowerment. Some may argue that mediation does not provide any level of empowerment because of its inherent interventionist strategy. Others may argue that a process which allows a greater level of self-determination in terms of procedure and outcome must surely empower its users. Perhaps within the theory of mediation lies another dichotomy, that is, a scale whereby state-controlled mediation is associated with lower gradations of empowerment because of the level of state involvement and its associated implications and, at the other end of the scale, private mediation, characterised as providing higher levels of empowerment because of the disassociation of the state. The problem mediation faces is that any level of intervention can conceivably lead to gradations of disempowerment. What society needs to weigh up is whether levels of disempowerment serve it better than no empowerment at all.

Neutrality [3.230]

The penultimate hallmark of mediation is said to be that the mediator is a neutral third party to the dispute. Neutrality, in this sense, relates to the mediator being neutral to the outcome of the dispute. In considering the process of mediation, it could be said that mediators have considerable power in mediation and that there is the potential for mediators to not always exercise that power in a neutral fashion. It is likely that mediators come to mediation with their own subjective notions of the outcome of the dispute. As well as this, mediators, like any human being, have their own views on a wide range of issues that may touch and concern any given mediation. In this respect the mediator’s “baggage” could be said to impinge on any notion of absolute neutrality. This means that mediators can never be truly neutral – a problem that Western mediators have been grappling with for some time. However, in other cultural groups, the issue is well settled. In an article entitled “Mediating in Aboriginal Communities” (1996–97) Commercial Dispute Resolution Journal 245, the author of this text explains how Australian Aborigines deal with the issue of neutrality, based on his experience in designing and teaching mediation for the NSW Aboriginal Land Council. The following expurgated extract (at 251-omitting footnotes), explains how Australian Aborigines have resolved the neutrality issue long before Western culture realised the problem existed. The Citizens’ Advice Bureau Family Mediation Service, is based in Western Australia and provides mediators for disputes involving: family separation and divorce; married and de facto relationships; custody of children and access

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issues; finance and property disputes; and adults and young people in conflict. The Bureau had not, at 1992, mediated any disputes involving Aborigines. It had received a referral from the Western Australian Department of Community Development to mediate a dispute where one party was Aboriginal, however, the mediation did not go ahead because of a withdrawal. Its Director stated, “Aboriginal people are unlikely to use the service, because they would prefer to have members of their own cultural group as mediators”. This idea that Aboriginal people prefer third parties to be Aboriginal, is confirmed in studies by the Australian Institute of Aboriginal Studies, “Anyone dealing with Aborigines must be accorded a degree of insider status. One way this is marked is by adoption into the kinship system”. In a project proposal for the Queensland Department of the Attorney-General, Joan Welsh considered the issue of Aboriginal versus non-Aboriginal mediators to be uncontentious. She preferred to emphasise the importance of outsiders being brought in to mediate: Although the concept of training community mediators to empower the local community is attractive, most people regarded outsiders, particularly Europeans, as being seen to be the most unaligned group. They would need to be appropriate people who could show respect for the culture and use acceptable processes. In keeping with the policy of self-determination, Aborigines generally want to have their own people in the field equipped with the skills to manage and assist in the resolution of disputes arising between themselves, and between themselves and non-Aborigines. It is felt that, culturally, third parties who have some cultural understanding of Aborigines should resolve disputes. Also, that settlement of disputes is more likely to be implemented if the process is seen by Aborigines to be legitimate. The above discussion raises the question of how neutral a mediator can be, in a culturally different milieu where they are required to have some knowledge of the culture and, because of the community ownership of disputes, some understanding of the dispute itself and quite probably the parties involved in it. It appears that Aboriginal people experience extended family responsibilities and relationships bound by kinship ties that lie at the very heart of their civilisation. This is one reason that Aborigines display community ownership of disputes. In terms of Aboriginal mediator neutrality, this means: Aboriginal people don’t expect other Aboriginal people to be neutral. Being neutral for Aboriginals means the ability to be fair minded, but not detached because Aboriginals see feuding as being a shared experience. Neutrality in relation to feuding is something you won’t get Aboriginal people to understand or accept. Because of the community ownership of disputes, mediators are assumed to have an opinion on the dispute, even if they are not personally involved in it. Tribal elders, who are expected to take on the role of resolving disputes, have preconceived ideas about the dispute because of their own kinship ties and family networks. It has been found that there is an expectation that heads of families or tribal elders, who command the respect of the family or tribe, will advise people during a dispute. These people are best placed to act as mediators as they take on this natural role in their own communities and the parties are more likely to honour and respect the assistance given to them by such a person.

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It also assists in keeping control of difficult parties to a dispute – an outsider, not respected by the community may have difficulty in preserving the mediation process in these circumstances.

It seems that Australian Aborigines can clearly differentiate between neutrality and impartiality, impartiality meaning the ability of a mediator not to be biased towards or against any of the parties in the mediation. So whilst it is not desirable for Aboriginal mediators to be neutral, they can certainly be impartial as to their treatment of the process and the outcome of mediation. Professor Hilary Astor considered the issue of neutrality in an article entitled “Rethinking Neutrality: A Theory to Inform Practice” (2000) Australasian Dispute Resolution Journal 73, by acknowledging the “baggage” carried by mediators and suggesting that mediation reject neutrality and focus instead on maximising the parties’ control of the mediation. Astor stated (at 145): We should stop asking whether the mediator is neutral or not and instead ask what the mediator is doing to ensure that, to the maximum extent possible, the parties control the content and the outcome of the dispute.

Astor suggested that focusing on the parties’ control of the mediation concentrates on the task of mediating rather than the mediator’s bona fides as to neutrality. This is consistent with the philosophy that mediation is a process where the parties own the process and the outcome, the mediator being merely the guardian of the process. This approach seeks to question the mediator only on what she or he is doing to achieve the philosophical outcomes of mediation. Next, it recognises that the philosophy of mediation dictates that the parties’ control should be maximised at all times. Given her hypothesis rejecting the idea of mediator neutrality, Astor asked the prophetic question as to whether such a rejection would destroy the legitimacy of mediation. She answered it in the negative, believing that mediator neutrality merely supported the parties arriving at a consensual outcome themselves. In this respect, when parties and mediators seek to maximise the parties’ control over the process and outcome of mediation, the focus is removed from the mediator’s neutrality and all the parties to the mediation can stop pretending that the mediator has no impact on the outcome of the mediation due to the baggage that he or she brings to mediation. The only sensible qualification Astor placed on this view of mediator neutrality was that mediators must inform the parties that their opinions will impinge on the mediation and seek their consent to proceed with the mediation with that knowledge. It would seem sensible to point out that every mediator will bring some form of baggage to mediation and, providing that the parties are prepared to be responsible for the process and outcome, then mediator neutrality should not be of concern.

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The parties’ own solution [3.240]

The final hallmark of mediation is said to be that the parties fashion their own solution to the dispute, and in this way they are more committed to its implementation. This hallmark of mediation is probably one of the most understated of the five. The importance of parties being able to decide on the outcome of their dispute is enormous. Not only does mediation allow for settlements that may be outside of the range of remedies offered by curial adjudication, but it allows the parties to reject proposed settlement options that do not satisfy their interests. The creative licence afforded to mediation by this process alone makes it a very distinctive method of dispute resolution. Parties can be as creative as they wish when fashioning settlements, and virtually any option for settlement can be accepted or rejected by them providing it is lawful. Given the parties’ involvement in the settlement, it is obvious that there is a high level of commitment when it comes to implementing it. While court orders are disobeyed at a party’s risk, the fact that the settlement was imposed as opposed to being agreed upon means that the enthusiasm with which implementation will occur may be greatly different. Court imposed resolution is generally begrudgingly carried out, whereas an agreed settlement is generally carried out with more enthusiasm and better quality by both sides of the dispute.

WHEN IS MEDIATION INAPPROPRIATE? [3.250]

It is arguable that there are some disputes that should not be mediated. Some people view mediation as appropriate for every type of dispute providing the parties themselves are willing to participate in good faith. Others view mediation as being only suitable in a limited number of matters, based on the substantive qualities of the dispute and its significance to the wider community. The following is a non-exhaustive list of some of the types of disputes that may be unsuitable for mediation: (a) Publicity: Where a party or parties are seeking publicity as opposed to resolution, then mediation may not be appropriate. Examples of such situations are environmental matters such as the dispute over the construction of the Gordon-below-Franklin river dam in Tasmania (Commonwealth v Tasmania; Attorney-General (TAS) v Commonwealth (1983) 158 CLR 1) (Tasmanian Dams case) and immigration matters such as the Tampa asylum seekers (Ruddock v Vadarlis (2001) [2001] FCA 1329). The public benefited by being informed about the actions of the Executive arm of State and Federal governments. In these sorts of disputes, while mediation would undoubtedly provide a satisfactory resolution to the dispute, it is important for the resolution to be decided in open court where the community can hear the evidence presented and bear witness to the adjudication rather than it being resolved behind closed doors in mediation. The confidentiality of mediation

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would not serve the community well in such cases where the public need to know what actions the Executive arms of government are taking on their behalf. (b) Precedent: The creation of precedent is a very important element of the development of the rule of law. In a dynamic society the rule of law changes and adapts to the changing mores of that society. Law changes according to public opinion by the society exerting pressure on the legislature. The courts can similarly be responsive to community change through the interpretation of legislation while not offending the separation of powers doctrine. Therefore, the courts have a vital role to play in the development of the law. In such cases, curial adjudication is more appropriate than mediation. For example, in the Tasmanian Dams case the Commonwealth Government had its corporations and external affairs powers tested under s 51(xx) and (xxix) respectively of the Commonwealth Constitution. This was a very important case that established an important line of authority on the use of these powers, which is still good law today. In such circumstances it is vital that precedent be established so that the community and the Executive arm of government know the limits of their power. (c) Delay: It is true that, as unethical as it sounds, some parties delay resolution for their own advantage. The advantage being sought might be the poor health of the other party or the other party’s lack of financial resources to fight the dispute. In such cases mediation should not delay proceedings. In fact the delayed party should be seeking expedition of the matter in the court list, not negotiating the name of a mediator, the venue and suitable dates and times. In such cases the courts have special procedures in place for parties to seek expedition and under those circumstances it may be inappropriate to delay proceedings any further by mediation. Even the promise of concurrent mediation with litigation is still diverting resources away from the dispute being heard and should perhaps not be considered. (d) Reticence: Some people shudder at the thought of the process of mediation. They cannot and do not want to participate in a process that requires them to speak about the dispute whether it be with a view to discovering issues, interests, BATNAs or even just telling their side of the story. In short, they do not wish to handle their own dispute or be actively involved in its resolution. Chances are that they have employed a lawyer in order to resolve the dispute through the courts on their behalf. In these sorts of disputes it is pointless pursuing mediation where a party feels this way. If mediation were pursued in such circumstances then the mediator risks conducting mediation with a power imbalance that could result in an unfair settlement that may not last through to complete implementation. (e) Power imbalance: In disputes where there is an obvious power imbalance, it may be better to have the dispute resolved by a court. Power imbalances occur in a variety of circumstances. For example, where domestic violence is involved, it is very hard to see how mediation will allow the victim and the perpetrator to sit down on equal terms and seek a resolution to the dispute. In such cases the state

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has determined that the dispute is one where a crime has been committed against the state and the state has statutorily defined sanctions for such behaviour that do not involve dispute resolution. Mediation should not prevent the state sanctions from applying and the various State statutory schemes generally exclude, for example, court ordered mediation in criminal matters. Another example is where the financial, educational or social imbalance is so great that mediation cannot reduce the imbalance to a point where the disadvantaged party can begin to negotiate with a view to satisfying interests. Such power imbalances do not miraculously disappear in curial proceedings. However, it is able to be controlled to a certain degree by the presiding judicial officer who is bound to apply the rule of law in an even-handed fashion to all who come before the courts. In short, the rules of evidence apply whether: a party is represented by counsel or not; has financial resources or not; and, is a leading member of the community or not. Certainly the quality of the legal argument may vary in a case of a financial power imbalance, but in such cases, court is still likely to produce a more balanced resolution than dispute resolution dependant on the party’s own ability to articulate his or her interests and fashion a settlement balanced in satisfying those interests.

4

Arbitration DEFINING ARBITRATION

[4.10] In Chapter 1 the predominant forms of dispute resolution that are practised in Australia were explained and it was noted that they can be distinguished by, amongst other ways, their levels of formality, consensuality and intervention. Arbitration lies at one end of the scale because it is the most formal of all the non-curial forms of dispute resolution – if, indeed, it can be classed as being “non-curial”, a point to be discussed below. This is because arbitration is governed by a statutory framework and relies on adjudication by the arbitrator, who hands down an award at the conclusion of the arbitration. The process of arbitration cannot be classed as consensual; rather, it takes place in a framework of adversarial advocacy where parties present evidence that seeks to persuade the arbitrator of the legal validity of their case. Arbitration is the most interventionist of all the non-curial methods of dispute resolution because: • arbitrators are empowered by statute to conduct arbitration in any manner they see fit pursuant to s 19 of the Uniform Commercial Arbitration Acts (the Acts); and, • arbitrators can also gather information in relation to any matter in such a manner as the arbitrator thinks fit pursuant to the paramount object of the Acts set out in s 1C, which is to facilitate the fair and final resolution of commercial disputes without unnecessary delay or expense. According to the former NADRAC, “arbitration is a process in which the participants to a dispute present arguments and evidence to a dispute resolution practitioner (the arbitrator) who makes a determination”. (See Dispute Resolution Terms, at the Commonwealth Attorney-General’s website, https://www.ag.gov.au/LegalSystem/AlternateDisputeResolution/Pages/ NADRACPublications-A-Z.aspx.) This definition probably omits more than it discloses about what arbitration is about. The determination referred to in the definition is called an “award” and has the force of a judicial determination, only subject to appeal on a point of law. Further, arbitration proceedings are conducted on an adversarial basis where the parties to the arbitration present their case to the arbitrator in a similar fashion to court proceedings. They may call witnesses who are examined and cross-examined, although pursuant to s 19(3) of the Acts the arbitral tribunal has the power to determine the admissibility, relevance, materiality and weight of any evidence presented at arbitration.

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Of all the dispute resolution processes being formally practised in Australia, arbitration is the oldest. It dates back to 1904 when the Commonwealth enacted the Conciliation and Arbitration Act 1904, whose objects were: • to promote goodwill in industry; • to encourage, and provide means for, conciliation with a view to amicable agreement, thereby preventing and settling industrial disputes; • to provide means for preventing and settling industrial disputes not resolved by amicable agreement, including threatened, impending and probable industrial disputes, with the maximum of expedition and the minimum of legal form and technicality; • to provide for the observance and enforcement of agreements and awards made for the prevention or settlement of industrial disputes; • to encourage the organisation of representative bodies of employers and employees and their registration under this Act; and • to encourage the democratic control of organisations so registered and the full participation by members of such an organisation in the affairs of the organisation. The same objects are probably true of current legislation governing arbitration only without the emphasis on industrial disputes. Since 1904, domestic arbitration in Australia has enjoyed a long and illustrious history. All jurisdictions within Australia have court-referred mechanisms for arbitration and international arbitration has enjoyed a gradual rise in popularity since its formalisation under both the Commonwealth Conciliation and Arbitration Act 1904 (Cth) and the International Arbitration Act 1974 (Cth) (IAA).

IS ARBITRATION A FORM OF DISPUTE RESOLUTION? [4.20] There are some characteristics of arbitration which are similar to litigation. For instance, arbitration is an adjudication where the arbitrator hands down an award that determines, with reasons pursuant to s 31(3) of the Acts, whether the plaintiff’s cause of action has been proved based on findings of fact. It is formal in the sense that prescribed procedures are followed and the arbitral tribunal will determine the admissibility and weight of evidence to apply throughout the arbitration. The plaintiff, defendant and any other parties joined to the proceedings are given the opportunity to examine and cross-examine witnesses and introduce certain documentation as evidence to be considered by the arbitrator. Expert evidence can be presented and lawyers generally represent the parties. The arbitrator generally conducts proceedings in a formal manner and parties may only appeal an award on a point of law. Given the above characteristics, it is not surprising that the question is often asked, “Is arbitration a form of dispute resolution?” According to well-known arbitration expert, Professor Luke Nottage:

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some arbitration processes and resulting awards may become very much like “interest based resolution of disputes by agreement”, with little or any “element of third party determination … of legal rights”, which the President of LEADR suggests distinguish ADR. In other words, at least certain types of international commercial arbitration may become so informal as to merge with some mediation processes, especially the more “evaluative” processes, rather than the more “facilitative” ones (where the third party tends to just paraphrase what each side says, more to defuse emotions and ensure surface understanding of issues and perceptions). (Nottage L, “Is (International Commercial) Arbitration ADR?” (2002) (Winter) Bar News at 28.)

Nottage’s point, about the move to more informal applications of the rules of arbitration, are reflected in two significant events. First, on 18 June 2007 the Institute of Arbitrators and Mediators Australia (IAMA, now known as Resolution Institute) launched its Fast Track Arbitration Rules and answered the call for a more user friendly process of arbitration. The Fast Track Rules have now been incorporated into IAMA’s Arbitration Rules. They state amongst other things, that parties may opt into a fast track arbitration, meaning they commit themselves to concluding the arbitration within 150 days from the day the arbitrator enters the reference. All the timelines for IAMA’s Fast Track Arbitration Rules are maximums, save for the notice requirement between the appointment of the arbitrator and the notice required to schedule the preliminary conference. As a safety net mechanism IAMA has allowed the parties and the arbitrator to make an application to extend any of the time limits by up to 10 days at a time providing the arbitrator is satisfied that such an extension is in the interests of justice. A key feature of IAMA’s Fast Track Arbitration Rules is the expedient handling of all documentation concerned with arbitration that has traditionally slowed arbitration to the point of delay and unnecessary expense. The second significant event in the reduction of the formalisation of arbitration is the assent of the new uniform Commercial Arbitration Acts, to be discussed later in this chapter. The Acts promote more flexible approaches to arbitration that enable disputes to be resolved cost effectively, informally and quickly (see[4.80]). All of this probably takes us to the point of conceding that arbitration, despite its adjudicatory nature, is part of the dispute resolution family of processes that seek to bring disputation to an end without recourse to litigation.

THE RELATIONSHIP BETWEEN DOMESTIC AND INTERNATIONAL ARBITRATION [4.30] While this chapter does not deal with international arbitration in detail, it is worth noting that like all treaties and conventions, the United Nations Commission on International Trade Law (UNCITRAL) Model Law

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on International Commercial Arbitration cannot have the force of law in Australia unless it is passed into domestic law through an Act of parliament. Section 16 of the IAA passes the UNCITRAL Model Law into Australian domestic law. In addition it adopts the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted in 1958 by the United Nations Conference on International Commercial Arbitration at its 24th meeting, a copy of which is set out in Sch 1 of the Act. Importantly, this additional adoption allows each subscribing country to recognise arbitral awards as binding and enforce them in accordance with the rules of procedure of the country where the award is relied upon pursuant to the conditions of the Convention. The relationship between domestic arbitration conducted under the uniform legislation and international arbitration under the IAA is largely the difference in the selection of rules to arbitrate within. Parties are bound to conduct arbitration under whatever rules they specify in their arbitration agreement. The only exceptions to this are courts empowered by legislation referring disputes to arbitration under a specific set of rules or, for example, a dispute between two parties the subject of an industry code who have a certain set of rules imposed on them by virtue of that operative industry code. This leaves open the situation where a dispute between international parties could select the uniform legislation to govern their arbitration or domestic parties could select the international rules to govern their arbitration. It is up to the parties to agree on the rules governing their arbitration. Where parties to an international dispute choose the domestic uniform legislation to govern their arbitration, the uniform legislation treats such arbitration as a domestic one. Therefore, parties have choices when it comes to which rules to arbitrate under. They may choose rules pursuant to: uniform domestic legislation; international legislation; or, peak bodies – both domestic and international. Well-known international peak body rules include the: American Arbitration Association; International Chamber of Commerce and, London Court of International Arbitration. All three of these sets of rules are often used by multinational corporations and governments in their commercial agreements to ensure standardised rules that are well-known by all the contracting parties which provide some certainty should a dispute arise under the relevant contract. However, international arbitration in Australia is not conducted under a simple dichotomy of using the uniform arbitration legislation for domestic disputes and the IAA for international disputes. Where an international commercial dispute does not meet the definition of the Model Law, the State and Territory uniform legislation may be invoked. This sets up the rather unsatisfactory situation of two statutory regimes competing for arbitration which has the potential to create confusion.

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THE ADVENT OF THE UNIFORM COMMERCIAL ARBITRATION ACTS [4.40] Section 51(xxxv) of the Constitution states: The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: (xxxv) conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State

Like all of the enumerated powers granted to the Commonwealth under s 51 of the Constitution, placitum (xxxv) is limited by the interpretation imposed on it by the High Court of Australia over the succeeding years since Federation and assent of the Commonwealth Constitution. One of the early cases before the High Court of Australia on the issue of how widely the term “arbitration” could be read in s 51(xxxv) was Australian Boot Trade Employees Federation v Whybrow & Co (No 1) (1910) 10 CLR 266. In this case, the Australian Boot Trade Employees Federation served a log of claims on Whybrow & Co and other boot makers located in Queensland, New South Wales, Victoria and South Australia. The Commonwealth Court of Conciliation and Arbitration made the award binding on all the boot makers who had been served the log of claims. Later, the Employees Federation applied to the Arbitration Court for an order declaring that the award be made a common law rule in the boot making industry applying to the four original States who had been served with the log of claims, plus Tasmania. The Commonwealth Conciliation and Arbitration Act 1904 (Cth) authorised the making of such an order, declaring the award a common law rule in the boot making industry. Several employers not involved in the original dispute that gave rise to the award objected to the Arbitration Court’s jurisdiction, claiming it was unconstitutional. By a unanimous judgment of five judges (the full Bench of the High Court of Australia comprised only five judges at the time), the court found for the employers on the basis that the arbitration power in s 51(xxxv) was limited to the making of an award for specific disputants in specific proceedings and not in making a common law rule. Of interest to this chapter is the interpretation the court put on the words “conciliation and arbitration”. The court made it clear that the function of conciliation and arbitration is not a legislative one. Therefore a conciliator or arbitrator cannot change the law. On the contrary, a conciliator or arbitrator must obey the law. Barton J stated (at 293): Arbitration is a term which, taken by itself, connotes a process for the settlement of disputes by submitting them to the decision of a tribunal selected by the parties or accepted by them, and an agreement by both to be bound by the decision, which is commonly called the award. The submission may include questions of pure law, of mixed law and fact, or fact alone … and beyond all question the award is a judicial determination … The range, then, of an arbitrator’s authority … is co-extensive with the powers of the parties to settle

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their dispute without him [sic]. Whatever they can lawfully agree to, he may lawfully award. If however they desire him to make for them an agreement in breach of the mandate of positive law, he is powerless to do so … it is one thing for a party to waive a legal right, and another thing for the tribunal to impair the obligation of a law or to attempt to make a new one.

[4.50] The case law that has developed since federation means that the arbitration power of the Commonwealth is a restricted power that only allows the Commonwealth of Australia to pass laws relating to arbitration arising from a dispute involving employees and employers across State or Territory borders. Therefore, because of the interpretation of s 51(xxxv) of the Constitution and the concomitant parameters of the elements of that section, it became clear that the Commonwealth had no power to pass laws governing arbitration outside of the industrial relations sphere. Therefore, the States and Territories agreed with the Commonwealth to pass uniform legislation governing the conduct of commercial arbitration. The first iteration of the uniform Acts came into force in 1984 with NSW and Victoria being the first States to enact the legislation. In April 2009 the Standing Committee of Attorneys-General agreed to draft a new Uniform Commercial Arbitration Act for domestic arbitration in Australia. The new Acts seek to apply the UNCITRAL Model Law on International Commercial Arbitration 1985 (including the 2006 amendments) thereby aligning some features of international arbitration to the domestic application of arbitration. The following States and Territories have enacted the new uniform legislation in the following order: • New South Wales – Commercial Arbitration Act 2010 • Victoria – Commercial Arbitration Act 2011 • South Australia – Commercial Arbitration Act 2011 • Tasmania – Commercial Arbitration Act 2011 • Northern Territory – Commercial Arbitration (National Uniform Legislation) Act • Queensland – Commercial Arbitration Act 2013 Interestingly the names of the Acts are somewhat of a misnomer as there is no restriction to invoking the Acts based on the subject matter of the dispute. In other words, the Acts can be invoked whether the dispute is commercial in nature or not. The word “commercial” could be removed from the title of the Acts and not affect their operation in the slightest. The Acts are only invoked when the parties have entered into an “arbitration agreement”, a term to be defined at [4.100], or when the legislature has empowered a court to refer matters to arbitration under the Acts. However, not all court-annexed arbitration takes place under the uniform Act. For example, in Victoria, s 106 of the Magistrates’ Court Act 1989 prohibits the use of the respective uniform Act and replaces it with conduct rules listed under s 103 of the same Act. Conversely, r 50.08 of both the Supreme Court (General Civil Procedure) Rules 2005 (Vic) and the County

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Court Civil Procedure Rules 2008 (Vic) specify the use of the uniform Act or IAA for arbitral proceedings under the respective acts.

MANDATORY OR VOLUNTARY REFERRAL AND PROVISIONS? [4.60] Courts in Australia have the power to order arbitration with or without the consent of the parties to a dispute. The following nonexhaustive list of key empowering legislation specifies as to whether courts can order arbitration with or without the consent of the parties and those with both powers. Jurisdiction

Commonwealth

Legislation Federal Court of Australia Act 1976, s 53A(1A) Fair Work Regulations 2009, Sch 6.1 Item (5) Family Law Act 1975, s 13F (financial disputes) Family Law Act 1975, s 13E (property & maintenance disputes); Family Law Regulations 1984, reg 67D; Family Law Rules 2004, r 10.14

Australian Capital Territory New South Wales Northern Territory Queensland South Australia Tasmania

Victoria

Western Australia

With consent ✗

✗ ✗ ✗

Federal Circuit Court of Australia Act 1999, s 35 Court Procedures Rules 2006, r 3252 Civil Procedure Act 2005, s 38(1) Civil and Administrative Tribunal Act 2013, Sch 4 Pt 5 s 5(1) (Consumer and Commercial Division) Commercial Arbitration Act 2010, s 8 Commercial Arbitration (National Uniform Legislation) Act, s 8 Commercial Arbitration Act 2013, s 8 Supreme Court Act 1935, s 66

Without consent

✗ ✗

✗ ✗ ✗ ✗ ✗ ✗

Commercial Arbitration Act 2011, s 8

✗

Commercial Arbitration Act 2011, s 8 Supreme Court (General Civil Procedure) Rules 2005, r 50.08(1) County Court Act 1958, s 46(1) (pursuant to an arbitration agreement) County Court Act 1958, s 47A (without an arbitration agreement) Magistrates’ Court Act 1989, s 102(3) (small claims) Commercial Arbitration Act 2011, s 8

✗ ✗ ✗ ✗ ✗ ✗ ✗

Supreme Court Act 1935, s 51 Industrial Relations Act 1979, s 32(6)(b)

✗

Commercial Arbitration Act 2012, s 8

✗

Some jurisdictions place conditions on the mandatory ordering of arbitration. For example, in New South Wales a mandatory order for arbitration can only be made pursuant to s 38(1) of the Civil Procedure Act

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2005 on a claim for the recovery of damages or other money, or in which any equitable relief or remedy is claimed ancillary to a claim for the recovery of damages or other money.

AUSTRALIAN DOMESTIC ARBITRATION – UNIFORM LEGISLATION [4.70] All six States of Australia and the Northern Territory have passed the new uniform Acts. Given the space limitations of this text, this chapter will deal only with selected sections of the Act that reflect key operational areas that affect the practice of domestic arbitration in Australia. Further, as with all sections of the new Acts, each will need to be tested before a court for the correct interpretation given the drafting changes since 2010. Although many of the new sections contain the same intent as sections in the superseded Acts, the drafting of some sections has changed the meaning or expanded upon sections in the superseded Acts. Therefore, some of the commentary and case law featured in this chapter is clearly based on the superseded Acts but will assist courts in interpreting the new Acts in the future as each section or parts thereof are brought before the courts. For the sake of ease the Commercial Arbitration Act 2010 (NSW) will be used as the example for the remainder of this chapter unless otherwise specified. Part 1A – Preliminary Section 1C – Paramount object of Act

[4.80] The new Acts have a paramount object to guide the interpretation of the Acts and the practice of domestic arbitration in Australia. In this respect s 1C of the Acts state: (1) The paramount object of this Act is to facilitate the fair and final resolution of commercial disputes by impartial arbitral tribunals without unnecessary delay or expense. (2) This Act aims to achieve its paramount object by: (a) enabling parties to agree about how their commercial disputes are to be resolved (subject to subsection (3) and such safeguards as are necessary in the public interest), and (b) providing arbitration procedures that enable commercial disputes to be resolved in a cost effective manner, informally and quickly. (3) This Act must be interpreted, and the functions of an arbitral tribunal must be exercised, so that (as far as practicable) the paramount object of this Act is achieved. (4) Subsection (3) does not affect the application of section 33 of the Interpretation Act 1987 for the purposes of interpreting this Act.

During debate on the second reading of the Bill, New South Wales government backbencher, Kayee Griffin, made the following speech about the paramount objective:

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The Commercial Arbitration Bill 2010 aims to ensure that arbitration can provide an efficient and cost-effective alternative to litigation for parties seeking to settle their commercial disputes. The bill’s paramount objective is to facilitate the fair and final resolution of commercial disputes by impartial arbitral tribunals without unnecessary delay or expense. It aims to achieve this by enabling parties to agree about how their commercial disputes are resolved, subject to safeguards necessary in the public interest, and providing arbitration procedures that enable disputes to be resolved in a cost-effective manner, informally and quickly. To preserve the attributes that make arbitration a viable and attractive alternative dispute resolution process, the bill also clearly defines and limits the role of the courts in arbitration while maintaining the important protective function they exercise. (The Hon Kayee Griffin MLC, New South Wales, Parliamentary Debates, Legislative Council, 9 June 2010, 23996-24033.)

Griffin’s comments highlight the attempt by the legislators to make domestic arbitration more flexible by moving the priority to informality that in theory will reduce time and costs to parties in dispute.

Part 1 – General Provisions Section 1 – Scope of application

[4.90] Section 1(1) of the Acts state, “This Act applies to domestic commercial arbitrations”. The word “commercial”” is defined in the footnote to s 1(1) by adopting the interpretation given to the word by the Art 1 of the Model Law. The footnote states: The term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business co-operation; carriage of goods or passengers by air, sea, rail or road.

Section 1(3) of the Acts state: (3) An arbitration is “domestic” if: (a) the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in Australia, and (b) the parties have (whether in the arbitration agreement or in any other document in writing) agreed that any dispute that has arisen or may arise between them is to be settled by arbitration, and (c) it is not an arbitration to which the Model Law (as given effect by the International Arbitration Act 1974 of the Commonwealth) applies.

Section 1(3)(c) specifically precludes arbitration to which the IAA applies. It was drafted in order to avoid confusion regarding whether arbitration was governed by the domestic Acts or the IAA and states: (3) An arbitration is international if:

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(a) the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different States; or (b) one of the following places is situated outside the State in which the parties have their places of business: (i) the place of arbitration if determined in, or pursuant to, the arbitration agreement; (ii) any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or (c) the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country. (4) For the purposes of paragraph (3) of this article: (a) if a party has more than one place of business, the place of business is that which has the closest relationship to the arbitration agreement; (b) if a party does not have a place of business, reference is to be made to his habitual residence.

Therefore, any arbitration that satisfies the definition of “international” pursuant to the IAA which adopted the Model Law is excluded from the Acts.

Part 2 – Arbitration Agreement Section 7 – Definition and form of arbitration agreement

[4.100] For the Act to be invoked, the parties have to have an “arbitration agreement”, which is defined by s 7 as meaning: (1) An “arbitration agreement” is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) The arbitration agreement must be in writing. (4) An arbitration agreement is in writing if its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct, or by other means. (5) The requirement that an arbitration agreement be in writing is met by an electronic communication if the information contained in it is accessible so as to be useable for subsequent reference. (6) In this section: “data message” means information generated, sent, received or stored by electronic, magnetic, optical or similar means, including, but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy. “electronic communication” means any communication that the parties make by means of data messages. (7) Furthermore, an arbitration agreement is in writing if it is contained in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other.

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(8) The reference in a contract to any document containing an arbitration clause constitutes an arbitration agreement in writing, provided that the reference is such as to make that clause part of the contract.

The legislation notes that s 7 is substantially the same as Option I of Art 7 of the Model Law. However, Option II of Art 7 omits the formatting requirements including the necessity for arbitration agreements to be in writing. Although the Acts adopt a requirement for arbitration agreements to be in writing, the common law still allows for a verbal agreement. Therefore, any such arbitration triggered by a verbal agreement would be conducted under common law arbitration rules. Section 8 of the Acts states: a court before which an action is brought in a matter which is the subject of an arbitration agreement must, if a party so requests not later than when submitting the party’s first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.

This section gives the court the right to refer matters to arbitration without the parties’ consent where they have previously agreed to arbitration should a dispute arise. The courts have not imposed the use of special words to be used indicating an arbitration agreement providing an agreement to submit a dispute to arbitration is apparent from the words themselves. In other words, the arbitration agreement must make it clear that arbitration is the chosen process to deal with the dispute. Further, the words must indicate that arbitration rather than any other form of non-curial dispute resolution is the preferred method of dispute resolution.

Part 3 – Appointing the arbitrator Section 11 – Appointment of arbitrators

[4.110] Section 11 of the Acts provides that the parties to arbitration are free to agree on a procedure to appoint an arbitrator or arbitrators and states: (1) ... (2) The parties are free to agree on a procedure of appointing the arbitrator or arbitrators, subject to the provisions of subsections (4) and (5). (3) Failing such agreement: (a) in an arbitration with 3 arbitrators and 2 parties, each party is to appoint one arbitrator, and the 2 arbitrators so appointed are to appoint the third arbitrator; if a party fails to appoint the arbitrator within 30 days of receipt of a request to do so from the other party, or if the 2 arbitrators fail to agree on the third arbitrator within 30 days of their appointment, the appointment is to be made, on the request of a party, by the Court, and (b) in an arbitration with a sole arbitrator, if the parties are unable to agree on the arbitrator, an arbitrator is to be appointed, on the request of a party, by the Court, and

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(c) in an arbitration with 2, 4 or more arbitrators or with 3 arbitrators and more than 2 parties the appointment is to be made, at the request of a party, by the Court. (4) Where, under an appointment procedure agreed on by the parties: (a) a party fails to act as required under the procedure, or (b) the parties, or 2 or more arbitrators, are unable to reach an agreement expected of them under the procedure, or (c) a third party, including an institution, fails to perform any function entrusted to it under the procedure, (5) A decision within the limits of the Court’s authority on a matter entrusted by subsection (3) or (4) to the Court is final. (6) The Court, in appointing an arbitrator, is to have due regard to any qualifications required of the arbitrator by the agreement of the parties and to such considerations as are likely to secure the appointment of an independent and impartial arbitrator.

Parties sometimes request an arbitrator with special qualifications. This leads to the arbitrator having some level of understanding of the subject matter of the dispute which may save time and costs. In relation to the requirement for any special qualifications for appointment as an arbitrator: Where the parties have agreed that the arbitration shall be before a person or persons having special qualifications, the award of non-qualified persons will be void, as the agreed qualifications of the arbitration tribunal refer to its jurisdiction to act: Re Backhouse and Taylor (1851) 20 LJQB 233; French Government v Tsurushima Maru (owners) (1921) 7 Ll L Rep 244, on appeal French Government v Tsurushima Maru (owners) (1921) 8 Ll L Rep 403. In Jungheim, Hopkins & Co v Foukelmann [1909] 2 KB 948, the arbitrator was required to be a member of the trade association. See also Merchants’ Marine Insurance Co Ltd v North of England Protecting & Indemnity Association (1926) 32 Com Cas 165; Ringland v Lowndes (1864) 17 CB (NS) 514; 144 ER 207. Unless the agreement between the parties otherwise provides, if an arbitrator satisfies the necessary qualifications at the time of his or her appointment, the arbitrator should not be disqualified from holding that position by his or her subsequent retirement from the position which clothed him or her with the necessary qualifications at the time of appointment. In Pan Atlantic Group Inc v Hassneh Insurance Co of Israel Ltd [1992] 2 Lloyd’s Rep 120 the court per Sir Donald Nicholls VC, Russell and Leggat LJJ held that it would be ridiculous if an arbitrator on accepting an appointment was impliedly expected to remain employed in the position which gave him or her qualifications for the duration of the arbitration. (Commercial Arbitration Law and Practice (Thomson Reuters, Sydney, January 2014), Update 145, at [300.120].)

Section 12 – Grounds for challenge

[4.120]

Section 12 of the Acts provide grounds by which parties can challenge the appointment of an arbitrator or arbitrators and states: (1) When a person is approached in connection with the person’s possible appointment as an arbitrator, the person must disclose any circumstances likely to give rise to justifiable doubts as to the person’s impartiality or independence.

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(2) An arbitrator, from the time of the arbitrator’s appointment and throughout the arbitral proceedings, must without delay disclose any circumstances of the kind referred to in subsection (1) to the parties unless they have already been informed of them by the arbitrator. (3) An arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to the arbitrator’s impartiality or independence, or if the arbitrator does not possess qualifications agreed to by the parties. (4) A party may challenge an arbitrator appointed by the party, or in whose appointment the party has participated, only for reasons of which the party becomes aware after the appointment has been made. (5) For the purposes of subsection (1), there are justifiable doubts as to the impartiality or independence of a person approached in connection with a possible appointment as arbitrator only if there is a real danger of bias on the part of the person in conducting the arbitration. (6) For the purposes of subsection (3), there are justifiable doubts as to the impartiality or independence of an arbitrator only if there is a real danger of bias on the part of the arbitrator in conducting the arbitration.

CASE NOTE: Bremer Handelsgesellschaft MBH v Ets Soules et Cie [4.130] Bremer Handelsgesellschaft MBH v Ets Soules et Cie [1985] 1 Lloyd’s Rep 160 Facts: On 20 November 1972 the applicant/respondent in arbitration, Bremer, sold to the respondent/applicant in arbitration, 1,320 tonnes of soya bean meal inclusive of cost insurance and freight for US$142.50 per tonne. The soya bean meal was to be shipped each month between April and September 1973. During June 1973 serious flooding occurred in the Mississippi basin in the United States and the United States government imposed an embargo to control the export of soya bean meal. The embargo limited the shipment of soya bean meal to 40% of the contracted quantity. In late July 1973, the government permitted the shipment of the balance of the contracted quantity. At the time it was common for the same shipment of soya bean meal to be sold and resold a number of times via a chain of contracts each dependent on the previous one. In some cases there were dozens of contracts involved covering the one shipment of soya bean meal. Should an issue arise there could often be a similar string of arbitrations. Bremer did not ship the soya bean meal after the embargo was announced, invoking the force majeure clause in the contract. On 30 July 1973, Bremer gave notice to Soules of the appropriation of 40% of the 220 tonnes being shipped to Soules. On 21 September 1973, Soules declared Bremer in default in respect of the unshipped balance and the dispute was referred to arbitration. The arbitrators handed down an award on 29 April 1974 ordering Bremer to pay Soules US$65,129. Bremer gave notice of an appeal and an Appeal Board was constituted pursuant to the Grain and Feed Trade

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Association Ltd rules that consisted of numerous members (including a Mr AG Scott who was, among other things, a director of Andre et Cie of Lausanne who was a potential buyer of the unfulfilled transactions as a result of the embargo). Bremer alleged that Mr Scott was not in a position to act as arbitrator because he could not act without bias and therefore he was guilty of misconduct. Decision: Bremer failed to prove its case as there was nothing to suggest Bremer had been treated unfairly in the past nor any risk appreciable to the reasonable man that they would be so treated in the future. Bremer’s application was dismissed with Mustill J stating: [166] I have no hesitation in rejecting this [Bremer’s] argument, whether in the light of the facts emerging at the present hearing, or solely on the basis of the material advanced by Bremer Handels at the time of the notice of motion. Taking the latter first, there was only the thinnest of evidence to found the supposition that Andre had a long position ... Moreover, even if it were legitimate to suspect that Andre were long and even if it could be surmised that Mr Scott knew this, the supposed risk of bias would not be established. This is not just a routine GAFTA June arbitration, with the same submissions being made on the same material, no doubt leading to the same result as in so many previous cases. Bremer Handels now have new lawyers, new evidence and new arguments. The members of the board are bound to be keenly interested in this novelty. Is there a real risk that unconsciously Mr Scott will be influenced by a desire to favour Andre in such a manner as to cause him to fail to assess this fresh evidence on its merits: and, what is more, if not to persuade at least one of his fellow members to join him, at least to conduct the debate in a way which did not disclose his ulterior motive? All this, it may be added, in the hope that a board in some future arbitration, on which he would not be sitting, might be influenced itself to decide a dispute involving Andre against the true weight of the evidence and the arguments. I can only say that in my judgment the reasonable man would not apprehend such a risk. Nor do I consider that he would foresee any risk that Mr Scott would be consciously motivated to do any such thing. If there had been any evidence of a significant pattern in the outcome of the previous [167] arbitrations, with the sellers tending to lose when Mr Scott was sitting on the Board of Appeal and win when he was not, then his voting record might cast a shadow on his impartiality. But the opposite is the case. Intermediate sellers of the June position have consistently lost, whoever was sitting. They have lost, not because Mr Scott or anyone else was biased against June sellers but because the Courts have laid down a test which, until now, the sellers have failed to satisfy: just as sellers for July and later months have tended to win, because the legal considerations are different. Why then at this late stage, with so many cases either decided or settled, should Mr Scott suddenly be struck with bias, for a motive which, even in the light of the lunchtime conversation, would be speculative in the extreme? I can see no reason.

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Part 4 – Jurisdiction of arbitral tribunal Section 16 – Competence of arbitral tribunal to rule on its own jurisdiction

[4.140]

Section 16 of the Acts empowers the arbitral tribunal to rule on its own jurisdiction and most importantly addresses the issue of arbitration clauses living on after a contract is found by the tribunal to be null and void due to, for example, an error at the formation stage of the contract. Section 16 states: (1) The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. (2) For that purpose, an arbitration clause which forms part of a contract is to be treated as an agreement independent of the other terms of the contract. (3) A decision by the arbitral tribunal that the contract is null and void does not of itself entail the invalidity of the arbitration clause. (4) A plea that the arbitral tribunal does not have jurisdiction must be raised not later than the submission of the statement of defence. (5) A party is not precluded from raising such a plea by the fact that the party has appointed, or participated in the appointment of, an arbitrator. (6) A plea that the arbitral tribunal is exceeding the scope of its authority must be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings …

The following extract addresses issues raised by the newly drafted s 16, particularly s 16(4) dealing with the timing of parties raising jurisdictional issues.

CASE NOTE: Balfour Beatty Power Construction Australia v Kidston Goldmines [4.150] Balfour Beatty Power Construction Australia Pty Ltd v Kidston Goldmines Ltd [1989] 2 Qd R 105 Facts: After two weeks of hearing by an arbitrator, one party to the arbitration sought to amend the points of defence to plead that a particular issue was beyond the scope of the agreement to arbitrate. The arbitrator refused the amendment and in a special case stated this and a number of other questions for the opinion of the Supreme Court. Several questions were referred to the court with the following referencing the arbitration tribunal’s ability to rule on its own jurisdiction: “Was I bound as a matter of law on the facts stated above and on the facts found by me as stated in my reasons to refuse the principal’s application for amendment?” Decision: The court answered the threshold question as to jurisdiction in the negative. The court judged that as a submission to arbitration

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was, unlike the submission to a court, based on contract, the arbitrator must determine whether or not there was an agreement to arbitrate rather than whether or not an objection to jurisdiction was taken at the right time. A defence which failed to raise a jurisdictional issue was not necessarily an ad hoc submission to arbitration in the absence of agreement. Dowsett J stated, at 120: However, it is quite clear from all of his reasoning that the question to which the arbitrator directed his attention was whether the objection to jurisdiction had been taken at the right time. This would of course be the correct question to ask if one were looking at the question of whether there had been submission to the jurisdiction of a court. However as I have said, the question to be asked by the arbitrator was whether or not there had been an agreement to arbitrate. He at no time appears to have considered whether or not the conduct in question could be given that description, his attention having been distracted by the other issue. Thus, although I think it was probably incumbent upon the principal to justify the amendment in the sense of showing why it should be allowed, and although in the absence of evidence to the contrary, it may have been open to the arbitrator to draw an inference from the delivery of the points of defence and subsequent participation in the arbitration that there had been an ad hoc reference to arbitration to the extent that the points of claim went beyond the agreement to arbitrate, nonetheless it seems to me that the arbitrator failed to consider that question. The course which should have been followed was either to allow the amendment and then to agitate the question in the usual way in the course of the hearing or alternatively, if for some reason he thought it appropriate, the arbitrator ought to have indicated to the principal’s counsel his intention to determine the matter in a preliminary way, inviting both parties then to lead such evidence as they thought appropriate. The matter was not one which could be dealt with by one counsel asserting that he wished to rely upon no other facts and challenging the other side to respond in a similar form, at least not in the absence of any agreement by the parties. I should not be taken as recommending this latter course as one which it would be desirable to follow when this matter goes back to the arbitrator.

Part 4A – Interim measures Section 17A – Conditions for granting interim measures

[4.160] Section 17 of the Acts gives the parties to arbitration the right to empower the arbitral tribunal to grant interim measures upon request by the parties. The section also defines the term “interim measures” in the following way: (2) An “interim measure” is any temporary measure, whether in the form of an award or in another form, by which, at any time prior to the issuance of the award by which the dispute is finally decided, the arbitral tribunal orders a party to:

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(a) maintain or restore the status quo pending determination of the dispute, or (b) take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process itself, or (c) provide a means of preserving assets out of which a subsequent award may be satisfied, or (d) preserve evidence that may be relevant and material to the resolution of the dispute.

Section 17A sets out the conditions for granting interim measures and states: (1) The party requesting an interim measure under section 17 (2) (a), (b) or (c) must satisfy the arbitral tribunal that: (a) harm not adequately reparable by an award of damages is likely to result if the measure is not ordered, and that harm substantially outweighs the harm that is likely to result to the party against whom the measure is directed if the measure is granted, and (b) there is a reasonable possibility that the requesting party will succeed on the merits of the claim. (2) The determination on the possibility referred to in subsection (1) (b) does not affect the discretion of the arbitral tribunal in making any subsequent determination. (3) With regard to a request for an interim measure under section 17 (2) (d), the requirements in subsection (1) (a) and (b) and subsection (2) apply only to the extent the arbitral tribunal considers appropriate.

The following extract is a landmark decision of the High Court of Australia that discusses the conditions by which an interlocutory injunction may be granted.

CASE NOTE: Beecham Group v Bristol Laboratories [4.170] Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1; [1968] RPC 30 Facts: The plaintiff/applicant, Beecham, owned certain patents for penicillin nucleus that allow the production of a semi-synthetic penicillin called “ampicillin” and for the production processes to produce the drug. The alleged patent infringement consisted of the defendant/respondent advertising, offering for sale, selling and supplying in Australia of a semi-synthetic penicillin called “hetacillin” which is manufactured outside of Australia. Hetacillin is chemically a different structure to ampicillin however it is produced by a process that uses the same penicillin nucleus. The applicant alleged that if hetacillin were produced in Australia some of its patents would be infringed both through manufacture and use of the chemical. Hetacillin is produced overseas under licence but the applicant asserted that its sale in Australia would be an infringement of its

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patents. The respondent asserted that hetacillin is a different substance from ampicillin and that no infringement occurs by its use in Australia. The applicant applied for an interlocutory injunction preventing the respondent from bringing hetacillin into Australia. The court at first instance rejected the applicant’s application for an interlocutory injunction. The applicant appealed to the full court of the High Court of Australia (then consisting of five justices). Decision: Appeal allowed on the basis that the balance of convenience favours the granting of the injunction because protecting the applicant’s good will built from an established product outweighs any injury the respondent would suffer given its product is a new product on the market. McTiernan J, Kitto, Taylor, Menzies and Owen JJ stated at 621-627: It is as well to begin consideration of the appeal by recalling the principles to be observed in dealing with applications for interlocutory injunctions in patent cases ...The Court addresses itself in all cases, patent as well as other, to two main inquiries. The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief: Preston v Luck (1884) 27 ChD 497 at 506; Challender v Royle (1887) 36 ChD 425 at 436 ... [623] The second inquiry is directed to this aspect of the matter. It is whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted … [626] In April 1967, after the plaintiff had been building up in Australia a substantial business in ampicillin over a period of several years, the defendant announced its intention of marketing hetacillin in Australia. The plaintiff on 10th May 1967 warned the defendant that if it began to do so proceedings for infringement of the patents would be taken. It was in the face of this warning that the defendant commenced the acts now complained of, and the action was thereafter instituted without delay. Any goodwill the defendant may since have built up for hetacillin would of course be destroyed or damaged by granting an injunction, but that was a risk the defendant took with its eyes open ... [627] We are persuaded upon the like consideration that the interests of justice will best be served by adhering to the general pattern of granting the patentee an injunction to keep the invader of its existing market at bay until a decision has been reached as to whether the invasion is lawful or not.

Part 5 – Conduct of arbitral proceedings Section 19 – Determination of rules of procedure

[4.180] The power for the tribunal to conduct arbitral proceedings is set out in Pt 5 of the Acts and is more detailed in its approach to empowering

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the tribunal to so conduct proceedings than the superseded Acts. Section 19 is the main section that empowers the tribunal to conduct proceedings and states: (1) Subject to the provisions of this Act, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings. (2) Failing such agreement, the arbitral tribunal may, subject to the provisions of this Act, conduct the arbitration in such manner as it considers appropriate. (3) The power conferred on the arbitral tribunal includes the power to determine the admissibility, relevance, materiality and weight of any evidence. (4) The power conferred on the tribunal also includes the power to make orders or give directions for the examination of a party or witness on oath or affirmation. (5) For the purposes of the exercise of the power referred to in subsection (4), the arbitral tribunal may administer any necessary oath or take any necessary affirmation. (6) An order made or direction given by an arbitral tribunal in the course of arbitral proceedings is, by leave of the Court, enforceable in the same manner as if it were an order of the Court and, where leave is so given, judgment may be entered in terms of the order or direction.

When interpreting the power of an arbitrator the following short commentary from Commercial Arbitration Law and Practice (Thomson Reuters, Sydney, January 2014), Update 145, at [400.50]) states: When considering the powers of an arbitrator in detail, it must be remembered that subject to the express or implied provisions of the arbitration agreement, the provisions of the relevant legislation and considerations of natural justice, the procedure of the arbitration is controlled by the arbitrator and the courts do not have an inherent general power to control the activities of the arbitrator: Abu Dhabi Gas Liquefaction Co Ltd v Eastern Bechtel Corp [1982] 2 Lloyd’s Rep 425 per Watkins LJ; FR Waring (UK) Ltd v Administracao Geral do Acucar E do Alcool EP [1983] 1 Lloyd’s Rep 45; Kirkawa Corp v Gatoil Overseas Inc, The Peter Kirk [1990] 1 Lloyd’s Rep 154 …

Arbitrators can only exercise powers granted to them

[4.190]

The primacy of the arbitration agreement is once again evidenced in the rule that arbitrators can only exercise the powers granted to them under the arbitration agreement.

CASE NOTE: Phoenix v Pope [4.200]

Phoenix v Pope [1974] 1 All ER 512

Facts: Twelve partners in a real estate business signed a partnership agreement that lacked a method for the dissolution of the partnership. The partnership agreement contained an arbitration clause empowering an arbitrator to arbitrate any disputes arising under the

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partnership agreement. Eleven of the twelve partners served a notice of expulsion on the twelfth partner, who sought an order from the court dissolving the partnership. A stay of proceedings was sought on the dissolution proceedings so that the matter could be arbitrated. The plaintiff claimed that the arbitrator had no power to dissolve the partnership. Decision: The arbitration clause in the partnership agreement was wide enough to include the power for the arbitrator to consider whether the partnership should be dissolved. That being so, the court found that it could order a stay of proceedings for the matter to be arbitrated. Goff J stated at 725: In Walmsley v White there was a power of expulsion but it had not been exercised. The action was for dissolution and in those circumstances it seems to me that the existence of that power is irrelevant. Then in Vawdrey v Simpson [1896] 1 Ch 166, which I have already mentioned, where also there was no power of determination, Chitty J said, at 168 Walmsley v White, 40 WR 675; before the Court of Appeal, has settled the question, about which a difference of opinion seems at one time to have been entertained, whether, when articles of partnership contain an arbitration clause similar to the one before me, an arbitrator has power, if he see fit, to award a dissolution. In that case the judge in the court below had made an order that the action should be stayed, and the Court of Appeal declined to interfere with his discretion. But it is a distinct decision that an arbitrator has power in a case like this to award a dissolution; it is, therefore, unnecessary for me to go into and examine any of the other authorities which have been cited to me ... [727] In my judgment … Apart from everything else, the decision in Walmsley v White, 40 WR 675 appears to me to be a decision of the Court of Appeal binding me just as it appeared to Chitty J in Vawdrey v Simpson [1896] 1 Ch 166; if it be wrong it is not for me to say so.

An arbitrator may only delegate powers when authorised to do so

[4.210] Part 5 of the Acts does not specifically prohibit the delegation of an arbitrator’s powers. However, the common law has provided that given the primacy of the arbitration agreement to appoint the arbitrator and define the procedures to be followed, an arbitrator can only delegate authority if authorised by the arbitration agreement to do so. The following extract highlights the accepted wisdom that arbitrators cannot delegate the role of arbitrator to another.

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CASE NOTE: Neale v Richardson [4.220]

Neale v Richardson [1938] 1 All ER 753

Facts: The defendant hired the plaintiff to build a home. Their contract provided for payments by instalment, to commence when the defendant received a certificate from the architect. It was agreed that should a dispute arise, the architect would act as arbitrator. When a dispute arose, the architect nominated a third party to act as arbitrator, refusing to arbitrate the matter himself or issue a certificate for the final payment. The plaintiff-builder sued the defendantproperty owner for the outstanding balance for labour and materials. The defendant argued that payment was not required as per the contract, since payments were only due upon receipt of the architect’s certificate. Decision: An arbitrator cannot delegate the role of arbitrator to another. Moreover, as arbitrator, it was the architect’s duty to decide whether the final certificate should be provided. The failure of the architect to arbitrate the matter or issue the certificate however, did not bar the plaintiff from recovering the balance. With the architect refusing to act as arbitrator, the builder could appoint a new arbitrator or seek a court order. Slesser LJ stated at 757: In the present case, it is clear on the facts that the arbitrator under the [758] contract has refused to arbitrate, and the question of the builder’s right to remuneration, in the absence of a final certificate, has failed to be determined. Following Brodie’s case, an arbitration resulting in favour of the builder for a sum there determined would have enabled him to sue for his payment as if a final certificate for that amount had been granted and not wrongfully refused. The defendant in her defence relies upon the absence of a final certificate, and takes no point that a new arbitrator might have been appointed by the court under the Arbitration Act 1889, s 5, nor has she herself applied under that section to have an arbitrator appointed in lieu of the architect who has refused to act, nor taken any steps to stay this action on the ground that the parties had agreed to submit their differences to arbitration. In these circumstances, I think that the plaintiff is not precluded from having the whole question determined in court, and that the judge was entitled, though for reasons different from those upon which he relied, to take seisin of the matter, and to refer the claim and counterclaim to the registrar for report. In the result, this appeal must be dismissed with costs.

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An arbitrator cannot substitute the opinions of others for their own opinion

[4.230]

An arbitrator cannot substitute the opinions of others for their own, which is a delegation of the arbitrator’s authority. However, while this power ensures an arbitrator makes a finding using an independent mind based on the evidence presented, an arbitrator is not prevented from seeking an expert opinion (see s 26 of the Acts), providing he or she has assessed the merits of the evidence and has formed an independent view. The following extract is an example of an arbitrator employing a third party opinion in the conduct of arbitral proceedings. CASE NOTE: Hopcraft v Hickman [4.240]

Hopcraft v Hickman (1824) 57 ER 295

Facts: The Plaintiff agreed to purchase an estate from the Defendant at a price to be determined by two surveyors; one selected by each party. Upon the valuation of the estate by the surveyors, the defendant communicated to the plaintiff that it did not agree with their findings. The defendant argued that the surveyors consulted outside parties without the defendant’s consent, thus rendering their decision invalid. Decision: An arbitrator may come to the same conclusion as an expert opinion providing the arbitrator’s independent mind has assessed the merits of such an opinion and the arbitrator formed an independent view in adopting the whole or part of the opinion. Sir John Leach stated at 296-297: If the two arbitrators had agreed [297] together to be bound by the opinion of the two builders whom they consulted, there would have been much weight in the first objection to the award. But, according to the statement of the bill, upon which I am now to act, the arbitrators received the opinion of the two builders merely as evidence, and adopted it as their own upon the credit they gave to the testimony.

The taking of evidence

[4.250]

Section 19(3) of the Acts empowers the arbitral tribunal to determine the admissibility, relevance, materiality and weight of any evidence presented to the tribunal. However, this subsection only comes into effect if the parties to arbitration fail to agree on procedures for the conduct of arbitration pursuant to subsection (1). Therefore parties can agree to invoke the rules of evidence or if they fail to agree on procedures, the arbitral tribunal will invoke said rules pursuant to subsection (3). Arbitrations are generally governed by the rules of evidence as they provide for the inclusion of useful rules such as the avoidance of hearsay evidence. However, from a procedural perspective, parties also like to keep

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the rules and procedures simple so as not to allow arbitration to become long-winded and therefore, expensive. The common law has established numerous requirements when it comes to hearing evidence in arbitral proceedings some of which are not expressly dealt with by the Acts but can be implied via the application of the rules of evidence to such proceedings. For example, the common law prescribes a duty to hear all relevant evidence, and prevents a party from leading irrelevant evidence. CASE NOTE: WFA v Hobart City Council [4.260]

WFA v Hobart City Council [2000] NSWCA 43

Facts: A contract between two parties contained an arbitration clause setting out a timetable for proceedings and the presentation of evidence. A dispute arose between the parties and arbitration was initiated. After the proceedings had commenced, and both parties had a chance to present evidence, the WFA applied for an extension of time, expressing its intentions to present new evidence. The arbitrator rejected their request, refusing to receive further documentary evidence, and made an award in favour of Hobart City Council. The WFA sought to have the arbitrator’s decision set aside, arguing that his refusal to grant more time resulted in a breach of natural justice. The trial judge, Hunter J dismissed WFA’s claim. Decision: The Supreme Court held that an arbitrator owes a duty to hear all relevant evidence, and is prohibited from preventing a party from leading relevant evidence. However, in this case, it was found that the parties were already given ample opportunity to present their evidence, and that the proceedings had abided by the arbitration clause agreed to by both parties. Thus, it was held that the arbitrator’s refusal to receive additional evidence was not an abuse of process, nor a denial of the appellant’s right to procedural fairness. Meagher JA stated at [10]: I do not know on what factual basis these remarks proceed. Certainly there was a concession of counsel for the respondent that the evidence that the appellant was constrained from leading was relevant to the issues being arbitrated. But the attack on the arbitrator by the appellant was that he denied natural justice to the appellant. All he did was deny another deviation from an agreed timetable. I know of no authority which holds that an arbitrator must admit all relevant evidence even if it be tendered outside the agreed timetable. Arbitrations are intended to be swift, and timetables are the means by which that swiftness is achieved. I can see no basis for impugning the decision of the arbitrator, arrived at were for reasons were never enunciated.

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A duty to allow cross-examination of witnesses unless the parties have expressly or impliedly agreed otherwise

[4.270]

Consistent with the predominance of the arbitration agreement between parties that determines matters of procedure during arbitration, is the notion that parties have a duty to allow cross-examination of witnesses unless they agree otherwise. This is an important convention as it ensures a fair process that will allow a just outcome. Each party is entitled to test the evidence being put to the arbitral tribunal and the best way to do so is through cross-examination of witness’s evidence.

CASE NOTE: Chilton v Saga Holidays plc [4.280]

Chilton v Saga Holidays plc [1986] 1 ALL ER 841

Facts: The plaintiff, Mr Chilton took legal action against Saga Holidays, claiming substandard service and conditions on his family holiday. The matter was referred to arbitration, in which the Chelmsford County Court registrar conducted the proceedings. The defendants had legal representation, but the plaintiff opted to represent himself. During the proceedings, the registrar declined the defendant’s counsel’s request to cross-examine the plaintiff on the grounds that without legal representation, the plaintiff would be unduly disadvantaged. On appeal, the court affirmed the arbitrator’s decision, finding that there is no express right of cross-examination, and that an arbitrator has discretionary powers to allow or refuse it. The defendants appealed. Decision: The Court of Appeal found that the arbitrator’s refusal to allow cross-examination deprived the defendant of a right to develop its case. The court stressed the importance of natural justice, the adversarial system, and the opportunity for parties to determine issues and present evidence. It was held that an arbitrator has a duty to allow cross-examination of witnesses, unless the parties have expressly or impliedly agreed otherwise. The award was set aside and the case was ordered to be reheard by a different registrar. Sir John Donaldson MR stated at 844: …in Allen v Allen and Bell [1894] P 248 at 253 in the judgment of Lopes LJ where he says: It appears to us contrary to all rules of evidence, and opposed to natural justice, that the evidence of one party should be received as evidence against another party, without the latter having an opportunity of testing its truthfulness by cross-examination. That has been applied to arbitrations, subject always to the right of the parties to agree otherwise, as has been made clear by Russell on the Law

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Arbitration (20th ed, 1982) p 215 where in a quotation from Drew v Drew and Leburn (1855) 2 Macq 1 at 3 in the judgment of Lord Cranworth LC it is said: The principles of universal justice require that the person who is to be prejudiced by the evidence ought to be present to hear it taken, to suggest cross-examination or himself to cross-examine, and to be able to find evidence, if he can, that shall meet and answer it in; short, to deal with it as in the ordinary course of legal proceedings … [845] I think that the registrar and the county court judge were plainly wrong in this case in refusing to allow Saga Holidays to ask questions of Mr Chilton, and I would therefore set the award aside … One final word, since Mr Chilton raised the point. He asked whether, if it went back, he would be entitled to call different and additional evidence. The answer to that is Yes; the matter will start entirely afresh. I would allow the appeal accordingly.

Section 27D – Power of arbitrator to act as mediator, conciliator or other non-arbitral intermediary

[4.290]

Section 27D of the Acts deals with an area of arbitration that has previously been controversial. Prior to the passing of the Commercial Arbitration (Amendment) Act 1990 (NSW) and its uniform equivalents, s 27 allowed an arbitrator to act as a mediator or conciliator after commencement of arbitration without regard to the rules of natural justice. Because of the use of separate sessions, mediation does not comply with the rules of natural justice as mediators have conversations with one party at the exclusion of the other. The term ‘natural justice’ means the right for a party to be given a fair hearing and to have the opportunity to present their case and to answer allegations put by the other party. It also encompasses the right to have a decision made by an unbiased and neutral third party arbitrator and to have that decision based on probative evidence presented to all of the parties and the arbitrator. Prima facie, the process of separate sessions in mediation breaches the rules of natural justice – a fundamental hallmark of arbitration. As suggested above, s 27 was drafted in a way that created quite a problem for arbitrators who saw the opportunity to resolve the dispute or elements of the dispute through mediation mid-way through arbitration. If an arbitrator was granted the right to act as mediator before or during arbitration, then they could not conduct mediation using separate sessions as this would breach the natural justice provisions of arbitration. In an attempt to enable parties the flexibility to mediate before or during arbitration many arbitrators appointed a separate mediator so that if arbitration resumed, they were not compromised by the requirements to observe natural justice. However, the cost of employing a mediator in addition to an arbitrator made this precaution an expensive option for innocent parties. Other arbitrators disqualified themselves if they had acted as mediators during an arbitral process thus necessitating the appointment

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of a new arbitrator. Once again, the cost of instructing a new arbitrator mid-way through arbitration was prohibitive and undesirable. The new Acts overcome this problem by a redrafting of the provisions that allow for a non-arbitral intermediary. Section 27D has no equivalent in the Model Law and states: (1) An arbitrator may act as a mediator in proceedings relating to a dispute between the parties to an arbitration agreement (“mediation proceedings”) if: (a) the arbitration agreement provides for the arbitrator to act as mediator in mediation proceedings (whether before or after proceeding to arbitration, and whether or not continuing with the arbitration), or (b) each party has consented in writing to the arbitrator so acting. (2) An arbitrator acting as a mediator: (a) may communicate with the parties collectively or separately, and (b) must treat information obtained by the arbitrator from a party with whom he or she communicates separately as confidential, unless that party otherwise agrees or unless the provisions of the arbitration agreement relating to mediation proceedings otherwise provide. (3) Mediation proceedings in relation to a dispute terminate if: (a) the parties to the dispute agree to terminate the proceedings, or (b) any party to the dispute withdraws consent to the arbitrator acting as mediator in the proceedings, or (c) the arbitrator terminates the proceedings. (4) An arbitrator who has acted as mediator in mediation proceedings that are terminated may not conduct subsequent arbitration proceedings in relation to the dispute without the written consent of all the parties to the arbitration given on or after the termination of the mediation proceedings. (5) If the parties consent under subsection (4), no objection may be taken to the conduct of subsequent arbitration proceedings by the arbitrator solely on the ground that he or she has acted previously as a mediator in accordance with this section. (6) If the parties do not consent under subsection (4), the arbitrator’s mandate is taken to have been terminated under section 14 and a substitute arbitrator is to be appointed in accordance with section 15. (7) If confidential information is obtained from a party during mediation proceedings as referred to in subsection (2) (b) and the mediation proceedings terminate, the arbitrator must, before conducting subsequent arbitration proceedings in relation to the dispute, disclose to all other parties to the arbitration proceedings so much of the information as the arbitrator considers material to the arbitration proceedings. (8) In this section, a reference to a “mediator” includes a reference to a conciliator or other non-arbitral intermediary between parties.

There is no significant case in Australia on the provisions of s 27D of the Acts and the requirements to observe the rules of natural justice in mediation as part of an arbitral process. However, Hong Kong’s Court of First Instance (which has unlimited jurisdiction in criminal and civil matters and is the first layer of Hong Kong’s High Court, the second layer

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being the Court of Appeal) recently had a matter before it that raised similar issues to those surrounding the natural justice issues in s 27D of the Acts.

CASE NOTE: Gao Haiyan v Keeneye Holdings Ltd [4.300] Gao Haiyan v Keeneye Holdings Ltd [2011] HKCA 459; [2012] 1 HKLRD 627; [2012] 1 HKC 335; CACV 79/2011 (2 December 2011) Facts: The applicants, Gao Haiyan, were in a joint venture agreement to operate the Changlebao coal mine in China. The applicants transferred 50% of their shareholding to Angola, a British Virgin Islands company, and the remaining 50% to Baijun, a Hong Kong company. By way of a share transfer agreement which contained an arbitration agreement, the applicants transferred their interest in Baijun to the respondent, Keeneye Holdings Ltd. Sometime later the applicants commenced proceedings against the respondent alleging that the share transfer agreement was void for misrepresentation and duress. The respondents commenced arbitration proceedings with three arbitrators presiding and pursuant to Xian Arbitration Commission’s (XAC) Arbitration Rules (the Rules), Art 37 of which stated: A mediation may be conducted by the arbitral tribunal or the presiding arbitrator (herein called mediator). With the approval of the parties, any third party may be invited to assist mediation, or they may act as mediator. The mediation may be proceeded simultaneously between both parties or with one party separately; the time and place for that mediation are confirmed after the mediator obtains the consent of the parties. The mediator may put forward a mediation resolution plan for the parties’ reference, and the parties may accept, refuse to accept, or render some amendment(s) to the resolution plan set forth by the mediator …

At the end of the first arbitration hearing, the arbitral Tribunal asked the parties if they were agreeable to mediation to which the parties agreed. One of the three arbitrators together with the SecretaryGeneral of XAC invited Mr Zeng Wei, a shareholder of Angola, to dinner at the Xian Shangri-la hotel and put a suggested settlement whereby the respondents would pay ¥250 million to the applicants. Mr Wei was seen by the Secretary-General as a person of influence over the respondent. Subsequently both parties refused to settle on this term and an award was handed down whereby the share transfer agreement was declared void and it was recommended that the applicants pay the respondent ¥50 million as economic compensation. The respondent alleged that the difference in the offer at mediation

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(the dinner at the Shangri-la) to the award was the result of manipulation of the outcome by the Secretary-General of XAC. In the Xian Intermediate People’s Court, Saunders J found for the applicant and ordered the enforcement of the arbitral award to which the respondent applied to the Court of First Instance to have the enforcement order set aside on the grounds of bias. In the Court of First Instance (Gao Haiyan v Keeneye Holdings Ltd [2011] 3 HKC 157), Reyes J raised concerns about the process of med-arb (mediation during arbitration) when his Honour stated: [75] Further, the mediator who acts as arbitrator obtains confidential information in the course of one-on-one meetings with a party. That information may consciously or sub-consciously influence the mediator when sitting as arbitrator. It would be unfair on the other party for the mediator turned arbitrator to act upon the confidential information without first disclosing the same and affording that other party a chance to comment on any prejudicial impact of the confidential information. [76] Thus, the mediator who may be sitting as arbitrator in the same case must be particularly careful not to convey to one party or the other the impression of bias. This means that, in a mediation session with one party A, the mediator when conveying settlement suggestions apparently benefitting the other party B to the dispute, must be sensitive to the need not to appear to A as if the mediator favoured B’s case. [77] The problems inherent in med-arb are such that many arbitrators decline to engage in it. They view the risk of apparent bias arising from their participation in med-arb as an insurmountable difficulty.

Reyes J found for the applicant on the grounds that there was apparent bias by the arbitrators (there was no evidence of actual bias) and that the respondent had not waived their right to raise this as an argument against enforcing the award. The court set aside the enforcement order. The applicant appealed to the Court of Appeal. Decision: The court allowed the appeal finding there was no apparent bias and in any case the respondent had waived their right to object to any allegation of bias through their continued involvement in arbitration. As to the issue of apparent bias, the Court of Appeal noted the Court of First Instance’s reservations about the process that had been adopted by the Tribunal in relation to the conduct of mediation pursuant to Art 37 of the Arbitration Rules. First, neither the complete Tribunal nor its presiding officer conducted the mediation; secondly, the parties in dispute were not invited to the mediation; thirdly, no date, time or venue was ever communicated to the parties in dispute; fourthly, the proposed settlement was not authorised by the applicants; and, fifthly, mediations are normally conducted in some sort of formal setting not in the course of a dinner at a hotel.

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The Vice-President of the Court of Appeal, Tang V-P, gave the judgment of the court and in addition to the reservations listed also noted Reyes J’s concerns about the conveners of the dinner impressing upon Mr Wei “to work on” the respondent in order to get them to accept the proposed settlement that had not been authorised by the applicants. Further, Reyes J was concerned about the lack of explanation regarding the disparity between the initial offer of ¥250 million payable to the applicants and the final award amount given the award stated that ¥50 million was fair compensation payable to the respondent. His Honour noted Reyes J statement (Gao Haiyan v Keeneye Holdings Ltd [2011] 3 HKC 157 at [54]), “The fair-minded observer would (I believe) be concerned that the underlying message being conveyed to Zeng at the dinner with Pan and Zhou was that the Tribunal favoured the applicants”. In addressing the reservations and issues raised in the Court of First Instance, Tang V-P, opined: [86] With respect, I doubt whether it is meaningful to compare the figures. Whether a payment of RMB250 million is reasonable will depend to an extent on the likelihood of the applicants’ succeeding in the arbitration. A court in Hong Kong is not in a position to express any view on the likelihood of Share Transfer Agreement and Supplemental Share Transfer Agreement being set aside under art 54 of the PRC Contract Law. Also, much may depend on the view which the Arbitral Tribunal may form on the facts or the circumstances of the case. [95] The expression “work on” is a common expression in the Mainland. It appeared three times in the Chinese original of Zeng’s witness statement of 11 September 2010 in the Xi’an Court as follows. [96] There is no indication from Zeng or Zhang’s evidence that Zeng had ever “pushed” the other shareholders. [97] In para 47 of the Judgment, the learned Judge said that the proposal of settlement at RMB250 million was advanced without the authorization of the applicants. That is so. Indeed, the evidence was that the Arbitral Tribunal had earlier been told that the applicants had “demanded a minimum of RMB200 million, but that (the applicants) had changed (their) mind and wanted the shares in Baijun back.” [99] As for holding a mediation over dinner in a hotel, in my view, a Mainland court is better able to decide whether that is acceptable. I note, also that no complaint about the venue had been made to the Xi’an Court. [100] Nor do I agree that there was any wining and dining by Pan (see para 67 of the Judgment quoted in para 72 above). The evidence was that it was Zeng who paid for the dinner. [101] As for why Pan had contacted Zeng rather than the respondents’ Mainland lawyers, what role a Mainland lawyer may be expected to play in such circumstances is better understood in the Mainland. [102] With respect, although one might share the learned Judge’s unease about the way in which the mediation was conducted because mediation

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is normally conducted differently in Hong Kong, whether that would give rise to an apprehension of apparent bias, may depend also on an understanding of how mediation is normally conducted in the place where it was conducted. In this context, I believe due weight must be given to the decision of the Xi’an Court refusing to set aside the Award. [103] In any event, it appears that the clincher for the learned Judge’s decision on apparent bias is the lack of correspondence or proportionality between the figure of RMB250 million and the figure of RMB50 million. That, together with others of the learned Judge’s concerns which I do not support, enable me to decide whether in the circumstances of these cases, a case of apparent bias has been made out. [104] After careful consideration, my conclusion is that no case of apparent bias has been established. Certainly not such that would lead me to refuse enforcement of the Award.

Part 6 – Making of award and termination of proceedings Section 28 – Rules applicable to substance of dispute

[4.310] Section 28 of the Acts requires parties to choose rules of law that are applicable to the substance of the dispute and are modelled on Art 28 of the Model Law. Section 28 states: (1) The arbitral tribunal must decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute. (2) Any designation of the law or legal system of a given State or Territory must be construed, unless otherwise expressed, as directly referring to the substantive law of that State or Territory and not to its conflict of laws rules. (3) Failing any designation by the parties, the arbitral tribunal must apply the law determined by the conflict of laws rules which it considers applicable. (4) The arbitral tribunal must decide the dispute, if the parties so agree, in accordance with such other considerations as are agreed to by the parties. (5) In all cases, the arbitral tribunal must decide in accordance with the terms of the contract and must take into account the usages of the trade applicable to the transaction.

Section 28 attempts to overcome invoking conflict of laws rules to determine the proper choice of law by placing the onus of choosing the appropriate law on the parties to the arbitration agreement. If parties fail to choose a governing law then s 28(3) empowers the arbitral tribunal to make that choice. Section 31 – Form and contents of award

[4.320] Section 31 of the Acts deals with the form and substance of arbitral awards and states: (1) The award must be made in writing and must be signed by the arbitrator or arbitrators.

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(2) In arbitral proceedings with more than one arbitrator, the signatures of the majority of all members of the arbitral tribunal suffices, provided that the reason for any omitted signature is stated. (3) The award must state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given or the award is an award on agreed terms under section 30. (4) The award must state its date and the place of arbitration as determined in accordance with section 20. (5) The award is taken to have been made at the place stated in the award in accordance with subsection (4). (6) After the award is made, a copy signed by the arbitrators in accordance with subsection (1) must be delivered to each party.

The new Acts do not define what an award is. However, Dodds-Streeton J in Mond v Berger [2004] VSC 45 at [290]-[298], made the following comments with regard to the definition of “award” under the superseded Acts. [293] Mustill and Boyd, in the absence of any legislative definition, suggest two characteristics which we believe would be accepted as indicia of an award by the arbitrating community at large: • An award is the discharge, either in whole or in part, of the mandate entrusted to the tribunal by the parties, namely to decide the dispute which the parties have referred to them. That is, the award is concerned to resolve the substance of the dispute. Important aspects of the arbitrator’s duties are naturally concerned with the processes which lead up to the making of the awards, and they are empowered to arrive at decisions which enable those processes to be performed. The exercise of those powers are, however, antecedent to the performance of the mandate, not part of the ultimate performance itself. Thus, procedural decisions, and the documents in which they may be embodied, are not “awards”. • Constituting as it does the discharge of the arbitrator’s mandate the award has two effects: (a) Since the parties have, by their agreement to arbitrate, promised to be bound by the arbitrators’ decision of their dispute, they are for all purposes bound by it themselves, although others are not so bound … (b) Since the making of the award constitutes a complete performance of the mandate entrusted to the arbitrators, it leaves them with no powers left to exercise: except of course, in the case of a partial award, when the exhaustion of the arbitrators’ powers is complete as to part and incomplete as to the remainder. So much is, we believe, generally accepted.

Section 31(3) of the Acts requires arbitrators to state reasons for the award unless the parties to arbitration have agreed that reasons are not required. The courts have determined that insufficient reasons may constitute an error of law on the face of the award and if so proved, pursuant to s 34A(7) of the Acts, the court may confirm, vary, set aside or remit to the arbitrator or a new arbitrator the award for reconsideration. It has been established that an arbitrator’s reasoning is not expected to be drafted to the same standard as the judicial reasoning of a court. In Gordian Runoff Ltd v Westport Insurance Corporation [2010] NSWCA 57 at [218]-[219], Allsop P in

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the NSW Court of Appeal stated: [218] Subject to agreement to the contrary, there is, however, a requirement for a reasoned award in arbitration ... it is a statement of reasons for making the award, not a statement of reasons for not making a different award ... This will require a statement of factual findings and legal or other reasons which led the arbitrators to conclude as they did. These provisions do not in terms require the arbitrators to resolve other issues or deal with other matters not necessary to explain why they have come to the view that they have. What is required in any particular case may be a question open to debate. However, nothing in the terms of the Model Law or in the reported history of its negotiation or in any contemporary writings of jurists, practitioners or scholars from before agreement on the Model Law to the present day leads to the legitimacy of any conclusion that … mandates in law a standard of reasons equivalent to those required of a judge at common law, in particular one subject to appellate review on questions of fact and law. [219] The [Acts] do not say that the arbitrator must deal with every substantial argument put forward by the contending parties. Nor do they state that the arbitrator should state the evidence from which he or she draws his or her findings of fact and give reasons for preferring some evidence over other evidence.

This view was affirmed on appeal by the High Court of Australia in Westport Insurance Corporation v Gordian Runoff Ltd (2011) 244 CLR 239 at [169] per French CJ, Gummow, Crennan and Bell JJ. The High Court also affirmed the NSW Court of Appeal’s application of the English Court of Appeal decision in Bremer Handelsgesellschaft mbH v Westzucker GmbH (No 2) [1981] 2 Lloyd’s Rep 130 at 132-133 per Donaldson LJ, which stated: All that is necessary is that the arbitrators should set out what, on their view of the evidence, did or did not happen and should explain succinctly why, in the light of what happened, they have reached their decision and what that decision is. This is all that is meant by a “reasoned award” ...

Section 32 – termination of proceedings

[4.330]

Section 32 of the Acts provides a number of trigger mechanisms for the arbitral tribunal to terminate proceedings and states: (1) The arbitral proceedings are terminated by the final award or by an order of the arbitral tribunal in accordance with subsection (2). (2) The arbitral tribunal is to issue an order for the termination of the arbitral proceedings when: (a) the claimant withdraws his or her claim, unless the respondent objects and the arbitral tribunal recognises a legitimate interest on the respondent’s part in obtaining a final settlement of the dispute, or (b) the parties agree on the termination of the proceedings, or (c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible, or (d) the arbitral tribunal makes an award under section 25 (2) (a) dismissing the claim. (3) The mandate of the arbitral tribunal terminates with the termination of the arbitral proceedings, subject to sections 33 and 34 (4).

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Section 32 is based on Art 32 of the Model Law and is a new addition to the Acts as the superseded Acts contained no provision for termination. Subsection (2)(c) provides a trigger for termination of arbitral proceedings which have become “unnecessary” or “impossible”, however the Acts do not define what is meant by those two terms. Professor Doug Jones, a leading solicitor, arbitrator, academic and dispute resolution practitioner, stated in his landmark text Commercial Arbitration in Australia ((2nd ed, Thomson Reuters, 2013), p 418) that: “Impossible” may include situations where the claimant or respondent becomes insolvent, is taken over by another company and no longer has standing. It may also contemplate a situation where a mandatory law prohibits the resolution of any future disputes by way of arbitration. “Unnecessary” may include a situation where parties have not agreed upon termination but the tribunal considers it unnecessary to proceed as all matters in the dispute have been resolved. The limited case law on this point provides further guidance as to the situations in which an arbitral tribunal will exercise its discretion to declare proceedings “unnecessary or impossible”.

Subsection (3) states that the mandate of the arbitral tribunal ceases with the termination of arbitral proceedings. However this subsection is conditional on the arbitral tribunal’s mandate not being revived via s 33 which allows for the tribunal to correct or interpret any part of its award. Further s 34(4) allows the court to suspend the setting aside of an award upon a party’s application in order to resume arbitration.

Part 7 – Recourse against an award Section 34 – Application for setting aside as exclusive recourse against arbitral award

[4.340] Section 34 provides for the trigger mechanisms allowing a party to make an application to set aside an arbitral award. It provides: (1) Recourse to the Court against an arbitral award may be made only by an application for setting aside in accordance with subsections (2) and (3) or by an appeal under section 34A. (2) An arbitral award may be set aside by the Court only if: (a) the party making the application furnishes proof that: (i) a party to the arbitration agreement referred to in section 7 was under some incapacity, or the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication in it, under the law of this State, or (ii) An arbitral award may be set aside by the Court only if: (iii) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside, or

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(iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Act from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Act, or (b) the Court finds that: (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State, or (ii) the award is in conflict with the public policy of this State. (3) An application for setting aside may not be made after 3 months have elapsed from the date on which the party making that application had received the award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal. (4) The Court, when asked to set aside an award, may, where appropriate and so requested by a party, suspend the setting aside of proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the arbitral tribunal’s opinion will eliminate the grounds for setting aside.

Grounds for challenging an award can be substantive and/or procedural. In a case of the former a challenge may be successfully made if the arbitral tribunal has no jurisdiction to hear the dispute because, for example, the arbitration agreement is void pursuant to the law of contract or does not empower the tribunal to hear the substance of the dispute. An example of the latter case could be where procedures set out in the Acts have not been complied with, hence the ability pursuant to s 34(4) for the arbitral tribunal, at the request of a party to the dispute, to have an opportunity to fix the procedural error and thereby not waste the time and cost of the arbitration. The following extract is an example of a procedural error in the conduct of the arbitration and most closely provides a trigger for the setting aside of the award pursuant to s 34(2)(a)(ii) of the Acts. The reference to s 42(1)(a) in the extract is a reference to the superseded Acts and was a precursor to the current s 34 of the Acts.

CASE NOTE: Re Tiki International Ltd [4.350]

Re Tiki International Ltd [1994] 2 Qd R 674 at 677–680

Facts: Perpetual Trustee Company Limited leased real property to the applicants, Tiki Properties Pty Ltd in 1983, who in turn assigned the lease in 1989 to Balfour Centre Pty Ltd. A dispute arose over contributions to land tax. The lease specified a lessee contribution to land tax based on the identification of the demised premises as set out in two plans contained in the schedule to the lease. The plans were open to various interpretations about what land was included within the definition of “demised premises”. The arbitrator consulted a solicitor to assist in his understanding of what constituted the demised premises. The parties to the dispute were not consulted

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about the employment of the solicitor and first became aware of it when the solicitor’s costs were listed on the bill forwarded to each of the parties. The arbitrator chose an interpretation of the demised premises that conflicted with the applicant’s. The applicant made application to have the arbitrator’s award set aside for, amongst other things, a breach of s 42(1)(a), in that the arbitrator misconducted the proceedings by not allowing the parties to be heard on the solicitor’s legal advice. Decision: Where an arbitrator without the parties’ agreement takes confidential legal advice and does not give the parties a chance to comment on points adverse to their case, a procedural irregularity has occurred which has possibly led to the arbitrator misconducting the proceedings within the meaning of s 42(1)(a) of the Act. Byrne J at 677-680 stated: But where an arbitrator secretly obtains legal advice, and the potentially influential communications are withheld from the parties, justice may not appear to have been done. Suspicions may be harboured as, for example, that the arbitrator has not exercised an independent judgment. An arbitrator without legal qualifications may often need a lawyer’s assistance, even, perhaps especially, where the parties are legally represented. The arbitrator must apply the law and is not bound to accept [678] the law as the parties or their lawyers propound it. Like the judge, the arbitrator is no mere selector between rival views of the law. In commercial arbitrations the opportunities for curial assistance are narrowly circumscribed. And so, generally speaking, of necessity, in commercial arbitrations like the present independent investigation into the legal issues must be possible. Acknowledging that in general a commercial arbitrator is impliedly authorised to seek guidance on points of law is one thing. It is another to conclude that the arbitrator is entitled to rely on such advice without disclosing it to the parties. Sometimes the ordinary incidents of procedural fairness will require disclosure. [679] The need to accord procedural fairness should incline an arbitrator to obtain legal advice only with the informed consent of the parties; and usually the advice should be disclosed. Otherwise the process of resolution of the dispute is likely to be regarded as less than the parties bargained for, and unfair … [680] The arbitrator’s failure to reveal his adviser’s identity is not a reason to intervene. Assuming, without deciding, that the arbitrator was obliged to reveal his proposed adviser’s identity before consulting him, if the intention to retain him had been disclosed, there would not have been any objection; and so that non-disclosure is immaterial here. But the absence of an opportunity to comment on the advice might perhaps have mattered. The arbitrator’s silence as to the content of the advice means that there is a chance – one not so slight it can be ignored – that the applicants have not had a fair opportunity to comment on points adverse to their case first raised by the arbitrator’s solicitor. A procedural irregularity has therefore

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occurred which possibly has led to a miscarriage of justice, unless what happened at the preliminary conference, when the arbitrator adverted to taking legal advice, precludes objection.

Section 34A – Appeals against awards

[4.360]

Section 34A provides for a party to make application to appeal the arbitral award on a question of law arising out of the award. It replaces s 38 of the superseded Acts and is far more prescriptive in its application. It states: (1) An appeal lies to the Court on a question of law arising out of an award if: (a) the parties agree, before the end of the appeal period referred to in subsection (6), that an appeal may be made under this section, and (b) the Court grants leave. (2) An appeal under this section may be brought by any of the parties to an arbitration agreement. (3) The Court must not grant leave unless it is satisfied: (a) that the determination of the question will substantially affect the rights of one or more of the parties, and (b) that the question is one which the arbitral tribunal was asked to determine, and (c) that, on the basis of the findings of fact in the award: (i) the decision of the tribunal on the question is obviously wrong, or (ii) the question is one of general public importance and the decision of the tribunal is at least open to serious doubt, and (d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the Court to determine the question. (4) An application for leave to appeal must identify the question of law to be determined and state the grounds on which it is alleged that leave to appeal should be granted. (5) The Court is to determine an application for leave to appeal without a hearing unless it appears to the Court that a hearing is required. (6) An appeal may not be made under this section after 3 months have elapsed from the date on which the party making the appeal received the award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal (in this section referred to as the ″appeal period″). (7) On the determination of an appeal under this section the Court may by order: (a) confirm the award, or (b) vary the award, or (c) remit the award, together with the Court’s opinion on the question of law which was the subject of the appeal, to the arbitrator for reconsideration or, where a new arbitrator has been appointed, to that arbitrator for consideration, or (d) set aside the award in whole or in part.

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(8) The Court must not exercise its power to set aside an award, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the arbitral tribunal for reconsideration. (9) Where the award is remitted under subsection (7) (c) the arbitrator must, unless the order otherwise directs, make the award within 3 months after the date of the order. (10) The Court may make any leave which it grants under subsection (3) (c) subject to the applicant complying with any conditions it considers appropriate. (11) Where the award of an arbitrator is varied on an appeal under this section, the award as varied has effect (except for the purposes of this section) as if it were the award of the arbitrator.

CASE NOTE: Norwest Holst Construction v Co-operative Wholesale Society [4.370] Norwest Holst Construction Ltd v Co-operative Wholesale Society Ltd [1998] EWHC Tech 339 Facts: The parties entered a subcontract to complete certain building works involving the installation of complex mechanical and electrical work for the Learning Resources Centre at John Moores University in Liverpool in England. The overall value of the work was somewhere between £1,269,487 and £1,623,315. A dispute arose between the parties and NHC instituted arbitration proceedings against the main contractor, John Moores University. This arbitration claim, with another arbitrator, included a claim for the value of CWS’s subcontract work. The arbitration dealing with the main contract was settled during the course of this subcontract arbitration hearing and the arbitrator then allowed further evidence concerning the main contract arbitration as opposed to the subcontract arbitration. An award was handed down and NHC contended that the award was thoroughly bad in procedure, content and result. Decision: The only findings of fact that can be raised as questions of law are findings that no reasonable tribunal could have reached. Further, a question as to whether particular evidence was admissible or should have been excluded and as to whether the arbitrator was obliged to apply the normal rules of evidence are questions of law. Finally, a question as to whether an arbitrator has invented evidence can only be raised as misconduct or procedural irregularity. The court found at 241, 247-248 and 254-255: [241] There has always been difficulty in identifying what is and what is not a question of law. The problem of identification arises in an acute form when a party wishes to challenge findings of fact, whether they be primary findings or inferences from primary findings, or else wishes to challenge a finding of mixed law and fact and needs to undermine the factual content of such a finding if the overall challenge is to get off the ground. In some of

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the questions of law raised in this appeal, both parties seek to challenge findings of fact on at least one of these grounds. [247] … there are four situations covered by the question as to whether a challenge to an arbitrator’s findings of fact can raise a question of law. These are: (1) An allegation that the raw finding of fact was not supported by any evidence. (2) An allegation that the arbitrator invented evidence or relied on evidence that was never adduced before him in making the disputed finding of fact. (3) An allegation that inferences, made from raw facts, so as to lead to further findings of fact, could not, on any reasonable view, have been made. (4) An allegation that an application of findings of fact to the relevant legal principle has produced a result that no reasonable arbitrator could have reached because the facts in question could not lead to, or produce, the result arrived at. This allegation is made of a mixed finding of fact and law, the legal part of the finding being the application of the raw or inferred facts to the legal principle involved. (5) Although it is not clear from Steyn LJ’s analysis, his view that findings of fact are no longer susceptible to review as questions of law would appear to cover all four of these situations. This is because he made them in the context not only of an argument that there was no evidence to support the finding that loss had been caused but also in relation to an argument that, on the basis of the findings of fact, no loss had been established. [248] The law on this topic is conveniently summarised in a passage in the speech of Lord Diplock in The Nema in which he discussed the meaning of the phrase ″question of law″. His analysis of this expression relies on the earlier decision of the House of Lords in Edwards v Bairstow and the oft-quoted passage on this topic from the speech of Lord Radcliffe. Lord Diplock stated: … If the case contains anything ex facie which is bad in law and which bears upon the determination, it is, obviously, erroneous in point of law. But, without any such misconception appearing ex facie, it may be that the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those circumstances, too, the court must intervene. It has no option but to assume that there has been some misconception of the law and that this has been responsible for the determination. So there, too, there has been error on point of law. [254] This leaves two further matters to be considered. The first is that any question of admissibility of evidence is a question of law. It is also a question of law whether the arbitrator, either generally or in the circumstances of a particular piece of evidence in a particular arbitration, was bound by any evidential rule which would be applicable to that situation in a court hearing. Thus, if an appropriate question of law arises and is answered to the effect that the arbitrator reached particular findings of fact in reliance on materials that he should have excluded from his consideration or by shutting out materials he should have considered, the

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court could intervene. Usually, it would answer the question of law that arises, assuming the threshold requirements of section 1 of the 1979 Act have been complied with. On some occasions, the erroneous reliance on extraneous evidence might amount to procedural irregularity. In such cases, which are unlikely to occur very often, the court would ordinarily remit the award for further consideration in the light of its views as to the admissibility or otherwise of the material in question. [255] The second matter concerns the situation where the arbitrator ″invents″ evidence and then makes findings of fact based on that non-existent evidence. NHC suggests that this might have occurred in this award. In such a situation, the appropriate relief to seek is for a remission or setting aside for procedural irregularity or misconduct. It is not correct to seek, additionally, to raise a question of law. The alleged mistake of the tribunal is not as to the legal reasoning used to formulate the findings in the award but to adopt a manifestly erroneous procedure in arriving at the primary findings of fact contained in the award.

A more flexible process [4.380]

On 11 June 2002 in the Banco Court of the Supreme Court of New South Wales, the former Lord of Appeal and President of the British Maritime Law Association and the UK Branch of the International Law Association, Lord Mustill, delivered an insightful address entitled “Arbitration, Imagination and the Culture of Compromise”. Lord Mustill is a well-known arbitration practitioner, advocate and author of the landmark text Law and Practice of Commercial Arbitration in England (co-authored with Stewart C Boyd). In his address, his Lordship suggested, amongst other things, that if arbitration is to survive, it needs to be more flexible in its process to allow parties to have a “mediation-like” experience and deliver flexible outcomes that are more creative compared to traditional arbitration. His Lordship noted that arbitration had become costly and lengthy to the point where litigation was perhaps the cheaper and more efficient alternative. Lord Mustill challenged arbitrators to be flexible when it comes to adherence to the rules governing arbitration and to allow the parties opportunity to participate in the process. Further, arbitrators should not be afraid of handing down awards that adopt a broader dispute resolutionstyle solution to the dispute. In other words, arbitrators should be encouraged to adopt an outcome that moves away from the type of court-sanctioned outcome, which has become the norm in arbitration. An example of a high profile case that applied the type of thinking Lord Mustill advocated in his address is the case of IBM v Fujitsu (see A Stork, “The Use of Arbitration in Copyright Disputes: IBM v FUJITSU” (1988) 3(2) High Technology Law Journal 241). Given that domestic arbitration in Australia is governed by legislation and that awards have the effect of a binding judicial determination, it is difficult to see how the flexibility suggested by Lord Mustill could apply. However,

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as has been discussed in this chapter, the new Acts provide for greater flexibility in relation to procedures, meaning arbitrators have more freedom than ever before when it comes to how arbitration is to be conducted. If arbitration is to survive, the challenge for the future is to make it more flexible not only in relation to process and outcome, but also in relation to the time it takes to conclude arbitration and the costs involved. In addressing the issue of the spiralling time and cost of arbitration the Council of The Institute of Arbitrators & Mediators Australia (now called Resolution Institute) passed a new set of Arbitration Rules on 17 April 2014 effective 2 May 2014 that incorporated IAMA’s Fast Track Arbitration Rules introduced in June 2007. While some “fast track” attributes remained, others like having to deliver awards within 150 days from the arbitral tribunal having entered on the reference have been extended to 365 days.

5

Additional Dispute Resolution Processes INTRODUCTION [5.10] Since the formalisation of dispute resolution there has been a paradigm shift in the way people and organisations deal with disputation. Instead of just having systems in place to resolve disputes when they arise, the thinking has now moved towards having systems in place to identify differences between parties to a project or transaction and then to properly manage those differences and the stakeholders involved. Then, if necessary, to assist the parties to reconcile those differences or assist the parties to a more formal resolution of any escalated dispute. In other words, people and organisations are not just thinking of what to do after a dispute arises; rather, they are thinking about how to detect differences between people that could ultimately escalate into a dispute. In this respect, the other dispute resolution processes described in this chapter seek to avoid or manage disputation to the point of preventing the escalation of disputes and the ultimate resolution by curial proceedings. These processes are often called “dispute avoidance” or “dispute management”. Exceptions to dispute avoidance or management are the processes of: neutral evaluation; expert determination; case appraisal; and referencing out. These processes are not classed as being avoidance or management procedures, rather they are more adjudicative in nature. In other words, dispute avoidance seeks to prevent a dispute arising while other adjudicative processes seek to resolve a dispute once it has arisen. All of the processes discussed in this chapter could be classed as “hybrid processes” in that they enjoy the basic elements of negotiation, mediation or arbitration but have similar or different process steps that achieve the purpose of dispute avoidance or resolution.

CONCILIATION [5.20] The Conciliation and Arbitration Act 1904 (Cth) established the Commonwealth Court of Conciliation and Arbitration to hear applications for the making of awards between employers and employees as well as the resolution of disputes between the said parties. As the name of the Act suggests, models of arbitration and conciliation were selected as being appropriate for these types of disputes. This was probably the earliest

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application of formal dispute resolution experienced in Australia. While the arbitration element of this Act has been discussed in Chapter 4, it is now appropriate to discuss the process of conciliation. NADRAC defines “conciliation” as: a process in which the parties to a dispute, with the assistance of a dispute resolution practitioner (the conciliator), identify the issues in dispute, develop options, consider alternatives and endeavour to reach an agreement. The conciliator may have an advisory role on the content of the dispute or the outcome of its resolution, but not a determinative role. The conciliator may advise on or determine the process of conciliation whereby resolution is attempted, and may make suggestions for terms of settlement, give expert advice on likely settlement terms, and may actively encourage the participants to reach an agreement. Note: there are wide variations in meanings for ‘conciliation’, which may be used to refer to a range of processes used to resolve complaints and disputes including: • Informal discussions held between the parties and an external agency in an endeavour to avoid, resolve or manage a dispute • Combined processes in which, for example, an impartial party facilitates discussion between the parties, provides advice on the substance of the dispute, makes proposals for settlement or actively contributes to the terms of any agreement’. (See Dispute Resolution Terms at the Commonwealth Attorney-General’s website, https://www.ag.gov.au/LegalSystem/ AlternateDisputeResolution/ Documents/NADRAC%20Publications/Dispute%20Resolution%20Terms.PDF.)

From the above definition we see that conciliation is a process whereby a third party seeks to bring the disputants together to gain an understanding of the other side’s view of the dispute, identify issues for resolution, develop options for settlement and possibly settle the dispute. Unlike mediation, the conciliator may make suggestions for terms of settlement and provide advice on those terms. In this respect, the conciliator takes a more evaluative and interventionist approach to the dispute resolution process. The conciliator may not see the parties together employing “shuttle diplomacy” as her or his chosen procedure and in fact, the process may, like negotiation, not be governed by any set of procedural rules. Often conciliation will not necessarily focus on settlement, rather it may focus on the sharing of information and identification of issues and options for potential settlement. Well-known conciliator and dispute resolution practitioner David Bryson has stated in a paper entitled “And the Leopard Shall Lie Down with the Kid: A Conciliation Model for Workplace Disputes” (1997) 8(4) Australian Dispute Resolution Journal 245 (at 245-246) that conciliators have varying roles under the law that include: • settlement of disputes as expeditiously as possible • administrative review of decisions • identification of systematic issues giving rise to disputation

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facilitation of mutually acceptable agreements power to issue recommendations power to give directions, and assessment of parties’ genuine attempt to conciliate.

From the above list comes many criticisms of the wide role of the conciliator that Bryson lists (at 246) as being: • idiosyncratic styles and inconsistent outcomes, leading to conciliator “shopping” by parties • time pressures result in no time to explore underlying (real) agenda of parties • repeat players have too much power which can undermine or circumvent conciliatory objectives • imbalance of power results in conciliators becoming advocates for less powerful • pressure or threats used by conciliators (“head-banging”) • conciliators mismanage transition between their different legislative roles, and • repeat players and conciliators may collude to achieve settlement.

Bryson’s view on the roles of the conciliator and the problems stemming from those roles needs to be juxtaposed with the role of the principled negotiator (see Chapter 2) and the facilitated mediator (see Chapter 3). Only in this way can the reader understand the much broader parameters that conciliators may work under in order to conduct conciliation. Bryson describes the conciliation model adopted at that time by the Victorian Workers’ Compensation Scheme, or WorkCover, and sets out a far more interventionist approach to dispute resolution than that previously described in other models of dispute resolution discussed in this book. However, Bryson balances this approach with a more facilitative model of conciliation and reports that factors such as workload and time pressures may come to bear on the conciliator thereby allowing her or him to adopt one model over the other. Most dispute resolution advocates would agree that conciliation is more informal than other processes because there is no prescriptive elements to the process, such as those found in, for example, a classical mediation model or in arbitration. Further, most would agree that a conciliator has more licence to take on an advisory role, whereas, again, juxtaposing it with a classical mediation model, mediators have no role to play in advising parties to the dispute. Whilst there are some stark differences between conciliators and mediators and between conciliation and mediation, there are also similarities such as the fact that they both seek to focus on problem solving and outcomes. Both processes seek to identify the issues between the parties and to develop options for settlement. From the perspective of the third party neutral, both processes require a third party neutral who is impartial and seeks to account for any power imbalance between the parties. Further, both seek to advise and act as the guardian of the processes being undertaken by the parties to the dispute.

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[5.30] Conciliation is widely used throughout Australian statutory schemes and the space limitations in this text do not allow for an exposition of each of those schemes. However, an examination of at least one effective system of conciliation may shed some light on the process issues surrounding it. One of the more well-known conciliation models is run by the Australian Human Rights Commission (formerly known as the Australian Human Rights and Equal Opportunity Commission) which is a government body charged with the responsibility of creating a greater understanding and protection of human rights under the following pieces of Commonwealth legislation: • Australian Human Rights Commission Act 1986 • Age Discrimination Act 2004 • Disability Discrimination Act 1992 • Racial Discrimination Act 1975 • Sex Discrimination Act 1984 The activities of the Commission are governed by Australian Human Rights Commission Act 1986 (Cth) (the Act). Amongst other activities, such as the conduct of public inquiries into issues of national importance and the development of education programs to assist in the education of the community about human rights and discrimination, the Commission resolves complaints of breaches of discrimination and human rights legislation. Such complaints may be either dismissed where there is a lack of evidence of a breach of relevant legislation or they may be conciliated. The Commission describes conciliation in the following way: • Conciliation is an informal, quick, and cost effective way to resolve a complaint. • Conciliation gives the person who made the complaint (the complainant) and the person or organisation being complained about (the respondent) the opportunity to talk about the issues in the complaint and try to resolve the matter themselves. • Conciliation can take place in a face-to-face meeting called a “conciliation conference” or through a telephone conference. In some cases, complaints can be resolved through an exchange of letters or by passing messages through the conciliator (shuttle conciliation). • Conciliation is not like a court hearing. The conciliator does not decide who is right or wrong and does not tell either side what they must do. (See https://www.humanrights.gov.au/understanding-and-preparingconciliation-unlawful-discrimination#Heading15.)

The procedure for complaints-handling is now the responsibility of the President pursuant to s 46PD of the Act and if a complaint is made, it must be referred to the President who is responsible for inquiring into the complaint and attempting to conciliate it through to resolution. A complaint will be terminated if, among other things, it is deemed to be lacking in substance, not unlawful discrimination or is out of time (s 46PH(1)).

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In order to deal with a complaint the President may hold a conciliation conference and direct relevant stakeholders to attend the conference. Further, a person attending such a conference may be required to produce specified documents to assist the conciliation process (s 46PJ). Conferences are held in private and may be conducted in in such a manner as the person presiding thinks fit providing that the conduct of the conference does not disadvantage either the complainant or respondent. A person may be represented at the conference with the permission of the conciliator or if the person has a disability that requires them to have representation (s 46PK). A person who is directed to attend a conference or produce a document must not fail to attend or produce the document and if they do fail to attend or produce the document may be fined (s 46PL and 46PM) If a complaint is terminated the President may provide the Federal Court or the Federal Circuit Court with a written report however, such a report must not set out or describe anything said or done in the course of conciliation proceedings (s 46PS). If the complaint does not reach an agreement at conciliation then it will be terminated by the Commission and the complainant may then take the matter to the Federal Magistrates Court of Australia or the Federal Court of Australia for determination. The process of conciliation at the Commission may involve a number of different methods of communication or a combination of methods such as face-to-face conferencing, shuttle diplomacy or telephone conferencing. The process is informal and therefore has no rigid procedural steps to follow other than the conciliator being the conduit for information passing between the parties and the encouragement by the conciliator for parties to resolve the issue or issues between them in a consensual manner. As guardian of the process, the conciliator will assist in the clarification of issues and setting the agenda for the session and may well contribute to those parts of the process given the conciliator’s knowledge of the legislation and likely outcomes. Like mediation, conciliators under the Commission scheme will help the parties generate options and assist in the process of converting those options into likely options for settlement. They will also carry out reality testing of the settlement to ensure that each party knows the precise nature of the settlement and what is to happen in order to implement the settlement. However, the Commission makes it clear that conciliators are not advocates for any of the parties to the dispute and is not an arbiter of right or wrong. They also state that the conciliator can provide advice about how the law may apply to their dispute – another stark departure from the process of mediation. In an article by Tracey Raymond and Sofie Georgalis entitled “Dispute Resolution in the Changing Shadow of the Law: A Study of the Parties’ View on the Conciliation Process in Federal Anti-discrimination Law”

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(2003) 6 ADR Bulletin 81, the authors state that conciliators at the Commission have a legitimate role to intervene in the process to ensure that the process is fair to all participants. They ensure that participants are appraised of information on a range of settlement options and that any such settlement does not breach legislation. The Commission’s description of conciliation defines a more facilitative approach to conciliation. However, the above observation by the aforementioned authors of the interventionist nature of the conciliators under the Commission model discloses a more evaluative or robust model of conciliation in terms of power imbalances which may affect conciliated outcomes. These contradictions need to be considered in light of the fact that it is particularly important in discrimination matters that the conciliator be interventionist on the issue of power imbalances as many complaints before the Commission are essentially about one party exerting power over the other party which is manifest in discriminatory behaviour or breaches of the victim’s human rights. Raymond and Georgalis report that in matters where complaints were settled, 82% of participants reported that they were satisfied with the result and 41% reported that they were highly satisfied with the result. According to the Commission’s 2013-2014 Annual Report, of the 2,223 complaints received by the Commission alleging discrimination and breaches of human rights (noting that some complaints contain more than one allegation of discrimination), it facilitated 1,444 conciliations of which 1,017 or 70% were successfully resolved. (See https:// www.humanrights.gov.au/sites/default/files/document/publication/ ahrc_annual_report_2013-14v2.pdf, p 46.)

DISPUTE RESOLUTION ADVISERS [5.40] While the former NADRAC does not have a definition for a “Dispute Resolution Adviser” (DRA), a number of organisations that employ DRAs define their role and function. A DRA is usually appointed to a project; for example, Australia’s multi-billion dollar national broadband network project authority, the NBN Co., employs DRAs on their customer service contract agreements. The DRA will often have expertise in the substantive elements of the project and will advise on dispute resolution methods should a dispute arise. The DRA may take an active role in the resolution of the dispute or may, with the parties’ permission and input, employ a third party such as mediator, to conduct a dispute resolution process. Most importantly the DRA should do nothing to compromise her or his role to advise the parties on how to resolve differences or disputes. DRA processes are many and varied and usually embodied in an agreement between the project parties. For example, a DRA may conduct regular meetings with project owners; managers; contractors; and, subcontractors, with a view to discover differences of opinion or the genesis of

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disputes that may adversely affect the project. The DRA will then try and assist the parties to resolve the differences or dispute either her/himself or by employing a third party dispute resolver. Throughout the process, the DRA is the communications conduit between the parties ensuring a free-flow of information and resources to equip the parties to quickly and easily resolve those tensions. The energy industry is one industry in Australia that has embraced the DRA process. For example, pursuant to the Competition and Consumer Act 2010 (Cth) the Trade Practices (Industry Codes – Oil code) Regulations 2006 (the Oil code) is a mandatory industry code that came into effect on 1 March 2007 that regulates the conduct of suppliers, distributors and retailers in the petroleum retail industry in Australia. The Oil code DRA is appointed by the Commonwealth Department of Industry to assist in the resolution of disputes between distributors, wholesalers or retailers about the supply of motor fuel in Australia. According to the Oil code DRA: Disputes can be resolved with the assistance of the DRA more quickly and cheaply than if the parties engage in court based approaches. Other benefits to the parties in using the DRA service is that the process is confidential, the parties can maintain an ongoing relationship and they can develop solutions that best meet their needs. (See http://www.oilcodedra.com.au/index.html.)

The Australian Energy Regulator (AER) regulates national energy markets pursuant to national legislation and rules and is responsible for resolving electricity distribution customer connection disputes under Pt 10 of the National Electricity Law. For disputes pursuant to the National Gas Rules and the National Electricity Rules, it appoints a Wholesale Energy Market DRA who is tasked to perform the functions set out in Pt 15C and Ch 8 of the Rules respectively. Section 135(G)(2) of the National Gas Rules describes the characteristics of the DRA in the following way: The Adviser: (a) must have detailed knowledge and experience of non-litigious dispute resolution processes (alternative dispute resolution processes); and (b) must be able to decide the most appropriate alternative dispute resolution processes for a particular relevant dispute; and (c) must have a good understanding of the natural gas industry or the capacity to acquire a good understanding of the natural gas industry quickly; and (d) must not have any material direct or indirect interest or association that compromises, or is likely to compromise, the impartiality of the Adviser in relation to relevant disputes.

Section 135(G)(2) of the Rules list the DRA’s functions as being: (1) The Adviser is responsible for ensuring the effective operation of the provisions of this Part for dispute resolution. (2) The Adviser must report to the AER at least once in each quarter about dispute resolution under this Part. (3) The AER must publish the report on its website.

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The DRA with the agreement of the parties to the dispute may seek to resolve the dispute her/himself or refer the dispute to a third party. The parties to the dispute determine the dispute resolution process to be employed with the DRA acting as an adviser on process issues. The DRA may also refer the dispute to a dispute resolution panel consisting of a maximum of three members (s 135(G)(2)) for an adjudication of the dispute that is binding on the parties.

[5.50] As a general proposition, and given the above industry notions of the role and function of DRAs, it can be said that DRAs generally use their experience in dispute resolution in regard to the management of businesses and or specific projects. They assist in the design and implementation of dispute avoidance, management and resolution systems and often will design and implement training schemes within organisations or as part of large scale projects so that the stakeholders within an organisation or the project are equipped with the skills to perform the desired dispute handling system. DRAs often have technical knowledge of a specific project, a type of business, as well as possessing good dispute resolution skills. The DRA will be neutral and independent of the parties to the project or business and therefore cannot be an employee of any of the parties. DRAs are appointed for the life of the project or under a fixed term contract of employment in a business however, in some cases there may be provisions for the DRA to be replaced by another DRA on particularly long projects. The DRA may be agreed upon by the parties at the pre-contractual stage and help the parties negotiate the actual contract for the project or may be appointed by the parties via the actual contract between the parties. In an article entitled, “Dispute Prevention and Resolution Design in Hong Kong” (1994) 1 Commercial Dispute Resolution Journal 3, Colin Wall discusses the use of DRAs in a large scale project, the refurbishment of the Queen Mary Hospital in Hong Kong. The hospital was one of Hong Kong’s primary hospitals located on Hong Kong Island. By the late 1980s it was in desperate need of refurbishment. By 1991, the Hong Kong Government’s Architectural Services Department had twice gone out for tender and both times received tenders well above the budgeted amount for the project. The contract for the refurbishment called for the operating theatres and the kitchens to remain open during the refurbishments and the contract had to be completed in phases so that patients and facilities could be moved into the newly completed areas. To add to all of this, there was an asbestos problem on the site. The contract was full of risk and even the Government described the project as “a nightmare”. A radical rethink on how disputes should be handled was needed. Historically, large scale construction in Hong Kong resulted in protracted arbitration at the conclusion of projects. The Government decided that a DRA would be appropriate and this person should help the parties avoid

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disputes and quickly resolve those that could arise. At the start of the appointment, the DRA held a series of familiarisation meetings that were designed to build support for the dispute management and resolution system. The stakeholders worked with each other every day on the site and were told to be candid at the meetings and to trust each other throughout the project. If a disagreement arose, they were to talk it through rather than sending acerbic letters to each other. There was an overall goal to reduce the amount of paperwork throughout the whole project. Stakeholders were encouraged to think of problems as problems belonging to the project as opposed to being “your problem” or “my problem”. The preliminary meetings gave the doctors, nurses and support staff of the hospital an opportunity be kept informed about the dispute management and resolution procedure and the project schedule. At the end of the meetings stakeholders were asked to sign a non-binding Charter embodying the principles of co-operation espoused by the process. Once the project commenced, the DRA visited the site monthly to keep informed of the project issues and to assist the site representatives in settling any problems that may have arisen in the previous month. The dispute management and resolution flow chart is reproduced in Figure 5.1 below. Figure 5.1 Dispute resolution adviser flow chart

Pursuant to the contract, parties had 28 days to challenge any decision made under the contract. If there was such a challenge the parties had 28 days to resolve the disagreement over the decision using good faith negotiation. If the disagreement was still not resolved, the aggrieved party was required to give a formal written notice of a dispute. The DRA and the site representatives then had 14 days to resolve the dispute. This is the first

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stage at which the DRA becomes involved in the dispute. The DRA can choose the most appropriate dispute resolution process to help the parties resolve the dispute. If mediation is selected, then the DRA would appoint a third party mediator and not act as the mediator her or himself. The 14 day time limit can be extended by agreement between the parties. If the dispute remained unsettled the parties were required to present their arguments to a panel of senior staff of the stakeholders who also read the DRA’s report (which is not admissible in any subsequent proceedings). The senior staff will attempt to resolve the dispute and may consider the DRA’s recommendations in the DRA’s report. If the dispute remained unresolved then it proceeded to short-form arbitration within 28 days from the senior staff meeting. The short-form arbitration would only hear single issues or a limited number of distinct claims. It was conducted and concluded in one day only unless otherwise agreed between the parties. Each party presented its case within a strict time limit set by the DRA that included time for questions from the arbitrator. The arbitrator had seven days to hand down the award. The decision was final and binding subject to limited rights of appeal under Hong Kong law. If the arbitration involved an issue of quantum, then that matter was resolved by way of a “final offer arbitration procedure” where the parties each submit a figure to settle the quantum issue and the arbitrator selected one or other figure as the more reasonable thereby precluding the arbitrator making her or his own award on quantum. It was reported that 29 months into the Queen Mary Hospital project there were no disputes. In the first phase of the project there were over 750 variations to the specifications of the project, yet there was not one dispute over those variations. The Government of Hong Kong announced in 1994 that it would use DRAs on all construction projects over HK$200 million (about five major projects per year).

DISPUTE REVIEW BOARDS [5.60] Dispute Review Boards (DRB) are sometimes known as Boards of Review and no matter what they are called, they are generally established to avoid disputes arising on specific projects for which they are constituted. However, the hybrid nature of dispute resolution means that dispute review boards can have, depending on how they are constructed, features of avoidance and resolution within the same process that allow differences to be managed. Should such difference escalate into a dispute, a resolution step is then available to resolve the escalated dispute. This hybridisation of dispute resolution is one of its distinct qualities and should be encouraged as disputants seek to develop dispute avoidance and resolution procedures that suit their own needs or the needs of their organisations. In Gerber and Ong, “21 Today! Dispute Review Boards in Australia: Past, Present and Future” (2011) Australasian Dispute Resolution Journal 180 at 181, the authors define DRB as:

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[A] panel of, generally, three independent and experienced persons who are jointly chosen and appointed by the contracting parties at the commencement of a project. The DB [dispute board] members become familiar with the construction project, and remain up-to-date with developments through regular site visits and meetings with the parties. The DB’s expertise and competence in the type of construction being performed enables them to understand potential complexities in the project, and their involvement with the parties and project enables them to help the parties prevent any conflicts that might arise, from escalating into disputes.

DRBs are commonly found in building and construction projects although they are finding some acceptance across other types of projects. DRBs do not enjoy widespread usage in Australia as yet but are becoming more frequent as parties see the benefits of keeping lines of communication open in an effort to restrict the amount of destructive disputation that takes place on short and long term projects. DRBs must remain up-to-date with the progress of the project and be prepared to activate a quick and cost-efficient dispute resolution process in order to resolve any potential dispute. DRBs hear the parties to any given problem and advise on the solution. While the solution is generally not binding on the parties they may agree otherwise as part of their contract for involvement in the project. In this respect, some DRB agreements specify that the decision of the DRB is not only final and binding, but is also not subject to review. The advantages of DRBs include: • Claim avoidance – because of the nature of a DRB, differences between parties to a project are identified very early and resolved before they escalate to a dispute; • Businesslike responses – the DRB facilitates a very businesslike response to difference and disputation by ensuring decision-maker stakeholders address issues; • Relationship building – DRBs allow key stakeholders to build professional relationships through their work together on the board to avoid disputation. The strengthening of these relationships assist the process of effective dispute avoidance; • Technical understanding – board members are experts in the project and their role in the project, therefore, they are best placed to suggest likely solutions to technical issues that arise on the project; • Impartial forum – a mix of stakeholders with authority to resolve differences meeting in a semi-formal environment provides for an objective view of issues and the ability to resolve those issues; • Cost effective – because differences are dealt with early on in the life of any potential dispute, unnecessary time is not wasted in escalating and maintaining a full-blown dispute; • Finalisation of projects – because DRBs practice dispute avoidance and early resolution projects finish without pending claims. The DRB panel is usually comprised of an odd number of representatives in order to avoid deadlocks. The panel itself may have members with

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technical knowledge, such as engineering or architecture, that understand the technical aspects of the project and may also have legal representatives to provide a legal perspective on the dispute and its likely outcome particularly should a dispute not be resolved by the DRB. Even though there may be a legal representative on the DRB, it tends to avoid overly legalistic approaches to its work. It will often allow the parties to a dispute to present material in the form of documentation and witnesses that may be questioned by the other side in a cross examination style but the rules of evidence, for example, do not apply to the hearing powers of the DRB. DRBs can be and most often are inquisitorial in that they actively inquire into the substantive issues and the roles of the parties to the dispute. However, DRBs can determine their own procedures and may opt for a less inquisitorial approach that involves the parties in more consensual problem solving and negotiation. Gerber and Ong (at 184) list the key features … of the Sydney Desalination Plant DRB as: • All three board members were required to be independent of the contracting parties. A somewhat unusual feature was that the DRB agreement required that the Chairman of the DRB be a Queen’s Counsel or Senior Counsel of the New South Wales or Victorian Bar. The inclusion of a lawyer as a member of a DRB is in itself controversial, let alone mandating that a lawyer be the chairman. This requirement recognised the importance of having a DRB member capable of resolving issues of contractual interpretation, and experienced in construction law and dispute resolution. The combination of technical engineering skills and legal experience ensured that the DRB was capable of addressing all manner of disputes. • The DRB operating procedures specified that key site representatives and non-involved senior party representatives must be present at all DRB meetings. This requirement ensured that the DRB could develop positive working relations with key on-site and off-site personnel. This acted as a catalyst for open and constructive communications. • A further unique provision in the DRB agreement was that if the DRB concluded that a particular issue could not be resolved by direct negotiations between the contracting parties, the DRB had the power to compel the disputants to refer the dispute to the DRB for a recommendation, unless the parties resolved it themselves within a designated timeline. Generally, a dispute only ends up being heard by a DRB if one or both of the parties elect to refer the matter for a hearing. It is highly unusual for a DRB to be empowered to itself initiate a hearing. • The DRB members were required to meet on site at three monthly intervals from the commencement of the project. If a key event was about to occur that would give rise to potential issues, a meeting would be arranged to take place shortly after the event. This ensured that the DRB was kept informed of developments and remained in regular communication with the parties so as to identify potential causes of conflict as soon as practicable. Further, the DRB operating procedures required that all significant project documents, such as design review

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minutes and monthly reports of the Superintendent, be forwarded to the DRB, so that the DRB stayed abreast of progress in between site meetings. The Dispute Resolution Board Foundation (DRBF) is a non-for-profit international organisation whose aims are to promote the use of DRB in the avoidance and resolution of disputes. In 2003 the Australasian chapter of the DRBF was established as the Dispute Resolution Board Australasia (DRBA). In January 2013 the chapter was formally admitted as Region 3 of DRBF. The DRBF holds a wealth of resources for anyone considering using the DRB and the DRBF Manual, authored by Baker, Douglass, Edgerton, and Sperry (2007) and provides advice on process, selection of board members and every conceivable issue arising from the use of a DRB. There are also template agreements and other documents to assist in the establishment of a DRB. According to the DRBA, a list of Australian and New Zealand projects with DRBs over the last two decades shows in excess of 21 major construction projects valued at over $7 billion including, Sydney’s third runway, the Brisbane Gateway Arterial upgrade, Sydney and Adelaide desalination plants and the Sydney Port upgrade. It is difficult to quantify exact savings achieved from the use of DRB because first, project disputes and DRB meetings are private and secondly, it is difficult to estimate the level of disputation on any project and then the potential savings should the DRB have prevented said disputation. However, USA attorney Richard Faulkner writing in Forum, the DRBF’s newsletter in October 2002 (vol 6, issue 4, p 1), stated that one US state Department of Transport estimated a 17% cost savings per contract due to the use of DRB. Further, another state department claimed a US$5m-US$7m saving on one highway project alone. (See, http://www.drb.org/newsletter/Forum64bb.pdf.) According to the DRBF web site: The International record through 2013 includes over 2,700 projects with a value approaching $300 billion. Over the past 10 years, between 70% and 80% of all projects utilising DBs have had no referrals to the DB, Where referrals have occurred, DB decisions been accepted or led to party to party settlements in 98% of cases, without further dispute resolution processes. (See http://www.drbf.org.au/concept/faqs.)

It is generally accepted that the cost of running a DRB is usually very modest compared to the destructive nature of disputation on any given project. Normally, the cost of running a DRB is no more than about 0.5% to 1.0% of the value of the contract and when compared with the potential damage disputes can cause to the progress of a project and the costs in arbitration or litigation during or after completion of a project, most parties find the costs of a DRB to be reasonable.

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PARTNERING [5.70] Partnering is a process similar to DRBs in that it is designed to deal with differences between stakeholders (partners) working together on a specific project before they become full-blown disputes. Another characteristic shared by partnering and DRBs is that partnering is more common in building and construction matters than in other areas of everyday life. Again, there is no reason why partnering cannot be efficiently used in other projects, particularly where there are a number of stakeholders that escalate the potential for disputation. One distinguishing feature between dispute review boards and the concept of partnering is the development and adherence to the charter. The charter sets out the road map of how the relationship between the stakeholders will proceed through to the successful implementation of the project via the dispute avoidance and resolution mechanisms. The big challenge in partnering is to develop the charter in a way that addresses the needs of the stakeholders and foresees the types of issues that will arise as the project progresses. In this respect it is advisable to have a flexible process in place for varying the charter as new and unforeseen issues arise. NADRAC defines “partnering” as a process that: Involves the development of a charter based on the parties need to act in good faith and with fair dealing with one another. The partnering process focuses on the definition of mutual objectives, improved communication, the identification of likely problems and development of formal problem-solving and dispute resolution strategies. (See Dispute Resolution Terms at the Commonwealth Attorney-General’s website, https://www.ag.gov.au/LegalSystem/ AlternateDisputeResolution/ Documents/NADRAC%20Publications/Dispute%20Resolution%20Terms.PDF.)

One of the important elements flowing from this definition is the development of relationships that are based on good faith. In other words, partnering has a lot to do with setting up and maintaining good relationships between the partners to the project in order to ensure a productive working environment that includes the early identification and resolution of any problems between parties. Another distinguishing feature of partnering compared to DRBs is that in the former the panel is comprised of parties in the project whilst in the latter the panel is generally comprised of people external to the parties in the project. Like other forms of dispute resolution, there are various permutations and combinations of partnering schemes but most display the following common characteristics. a) Identification of the partners’ aims and objectives that may include, for example, finishing the project on or ahead of time, having an accident and dispute free project and ensuring quality standards are adhered to. b) A workshop where partners meet and get to know each other and come to understand the aims and objectives of the project. Further, partners

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should discuss the aims and objectives of the partnering program and how it will operate on the particular project. During the workshop, ideas may be forthcoming in relation to the process of the partnering program and these may be incorporated into the program. Sometimes the workshop may include team building exercises by the use of, for example, team sports or executive team games which aim to build team spirit and assist the process of building relationships. c) The drafting and execution of a charter. The partners work together to draft a charter that will govern their relationship throughout the project. This document will guide the partners through the program and will include the aims and objectives of the program and most importantly, how to achieve those aims and objectives. Finally, the charter should address communication issues that include which of the representatives for each partner has delegated authority to speak on issues that may arise and how the partners will communicate with each other to ensure there is no miscommunication or a lack of communication throughout the project – these issues often being major sources of disputation in themselves. Further, the partners should decide how disputes are to be resolved and determine the trigger mechanisms for when a dispute should be escalated to the next level of the resolution process. d) Perform and revisit the charter. To state the obvious, the charter should be performed. However, in order to ensure its performance, the charter should be revisited by first ensuring all the partners have copies of it and secondly, referring to it at meetings of the partners and employing it to dictate the process of resolution of disputes that arise. On lengthy projects it may be a good idea to reconvene another workshop to update the partners on how the program is working and address any concerns the partners may have about its operation. e) Review of the partnering program. There should be a final workshop convened at the conclusion of the project to assess the effectiveness of it and to ensure that there are no outstanding disputes that have slipped past the program without being discovered and addressed. Partnering seeks to stop problems becoming disputes and in that respect operates as an efficient dispute avoidance process as well as a resolution process. Here, it has two worthwhile qualities, first, it seeks out issues of difference between partners to the project and encourages consensual problem-solving of those differences and secondly, should differences either not be resolved at an early stage or they slip through the partnering process, then there is a mechanism in place to resolve differences that have become disputes. It will be up to the partners to determine what sort of dispute resolution processes will be employed at any given moment in the process, but common processes include facilitation and negotiation in the early stages of a dispute to mediation in disputes escalated after no resolution in the early stages of the partnering process.

APPRAISALS AND DETERMINATIONS [5.80] There are three basic types of appraisals and determinations. The former

NADRAC

defines

the

different

types

of

appraisals

and

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determinations in the following manner: (a) Case appraisal is a process in which a dispute resolution practitioner (the case appraiser) investigates the dispute and provides advice on possible and desirable outcomes and the means whereby these may be achieved. (b) Expert appraisal is a process in which a dispute resolution practitioner, chosen on the basis of their expert knowledge of the subject matter (the expert appraiser), investigates the dispute. The appraiser then provides advice on the facts and possible and desirable outcomes and the means whereby these may be achieved. (c) Expert determination is a process in which the parties to a dispute present arguments and evidence to a dispute resolution practitioner, who is chosen on the basis of their specialist qualification or experience in the subject matter of the dispute (the expert) and who makes a determination.

In addition to expert determination, the former NADRAC also defines: (d) Determinative case appraisal is a process in which the parties to a dispute present arguments and evidence to a dispute resolution practitioner (the appraiser) who makes a determination as to the most effective means whereby the dispute may be resolved, without making any determination as to the facts of the dispute. (See Dispute Resolution Terms at the Commonwealth Attorney-General’s website, https://www.ag.gov.au/LegalSystem/ AlternateDisputeResolution/ Documents/NADRAC%20Publications/Dispute%20Resolution%20Terms.PDF.)

The distinguishing features of appraisals and determinations are that appraisals are generally not binding on the parties whereas an expert determination is generally binding on the parties by contract and not by statute. Unlike other forms of dispute resolution, appraisals and determinations are generally predicated on the appointment of a third party neutral who is an expert in the area of the dispute. For example, in a dispute about information technology, the appraiser is likely to be someone with experience in that field. Lawyers feature frequently in appraisals and determinations where there is an issue over, for example, legal interpretation of a clause in a contract. Some of the most successful appraisers have combined disciplines or expertise, such as law and information technology, and can assist the parties examine the technical and legal issues surrounding the dispute. It is generally accepted that the advantages of expert determination are that: • it provides an informal, speedy and effective means of resolving disputes, particularly where the dispute is of a specific technical character or specialised kind (Heart Research Institute Ltd v Psiron [2002] NSWSC 646); • the parties can dictate the procedures by which the expert determination is established; • it is not governed by legislation thus the rigours of the application of the rules of evidence and procedure involved in arbitration and litigation can be avoided;

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• the finality of the procedure may appeal to parties seeking to avoid the delays, potential re-hearings and appeals typically experienced in the formal litigation system; and • it is private and therefore promotes the maintenance of ongoing commercial relationships. Conversely, the evident disadvantages of expert determination are that the expert cannot issue subpoenas, request the production of documents and determine interlocutory issues. Further, the court will not determine procedures to be followed in an expert determination if the agreement engaging the expert is silent. Where a report is not adopted, the effect is one of significantly increasing the time and cost of dispute resolution. Careful consideration should be given to whether or not a particular case is appropriate to be referred out for determination. Many parties confuse appraisals with arbitration because of the adjudicative quality of them. The difference between arbitration and appraisals is that in the former, the process is governed by strict rules set out in legislation whereas the latter is flexible as to its rules. For example, in arbitration the arbitrator must observe the rules of natural justice, whereas this is not a strict requirement in appraisals. Finally, in an appraisal, the appraiser can adopt a more inquisitorial role than in arbitration. This provides the appraiser with more flexibility to conduct the appraisal in a manner the appraiser sees fit unfettered by legislative rules. The key procedural elements of appraisals are listed below. • The appraiser acts as an appraiser and not an arbitrator. • The appraiser is not bound by the rules of natural justice. • The appraiser may conduct the appraisal in any manner they think fit. • The appraiser is not bound by the evidence presented to them by any of the parties, the appraiser may appraise themselves of any documents or information that they think fit. • The appraisal must disclose the determination with or without reasons. • Parties may limit the issues to be appraised and the evidence to be admitted in the appraisal. Appraisals are most commonly agreed to when parties first enter contracts for the performance of services or delivery of goods or both. Seldom do parties agree on appraisals after a dispute has occurred. In this respect contracts sometimes contain a second-phase dispute resolution process that may include appraisal after having attempted a first-phase process such as negotiation or mediation. In other words, parties often select a dual process of dispute resolution, the first-phase being a consensual process and the second-phase process being an adjudicative process such as appraisal or arbitration.

EARLY NEUTRAL EVALUATION [5.90] According to the former NADRAC, Early Neutral Evaluation (ENE) can be defined as:

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A process in which the participants to a dispute present, at an early attempting to resolve the dispute, arguments and evidence to a resolution practitioner. That practitioner makes a determination on issues in dispute, and most effective means of resolving the dispute determining the facts of the dispute.

stage in dispute the key without

(See Dispute Resolution Terms at the Commonwealth Attorney-General’s website, https://www.ag.gov.au/LegalSystem/ AlternateDisputeResolution/ Documents/NADRAC%20Publications/Dispute%20Resolution%20Terms.PDF.)

Section 3 of the Alternative Dispute Resolution Act 2001 (Tas) defines ENE as: (3) ... a process of evaluation of a dispute in which the evaluator seeks to identify and reduce the issues of fact and law that are in dispute. (4) The evaluator’s role includes assessing the relative strengths and weaknesses of each party’s case and offering an opinion as to the likely outcome of the proceedings, including any likely findings of liability or the award of compensation.

ENE is a non-binding adjudicative process where parties present their arguments similarly to how they will present them in court and then receive from the neutral evaluator an assessment of how the matter is likely to be resolved in court. This process makes obvious the need for a senior legal practitioner or officer, preferably a former judge or senior barrister, as the case presentation includes the reception of evidence and examination of witnesses in some circumstances under oath. One of the great benefits of ENE is the sobering effect it has on parties to the process. Hearing a former Supreme Court judge or a barrister of Queen’s or Senior Counsel status describe a party’s case as weak, is a potent reality check on the likelihood of success if the matter is litigated and provides parties with an incentive to negotiate a settlement. In New South Wales ENE was established by the passing of the Courts Legislation (Mediation and Early Neutral Evaluation) Amendment Act 1994 (NSW) which amended, amongst other legislation, the Supreme Court Act 1970 (NSW) and empowered the court to order civil matters to early neutral evaluation. Interestingly, the Courts Legislation Amendment Act 2003 (NSW) removed all references to ENE. According to the Honourable Henry Tsang, Parliamentary Secretary, in his second reading of the Courts Legislation Amendment Bill on 12 November 2003: The amendments to ss 110H through to 110Q remove any reference to the process of early neutral evaluation, as it has not been useful in the Supreme Court because litigants generally have legal representation and have received advice on their prospects of success. Mediation, on the other hand, is useful as an alternate means of dispute resolution that has widespread acceptance among practitioners and parties.

While ENE still appears frequently in legislation, it commonly appears as a dispute resolution process alongside mediation giving the courts and tribunals the option to direct disputes to either process. The reality is that

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mediation is used more frequently than ENE and the references to it are more a matter of history than of the desire of the courts and tribunals to continue using it.

REFERENCING OUT [5.100]

Referencing out has a lengthy history, particularly in England where the Judicature Act 1873 provided for reports tendered to courts by referees. In such processes the court allows a question or questions arising from the dispute before it to be answered by a third party expert and then for the court to reject, vary or adopt the report of the referee. It is most commonly used to answer technical issues arising out of a dispute where a court can benefit from an inquiry into the issue conducted by a technical expert who then reports back to the court with a decision for the court’s consideration. Every jurisdiction in Australia has a system of referring disputes or parts of disputes out to court appointed referees. The following pieces of legislation allow judges in their respective jurisdictions to so refer matters to referees: • Federal Court of Australia Act 1976 (Cth), s 54A • Court Procedures Rules 2006 (ACT), r 1531 • Uniform Civil Procedure Rules 2005 (NSW), r 20.14 • Supreme Court Rules (NT), r 50.01 • Uniform Civil Procedure Rules 1999 (Qld), s 501 • Supreme Court Act 1935 (SA), s 67 • Supreme Court Rules 2000 (Tas), s 574 • Supreme Court (General Civil Procedure) Rules 1996 (Vic), r 50.01 • Supreme Court Act 1935 (WA), s 50 Court orders for referees may be made by the court with or without the parties’ consent. When a court refers a matter to a referee, the referee is usually an expert in the area of the matter and is appointed by the referring court to decide a question arising from the matter before the court. The referee may be asked to decide a particular issue in the matter or to decide all the substantive issues in the matter. Once the referee has heard the arguments of the parties to the matter he or she will hand down a report that usually recounts the arguments in short form and provides the legal reasoning behind the decision of the referee. An example of the empowering legislation is r 50.01 of the Supreme Court (General Civil Procedure) Rules 1996 (Vic) which state: (1) In any proceeding the Court may, subject to any right to a trial with a jury, refer any question to a special referee for the referee to (a) decide the question; or (b) give the referee’s opinion with respect to it. (2) Where an order is made under paragraph (1), the Court

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(a) shall state the question referred; (b) shall direct that the special referee make a report in writing to the Court on the question referred to the referee stating, with reasons, the referee’s decision or opinion; (c) may direct that the special referee give such further information in the referee’s report as it thinks fit. (3) The Court may upon application by a party or by the special referee set aside or vary an order made under this Rule.

Referees are usually given wide powers to conduct their reference. An example of the width of those powers is r 20.20 of the Uniform Civil Procedure Rules 2005 (NSW) which state: (1) The court may give directions with respect to the conduct of proceedings under the reference. (2) Subject to any direction under subrule (1): (a) the referee may conduct the proceedings under the reference in such manner as the referee thinks fit, and (b) in conducting proceedings under the reference, the referee is not bound by the rules of evidence but may inform himself or herself in relation to any matter in such manner as the referee thinks fit. (3) Evidence before the referee: (a) may be given orally or in writing, and (b) if the referee so requires, must, be given on oath or by affidavit. (4) A referee may take the examination of any person. (5) Each party must, within a time fixed by the referee but in any event before the conclusion of evidence on the inquiry, give to the referee and each other party a brief statement of the findings of fact and law for which the party contends. (6) The parties must at all times do all things which the referee requires to enable a just opinion to be reached and no party may wilfully do or cause to be done any act to delay or prevent an opinion being reached.

Once the referee’s report has been handed down to the parties and the court, parties have the choice to agree with its findings or to challenge some or all of the findings. If they choose to challenge some or all of the findings then they have to move the court to vary the report or to dispense with it in its entirety and appoint a new referee or have the court hear the issues and make a determination. An example of how a court may deal with a referee’s report is to be found in r 20.24 of the Uniform Civil Procedure Rules 2005 (NSW) which state: (1) If a report is made under rule 20.23, the court may on a matter of fact or law, or both, do any of the following: (a) it may adopt, vary or reject the report in whole or in part, (b) it may require an explanation by way of report from the referee, (c) it may, on any ground, remit for further consideration by the referee the whole or any part of the matter referred for a further report, (d) it may decide any matter on the evidence taken before the referee, with or without additional evidence, and must, in any event, give such judgment or make such order as the court thinks fit.

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(2) Evidence additional to the evidence taken before the referee may not be adduced before the court except by leave of the court.

There are at least two distinct advantages of referrals to referees. First, referees free up judges so that they can carry out their duties as judicial officers adjudicating matters according to law. Given the amount of matters before courts and the diminishing resources of the courts to deal with those matters, any system of adjudication that takes some pressure off the courts is of benefit to the community because it may mean that those matters that require judicial adjudication will be put before a judge sooner rather than later. Secondly, it allows people other than judges to become involved in the adjudication of cases particularly where there are technical issues that judges may not be familiar with. Having the opportunity to engage experts on the technical side of matters is of benefit to the parties who can present their case to the required technical standard that does justice to their argument without fear of the adjudicator not quite understanding the technical elements of the arguments. His Honour, Justice R D Giles in an article entitled “The Supreme Court Reference Out System” (1996) 12 Building & Construction Law 85 at 93-94, made the following comments about the settlements rates achieved by the simple referencing out of certain elements of disputes in the NSW Supreme Court. Thus something like 60 % of the cases referred were satisfactorily resolved prior to consideration of a report and something like 63% of the contested reports were adopted as to the whole … 68% of the cases referred were satisfactorily resolved prior to consideration of a report and 50% of the contested reports were adopted as to the whole …. One can wish, and strive, for greater expedition, but given the nature of cases in the Construction List in which orders for reference are made the figures are understandable. They certainly show greater expedition than would be possible if the few judges assigned to such cases had to take on the full trial of the questions referred.

As a dispute resolution process referencing out seems quite efficient and relatively cost efficient compared to other forms of dispute resolution. In addition to allowing a court to take advantage of any special skill or knowledge that the special referee might possess, referencing out enables a matter to be heard in private while court proceedings generally take place in public – this feature of referencing out may be particularly advantageous where the matters raised are commercially sensitive. Finally, the parties to the reference have some say in the procedure used during the inquiry, which gives them some control over the process. While the use of referrals out of court is becoming increasingly common, concern has been expressed about whether it is appropriate to continue to send building and construction disputes to be determined by referees.

ADJUDICATION [5.110]

The former NADRAC defines “adjudication” as:

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A process in which the participants present arguments and evidence to a dispute resolution practitioner (the adjudicator) who makes a determination which is enforceable by the authority of the adjudicator. The most common form of internally enforceable adjudication is determination by state authorities empowered to enforce decisions by law (for example, courts, tribunals) within the traditional judicial system. However, there are also other internally enforceable adjudication processes (for example, internal disciplinary or grievance processes implemented by employers). (See Dispute Resolution Terms at the Commonwealth Attorney-General’s website, https://www.ag.gov.au/LegalSystem/ AlternateDisputeResolution/ Documents/NADRAC%20Publications/Dispute%20Resolution%20Terms.PDF.)

There are several legislative processes that provide for the adjudication of disputes as an alternative to curial proceedings. As discussed in Chapter 1, it is arguable whether such processes are strictly within the purview of dispute resolution, however, they are certainly alternatives to litigation and warrant mention in this chapter. Like arbitration, Australia has uniform legislation covering adjudication in the building and construction industry when there is a dispute over the payment for goods and services pursuant to construction contracts. The uniform legislation (the Acts) are listed below by year of assent: • Building and Construction Industry Security of Payment Act 1999 (NSW) • Building and Construction Industry Security of Payment Act 2002 (Vic) • Building and Construction Industry Payments Act 2004 (Qld) • Construction Contracts Act 2004 (WA) • Construction Contracts (Security of Payments) Act (NT) • Building and Construction Industry Security of Payment Act 2009 (SA) • Building and Construction Industry (Security of Payment) Act 2009 (ACT) • Building and Construction Industry Security of Payment Act 2009 (Tas) The following commentary discusses some of the sections of the uniform Acts using the Queensland Act as the sample Act. The object of the Act is stated as being, “to ensure that a person is entitled to receive, and is able to recover, progress payments if the person undertakes to carry out construction work under a construction contract or undertakes to supply related goods and services under a construction contract” (s 7). The object is achieved by granting an entitlement to progress payments whether or not the relevant contract makes provision for progress payments and establishing a procedure that involves, among other things, the referral of a disputed claim, or a claim that is not paid, to an adjudicator for decision (s 8). A claimant (commonly a sub-contractor) may apply for adjudication of a claim if the respondent (commonly a head contractor), among other things, serves a payment schedule but the respondent fails to pay the whole or any

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part of the claim by the due date for payment (s 21). Adjudicators are appointed by an authorised nominating authority, who are authorised by the Adjudication Registrar (s 23). Pursuant to s 26 of the Acts an adjudicator is to decide: (1) An adjudicator is to decide: (a) the amount of the progress payment, if any, to be paid by the respondent to the claimant (the adjudicated amount); and (b) the date on which any amount became or becomes payable; and (c) the rate of interest payable on any amount. (2) In deciding an adjudication application, the adjudicator is to consider the following matters only: (a) the provisions of this Act and, to the extent they are relevant, the provisions of the Queensland Building Services Authority Act 1991, part 4A; (b) the provisions of the construction contract from which the application arose; (c) the payment claim to which the application relates, together with all submissions, including relevant documentation, that have been properly made by the claimant in support of the claim; (d) the payment schedule, if any, to which the application relates, together with all submissions, including relevant documentation, that have been properly made by the respondent in support of the schedule; (e) the results of any inspection carried out by the adjudicator of any matter to which the claim relates. (3) The adjudicator’s decision must (a) be in writing; and (b) include the reasons for the decision, unless the claimant and the respondent have both asked the adjudicator not to include the reasons in the decision.

Upon a successful adjudication, if the respondent does not pay the claimed amount they may stop further work on the construction (s 30) and the claimed amount becomes a judgment debt enforceable in a court (s 31). There are strict time limits applied to claims made under the Acts to ensure timely disposal of claims so that construction projects are not held up and the adjudication is open to internal review by the Adjudication Registrar and then to the Civil and Administrative Tribunal or equivalent in the respective jurisdiction. The adjudicator’s wide ranging power to conduct proceedings is found in s 25 of the Acts which state: (1) An adjudicator must not decide an adjudication application until after the end of the period within which the respondent may give an adjudication response to the adjudicator. (2) An adjudicator must not consider an adjudication response unless it was made before the end of the period within which the respondent may give a response to the adjudicator … (4) For a proceeding conducted to decide an adjudication application, an adjudicator

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(a) may ask for further written submissions from either party and must give the other party an opportunity to comment on the submissions; and (b) may set deadlines for further submissions and comments by the parties; and (c) may call a conference of the parties; and (d) may carry out an inspection of any matter to which the claim relates. (5) If a conference is called, it must be conducted informally and the parties are not entitled to any legal representation. (6) The adjudicator’s power to decide an adjudication application is not affected by the failure of either or both of the parties to make a submission or comment within time or to comply with the adjudicator’s call for a conference of the parties.

Finally, the adjudicator has power to conduct a hearing or proceed on the papers and in the case of the former may call a face-to-face conference and carry out site inspections if such procedures will assist the adjudicator to make an adjudication on the claim.

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Dispute Resolution Hybrids INTRODUCTION

[6.10] One of the great benefits of employing dispute resolution within organisations or between individuals is its ability to adapt to the needs of the organisation or those individuals. In other words, dispute resolution can adapt its processes to suit the types of disputes being experienced by organisations or individuals or the types of people involved in those disputes. In this respect dispute resolution may well display some features of, for example, principled negotiation and combine those features with a model of evaluative mediation that allows the mediator to be more interventionist than in the classical model of mediation, yet at the same time preserving the interest-based bargaining model of principled negotiation. If a particular organisation favours a more interventionist model of mediation because its members or employees desire a more directive mediator or a mix of an adjudicative model such as arbitration and mediation, then dispute resolution can also manage that variation of the classical model of just straight mediation. Some of the following dispute resolution processes have developed because organisations or individuals have desired a hybrid form of dispute resolution that works well for them given their particular set of circumstances. Other processes discussed in this chapter pre-date the formalisation of dispute resolution and are independent of later more recognised processes. However, even those earlier models have been touched by other formal methods of dispute resolution that have developed in recent times. For example, many conciliation or conferencing programs have facilitators that are trained in principled negotiation and classical mediation. The intermingling of such processes and theories of dispute resolution is a healthy development and should be encouraged and advertised as one of the great strengths of the family of processes called “dispute resolution”.

FAMILY LAW – COLLABORATIVE LAW (COLLABORATIVE PRACTICE) [6.20] Collaborative law (sometimes referred to as collaborative practice) is similar to mediation in that they both describe a process the substance of which leads to negotiated outcomes. In other words, collaborative law merely provides a shell of a process parties may choose to follow and within that process the parties will seek resolution based on negotiation.

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However, a distinguishing feature of collaborative law is that there is no third party neutral or mediator and the lawyers act in the interests of their own clients and not as, for example, co-mediators. The Australian Institute of Family Studies defines collaborative law and practice as: Collaborative family law practice creates a new role for lawyers that includes skills similar to those used in mediation, whereby lawyers work together (sometimes in conjunction with other collaboratively trained professionals) to facilitate child- and family-focused discussion between the parties, with the aim of reaching mutually acceptable negotiated settlements. It is a process involving confidential and transparent negotiations that take an interest-based, team approach, as opposed to one that is rights-based or adversarial. The process involves separating couples and their lawyers entering into a written agreement that during the process the parties will not litigate or threaten litigation in relation to the dispute, and the lawyers will not advise clients to threaten litigation. If the collaborative process is not adhered to and/or the process does not resolve the dispute, the agreement is terminated; the lawyers for both cannot represent the separating couple in any subsequent, related litigation and the clients are referred to new lawyers. Clients and lawyers have a duty to make a full and frank disclosure of all matters relevant to the dispute. Lawyers, while representing their individual clients, have a duty to assist the family as a whole to achieve the best possible outcome. Jointly retained neutral experts can be called into the process to reduce conflict opportunities and support parties. (See C Counsel, “What is this Thing Called Collaborative Law?” (2010) Family Matters 85 at 77, at https://aifs.gov.au/publications/family-matters/issue-85 /what-thing-called-collaborative-law.)

[6.30] There are collaborative law organisations in most States and Territories of Australia some of which are independent non-for-profits while others are run by their respective law societies or institutes. These organisations advise parties who have commenced or about to commence family law proceedings on what collaborative law is about. Further, they can recommend member lawyers who practice collaborative law. The Collaborative Professionals in New South Wales define collaborative law by its process, in the following way: What does Collaborative Family Law involve? • You and your partner will each retain a family lawyer to advise you throughout the process. • Your lawyer will discuss with you in your introductory meeting or telephone call whether your case is suitable for the collaborative process. • You, your partner and your lawyers will all sign a Participation Agreement setting out the ground rules for the collaborative process and stipulating that if either client commences court proceedings, both collaborative lawyers will be disqualified from representing either client. • Underpinning the collaborative process is an understanding that you and your partner, (and your respective lawyers), will act in good faith, be open and honest in your dealings with one another and respect the fact that different views will need to be expressed to achieve a fair settlement.

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• The majority of the negotiations will take place at “4 way” in-person meetings between you, your partner and the lawyers. Correspondence between lawyers is kept to a minimum. By being present throughout the negotiations, you and your partner retain control, the scope for misunderstandings is reduced and you will be assisted in communicating with each other in a non-confrontational way, which is particularly important if you are parenting children together. • The meetings are minuted and action points for future meetings agreed. Where appropriate, you will be encouraged to draw on the skills of other specialist advisers, such as accountants to assist with financial disclosure, or child counsellors to discuss an issue which may have arisen in relation to the care of your children. • Once a settlement is reached, the lawyers will draw up a Settlement Agreement which will usually be submitted to the court for approval and made into a consent order. (See http://www.collabprofessionalsnsw.org.au/faqs?.)

The Collaborative Professional Victoria answer the question, “What’s the difference between Mediation and Collaboration?” in the following way: Mediation is a means of resolving a dispute whereby a neutral person, the mediator, helps the disagreeing parties reach a solution during a face-to-face meeting. The mediator assists the parties clarify the disputed issues and identify possible options but does not impose a decision. The mediator does not provide legal advice to the parties. Legal advice can be given along the way in collaboration, and your lawyers will write up agreements which they understand from representing you in meetings, rather than you needing to meet with a lawyer after the mediation to explain your needs and to have your agreement written up. (See Collaborative Professionals Victoria at http://www.liv.asn.au/For -Lawyers/Sections-Groups-Associations/Practice-Sections/Collaborative -Practice.)

Collaborative law is characterised by the execution of a “collaborative agreement” (or “participation agreement”) that requires the parties (including their lawyers as they are parties to the process) to withdraw from the dispute should negotiations fail. This means that the lawyers and professionals engaged in the collaborative process must withdraw and both lawyers are disqualified from litigation representation. Further, they agree that while the process continues that neither party will commence or continue proceedings in court. It is said that the process promotes resolution because all participants have an incentive to resolve matters in a co-operative and non-adversarial manner as they will not be further involved in the dispute should negotiations fail to reach resolution. This “withdrawal” principle is the centre piece of collaborative law. A further distinguishing feature of collaborative law is the role of the allied professional (who may be, for example, an accountant, psychologist, therapist, business planner, financial expert or mental health expert) who may assist in the resolution of the dispute via their expertise in an area of the dispute or the interpersonal and psychological skills they may bring to the negotiation. They too are disqualified from continuing to work and

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cannot assist either party if the matter goes to court. The agreement generally provides the process of negotiation and consequences of any breach of the agreement. The process also may include another player unique to collaborative law, namely the coach, who can support the parties and their lawyers and may be a process expert – that is, a person with extensive negotiation experience. The coach can assist parties with their interpersonal skills or emotional issues brought about by the dispute or may be one of the allied professionals rendering expert assistance in the negotiation. It is important to note that the coach does not act as a counsellor or therapist, unless that is their professional expertise, and even then in an impartial way rather, the coach coaches the parties to participate in the process and to work towards resolution. Collaborative law is a voluntary process in which parties agree to commit to ongoing communication and full disclosure in an attempt to resolve the dispute in a way that respects their legitimate needs. In essence, the process relies on trust and co-operation between lawyers, as disclosure and information is not subject to the control of court processes. Stuart Webb, a Minneapolis based family lawyer and mediator, first described and initiated the collaborative process in his local community in 1990. Frustrated and disappointed with the financial and emotional costs associated with a litigation oriented approach to family conflict, Webb declared he would no longer go to court – he would only represent clients in a participatory negotiation process aimed solely at creative settlements (see P Tessler in J Pollard, “Collaborative Law Gaining Momentum” (2007) 45(5) Law Society Journal 68 at 71). Whilst collaborative law arose out of family law practice, it is now used to great effect in North America in settling various disputes including: commercial, partnership, workplace, medical or estate disputes. The collaborative law process has been described as a “paradigm shift” from adversarial to co-operative practice, lawyer-directed and rights-based negotiations to client-centred, interestbased collaboration. The Collaborative Professionals in New South Wales list the benefits of collaborative practice and when it will be the wrong option for parties: It will be of interest if the following are important to you: • you want a dignified, non-aggressive resolution of the issues; • you and your partner have children and wish to reach a resolution by agreement with their needs and interests at the forefront; • you do not wish to incur the costs and animosity generated by court litigation; • you value retaining control over decisions about restructuring your financial arrangements or arrangements in relation to the children, but with advice from experts; • you do not wish to hand over such decision making either to your lawyer or to a judge;

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• you want your dispute and the terms of any subsequent settlement agreement to be confidential; • you need the assistance of a lawyer to help you negotiate in face to face meetings. Collaborative law will not be the right option for you if: • your main objective is to “seek revenge” or to “have your day in court”; • you are looking for a “soft option”; • you think that the process will allow you to “out-manoeuvre” the other party; • you are hoping to get away with giving less than a full and frank financial disclosure! • In cases where there is a history of domestic violence or other abuse, the collaborative family law specialists will need to consider very carefully whether the case is suitable for the collaborative process and are likely to insist on the involvement of other professionals in the process to ensure that the interests of you, your partner and any dependent children are adequately protected and represented. (See http://www.collabprofessionalsnsw.org.au/faqs/.)

[6.40] The International Academy of Collaborative Professionals (IACP) is based in the United States and its founder, Stu Webb of Minneapolis, Minnesota, after practising family law for more than 20 years, became interested in dispute resolution in the late 1980’s. By 1990 he was telling his clients that he would no longer go to court and that he would only try and achieve a creative settlement for his clients by dispute resolution and if that process did not result in settlement then he would refer his client to a litigation lawyer and withdraw from the matter. Today the IACP boasts in excess of 5,000 members from 24 countries around the world. In Australia, support for collaborative law has occurred at an executive administrative level with endorsement from the Federal Government, the Law Council of Australia and the Chief Judge of the Family Court of Australia. Marilyn Scott notes (in “Collaborative Law: Dispute Resolution Competencies for the New Advocacy” (2008) 8(1) QUT Law and Justice Journal 213, at 219) that it is estimated that there are at present over 300 lawyers and allied professionals trained in collaborative law processes – the very first training being conducted in Canberra and Sydney in 2005. In New South Wales alone there are reportedly 92 family law lawyers and 16 commercial and general practice lawyers that are members of the Collaborative Professionals (NSW) Inc. In 2007, five State collaborative practice websites were launched by the then Federal Attorney-General, The Honourable Philip Ruddock MP and the release of “Collaborative Practice in Family Law: A Report to the Attorney-General prepared by the Family Law Council” December 2006 (see Scott at 220). Standards and principles to assist those engaged in collaborative law have been prepared by the International Academy of Collaborative Professionals (IACP) and have been extended by the Family Law Council and the Law Council of Australia. While collaborative law first started in the family law area of legal practice, it has now spread to take in commercial and general civil disputes. In an

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article entitled, “The Civil Collaborative Law Movement” (2010) 12(3) ADR Bulletin 45, Texas lawyer Sherrie Abney recounts that, in 2005, the Dallas and Houston Bar Associations established collaborative law sections for civil law matters. The Collaborative Professionals NSW already provide a collaborative service for commercial and general civil disputes.

CRIMINAL LAW – RESTORATIVE JUSTICE? Defining restorative justice [6.50] Traditionally dispute resolution has operated within the sphere of civil disputes only. However, recently the theory and philosophy of dispute resolution has found its way into the criminal justice system. Such practices are colloquially known as “restorative justice” in that they seek to repair or restore harm done to people when a criminal offence occurs as opposed to just punishing the perpetrator. The International Institute for Restorative Practices (IIRP) states the theoretical rationale for restorative justice as being: The fundamental premise of restorative practices is that people are happier, more cooperative and productive, and more likely to make positive changes when those in positions of authority do things with them, rather than to them or for them. The IIRP distinguishes between the terms restorative practices and restorative justice. We view restorative justice practices as a subset of restorative practices. Restorative justice practices are reactive, consisting of formal or informal responses to crime and other wrongdoing after it occurs. The IIRP’s definition of restorative practices also includes the use of informal and formal processes that precede wrongdoing, those that proactively build relationships and a sense of community to prevent conflict and wrongdoing. The field of restorative practices has significant implications for all aspects of society – from families, classrooms, schools and prisons to workplaces, associations, governments, even whole nations – because restorative practices can develop better relationships among these organizations’ constituents and help the overall organization function more effectively. For example, in schools, the use of restorative practices has been shown to reliably reduce misbehavior, bullying, violence and crime among students and improve the overall climate for learning. Everyone who finds themselves in positions of authority – from parents, teachers and police to administrators and government officials — can benefit from learning about restorative practices. (See http://www.iirp.edu/what-is-restorative-practices.php.)

According to the former NADRAC, restorative justice, in its many derivations, can be defined as: Diversionary, victim-offender, community accountability, restorative and family group conferencing are processes which aim to steer an offender away from the formal criminal justice (or disciplinary) system and refer him/her to a meeting (conference) with the victim, others affected by the offence, family members

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and/or other support people. The practitioner who facilitates the conference may be part of the criminal justice system (for example, a police or corrections officer) or an independent person. Victim-offender mediation is a process in which the parties to a dispute arising from the commission by one of a crime against the other, with the assistance of a dispute resolution practitioner (the mediator), identify the disputed issues, develop options, consider alternatives and endeavour to reach an agreement. The mediator has no advisory or determinative role on the content of the dispute or the outcome of its resolution, but may advise on or determine the process. (See Dispute Resolution Terms at Commonwealth Attorney-General website, https://www.ag.gov.au/LegalSystem/AlternateDisputeResolution/Pages/ NADRACpublications.aspx

Restorative justice can manifest itself in a number of different processes. For example, it may be as simple as having the victim or the victim’s family and friends draft “impact statements” on how the perpetrator’s actions in committing the crime have affected the victims both during and after the crime. At the other end of the spectrum there are restorative conferences where victims and/or their families and friends are brought face-to-face with the perpetrator of the crime in order to express their feelings and to explain the ramifications the crime has had on them and to give the perpetrator the opportunity to explain their actions and to discuss the potential to restore the victims to the position they were in before the crime took place. Another popular restorative justice process is the concept of “circle sentencing”. Here, after a perpetrator pleads guilty but before the court sentences the perpetrator, a group is convened that includes: the perpetrator; the victim or victims; the sentencing magistrate or judge; the police informant or nominee; a (usually) government appointed circle sentencing officer; and any other stakeholders (such as community representatives that may have been affected by the criminal act). At the circle sentencing meeting, discussions are initiated along the lines already described with the view that a suitable sentence be recommended to the sentencing magistrate or judge who has the discretion to consider the circle sentencing outcome when sentencing the perpetrator. It is said that there are three basic principles of restorative justice, being: (i) The crime is not just against the State, it is against victims – not only individual victims but against the community as a whole. (ii) The primary goal is to make amends for offending, rather than inflicting pain on the offender. Accountability means recognising the wrongfulness of one’s conduct, expressing remorse for any resulting injury, and taking actions to repair the damage done. It is said in the case of Yourth or Victim Offender Conferences (YVOCs), that crime creates positive obligations that require affirmative action by the offender. (iii) Restorative justice requires collaborative sanctioning involving all stakeholders. The key here is to ensure uninhibited dialogue between

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the parties and a focus on the steps required to heal the victim and the community as well as a way to confront the offender’s conduct and facilitate her or his development as a law-abiding citizen. Therefore, restorative justice is really about focusing on the harm caused by the wrongful conduct at various levels. But more than this, it requires the offender to take responsibility for their wrongful conduct and the harm that flowed from that conduct. In a landmark paper entitled, “Restorative Justice: A New Paradigm for Criminal Justice Policy” (2003) 34 VUW Law Review 91, Donald Schmid, Assistant US Attorney for the US Department of Justice, stated the following six characteristics of restorative justice: 1. Victims playing a role – for example, in most restorative justice processes victims are given rights – rights to tell the offender about the impact of the crime on the victim and/or the victim’s family. Often the question is asked and answered as to why the victim was victimised? Will the victim be victimised again? How will the offender put things right? 2. Giving a voice to the victim – in anecdotal evidence to date the process has received favourable responses because they give the participants a chance, that court did not give them, to have a say and therefore have some ownership in the process and its outcomes. 3. Fitting with community policing – the process has in some overseas jurisdictions helped reduce crime rates and the incidents of recidivist behaviour. This accords with community policing which relies on better understanding the community in order to reduce crime rates. 4. Accommodating cultural, ethnic and religious diversity – the process can be held anywhere to account for cultural, ethnic and religious differences. For example, it could be held at a place of cultural or religious significance to add to the impact of the procedure. 5. Consensual decision-making – outcomes are consensual that are arrived at by all stakeholders achieved through a better understanding of the conduct and its ramifications. 6. Greater use of community resources – because the process reveals a deeper understanding of what it takes to reintegrate the offender back into the community, this leads to a greater understanding of the use of community resources (and where they are lacking). For example, drug rehabilitation and support and educational groups.

Restorative justice must be entered into voluntarily by the stakeholders and provide support for both victim and offender. Further, parties are in control of the process and the outcome – hence its classification as a dispute resolution process. In some process, for example, circle sentencing, the perpetrator must plead guilty in court before the circle sentencing process can begin. Owning up to the harm caused by the criminal offence is an important element of the restorative process.

Why did restorative justice develop? [6.60] Restorative justice developed for four basic reasons. First, in the 1960s and 1970s people in the United States became concerned about the lack of victim’s rights in the justice system. Interestingly, many who had

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been through the criminal justice system as victims believed that express rights belonged to the offenders at the expense of the victims. Secondly, most people believed that the rates of incarceration were too high. Further, the cost to the community in dollar and non-monetary terms was too high. Thirdly, there was and in some jurisdictions of Australia and overseas still is, overwhelming evidence that the rate of recidivist behaviour was too high. Statistics compiled by the Ministry of Justice in New Zealand (where Schmid conducted his study) at the time showed that 80% of persons imprisoned were re-convicted within two years of their release from prison. Finally, restorative justice has a strong basis in religious and moral theory. The notion of accountability and healing is very much in line with religious and moral theory and therefore, in line with the majority of the community.

How does it work? [6.70] Generally speaking most restorative justice processes have an intake procedure that includes: • • • • •

establishing that there was a direct victim; the offence carried a period of incarceration (depends on the program); the offender had pleaded guilty; there was agreement about the facts underlying the case; and the matter is suitable for a restorative justice in-person process (for example, the nature of the offence, level of violence, and age of offender and victim etc).

In all States and Territories of Australia some form of restorative justice programs operate, such as youth conferencing, and in six of those States and Territories victim-offender programs operate with circle-sentencing only operating in two States. As a general rule, any participant can usually ask for a restorative justice process, although both the victim and the offender must agree and the offender has to accept responsibility for the offence and has already been sentenced. Once there is agreement that a case is suitable for a selected process, a trained facilitator is appointed who contacts the parties involved to arrange an in-person meeting or conference. The focus of the conference is to discuss the criminal offence and how amends could be made. The advantages of restorative justice

[6.80] Schmid suggested that there are a number of advantages in using restorative justice. The following non-exhaustive list raises some of those advantages. 1. Victim participation. (a) Resources spent on victim: traditionally victims have been a mere source of information for police so that they can make an arrest and secure a conviction. Resources were only ever spent on the offender: in the investigation; legal aid; access to the courts for

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various motions prior to hearing; ability to compel witnesses to give evidence and obtain documents; right to a public trial before a jury of the offender’s peers; costs of court borne by the community. (b) Victim involved in resolution: traditionally the victim is not involved in the resolution – the court provides the sentence which is seen as the only resolution. With restorative justice the victim can be a full and equal partner in sentencing. (c) Catharsis for victim: restorative justice provides a very important step in the process of healing – that of a catharsis for the victim. The process of the victim confronting the offender and telling them how the crime has affected their lives and having the offender respond to that allows the victim to discharge their pent-up emotions. Frequent outcomes in restorative justice are an apology from the offender which starts the victim’s healing process. (d) Restoration by restitution: a central component of restorative justice is restoration of the victim through restitution or other forms of reparation. The parties in the process work towards a consensus on what will restore the victim as well as what will reintegrate the offender. (e) Victims given a voice in criminal justice system: restorative justice gives a new voice to victims never heard before in the criminal justice system. Further, the victim gets to observe the criminal justice system and the offender “close-up”. 2. Increased satisfaction for offenders and victims. Schmid quotes a study of a restorative justice program in Pennsylvania in the USA which found that 93% of victims who participated in YVOCs said the meeting with the offender was helpful – 100% of offenders said meeting with the victims was helpful – 94% of victims, their families and offenders said they would choose to participate in the YVOC again if they had to do it over again. Similar levels of satisfaction have been found in Minnesota in the US and in New Zealand and New South Wales. 3. The reason that matters are generally not referred to YVOCs if the offender does not plead guilty is the requirement that the offender accepts responsibility for the wrongful conduct. This is an important concept in order to make the process work and to help the process of offenders reintegrating into the community. Offenders that do not accept the wrongful conduct and take responsibility for it have high rates of recidivist behaviour. 4. Offenders that participate in the process record lower levels of recidivism probably because: (a) Reversal of moral disengagement – the offender is re-engaged at a moral psychological level with the consequences of their behaviour; (b) Social and moral development – the program aids the moral and social development of the offender so that they understand what has happened and its wider implications and they are basically wiser for the experience;

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(c) Emotional and moral psychological healing – the program helps the moral and emotional psychological healing from the trauma of the crime by interaction with the parties and symbolic reparation; (d) Re-integrative shaming – balancing disapproval of the wrongful behaviour (shaming) with expressions of respect and acceptance of the offender into his or her community (reintegration). 5. Restorative justice provides answers for the community and the authorities into the nature of crime. This problem-solving approach helps the community and authorities deal with crime and how to stop it before the behaviour becomes criminal in nature. 6. In the case of YVOCs, they allow offenders and victims to come in contact with police in a problem-solving arena and therefore, all stakeholders see police in a different light. Preliminary data from an Australian Capital Territory pilot program shows offenders having a much more positive perception of police after participating in in the process. Interestingly, in about 90% of cases, offenders thought police had been fair to them. On the other side of the equation, police gain a deeper understanding of their community and how crimes are committed. Suggested sentencing of offenders allows police to be empathetic towards offenders where appropriate. 7. It has been observed that restorative justice appeals to liberal politicians as a less punitive system as well as conservatives through its emphasis on victim’s rights. Concerns about restorative justice

[6.90] Schmid also raised some concerns about restorative justice. The following is a summary of his non-exhaustive list: 1. A common complaint is that it treats offenders too softly. Research has shown that it is actually tough on offenders because it is a difficult and emotional experience for offenders. Offenders find it difficult to face the suffering of victims and their families and have to explain their own behaviour. Many offenders stated that restorative justice processes are more difficult to endure than the traditional criminal justice processes and punishment. Further, restitution is expected whereas in the criminal justice system restitution is not expected (it is easier to sit in a cell and do nothing). 2. Restorative justice provides different outcomes that may be inconsistent with each matter. The counter-argument to this is that sentencing itself often produces inconsistent outcomes and that one of the challenges for restorative justice is to try and achieve consistent outcomes. 3. There is a very genuine concern that victims become victims again through the process of restorative justice by having to re-live the whole criminal offence again after it has been dealt with by the court. The only way to ensure this does not happen is through ensuring adequate support for the victim through the process. Although there are no guarantees that it won’t happen even with support! However, for example, in most YVOC’s police and other community representatives try to ensure that the victim is adequately protected from being the victim again. 4. Some argue that the offender’s rights are likely to be infringed through restorative justice because lawyers are not always present and do not manage the process. Again, there is an easy solution that is to have lawyers present to

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ensure the offender’s rights are protected. There is a cost implication of this (that could be covered by the State) and it is important that the lawyers understand the difference in their role under the restorative justice process.

It is generally agreed that in the case of YVOC’s they were generally only seen as being appropriate for minor crimes that involved low levels of violence, especially property crimes. However, there have been some pilot programs in New South Wales, the United States and Canada of YVOCs for homicide matters that have produced some interesting results in relation to victim/offender satisfaction levels (see, for example, the murder of Michael Marslew who was senselessly murdered as he worked at a local Pizza Hut take-away store in Sydney and the subsequent documentary entitled, “Facing the Demons”. Further, see http://www.enoughisenough.org.au/ about, an organisation founded by Michael’s father Ken Marslew to educate the community in personal responsibility and reforming attitudes to violence). These studies and the on-going programs in restorative justice indicate the potential effectiveness of restorative justice.

Effectiveness of restorative justice [6.100]

In a report commissioned by the Australian Institute of Criminology, Jacqueline Joudo Larsen provided an account of the types of restorative justice systems in existence in Australia and their effectiveness. While the results of the research conducted into the effectiveness of restorative justice are inconclusive given there is research showing contrary findings, there is generally a positive view on its effects notwithstanding the inconclusive nature of the data. Larsen’s report is a valuable insight into restorative justice for many reasons, including the discussion on the wider research landscape as it pertains to the effectiveness of restorative justice. In relation to the issue of re-offending after a restorative justice experience, Larsen writes: A meta-analysis of 22 studies examining the effectiveness of 35 individual restorative justice programs found that restorative justice was more effective than traditional criminal justice approaches, leading to reduced reoffending … Similar findings were reported … in a review of research comparing restorative justice outcomes with those from conventional processes. They reported ‘substantial reductions in repeat offending for both violence and property crime’ that restorative justice was found to be more effective with more serious offences and for crimes involving personal victims. [references omitted] (See, JJ Larsen, “Restorative Justice in the Australian Criminal Justice System” (Research and Public Policy Series No 127, Australian Institute of Criminology, 2014), pp 23-24.)

Further: [researchers] … reviewed a range of studies that compared the impact of reoffending between those who undertook youth conferencing and those who only appeared in Children’s Court, as well as studies that compared conferencing and other measures such as cautions, mediation and orders to pay restitution. Authors of the review concluded that there was ‘little basis for the confidence

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that conferencing reduces re-offending at all’ … and cited several methodological problems in studies on conferencing, such as a failure to adjust for differences between control and treatment groups, small sample sizes and restricted definitions of reoffending, among others. Consequently, [they] … revisited the question of whether conferencing was more effective in reducing reoffending than court using propensity score matching ... Their comparison of reoffending between young people participating in Youth Justice conferences in New South Wales and those eligible for a conference but processed through the Children’s Court in 2007 found no significant differences between the two groups in the proportion who reoffended, the length of time to first (proven) reoffence, the level of seriousness of reoffending, or the number of proven offences. This led to the conclusion that conferencing for young offenders in New South Wales ‘is no more effective than the NSW Children’s Court in reducing juvenile offending among young person’s eligible for a conference’ … [references omitted] (See, JJ Larsen, “Restorative Justice in the Australian Criminal Justice System” (Research and Public Policy Series No 127, Australian Institute of Criminology, 2014), p 24.)

Larsen pointed the way ahead: While the evidence is not overwhelming at present, there is a growing body of evidence that supports the assertion that restorative justice can reduce reoffending, however, more attention needs to be paid to the results of rigorous studies in order to state conclusively that it is ‘a less expensive and more efficient way’ … of addressing offending. [references omitted] (See, JJ Larsen, “Restorative Justice in the Australian Criminal Justice System” (Research and Public Policy Series No 127, Australian Institute of Criminology, 2014), p 26.)

Larsen summarised the research on the effectiveness of restorative justice in the following way: The evidence on the impact of restorative justice on reoffending is mixed but a growing body of research suggests positive impacts for both victims and offenders. Research has demonstrated that contrary to popular opinion, restorative justice may be more effective for more prolific offenders; that it has the ability to prevent some offenders from further criminal activity, slows the offending of others (although it leaves some others unaffected); that it is more effective for violent rather than property offences, more effective post- rather than pre-sentence and while there are differing expectations of what the process offers, there is clear evidence that those willing to engage in the process do benefit ... While the ability of restorative justice to reduce reoffending is still contested, a focus on reoffending outcomes alone fails to capture the extent of other benefits, such as, victim satisfaction, offender responsibility for actions and increased compliance with a range of orders, among others. Studies examining the impact of restorative justice have shown different results for different offences and offenders, as is the case for many other forms of intervention, including processing through the courts, among others. What is critical in terms of reoffending, is to be confident that restorative justice does not lead to increases in reoffending. [references omitted]

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(See, JJ Larsen, “Restorative Justice in the Australian Criminal Justice System” (Research and Public Policy Series No 127, Australian Institute of Criminology, 2014), p 28.)

COMBINED PROCESSES [6.110]

A common hybrid form of dispute resolution is to combine two or more dispute resolution processes. This is a common approach and often carried out in an unconscious way in terms of embarking on formal dispute resolution processes. For example, most people attempt to negotiate a dispute before resorting to other dispute resolution processes or court. Rarely do parties issue statements of claim before some form of communication to resolve the dispute or even assert rights has occurred. So probably the most common combined process is negotiation–formal dispute resolution process. Another common combined process is where negotiation has failed and during litigation or just before judgment, parties renegotiate and produce a settlement – this produces a negotiation–litigation–negotiation process model. The former NADRAC defines such processes in the following way: Combined or hybrid dispute resolution processes are processes in which the dispute resolution practitioner plays multiple roles. For example, in conciliation and in conferencing, the dispute resolution practitioner may facilitate discussions, as well as provide advice on the merits of the dispute. In hybrid processes, such as med-arb, the practitioner first uses one process (mediation) and then a different one (arbitration). (See Dispute Resolution Terms at the Commonwealth Attorney-General’s website, https://www.ag.gov.au/LegalSystem/ AlternateDisputeResolution/ Documents/NADRAC%20Publications/Dispute%20Resolution%20Terms.PDF.)

[6.120]

One of the more common instances of combined processes is discussed in Chapter 4 of this book dealing with s 27D of the new Uniform Commercial Arbitration Acts(Cth) where parties to arbitration may authorise an arbitrator to act as a mediator. This hybrid is colloquially known as ‘arb-med’ or where the parties authorise the arbitrator/mediator to resume arbitration after a failed mediation pursuant to s 27D(2) of the Uniform Commercial Arbitration Acts(Cth), “arb-med-arb”. As discussed in Chapter 4, there are issues of potential breaches of natural justice or procedural fairness through arbitrators hearing confidential information in separate sessions that could then influence their decision-making ability when resuming the role of arbitrator. Such information has not been put to the other side hence the breach of natural justice provisions which require allegations to be put to the other party to allow them to respond in the presence of the arbitrator. Another derivation of the above is commonly called “med-arb”, where parties attempt mediation first and should that process fail, they revert to arbitration. Parties will usually agree to this process by contract either before or after the dispute has arisen. Med-arb is a popular hybrid as it gives parties the opportunity to resolve their dispute in a consensual

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non-adversarial way before resorting to adjudication via arbitration. The advantages of med-arb are the possibilities of: avoiding adjudication; maintaining relationships; and, reaching a consensual resolution. The negatives are the potential for: a lack of honesty and forthright discussion knowing adjudication will follow; a deliberate testing or quarantining of evidence during mediation which provides confidentiality as to certain kinds of evidence; and, treating mediation as a trial run for a subsequent hearing.

[6.130]

A new and interesting hybrid has been introduced in the Queensland Civil and Administrative Tribunal (QCAT) called a “Hybrid hearing”. In this model a hearing is listed and conducted then the parties move to mediation. According to the QCAT Practice Direction No 1 of 2012 entitled, “Hybrid Hearings: QCAT gives the parties the opportunity to mediate after the hearing because: (a) During the hearing, parties will hear all of the evidence and submissions of the other party. Parties may have a different view about reaching an agreement afterwards. (b) During the mediation, parties will not know what the Member is going to decide and can make their own agreement. (c) Parties can be confident that if they don’t reach an agreement and the Member does make a decision, the decision is not affected by anything said or done by the parties during the mediation. (d) Mediation gives the parties the opportunity to make an agreement between them rather than have a decision made for them. Research shows that parties are more likely to honour an agreement they reach together, rather than a decision that is made for them by someone else. (e) Mediation gives the parties an opportunity to find middle ground instead of one party winning and one party losing. Sometimes, even the party who “wins” a tribunal hearing is not happy with the result. (f) QCAT may be limited in the kinds of orders it can make to resolve a dispute. The parties may be able to find creative ways to solve a dispute that the tribunal could not order. (g) Mediation gives parties the opportunity to say things to each other that are “off the record”. (h) Disputes often arise because the parties are not communicating well, or have stopped communicating. Mediation often provides the first opportunity for the parties to speak to each directly. The Member can assist in opening the lines of communication between them. (i) Parties may need to work together in the future. Reaching an agreement together may help maintain working relationships.

The Practice Direction states that where parties fail to settle at a dispute resolution process, “[I]t is not practical or efficient to list the proceedings for hearing on a later date” (p 1). The Practice Direction gives examples of these kinds of proceedings and lists: one-issue disputes; animal management cases; or, where parties have travelled a long distance to attend QCAT. While this is a rather eclectic non-exhaustive group of substantive matters, QCAT’s experience in its own business clearly has dictated the types of matters to have a hybrid hearing applied.

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The hearing and mediation are listed for the same day with agreed bundles of documents going to all parties. No further documents are allowed to be presented outside of the agreed bundle. The hearing is conducted by a Member of the Tribunal who will take evidence and submissions from the parties in accordance with the Tribunal’s governing Act and Rules. Upon conclusion of the hearing the Member will reserve their decision and adjourn the matter. The Member will then consider the evidence and submissions and record their decision in writing along with brief reasons for the decision. The Member will place the decision in an envelope and seal it. The Member will not tell the parties their decision or the reasons for that decision. The Member will then conduct mediation according to the governing Act and Rules and will not meet with parties in separate session during mediation. If the matter is settled at mediation then it will be recorded in writing and the Member will make orders consistent with the settlement. Further, the Member will destroy the sealed envelope without disclosing its contents to the parties. If the matter does not settle at mediation the Member will open the sealed envelope and make a decision by reading the decision and its reasons and that will be the record of the decision. Finally, the Member will make such orders as are consistent with the decision. Dr Bobette Wolski, in an article entitled, “QCAT’s Hybrid Hearing: The Best of Both Worlds or Compromised Mediation?” sees the benefits of QCAT’s hybrid hearing in the following way: QCAT’s hybrid hearing is efficient in that the same third party is performing both adjudicative and mediatory functions and has full access to information concerning the matter and some knowledge of the parties. There is no need to bring a second party up to speed. It is also efficient in that, one way or the other, a decision will be made. Also on the plus side, the hearing is not expected to be lengthy or complex. The parties will usually be unrepresented. QCAT might be hoping that by participating in a hearing, the parties will be better able to perceive the strengths and weaknesses of their respective cases and will see mediation as an opportunity to avoid a complete loss, perhaps save face, and possibly even preserve their relationship with the other party. This means that the hybrid hearing is more effective than mediation alone. But is it more effective than mediation (or a compulsory conference) first, followed by a hearing if necessary, which is what the parties to a hybrid hearing must forego? (B Wolski, “QCAT’s Hybrid Hearing: The Best of Both Worlds or Compromised Mediation?” (2013) 22 Journal of Judicial Administration 154 at 164.)

Dr Wolski also expresses the disadvantages in the same article. All of the cases listed for a hybrid hearing will go straight to a hearing without the benefits of ADR first. Had these matters been mediated prior to a hearing, presumably a certain percentage of them would have settled without the need for a hearing. The development of the hybrid hearing seems fundamentally at odds with the object of helping parties to settle disputes without the need for a hearing.

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Parties to a hybrid hearing are still provided with the opportunity to settle their dispute in mediation but a post-hearing mediation is a different kind of mediation than they otherwise would have participated in. When mediation takes place before a hearing, mediators are able to hold separate sessions with the parties. This process option is not available to Members who conduct mediation in the hybrid hearing. Arguably these mediators have been “stripped” of “an important tool in the mediation stage”, possibly the most powerful “tool” in the mediator’s “toolbox”. Separate meetings can be used to: control the expression of emotions; redress inappropriate behaviour; acquire a range of information that the parties will not share in joint sessions; provide a safety zone for a party to consider proposals and to offer proposals without fear of commitment or loss of face; and to encourage parties to consider the consequences of particular options, including the consequences of failing to reach agreement. There are other opportunities lost to parties who are sent down the hybrid hearing path (there are a number of reasons why Ury, Brett and Goldberg suggested that interests-based procedures should be used before resorting to rights-based processes). The parties lose the opportunity to: 1. Identify and agree upon disputed and undisputed issues prior to the hearing. It has long been recognised that even an “unsuccessful” mediation might provide some benefits, in particular, by identifying and clarifying the issues in dispute. QCAT makes use of this function of mediation in the ADR-hearing pathway. The tribunal in a hybrid hearing will not have this preliminary work done for it. 2. Find some common ground and build upon it. An unsuccessful pre-hearing mediation might help the parties to identify common ground and begin the process of building trust and empathy between them. The dynamic is reversed with a hybrid hearing. If the parties were not polarized before the hearing, they likely will be after the hearing. 3. Change the nature of the conversation between them. Mediation offers parties the opportunity to talk about their non-legal interests and future concerns. In a hearing, the information is funneled (rather than expanded) and the conversation turns to facts, past events, and rights-based arguments. Once funneled, it is less likely that the information will be expanded and the nature of the conversation changed in a subsequent mediation. The short timeframe between the hearing and mediation presents a problem in itself. The hearing and mediation take place virtually back-to-back (in a period of about four hours). It will be difficult for all concerned, parties and adjudicatormediator to change their mindsets and conversations. (B Wolski, “QCAT’s Hybrid Hearing: The Best of Both Worlds or Compromised Mediation?” (2013) 22 Journal of Judicial Administration 154 at 165.)

ONLINE DISPUTE RESOLUTION [6.140]

The digital revolution has delivered a new generation of digitally conversant people and that has meant that dispute resolution has adapted to new modes of delivery. According to Marc Prensky, educational speaker, writer and designer, “digital natives” are born during or after the general introduction of digital technology, being arguably in the last 20-40 years (M Prensky, “Digital Natives, Digital Immigrants” (2001) 9(5) On the Horizon 1).

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The current generation of primary, secondary and tertiary students and/or those that have entered the work force in last decade are the first generation of digital natives since the commencement of the digital revolution. These digital natives are conversant with technology in a way that resembles being able to speak a second language. The generations that do not qualify as digital natives are referred to as “digital immigrants”. One of the world’s most well-known digital immigrants recently stated: Like many of you in this room, I’m a digital immigrant … My two young daughters, on the other hand, will be digital natives. They’ll know a world without ubiquitous broadband internet access … We may never become true digital natives, but we can and must begin to assimilate to their culture and way of thinking. (R Murdoch, http://www.smh.com.au/news/Technology/Text-ofMurdochs-speech/2005/04/14/1113251729950.html.)

Dispute resolution providers, whether they be courts or private providers must similarly speak to the digital natives in a language they understand. According to the Australian Bureau of Statistics, in 2014-15, 7.7 million or 86% of Australian households had access to the internet and for households with children under the age of 15, 97% of households had access to the internet. Further: In 2014–15, the four most popular online activities were: banking (72%); social networking (72%); purchasing goods or services (61%); and entertainment (60%) ... Overall, internet use was highest among the younger age groups (persons under the age of 35). Those aged 15–17 years old most commonly went online for social networking (91%), followed by entertainment and formal education activities (73% for both). For those aged 65 years and over the most common activities online were the same as for all internet users: banking (50%); and social networking (43%). (Australian Bureau of Statistics, “Household Use of Information Technology” Cat No 8146.0 (Australia, 2014-15), at http://www.abs.gov.au /ausstats/[email protected]/mf/8146.0).

From usage figures it seems that digital natives have high levels of Internet usage to facilitate commerce, business and the use of social and public networks. Because of this, online dispute resolution or ODR has developed to the point where parties to a dispute can now avail themselves of dispute resolution procedures online without having to participate in in-person processes. There are advantages and disadvantages when using ODR and the loss of opportunities presented by in-person dispute resolution. However, these need to be balanced with the desire of the market place for quicker and cheaper methods of dispute resolution.

Defining online dispute resolution [6.150]

The former NADRAC defines ODR in the following two ways:

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Automated dispute resolution processes are processes conducted through a computer program or other artificial intelligence, and do not involve a ‘human’ practitioner. On-line dispute resolution, ODR, eADR, cyber-ADR are processes where a substantial part, or all, of the communication in the dispute resolution process takes place electronically, especially via e-mail. (See Dispute Resolution Terms at the Commonwealth Attorney-General’s website, https://www.ag.gov.au/LegalSystem/ AlternateDisputeResolution/ Documents/NADRAC%20Publications/Dispute%20Resolution%20Terms.PDF.)

ODR can take place with or without in-person contact between the parties with solely online or a blend of online and in-person contact established via electronic means which could include any combination of: • internet – an open network based on public telecommunications infrastructure (service providers); • intranets – privately established networks applying in an organisation (for example, a company’s internal network); and • extranets – a network of intranet communities and virtual secure networks which have the features of both internet and intranet. Such networks may use basic telephone wires through to fibre optic cable or wireless technology, such a satellite and mobile phone technology. Further, online communications may be either “interactive” meaning communications that include text formats such as email, internet chat rooms and discussion groups as well as online video and audio conferencing or “non-interactive” meaning communications that include the provision of information and images on websites where the host provides but does not receive information. The provision of online dispute resolution services predominantly involves the provision of interactive communication in order to facilitate the actual online dispute resolution service itself.

Examples of online dispute resolution? Automated negotiation

[6.160]

In automated negotiation, usually one of the two parties in dispute contacts an ODR provider and requests its services. The provider then contacts the other party, which can accept or refuse to submit to the jurisdiction of the provider unless previously agreed to by contract or membership of an association. The parties then enter a ‘blind bidding’ procedure, in which each of them, in turn, makes monetary offers and counter-offers. The proposed offers and counter-offers are confidential in that they are neither made public nor communicated to the other party. When the amounts of the offer and the counter-offers are sufficiently close, the case is settled for the average of the two figures. The proposed amounts are usually considered close enough for a settlement when they are within 30% of each other, although some providers go as low as 10% or 5%. The number of bids allowed for each party may be limited or unlimited. There

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is usually a time limit for the parties to reach an agreement, which may range from two weeks to two months or even 12 months depending on the complexity of the dispute. Because of the nature of the process, automated negotiation generally addresses the amount or quantum of the dispute as opposed to discussing needs as in a principled negotiation model. Further, it is generally only suitable for disputes where the substantive issue is the recovery of a sum of money although some providers allow negotiations over monetary and non-monetary items in dispute. Assisted negotiation

[6.170]

In assisted negotiation, ODR providers provide a secure site but no actual negotiation service. Using this method the parties have to reach an agreement without a third party having the capacity to decide for them as is the case in automated negotiation. Therefore, the main service offered by the provider is: software for setting up the process of communication; assistance in developing agendas; engaging in productive discussions; generating options; assessing those options for a potential solution; and writing settlement agreements. The outcome is determined by the parties to the dispute without the intervention of a third party neutral.

Mediation

[6.180]

In mediation, an appointed mediator helps the parties come to an agreement to resolve their dispute. Just like in-person mediation, in the online space mediators have no decision-making power and therefore do not impose a solution. However, the degree of the mediator’s intervention can vary significantly ranging from a “facilitative approach” where the mediator intervenes as little as possible and concentrates on relationship issues, to an “evaluative approach” where the mediator concentrates on the parties reaching an agreement. In online mediation generally the parties will talk to each other and the mediator contemporaneously to determine the issues between themselves. This is usually achieved through “chat room style” software that allows all parties to communicate contemporaneously or at different times with the other disputants and the mediator. Like traditional in-person mediation, the investigation phase allows the parties to ask questions of each other with a view to them discovering interests and BATNA’s. The mediator may assist the parties by also asking questions and seeking relevant documents from the parties. Separate sessions may be conducted as in-person mediation but is conducted by way of emails to and from the mediator directly with each party so that each party does not see the other party’s communication with the mediator. The option generation phase in online mediation is handled by joint problem solving that enables each party to contribute to the creation of options for potential settlement. This can either be managed by the chat room or in separate session which aims to gradually build the settlement

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by electronically shuttling back and forth between the parties canvassing options that ultimately form the final settlement. This process eventually results in the final package of options being reality tested to ensure that each party will be able to realistically implement the proposed settlement. Finally, should settlement be reached the terms are written in a document and circulated to the parties after which it is signed. Arbitration

[6.190]

Given the adjudicative nature of arbitration, it is probably the easiest of all the dispute resolution processes to convert to online delivery. The fact that in most jurisdictions arbitration is governed by statute that sets out strict procedural steps makes it ideal to use in an online setting. For example, compliance with the rules of natural justice is unproblematic with the ability to simply copy all communications to all parties involved in the arbitration. Given the technology currently available (which continues to improve), the transmission of documents, diagrams, pictures and video electronically is relatively simple and generally cost effective. As in in-person arbitration, the online arbitrator is responsible for setting up the arbitration hearings and presiding over the procedures to be followed. In respect of this last issue, given the primacy of the arbitration agreement, it should be specified by parties to a contract that should a dispute arise it should be dealt with via online, as opposed to in-person, arbitration. For arbitration agreements entered into after the dispute arises, parties can simply choose online arbitration ahead of its in-person equivalent. The process of arbitration will come down to whether it is governed by legislation and in cases where it is governed by legislation, whether the arbitration agreement varies the steps imposed by statute. In either case the arbitration proceeds online with parties presenting their case via email/ chat room type facilities. One of the great benefits of online arbitration is that it should reduce the costs of arbitration commonly complained of by users. However, arbitrators will need to be aware that because of the luxury of having instantaneous communication they should not fall into the trap of believing everything can happen instantaneously. In other words, online arbitrators must ensure parties have ample opportunity to present their case without having time restrictions disadvantage them. As with mediation, technology also provides opportunities for face-to-face electronic arbitrations using software that can provide contemporaneous arbitral hearings.

Online dispute resolution and the digital natives [6.200]

Clearly online dispute resolution is one way to engage with the next generation of disputants and dispute resolution practitioners. In a slightly dated but still revealing paper by Melissa Conley Tyler entitled, “115 and Counting: The State of ODR 2004”, the author plotted the rise of

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global ODR services over the period 1996-2004. Figure 6.1 shows the pattern of development of ODR programs by their year of launch. Figure 6.1 Global development of ODR programs 1996-2004 by date of launch

[M Conley Tyler, “115 and Counting: The State of ODR 2004”, in M Conley Tyler, E Katsh, D Choi (eds), Proceedings of the Third Annual Forum on Online Dispute Resolution (Melbourne, Australia, 5-6 July 2004).] The rise of ODR sites is a consequence of technology meeting flexible processes of dispute resolution. It is reflective of processes that are able to be adapted to a changing environment of delivery. Further, it is the result of dispute resolution responding to the market place. The needs of disputants have driven the changes by seeking more streamlined dispute resolution processes that cost less time and money, particularly where there are small monetary amounts at stake. Finally, the impact of the global community has facilitated the rise of ODR services. Domestic and commercial relationships and commerce are, in many cases truly global, thereby necessitating the need for dispute resolution processes that easily and cost effectively cross international borders. Beyond ODR are the newer technologies, such as virtual worlds that are also being taken up, albeit slowly, by the digital natives. Virtual worlds operate through “relational agents” or “avatars” where people create an electronic image of themselves loaded with artificial and emotional intelligence that exists only in cyberspace. People lead a virtual second life by instructing their avatar to act in certain settings that may be inherently social or professional or in the business sphere. People can interact with each other through their avatars – they can participate in individual and group activities, conduct virtual business, create and trade virtual property and services with each other, or travel anywhere in the world or outer space.

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Avatars can be programmed with artificial intelligence. Artificial intelligence is a branch of computer science that seeks to make machines intelligent. The central premise of artificial intelligence is that human intelligence can be so precisely described that it can be replicated by a machine. Machines can be programmed so that when an issue arises the machine is programmed to provide a solution based on the array of human responses available for any individual issue. In a paper by David Larson entitled, AI: Robots, Avatars and the Demise of the Human Mediator (2010) 25 Ohio State Journal on Dispute Resolution 105, Larson reports (at 124) on a health study conducted in the United States using virtual nurses to provide discharge information to patients. The research showed that patients felt the use of a nurse avatar: empowered them; made them more active in their own health care; and, made them more involved in the resolution of their problem. Curiously, these are the very attributes we chase in dispute resolution. It is conceivable that digital natives would respond to virtual dispute resolution in certain circumstances. For example, those that feel more comfortable and communicate more effectively in cyberspace may prefer virtual dispute resolution compared to in-person processes where they may not represent themselves or preserve their interests effectively. Those that are involved in a dispute where there are enormous power imbalances may find it more empowering to have their avatar represent them in negotiations rather than an in-person confrontation. Those geographically remote may find it more cost and time efficient to send their avatar to mediation rather than travel thousands of kilometres to attend it. Some of the advantages of virtual dispute resolution are: 1. Behaving and being intelligent – often human beings do not behave and display the attributes of intelligence when in dispute mode rather, they become overly emotional about the dispute and take matters personally. An avatar is programmed not to allow emotion to cloud its judgment. 2. Ability to connect with humans (empathetic and conversational) – when in dispute mode human beings are often defensive, resentful and seeking retribution and therefore, do not have the ability to connect with other humans in the dispute resolution process. Avatars do not have such problems and are able to deal with the substantive elements of the dispute in an unemotional way. 3. Ability to collaborate and create social relations – this may depend on the extent of the programming but avatars can be programmed to collaborate and create social relations with other avatars that may stand the dispute resolution process in good step. 4. Program avatars for special circumstances – avatars can be programmed to multi-task, for example, an avatar could not only interact with a large group of disputants in a multi-party dispute but can also negotiate using Auslan (Australian sign language) for any deaf participants. If the dispute is about a technical issue, avatars can be programmed to have

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knowledge of those technical issues that may assist the dispute resolution process to reach a solution. More open with an avatar where painful or embarrassing disclosures – humans can be embarrassed about their own behaviours or disclosures affecting the dispute that may block the dispute resolution process. Avatars have no such embarrassment and can continue negotiating without losing face at any point. Greater potential for creative options – like a computer, an avatar can be programmed for a wide range of creative options. Their recall is better than humans meaning a more efficient and thorough approach to dispute resolution outcomes. Less emotional/unlikely to be influenced – avatars are less likely to be influenced and agree to settlement based on attempts to emotionally blackmail them. Greater capacity to organise information – like a computer an avatar can be programmed to organise information in a variety of logical sequences that can assist the process of reaching settlement. Humans grapple with the frailties of failing memories and disorganised information.

While it is not suggested that the digital natives will entirely replace in-person with virtual dispute resolution processes, Larson did report (at 163) on a survey conducted in Germany by Bitkom (a Germany communications company) that found that 84% of those surveyed would rather give up their partner or their car than forego their connection to the web and that 97% stated that living without a mobile phone is unthinkable. Given this, the digital natives’ reliance on technology as a permutation of in-person interaction is a future consideration for how dispute resolution will speak to future generations.

The advantages of online dispute resolution [6.210]

The following is a non-exhaustive list of the advantages of ODR using an amalgam of ideas from: Dr Samantha Hardy in her paper entitled, “Online Mediation: Internet Dispute Resolution” (1998) 9 Australian Dispute Resolution Journal 216; and, T Schultz, G Kaufman-Kohler, D Langer and V Bonnett, “Online Dispute Resolution: The State of the Art and the Issues” (E-Com Research Project of the University of Geneva, Geneva, 2001, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=899079). 1. Geography – ODR is not constrained by geography. Therefore, ODR is very flexible as to its delivery to any part of the country or the world. Because of this, ODR provides access to dispute resolution procedures to those that are geographically isolated or have mobility or confinement problems. 2. Time restraints – Participation in ODR is not restricted by having all the parties in the same room at the same time. One can participate in ODR, within reason, when one chooses. This is particularly useful in international dispute resolution where time zones prevent parties being online contemporaneously. Notwithstanding this, another advantage even in contemporaneous ODR is that parties still have time to consider

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propositions put and respond with a more considered view of the proposition rather than being pressured for an instantaneous response in in-person dispute resolution process. Ability to convey information – A benefit of ODR is the fact that large amounts of information can be sent quickly and with little cost. Just about any type of document, drawing or footage can be up loaded and sent to the other parties and the third party neutral. Similarly, three dimensional drawings of objects can be sent electronically thereby making access to information virtually unlimited. Storage of information – Once delivered ODR allows recipients to store information including pictures, plans, videos and sound files quickly and efficiently for later referral and record keeping if that is an agreed element of the chosen dispute resolution process. Useful software – Useful software can be incorporated into the medium, such as voice recognition word processing, accounting/amortisation packages and the use of graphics to make the ODR process more efficient in terms of its ability to allow parties to communicate in an efficient and effective manner. Lack of interpersonal communication – Lack of interpersonal communication is conceivably a benefit attached to ODR. First, it allows parties to focus on the substance of the dispute rather than the personalities involved. Secondly, it reduces the emotional content of the process. Thirdly, it may help the structure of the process as parties are less likely to digress given the nature of the communication. Fourthly, ODR is easier to withdraw from or adjourn compared to in-person dispute resolution – for example, one does not have to physically leave rather, one just logs off. Third party neutrals can control interruptions and terminate sessions more easily in cases where, for example, one party is becoming abusive towards the other party. Finally, there is little chance of effective threats of personal violence in an ODR process and if made they are easily evidenced to authorities. Assists those with disabilities – ODR assists those with sight or hearing impairments who may be able to use appropriate software that enhances their ability to communicate through the online medium. Assists those lacking in confidence – ODR helps those that have difficulty expressing themselves through the spoken word. The lack of confidence may be as a result of a psychological or psychiatric problem or simply an inability to express oneself in a manner that will assist their participation. Another issue is lack of ability to express oneself because English may not be the person’s first language – in such cases friends who can communicate more effectively can assist that person on the computer to express their thoughts clearly and in a way that will assist their participation in the process. Removes screening mechanisms – ODR removes what some see as a screening element of in-person dispute resolution that is, the requirement of physical presence. In other words, the in-person requirement of traditional dispute resolution has been seen as a screening process for those people without access to such services. People who do not have dispute resolution services available to them may now have access to them through the online medium.

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10. Costs – There are no venue costs using ODR. Further there are no travel expenses for third party neutrals as is usually the case in in-person dispute resolution. Hardware and software costs are a disadvantage but if parties already have the equipment and software for other applications then the costs are low being only the connection time through the service provider. 11. Screen persuasion – There is some research that suggests that people pay much more attention to the substantive content of messages on a computer screen than they do to such content when it is delivered verbally (S Hardy, “Online Mediation: Internet Dispute Resolution” (1998) 9 Australian Dispute Resolution Journal 216 at 218, citing GR Shell, “Computer-assisted Negotiation and Mediation: Where We are and Where We are Going” (1995) Negotiation Journal 117 at 119). This means the medium enhances the veracity of the communication and this is an advantage for participants.

The disadvantages of online dispute resolution [6.220]

From the same sources as above, a non-exhaustive list of the disadvantages of ODR. 1. Culture shock – It is said that users who are suddenly introduced to the virtual environment experience feelings like visitors to a foreign country. (S Hardy, “Online Mediation: Internet Dispute Resolution” (1998) 9 Australian Dispute Resolution Journal 216 at 218, citing SR Hiltz and M Turoff, The Network Nation: Human Communication Via Computer (Massachusetts, Addison-Wesley, 1978), p 27.) That is, they experience a culture shock because of the new environment and the new language that needs to be adopted. In that respect the feeling is said to be a feeling of alienation similar to the feeling felt by new immigrants in a country they intend to settle in. 2. Loss of personal communication – ODR prevents personal communication. Computers are said to be a “cool” medium that eliminates the warmth of interpersonal contact making the communication process that much more difficult. The loss of the ability to practice and develop interpersonal skills is said to be an unfortunate side-effect of ODR. 3. Loss of non-verbal communication – Experts in the study of body language say that anything between 60% and 95% of the meaning of verbal communication is conveyed in the non-verbal part of the communication. The use of ODR means that important elements of the communication process, such as intonation and body language are lost (although intonation can be simulated through, for example, the use of capital letters to denote a loud voice). This in turn means that important non-verbal indicators, such as: a willingness to engage in DR; a willingness to compromise; the emotional changes of parties; credibility; anxiety; honesty; and lack of confidence, may be lost. These are important indicators to each party and the third party neutral as to the progress or otherwise of the dispute resolution process that are lost in ODR.

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4. Video-conferencing technology (such as Skype) – Video conferencing often experiences problems such as blurring and poor audio quality which require the parties to sit still. Further, there may be problems with delay. Even where the picture quality is good there are problems with reading the two-dimensional image. Finally, video conferencing does not allow eye contact to be maintained because of the importance placed on eye contact with the camera. 5. Loss of rituals – DR is replete with rituals and ceremonial moments such as handshaking and seating/settling rituals at the opening stage. Further, there are rituals such as signing agreements at the concluding stages that signify the conclusion of the process and the dispute. Of course many of those rituals and ceremonial moments are largely lost in ODR. 6. Imposes screening mechanisms – ODR requires a certain level of computer literacy that not all members of the community have. In this respect it effectively prevents certain people from participating in ODR. Further, those without a computer or access to one are effectively precluded from ODR. Because of the types of people using online services, as discussed above, another screening mechanism is that those in lower socio-economic groups with low levels of literacy and education are generally precluded from participating in ODR. People in rural areas that do not have the same access to telecommunications services are also possibly screened out of the process of ODR. 7. Encourages manipulation – Because of the fact that ODR does not differentiate between those with poor computer and/or English literacy skills and those that are proficient in those skills, it may mean that the people with poor literacy skills may be manipulated into settling more easily than in-person encounters where, for example physical presence may balance any perceived technological power imbalance. 8. Jurisdiction – There may be no clear jurisdiction for ODR to operate within. Therefore, rules of public international law may dictate a party’s involvement unless a choice of law clause is part of the party’s contract governing the transaction and any dispute that arises from it. Further, enforcement of agreements is only possible through relevant federal legislation that may preclude some countries that do not have reciprocal arrangements in place to enforce Australian court orders and vice versa. 9. Expense – ODR can be expensive – the cost of hardware, software, internet service provider charges and video conferencing can be expensive. Further, there may be increased costs where electronic and hard copy records are kept, the latter being a backup system in case the electronic information is destroyed either deliberately or by accident. Not everyone in society is computer literate or able to use a particular software application. This means that some inefficiency must be expected until users become acquainted with the system. This in turn comes at a cost to the individual or organisation in terms of lost productivity while people become proficient at using the required software. Flowing from this is the cost factor of training users of ODR. Finally, low take-up rates mean there are not the economies of scale that people expect from procedural systems. Some of these issues will be resolved as software applications improve and become more user-

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friendly and the community becomes more computer savvy and therefore become more willing to use ODR. Lack of immediacy – Lack of immediacy can cause frustration amongst the parties and therefore provide obstacles in the path to settlement. Participation in ODR usually requires adherence to time frames, such as a maximum time to respond to certain stages of the process. Without the benefit of an immediate response parties may reconsider responses already made which may hamper the process. There is some benefit in having the pressure to respond as is the case in in-person dispute resolution. Encourages irrelevant material – The ease by which parties can send material may encourage parties to try and swamp each other with irrelevant material in the hope that it will preoccupy the other party and take their focus off other issues or solutions in the dispute. Lack of security/confidentiality – Online communication is not secure. Therefore, confidentiality cannot be guaranteed and this may be a major turn-off for parties in some circumstances. However, the use of encoded systems can ensure more secure communications during an ODR process. Once again, advancements in technology are making security less of an issue in ODR. Loss of catharsis – For some people, dispute resolution is the opportunity to tell the other disputant how they feel about the dispute and what it has done to their lives. For others it is the first and perhaps the only opportunity to have the other side sit without interruption and listen to how the other side’s behaviour has affected them. It is said that this experience is cathartic allowing the parties to discharge pent-up feelings. The effect of a catharsis is the release of those pent-up feelings but not necessarily the cure. Despite the lack of a cure, the process of catharsis is said to be therapeutic in itself. Whilst ODR may offer similar opportunities, it cannot replace the heightened catharsis provided in in-person dispute resolution. Facilitating “willingness” – A benefit of in-person dispute resolution is the possibility to facilitate the “willingness” element of the process. This is done by the third party neutral building confidence in the process and showing the parties that the process can work for them. It is virtually “selling” the process to parties that engender the willingness to participate. ODR may not provide that same opportunity as the “sales” factor is reduced in its impact without in-person contact. Professor Ethan Katsh, Professor Janet Rifkin and Alan Gaitenby of the University of Massachusetts were the architects of the eBay dispute resolution process and recounted in an article entitled, “eCommerce, eDisputes, and eDispute Resolution: In the Shadow of eBay Law” (2000) 15 Ohio State Journal on Dispute Resolution 705 (at 715-716) an episode of a party who throughout the DR process continually sent a barrage of negative feedback to the other disputant and the mediator: As the injured party he [the disputant] felt no compunction to stop the negative feedback and told the mediator that his assistance was no longer wanted because the mediator “just didn’t get it”. Indeed it may be harder to

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“get it”, that is, to understand what the parties consider to be their best alternative to a negotiated agreement and to gain a sense of whether the parties see the mediation process as their best alternative.

The future of online dispute resolution [6.230]

In a report entitled Online ADR (NADRAC, Canberra, January 2001), the former NADRAC suggests that the reasons for the low user rates of ODR may be due to the following factors that need to be overcome: 1. most people prefer in-person services (particularly in consumer transactions) 2. lack of internet literacy 3. low familiarity of dispute resolution 4. low familiarity of online communication 5. legal status of dispute resolution magnified by online provisions (for example, identity and qualifications of third party neutral and the legal status of process) 6. an anathema to facilitative dispute resolution (facilitative dispute resolution processes are processes in which a dispute resolution practitioner assists the parties to a dispute to identify the disputed issues, develop options, consider alternatives and endeavour to reach an agreement about some issues or the whole dispute. Examples of facilitative processes are mediation, facilitation and facilitated negotiation.) 7. fear of technology (even video conferencing has an initial period of embarrassment after which the parties settle into the medium). Overcoming these difficulties is challenging but NADRAC suggests the following strategies: 1. community networks should be used to help parties increase their competence and confidence in the medium 2. ODR could be delivered via community facilities to solve the access problems 3. use ODR in conjunction with in-person services to provide interpersonal support and effective infrastructure to overcome computer literacy and confidence 4. create a group environment where, for example, several people use the same facility to overcome the social isolation of ODR 5. ensure parties to ODR have the same medium to overcome “hardware envy”! 6. ensure there neutral facilities available to overcome any power imbalance 7. have dispute resolution practitioners at both ends of the ODR systems to ensure fairness of resources and to provide an “advocate” for parties that have difficulty in expressing themselves for whatever reason 8. have legal practitioners become more “e-friendly” and help them to change their thinking on dispute resolution and the provision of ODR (build “e-awareness”).

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Continued advances in technology will itself enable some of the problems to be resolved. Further as subsequent generations of digital natives enter the workforce and take up positions of responsibility as both disputants and dispute resolution practitioners, there will be second waves of popularity that will see ODR increase its usage and the demand for further ODR services. Assisting that rise will be the fact that better and cheaper technology will be available to users – in particular the use of 3D technology that will enable some of the communication disadvantages to be resolved such as the loss of interpersonal skills and the ability to read and use non-verbal communication. The author believes that ODR’s time has yet to come and that the combination of a receptive audience and quicker cheaper and more portable technology will secure the future for ODR. While in-person dispute resolution will probably never vanish, ODR will become a formidable complement to the dispute resolution services offered by dispute resolution practitioners. A glimpse of the future can be found by visiting the European Commission’s website (see http://ec.europa.eu/ consumers/solving_consumer_disputes/non-judicial_redress/adr-odr/ index_en.htm) on alternative and online dispute resolution which discusses the new legislation adopted by the European legislature on alternative and online dispute resolution. It provides the new directive on consumer alternative dispute resolution and the directive on ODR which provides among other things, the establishment of the European ODR Platform for resolving consumer and contractual disputes. Further, it ensures that all consumers have dispute resolution as a process choice for resolving all such disputes whether goods or services were purchased on or off line and whether the trader is in a consumer’s member state or in another member state. The platform provides ODR for consumers in 23 different official languages of the European Union and auspices dispute resolution to approved dispute resolution providers.

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Statutory Dispute Resolution Schemes INTRODUCTION [7.10]

State, Territory and federal parliaments have enacted numerous statutes that provide for dispute resolution of varying complexity. The following discussion will seek to examine the various State, Territory and federal statutory dispute resolution schemes many of which are part of the system of civil procedure in their respective courts. It is beyond the scope of this text to detail every aspect of every statute in Australia, rather this chapter seeks to give an outline of the key statutes and the key sections in the chosen legislation that relate to dispute resolution. The key statutes are those that provide for dispute resolution in the courts and civil tribunals and other major statutory dispute resolution schemes of note. This chapter does not seek to discuss legislation regulating arbitration, as this has been dealt with in Chapter 4.

FEDERAL STATUTORY DISPUTE RESOLUTION SCHEMES Administrative Appeals Tribunal [7.20] Section 3(1) of the Administrative Appeals Tribunal Act 1975 (Cth) defines dispute resolution as: conferencing; and, mediation; and, neutral evaluation; and, case appraisal; and, conciliation; and, procedures or services specified in the regulations; but does not include: arbitration; or, court procedures or services. The Administrative Appeals Tribunal (AAT) has a set of clear process steps that takes applications for administrative review from receipt to resolution. One of the very early steps is to conduct a conference conducted by a Tribunal member or Conference Registrar. If the need arises, more than one conference may be conducted. When an application has not been resolved during the conference process, the Tribunal may, with the consent of the parties, refer the proceedings to mediation. Section 34A(1) empowers the President of the AAT to order mediation without the parties’ consent. If parties make application to the AAT for review of a decision then the President can direct that a conference and alternative dispute resolution process will be held in relation to the proceeding or any part of the proceeding. It is important to note that the

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empowering Act enables the Tribunal to make such a direction without the parties’ consent however the Tribunal takes the approach that both the parties and Tribunal must agree to mediation. Section 34A(3) requires parties to act in good faith when they are participating in mediation in the AAT. Good faith is not defined by the Act however, the AAT defines good faith conduct in the following way: The term ‘good faith’ is not defined in the AAT Act, but could be defined to include a ‘genuine effort’ to uphold the basic principles of ADR. These include: • people have a responsibility to take steps to resolve or clarify disputes • disputes should be resolved in the simplest and most cost-effective way • people who attend a dispute resolution process should show their commitment to that process by listening to other views and by putting forward and considering options for resolution. (See http://www.aat.gov.au/steps-in-a-review/alternative-disputeresolution/the-duty-to-act-in-good-faith-in-adr-processes-at.)

Pursuant to s 34C(5) of the Act, a person is not entitled to mediate unless he or she is a member or an officer of the AAT or a person engaged under s 34H of the Act. Section 34H empowers the Registrar of the AAT to engage persons to conduct mediation under the Act. The section goes on to require the Registrar to only engage mediators that are qualified and experienced in the conduct of mediation and is a person “suitable” to conduct the relevant kinds of mediation under the Act. Section 34E provides that nothing said or done in mediation can be used in subsequent proceedings before any court or tribunal. The only exception to this rule is if the parties agree that the evidence should be admitted to the Tribunal as part of the proceedings. In order to avoid a breach of the rules of natural justice, where a member of the Tribunal has acted as a mediator and then all or part of the proceedings have been sent back to the Tribunal for hearing, pursuant to s 34F, a party may object to that member participating in the hearing. In such a case the member is not entitled to be a member of the Tribunal constituted for the purposes of the same proceedings. The reason this provision exists is to avoid a breach of the rules of natural justice which provide each party with the right to a fair hearing. An important element of having a fair hearing in front of the Tribunal is that each of the parties are fully aware of the nature of the allegations against them and have the proper opportunity to present their own case and answer the allegations against them. Given mediation usually entails separate sessions where each party has a private and confidential session with the mediator to the exclusion of the other party, the mediator who then resumes as a member of the Tribunal hearing the matter through to adjudication has heard certain information that could be considered as evidence that may be considered along with the evidence in the open Tribunal proceedings. Such information heard confidentially during mediation may influence the mind of the member during the

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hearing and therefore influence the ultimate decision. If this were to occur, it would be a breach of the rules of natural justice. Pursuant to s 34D, if an agreement is struck in mediation over part or all of the proceedings and if: the agreement is in writing; the terms of the agreement are within the powers of the Tribunal; and seven days have elapsed without a party withdrawing from the agreement, then the Tribunal may make a decision consistent with the terms of the agreement.

Civil procedure [7.30] The object of the Civil Dispute Resolution Act 2011 (Cth) is to ensure as far as possible that parties contemplating proceedings in certain federal courts take genuine steps to resolve disputes before civil proceedings are commenced (s 3). According to s 5, the Act only applies to proceedings commenced in the Federal Court of Australia and the Federal Circuit Court of Australia and pursuant to ss 15 and 16, specifically excludes: • criminal proceedings; • listed federal Tribunals; • appellate proceedings in the Federal and Federal Circuit Courts; • listed evidentiary rulings; • vexatious litigants; • ex parte proceedings; and • proceedings under certain listed legislation or subordinate legislation. Sections 6 and 7 require applicants and respondents who participate in civil proceedings to file a “genuine steps statement” which must specify that steps have been taken to resolve the issues in the dispute or why no steps were taken. The reason no steps may have been taken could be, for example, the urgency of proceedings or whether safety or security of persons or property would have been compromised by taking such steps. The respondent’s “genuine steps statement” must state that the respondent agrees with the “genuine steps statement” filed by the applicant or the reasons why the respondent does not agree with the applicant’s statement. The failure to file a “genuine steps statement” does not invalidate the application instituting proceedings (s 10). The Act defines “genuine steps” in s 4(1A) as being: [A] person takes genuine steps to resolve a dispute if the steps taken by the person in relation to the dispute constitute a sincere and genuine attempt to resolve the dispute, having regard to the person’s circumstances and the nature and circumstances of the dispute.

Section 4(1) provides examples of steps that could be taken by a person to evidence that they have in fact taken ‘genuine steps’ to resolve the dispute. The following is a non-exhaustive list of the suggested steps. (a) notifying the other person of the issues that are, or may be, in dispute, and offering to discuss them, with a view to resolving the dispute;

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(b) responding appropriately to any such notification; (c) providing relevant information and documents to the other person to enable the other person to understand the issues involved and how the dispute might be resolved; (d) considering whether the dispute could be resolved by a process facilitated by another person, including an alternative dispute resolution process; (e) if such a process is agreed to: (i) agreeing on a particular person to facilitate the process; and (ii) attending the process; (f) if such a process is conducted but does not result in resolution of the dispute – considering a different process; (g) attempting to negotiate with the other person, with a view to resolving some or all the issues in dispute, or authorising a representative to do so.

Section 11 states that when exercising and performing its functions in relation to civil proceedings, the court is entitled to take into consideration whether a person required to file a “genuine steps statement” did file the said statement and whether such a person took genuine steps to try and resolve the issues in the dispute. Similarly, when exercising its discretion as to costs in a civil proceeding, the court may take account of whether a person required to file a “genuine steps statement” did file the said statement and whether such a person took steps to resolve the issues in the dispute (s 12). Pursuant to s 12(2) and (3), the court can also take into account when awarding costs, whether a person’s lawyer failed to comply with the requirement of the Act to advise their clients of the requirements to file a “genuine steps statement” and if the court makes an adverse finding against such a lawyer, the lawyer is prohibited from recovering those costs from their client. The Act does not provide for confidentiality or inadmissibility of anything said or any admission made during mediation as is common in other legislation providing for court-annexed mediation. However, pursuant to s 17A, the Act does not exclude or limit the operation of a law of the Commonwealth, State or Territory or the common law relating to the use or disclosure of information, the production of documents or the admissibility of evidence. This means that the same rules apply to mediation under the Act as apply to other legislative instruments making communications confidential and preventing the admissibility of evidence and admissions made at mediation.

Courts [7.40] The Federal Court of Australia was one of the early adopters of court-annexed dispute resolution. The Federal Court of Australia Act 1976 (Cth), as supplemented by the Federal Court Rules 2011 (Cth), covers referrals to mediation, admissions made to mediators and the immunity and protection of mediators. Under s 53A of the Act, the Federal Court has the power to refer proceedings or any part of them to a mediator for mediation with or without the consent of the parties. Further, under r 28.02

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of the Rules, parties to proceedings may apply to the court for an order that all or part of the proceedings are referred to a mediator for resolution by an alternative dispute resolution process and the appointment of a mediator to progress mediation. Pursuant to r 28.05, parties can also refer proceedings to private mediation outside of the court-annexed program and if they do so they must notify the court within 14 days of the referral so that directions as to the future management and conduct of the proceeding can be sought. The term, “alternative dispute resolution process” is defined by the definitions section in Sch 1 of the Rules as, “an alternative dispute resolution process conducted by a suitable person”. A “suitable person” is defined in r 28.02 of the Rules to mean a person appointed under the Rules (nominated by the Registrar of the Court for mediation and any other alternative dispute resolution process pursuant to rr 28.21 and 28.31 and by the court in the case of arbitration under r 28.11). Rule 28.01 requires both the court and parties to proceedings in the court to consider options for alternative dispute resolution including mediation as early as is reasonably practicable and the court is charged with the responsibility to assist in the implementation of such options. Pursuant to r 28.22, mediation is conducted in accordance with any orders made by the court and under r 28.25 if agreement is reached then parties may file consent orders consistent with the agreement struck at mediation. However, under r 28.23 if only part of the proceedings are referred to mediation then at the conclusion of mediation the mediator may report the outcome to the court providing the parties agree to the terms of the report. Under r 28.04 a party may apply to the court for an order to terminate mediation or terminate the appointment of the mediator. Further, under r 28.24 if a mediator considers that mediation should not continue, the mediator must terminate the mediation and report the outcome to the court. Under s 53C of the Act, mediators are afforded the same protection and immunity as a judge in performing judicial functions when mediating a matter referred under the Act. Pursuant to s 53B of the Act, evidence of anything said or any admission made at a conference conducted by the mediator pursuant to an order under the Act is not admissible in any court (whether that court is exercising federal jurisdiction or not) or in any other, Commonwealth, State or Territory statutory proceeding.

[7.50] The Federal Circuit Court was created to relieve the backlog of cases in the Family Court and the Federal Court. The new court came into operation on 3 July 2000 with Registrars appointed in every State. Since its establishment, the range and volume of cases heard by the court has substantially increased with approximately 80% of the court’s work comprising family law. Section 43 of the Act provides that where the Federal

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Circuit Court Rules 2001 (Cth) (the Rules) are insufficient, the rules made under the Family Law Act 1975 (Cth) and the Federal Court of Australia Act 1976 (Cth) will apply. Part 4 of the Federal Circuit Court of Australia Act 1999 (Cth) (the Act) deals with dispute resolution for proceedings other than proceedings under the Family Law Act 1975 (Cth) which has its own legislation and subordinate legislation dealing with mediation. Section 21 defines the term “dispute resolution processes” as non-judicial dispute resolution procedures and services, and includes: counselling; mediation; arbitration; neutral evaluation; case appraisal; and, conciliation. Under s 22, the court has a duty to consider whether or not to advise parties to proceedings before it about mediation that could be used to resolve any matter in dispute. However, pursuant to s 23, if the court considers that mediation may help parties resolve the dispute, then it must advise the parties to use mediation and in this respect has the power to adjourn proceedings to enable attendance in connection with mediation. Section 24 requires legal practitioners who are consulted by a person who is considering instituting proceedings in the court, to also consider whether or not to advise parties about mediation. Pursuant to rr 4.09 and 4.10, if Pt 2 of the Civil Dispute Resolution Act 2011 (Cth) applies to the proceedings before the court then applicants and respondents must file a genuine steps statement in accordance with the approved form. Further, a lawyer acting for a person who is required to file a genuine steps statement must advise that person of the requirement and assist them to comply (see s 9 of the Civil Dispute Resolution Act 2011 (Cth)). Under s 34 of the Act, the Federal Circuit Court can refer part or all of the proceedings before it to mediation in accordance with the rules of court with or without the parties’ consent. Section 27 allows a party to mediation to make an application to the court for determination of a question of law arising out of the proceedings during the conduct of mediation. Section 34(4) states that evidence of anything said or any admission made at a mediation conference is inadmissible in any court whether exercising federal jurisdiction or not and in any proceeding before a person authorised by law to hear evidence. Further, s 34(5) provides that mediators performing the role of mediator have the same protection and immunity as a Federal Judge has in performing his or her judicial functions. Under Section 32, if parties have reached agreement about a matter in dispute in mediation, the court, on application by the parties, may make an order in the terms of the agreement.

Family law [7.60] A comprehensive dispute resolution program exists under the Family Law Act 1975 (Cth) with the program being largely created by the Family Law Reform Act 1995 (Cth). Non-court based family services

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available in the Family Court are listed as “family counselling”, “family dispute resolution” and “arbitration”. The relevant provisions also deal with issues such as the confidentiality and admissibility of communications under the aforementioned processes. A major objective of the Family Law Act 1975 (Cth) is to encourage the use of family dispute resolution. Changes to the Family Law Act 1975 place an increased emphasis on using mediation to resolve family disputes through the use of non-court based family services. The federal government has stated that the amendments to the Act “aim to bring about a cultural shift in how family separation is managed: away from litigation and towards cooperative parenting”. In order to implement this shift, the obligation to give advice about family dispute resolution is found in various provisions in the Family Law Act 1975 (Cth) (the Act), Family Law Rules 2004 (Cth) (the Rules) and the Family Law Regulations 1984 (Cth) (the Regulations). Thus, for example, pursuant to s 62B of the Act, there is now an obligation to provide advice regarding family dispute resolution which states that if a court makes an order in proceedings under Pt VII of the Act (pertaining to provisions dealing with the best interests of children), “the court must inform the parties to the proceedings about the family counselling services, family dispute resolution services and other courses, programs and services available to help the parties adjust to the consequences of that Order”. Lawyers acting for people in family law proceedings also have obligations, under Sch 1 Pt 1 cl 6(1) of the Rules that state: (1) Lawyers must, as early as practicable: (a) advise clients of ways of resolving the dispute without starting legal action; (b) advise clients of their duty to make full and frank disclosure, and of the possible consequences of breaching that duty; (c) subject to it being in the best interests of the client and any child, endeavour to reach a solution by settlement rather than start or continue legal action; (d) notify the client if, in the lawyer’s opinion, it is in the client’s best interests to accept a compromise or settlement if, in the lawyer’s opinion, the compromise or settlement is a reasonable one; (e) in cases of unexpected delay, explain the delay and whether or not the client may assist to resolve the delay; (f) advise clients of the estimated costs of legal action (see rule 19.03); (g) advise clients about the factors that may affect the court in considering costs orders; (h) give clients documents prepared by the court (if applicable) about: (i) the legal aid services and dispute resolution services available to them; and (ii) the legal and social effects and the possible consequences for children of proposed litigation; and

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(i) actively discourage clients from making ambit claims or seeking orders that the evidence and established principle, including recent case law, indicates is not reasonably achievable.

To assist in managing proceedings in the court, s 11A of the Act creates the role of family consultant in order to advise and help people in proceedings before the court. As well as assisting parties to proceedings, family consultants can also give evidence in relation to proceedings and report to the court on matters including where the court is dissatisfied as to the arrangements for care welfare and development of children the subject of divorce proceedings. They can also advise the court about: appropriate family counsellors; family dispute resolution practitioners; and, courses, programs and services to which the court can refer the parties to the proceedings. Pursuant to s 11E of the Act, the court can order people to attend appointments with family consultants and may seek their advice on services appropriate to the needs of a person and may recommend a provider of a recommended service. It is common for people involved in proceedings before the court where children are involved to have an initial conference with the assigned family consultant in order to progress their matter through the court. Family consultants may recommend mediation as the appropriate service in order to resolve matters the subject of proceedings. If parties cannot resolve their dispute, the judicial officer may order a family report be prepared. If this happens, parties will need to attend further conferences with the family consultant. Further, s 11G of the Act provides that after parenting orders are made sometimes the judicial officer may order parties to see the family consultant to assist them to adjust to and comply with those orders. Failure to attend any court ordered family consultant conference will result in the family consultant reporting this to the court. Section 12A of the Act requires that married couples considering separation or divorce are informed about services for reconciliation where reconciliation seems feasible and where not, about services designed to help people adjust to separation or divorce. This includes the use of family dispute resolution practitioners and arbitration facilities. Section 13A of the Act facilitates access to family counselling and encourages people to use dispute resolution to resolve matters to which a court order would ordinarily be made. It is Pt IIIB of the Act that empowers the court to make mandatory orders referring proceedings to family counselling dispute resolution (including mediation) or other services provided by the court. Section 13C states: (1) A court exercising jurisdiction in proceedings under this Act may, at any stage in the proceedings, make one or more of the following orders: (a) that one or more of the parties to the proceedings attend family counselling; (b) that the parties to the proceedings attend family dispute resolution;

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(c) that one or more of the parties to the proceedings participate in an appropriate course, program or other service. (2) The court may suggest a particular purpose for the attendance or participation. (3) The order may require the party or parties to encourage the participation of specified other persons who are likely to be affected by the proceedings. (4) The court may make any other orders it considers reasonably necessary or appropriate in relation to the order. (5) The court may make orders under this section: (a) on its own initiative; or (b) on the application of: (i) a party to the proceedings; or (ii) a lawyer independently representing a child’s interests under an order made under section 68L.

A note to that section in the Act states that before making such an order the court must consider the advice of a family consultant as to the appropriate service to suit the parties’ needs. Pursuant to s 13D of the Act, if a party refuses to comply with the court’s order, the “family counsellor, family dispute resolution practitioner or provider of the course, program or other service must report the failure to the court”. On receiving the report, the court may make any further orders it considers appropriate on its own initiative or on the application of a party to the proceedings or a lawyer independently representing a child’s interests under an order made under s 68L of the Act. The Family Court, pursuant to s 60I(7) of the Act, is not permitted to hear an application for an order in relation to a child under Pt VII of the Act unless a valid certificate confirming that family dispute resolution has been attempted is obtained from a registered family dispute resolution practitioner and filed with the court. There are a number of exceptions to the requirement to engage in family dispute resolution pursuant to s 60I(9), such as where there is evidence of child abuse, domestic violence or a party cannot physically participate in dispute resolution.

[7.70] Part 7 of the Family Law (Family Dispute Resolution Practitioners) Regulations 2008 (Cth) deals with the assessment of family dispute resolution suitability, information to be given to the parties prior to family dispute resolution and the avoidance of conflicts of interest. Regulation 25 provides that family dispute resolution practitioners have a duty, when a dispute is referred to them, to conduct an assessment of the parties to the dispute and be satisfied that family dispute resolution is appropriate before going on with the process. Pursuant to reg 25(2), when determining whether family dispute resolution is appropriate the practitioner must consider whether any party’s ability to negotiate freely might be affected by such matters as:

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(a) a history of family violence (if any) among the parties; (b) the likely safety of the parties; (c) the equality of bargaining power among the parties; (d) the risk that a child may suffer abuse; (e) the emotional, psychological and physical health of the parties; (f) any other matter that the family dispute resolution practitioner considers relevant to the proposed family dispute resolution. If the matter is considered appropriate for dispute resolution then the family dispute resolution practitioner may provide family dispute resolution services subject to conditions being satisfied under regs 28 and 30. Regulation 25(4) states that if family dispute resolution is not considered to be suitable after consideration of the specified matters then the family dispute resolution practitioner must not proceed with mediation. Pursuant to reg 28, family dispute resolution practitioners are required to advise parties, among other things: that they are not to give people legal advice (unless the family dispute resolution practitioner is also a legal practitioner); discussions are confidential; their fees; information about the family dispute resolution services complaints mechanism. Section 10H(1) of the Act provides that family dispute resolution practitioners must not disclose any communication made during family dispute resolution unless the disclosure is required by the Act. However, under s 10H(3) of the Act, a family dispute resolution practitioner may disclose a communication made during family dispute resolution if consent is given by the person who made the communication is over 18 or if they are under 18 with the consent of the person that has parental responsibility. Other exceptions are listed in s 10H(4) of the Act and include: protecting a child from the risk of harm (whether physical or psychological); or, preventing or lessening a serious and imminent threat to the life or health of a person; or reporting the commission, or preventing the likely commission, of an offence involving violence or a threat of violence to a person. Section 10J(1) of the Act provides that evidence of anything said or any admission made during family dispute resolution by any person including a medical or other professional is inadmissible in any Commonwealth, State or Territory court. As with confidentiality, s 10J(2) of the Act provides that the inadmissibility of evidence from family dispute resolution processes has an exception where an admission by an adult or a child indicates that a child under the age of 18 has been abused or is at risk of abuse. Section 10A states that family dispute resolution practitioners are subject to a qualification and competency based accreditation system that ensures all practitioners providing family dispute resolution under the Act meet a set of nationally consistent standards. This section refers the power to

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prescribe the accreditation requirements to the Regulations and regs 5 and 6 of the Family Law (Family Dispute Resolution Practitioners) Regulations 2008 (Cth) set the criteria for accreditation that include accreditation under the National Mediator Approval Standards (discussed in Chapter 9 of this book).

Native title [7.80] The Native Title Act 1993 (Cth) provides for dispute resolution as a means of resolving disputed matters relating to native title and compensation applications. The statute sets up the National Native Title Tribunal (Tribunal) whose function is to recognise and protect native title. It is not a court but an administrative body. Its primary role is to provide mediation services in relation to applications under the Act. Applications can be made by indigenous people claiming native title or compensation, as well as by non-claimants who wish to know whether particular land is subject to native title. Governments can give notice under the Act of their intention to grant interests or acquire land which affects native title. The Tribunal can be asked to mediate between parties who are negotiating such grants or acquisitions under the Act. If an application is opposed, and the parties do not reach agreement, the matter must be referred to the Federal Court of Australia. According to s 86A of the Act, the purpose of mediation in the Tribunal is to assist parties to reach agreement on whether native title exists over land or waters and if so, who owns it along with the nature and extent of the title. Further, to determine who is entitled to compensation and the extent of that compensation. Where a party seeks to conduct a future act, such as mining, on native title land, the Act provides that the native title holder and the party seeking to conduct the future act must negotiate with a view to reaching agreement about the act. Such negotiation is conducted with the assistance of the Tribunal. Pursuant to s 86B, where a party makes application for a native title determination, the Act empowers the Federal Court of Australia to refer each application for mediation as soon as practicable. Under s 86B(3) the court must not make an order for mediation if it considers that: mediation will be unnecessary as a result of an agreement between the parties or for any other reason; there is no likelihood of reaching agreement; or, insufficient detail has been provided about the relevant matters. When deciding whether or not to order a mediation in a matter before it, the court, pursuant to s 86B(4), is required to take into account: the number of parties; the estimated length of time for reaching agreement; the size of the area involved; the nature and extent of any non-native title rights; and, any other factor the court considers relevant.

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The Tribunal has power to determine the process for mediation and the qualifications and identity of the mediator. Under s 86B(5C), once the court has referred part or all of proceedings for mediation, it can make an order in relation to how the mediation is to be provided, whether a co-mediation model will be employed and any other matter the court considers relevant. The court is empowered under s 86B(2) and (2A), to determine a particular person or body to mediate referred matters and may take into account the level of training, qualifications and experience the person has that enables them to mediate and that person may be the court’s: Registrar; Deputy Registrar; District Registrar; or, Deputy District Registrar. Section 86C(1) states that the court can order mediation to cease at any point of the mediation process if it considers: that further mediation will be unnecessary; the parties are unlikely to reach agreement; or, it is appropriate to do so for any other reason. Further, under s 86C(3), a party can also apply to cease mediation after three months of the commencement of mediation providing the court is satisfied that mediation is unlikely to be successful. Under s 86E, the Federal Court may request the Tribunal to provide reports on the progress of any mediation being undertaken and it may request the Tribunal to provide either a “regional mediation progress report” or a “regional work plan” in order to assist the court in progressing proceedings.

Other Commonwealth statutory schemes [7.90] The Commonwealth has other statutes that provide for and encourage the use of dispute resolution. The sections in [7.20]-[7.80] discuss the main Commonwealth statutory processes governing the courts and other schemes while the following table lists references to dispute resolution in other Commonwealth statutes. Statute Competition and Consumer Act 2010 Corporations Act 2001 Corporations (Aboriginal and Torres Strait Islander) Act 2006 Migration Act 1958 Road Safety Remuneration Act 2012 Water Act 2007 Work Health and Safety Act 2011

Relevant section s 152BBA s 241 s 169.25 s 318 s 44 s 73 s 142

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STATE AND TERRITORY STATUTORY DISPUTE RESOLUTION SCHEMES Australian Capital Territory Civil and Administrative Tribunal

[7.100]

Section 31 of the ACT Civil and Administrative Appeals Tribunal Act 2008 (ACT) empowers the ACT Civil and Administrative Tribunal that, if appropriate, it should take all reasonable practical steps to resolve matters prior to hearing applications. Further, s 35 provides that before the hearing of any application, if the Tribunal considers that the subject matter is suitable for mediation and the dispute is reasonably likely to be resolved by mediation, then it may refer the proceedings to mediation and order that the parties attend. In making such a referral, the Tribunal may make such an order on its own initiative or on the application by a party.

Courts

[7.110]

The Court Procedure Rules 2006 (ACT) govern the order and conduct of dispute resolution in the Supreme Court of the Australian Capital Territory. Rule 1175 states that parties are not prevented or prejudiced by attempting mediation or neutral evaluation outside of the court-annexed process. The court has the power pursuant to r 1179 to order proceedings before it to mediation or neutral evaluation with or without the consent of the parties and such mediation or evaluation must be conducted by a mediator or evaluator appointed by the court. According to r 1176, “mediation” is defined as “a structured negotiation process in which the mediator, as a neutral and independent party, assists the parties to a dispute to achieve their own resolution of the dispute”. “Neutral evaluation” is defined as, “a process of evaluation of a dispute in which the evaluator seeks to identify and reduce the issues of fact and law that are in dispute”. The evaluator’s role is stated as being, “assessing the relative strengths and weaknesses of each party’s case and offering an opinion about the likely outcome of the proceeding, including any likely findings of liability or the award of damages”. Rule 1177 states that a person can be a mediator if they are registered pursuant to the Mediation Act 1997 (ACT) and is appointed by the court as a mediator while r 1178 states that an evaluator can be, “the registrar of the court or someone else that the court considers has the skills and qualifications to be an evaluator and appoints as an evaluator”. Rather than requiring parties to dispute resolution to take part in good faith as in other jurisdictions, r 1180 requires parties in Supreme Court mediations and evaluations to take part “genuinely and constructively” – a phrase that is not defined by the Rules. Rule 1181 requires the costs to be agreed upon between the parties or by order of the court and pursuant to r 1182, any agreement arising from mediation or evaluation can be embodied

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in an order of the court although this process does not affect its enforceability as between the parties themselves. For evaluations, r 1183 provides the same privilege in relation to defamation that exists for a proceeding in the court, and a document in a proceeding, exists for a neutral evaluation session; or a document or thing sent to or produced to an evaluator; or a document or thing sent to, or produced at, the court to enable a neutral evaluation session to be arranged. Rule 1184 states: An evaluator may disclose information obtained in relation to the administration or enforcement of this division only in the following circumstances: (a) with the consent of the person who provided the information; (b) for the administration or enforcement of this division; (c) if there are reasonable grounds to believe the disclosure is necessary to prevent or reduce the danger of death or injury to anyone or damage to any property; (d) if the disclosure– (e) in cases of unexpected delay, explain the delay and whether or not the client may assist to resolve the delay; (i) is reasonably required for the referral to an entity of any party to a neutral evaluation session; and (ii) is made to assist the resolution of a dispute between the parties, or assist the parties in any other way; and (iii) is made with the consent of the parties to the neutral evaluation session; (e) in accordance with a requirement imposed under a territory law or a law of the Commonwealth (other than a requirement imposed by a subpoena or other compulsory process).

Rule 1185 provides that an evaluator is not personally liable for anything done or omitted to be done honestly for a neutral evaluation session under this division. Other Australian Capital Territory statutory schemes

[7.120]

The Australian Capital Territory has other statutes that provide for and encourage the use of dispute resolution. The sections in [7.100]-[7.110] discuss the main ACT statutory processes governing the courts and other schemes while the following table lists references to dispute resolution in other ACT statutes. Statute Children and Young People Act 2008 Civil Law (Wrongs) Act 2002 Cooperatives Act 2002 Domestic Relationships Act 1994 Domestic Violence and Protection Orders Act 2008 Health Act 1993 Legal Profession Act 2006

Relevant section s 79 ss 192–201 s 99 ss 6–9 ss 25, 89 s 106 ss 157, 286, 297, 395, 401–406

7 Statutory Dispute Resolution Schemes Statute Retirement Villages Act 2012 Road Transport (Third-Party Insurance) Act 2008 Work Health and Safety Act 2011

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Relevant section ss 176–178 ss 130–133, 136–140 ss 141–143

New South Wales Courts

[7.130] The Civil Procedure Act 2005 (NSW) (the Act) and the Uniform Civil Procedure Rules 2005 (NSW) (the Rules) govern the conduct of civil procedures and dispute resolution in the courts and tribunals of New South Wales. Section 56(1) states the Act’s overriding purpose as to “facilitate the just, quick and cheap resolution of the real issues in the proceedings”. Courts are to give effect to this purpose and pursuant to s 56(2)–(4), litigants and their lawyers are under a duty to assist the courts in furthering that purpose. Section 26 prescribes that a proceeding or part of a proceeding may be referred to mediation at the request of the parties or the court may refer appropriate cases to mediation, with or without the consent of parties. Further, where the court orders that a matter be referred to mediation, there are a number of ways in which the mediator may be appointed. First, parties may be in agreement as to the identity of the mediator and secondly, should the parties fail to reach agreement the court is responsible for appointing a qualified mediator. The court may refer proceedings or any part of a proceeding to the Community Justice Centres pursuant to its governing Act, the Community Justice Centres Act 1983 (NSW). Where the court is required to select the mediator, the selection procedure is set out in Practice Note SC Gen 6 “Mediation” and specific rules complementing Pt 4 of the Act are contained in rr 20.1–20.7 of the Rules. Pursuant to Practice Note SC Gen 6 “Mediation”, where parties do not agree on the appointment of the mediator, the court may select the mediator to be appointed or may appoint the mediator pursuant to the Joint Protocol set out in the Practice Note. Where the court’s order requires a mediator to be appointed pursuant to the Joint Protocol, within seven days of the order the plaintiff sends to the Principal Registrar a copy of the pleadings, or a copy of the summons if there are no pleadings, and inform the Registrar of the Joint Protocol Referral Information. The Joint Protocol Referral Information includes information about the Court’s order referring the proceedings to mediation, the nature of the proceedings and the identity of the parties. Once the Joint Protocol Referral Information is received by the Registrar, it is sent to one of the following nominating entities, with a request for

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nomination of a person as the mediator in the proceedings. The Principal Registrar sends the information on the day of receiving it or the following day. The nominating entities are: • the NSW Bar Association; • the Law Society of New South Wales; • the Institute of Arbitrators and Mediators Australia (now known as Resolution Institute); • the Australian Commercial Disputes Centre; • LEADR (now known as Resolution Institute); and • the Australian Branch of the Chartered Institute of Arbitrators. Once the Joint Protocol Referral Information is received by the selected nominating entity, the President or Chief Executive Officer of the nominating entity considers providing mediation on a reduced or no fee basis and if the nominating entity decides to provide a mediator for the dispute within seven days of receiving the Joint Protocol Referral Information the President, the Chief Executive Officer or a delegate nominates in writing a person who is a suitably qualified and experienced person and consents to the nomination as the mediator in the proceedings. The representative of the nominating entity then provides the telephone number, facsimile number and email address of the mediator to the Principal Registrar. On receipt of a nomination, the Registrar promptly, by letter, facsimile or email, informs the parties to the proceedings of the name, telephone number, facsimile number and email address of the mediator. When the Principal Registrar has dispatched the above details the person nominated by the nominating entity as the mediator is deemed to have been appointed the mediator in the proceedings under s 26 of the Act. A party to the proceedings may make a written request within 10 days of dispatch of the appointment to the judicial officer who made the order referring the proceedings to mediation to review the appointment of the mediator. Finally, within 14 days after the conclusion of the mediation, the plaintiff in writing provides the Registrar of the Joint Protocol Evaluation Information which includes the following information: • • • • • • •

the name and file number of the proceedings; the name of the mediator; the date(s) of the mediation; the number of hours occupied by the mediation; whether the parties were represented at the mediation by solicitors; whether the parties were represented at the mediation by counsel; whether the parties agreed to settle, or partly settle, the proceedings or whether no resolution of any issues was achieved; • to the extent that any terms of settlement are not confidential to the parties, the terms of settlement; and

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• to the extent that any terms of settlement are not confidential to the parties, the terms of settlement; and On receipt of the Joint Protocol Evaluation Information, the Principal Registrar will forward a copy to the relevant nominating entity.

[7.140]

Section 27 of the Act requires the parties to participate in mediation in good faith. Neither the Act nor the Rules define “good faith participation” nor impose any sanction for breach of the duty of good faith. Section 28 of the Act deals with costs and states that the cost of mediation, including the costs payable to the mediator, are payable: if the court makes an order as to the payment of those costs, by one or more of the parties in such a manner as the order may specify; or, in any other case, by the parties in such proportions as they may agree among themselves. Pursuant to s 29 of the Act, the court is empowered to make orders to give effect to any agreement or arrangement arising from mediation and, for that purpose, to hear evidence as to the fact that any such agreement or arrangement has been attained and as to the substance of any such agreement or arrangement. This is an exception to the confidentiality rule in s 31 of the Act and is designed to ensure that the court receives proper evidence should there be a breach of contract or challenge to the formation of an agreement flowing of mediation. The Act confers privilege on matters arising in relation to a mediation session and with specified exceptions listed in s 30, renders evidence of any such matter inadmissible in any other legal proceedings. In essence, evidence of events, conduct and documents that relate to mediation are not admissible unless they are probative of settlement agreement or the parties participating in mediation consent. Section 31 states that a mediator may disclose information in connection with the administration or execution of Pt 4 of the Act only in one or more of the following circumstances: (a) with the consent of the person from whom the information was obtained, (b) in connection with the administration or execution of this Part, including s 29(2), (c) if there are reasonable grounds to believe that the disclosure is necessary to prevent or minimise the danger of injury to any person or damage to any property, (d) if the disclosure is reasonably required for the purpose of referring any party or parties to a mediation session to any person, agency, organisation or other body and the disclosure is made with the consent of the parties to the mediation session for the purpose of aiding in the resolution of a dispute between those parties or assisting the parties in any other manner, (e) in accordance with a requirement imposed by or under a law of the State (other than a requirement imposed by a subpoena or other compulsory process) or the Commonwealth.

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In relation to proceedings referred to mediation by a court, pursuant to s 33, the Act gives mediators, who are exercising their functions as a mediator, the same protection and immunity as a judicial officer of that court. Section 32 of the Act empowers mediators to give directions as to the preparation for, and conduct of, the mediation. Rules 20.2 empowers the court to give directions regulating the practice and procedure to be followed at mediation. Pursuant to r 20.3, in referring proceedings to mediation, the court can require each party to state whether: the party consents to the referral to mediation; the parties agree to the identity of the mediator; and, the parties agree as to the proportions in which the costs of mediation are to be borne. Rules 20.4 and 20.5 state that once a mediator has been appointed, she or he must appoint a time for mediation within seven days after being notified that the proceedings have been so referred and that mediation, so far as practicable, should be completed within 28 days. Under r 20.6 mediation sessions must be attended by: each party or if the party is a corporation, by an officer of the corporation having authority to settle the proceedings; if a party is controlled by an insurer, an officer of that insurer having authority to settle proceedings; and, if so desires, that party’s barrister or solicitor. Finally, attendance pursuant to rr 20.6 and 20.7 can be by electronic means with the leave of the court or the mediator. Within seven days of the conclusion of mediation, the mediator must advise the court of the date and time that mediation commenced and the date and time it concluded. Community Justice Centres

[7.150]

According to s 3 of the Community Justice Centres Act 1983 (NSW) (the Act) the object of the Act is to provide for the establishment and operation of Community Justice Centres (CJC) for the purpose of: (a) providing dispute resolution and conflict management services, including the mediation of disputes, and (b) training persons to be mediators, and (c) promoting alternative dispute resolution, and (d) contributing to the development of alternative dispute resolution in New South Wales by entering into connections and partnerships with the legal profession, courts, tribunals, the academic sector and other providers of alternative dispute resolution services, and (e) undertaking other matters incidental to the provision of dispute resolution and conflict management services.

The CJCs help resolve disputes in the following areas: neighbours; family, relationships and children; work and employment; business and consumers; money and debt; communities and associations; and other matters. The CJC are administered by the Department of Courts Administration which is a department within the New South Wales Attorney-General’s Department. Section 5 of the Act states that the Director General of the NSW

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Department of Justice may, on the recommendation of the Director of the CJC (the Director) appoint a person as a mediator. Under s 20 of the Act, the Director is responsible for providing mediation services pursuant to the Act and assigning one or more mediators for each mediation session, meaning that the CJC is able to employ a co-mediation model. Section 20A provides that a New South Wales court or tribunal may refer proceedings to the CJC and the Director can accept or reject such a referral and if accepted, the mediator or mediators appointed to mediate the dispute are deemed to be mediators appointed by the respective court or tribunal. If a referred dispute is accepted for mediation by the CJC then a report of the outcome of mediation must be sent to the referring court or tribunal upon conclusion of mediation. If a referred dispute is not accepted by the CJC then the Director must write to the referring court or tribunal advising same and giving reasons. Pursuant to s 21 of the Act, the procedures to be followed at mediation sessions are determined by the Director and mediations are to be conducted with as little formality and technicality and with as much expedition as possible. Further the rules of evidence do not apply in CJC mediations. Finally, a party to mediation can be accompanied by or represented by another person but the Director can exclude a person other than a party of mediation if in the Director’s opinion the person is frustrating the purpose or conduct of the mediation session. Under s 22, the Director determines the classes of disputes which can be mediated by the CJC. Further, mediations may be commenced or continued whether or not the dispute can be adjudicated before a court, tribunal or body, or whether the dispute is the subject of any legal proceedings. Finally, persons may be treated as being in dispute on any matter if they are not in agreement on the matter and whether or not negotiations are still in progress. Section 23 of the Act provides that attendance and participation in mediation is voluntary unless it has been ordered by a court or tribunal in which case attendance is mandatory. Further, any agreement reached at mediation is not enforceable in any court or tribunal unless the parties agree otherwise unless it has been ordered by a court or tribunal in which case the agreement is subject to the rules of that court or tribunal. Finally, a party to mediation may withdraw from mediation at any time. Pursuant to s 24, mediation can be terminated at any time by the mediator or the Director. Section 27 states that no matter or thing done or omitted to be done by a mediator, Director or staff of CJC shall subject them to any action, liability, claim or demand unless they have not acted in good faith in executing the Act. Police officers are not liable to be proceeded against if they failed to charge a person with a criminal offence (excluding domestic violence offences) or fail to offer evidence at the hearing of any charge or potential charge providing the police officer satisfies the Court that the

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failure was reasonable because of reference of the dispute to the CJC or by reason of the parties coming to an agreement over the dispute. Under s 28, the same privilege exists with respect to mediation as for judicial proceedings and a document produced in judicial proceedings. Privilege with respect to mediation includes steps taken in the course of arranging for mediation or the follow up of a mediation session, as well as any document sent to a Community Justice Centre or prepared at a centre to enable a mediation session to be conducted. Anything said or any admission made in the course of a mediation session is not admissible in any proceedings before any court, tribunal or body. Section 29 provides that CJC mediators have obligations of secrecy and confidentiality with respect to the mediations they conduct. Prior to mediators commencing to exercise their functions, they must first take an oath or make an affirmation of secrecy. Exceptions to non-disclosure of information by a past or present mediator, a Director, a CJC staff member or any person asked by the Minister to make an evaluation of the CJC, include: where consent is obtained from the person making the statement; in connection with the execution of the Act; to enforce an agreement reached at mediation; where disclosure would prevent or minimize injury to a person; and other reasons. Finally, s 29(2) states if a mediator has reasonable grounds to suspect that a child is at risk of significant harm then they must make a report to the Director General of the NSW Department of Family and Community Services. Farm Debt Mediation Act 1994

[7.160]

According to s 3 of the Farm Debt Mediation Act 1994 (NSW) (the Act) the principal purpose of the Act is to “provide for the efficient and equitable resolution of farm debt disputes” and to require mediation before a creditor can take possession of property or other enforcement action under a farm mortgage. Section 4(1) of the Act defines the term “farmer” as “a person (whether an individual person or a corporation) who is solely or principally engaged in a farming operation and includes a person who owns land cultivated under a share-farming agreement and the personal representatives of a deceased farmer”. Finally, the term “creditor” means, “a person to whom a farm debt is for the time being owed by a farmer”. Section 8 of the Act provides that creditors who are owed money under a farm mortgage must not take enforcement action against a farmer until at least 21 days elapse after the creditor gives a prescribed notice. The notice advises the farmer of the creditor’s intention to take enforcement action and the availability of mediation in respect of farm debts. The section does not apply if a certificate is in force under s 11 in respect of the farm mortgage.

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Section 9 of the Act provides that once a farmer has been given a notice, the farmer may within 21 days request mediation concerning the farm debt by notifying the creditor in writing. Having done so, pursuant to s 10, the creditor cannot take enforcement action in respect of the farm mortgage unless a s 11 certificate is in force. Under s 9(1A) a farmer may also request mediation without the necessity of the creditor issuing a prescribed notice – under such conditions, the farmer may notify the creditor in writing requesting mediation. In the event that a farmer requests mediation but subsequently refuses to mediate, the farmer is no longer afforded the protection of the Act. Alternatively, under s 9A(2), the creditor may agree or decline the invitation to mediate by the farmer and such a refusal, where the farmer is not in default of the farm mortgage, does not give rise to any claim or consequence under the Act. However, if a farmer is in default of the farm mortgage, the creditor’s refusal to mediate may result in the issuance by the NSW Rural Assistance Authority (NSWRAA) of an exemption certificate pursuant to s 9B. Such an exemption certificate prevents the issuance of a s 11 certificate and prohibits the creditor from seeking enforcement action while the exemption certificate is in force. Section 11(1) of the Act specifies that a certificate under s 11 provides that the Act does not apply to a farm mortgage. Once in possession of a s 11 certificate, a creditor may commence enforcement action under the relevant farm mortgage. Some of the conditions which must be satisfied before the NSWRAA can issue such a certificate are that: (1) satisfactory mediation has taken place in respect of the farm debt owed; (2) the farmer has declined to mediate; or (3) three months have elapsed following a s 8 notice by the creditor who has attempted to mediate in good faith regardless of whether a satisfactory mediation has taken place during that period.

Section 11(5) of the Act states that a s 11 certificate remains in force until the date specified by the NSWRAA in the certificate. The date specified is to be calculated on the basis that the period for which the certificate is to be in force is: (a) if satisfactory mediation in respect of the farm debt concerned has taken place, the period commencing on the date of its issue and ending on the third anniversary of the last date of mediation, or (b) if the farmer has failed to take part in mediation in good faith, the period commencing on the date of its issue and ending on the third anniversary of the last date of mediation, or (c) if the farmer has indicated in writing that the farmer does not wish to enter into or proceed with mediation, the period commencing on the date of its issue and ending on the third anniversary of the date the indication was given to the Authority or creditor, or (d) if the farmer has failed to respond in writing, within 28 days, to an invitation referred to in subsection (2)(c), the period commencing on the date of its issue and ending on the third anniversary of the date that is 28 days after the invitation was given to the farmer, or

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(e) if a notice was given by the creditor under section 8, the period commencing on the date of its issue and ending on the date that is three years and three months after the date the notice was given, or (f) if any other case in which a certificate is issued, the period of three years commencing on the date the certificate was issued.

[7.170]

According to Section 11AA of the Act, if it appears to a mediator that the parties to mediation have agreed, or are about to agree, on an issue between them, the mediator is obliged to personally prepare for the consideration of the parties a document setting out the main points of agreement on the issue. Failure to comply with this requirement (or the requirement to complete a summary of mediation under s 18A) may result in the withdrawal of the accreditation of a mediator. If the parties are satisfied that the documents set out the main points agreed by them during or within 24 hours of the end of mediation, the parties may enter into Heads of Agreement by signing the document. Section 11A prescribes that there be a cooling off period in relation to any Heads of Agreement entered into by a farmer in the course of or at the end of mediation session which starts when the Heads of Agreement is executed. Further, it ends at 5 pm on the 14th day after the date on which the Heads of Agreement is executed or at a later time or another day as agreed between the farmer and the creditor. The cooling off period may be extended by agreement between the farmer and the creditor. Finally, the NSWRAA has the discretion not to issue a s 11 certificate to a creditor on the ground that a satisfactory mediation has taken place if the written agreement relating to farm debt was entered into during, or at the end of, the mediation session, and the cooling off period has not expired. Pursuant to s 11B of the Act, a farmer is given the right to serve a written notice on the creditor or the creditor’s solicitor rescinding the Heads of Agreement during the cooling off period, such notice being signed by the farmer or the farmer’s Australian lawyer. Finally, once the notice is served on the creditor the Heads of Agreement is rescinded ab initio and an adjustment that is equitable between the parties is made where a party has received a benefit under the Agreement. Under s 11C, any subsequent contract, deed, mortgage or other instrument that is executed as a result of or pursuant to the Heads of Agreement must reflect the Agreement and any creditor that breaches this requirement of the Act is guilty of an offence.

[7.180]

Section 12 states that the NSWRAA can withdraw the accreditation of a mediator if the mediator fails to comply with the Act. If mediation is agreed upon between the parties, the farmer has a statutory right to nominate the mediator and the creditor must accept or reject the nominated mediator. Section 12A provides that if the creditor rejects the mediator nominated by the farmer, the farmer must nominate a panel of three other mediators and the creditor can choose from the panel.

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The function of a mediator is described in s 13 of the Act as being to mediate impartially or attempt to mediate impartially between the farmer and the creditor to arrive at an agreement for the present arrangements and future conduct of fiinancia relations among them and any other functions under this or any other Act. It also prescribes that the mediator cannot advise a farmer or a creditor about the law or encourage or assist a farmer or creditor in reserving or establishing legal rights, or act as an adjudicator or arbitrator. Pursuant to s 14 of the Act, mediation sessions are to be conducted according to a procedure determined by the NSWRAA. The sessions must be conducted expeditiously and with as little formality and technicality as possible and a mediator has the discretion to call a pre-mediation conference and adjourn a mediation session if it appears that a party would be significantly disadvantaged because of the length of the session. Further, the rules of evidence do not apply to mediation sessions and mediation under the Act is not open to the public. Finally, persons who are not parties to a mediation session may attend as participants as a farmer’s advisor or representative or may be permitted by the mediator to be present. Section 17 of the Act provides that parties are not entitled to be represented by an agent unless the mediator is satisfied that the agent would assist in the facilitation of mediation and knows enough about the dispute to represent the party effectively. Further, a corporation may be represented at mediation by an authorised officer and mediators must ensure that representation does not cause substantial disadvantage to the other side. Farmers are entitled to seek advice and counsel during mediation sessions. Under s 15 of the Act, evidence of anything said or admitted during a mediation session and a document prepared for the purpose of or in the course of a mediation session is not admissible in any proceedings in a court or a person authorised to hear evidence. “Mediation session” includes steps taken to arrange for a mediation session or any follow-up action. This provision does not apply to documents such as Heads of Agreement, a contract, deed, mortgage, or other document entered into as a result of, or pursuant to, Heads of Agreement or a summary of mediation under s 18A – this is to ensure that evidence that led to the creation of such documents and may prove the legal formation of such agreements is not lost to the court if the agreement is breached and sought to be enforced. Pursuant to s 16, disclosure of information obtained in a mediation session in the course of the administration or execution of the Act is prohibited unless the person from whom the information obtained consent, or it relates to the administration or execution of the Act, or it is reasonably required in order to refer a party or parties to mediation or to any other service with the parties’ consent for the purpose of helping to resolve an issue between the parties. Further, the prohibition on disclosure does not

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apply if it relates to a legal requirement under State or Commonwealth law other than a requirement imposed by subpoena or other compulsory process. Section 18 of the Act provides that mediators and anyone acting under the direction of a mediator are exonerated from personal liability for any act or omission done or omitted to be done in good faith pursuant to the execution of the Act. Other New South Wales statutory schemes

[7.190]

New South Wales has other statutes that provide for and encourage the use of dispute resolution. The sections in [7.130]-[7.180] discuss the main New South Wales statutory processes governing the courts and other schemes while the following table lists references to dispute resolution in other New South Wales statutes. Statute Aboriginal Land Rights Act 1983 Children and Young Persons (Care and Protection) Act 1998 Community Land Management Act 1989 Crimes (Domestic and Personal Violence) Act 2007 Dust Diseases Tribunal Act 1989 and Dust Diseases Tribunal Regulation 2013 Local Government Act 1993 National Parks and Wildlife Act 1974 Residential (Land Lease) Communities Act 2013 Retail Leases Act 1994 Retirement Villages Act 1999 Small Business Commissioner Act 2013 Strata Schemes Management Act 2015* Succession Act 2006 Thoroughbred Racing Act 1996 Water Management Act 2000 Work Health and Safety Act 2011 Workplace Injury Management and Workers Compensation Act 1998

Relevant section ss 238–241 s 114 ss 62–70A ss 21, 24A ss 32H, 38–39 s 440I s 71K ss 69, 71, 145–155, 158 ss 64–69 ss 121–123, 125 ss 13–24 ss 216–225, 227 ss 98, 99 s 29G ss 62, 93, 368 ss 141–143 ss 318A–G

(* At the time of writing no date had been fixed for commencement of the Act.)

Northern Territory Community Justice Centres

[7.200]

The Community Justice Centre Act (NT) provides for the establishment of the Northern Territory Community Justice Centre (CJC), its functions, the mediation process and the recruitment and duties of suitably qualified staff. The Act promotes mediation services and empowers the CJC to provide those services. Further, s 3(b) of the Act has the objective of facilitating the adjudication of certain small disputes that are subject to

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resolution under the Construction Contracts (Security of Payments) Act (NT). The range of matters that may be dealt with by mediation include: • Local community/neighbourhood disputes over such things as a fence, noise, pets, trees, property damage and people’s behaviour • Clubs and organisations whose members are in conflict • Relationships between family members • Small claims/civil claims • Victim Offender Conferencing • Many other types of disputes • Noise from barking dogs and babies (See http://www.cjc.nt.gov.au/.) Section 24 of the Act establishes the Community Justice Consultative Council (Council) which ensures the proper functioning of the CJC. The key functions of the Council, according to s 25, are to: provide policy guidelines; deal with complaints from parties; and, make reports and recommendations to the Minister on matters contained in the Act and which the Council deems appropriate. Pursuant to s 10, mediators mediating under the Act must be a public sector employee and be approved by the Chief Executive Officer (CEO) of the CJC. Further, they must hold prescribed qualifications for a mediator – meaning all CJC mediators are accredited under the National Mediator Accreditation System. Under s 13 of the Act, the parties to any dispute may apply in a form approved by the CEO to the Director for the provision of mediation services for a dispute. The Director must refer to the Guidelines issued by the Council in determining whether to accept or refuse the application mediation may only be provided for the dispute if the Director accepts the application. Section 16 provides that attendance and participation in mediation is voluntary and a party can withdraw from the process at any time and other than when an agreement is reached, mediation does not affect parties’ rights or create any obligations. According to s 14, mediation can be terminated by: a party to the dispute; the Director of CJC; or, the mediator. Pursuant to s 15 of the Act mediation must be conducted by one or more mediators and in accordance with any directions given by the Director. Further, in conducting the session, a mediator must have regard to the Guidelines and the rules of evidence do not apply in relation to the mediation. A mediator must not engage in the adjudication or arbitration of a dispute in the session. Further, a person who is not a party must not participate in the mediation session unless permitted by the Director or as a representative pursuant to s 17 of the Act. Finally, mediations are to be conducted with as little formality and technicality and as expeditiously as possible.

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Section 33 of the Act provides exoneration from liability for any act or omission by a mediator committed in good faith in the exercise or performance of his or her terms of employment. The Act provides, pursuant to s 34, that any matter arising from a mediation session shall not be admissible as evidence in any proceedings before a court, tribunal or any other body which can admit sworn statements. Under s 35, the same privilege exists with respect to mediation as for judicial proceedings and a document produced in judicial proceedings. Finally, s 37 of the Act provides for confidentiality proceedings and imposes penalties for such breaches. Courts

[7.210]

The Local Court Act (NT) makes specific reference to mediation as one of the options for dispute settlement. Under s 16, the Local Court, either on its own motion or on a party’s application, may order a pre-hearing conference, a mediation conference or an arbitration conference which is to be conducted in accordance with the Local Court Rules by the person presiding over the conference. If the matter is not settled between the parties at a conference then it may be referred back to the court by the person presiding over the conference. When a matter is settled at a conference, the person presiding at a pre-hearing or mediation conference may make a final order in the proceeding and such an order has effect as an order of the court. Further, within 14 days of the making of such an order a party may apply for rehearing of the matter in accordance with the rules of court. Section 17 of the Act provides that at any stage of a pre-hearing, mediation or arbitration conference, the Local Court may give directions for the conduct of the proceeding which are deemed conducive to the effective, complete, prompt and economical determination of the matter in dispute. Pursuant to s 21, the Act provides for the Chief Magistrate to make rules and practice directions regulating court practice and procedures, regulating the enforcement of such procedures and regulating and prescribing any matter incidental or relating to practice, procedure and enforcement. The rules may also prescribe procedures to be followed by a mediator and for the attendance by persons at mediation conferences as well as the procedure when mediation ends, whether or not agreement has been reached. According to r 32.06 of the Local Court Rules (NT), at a pre-hearing conference the court may: conciliate between the parties; or, refer the matter to mediation; or, make a direction for the expeditious determination of proceedings. Rule 32.07 provides that mediation must be conducted by a: Judicial Registrar; Registrar; or a mediator appointed by the Chief Magistrate or Judicial Registrar from a list of mediators considered by the Chief Magistrate to be suitably qualified. Each party must attend mediation and in the case of a corporation, a duly authorised officer of the corporation

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who is authorised to settle the dispute. Further, with the leave of the court a party may attend mediation with a lawyer who is instructed as to the conduct of the proceeding and the options for settlement. Under r 32.09, if a party applies to adjourn mediation without the consent of the other parties and the mediation is adjourned, the party must pay the mediator’s costs and pay the other party’s costs for the adjourned mediation. Pursuant to r 32.10, if a party fails to attend conciliation or a pre-hearing or mediation conference, the court may: strike out the claim; make an order against that party; make an order for costs against that party; list the proceedings before a magistrate; or make any other order it considers appropriate. Rule 32.11 provides that unless parties consent, evidence of anything said or admissions made in the course of and for the purpose of a pre-hearing, conciliation or mediation conference is not admissible in any court except to prove that a settlement was reached between the parties.

[7.220]

The Supreme Court Rules (NT) set out the regime by which mediation will be practiced in the Supreme Court of the Northern Territory. Rule 48.12 provides that if a Judge or Master is of the opinion that a proceeding is capable of settlement or ought to be settled, they may direct that the matter be set down before a Master for a settlement conference for the purpose of exploring the possibility of settlement. The Judge or Master may direct that the parties attend the settlement conference in person and if a party is a corporation may order that the settlement conference be attended by an agent of the corporation who is familiar with the substance of the issues in the proceeding and has unqualified authority either to settle the proceeding or to make recommendations to the corporation that are likely to result in the settlement of the proceeding. Further, except to prove that a settlement was reached between the parties and the terms of the settlement, evidence of things said or admissions made at a settlement conference is not admissible in either the proceeding or a court without the consent of those parties. If a party fails to attend a settlement conference after having been notified of the conference or having attended a settlement conference refuses to participate in the settlement conference; or applies (other than with the consent of the other parties) to adjourn or further adjourn the settlement conference and the adjournment is granted by the Master, the party at fault must pay the costs of the other parties thrown away as a result. A settlement conference may be adjourned by the Master if the parties consider that further negotiations may lead to a settlement. If an offer of settlement is made before the Master at a settlement conference: the Master must record the offer and place that record in a sealed envelope on the court file; and the offer may be taken into consideration by the court in exercising its discretion to award costs once final judgment in the proceeding is given.

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Rule 48.13 deals with mediation and mirrors the provisions of r 48.12 that relate to conferencing. It provides that the court has the power to set a matter down for mediation without the parties consent should a Judge or Master of the Court opine that the matter is suitable for mediation. The mediator may be a Judge or Master of the Court or the court will appoint a mediator from a list kept by the court and may appoint joint mediators where the court feels it necessary. Representation is permitted at courtannexed mediation and any evidence of things said or admissions made in mediation are inadmissible in subsequent proceedings without the consent of the parties unless it is to prove that a settlement was reached at mediation. If a party fails to attend mediation after being notified of the mediation or after attending refuses to participate in mediation or adjourns mediation without the consent of the other parties, the party at fault must pay the costs of the mediator and the thrown away costs of the other party or parties to mediation. Mediators must keep confidential any information that the mediator has become aware of throughout mediation. A mediator can adjourn mediation and once mediation has concluded whether by adjournment or not, the mediator must within seven days of the conclusion of mediation file a report indicating one of the following: settlement has been reached; certain listed issues have not been resolved but all other issues have been resolved; or, no issues have been resolved. Such a report must be given to all the parties. Other Northern Territory statutory schemes

[7.230] The Northern Territory has other statutes that provide for and encourage the use of dispute resolution. The sections in [7.200]-[7.220] discuss the main NT statutory processes governing the courts and other schemes while the following table lists references to dispute resolution in other NT statutes. Statute Adoption of Children Act Building Act Business Tenancies (Fair Dealings) Act 9 Care and Protection of Children Act

Relevant section s 86 s 54FA ss 90–97 ss 48–49, 127–128

Queensland Civil and Administrative Tribunal

[7.240] The Queensland Civil and Administrative Tribunal (QCAT) is governed pursuant to the Queensland Civil and Administrative Appeals Tribunal Act 2009 (Qld) (the Act) and the Queensland Civil and Administrative Appeals Tribunal Rules 2009 (Qld) (the Rules). Section 75 of the Act allows the Tribunal to refer part or whole of the proceedings before the Tribunal to

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mediation with or without the consent of the parties. Under s 76, a referral to mediation will include a requirement for the party to attend in person or to be represented by a person who has authority to settle the dispute. Section 77 explains that the purpose of mediation is to, “promote the settlement of the dispute the subject of the proceeding”. Mediation under s 78 of the Act must be held in private and conducted in a way decided by the mediator providing it is conducted in accordance with the rules. Rule 71, states that parties must act reasonably and genuinely in mediation and help the mediator to complete mediation within the time estimated by the mediator or in accordance with the written referral. Pursuant to r 72, in conducting mediation, the mediator may gather information and facts to which the mediation relates in a way decided by the mediator and may see the parties with or without their representatives, together or separately. According to r 73, if the parties to a proceeding agree to settle the dispute or part of the proceeding, the mediator must discuss with the parties, the terms of the settlement, and if the mediator is a member of the Tribunal, an adjudicator or the Principal Registrar, whether the terms of settlement will be recorded in writing under s 85(2) of the Act and will give effect to the orders to be made by the mediator. If the mediator is not a member of the Tribunal, an adjudicator or Principle Registrar whether the settlement will be recorded in writing and filed under s 85(2) of the Act and whether Tribunal orders are required to give effect to the settlement. If mediation fails to settle the proceeding or part of the proceeding the mediator must help the parties identify the issues in dispute and the issues no longer in dispute and discuss which things said or done at mediation may be admitted into evidence for the subsequent proceeding. Pursuant to r 74, as soon as practicable after mediation, the mediator must file a certificate about the outcome of mediation. The certificate must not state anything about the extent of participation by the parties but may state that a party did not attend mediation. The certificate must also state the things said or done in mediation that parties have agreed may be admitted into evidence in subsequent proceedings. According to s 79 of the Act, a person can only be a mediator if the person is: a member of the tribunal; and adjudicator; the Principal Registrar; a mediator pursuant to the Dispute Resolution Centres Act 1990 (Qld); or a person approved by the Principal Registrar as a mediator for the Tribunal. Further, the Principal Registrar may approve a person as a mediator for the Tribunal if the Registrar is satisfied of the person’s qualifications and experience. Section 80 provides that if a mediator acquires an interest, financial or otherwise, that may conflict with the functions of mediator, the mediator must disclose the nature of the interest to the President of the Tribunal and not take part in mediation unless all parties and the President agree otherwise.

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Under s 81 of the Act, a member of the Tribunal or adjudicator must not constitute the Tribunal for the proceedings dealing with the same matter as that mediated unless all the parties to proceedings agree. Section 82 provides that if the parties to a proceeding agree to settle the proceeding or a part of the proceeding at mediation, the mediator must notify the principal registrar. Further, if a mediator has attempted unsuccessfully to settle a proceeding by mediation, the mediator must notify the principal registrar that the mediation was unsuccessful. Under s 83 of the Act, evidence of anything said or done during mediation for a proceeding is not admissible at any stage of the proceeding unless, all parties to the proceeding have agreed to admit certain evidence or the evidence relates to a proceeding for an offence of giving of false or misleading information; or for contempt. Courts

[7.250]

The Civil Proceedings Act 2011 (Qld) (the Act) and the Uniform Civil Procedure Rules 1999 (Qld) (the Rules) contain provisions relating to, among other things, the use of dispute resolution in the Supreme, District and Magistrates Courts in Queensland. The objects of the dispute resolution sections of the Act are expressed as being: (a) to provide an opportunity for litigants to participate in ADR processes in order to achieve negotiated settlements and satisfactory resolution of disputes; and (b) to improve access to justice for litigants and to reduce cost and delay; and (c) to provide a legislative framework allowing ADR processes to be conducted as quickly, and with as little formality and technicality, as possible; and (d) to safeguard ADR processes – (i) by extending the same protection to participants in an ADR process as they would have if the dispute were before a court; and (ii) by ensuring they remain confidential.

Section 39 of the Act defines alternative dispute resolution as being either mediation or case appraisal where parties are assisted in achieving an early, inexpensive settlement or resolution to their dispute and includes pre and post mediation sessions. Sections 40 and 41 of the Act define mediation as, “a process under the rules in which the parties use a mediator to help them resolve their dispute by negotiated agreement without adjudication” and case appraisal as, “a process under the rules in which a case appraiser provisionally decides a dispute” – although a case appraiser’s decision is not binding on the parties until the time prescribed under the rules for filing an election to go to trial has passed; and a court, by order, gives effect to the decision. Sections 42 and 43 of the Act and rr 319 and 320 of the Rules provide that parties may agree to refer their dispute to mediation or the court may order it and in deciding to order mediation it may consider the whether the costs of litigation are disproportionate to the benefit gained. Under s 44, if the

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court makes an order for mediation the parties are required to attend and must not impede the conduct and finalisation of mediation: failure of which may result in the court imposing sanctions against the offending party and an adverse costs ruling. Further, under s 47, if the court is of the opinion at any time during the mediation process that a party is unable to pay their share of mediation, the court can cancel or revoke the reference order to mediation and make a substitute order. According to s 48 of the Act, if agreement is reached at mediation the parties must commit the agreement to writing and sign it and such an agreement has the effect as a compromise. Pursuant to s 49, upon conclusion of mediation the mediator must file a certificate about the mediation in the approved form specified by the court. For case appraisals, under s 50, after the case appraiser’s decision a party may apply to the court for an order giving effect to the decision and the court may make any order it considers appropriate in the circumstances. Under s 52 of the Act, mediators and case appraisers have the same protection and immunity as a Supreme Court judge performing a judicial function and parties have the same protection and immunity as they would have if mediation were a proceeding before the court. Further, witnesses and documents have the same protection and immunity as they would have if they were attending or being produced before a court respectively. According to s 53, evidence of anything done or said, or an admission made at mediation is admissible in subsequent proceedings only if all parties to the dispute agree or the subsequent proceeding is founded on fraud alleged to be connected with the mediation process. Further, pursuant to s 54 of the Act, mediators and case appraisers may not disclose information learned from dispute resolution processes unless the disclosure is made: (a) with the agreement of all the parties to the ADR process; or (b) for the purpose of giving effect to this part; or (c) for statistical purposes not likely to reveal the identity of a person to whom the information relates; or (d) for an inquiry or proceeding about an offence happening during the ADR process; or (e) for a proceeding founded on fraud alleged to be connected with, or to have happened during, the ADR process; or (f) under a requirement imposed under an Act.

Notwithstanding the power in the Act to refer disputes to mediation, pursuant to r 319, a party may object to the reference by filing an objection notice that states the reasons for the objection and once such a notice is filed the parties may be required to attend before the court for hearing after which the court can make orders it considers appropriate in the circumstances. Where dispute resolution is ordered, proceedings are stayed until six days after the report of the mediator or case appraiser certifying the dispute resolution process has concluded.

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[7.260]

Chapter 9, Pt 4, Divs 3 and 4 of the Rules largely mirror each other as they relate to mediation and case appraisal. For the sake of convenience, rules under Div 3 will be used as the chosen examples of dispute resolution process. Rule 323 provides that the referring order must appoint a specified mediator or a mediator selected by the party and must include enough information from the pleadings, statements of issues or other documents to inform the mediator. Further, it must set a date for the finalisation of mediation and require the parties, if mediation is not complete within three months of the date of the referring order, to file a report setting out why mediation has not been completed so that the matter can be referred to the court for resolution. According to rr 324 and 325, once the mediator is appointed, they must try and finish mediation within 28 days after the appointment and parties are required to assist the mediator to start and finish the mediation within the estimated time or the time set out in the referring order or by acting reasonably and genuinely in the mediation. Pursuant to r 326, mediators have some freedom under the Rules to conduct mediation in a way that the mediator decides and that includes a freedom to: gather information about the dispute; decide whether a party can be represented at the mediation and if so, by whom; and, seeing the parties with or without their representatives together or separately. Notwithstanding this power, under r 327, the mediator may at any time apply for directions on any issue about the mediation. Under r 328, the mediator may also seek legal or any other advice about the dispute from independent third parties. However, if that independent advice involves additional cost, the mediator must first obtain the parties’ agreement to pay the extra cost or obtain the court’s leave. If the court grants leave, the court will order the parties to pay the extra cost and the mediator is obliged to disclose the substance of the advice to the parties. Rule 330 provides that the mediator may abandon the mediation if the mediator considers that any further efforts through mediation will not lead to the resolution of the dispute or an issue in the dispute. In doing so the mediator must first inform the parties of the intention to abandon the mediation and provide the parties with the opportunity to reconsider their positions. Pursuant to r 332, if the mediation is not a success, then the matter may go to trial or be heard in the ordinary way without any inferences being drawn against any party because of the failure to settle at the mediation. According to r 333, if the court is satisfied that it is desirable to do so, the court may revoke the mediator’s appointment and appoint someone else as mediator. Chapter 9 Pt 4 Div 5 relates to costs and parties’ liability, recovery of costs and the period within which costs are to be paid. Queensland Supreme Court Practice Direction 1999/26 provides for mediation prior to an appeal. The Practice Direction makes mediation available prior to the appeal

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hearing date in some civil applications and civil appeals. An appeal may be referred to mediation with the consent of all the parties to an appeal or by a court order which may be made on a party’s application or on the court’s own motion. Dispute Resolution Centres

[7.270]

The Dispute Resolution Centres Act 1990 (Qld) (the Act) provides for the establishment and operation of dispute resolution centres to make available mediation services in relation to certain disputes. The Dispute Resolution Centres Act 1990 is similar to the Community Justice Centres Act 1983 (NSW), discussed at [7.150]. Part 3 of the Act establishes Queensland’s dispute resolution centres, their operation and staffing arrangements. Section 27AB of the Act provides that mediators can be appointed by the chief executive only if that person considers a mediator has knowledge, experience or skills relevant to the exercise of a mediator’s function. Under s 28, mediations under the Act can be carried out by one or more mediators or joint mediators and no dispute will be accepted for mediation unless the Director of the respective centre consents. Section 29 provides that mediation procedures are determined by the Director and are to be conducted with as little formality and technicality, and with as much expedition as possible. Further, the rules of evidence do not apply to mediations under the Act and no dispute is to be arbitrated or adjudicated. Finally, mediation sessions are to be conducted in private although people not a party to the dispute can be present with the permission of the Director. Pursuant to s 30, each Director may decide that the respective centre will not accept certain disputes for mediation and mediation can be conducted over disputes that are not justiciable before any court, tribunal or body. A person is in dispute with another person if they are not in agreement on the matter whether or not negotiations are still in progress. According to s 31, attendance at and participation in mediation is voluntary and a party may withdraw from mediation at any time. Further, any agreement reached at mediation under the Act is not enforceable in any court, tribunal or body unless the parties agree in writing that such an agreement is enforceable. Under ss 32 and 33, the Director may terminate mediation at any time and parties can be represented at mediation with the consent of the Director who will need to be convinced of that the agent of the party has sufficient knowledge of the dispute to enable the agent to effectively represent the party. Corporations are exempt from this provision and may send a duly authorised officer. Under s 35, mediators are exonerated from liability for any act or omission done in good faith for the purpose of executing the Act. Section 36 provides that the privilege which exists with respect to defamation also exists with respect to a mediation session or a document or other material relevant to the mediation session. It is the same privilege which exists with respect to

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proceedings before the Supreme Court. However, privilege does not extend to a publication made otherwise than at a mediation session for a purpose other than that of enabling a mediation session to be arranged or for a purpose other than for research or evaluation as set out in s 37(2). According to s 37, a mediator is not permitted to commence mediation without first taking an oath or making an affirmation of secrecy. A director may in appropriate circumstances disclose to an agency or a court that a dispute resolution process has taken place and indicate whether or not an agreement has been reached as a result. Disclosure of the terms of any agreement so reached cannot be made without the consent of the parties. Conditions relating to that disclosure include telling the party of the intention to disclose and allowing the parties a reasonable time, at least five days, to make a written representation to the director about the disclosure. These secrecy provisions do not apply in relation to a dispute which is the subject of a referring order. Other Queensland statutory schemes

[7.280]

Queensland has other statutes that provide for and encourage the use of dispute resolution. The sections in [7.240]-[7.270] discuss the main Queensland statutory processes governing the courts and other schemes while the following table lists references to dispute resolution in other Queensland statutes. Statute Aboriginal Cultural Heritage Act 2003 Building Act 1975 City of Brisbane Act 2010 Cooperatives Act 1997 Electricity Act 1994 Energy and Water Ombudsman Act 2006 Environmental Protection Act 1994 Geothermal Energy Act 2010 Greenhouse Gas Storage Act 2009 Industrial Relations Act 1999 Information Privacy Act 2009 Justices Act 1886 Land Act 1994 Legal Profession Act 2007 Local Government Act 2009 Mineral Resources Act 1989 Motor Accident Insurance Act 1994 Peace and Good Behaviour Act 1982 Peaceful Assembly Act 1992 Personal Injuries Proceedings Act 2002 Petroleum Act 1923 Petroleum and Gas (Production and Safety) Act 2004

Relevant section ss 106, 112, 116 ss 192–194, 246CM, 246CN, 246CO s 183 s 98 ss 217–218 ss 11, 28 ss 189, 526 ss 250–255 ss 323–325AB ss 230–234 ss 103, 171–174 ss 53A–53B ss 339A–339B ss 167, 440–442 s 180 ss 194A, 278A ss 51, 51D s4 ss 13, 15 ss 36–42 ss 79T–79VAB ss 535-537AB

7 Statutory Dispute Resolution Schemes Statute Queensland Competition Authority Act 1997 Right to Information Act 2009 Sugar Industry Act 1999 Torres Strait Islander Cultural Heritage Act 2003 Water Act 2000 Water Supply (Safety and Reliability) Act 2008 Work Health and Safety Act 2011 Workers’ Compensation and Rehabilitation Act 2003

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Relevant section ss 112, 113, 115, 187 s 90 ss 36–37 ss 106, 112, 116 ss 425–437 ss 315–317 ss 141–143 ss 288–292

South Australia Civil and Administrative Tribunal

[7.290] The South Australian Civil and Administrative Tribunal Act 2013 (SA) (the Act) governs the operation of the South Australian Civil and Administrative Tribunal. Pursuant to s 8(1)(c) of the Act, the main objectives of the Tribunal include dealing with matters: [T]o ensure that applications are processed and resolved as quickly as possible while achieving a just outcome, including by resolving disputes through high-quality processes and the use of mediation and alternative dispute resolution procedures wherever appropriate.

Sections 50 and 51 provide that the Tribunal may refer matters to a compulsory conference or mediation with or without the consent of parties for the purpose of achieving resolution of the matters by a settlement between the parties. Further, both processes are to be conducted in private and the person presiding, who is a person approved by the President of the Tribunal, may conduct the process in any way they see fit providing it is consistent with any rules that prescribe such procedures. In terms of mediation, s 51 provides that if the mediator is a member of the Tribunal and a settlement is reached, the mediator may reduce the terms of the settlement to writing and make an order to give effect to the settlement. If settlement is not reached at mediation or the mediator is not a member of the Tribunal the mediator is to report on the outcome of mediation to the Tribunal as constituted when the referral was made. For both compulsory conferences and mediation, any settlement may be rejected by the Tribunal if it is inconsistent with the relevant Act (the empowering Act for that jurisdictionally relevant issue) and if it materially prejudices a person who did not participate in the process who has a direct material interest in the matter. Pursuant to s 51, evidence of anything said or done in the course of mediation is inadmissible in proceedings before the Tribunal except with the consent of all parties to the proceeding. If the mediator is a member of the Tribunal, the member cannot take any further part in the proceeding after mediation unless with the consent of all parties to the proceeding.

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Courts

[7.300]

In South Australia, pursuant to the following legislation, there is provision for mediation (and conciliation in the Magistrates Court), arbitration and expert referees in the Supreme, District and Magistrates Courts: • Magistrates Court Act 1991 (SA) – ss 27 (mediation), 28 (arbitration) and 29 (referree); • District Court Act 1991 (SA) – ss 32 (mediation), 33 (arbitration) and 34 (referree); and • Supreme Court Act 1935 (SA) – ss 65 (mediation), 66 (arbitration) and 67 (referree). The empowering sections of each Act are largely identical and using mediation as the example dispute resolution process, commence with the power of the respective court to refer proceedings (civil proceedings specified in the Supreme Court Act) to mediation with or without the consent of the parties. A mediator appointed under the respective Acts is granted the same privileges and immunities as a judge and any powers which may be delegated by the court to the mediator. Information obtained in the course of, or for the purposes of the mediation, must not be disclosed to any other person unless required to do so by law. The respective court is free to achieve a negotiated settlement of the proceeding itself and is therefore not bound by its ability to refer matters to mediation alone. A Judge, Master, Magistrate or other Judicial Officer who attempts to settle a proceeding or to resolve any issue arising from a proceeding is not disqualified from taking part in the proceeding but will be disqualified if they are appointed mediator in relation to the proceeding. Evidence of anything said or done in settlement attempts involving mediation is not admissible in the civil proceedings or any related proceedings. If a matter is settled under s 65, the settlement terms may be embodied in a judgment. In addition to the Supreme Court Act 1935, Ch 9 of the Supreme Court Practice Directions 2006, deals in some detail with the following matters relating to the conduct of mediation in the court. • • • • • • • • •

Direction Direction Direction Direction Direction Direction Direction Direction Direction

9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9

– – – – – – – – –

Panel of Mediators Mediation Officer Fees of Mediators Security for Mediator’s Fees Referral to Mediation Informing the Mediator Mediation Agreement Convening the Preliminary Conference Preliminary Conference

7 Statutory Dispute Resolution Schemes

• • • • • • •

Direction Direction Direction Direction Direction Direction Direction

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9.10 – Premises and Facilities 9.11 – Change or Discharge of the Mediator 9.12 – Conduct of the Mediation 9.13 – Report on Progress of the Mediation 9.14 – Implementing Settlements 9.15 – Review Date 9.16 – Questionnaire

Other South Australian statutory schemes

[7.310] South Australia has other statutes that provide for and encourage the use of dispute resolution. The sections in [7.290]-[7.300] discuss the main South Australian statutory processes governing the courts and other schemes while the following table lists references to dispute resolution in other South Australian statutes. Statute Aboriginal Lands Trust Act 2013 Consent to Medical Treatment and Palliative Care Act 1995 Electricity Act 1996 Environment, Resources and Development Court Act 1993 Fair Work Act 1994 Health and Community Services Complaints Act 2004 Intervention Orders (Prevention of Abuse) Act 2009 Local Government Act 1999 Petroleum and Geothermal Energy Act 2000 Retail and Commercial Leases Act 1995 Small Business Commissioners Act 2011 Work Health and Safety Act 2012

Relevant section ss 58–60 ss 18A–18H s 55N s 28B ss 197–205 s 30 s 21 s 271 s 62 ss 63–66 s5 ss 141–142

Tasmania Courts

[7.320] The Alternative Dispute Resolution Act 2001 (Tas) (the Act) provides for the mandatory mediation or neutral evaluation of disputes as an alternative to litigation in all the courts of Tasmania. Section 4 provides that the Act does not prevent parties from mediating or evaluating disputes outside of the Act or subject to other legislative provisions that provide for mediation or neutral evaluation. Pursuant to s 5, the Act empowers any court within Tasmania to refer a matter arising in proceedings before it (other than criminal proceedings) for mediation or neutral evaluation if the court considers the circumstances appropriate and whether or not the parties to the proceedings consent to the referral. Further, the Act provides that parties to the proceedings may agree on the mediator or evaluator, but failing this, the mediator or evaluator will be the Registrar or their nominee and that person may or may not be on a list of potential people compiled

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under the Act. Under s 6, a party to a mediation or evaluation session may withdraw from the session at any time. According to s 7 of the Act, remuneration for a mediator or evaluator will be borne by the parties in such proportions that they may agree on or, failing agreement, in equal shares or as otherwise directed by the court. Further, the court may order that the party’s costs for the mediation or evaluation can be that party’s costs in the cause. Pursuant to s 8, a court may make orders to give effect to any arrangement or agreement arising out of a mediation session and the Act does not affect the enforceability of any other agreement or arrangement that has been made, whether or not arising out of a mediation session, in respect of the matters the subject of a mediation session. Section 9 provides that the Chief Justice and the Chief Magistrate may compile a list of persons considered to be suitable to be mediators or evaluators for the purposes of the Act and to amend or revoke any such list for any reason that he or she considers appropriate. Finally, the Chief Justice and the Chief Magistrate must review at least annually any list compiled under this section. Section 10 of the Act defines the term, mediation or a neutral evaluation session as, “includ[ing] any steps taken in the course of making arrangements for the session or in the course of the follow-up of the session”. Further, the Act provides the same privilege with respect to defamation as exists with respect to judicial proceedings. The privilege extends to documents and other materials produced at or in a mediation or neutral evaluation session. Evidence of anything said or of any admission made in a mediation or neutral evaluation session is not admissible in any proceedings before any court, tribunal or body. Exceptions to privilege are listed as: (a) if the persons in attendance at, or identified during, the mediation session or neutral evaluation session and, in the case of a document, all persons identified in the document consent to the admission of the evidence or document; or (b) in proceedings instituted with respect to any act or omission in connection with which a disclosure has been made under s 11; or (c) in proceedings instituted in respect of the commission of a fraud or an offence or the commission of an act that renders a person liable to a civil penalty; or (d) in any circumstances where all parties involved in the relevant mediation session or neutral evaluation session agree to the waiver of the privilege; or (e) if the document was prepared to give effect to a decision taken or an undertaking given in a mediation session or neutral evaluation session. According to s 11 of the Act, a mediator or evaluator may disclose information obtained in connection with a mediation or neutral evaluation session only, among other things, with the consent of the person from whom the information was obtained, provided it was in connection with

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the administration or execution of this Act under which such a session is conducted and if there are reasonable grounds to believe that the disclosure is necessary to prevent or minimise the danger of injury to any person or damage to any property. Pursuant to s 12, no matter or thing done or omitted to be done by a mediator or evaluator subjects them to any action, liability, claim or demand if the matter or thing was done in good faith for the purposes of a mediation or neutral evaluation session under the Act. Other Tasmanian statutory schemes

[7.330] Tasmania has other statutes that provide for and encourage the use of dispute resolution. The sections in [7.320] discuss the main Tasmanian statutory processes governing the courts and other schemes while the following table lists references to dispute resolution in other Tasmanian statutes. Statute Electricity Supply Industry Act 1995 Gas Act 2000 Health Complaints Act 1995 Land Use Planning and Approvals Act 1993 Fair Work Act 1994 Legal Profession Act 2007 Resource Management and Planning Appeal Tribunal Act 1993 Sentencing Act 1997 Work Health and Safety Act 2012 Workers Rehabilitation and Compensation Act 1988

Relevant section ss 45, 98, 100 ss 49, 107, 109 ss 25A, 31–39 s 57A ss 197–205 s 30 ss 16A–17 ss 80, 84, 88 ss 141–143 s 143C

Victoria Civil and Administrative Tribunal

[7.340] Under ss 83 and 88 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) the Victorian Civil and Administrative Tribunal (VCAT) with or without the parties’ consent may refer a proceeding or part of a proceeding for compulsory conference or mediation by a person nominated by the Tribunal or the Principal Registrar. Further, the conduct of compulsory conferences and mediations are at the discretion of the mediator. Sections 84 and 89 require that once a proceeding is referred to a compulsory conference or mediation, a party may be required to attend either personally or by a representative with authority to settle on behalf of the party. Sections 86 and 93A provide that a party may object to a Member of the Tribunal going on to hear the proceeding after having presided at the compulsory conference or mediation. According to paragraph 52 (p 8) of the Tribunal’s Practice Note PNVCAT4 on alternative dispute resolution, if

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a member of VCAT is a mediator in the proceeding, he or she cannot constitute the Tribunal for the purpose of hearing the proceeding unless with the consent of the parties. Pursuant to s 83, if mediation is successful or unsuccessful, the mediator must notify the principal registrar accordingly. Sections 85 and 92 provide that evidence of anything said or done in the course of a compulsory conference or mediation is not admissible in any VCAT hearing unless all parties agree otherwise. Under s 93 should the proceeding settle at mediation, VCAT has the power to make an order giving effect to that settlement. The Tribunal’s Practice Note PNVCAT4 on alternative dispute resolution lists in detail the procedures for the conduct of dispute resolution in the Tribunal under the following headings: • Introduction • Definitions • What are the benefits of participating in ADR? • Is a compulsory conference or mediation confidential? • What happens in a mediation? • What happens in a compulsory conference? • How is a matter referred to ADR? • Can I be represented by a lawyer at a mediation or compulsory conference? • How do I prepare for a mediation or compulsory conference? • How long will the mediation or compulsory conference take? • Is there a fee or cost for the mediation or compulsory conference? • How do I seek an adjournment? • What happens if one of the parties does not turn up? • What happens if the mediation or compulsory conference is successful? • What happens if the mediation or compulsory conference is not successful? • Should I expect a phone call before the mediation or compulsory conference? • What is the cooling off period and when does it apply? • How can I help make the mediation or compulsory conference successful? • Can I tell the Tribunal about my experience with ADR? • Where can I obtain further information? (See https://www.vcat.vic.gov.au/resources/document/pnvcat4-altern ative-dispute-resolution-adr.)

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Courts

[7.350]

Rules 50.01, 50.07 and 50.08 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) empower the court to refer proceedings or part of a proceeding to: a special referee to decide a question or give an opinion; or, to mediation; or, arbitration, with or without the consent of the parties. In the case of a referral to mediation, pursuant to r 50.07, the mediator must endeavour to assist the parties to reach a settlement of the proceeding or any part of it referred to mediation. The mediator may, and shall if ordered to, report to the court as to whether the mediation is finished. The mediator’s remuneration may be determined by the court as well as who pays and in what proportion in the first instance or finally. The court may order any party to give security for the mediator’s remuneration. In the case of a special referee, r 50.04 the court may, as the interests of justice require, adopt the report of a special referee or decline to adopt the report in whole or in part, and make such order or give such judgment as it thinks fit. Section 24A of the Supreme Court Act 1986 (Vic) states that where the Court refers a proceeding or any part of a proceeding to mediation, unless all the parties who attend the mediation otherwise agree in writing, no evidence shall be admitted at the hearing of the proceeding of anything said or done by any person at the mediation. Section 47A of the County Court Act 1958 (Vic) empowers the court to refer the whole or part of any civil proceedings to mediation or arbitration with or without the consent of the parties at any time during those proceedings. Pursuant to r 50.01 of the County Court Civil Procedure Rules 2008 (Vic) of the , the court can order proceedings to a special referee to answer a question or provide an opinion without the consent of the parties. Rule 50.07 provides that an order for a reference to mediation does not operate as a stay of proceedings. The mediator’s role is described as that of endeavouring to assist the parties to reach a settlement of the proceeding or part of the proceeding referred for mediation. The mediator may report or be ordered to report to the court as to whether the mediation is finished and no other report shall be submitted to the court. No evidence of anything said or done by any person at the mediation shall be admitted unless all parties otherwise agree in writing. The court may determine the mediator’s remuneration as well as the contribution to be paid by each party and may order a party to pay security for the remuneration of the mediator. Under Section 48C of the County Court Act 1958, mediators are afforded the same protection and immunity in the performance of their duties as a judge of the Court in the performance of his or her duties as a judge. Section 108 of the Magistrates’ Court Act 1989 (Vic) empowers the court to refer the whole or part of any civil proceeding to mediation at any time in

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proceedings and with or without the parties consent. Rule 50.05 of the (Vic), provides that a mediator is a person whom a Magistrate or Registrar decides is acceptable to mediate a dispute, but not restricted to, a person who is: (a) a registrar or deputy registrar; (b) a local legal practitioner (within the meaning of the Legal Profession Act 2004), who has been approved as a mediator by the Law Institute (within the meaning of that Act); (c) a local legal practitioner (within the meaning of the Legal Profession Act 2004), who has been approved as a mediator by the Victorian Bar (within the meaning of that Act); (d) a mediator accredited by The Institute of Arbitrators and Mediators Australia (now known as Resolution Institute) …; (e) a mediator within the meaning of s 21K of the Evidence (Miscellaneous Provisions) Act 1958, or a person working with or for the body known as the Dispute Settlement Centre of Victoria, established by Order of the Governor in Council of 7 June 1994 under s 21K of the Evidence (Miscellaneous Provisions) Act 1958.

According to r 50.06, all parties are required to attend court ordered mediation either personally or by the person’s lawyer or other person empowered by law to appear. In cases where a party is a corporation an authorised representative of that corporation or in the case of an insurer an officer or employee of that insurer. Any representative attending mediation must have authority to settle. Pursuant to r 50.07, failure to attend court ordered mediation may result in the parties’ proceedings being struck out and the court making an adverse costs order for the cost of mediation. Under r 50.08, if all parties agree, a mediated settlement may be embodied in an order of the court. Rule 50.09 provides that on or before the day fixed for mediation, the mediator may, with the consent of parties, adjourn mediation to another date. In the case of a mediator appointed within the meaning of s 21K of the Evidence (Miscellaneous Provisions) Act 1958, or a person working with or for the body known as the Dispute Settlement Centre of Victoria, established by Order of the Governor in Council of 7 June 1994 under s 21K of the Evidence (Miscellaneous Provisions) Act 1958, mediation may be adjourned without the consent of the parties. According to r 50.10, within seven days of the conclusion of mediation the mediator must fius a report in court. Under r 50.11, no evidence shall be admitted of anything said or done by any person at the mediation. Pursuant to s 108 of the Magistrates’ Court Act 1989, mediators have the same protection and immunity in the performance of their duties as a judge of the Supreme Court in the performance of their duties. Farm debt mediation

[7.360]

The Farm Debt Mediation Act 2011 (Vic) (the Act) commenced operation on 1 December 2011 and largely replicates the New South Wales version of the court-annexed scheme (see [7.160]). Section 1 of the Act

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states its purpose as being: [T]o provide for the efficient and equitable resolution of farm debt disputes by requiring a creditor to provide a farmer with the option to mediate before taking possession of property or other enforcement action under a farm mortgage.

Section 4 of the Act defines a satisfactory mediation as being a mediation that has achieved resolution or a mediation that has proceeded as far as it reasonably can in an attempt to achieve resolution but has failed to resolve the dispute. According to s 6, an action taken by a creditor to whom the Act applies otherwise than in accordance with this Act is void. Under s 8 a creditor may not take action against a farmer under a farm mortgage until the creditor has given the farmer a written notice stating they intend to take enforcement action and offering mediation in order to resolve the dispute. Further, the farmer has 21 days from the date of the notice to request mediation or the creditor may commence said proceedings. Finally, the notice does not apply if an exemption certificate under the Act has been issued. Pursuant to s 9 of the Act, the farmer has 21 days to notify the creditor in writing that they wish to proceed to mediation concerning the farm debt. The farmer does not have to be in default of the farm mortgage to request mediation. If the farmer has requested mediation then refuses to mediate, the creditor may apply to the Small Business Commissioner for an exemption certificate. Section 10 of the Act provides that a creditor who receives a request to mediate may agree or refuse to mediate and if they refuse to mediate and the farmer is in default of the farm mortgage, then the farmer can apply to the Commissioner for a prohibition certificate which prevents the creditor from commencing enforcement action against the farmer. Under s 12, once the farmer has requested mediation the creditor must not take enforcement action against the farmer in respect of the farm mortgage unless an exemption certificate is in force. Under s 13, a farmer may apply to the Commissioner for a prohibition certificate if: the farmer is in default of the farm mortgage; the farmer has requested the creditor to mediate; and, the creditor has refused to mediate or has failed to respond to the request to mediate within 21 days of the request. A refusal to mediate can include the creditor refusing to continue to mediate once mediation has commenced or at least 3 months have elapsed after the request was made by the farmer to mediate and throughout that period the farmer has attempted to mediate in good faith but no satisfactory mediation has taken place. Pursuant to s 14, on an application from a farmer, the Commissioner must issue a prohibition certificate if: (a) the farmer is in default under a farm mortgage; and (b) the farmer has, under section 9(1) or (2), requested mediation in respect of the farm debt with the creditor; and

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(c) an exemption certificate is not in force in respect of the farm mortgage; and (d) the Small Business Commissioner is satisfied that — (i) having regard to section 19(2), the creditor refuses to mediate; or (ii) the creditor does not want to continue to mediate; or (iii) the creditor, having received a request from a farmer under section 9(1) or (2), has failed to respond within 21 days after that request; or (iv) at least 3 months have elapsed after a request was made by the farmer under section 9(1) or (2) and throughout that period the farmer has attempted to mediate in good faith but no mediation or no satisfactory mediation has taken place between the farmer and the creditor.

Further, a creditor cannot commence enforcement proceedings against a farmer if a prohibition certificate is in force and a prohibition certificate ceases to be in force on the earlier of 6 months after the date of issue or the day on which mediation commences. Section 15 provides that a creditor may apply to the Commissioner for an exemption certificate if: the farmer is in default under the farm mortgage; a prohibition certificate is not in force; and, satisfactory mediation has taken place or the farmer has refused to mediate or 3 months’ notice has elapsed after a notice to mediate was given by the creditor and the creditor has attempted to mediate in good faith. Under s 16, on an application by a creditor, the Commissioner must issue an exemption certificate if: (a) the farmer is in default under the farm mortgage; and (b) no prohibition certificate is in force in relation to the farm mortgage; and (c) the Small Business Commissioner is satisfied that— (i) having regard to section 17, satisfactory mediation has taken place in respect of the farm debt involved; or (ii) having regard to section 19(1), the farmer has refused to mediate; or (iii) at least 3 months have elapsed after a notice was given by the creditor under section 8, or any extended period that has been agreed to in writing by the creditor and farmer, and throughout that period the creditor has attempted to mediate in good faith but no mediation or no satisfactory mediation has taken place.

Further, the Commissioner may issue an exemption certificate if satisfactory mediation has taken place outside of the Act and if mediation has taken place pursuant to the Act, the Commissioner will rely on the mediator’s report to determine whether satisfactory mediation has taken place between the parties. Pursuant to s 18, an exemption certificate remains in force: (a) if satisfactory mediation in respect of the farm debt concerned has taken place, for the period commencing on the date of issue of the exemption certificate and ending on the third anniversary of the last date of the mediation; or (b) if the farmer has failed to take part in mediation in good faith, for the period commencing on the date of issue of the exemption certificate and ending on the third anniversary of the last date of the mediation; or

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(c) if the farmer has indicated in writing that the farmer does not wish to enter into or proceed with mediation, for the period commencing on the date of issue of the exemption certificate and ending on the third anniversary of the date on which the indication was given to the Department or creditor; or (d) if the farmer has failed to respond in writing, within 28 days, to an invitation referred to in section 19(1)(c), for the period commencing on the date of issue of the exemption certificate and ending on the third anniversary of the date that is 28 days after the invitation was given to the farmer; or (e) if a notice was given by the creditor under section 8, for the period commencing on the date of issue of the exemption certificate and ending on the date that is 3 years and 3 months after the date the notice was given; or (f) in any other case, for the period of 3 years commencing on the date on which the certificate was issued.

[7.370]

Section 17 of the Act provides that a failure by a creditor to forgive any debt does not, of itself, demonstrate a lack of good faith in attempting to mediate. According to s 19, a farmer is presumed to have refused to mediate in any of the following circumstances: (a) the farmer has failed to take part in mediation in good faith or has unreasonably delayed entering into or proceeding with mediation; (b) the farmer has indicated in writing to the Department or to the creditor that the farmer does not wish to enter into or proceed with mediation in respect of the farm debt; (c) the farmer has failed to respond in writing within 28 days to an invitation that – (i) is made in writing by the creditor and is identified as an invitation under this paragraph; and (ii) invites the farmer to attend a mediation session; and (iii) indicates that a failure of the farmer to respond in writing to the invitation might be taken to be an indication that the farmer refuses to mediate in respect of the farm debt.

Further, a creditor is presumed to have refused to mediate in any of the following circumstances: (a) the creditor has failed to take part in mediation in good faith or has unreasonably delayed entering into or proceeding with mediation; (b) the creditor has indicated in writing to the Department or to the farmer that the creditor does not wish to enter into or proceed with mediation in respect of the farm debt.

Section 21 of the Act provides that mediators are required to assist parties to reach agreement about the present and future conduct of the parties and must not give advice about the law or encourage parties to reserve, or establish their legal rights, or act as an adjudicator or arbitrator. Pursuant to s 23, the Act prescribes that mediation is to be conducted expeditiously and with as little formality and technicality as possible. Further, parties may be represented by a lawyer or any other person considered appropriate by the Commissioner and may meet with the party in the absence of that representative if the relevant party agrees to such a meeting. According to s 25, the costs of mediation are to be paid for by the parties in proportions they agree upon or failing agreement in equal shares.

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Under s 26 of the Act, evidence of anything said or admitted during mediation and any document prepared for the purposes of or in the case of mediation are not admissible in any court proceedings unless it is in relation to an agreement entered into as a result of mediation or any report on the mediation written by the mediator. Section 27 provides that a person must not disclose any information obtained at mediation unless it is: made with the consent of the disclosing party; or, necessary to ensure the administration or execution of the Act; or, reasonably required to aid the resolution of the dispute by a referring body; or, a requirement of law. Pursuant to s 28, the creditor must ensure that any agreement entered into as a result of the resolution of the dispute at mediation is reflected in any document entered into as a result of the mediated agreement. Finally, s 29 provides that parties may not contract out of the Act. Other Victorian statutory schemes

[7.380] Victoria has other statutes that provide for and encourage the use of dispute resolution. The sections in [7.340]–[7.360] discuss the main Victorian statutory processes governing the courts and other schemes while the following table lists references to dispute resolution in other Victorian statutes. Statute Aboriginal Heritage Act 2006 Architects Act 1991 Australian Consumer Law and Fair Trading Act 2012 Equal Opportunity Act 2010 Grain Handling and Storage Act 1995 Legal Profession Uniform Law Application Act 2014 Owner Drivers and Forestry Contractors Act 2005 Owners Corporations Act 2006 Personal Safety Intervention Orders Act 2010 Retirement Villages Act 1986 Transport (Compliance and Miscellaneous) Act 1983

Relevant section ss 111–129 ss 18(A), 18(E)–(J) ss 113–118 ss 111–126 s 24B ss 60, 61, Sch 1 Ch 5, Sch 3 Pt 4 ss 33–40 s 61 ss 24–34, 66 ss 38E–38H ss 162N, 162P, 162PA, 162PB, 162U

Western Australia Administrative Tribunal

[7.390] The State Administrative Tribunal Act 2004 (WA) provides a place for the review of decisions made by government agencies, public officials and local governments. As part of its case management processes, the State Administrative Tribunal encourages dispute resolution through the use of mediation. Sections 52 and 54 of the Act provide that at any stage of proceedings the Tribunal may refer a matter or any aspect of the matter to a compulsory conference or mediation with or without the consent of the

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parties to the proceedings. Further, presiding officers at conferences and mediators can determine the procedures for the conduct of those processes providing it does not contravene the tribunal rules. If the presiding officer or mediator is a member of the Tribunal and settlement is reached, they may reduce the terms of the settlement to writing and make orders to give effect to the settlement. In the case of mediation, if the mediator is not a member of the Tribunal, the mediator is to report the outcome of mediation to the Tribunal. Finally, should a Tribunal member act as a presiding officer in a conference or as a mediator and the dispute does not settle as a result of the process, the member cannot take any further part in the proceedings unless the parties agree to him or her doing so. Pursuant to s 55 of the Act, evidence of anything said or done in the course of a conference or mediation is not admissible at any later stage of the proceedings unless all parties agree to the admission of evidence or it is evidence of directions given or orders made at the conference or mediation or the reasons for those directions or orders or it is part of proceedings related to the giving of false and misleading information. Courts

[7.400]

Section 167(1)(q)(i) of the Supreme Court Act 1935 (WA) (the Act) empowers the Supreme Court of Western Australia to make rules for, among other things, the reference of a proceeding or any part of a proceeding before the Court to a mediator with or without the consent of any party to the proceeding. The section specifically states: Rules of court may be made under this Act, by the judges of the Supreme Court, for the following purposes – ... (q) for enabling and regulating the mediation of any of the differences between any parties to a proceeding generally and, in particular, providing for (i) the reference of a proceeding or any part of a proceeding to a mediator with or without the consent of any party to the proceeding; and (ii) the conduct of the mediator and of the parties; and (iii) the terms and conditions upon which the mediation conference is to be held; and (iv) the admissibility of evidence in relation to a mediation for the purpose of determining the costs of the mediation or the costs of the proceedings between the parties to the mediation;

Notwithstanding this, Pt IV of the Act deals with three areas of mediation within the court. Under s 69 of the Act a “mediator” is defined as being: a registrar appointed by the Chief Justice to be a mediation registrar under the rules of court; a person approved by the Chief Justice to be a mediator under the rules of court; or, a person agreed by the parties. Pursuant to s 70, mediators mediating under the Act have the same privileges and immunities as a judge of the court. Section 71 provides that evidence of anything said or done or any communication, whether oral or

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in writing or any admission made, in the course of attempting to settle a proceeding by mediation under direction is to be taken to be in confidence and is not admissible in any proceedings before any court, tribunal or body. The confidentiality requirement extends to any document prepared in the course of or for the purposes of an attempt to settle a proceeding by mediation, or any copy of such a document or evidence of any such document. The requirements of confidentiality do not apply if the parties to mediation consent to the admission of the evidence or document in the proceedings or there is a dispute as to whether or not the parties to the mediation entered into a binding agreement at mediation or whether the proceedings relate to a costs application. According to s 72 of the Act, the requirement for confidentiality prevents mediators from disclosing any information obtained in the course of or for the purpose of carrying out mediation. Such confidentiality does not apply if the disclosure is made for the purpose of reporting under the rules of court on any failure of a party to co-operate in a mediation; the disclosure is made with the parties’ consent; there are reasonable grounds to believe that the disclosure is necessary to minimise or prevent the danger of injury to any person or damage to any property; or the disclosure is authorised by law or is required by a law of the State or the Commonwealth. While the Rules of the Supreme Court 1971 (WA) do not set out a statutory regime for dispute resolution (other than O 35 which provides for the appointment of assessors and referees at the court’s discretion), O 1 r 4B refers to the objects of the court’s case flow management system in the following way: (1) Actions, causes and matters in the Court will, to the extent that the resources of the Court permit, be managed and supervised in accordance with a system of positive case flow management with the objects of – (a) promoting the just determination of litigation; and (b) disposing efficiently of the business of the Court; and (c) maximising the efficient use of available judicial and administrative resources; and (d) facilitating the timely disposal of business; and (e) ensuring the procedure applicable, and the costs of the procedure to the parties and the State, are proportionate to the value, importance and complexity of the subject matter in dispute; and (f) that the procedure applicable, and the costs of the procedure to the parties, are proportionate to the financial position of each party.

[7.410]

However, s 4.2 of the Supreme Court of Western Australia Consolidated Practice Directions 2009 (updated 27 October 2014) sets out the Court’s mediation scheme which is described (p 66), as being “an integral part of the case management process and, in general, no case will be listed for trial without the mediation process having first been exhausted” (see http://www.supremecourt.wa.gov.au/_files/SCPracticeDirections.pdf). Section 4.2.1, para 6, allows the court to appoint a mediator to mediate

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between experts with a view to narrowing points of disagreement. Paragraph 8 requires parties to justify any refusal to have the matter mediated and paragraphs 14 and 15 allow parties to request a preliminary conference at which the following issues will be addressed: • • • •

where the mediation is to be held the length of the mediation who is to attend the mediation and when whether a number of actions will be mediated at the same time or one after the other • confidentiality issues that arise from actions involving different parties being mediated at the same time • facilities that may be required for the mediation, such as teleconferencing. In relation to attendance, para 20 states: Each party shall attend the mediation or if a party is not a natural person, a representative of that party familiar with the substance of the litigation and with authority to compromise it, and the solicitor or counsel, if any, representing each party.

According to para 21, telephone attendance, even by parties who are interstate is forbidden and parties cannot agree to allow a party to attend by telephone. Paragraphs 26-28 deal with procedural issues and require lawyers and their clients to prepare for mediation by considering the following issues: • • • • • • • • •

the mediation process; the legal aspects of the case; possible outcomes at trial; the costs incurred up to the date of the mediation conference; the costs likely to be incurred in taking the matter to trial; the costs likely to be recovered if the party wins; the costs likely to be incurred if the party loses; the interests of the parties; and possible solutions to the dispute.

Paragraph 28 also requires the parties to consider tax issues of any potential settlements thereby ensuring that a further dispute does not arise post settlement. Paragraph 31 provides that a party to mediation may apply for the costs of mediation if they have been incurred unnecessarily by the conduct of another party and para 32 allows the mediator to report to the court on a party’s failure to co-operate. Paragraph 33 allows the court to mediate appeals, and states: The Court of Appeal encourages all parties to an appeal to consider mediation as a way of achieving a final resolution of their dispute. Mediation of appeals is generally conducted on the same basis as mediations of civil cases except that the time for the mediation conference is normally limited to 1.5-2 hours unless the parties agree to extend the time.

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Section 4.2.1.2 deals with accreditation and all court and other mediators are required to be trained and accredited pursuant to the National Mediation Accreditation Scheme.

[7.420]

Pursuant to s 23 of the Magistrates Court (Civil Proceedings) Act 2004 (WA), the court is empowered to order parties to civil proceedings to mediation with or without their consent. Further, the costs of a mediator who is not a Registrar of the court are to be paid by the parties in equal shares unless the court orders or the parties agree otherwise. Section 35 provides that if the court orders parties to mediation then they may chose the mediator or failing that, the court may appoint a Registrar or another person as mediator. Under s 37, evidence of anything said or done or any admission made in the course of mediation or in any attempt to settle a case is not admissible in any court proceedings. Further, any document prepared in the course of, or for the purpose of, attempting to settle a case by mediation is confidential and not admissible in any court, tribunal or body. Evidence or a document prepared for or used in mediation is admissible if: (a) the parties to the compulsory mediation consent to the admission of the evidence or document; or (b) there is a dispute in the proceedings as to whether the parties to the compulsory mediation entered into a binding agreement settling all or any of their differences and the evidence or document is relevant to that dispute; or (c) the proceedings relate to a costs application and, under the rules of court, the evidence or document is admissible for the purposes of determining any question of costs; or (d) the proceedings relate to any act or omission in connection with which a disclosure has been made under section 38(2)(c).

Section 38 provides that mediators must not disclose any information obtained in the course of mediation unless: (a) the disclosure is made for the purpose of reporting under the rules of court on any failure by a party to cooperate in compulsory mediation; or (b) the disclosure is made with the consent of the parties involved in the compulsory mediation; o (c) there are reasonable grounds to believe that the disclosure is necessary to prevent or minimise the danger of injury to any person or damage to any property; or (d) the disclosure is authorised by law or is required by or under a law of the State (other than a requirement imposed by a summons or other compulsory process) or of the Commonwealth.

Industrial relations

[7.430]

The Employment Dispute Resolution Act 2008 (WA) (the Act) seeks to develop the role of the Western Australian Industrial Relations Commission in the provision of dispute resolution and mediation services for workplace disputes. The Act provides employers, employees and organisations in both the federal and State industrial relations systems with

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options, such as mediation for resolving their disputes in an informal, easily accessible, expeditious and effective manner. Sections 6 and 7 of the Act empowers the Western Australian Industrial Relations Commission to act as mediator in employment disputes whether or not the dispute falls within the jurisdiction of the Commission providing a request to mediate is made by: an employee; a group of employees; an employer; a group of employers; or, an organisation of employees or employers. All parties to the dispute must consent to the Commission acting as mediator. Pursuant to s 8, groups of employees or employers may be represented at mediation by a person appointed by the group to act on their behalf such an appointment being made in writing to the Chief Commissioner of the Commission. Under s 9 of the Act, the Commissioner may at any time refuse a request to mediate or suspend or discontinue mediation if the Commissioner is of the opinion that: the dispute should be resolved in some other way; proceedings related to the same dispute have been commenced under the law of another State or Territory; or, there is some other reason that justifies a decision not to mediate or to discontinue mediation. According to s 11, if agreement is reached then the Commissioner may with the consent of the parties register the agreement as a mediation settlement agreement. Such an agreement is binding on all the parties to the agreement and may be enforced under the Industrial Relations Act as if the agreement were an industrial agreement under that Act. Finally, a mediation settlement agreement cannot vary the operation of an existing award, order or industrial agreement under the Industrial Relations Act 1979 (WA) and parties cannot make any claim under any law that is the subject of the mediation settlement agreement. Pursuant to ss 24 and 25 of the Act, evidence of anything said or done or any communication in the course of attempting to settle the dispute by mediation is not admissible in any proceedings before any court, tribunal or body unless the parties to mediation consent to the admission of such evidence or the evidence relates to a dispute over whether a binding agreement was entered at mediation. Mediation under the Act must be held in private and the Commission may give directions as to who may be present during mediation. Further, the Commission may direct that oral and written evidence given in mediation cannot be published or disclosed except in the manner or to persons specified by an order of the Commission. Other Western Australian statutory schemes

[7.440]

Western Australia has other statutes that provide for and encourage the use of dispute resolution. The sections in [7.390]–[7.430] discuss the main Western Australian statutory processes governing the

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courts and other schemes while the following table lists references to dispute resolution in other Western Australian statutes. Statute Adoption Act 1994 Legal Profession Act 2008 Sentencing Act 1995 Small Business Development Corporation Act 1983 Workers’ Compensation and Injury Management Act 1981

Relevant section ss 47, 72, 76, 106, 127, 131 ss 417–420, 591 ss 16, 27–30 ss 15A-15I s 157B

8

Legal Issues CONFIDENTIALITY

[8.10] One of the hallmarks of dispute resolution is that the process is confidential. This most commonly means that no party will be able to use information disclosed in a dispute resolution process in subsequent court proceedings. When dealing with confidentiality and dispute resolution processes one should ask the following questions. • What information is the subject of confidentiality? • What is the purpose for which information is said to be confidential? • Which party or parties are able to assert confidentiality? • Against which party or parties can confidentiality be asserted? When drafting confidentiality agreements drafters should identify the answers to the above questions and ensure that the agreement adequately addresses those answers. In all questions of whether a court should admit into evidence communications which may be confidential or privileged the courts weigh up competing public policies.

The public policy rationale [8.20] Courts weigh up two competing public policy issues when deciding if a communication is privileged. First, courts consider the public interest in encouraging parties to resolve their disputes outside of the court system. If the courts did not encourage this, then the judicial system would break down for its inability to handle the increased case load. This recognises the fact that only those matters deserving of adjudication should end up in court. In this respect the courts have a genuine interest in seeing parties at least attempt to solve their own problems prior to coming to the courts for adjudication. Because of this, parties have a genuine expectation that information disclosed in a dispute resolution process will not be disclosed to the world at large and in this respect such protection becomes a matter of business efficacy where business dealings are predicated on the confidentiality of such discussions. Parties also have a genuine expectation that information disclosed in a dispute resolution process should not be able to be used against them in subsequent litigation – otherwise, parties may choose not to participate in such processes. Secondly, the courts take the view that the best possible evidence must be presented in court at a trial to enable a fair, just and legal outcome. In this respect the courts must be careful not to exclude evidence because of

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confidentiality that will prevent justice being done. Further, parties should not be allowed to take advantage of confidentiality by being able to quarantine certain evidence that would be damaging to their own case by deliberately introducing it in a dispute resolution process for the sole purpose of preventing it being introduced as evidence in a subsequent trial. So the courts have to weigh up these two considerations and decide whether evidence should be admissible based on whichever consideration carries the greatest weight for the presiding judicial officer in each case.

Without prejudice privilege [8.30] A without prejudice communication is one made during the course of genuine negotiations conducted with a view to settling an existing dispute. There are three important elements to such communications before they can be classed as being without prejudice: 1) there must be a litigious dispute between the parties or contemplated by the parties; 2) the communication must be made with the express or implied intention that it would not be disclosed to the court in the event that negotiations fail; and 3) the purpose of the negotiation must be to attempt to effect a settlement (see Lukies v Ripley (No 2) (1994) 35 NSWLR 283 at 290 per Young J citing Sopinka, Lederman and Bryant, The Law of Evidence in Canada (Butterworths, 1992)). Without prejudice privilege applies whether or not there is litigation on foot between the parties. Therefore, litigation may be merely contemplated and this will allow the parties to invoke without prejudice privilege. It is a rule of evidence that without prejudice communications may not be admitted into evidence without the consent of both parties to the communication.

CASE NOTE: Lukies v Ripley (No 2) [8.40]

Lukies v Ripley (No 2) (1994) 35 NSWLR 283

Facts: Lukies agreed to purchase a house at Lake Illawarra which burnt down between exchange and settlement. In previous proceedings, Young J found for Lukies on their claim for abatement of the purchase price. The issue before the court was whether the court should receive in evidence two letters that could go to the issue of costs – being the only remaining substantive issue before the court. The first letter was from the plaintiffs’ solicitors to the insurer’s solicitors suggesting that a proposed conference between the parties be postponed until the plaintiffs offered a sum of money that the plaintiffs would compromise the claim for. The second letter was from

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the defendants’ solicitors to the plaintiffs’ solicitors requesting that the plaintiffs have a firm figure in mind so that “matters can be swiftly agreed to”. Decision: The court inferred that the parties had intended that the correspondence was to be on a without prejudice basis. Young J based his judgment on public policy reasons. In particular, that it was in the interests of the public that parties be encouraged to resolve their disputes outside of court adjudication. In relation to the specific issue before the court, that of correspondence sought to be introduced in relation to a costs argument, as opposed to resolving the dispute between the parties, the court found that where negotiations were designed to agree only on matters of figures and values so as to shorten litigation, they were within the protection of the privilege. Young J stated (at 288): In my view the true rule is as follows: If parties have attempted to settle the whole or part of litigation and if they have agreed between themselves expressly or impliedly that they will not give in evidence any communication made during those discussions, then public policy makes those discussions privileged from disclosure in a court of law or equity. I must admit the rule is nowhere so stated but it seems to me that it fits in with the authorities, some of which I will now proceed to examine.

CASE NOTE: Rush & Tompkins Ltd v Greater London Council [8.50]

Rush & Tompkins Ltd v Greater London Council [1989] 1 AC 1280

Facts: Rush & Tompkins were building contractors who entered a building contract with the Greater London Council to construct houses on a council owned estate in Ealing, a suburb of London. The council refused to pay for certain losses and expenses submitted by a subcontractor of the plaintiff that was allegedly agreed to under the contract. Before the dispute was heard, it was settled by the Council agreeing to pay the plaintiff £1.2 million, providing the plaintiff took care of any claims by subcontractors. In negotiations with the Council, the value of the subcontractor’s claim had not been revealed to the Council. The settlement sum was disclosed to the subcontractor, and the subcontractor sought to discover the correspondence that had passed between Rush & Tompkins and the Council. The Court of Appeal held that the protection provided by “without prejudice” privilege came to an end once settlement had been effected. Decision: The House of Lords overturned that decision and found that in general the “without prejudice” rule made inadmissible in any subsequent litigation proof of any admissions made with a genuine intention to reach a settlement. Also, admissions made to reach settlement with a different party within the same litigation were also

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inadmissible whether or not settlement was actually reached with that party. The court relied on public policy reasoning for protecting settlement negotiations and stated that such public policy also protected genuine negotiations from being disclosed to third parties. The court’s view was that if the privilege did not operate to protect genuine negotiations, then a fetter would be placed upon parties wishing to negotiate a compromise. Lord Griffiths (at 1305) stated: it seems to me that if those admissions made to achieve settlement of a minor piece of litigation could be held against him in a subsequent major litigation it would actively discourage settlement of the minor litigation and run counter to the whole underlying purpose of the “without prejudice” rule. I would therefore hold that as a general rule the “without prejudice” rule renders inadmissible in any subsequent litigation connected with the same subject matter proof of any admissions made in a genuine attempt to reach settlement. It of course goes without saying that admissions made to recharge settlement with a different party within the same litigation are also inadmissible whether or not settlement was reached with that party.

The limitations of without prejudice privilege Limitations under statute

[8.60] Sections 131(1) of the Evidence Act 1995 (Cth) and Evidence Act 1995 (NSW) states that evidence may not be adduced of a communication that is made between persons in dispute and between third parties in connection with an attempt to negotiate settlement of the dispute or a document that has been prepared in connection with an attempt to negotiate a settlement of a dispute. Subsection (2) provides the following list of exclusions and includes where: (a) the persons in dispute consent to the evidence being adduced in the proceeding concerned or, if any of those persons has tendered the communication or document in evidence in another Australian or overseas proceeding, all the other persons so consent, or (b) the substance of the evidence has been disclosed with the express or implied consent of all the persons in dispute, or (c) the substance of the evidence has been partly disclosed with the express or implied consent of the persons in dispute, and full disclosure of the evidence is reasonably necessary to enable a proper understanding of the other evidence that has already been adduced, or (d) the communication or document included a statement to the effect that it was not to be treated as confidential, or (e) the evidence tends to contradict or to qualify evidence that has already been admitted about the course of an attempt to settle the dispute, or (f) the proceeding in which it is sought to adduce the evidence is a proceeding to enforce an agreement between the persons in dispute to settle the dispute, or a proceeding in which the making of such an agreement is in issue, or

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(g) evidence that has been adduced in the proceeding, or an inference from evidence that has been adduced in the proceeding, is likely to mislead the court unless evidence of the communication or document is adduced to contradict or to qualify that evidence, or (h) the communication or document is relevant to determining liability for costs, or (i) making the communication, or preparing the document, affects a right of a person, or (j) the communication was made, or the document was prepared, in furtherance of the commission of a fraud or an offence or the commission of an act that renders a person liable to a civil penalty, or (k) one of the persons in dispute, or an employee or agent of such a person, knew or ought reasonably to have known that the communication was made, or the document was prepared, in furtherance of a deliberate abuse of a power.

CASE NOTE: Silver Fox Co Pty Ltd v Lenards [8.70] The Silver Fox Company Pty Ltd as Trustee for the Baker Family Trust v Lenards Pty Ltd [2004] FCA 1570 Facts: The applicants, Mr and Mrs Baker, entered into a franchise agreement with the respondents, Lenard’s Pty Ltd. The franchise failed and the applicants sued the respondents for a breach of s 52 of the Trade Practices Act 1974 (Cth) claiming misleading and deceptive conduct in relation to representations made regarding likely profits to be earned from the franchise inducing the applicants to enter the franchise agreement. The applicants were successful against the respondents on the substantive issue before the court and in this application sought, amongst other things, their costs on an indemnity basis. In support of their claim for indemnity costs, the applicants relied on two affidavits of their solicitor which referred to mediation between the parties and specifically mentioned final proposals put by the applicants and the respondents at the point when the mediation broke down. The mediation appointment agreement expressly stated that the parties and the mediator would keep the mediation process confidential and that included any information or document provided during the mediation unless disclosure was required by law. However, notwithstanding the confidentiality clauses in the mediation appointment agreement, the applicants sought to rely on communications of final offers made in mediation and submitted that such reliance was authorised by s 131(2)(h) of the Evidence Act 1995 (Cth) which provides an exception to the confidentiality rule in negotiated settlement discussions where the communication or document is relevant to determining liability for costs. Decision: The Court found that s 131(2)(h) of the Evidence Act 1995 (Cth) applied to the mediation agreement regardless of the

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unambiguous nature of the wording of the agreement. Confidentiality in mediation operates to prevent evidence from mediation being adduced in court that would affect the outcome on the primary matters in issue. In this case the disclosure only affected the issue of costs. Therefore, the court allowed the two affidavits into evidence as the information contained therein would not be unfairly prejudicial to the objecting party as it only goes to the issue of costs. Mansfield J stated: [35] … the policy lying behind s 131 of the Evidence Act is twofold. First, it is to lay down a statutory basis for excluding evidence of communications relating to attempts to settle disputes. Secondly, it is to provide specific exceptions to such exclusion. The exception found in s 131(2)(h) relates to the probative value or probative nature of the contents of the communication and not to the manner in which the communication came initially to be subjected to the protection from being adduced into evidence found in subs (1) of s 131. Although a consensual arrangement or agreement underlies the basis or part of the basis upon which “without prejudice” communications are protected from admissibility, that consensual aspect does not determine the issue of relevance for the purposes of s 131(2)(h) of the Evidence Act. The relevance there provided for is to be judged and determined by reference to legal principle rather than the decision of the parties. [36] … Section 131(1), subject to its exceptions, gives effect to the policy of ensuring the course of negotiations – whether private or by mediation – are not adduced into evidence for the purpose of influencing the outcome on the primary matters in issue. Clearly, it is in the public interest that negotiations to explore resolution of proceedings should not be inhibited by the risk of such negotiations influencing the outcome on those primary issues. It is equally in the public interest that negotiations should be conducted genuinely and realistically. The effect of s 131(2)(h) is to expose that issue to inspection when costs issues only are to be resolved. There is no apparent public interest in permitting a party to avoid such exposure by imposing terms upon the communication, whether by the use of the expression “without prejudice” or by a mediation agreement.

(Note: the decision was reversed on appeal by the Full Court of the Federal Court of Australia on the issue of misleading and deceptive conduct.) Limitations under general law

[8.80] The general law also imposes limitations on the use of without prejudice privilege that includes the following where the: (a) communication is not objectively part of the negotiations for settlement; (b) statement is an unqualified admission concerning objective facts; (c) statement is not concerned with the same subject matter as the negotiation; (d) party engages in misleading or deceptive conduct contrary to s 18 of the Australian Consumer Law (contained in Sch 2 of the Competition and Consumer Act 2010 (Cth)) which triggers an action under that Act;

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(e) communication creates an offer and acceptance thereby creating a contract; (f) communication constitutes criminal conduct; (g) communication prevents the court from being misled (Bloss Holdings Ltd v Brackley Industries Pty Ltd [2005] NSWSC 756), for example, where a party seeks to rely upon an admission by silence and non-response when there is in fact without prejudice communication which would negative that inference (Verge v Devere Holdings Pty Ltd (2009) 258 ALR 464 at 473); and (h) communication constitutes tortious conduct.

CASE NOTE: Field v Commissioner for Railways (NSW) [8.90]

Field v Commissioner for Railways (NSW) (1957) 99 CLR 285

Facts: Field was injured when alighting from a train at Daroobalgie located between Parkes and Forbes in western New South Wales and sued the Commissioner for negligence claiming he was thrown onto the platform by the negligent driving of the train. Field attended a medical examination arranged by the defendant and during that examination told the medical officer that he alighted from the train while it was still moving. The medical examiner reported this to lawyers acting for the Commissioner. Negotiations did not settle the dispute and it went to a full hearing. The medical examiner was called and asked to recount the discussion with Field. The issue for the court was whether the admission by Field was admissible given that it had been made during settlement negotiations. Decision: The High Court found that Field’s comment to the medical examiner constituted an admission that he had got off the train whilst it was still moving and in such a case the admission was not reasonably incidental to the negotiations. In other words, the role of the doctor’s examination was to help the doctor form an opinion to be reported to the court if negotiations broke down. The medical examination had nothing to do with the settlement negotiations. Nobody expected that the plaintiff would discuss the cause of action with the doctor – the doctor’s report was not a matter incidental to the negotiations – it was wholly for the purpose of a medical opinion relevant at a potential hearing should negotiations break down. Dixon CJ, Webb, Kitto and Taylor JJ stated (at 293): The question really is whether it was fairly incidental to the purposes of the negotiations to which the medical examination was subsidiary or ancillary that the plaintiff should communicate to the surgeon appointed by the Railway Commissioner the manner in which the accident was caused. To answer this question in the affirmative stretches the notion of incidental protection very far. The defendant’s contention that it was outside the scope of the purpose of the plaintiff’s visit to the doctor to

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enter upon such a question seems clearly right. On the whole the conclusion of the Supreme Court that the plaintiff’s admission fell outside the area of protection must command assent as correct. It was not reasonably incidental to the negotiations that such an admission should be protected. It was made without any proper connexion with any purpose connected with the settlement of the action. In these circumstances it appears that the evidence of Dr Teece on this subject was admissible.

CASE NOTE: Betfair v Racing New South Wales (No 7) [8.100]

Betfair Ltd v Racing New South Wales (No 7) (2009) 181 FCR 66

Facts: Betfair Pty Ltd, brought proceedings against the respondents, Racing New South Wales and Harness Racing New South Wales, in the Federal Court of Australia. The New South Wales Office of Liquor, Gaming and Racing, a statutory authority, consulted with Racing New South Wales in relation to racing policy and specifically amendments to the Racing Administration Act 1998 (NSW). A working group was established to assist the NSW Office of Liquor, Gaming and Racing in developing legislative drafting instructions to be provided to the NSW Parliamentary Counsel. The meetings of the working group were stated to be confidential. The effect of the amendments was to allow Racing New South Wales to grant an approval to use race field information, subject to a condition requiring payment of a fee not exceeding 1.5% of the approval holder’s wagering turnover. Betfair alleged that the requirement of payment was unlawfully protectionist and discriminatory, such as to breach s 92 of the Commonwealth Constitution. Betfair sought, by notice of motion, orders requiring Racing New South Wales and Harness Racing New South Wales to produce certain documents. The Attorney-General for the State of New South Wales intervened, claiming public interest immunity and legal professional privilege in relation to the documents. Betfair argued that the privilege was limited to evidence of express or implied admissions. Decision: Jagot J found that Betfair did not intend to use the documents in order to establish the truth of any admissions made about the operation of the Racing Distribution Agreement, but in order to prove the commercial relationship between Racing NSW and Tabcorp. Thus the privilege was circumvented because no privilege was being lost. Jagot J stated (at 564-565): The privilege has never been said to extend to statements made in the course of negotiations relevant other than for the purpose of proving the truth of the admissions. In Field at 291 the reference of the High Court is to neither party being able to use “the readiness of the other to negotiate as an implied admission”. The implied admission, submitted Betfair, must be an implied admission (and I quote from Betfair’s submissions) “to the

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effect that the claim asserted by or against the party in the earlier dispute may be well-founded”. Accordingly, if Betfair were seeking to use in the proceeding the readiness of Racing NSW to negotiate with Tabcorp as an implied admission of breach of the Racing Distribution Agreement, the privilege may be attracted to prevent Betfair from so doing. However, Betfair does not seek to make such a use of the documents. Betfair seeks to use the documents to demonstrate the nature of the commercial relationship between Racing NSW and Tabcorp. That use cannot be protected by the privilege recognised in Field at 291... .

Legal professional privilege [8.110]

At common law, legal professional privilege attaches to confidential communications brought into existence for the dominant purpose of existing or contemplated legal proceedings (see Esso Australia Resources Limited v The Commissioner of Taxation (1999) 201 CLR 49). The dominant purpose test allows for a communication to attract legal professional privilege providing one, not insubstantial purpose, was that of obtaining legal advice or assistance. Such communications generally apply to communications made between lawyers and their clients although they can extend to communications made between a lawyer and a third party or a client and a third party.

CASE NOTE: Network Ten v Capital Television [8.120] Network Ten Ltd v Capital Television Holdings Ltd (1995) 36 NSWLR 275 Facts: Network Ten was in litigation with Capital Television. Capital Television’s lawyers tendered a letter of advice which raised certain arguments advanced by Network Ten. Southern Cross Communications Ltd was considering buying shares in Capital Television who gave the advice to Southern Cross and their bankers. Network Ten sought to discover the advice. The issue before the court was whether the disclosure by Capital Television waived the privileged status of the document or if the advice was protected by common interest privilege. Giles J explained common interest privilege (at 279) in the following way, “If two parties with a common interest exchange information and advice relating to that interest, the documents or copy documents containing that information will be privileged from production in the hands of each; thus, if one of the parties obtains a letter of advice attracting legal professional privilege and provides it to the other, the other can also claim legal professional privilege.” Decision: The court held that the advice did not attract legal professional privilege because there was insufficient commonality of

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interest for Southern Cross and its bankers to avail themselves of Capital Television’s privilege. Capital Television’s interest was to ensure the highest possible price of its shares whilst the interests of Southern Cross would be served by ensuring the lowest possible price of Capital Television’s shares. However, the court was at pains to establish that mere disclosure does not mean a party has waived its right to rely on legal professional privilege. On the contrary, if the disclosure is limited and the privilege will not cause unfairness and the public interest is served by encouraging parties to resolve disputes out of court, then the privilege will be enforced to keep out of evidence certain communications. On this basis Network Ten was refused access to the document. In relation to the issue of whether the letter should be protected by common interest privilege, Giles J (at 282-283) stated: In the present case it was said that Capital Television and Southern Cross had a common interest in that the former was concerned to receive advice as to its position in the claim made against it by Network Ten while the latter was concerned to receive advice as to Capital Television’s self-same position in order to assess its own position as purchaser of the shares in Australian Capital Television. But beyond that Capital Television and Southern Cross had quite different interests, the more so because Network Ten’s claim against Capital Television injected into the negotiations for the sale of the shares in Australian Capital Television a factor as to which Capital Television and Southern Cross could well take competing attitudes, the one concerned to minimise the impediment to Australian Capital Television’s activities thereby presented in order to obtain a higher price for the shares and the other concerned to maximise that impediment in order to secure the shares for a lower price. Capital Television and Southern Cross were concerned to assess the strength of the claim against Capital Television for quite different reasons. The commonality of interest is not helped, but if anything hindered, by considering the position of ANZ as distinct from Southern Cross. Its interest was in assessing the position as between Capital Television and Network Ten for the purposes of deciding whether or not to provide finance to Southern Cross, whereby many other commercial considerations of no concern to Capital Television (beyond, perhaps, a desire that a potential purchaser of the shares in Australian Capital Television should be able to obtain finance for the purchase) came into the picture. Only in the narrow sense that each for its own individual purposes was concerned to assess the position of the claim by Network Ten against Capital Television was there a common interest between Capital Television and either of Southern Cross or ANZ, and in my view that is not sufficient for common interest privilege.

In relation to the issue of whether there can be limited waiver without loss of legal professional privilege, Giles J (at 286) stated: In the present case I do not think it matters which approach be taken. The disclosure by Capital Television was to a limited number of persons, on terms of confidentiality, and with emphasis both on confining the

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dissemination of the letter of advice and on regaining copies of the letter of advice once the purpose of the disclosure had been served. Although I have held that there was not a common interest in those concerned, there was an evident purpose to be served by the disclosure, a purpose which accommodated the limited extent of the disclosure and a purpose the fulfilment of which caused and causes no unfairness to Network Ten … there must have been something approaching a commercial imperative in suitably informing Southern Cross and ANZ of the advice which Capital Television had received. If the correct approach be that there can be limited waiver without loss of the privilege as against an opposing litigant, in my opinion this is a case in which it should be held that there was a limited waiver; if the correct approach is that the law will not impute a waiver unless a party intentionally performs an act which renders it unfair to another party that the privilege be maintained, I do not think that it would in the circumstances be unfair to Network Ten if Capital Television were to maintain the privilege.

Contractual confidentiality [8.130]

Another problematic issue is the situation many parties find themselves in when they agree by contract to submit themselves to a dispute resolution process with a confidentiality clause in the agreement (for example, see cll 15 and 16 of the NSW Law Society’s Mediation Appointment Agreement reproduced in Appendix 4). The question becomes, “Whether these agreements can be enforced?” While this issue is yet to come before a court in Australia, some guidance can be taken from Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10.

CASE NOTE: Esso Australia Resources v Plowman [8.140]

Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10

Facts: On 1 June 1992, the predecessor of the first respondent, the Minister for Energy and Minerals, brought an action against Esso seeking a declaration that any and all information disclosed to a third party in the course of its arbitration with Esso was not subject to any obligation of confidence. Esso submitted that the court should imply a term into the arbitration agreement that arbitration be conducted in private and that documents could not be disclosed to third parties not involved in the arbitration. Decision: A majority of the High Court rejected the argument that there should be an implied term of confidentiality. Importantly the majority stated that unless the arbitration agreement expressly stated as such, confidentiality would not be implied in arbitration. Therefore, the court left open the issue of whether express confidentiality in a contract can be enforced. Brennan and Toohey JJ were of the view that

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a term requiring confidentiality would be implied. They opined that arbitration is a dispute resolution process and therefore there is an expectation by parties that the process will be confidential. Mason CJ (at 402) stated: An obligation not to disclose may arise from an express contractual provision. If the parties wished to secure the confidentiality of the materials prepared for or used in the arbitration and of the transcripts and notes of evidence given, they could insert a provision to that effect in their arbitration agreement. Importantly, such a provision would bind the parties and the arbitrator, but not others. Witnesses, for example, would be under no obligation of confidentiality. Absent such a provision, it is difficult to resist the conclusion that, historically, an agreement to arbitrate gave rise to an arbitration which was private in the sense that strangers were not entitled to attend the hearing. Privacy in that sense went some distance in bringing about confidentiality because strangers were not in a position to publish the proceedings or any part of them. That confidentiality, though it was not grounded initially in any legal right or obligation, was a consequential benefit or advantage attaching to arbitration which made it an attractive mode of dispute resolution. There is, accordingly, a case for saying that, in the course of evolution, the private arbitration has advanced to the stage where confidentiality has become one of its essential attributes so that confidentiality is a characteristic or quality that inheres in arbitration … I do not consider that, in Australia, having regard to the various matters to which I have referred, we are justified in concluding that confidentiality is an essential attribute of a private arbitration imposing an obligation on each party not to disclose the proceedings or documents and information provided in and for the purposes of the arbitration.

Transfield Philippines v Pacific Hydro [8.150]

Transfield Philippines Inc v Pacific Hydro Ltd [2006] VSC 175

Facts: Transfield sought to rely on emails that contained legal advice obtained during arbitration sessions with Pacific Hydro. The arbitration agreement signed by the two parties did not contain express confidentiality clauses. Decision: Hollingworth J, considered the High Court decision in Esso Australia Resources Ltd v Plowman [1995] HCA 19; (1995) 183 CLR 10 and the effect of that decision on the documents that Transfield was seeking to use outside mediation. The court affirmed the decision of the High Court in Esso and reiterated that absolute confidentiality of documents produced and disclosed in arbitration is not a characteristic of arbitrations in Australia. However, documents that are produced compulsorily, such as pursuant to a direction by an arbitrator, do

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attract the same confidentiality or implied undertaking as would apply in court proceedings. Hollingworth J (at [109]-[110]) stated: In Esso Australia Resources Ltd v Plowman, the High Court considered the nature of arbitral proceedings and documents produced during their course. The majority held that absolute confidentiality of documents produced and information disclosed in an arbitration is not a characteristic of arbitrations in Australia. In so deciding, the majority disapproved the contrary approach which had developed in the United Kingdom. However, the court held that documents produced compulsorily, for example, pursuant to a direction by the arbitrator, do attract the same confidentiality or implied undertaking as would apply in court proceedings. Applying the principles enunciated in Esso, I hold that the disputed emails are the subject of an implied undertaking on the part of Transfield.

Statutory privilege [8.160]

There are many statutes that prescribe privilege. The following is an example of one statutory dispute resolution scheme that provides for confidentiality in mediation. Federal Court of Australia Act 1976 (Cth), s 53B Evidence of anything said, or of any admission made, at a conference conducted by a mediator in the course of mediating anything referred under section 53A is not admissible: (a) in any court (whether exercising federal jurisdiction or not); or (b) in any proceedings before a person authorised by a law of the Commonwealth or of a State or Territory, or by the consent of the parties, to hear evidence.

Each State and Territory has statutory confidentiality and privilege provisions for dispute resolution processes that, among other things, prevent most verbal or documentary forms of communication from being used outside the dispute resolution process, particularly in a court of law in subsequent proceedings. The following is a non-exhaustive list of State and Territory legislation providing superior courts with statutory privilege over communications in dispute resolution processes. • Australian Capital Territory – Court Procedures Rules 2006, r 1183 (neutral evaluators only); Mediation Act 1997, ss 9 and 10 • New South Wales – Civil Procedure Act 2005, ss 30 and 31 • Northern Territory – Supreme Court Rules, r 48.13(8) • Queensland – Civil Proceedings Act 2011, s 36 • South Australia – Supreme Court Act 1935, s 65(3) and (6) • Tasmania – Civil Procedure Act 2005, ss 10 and 11 • Victoria – Supreme Court Act 1986, s 24A • Western Australia – Civil Procedure Act 2005, ss 71 and 72

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Few of the State and Territory statutory provisions as to confidentiality and privilege have been tested by their respective courts. However, there have been some discussions of the strength of the statutory confidentiality provisions in some jurisdictions as the following extract illustrates.

CASE NOTE: Wentworth v Rogers [8.170]

Wentworth v Rogers [2004] NSWCA 109

Facts: The claimant Katherine Wentworth filed a notice of motion seeking vacation of directions made by the court regarding steps in the appeal case between the parties that had arisen since the claimant had applied to the court for an order for specific performance of a mediated settlement agreement. That application was supported by the tendering of the agreement and that tendering was objected to by the second opponent, Ms Toni Rogers on the basis of the requirements for confidentiality under s 110P of the Supreme Court Act 1970 (NSW) (note that the new section is s 31 of the Civil Procedure Act 2005 (NSW)). The complainant’s submissions centred on the argument that s 110P was designed to encourage frankness among disputing parties in negotiations and not to prevent the enforcement of a mediated settlement agreement and that such documents were not within the purview of s 110P because such a document was not prepared for the purpose of mediation or in the course of mediation. The opponent argued that in the instant case the agreement was only interim or draft – not final, and was signed before the mediation had ended, and it did not, as a matter of fact, bring the mediation to an end, there having been a further mediation. Further, the opponent submitted that the uncertain nature of the terms of the agreement was additional evidence that the agreement was not final and binding. Decision: Hodgson JA concluded that the only way the agreement could be admitted into evidence in support of the application for an order of specific performance would be if the court was satisfied that the parties to the agreement had consented to its admission. His Honour was not satisfied that on the face of the document any such consent was implicit in the agreement. Hodgson JA opined that the agreement contemplated the drawing up of a later deed and this opinion led his Honour to ponder whether the agreement was immediately binding. On this issue Hodgson JA concluded that the agreement did not constitute a final and binding agreement because of the lack of evidence of an intention to be bound by it. For that reason, his Honour was satisfied that there was no consent to the document being tendered in any legal proceedings. His Honour did not admit the agreement into evidence and dismissed the application of the complainant for an order for specific performance of it. Hodgson JA (at [28]-[30]) stated:

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… in my opinion a document prepared and signed at a mediation session may itself express or imply consent that it be admitted into evidence in proceedings taken with a view to enforcing an agreement contained in that document. Certainly that could be an express term of such a document. Consent could well be implied: for example, if the document is prepared in the form of terms of settlement ready to be filed in the proceedings being mediated, one may, in those circumstances, perhaps imply a consent that the document be used in this way. Similarly, in my opinion, such a document may express or imply a promise not to withdraw that consent. If that is the case, then a party tendering such a document can rely on the consent expressed or implied in the document itself, and can rely on an express or implied promise not to withdraw that consent. If a person who has given that consent and promised not to withdraw it, does purport to withdraw the consent, then, it seems to me, it would be a matter for the court dealing with the tender to decide whether or not it would, in effect, specifically enforce the promise not to withdraw the consent. Applying that approach to this case, I think I must refuse admission of the document unless I am satisfied that the parties consented to the admission of this document in evidence, and perhaps also promised not to withdraw that consent. I do not think I can be so satisfied from this document. The document, in its terms, plainly contemplates the drawing up of a later deed …

[8.180]

Pursuant to s 29(1) of the Civil Procedure Act 2005 (NSW), the court is now able to make orders to give effect to any agreement or arrangement arising out of a mediation session and s 29(2) was subsequently introduced in order to get around the problem discussed in Wentworth v Rogers [2004] NSWCA 109. Since the introduction of s 29(2), any party may call evidence from the mediator and any other person engaged in the mediation, as to the fact that an agreement or arrangement has been reached and as to the substance of the agreement or arrangement. (See Gzell J in Owners Corporation Strata Plan 62285 v Betona Corporation (NSW) Pty Ltd [2006] NSWSC 216 at [16].)

IMMUNITY [8.190]

Liability of dispute resolution professionals has been a topic of concern ever since the formalisation of dispute resolution. Although there are no known cases in Australia of a dispute resolution professional being successfully sued, there is always the possibility that proceedings will be brought against a third party neutral for either breach of contract or negligence. This is distinguishable from a mere failure to advise where the dispute resolution professional is a lawyer, and as a consequence statutory sanctions may come into play under the various State and Territory pieces of legislation governing the practise of lawyers. One of the reasons that there hasn’t been a case to date is possibly because if the dispute resolution professional is doing her or his job correctly, then they rarely intervene in the process, thereby allowing the parties to drive the process and arrive at

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a resolution of their own making. In other words, there is nothing to sue a dispute resolution professional over if the parties have arrived at the settlement themselves and the dispute resolution professional has not facilitated any vitiating factors to the validity of the settlement agreement. While it is unlikely that a dispute resolution professional will be sued over the substantive issues associated with dispute resolution, it may be possible to sue a dispute resolution professional over procedural issues. For example, a dispute resolution professional could be accused of negligence if they are proved to be incompetent in being able to facilitate dispute resolution processes. However, in most dispute resolution schemes, third party neutrals enjoy immunity from being sued. Immunity for dispute resolution professionals tends to be addressed in two ways. First, in private dispute resolution by way of an agreement between the parties that the dispute resolution professional is immune from legal liability arising from the dispute resolution process and secondly, by way of statutory immunity.

Common law immunity [8.200]

Liability of dispute resolution professionals at common law largely has its doctrinal base in tort or contract. In a dated, but still thought provoking article by Professor Andrew Lynch entitled, “Can I Sue My Mediator? – Finding the Key to Mediator Liability” (1995) 6 Australasian Dispute Resolution Journal 113, Lynch discusses the duty of care a mediator has towards their clients. He cautiously acknowledges that a duty of care could exist although reasonable foreseeability that the actions of the mediator could cause damage is problematic given the mediator is not really liable for the substantive result of mediation. He raises the problematic issue of how we tell if the duty of care has been breached given there is no standard of care in the mediation profession as the nature of the process is largely driven by the parties themselves. The overall problem with third party neutral immunity in tort is to determine precisely the obligations of a third party neutral in a dispute resolution process. To establish negligence by a third party neutral in a dispute resolution process one must establish the following elements and their breach. (a) A duty of care owed to the innocent party. In relation to the duty of care, the court would look for a relationship of proximity between the third party neutral and the innocent party on which to base the duty of care to avoid foreseeable injury. The court would ask whether a reasonable person would foresee that negligence, on the part of the third party neutral, might cause damage. (b) A breach of the duty of care by failure to exercise the standard of care required of a third party neutral. As for the standard of care required of a third party neutral, the test is that of reasonableness in the circumstances. However, given that the third party neutral is a person that has a special skill or knowledge, the law would ascribe to that person a higher standard of care which is relevant to the issue of what is

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reasonable in the circumstances of the relationship between the third party neutral and the innocent party. Andrew Lynch (at 121) posed the question as to whether there is a standard of care for dispute resolution practitioners. He says that we have progressed from the position that there is no agreement on what a reasonably competent third party neutral should do to a position of knowing that third party neutrals should be, for example, impartial and keep matters confidential unless authorised to do otherwise. Therefore, perhaps there can be a standard of care worked out for third party neutrals in dispute resolution processes. (c) Actual loss or damage suffered by the aggrieved party. Calculating damages is another problem area for tortious recovery from a third party neutral’s negligence. How does one establish loss? Does one compare what might have happened if the dispute resolution process had been successful or if the parties had proceeded to court? If so, how can this be quantified? (d) A causal connection between the negligence and the loss. Causation raises similar problems. It is difficult to establish that actual damages occurred which would not have been sustained but for the negligent conduct of the third party neutral. The impact of the parties in dispute resolution is more central to the result than the third party neutral’s conduct, so it may not be easy to prove that the third party neutral’s negligence was the crucial factor in the end result. Lynch (at 122) mentions Lange v Marshall 622 SW 2d 237 Mo Ct App (1981) at 238, where the court dismissed an action for negligence against a family mediator because it could not establish a causal link between the breach of the duty of care and the loss suffered. The court could not say whether the plaintiff would have accepted an offer even if the mediator had not acted negligently. Lynch acknowledges that mediation is unlike other professions in that if mediation causes more harm than good, it is not easy to single out the mediator as the cause of the damage. He acknowledges (at 123) that: Mediation is a collaborative process with all parties involved – mediator and clients – working towards a universally acceptable solution. Untangling the causative link is an extremely complex and, perhaps, unachievable process. It is more than apparent from the above discussion that the establishment of tortious liability of a mediator is not a feasible proposition. There is not one element of the tort of negligence that can be easily applied to the scenario of a client unhappy with the result of the mediation who is seeking redress from the mediator. Yet, while the existence of a duty and widely accepted standards of care may possibly emerge, the causative link between conduct and damage will remain as elusive as ever, until we conclusively assess the role of the mediator and what impact the mediator has upon the substantive result of the mediation.

Since Lynch first published his paper, dispute resolution, and in particular mediation, has grown considerably allowing a more accurate picture of what mediators should and should not do. In turn this will shed light on the duty and standard of care a dispute resolution professional has towards their clients and the basis if any of liability for a breach of that duty.

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However, even if an accurate picture can be painted of the role of a mediator in any given situation, uncertainty still prevails in terms of what kind of remedy is available for a negligent mediator or dispute resolution practitioner.

[8.210]

Turning to contract law, Appendix 4 sets out the NSW Law Society’s “Agreement to Mediate” and cll 25 and 26 of which state: 25. The mediator will not be liable to a party for any act or omission in the performance of the mediator’s obligations under this Agreement unless the act or omission is fraudulent. 26. The parties together and separately indemnify the mediator against any claim for any act or omission in the performance of the mediator’s obligations under this Agreement unless the act or omission is fraudulent.

Given the other clauses in the Agreement to Mediate, it is interesting to ponder whether breaches of those clauses by the mediator give rise to liability and whether cll 25 and 26 allow a mediator to avoid that liability. Establishing the breach is always going to be the problem in a breach of contract claim against a third party neutral. Breaches such as a breach of confidentiality may be easy to prove, however breaches relating to the third party neutral’s performance of the agreement are difficult to prove for similar reasons as those raised above in the case of tortious liability. In the following case note the court did not have to pronounce on whether the mediator had been negligent in his conduct of mediation as the plaintiff dropped her claim against the mediator and pursued her solicitors instead. However, the case is a good example of the sorts of facts that may give rise to a claim of negligence against a mediator.

CASE NOTE: Tapoohi v Lewenberg (No 2) [8.220]

Tapoohi v Lewenberg (No 2) [2003] VSC 410

Facts: A dispute arose between the plaintiff daughter, Mrs Tapoohi and the defendant executrix and trustee, Mrs Lewenberg, over the will of the plaintiff’s deceased mother. Mediation was conducted despite the fact that the plaintiff was overseas although represented at mediation by her lawyers and a commercial settlement was arrived at around 8pm the same day between the parties which included the transfer of some real estate and shares whose nominal value was entered as being $1 at the insistence of the mediator until the shares could be valued. The plaintiff’s solicitors made it clear to the mediator that they could not enter a binding agreement without seeking taxation advice on the implications of the proposed settlement. However, the mediator went ahead and drafted the settlement agreement without the requirement of taxation advice being an express term of the agreement. It was alleged that the mediator forced

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the parties to sign the settlement agreement and upon reaching verbal agreement said words to the effect: You have got to stay, you have got to do the terms of settlement tonight. No, we are doing it now. We are signing up tonight as that is the way that I do it, that’s how I conduct mediations. Given the acrimony between these two sisters we must go away with something that is written. It is in the interests of all the parties to sign up tonight. All the parties present at mediation read the agreement and signed it, the plaintiff so executing the settlement by facsimile from Israel under the advice of her lawyers. Later the plaintiff and her lawyers asserted that at no time did they consider themselves bound by the agreement because of the lack of an express term to seek taxation advice prior to considering themselves so bound. Decision: The plaintiff dropped her action to have the settlement agreement set aside and pursued her action against her solicitors through an amended statement of claim to be filed in the future. While the court left open the possibility that there may be evidence of breaches of contractual and tortious duties by the mediator, the court was not required to make a finding on these issues as the application sought summary judgment on the grounds that the defendants had a good defence on the merits and that action had been withdrawn. Habersberger J stated (at [57], [80] and [86]-[88]): [57] ... it is alleged that the mediator knew or ought to have known a large number of specified matters. It is not necessary that I set them all out in detail. I note, however, that they included the following: … (e) any settlement between the Parties would, alternatively was highly likely to, involve consideration of tax issues worth potentially millions of dollars to the Parties, or one or more of the Parties; (f) none of Denton, Shiff or Adams was a tax expert and none of them was in a position to give tax advice to Tapoohi on 20 September 2001; (g) the Parties, alternatively Tapoohi, did not intend to enter into any legally binding agreement at the Mediation, but only intended to reach an agreement in principle, with any such agreement being subject to the Express Terms; … (n) at the time that Golvan insisted that the Alleged Terms of Settlement be drafted that night he represented to Shiff in substance that it was in the interests of all of the Parties that a written agreement be prepared and executed that night; … (q) during the drafting of the Alleged Terms of Settlement by Golvan it became apparent that there had been no negotiations between the Parties as to what consideration should be paid to Tapoohi for the proposed transfer of Tapoohi’s shares in EOS Holdings …; (r) none of the legal representatives of the Parties still present at the Mediation expressed an opinion as to what the appropriate consideration was for the proposed transfer of shares in EOS Holdings; (s) Golvan then represented that a figure of $1.00 should be inserted as the consideration for the proposed

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transfer of the shares in EOS Holdings; … (v) the drafting of the Alleged Terms of Settlement was completed without any of the legal representatives of the Parties obtaining, or seeking to obtain, tax advice; … (x) Golvan represented to Shiff and Adams that the Alleged Terms of Settlement should be faxed immediately to Tapoohi for execution; (y) the Alleged Terms of Settlement were faxed to Tapoohi in Israel for execution that night; … [80] Mr Sifris submitted that any tortious duty and the content thereof must be assessed in the context of the facts of this case. In particular, he referred to the following propositions which, he submitted, must lead to the conclusion that, even on their own version of what happened at the mediation, the solicitors could not succeed: (a) It could not be said that there was, and the evidence did not establish, any assumption of responsibility by the mediator in the circumstances of this case, in particular, given that Mrs Tapoohi was represented by three legal practitioners. (b) It could not be said that there was, and the evidence did not establish, reasonable reliance by Mrs Tapoohi on the mediator. She had not deposed to any reliance. She relied on her legal advisers. She was not even present. (c) It could not be said that there was, and the evidence did not establish, vulnerability on the part of Mrs Tapoohi. She was able to, and did, look after her own interests and she was represented by three experienced legal practitioners. (d) Clearly the mediator did not have any control in the relevant sense. Simply because the mediator dictated the Terms did not mean that the plaintiff’s lawyers could not have added the express terms. [86] In considering these competing submissions, I must remind myself of the caution which must attend my determination of this application. I have reached the conclusion that it is not beyond argument that some at least of the breaches of the contractual and tortious duties might be made out. I consider that it is possible that a court could find that there was such a breach constituted by the imposition of undue pressure upon resistant parties, at the end of a long and tiring mediation, to execute an unconditional final agreement settling their disputes where it was apparent that they, or one of them, wanted to seek further advice upon aspects of it, or where it was apparent that the agreement was not unconditional, or where the agreement was of such complexity that it required further consideration. I emphasise that it is not for me to conclude that any of these things occurred in the present case and I do not do so. It is sufficient that I conclude, as I do, that on the evidence before me such a contention is not plainly hopeless. [87] A claim of the kind presently under consideration raises formidable difficulties of causation. These are illustrated by the decision of the Missouri Court of Appeals in Lange v Marshall 622 SW 2d 237 Mo Ct App (1981). Nevertheless, I think this is a matter, too, which must go to trial. It is only when all the facts are known and examined that this question can be determined. I would certainly not conclude, as things stand, that it is so plainly hopeless that the solicitors should be denied a trial of the issue.

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[88] It was also submitted by Mr Sifris that the damage suffered by Mrs Tapoohi, assuming her success on all other issues, was at best highly speculative. If the settlement had not occurred, or even if Mrs Tapoohi has incurred a substantial taxation liability, it was impossible to say what would have happened if all of the disputes had gone to trial and whether Mrs Tapoohi would have been better or worse off. I would not give summary judgment on this basis. Mrs Tapoohi will have to prove her loss in her proceeding against the solicitors. It would be undesirable that I should conclude here that she must inevitably fail to do so without having heard what she has to say about this issue.

Statutory immunity [8.230]

There are a number of statutes throughout Australia that provide immunity for third party neutrals from any action, liability or demand as a result of the conduct of a dispute resolution process (most predominantly mediation). The protection afforded to third party neutrals by this legislation generally provides the same kind of immunity as a judge has in performing her or his judicial duties. The extent of the immunity is best represented by s 53C of the Federal Court of Australia Act 1976 (Cth) which states: A mediator or an arbitrator has, in mediating or arbitrating anything referred under section 53A, the same protection and immunity as a Judge has in performing the functions of a Judge.

A non-exhaustive list of some of the key legislation providing for the immunity of third party neutrals in the superior courts of the States is as follows: • New South Wales – Civil Procedure Act 2005, s 33 • Queensland – Civil Proceedings Act 2011, s 52 • South Australia – Supreme Court Act 1935, s 65(2) • Tasmania – Alternative Dispute Resolution Act 2001, s 12 • Victoria – Supreme Court Act 1986, s 27A • Western Australia – Supreme Court Act 1935, s 70 Statutory immunity has not been tested to any great extent in the courts of Australia. The following case note merely affirms the court’s view that there is no issue as to the enforceability of statutory immunity for third party dispute resolution practitioners operating under statutory schemes.

CASE NOTE: von Schultz v Attorney-General of Queensland [8.240]

von Schultz v Attorney-General of Queensland [2000] QCA 406

Facts: The appellants, von Schultz, alleged that during 1995 their landlords and a pest company caused them to deliberately ingest

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arsenic trioxide during a termite extraction process at their rented unit. After numerous interlocutory applications the court ordered mediation. The mediator was, at the time a barrister, since elevated to the Queensland Supreme Court bench. The mediator had to discontinue the mediation and a new mediator was appointed. The mediation concluded with agreement being reached, although the appellants disputed this, and almost three weeks after the mediation, the appellants repudiated the settlement agreement. The settlement required the appellants to file a notice of discontinuance of the action, which they failed to do. Applications were made to compel the appellants to file the notice that culminated in an appeal that effectively held that the appellant’s action against the landlords was ended. The appellants instituted further proceedings, identical to the first action, that were struck out by a judge sitting in chambers on the grounds that it constituted an abuse of process and was vexatious. The appellants unsuccessfully appealed that decision twice then sought criminal sanctions for administering poisons illegally – at the time of this hearing they were seeking leave to appeal to the High Court. These proceedings were instituted in the Magistrates Court alleging conspiracy and fraud in the matter of the mediation and subsequent appeals and other proceedings. The magistrate struck out the proceedings and the appellants appealed to the District Court, who in turn dismissed the appeal. In this matter, the appellants sought an extension of time to file their appeal against the decision of the District Court. They attempted to lodge the appeal some six weeks after the 28 days allowed for filing of an appeal had expired. The materials and pleadings filed by the appellants constituted an attack on the impartiality and integrity of two sitting justices of the Supreme Court, and on this basis the Attorney-General for Queensland intervened in the interest of the public. The appellants contended that the change in mediator was a conspiracy against them. Also, that the mediator had falsely signed the mediator’s certificate filed in court to the affect that a settlement had been reached between the parties. Decision: The court found no evidence to support the allegations by the appellants, with White J (at [18]-[19]) stating: [18] … So far as the action against the first named judge is concerned, the law is clear: “… no action may be brought under our legal system against judges for acts done in the course of hearing or deciding cases which come before them,” per Aicken J in an unreported decision, Durack v Gassior (High Court of Australia, 13 April 1981) quoted by Priestley JA in Rajski v Powell (1987) 11 NSWLR 522 at 538. Kirby P in that case referred to numerous authorities in other countries to the same effect at 529 and following. This immunity from suit of judges when carrying out their public duty as judges is for the benefit of the public and not the judges. It is in the interest of the public that the judges should be at liberty to

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exercise their functions with independence and without fear of the consequences, Pierson v Ray (1967) 386 US 547 per Warren CJ at 553 to 554. Litigants with a grievance about how their case has been conducted have access to appeal procedures to ventilate those concerns. [19] So far as the second named judge is concerned, she has the same immunity from suit as a mediator as a judge has, s 113 Supreme Court Act 1991 and further the issue of the settlement of the action at mediation has been amply ventilated on numerous occasions. There is no additional factual basis advanced for the allegations against her or the allegations of a widespread conspiracy by all members of the legal profession, court officers and the judges who have had anything to do with the applicants in the course of their many applications and appeals, and now the Attorney-General, to cover up the alleged fraud. It is all assertion.

ENFORCEABILITY OF SETTLEMENT AGREEMENTS [8.250]

Most settlements arising from a dispute resolution process are classified as an agreement to compromise the claim by way of settlement. Therefore, the law of contract comes into play when it comes to the enforcement of such agreements. Contracts can be in writing, or they can be oral, or they can be partly oral and partly written. Most commonly in dispute resolution settlements, the parties write up the settlement as either a contract or a deed. There have been a number of cases where settlement agreements resulting from a dispute resolution process have sought to be overturned.

CASE NOTE: Pittorino v Meynert [8.260]

Pittorino v Meynert [2002] WASC 76

Facts: The plaintiff was one of four children of deceased parents. The first defendant was the executrix of both wills. The second and third defendants were the daughters and the fourth defendant was the only son of the deceased parents. The deceased parents operated a Cray fishing business with a number of boats. The estate, after the usual payment of debts and funeral expenses, was used to establish a family trust which held two pieces of real property and a number of rock lobster pot entitlements. Following the death of the parents, the plaintiff and the third defendant each brought proceedings under the provisions of the Inheritance (Family and Dependents Provisions) Act 1972 (WA), seeking a more favourable distribution of the estates. Following the instigation of proceedings, mediation was held at the Supreme Court of Western Australia on 7 and 25 September 2000 at which the Registrar of the court acted as mediator. The plaintiff was represented at both mediation sessions by senior counsel and an instructing solicitor. At the conclusion of the second mediation session

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a hand written document was prepared embodying the terms of the settlement that was signed by all the parties including the legal representatives. Before the court, the plaintiff sought to have the mediated settlement set aside on the grounds that: (a) The plaintiff was not effectively legally represented at the mediation conference on 25 September 2000 in that she had lost the confidence of her former solicitors prior to the conference and received no advice or proper advice; (b) The purported agreement made on 25 September 2000 was and is unconscionable; (c) The learned Deputy Registrar, who presided over the said conference, was aware at all material times of the said loss of confidence referred to in (a) abovementioned; (d) The learned Deputy Registrar was wrong in law when she sought to influence the plaintiff by giving her advice on the compromise in her position as Deputy Registrar; (e) The mediation conference was conducted over an excessive length of time and with acrimony – most of it directed at the plaintiff; (f) The plaintiff suffered a ruptured cyst during the said conference and her request for an adjournment and to be excused from further attendance should have been granted; and (g) The first defendant, as trustee for the estates, had failed to provide all of the parties prior to the said conference with a full and accurate statement of all accounts of assets and liabilities, including a full statement of accounts of income received by the estate since the dates of death of both deceased. Decision: The court dismissed the plaintiff’s application. Scott J accepted the executrix’s evidence that when the agreement was signed, there was no pressure on the plaintiff to sign, but because the matter was settled at around 7.00pm, the parties were anxious to finalise the matter once the plaintiff had decided to sign the agreement. At no time was the executrix told by the plaintiff that the plaintiff was in pain or that she was not a willing party to the agreement. The evidence of the second defendant, who signed the agreement and regarded herself as bound by it, was consistent with that of the first defendant in that it was stated that the mediation was conducted without acrimony but with a clear objective to reach an agreement. While the second defendant gave evidence that at one stage during the mediation, the Registrar stated to her that the plaintiff’s solicitor was speaking with the plaintiff in order to make her “see sense” the view of the second defendant was that the Registrar conducted herself in a neutral manner towards the parties. In relation to the plaintiff’s submissions regarding emotional and medical conditions, his Honour (at [51]) opined:

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Two other matters that should be mentioned about Caterina’s [second defendant] evidence are: first, she never saw any loss of confidence between the plaintiff and her solicitor and, secondly, she was never told by the plaintiff that the plaintiff was in pain or unwell. Had the plaintiff been as ill as she said in her evidence she was, in my view, she would have said so to one, if not both, of her sisters. She did not, however, do so.

Scott J reviewed the plaintiff’s evidence by first observing that the plaintiff appeared to have good legal advice throughout the mediation and that such advice had been tendered throughout the mediation. The plaintiff gave evidence that she had been sick two weeks prior to the mediation, but his Honour concluded that there was no diagnosis produced in court to indicate that the plaintiff was sick during the mediation. Further, the plaintiff gave evidence that she had taken Panadeine Forte tablets and pleaded with the Registrar to let her go home. Scott J left open the possibility that the plaintiff had asked her solicitor if she could leave the mediation, but that there was no evidence that the Registrar had had such a request made of her. Scott J drew the evidence together and in summation hypothesised on what really happened when his Honour (at [105]) stated: In my view, after signing the mediation agreement in the presence of her solicitor and after going home and having a night’s sleep, the plaintiff decided that she had not received what she then considered was her fair share of her parents’ estate. She says that the following day she phoned Mr McCusker [senior counsel], but I note that he was not called as a witness. She says that she told him that she was not happy with the agreement. In my view, that is consistent with the plaintiff having signed and accepted the agreement and the following day after sleeping on it, having decided that the agreement was no longer acceptable to her.

ENFORCEABILITY OF DISPUTE RESOLUTION CLAUSES Introduction [8.270]

Dispute resolution clauses are found in most contracts. The different types of clauses are many and varied and often specify one or more types of dispute resolution process should a dispute arise. Appendix 5 sets out the NSW Law Society’s suggested dispute resolution clause for contracts. Except for the Victorian Supreme Court, Australian courts have been reticent to enforce dispute resolution clauses in contracts. The common law rules surrounding the enforceability of dispute resolution clauses tell us that clauses should: (1) be drafted in Scott v Avery form;

(2) be drafted with requisite certainty; (3) avoid making references to good faith negotiation; and (4) provide a remedy for breach.

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Despite the fact that there has not been been widespread success in enforcing dispute resolution clauses, the courts have been in agreement that a way to indirectly enforce them is to order a stay of proceedings, thereby allowing the parties to participate in the dispute resolution process as contractually agreed (see Aiton Australia Pty Ltd v Transfield Pty Ltd (1999) 153 FLR 236 at 244). The court’s power to do this is derived from its inherent jurisdiction to prevent an abuse of process (see, for example, Uniform Civil Procedure Rules 2005 (NSW), r 13.4). The courts have viewed a party seeking to breach its agreement to refer any dispute arising out of the contract to the nominated dispute resolution process prior to proceeding to litigation, as an abuse of court process. So a court may effectively achieve enforcement of a dispute resolution clause by ordering a stay of proceedings. However, a court will not order a stay of proceedings where the clause does not comply with the aforementioned rules of construction. In this respect the proper drafting of dispute resolution clauses is vitally important.

Clauses should be drafted in Scott v Avery form [8.280]

Dispute resolution clauses must be drafted in Scott v Avery form, that is, they may not have the effect of ousting the jurisdiction of the court. It is every citizens’ right to have their matter adjudicated by a court and this restriction ensures that more powerful parties cannot contract the rights of weaker parties away. CASE NOTE: Scott v Avery [8.290]

Scott v Avery (1856) 5 HL Cas 811; 10 ER 1121

Facts: The plaintiff and the defendant were shareholders in an insurance company who underwrote an insurance policy on a ship called The Alexander. The policy had a clause which provided that a committee, appointed by the insurer, should determine any sum paid to a policyholder. Further, should the policyholder dispute the amount determined by the committee, then the policyholder was prevented from litigating the dispute until such time as the dispute had been arbitrated. There was a claim against the policy and before the committee had finished ascertaining and settling the claim, the plaintiff ship owner, Alexander Scott, questioned the extent of the loss and repairs carried out on the ship and then refused to have the dispute arbitrated. The issue for the court was simply whether parties could agree by contract to accept a decision of an arbitrator before giving the parties the right to have the dispute resolved by a court. Decision: The majority of the court found for the defendant on the basis that, under the contract, until the arbitrator had made an award, no cause of action had arisen. Therefore, the plaintiff’s claim could not be upheld. On the issue of whether contracting parties could oust the

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jurisdiction of the court, the court spoke with one voice. The court opined that parties may agree that no right to litigate a dispute shall arise until a third person, in this case an arbitrator, has attempted to resolve the dispute. In other words, parties may not contract to oust the jurisdiction of the courts, but may make a dispute resolution process a condition precedent to litigation. Coleridge J (at 1133-1134) stated: The courts will not enforce or sanction an agreement which deprives the subject of that recourse to their jurisdiction, which has been considered a right inalienable even by the concurrent will of the parties. But nothing prevents parties from ascertaining and constituting as they please the cause of action which is to become the subject-matter of decision by the courts. Covenanting parties may agree that in case of an alleged breach the damages to be recovered shall be a sum fixed, or a sum to be ascertained by A. B., or by arbitrators to be chosen in such or such a manner; and until this be done, or the non-feasance be satisfactorily accounted for, that no action shall be maintainable for the breach.

[8.300]

So, contracting parties may agree to submit disputes to dispute resolution prior to allowing one or more parties to have a court finally adjudicate the dispute, but parties may not substitute a dispute resolution process for the decision of a court. Therefore, a dispute resolution clause in a contract should be drafted in Scott v Avery form as is the NSW Law Society’s suggested clause that appears as Appendix 5 to this text.

Clauses should be drafted with the requisite certainty [8.310]

Where a term or terms of an agreement are vague or uncertain as to their meaning, the court may declare that those terms do not give rise to a binding promise or agreement. In other words, the language used by the contracting parties makes it difficult for the parties to ascertain a precise meaning so as to understand their rights and obligations under the contract, thereby making the term of the contract void for uncertainty. But where a contract or a term of a contract evinces more than one possible meaning, the term will still be capable of meaning, and will therefore not be void for uncertainty. Providing the court can determine a meaning for such a term, it will be valid and enforceable. When determining the meaning of a contractual term, the court looks at the language used. In this way, the construction of contractual terms discloses an intention to be bound or not to be bound. In other words, if parties allow terms to be drafted in an uncertain way, this may disclose an intention to not be legally bound to the agreement. Because of the nature of dispute resolution, the terms requiring parties to participate in such a process are prone to uncertainty. An examination of four of the leading cases on uncertainty regarding dispute resolution clauses will illustrate this concept.

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CASE NOTE: Elizabeth Bay Developments v Boral Building Services [8.320] Elizabeth Bay Developments Pty Ltd v Boral Building Services Pty Ltd (1995) 36 NSWLR 709 Facts: The plaintiff executed two contracts with the defendant for design and construction management of a joint venture building project at Lake Munmorah on the central coast of New South Wales. The dispute resolution clauses in both contracts were similar. The construction management contract reciting the parties’ agreement to mediate before litigating stated: 19(a) In case any dispute or difference shall arise between the Principal and the Construction Manager either during the progress of the Works or after the determination, abandonment or breach of the Contract as to the construction of the Contract or as to any matter or thing of whatsoever nature arising hereunder or in connection therewith, then either party shall give to the other notice in writing of the dispute or difference and at the expiration of seven days, unless it shall have been otherwise settled, the parties agree to first endeavour to settle the dispute or difference by mediation administered by the Australian Commercial Disputes Centre (ACDC). (b) In the event that the dispute has not been settled within 28 days (or such other period as agreed to in writing between the parties hereto) after the appointment of the mediator the dispute shall be submitted to arbitration administered by and in accordance with the Arbitration Rules of the ACDC. (c) The arbitrator shall be a person agreed between the parties. ACDC will assist the parties by providing a list of suggested arbitrators. Failing agreement, the arbitrator shall be a person appointed by ACDC. The arbitrator shall not be the same person as the mediator. (d) The arbitration shall be held in Sydney or in such other place as the parties may agree in accordance with and subject to the laws of the State of New South Wales. (e) The decision of the arbitrator shall be final and binding upon the parties.

A dispute broke out between the parties and the defendant sought to invoke the mediation clause against the wishes of the plaintiff. Since 1993, the ACDC had published guidelines for its various dispute resolution processes. The defendant submitted and the plaintiff conceded that the ACDC’s guidelines for mediation were incorporated into the contracts because of the reference made to ACDC in the dispute resolution clauses. Paragraph 6 of the ACDC mediation guidelines stated: Prior to the mediation, the parties shall sign a mediation appointment agreement which sets out the terms of the mediation. The terms of the appointment agreement are consistent with these guidelines. The appointment agreement is also signed by the mediator.

There were three documents of relevance to the case. First, the actual contracts between the parties that contained the dispute resolution clauses, secondly, the ACDC mediation guidelines that made reference

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to the parties executing a mediation appointment agreement, and finally, the ACDC mediation appointment agreement that made reference to the mediation being conducted according to the guidelines. Neither the guidelines nor the appointment agreement were annexed to the contract. Decision: Giles J, pointed out that the documents were inconsistent with each other in many ways. The contract itself made no reference to the guidelines. Elizabeth Bay conceded that the guidelines were incorporated into the contract. His Honour stated, at 714, that because of this concession, it was: … unnecessary to express any view upon whether a mediation clause having no greater content than an agreement to settle the dispute by mediation administered by a named person or body would require of the parties participation in a process of mediation of sufficient certainty for legal recognition of their agreement.

Despite not having to address the issue of the certainty of the dispute resolution clause in the contract, his Honour went on to consider whether the guidelines and the appointment agreement ensured a sufficiently certain process for the conduct of mediation. Ultimately, it was the aforementioned inconsistency between the documents that compelled Giles J to conclude that the agreement of the parties failed for lack of certainty in the process that the parties should follow in their mediation. His Honour examined paragraph 6 of the ACDC mediation guidelines and noted that it did not identify the form of the agreement or its terms, other than to state that the appointment agreement was consistent with the guidelines. In other words, the parties had agreed on the execution of a mediation appointment agreement without agreeing to its terms. In finding that such an agreement was uncertain, his Honour (at 715) stated: … by the incorporation of the guidelines the parties had agreed (inter alia) to sign mediation agreements the terms of which were not settled beyond the necessity that they be consistent with the guidelines. The agreements to mediate were open-ended, indeed unworkable because the process to which the parties had committed themselves would come to an early stop when, prior to the mediation, it was asked what parties had to sign and the question could not be answered.

Even if an agreement to execute a further agreement on terms yet to be disclosed was a valid practice in law, his Honour, after examining both documents, found there was a lack of consistency between the guidelines and the appointment agreement. In particular, his Honour pointed to the fact that the guidelines required attendance by the individual to the dispute or an authorised company representative,

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whereas the appointment agreement made reference to attendance by a nondescript representative. Further, Giles J (at 714) stated: … the statements of issues required differed, the mediation agreement did not call for the signing of “confidentiality forms”, and the events of termination of the mediation differed. More generally, there were differences in scope and terminology, and the relationship between the guidelines and the form of mediation agreement was far from clear.

CASE NOTE: Aiton Australia v Transfield [8.330]

Aiton Australia Pty Ltd v Transfield Pty Ltd (1999) 153 FLR 236

Facts: The parties to the proceedings entered three contracts for the construction of the Osborne Co-Generation Project in Adelaide, South Australia. Proceedings commenced on the basis that the plaintiff claimed that the defendant had made certain representations during the tender negotiations that were misleading and deceptive. The defendant moved the court, on a notice of motion, seeking a stay of proceedings on the basis that the contracts contained express procedures for dispute resolution prior to either party commencing litigation. All three contracts contained identical dispute resolution clauses numbered as clause 28 in each agreement. The pertinent elements of clause 28 stated: 28.1 General The Purchaser [Transfield] and Supplier [Aiton] shall make diligent and good faith efforts to resolve all Disputes in accordance with the provisions of this section 28.1 [General] before either party commences mediation, legal action or the expert Resolution Process, as the case may be. If the representatives of the parties are unable to resolve a Dispute within 15 days after Notice from one Party to the other of the existence of the dispute (the “Dispute Notice”) and after exchange of the pertinent information, either party may, by a second Notice to the other Party, submit the Dispute to the Designated Officers of Supplier and Purchaser. A meeting date and place shall be established by mutual Contract of the Designated Officers. However, if they are unable to agree, the meeting shall take place at the site on the 10th business day after the date of the second Notice. The Designated Officers shall meet in person and each shall afford sufficient time for such meeting (or daily consecutive meetings) as will provide a good faith, thorough exploration and attempt to resolve the issues. If the Dispute remains unresolved five Business Days following such last meeting, the Designated Officers shall meet at least once again within five Business Days thereafter in a further good faith attempt to resolve the Dispute. For any Dispute which is unresolved at the conclusion of such meeting, each Party shall submit within 10 days thereafter a written statement of its position to the other party and the Dispute shall be immediately submitted to mediation pursuant to Section 28.2 [Mediation].

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28.2 Mediation If the Dispute is not resolved pursuant to the process established in Section 28.1 [General], either Purchaser or Supplier shall submit the same for mediation and the parties shall expressly agree upon the following process and subject to Section 28.5 [Limitation Periods] agree that Mediation shall be compulsory before either Party may commence legal action or initiate the Expert Resolution process, as the case may be: (a) The Party initiating shall provide Notice of that request to the other Party, including a summary of the Dispute, a written statement of its position and a list of four mediators acceptable to it. (b) Within five business days following receipt of the above Notice, the recipient Party shall provide the other Party with a written statement of its position on the Dispute, any objections and amendments that it may have to the other Party’s above mentioned summary of the Dispute and a list of four mediators acceptable to it if it does not accept an individual from the other Party’s list. (c) If the Parties are unable to agree on a mediator within five business days following delivery of the material mentioned in Subsection (b) above, then either party may apply on an expedited basis to have the mediator appointed by the President for the time being of the New South Wales Bar Association (or paramount officer of any successor organisation). The mediator shall have suitable qualifications and standing to mediate the Dispute. (d) The place of any mediation proceeding shall be in Sydney, New South Wales. (e) The mediator may conduct the proceedings in any manner he [sic] considers appropriate, taking into account the circumstances of the Dispute, any desires expressed by the Parties, and the desire for speedy resolution of the Dispute. The mediator may communicate with the Parties orally or in writing and may meet with the Parties together or individually. The Party initially referring the Dispute to mediation is entitled to make the first opening statement to the mediator. (f) The mediator shall not act as a representative or witness of either Party or otherwise participate in any Expert Resolution or judicial proceedings related to a Dispute that was the subject of mediation. (g) Statements made by either Party or the mediator in the course of the mediation process shall not be disclosed to any third party and shall not be introduced by either party in the Expert Resolution process or judicial proceedings, whether or not those proceedings relate to the Dispute that was the subject of the mediation. (h) The parties agree to use all reasonable endeavours in good faith to expeditiously resolve the Dispute by mediation.

Decision: His Honour found that clause 28 was uncertain as to the mechanism for apportionment of the mediator’s costs. Citing Mason J in Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1981) 149 CLR 337 at 347, applying BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 at 281-283, regarding the conditions necessary to imply a term into a contract, his Honour was not prepared to imply agreement on the uncertain issue of the apportionment of the mediator’s costs. Finally his Honour referred to the Australian Law Reform Commission paper entitled Review of the Adversarial System of Litigation (Issues paper 25, June 1998, Chapter 6, paragraph 6.20) and (at 252) concluded:

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It follows that the subject mediation clause is unenforceable. To my mind, the mediation clause is not severable from the negotiation clause. The two are intended to walk together as a staged procedure, constituting the dispute resolution process as agreed between the parties. As such, the agreement to negotiate must also be unenforceable.

[8.340] Given the decisions in Elizabeth Bay and Aiton, the question becomes: do parties have to actually set out detailed procedures of a dispute resolution process in the contract in order to evidence their requisite intention to be contractually bound to such a process? This question was answered in the negative in the Supreme Court of Victoria’s decision in Computershare Ltd v Perpetual Registrars Ltd (No 2) [2000] VSC 223.

CASE NOTE: Computershare v Perpetual Registrars (No 2) [8.350] 223

Computershare Ltd v Perpetual Registrars Ltd (No 2) [2000] VSC

Facts: The plaintiff entered an agreement with accountants Coopers & Lybrand where they would provide registry bureau services to Coopers & Lybrand’s “Share Registry Service”. The agreement contained a dispute resolution clause that provided: 24.1 A party must not start arbitration or court proceedings (except proceedings seeking interlocutory relief) in respect of a dispute arising out of this agreement (“Dispute”) unless it has complied with this clause. 24.2 A party claiming that a Dispute has arisen must notify the other party within 30 days of becoming aware of the matter the subject of the Dispute. 24.3 Within seven days after a notice is given under clause 24.2 each party must nominate in writing a representative authorised to settle the Dispute on its behalf. Each representative will use their best efforts to arrive at an amicable solution as soon as possible. 24.4 If the respective representatives of each party are unable to resolve the Dispute within 10 days (or such other period as agreed between the parties and in the absence of agreement, 10 days) after the notice is given, they must refer the dispute to the Chief Executive Officer of each party for resolution. 24.5 If the Chief Executive Officers cannot resolve the Dispute within 10 days after referral under clause 24.4, the parties must endeavour in good faith during the following 10 days: (a) to resolve the Dispute; or (b) to agree on: (i) a process to resolve all or at least part of the Dispute without arbitration or court proceedings (eg, mediation, conciliation, executive appraisal or independent expert determination), (ii) the selection and payment of any third party to be engaged by the parties and the involvement of any dispute resolution organisation, (iii) any procedural rules,

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(iv) the timetable, including any exchange of relevant information and documents, and (v) the place where meetings will be held. 24.6 The role of any third party will be to assist in negotiating a resolution of the Dispute. A third party may not make a decision that is binding on a party unless that party’s representative has so agreed in writing. 24.7 Any information or documents disclosed by a representative under this clause: (a) must be kept confidential; and (b) may not be used except to attempt to settle the Dispute. 24.8 Each party must bear its own costs of resolving a Dispute under this clause and, unless the parties agree otherwise in accordance with clause 24.5(b)(ii), the parties must bear equally the costs of any third party engaged. 24.9 After the second 10 day period referred to in clause 24.5 (or longer period between the parties), a party that has complied with clauses 24.2–24.5 may terminate the dispute resolution process by giving notice to the other party. 24.10 If a party does not comply with any provision of clauses 24.1–24.5 the other party will not be bound by clauses 24.1 –24.5.

A dispute arose between the parties and the defendants applied for a stay of proceedings so that clause 24 of the contract could be performed prior to litigation proceeding. Decision: Warren J granted the application for a limited stay of proceedings so that clause 24 could be performed within the time limits specified by the dispute resolution clause. Her Honour canvassed the usual cases, such as Hooper Bailie and Kirby P’s judgment in Coal Cliff Collieries, where his Honour stated that uncertainty in the drafting of a contractual term may be overcome where a third party is given power to resolve the uncertainty or where an ascertainable external standard can be applied. In applying the findings of the New South Wales Supreme Court, her Honour found that agreements to negotiate were capable of being enforced. Her Honour (at [14]) opined that most dispute resolution processes, other than arbitration that is governed by statute, are flexible as to their procedural elements, because of the many permutations and combinations that may be used to arrive at a resolution: Logically, parties cannot stipulate principles upon which mediation processes must produce an outcome. Of its very nature, the parties must negotiate and hold discussions to find their own solution. In essence, the parties are required to establish a protocol or framework within which matters between them are to be negotiated. In essence that is what mediation and conciliation are about.

As to the precise nature of the framework to be established under clause 24.5, Warren J, at [15], stated: Furthermore, where parties have made a special agreement requiring them to address a path to a potential solution there is every reason for a court to say such parties should be required to endeavour in good faith to achieve it. In these circumstances the court does not need to see a set of rules laid out in advance by which the agreement, if any, between the parties may in

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fact be achieved.

[8.360]

Whilst the court did not state specifically, it would seem that the judgment in Computershare relied on the objective test of intention to determine whether the dispute resolution clause contained the requisite certainty to be enforced. That is, the dispute resolution clause displayed a clear intention that the parties agreed to participate in a yet to be prescribed dispute resolution process. A decision of the NSW Court of Appeal in United Group Rail Services Ltd v Rail Corporation NSW [2009] NSWCA 177, has criticised the approach of Giles J in the Elizabeth Bay and affirmed the view of Einstein J in Aiton.

CASE NOTE: United Group Rail Services v Rail Corp NSW [8.370] United Group Rail Services Ltd v Rail Corporation NSW [2009] NSWCA 177 Facts: An appeal was lodged with the Court of Appeal after the judge at first instance found that a dispute resolution clause agreed to between the parties, which required them to seek to resolve disputes by “genuine and good faith negotiations”, was valid and enforceable. This appeal concerned the content and operation of a clause dealing with dispute resolution in the General Conditions of Contract of two contracts between Rail Corporation New South Wales, formerly the State Rail Authority of New South Wales and United Rail Group Services Ltd, under which United undertook to design and build new rolling stock for Railcorp. The dispute resolution clause stated: [35.11] Negotiation If: (1) a notice of appeal is given in accordance with Clause 35.9; or (2) the dispute or difference for which the notice under Clause 35.1 has been given does not relate to a Direction of the Principal’s Representative under one of the Clauses referred to in Attachment “A”, the dispute or difference is to be referred to a senior representative of each of the Principal and Contractor who must: (3) meet and undertake genuine and good faith negotiations with a view to resolving the dispute or difference; and (4) if they cannot resolve the dispute or difference within 14 days after the giving of the notice under Clause 35.1 or 35.9 (whichever is later), the matter at issue will be referred to the Australian Dispute Centre for mediation.

Decision: Clause 35.11(d) was held to be void for uncertainty because the Australian Dispute Centre did not exist. United then argued that if clause 35.11 was invalid then clause 35.12, the arbitration clause, was also invalid, because the two clauses were not severable which meant that any disputes arising between the parties were only justiciable in a

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court. Allsop P discussed at length the certainty of terms that include the phrase “good faith” negotiations. His Honour opined that the phrase “good faith” signifies in any particular context and contract will depend on that context and that contract. Allsop P made a number of qualifications adding that in Australia, the phrase does not, by its terms, necessarily import, or presumptively introduce, notions of fiduciary obligation familiar in equity or the law of trusts. Nor does it necessarily import any notion or requirement to act in the interests of the other party to the contract. His Honour noted that the phrase “genuine and good faith” in clause 35.11 was a composite phrase. It was a phrase concerning an obligation to behave in a particular way in the conduct of an essentially self-interested commercial activity: the negotiation of a resolution of a commercial dispute. Furthermore, as a matter of language, the Court suggested (at 639) that the phrase “genuine and good faith in this context needs little explication: it connotes an honest and genuine approach to the task”. However Allsop P disagreed with the reasoning of Giles J in Elizabeth Bay and subsequent cases that affirmed Giles J’s opinion, such as the decision of Hammerschlag J in Laing O’Rourke v Transport Infrastructure [2007] NSWSC 723, that an obligation to negotiate in good faith is uncertain because of “a necessary tension between negotiation, in which a party is free to, and may be expected to, have regard to self-interest rather than the interests of the other party, and the maintenance of good faith.” Allsop P (at 640) did not believe that such contradistinction existed on the following grounds: First, the obligation to undertake good faith does not require any step to advance the interests of the other party. Second, there is a voluntarily assumed requirement to take self – interested steps in negotiation by reference to the genuine and honest conception of the pre-existing bargain, including the rights and obligations there from and of the facts said to comprise the controversy. Within that constraint of those genuinely and honestly held beliefs as to the bargain, the required behaviour is genuine and good faith negotiations with a view to settlement or compromise.

Moreover, Allsop P (at 641) argued that the “yard stick” in which good faith is measured is honest and genuine negotiation, within a framework of fidelity to the bargain and the posited controversy. It is a question of fact to determine if and whether the parties have or have not met their good faith obligations. The Court believed that “parties are expected to co-operate with each other in the isolation of real issues for litigation and to deal with each other in litigation in court in a manner requiring co-operation, clarity and disclosure”.

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[8.380]

The decision in United Group Rail Services provides practitioners with a number of helpful reminders and some important changes when drafting dispute resolution clauses into commercial contracts.

First, a clause dealing specifically with mediation will need to state more than the name of the mediation organisation in order to avoid a finding of uncertainty. Specifically in United Group Rail Services, the mediation centre did not exist. Secondly, a clause requiring parties to meet and negotiate in good faith may no longer be void for uncertainty as has been suggested by Giles J in Elizabeth Bay, because the language was a reflection of the expected behaviour that the contracting parties would adhere to in the event of a dispute between the parties. From the above cases we can state that initially the New South Wales courts adopted a narrower definition of uncertainty than, for example, Victorian courts, which have recognised that dispute resolution is a self-determining, flexible process. It would seem now that the courts in New South Wales are taking a broader view that better reflects the contractual and commercial arrangements between parties. The Victorian courts acknowledge that the very nature of dispute resolution, which gives the parties the freedom to determine their own processes, may not always be able to be expressed with any great degree of certainty in a contract. The New South Wales courts appear to be heading in a similar direction following the Court of Appeal’s decision in United Group Rail Services. At the date of publication of this text, there have been no decisions of the High Court of Australia to provide guidance on how broadly one should read the legal concept of uncertainty as it pertains to dispute resolution clauses

Clause should avoid making a reference to good faith [8.390]

Prior to March 1995, most dispute resolution clauses included a requirement that the contracting parties endeavour to negotiate in good faith. However, after the decision of the New South Wales Supreme Court in Elizabeth Bay Developments Pty Ltd v Boral Building Services Pty Ltd (1995) 36 NSWLR 709, discussed above, it became dubious practice to include such a reference in a dispute resolution clause in a contract. In Elizabeth Bay, Giles J, had some difficulty ascertaining the meaning of clause 11 of the ACDC mediation appointment agreement which stated, “Each party confirms that it enters into this mediation with a commitment to attempt in good faith to negotiate towards achieving settlement of the dispute.” In particular, his Honour stated (at 716): On one view it was merely declaratory, a statement of the parties’ states of mind. It is difficult to regard the parties as having undertaken in 1993 to declare at a future time that they had (at the future time) a commitment to good faith negotiations: first, other than being a laudable emotion the declaration itself would not advance the process of mediation, and secondly by the future time one or other of the parties may well not have had that commitment. It is more

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likely that, as one of a number of paragraphs expressing rights and obligations in a formal legal agreement, clause 11 was intended to impose an obligation to negotiate in good faith. The obscurity in clause 11 is to be regretted, since it brought to the mediation agreement either a legally peripheral declaration likely to be disproved at the very time clause 11 was invoked or a purported obligation the recognition of which involved formidable legal difficulty: the cumulative uncertainty of “commitment”, “attempt”, “negotiate” and “in good faith” is forbidding. I do not think it matters which view is taken of clause 11. It is not easy to take a course requiring a party to assert a state of mind which it may well not have, and even less easy to take a course which compels a party to commit itself to the vagueness of attempting in good faith to negotiate with the other party to the dispute. The latter difficulty lies not so much in the ascertainment of the presence or absence of good faith, or even in the uncertainty of attempting, but rather in the necessary tension [emphasis added] between negotiation, in which a party is free to, and may be expected to, have regard to self-interest rather than the interests of the other party, and the maintenance of good faith: see Hooper Bailie Associated Ltd v Natcon Group Pty Ltd (at 209); Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1 at 26-27; Walford v Miles [1992] 2 AC 128 at 138 … In my opinion, to adjourn or stay the proceedings so that Elizabeth Bay would be required either to sign an unknown agreement as an important step in the process of mediation or to commit itself to attempting in good faith to negotiate towards achieving a settlement of the dispute, would require of Elizabeth Bay conduct of unacceptable uncertainty.

The decision in Elizabeth Bay defined a contractual agreement to negotiate in good faith as uncertain because it committed the parties to a course of behaviour that they may not have chosen to follow when a dispute eventually arose. His Honour hypothesised that defining the presence or absence of good faith was not an insurmountable issue, rather, what was more difficult was accounting for a party’s right to act with self-interest rather than in the interests of the other party, and how, under those circumstances, the parties could act collectively in good faith. So, between March 1995 and October 1999, an agreement to negotiate or mediate in good faith may not have been enforceable. The concept of the relationship between self-interest and acting in good faith, and the historical path that led the New South Wales Supreme Court to its decision in Elizabeth Bay was discussed in Aiton Australia Pty Ltd v Transfield Pty Ltd (1999) 153 FLR 236, a decision of the same court handed down on 1 October 1999. In Aiton, the plaintiff submitted that the concept of good faith was too imprecise and unenforceable. It is this submission that occupied a great deal of the court’s consideration. His Honour examined the issue in the context of whether the words “good faith” have a sufficiently certain meaning to be enforceable. His Honour (at 253) commenced his judgement with Lord Ackner’s well-known proposition in Walford v Miles [1992] 2 AC 128 at 138, that: … the concept of a duty to carry on negotiations in good faith is inherently repugnant to the adversarial position of the parties when involved in negotiations. Each party to the negotiations is entitled to pursue his (or her) own

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interest, so long as he [sic] avoids making misrepresentations. To advance that interest he must be entitled, if he thinks it is appropriate, to threaten to withdraw from further negotiations or to withdraw in fact, in the hope that the opposite party may seek to reopen negotiations by offering him improved terms.

Einstein J noted that a similar position to that of Lord Ackner was adopted by Giles J in Elizabeth Bay. In Walford, Lord Ackner went on to discuss the difficulty a court has in determining how a court can police such an agreement, whereas Einstein J suggested that Giles J, in Elizabeth Bay, was more concerned with how the parties could act in good faith when they have a right to act with self-interest rather than the interests of the other party. In relation to the view expressed by Giles J in Elizabeth Bay, Einstein J (at 254) stated: With great respect, I disagree – such tension … ought not be the linchpin in an argument that a good faith requirement in negotiation is too vague and uncertain to be meaningfully enforced. It is clear that a tension may exist between negotiation from a position of self-interest and the maintenance of good faith in attempting to settle disputes. However, maintenance of good faith in a negotiating process is not inconsistent with having regard to self-interest …

Einstein J suggested that good faith is not a synonym for settlement, nor does it prevent a party from withdrawing from negotiations. His Honour looked at the various cases and academic writings in this area. His Honour referred to Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 and stated (at 258): It appears to be common sense that as an obligation to act in good faith may, in principle, be legally recognised as an implied or imputed obligation, there is no reason why it should be struck down as uncertain in cases where there is an express contractual term, as in the present case.

Einstein J discussed the various definitions of good faith in the academic community and the popular view that good faith can be identified not by what it constituted, rather, by identifying when it is absent. His Honour referred to the Western Australian decision of Capolingua v Phylum Pty Ltd (As Trustee for the Gennoe Family Trust and Others) (1991) 5 WAR 137, where Ipp J delivered a costs sanction against a party who adopted an obstructive attitude in regard to the narrowing of issues, as evidence of bad faith. His Honour (at 263) concluded: To my mind, the matter should be approached as a question of principle, it being undesirable to attempt to formulate a list of factual indicia suggesting compliance or non-compliance with the obligation to mediate in good faith … The good faith concept acquires substance from the particular events that take place and to which it is applied. As such, the standard must be fact-intensive and is best determined on a case-by-case basis using the broad discretion of the trial court.

Einstein J then went on to discuss statutory good faith and referred at length to Western Australia v Taylor (Njamal People) (1996) 67 FCR 366, and Member Sumner’s detailed analysis of the concept of statutory good faith

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under the Native Title Act 1993 (Cth). His Honour summed up (at 268), quoting Badgery-Parker J, in State Bank of NSW v Freeman (unreported, Badgery-Parker J, 1996), at 11: An undertaking to mediate in good faith no doubt connotes a willingness on the part of a party to consider such options for resolution of a dispute as are propounded by the mediator or the opposing party; but it does not appear to me than an inference of lack of good faith can be drawn from the adoption of a strong position at the outset and a reluctance to move very far in the direction of compromise, without more.

In other words, good faith does not mean having to forfeit one’s own position in deference to the other party. In conclusion, Einstein J (at 268) stated his own view of the contents of an obligation to negotiate or mediate in good faith, by providing the following non-exhaustive terms: (1) To undertake to subject oneself to the process of negotiation or mediation (which must be sufficiently precisely defined by the agreement to be certain and hence enforceable). (2) To undertake in subjecting oneself to that process, to have an open mind in the sense of: (a) a willingness to consider such options for the resolution of the dispute as may be propounded by the opposing party or by the mediator, as appropriate; (b) a willingness to give consideration to putting forward options for the resolution of the dispute. Subject only to these undertakings, the obligations of a party who contracts to negotiate or mediate in good faith, do not oblige nor require the party: (a) to act for or on behalf of or in the interests of the other party; (b) to act otherwise than by having regard to self-interest.

His Honour acknowledged that, whilst there are difficulties in being able to prove a breach of an obligation to negotiate in good faith, it did not mean that an obligation to negotiate or mediate in good faith is devoid of meaning to the point where the agreement became too uncertain to be enforced at law. Finally, Einstein J (at 268) stated: In my view, the authorities and academic writings referred to above demonstrate that while the content of any good faith requirement depends on context (statutory or otherwise) and the particular factual circumstances, it is possible to delineate an essential framework for the notion of “good faith” such that the requirement of good faith in clause 28 is sufficiently certain for legal recognition of the agreement.

Notwithstanding his Honour’s judgment that clause 28 lacked sufficient certainty as to process and therefore the defendant’s notice of motion be dismissed, in his Honour’s view, the references to good faith negotiation contained the requisite certainty to be enforced at law. Aiton’s case is a very important decision. It stands at odds to the findings of Giles J in Elizabeth Bay on the issue of the recognition of contractual good faith negotiation.

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The subsequent decision by the full bench of the Court of Appeal in United Group Rail Services appears to have approved Einstein J’s conclusions in the court of original jurisdiction. In that case, Allsop P stated that the phrase “genuine and good faith” was a composite phrase. It was a phrase concerning an obligation to behave in a particular way in the conduct of an essentially self-interested commercial activity: the negotiation of a resolution of a commercial dispute. Furthermore, his Honour (at 639) stated as a matter of language, “that the phrase genuine and good faith in this context needs little explication: it connotes an honest and genuine approach to the task”. Allsop P also agreed with Einstein J that the tension which so disturbed Giles J was an unnecessary contradistinction because self interest and good faith were not mutually exclusive and the requirement to bargain in good faith created expectations for behaviour that would be met by both parties during negotiations. Elizabeth Bay and Aiton were judgments from single judges of the Supreme Court of New South Wales, whereas United Group Rail Services is a Court of Appeal decision meaning the deadlock between Elizabeth Bay and Aiton has been resolved in New South Wales. It is now clear that contractual good faith is sufficiently certain to be enforced. The Court of Appeal decision in United Group Rail Services, should allow drafters of contracts to state definitively that references to good faith negotiation contain the requisite certainty required by law and are no longer unenforceable.

Clause should provide a remedy for breach [8.400]

Courts are reticent to enforce dispute resolution clauses because of their inability to find a remedy for breach. In particular, the courts have struggled to be able to estimate damages or satisfy themselves that an order for specific performance will not require constant supervision. Given that damages and specific performance are the most common remedies sought by parties to a contract, the courts’ inability to grant such remedies in the case of dispute resolution clauses is a major frustration to parties seeking to enforce such clauses.

Damages

[8.410]

At common law, damages are a commonly sought remedy for breach of contract because most contracts are commercial in nature and financial compensation is usually adequate. The object of damages in contract is to compensate actual loss. That is, damages are awarded to place the non-defaulting party in the position that he or she would have been in if the contract had been performed. Damages in contract look at what the position of the non-defaulting party would have been if the contract had been performed. There are four rules to be observed by courts when awarding damages. They are: • there must be a causal connection between loss and breach (see Alexander v Cambridge Credit Corporation (1987) 9 NSWLR 310);

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• damages may not be too remote (see Hadley v Baxendale (1854) 156 ER 145); • damages are only compensatory (see Commonwealth of Australia v Amann Aviation Pry Ltd (1991) 174 CLR 64); and • damages must be mitigated (see British Westinghouse Electric Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673). Causation

[8.420]

In the case of dispute resolution clauses in contracts the first rule of damages can generally be satisfied. In fact, the issue of loss caused by one party’s failure to conduct itself appropriately at mediation has already been established by the courts in Capolingua v Phylum Pty Ltd (1991) 5 WAR 137 where Ipp J stated, at 140: In my view where, at a mediation conference, a party to an Expedited Proceeding under O 3lA adopts an obstructive or unco-operative attitude in regard to attempts to narrow the issues, and where it is subsequently shown that, but for such conduct, the issues would probably have been reduced, the extent to which the trial is in consequence unnecessarily extended is a relevant factor when deciding upon an appropriate award of costs.

Ipp J established that, among other things, the defendants’ attempts to frustrate mediation was the cause of certain quantifiable additional costs relating to the extra two days of trial time taken to have the dispute resolved by the court. However, as Mead notes in an article entitled “ADR Agreements: Good Faith and Enforceability” (1999) 10 Australasian Dispute Resolution Journal 40 at 48, “Causation is also likely to be an issue as there is no guarantee that, even if the party had complied with its ‘obligations’, the outcome of the mediation would have been any different”. Perhaps then, in relation to the rule requiring a causal link between breach and loss, courts are called upon to do, arguably, what they do best in causes of actions involving contract, that is, judge whether there has been a breach and estimate damages based on the evidence before the court that will adequately compensate the innocent party. Litigants can rely on the experience of judges to determine when performance of a dispute resolution term would have resulted in a diminution of damages thereby ensuring the causal link necessary for the awarding of damages. Remoteness

[8.430]

The second rule is that damages may not be too remote which means that if one party does not comply with a dispute resolution clause in a contract, damages will arise naturally or be within the contemplation of both parties to the contract. Given that dispute resolution is all about giving the parties the opportunity to settle disputes arising under the contract and/or narrowing the issues to be ultimately tried, it must be within the contemplation of parties that failure to comply with the

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contractually prescribed dispute resolution process means that further damages, even if only legal costs, are likely to be incurred. Admittedly, there is no guarantee that participating in a dispute resolution process will produce a resolution on all or any issues. However, if there is a chance of settling some or all of the issues in dispute between the parties and the parties have agreed by contract to participate in a dispute resolution process then losses that flow from non-compliance cannot be too remote from the breach. The author admits that this is an arguable proposition. Compensatory damages

[8.440]

The third rule is that damages can only be compensatory. This rule presents a problem in the case of dispute resolution clauses because it calls for a precise calculation of the losses based on the performance of the contract. What is the loss if a dispute resolution process is breached? Presumably there would be a reduction in the costs of resolving the dispute(s) arising out of the contract. Are these reductions quantifiable by a court? In truth, probably not, however, even given the problems in calculating precise quantum of compensatory damages, a court always has the discretion to award only nominal damages where a precise calculation of other heads of damages are impossible. In this respect, the third rule of awarding damages can be satisfied in the case of a breach of a dispute resolution clause in a contract.

Mitigation of damages

[8.450]

The fourth rule in the awarding of damages is that damages must be mitigated. In the case of dispute resolution clauses, the parties have to take positive action in an attempt to reduce their loss and not allow them to increase or do anything to inflate the loss suffered by not participating in the contractually agreed dispute resolution process. However, an interesting situation arises where a party contends that given the nature of the dispute and/or the parties to it, that settlement is highly unlikely. In such cases it may be the view of the dissenting party that participating in the contractually agreed upon dispute resolution process will only delay the inevitable hearing of the dispute and therefore increase the costs of the matter. In such circumstances such a party will be mitigating their loss by not agreeing to participate in the dispute resolution process and instead force the dispute to court. In such cases it can still be argued that participating in a dispute resolution process provides an opportunity to resolve issues in dispute or to narrow them for hearing and therefore, it is likely that participation will do some good and not be a waste of time thereby inflating the costs of resolving the dispute.

Specific performance

[8.460]

An order for specific performance means the court is requiring the defaulting party to perform the contract according to its terms. The court has the power to order specific performance of a particular term of

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the contract or the entire contract. Unlike the common law remedy of damages which are awarded as a right should a breach of contract be proved, an order for specific performance is an equitable remedy and therefore at the discretion of the court. In other words, parties cannot seek specific performance as a right and generally, there are six limitations on its use – specific performance is not available where: • damages would suffice (see Beswick v Beswick [1968] AC 58); • it would cause undue hardship (see Norton v Angus (1926) 38 CLR 523); • it is not mutually available (See Boyd v Ryan (1947) 48 SR (NSW) 163); • it is being used to enforce contracts of personal service (see Posner v Scott-Lewis [1986] 3 All ER 513); • the contract is defective (see E Johnson & Co (Barbados) Ltd v NSR Ltd [1997] AC 400 at 411); and • it would require constant supervision (see Patrick Stevedores Operations No 2 Proprietary Limited v Maritime Union of Australia (1998) 195 CLR 1). Sufficiency of damages

[8.470]

As to the first rule, specific performance is not available where damages will suffice. This is commonly the case in, for example, sale of goods disputes, where damages will allow the plaintiff to buy goods of an identical nature at, usually, the same or similar price. Of course specific performance will generally be granted where the goods are unique and cannot be purchased elsewhere. In the case of the performance of a dispute resolution clause in a contract it could be said that damages will not suffice as the awarding of damages is no substitute for the provision of dispute resolution service and a chance to resolve the dispute without recourse to the courts.

Undue hardship

[8.480]

The second rule is that specific performance is not available where it would cause undue hardship. Because specific performance is an equitable remedy, it will not be ordered if it would cause undue hardship to the defendant. It is unlikely that one could argue hardship in ordering a recalcitrant party to perform the dispute resolution provision in the contract, unless it could be argued that it is too costly, for example, flying participants from long distances away, or that ordering the process would detrimentally delay a hearing where one party is terminally ill.

Mutual availability

[8.490]

The third rule is that specific performance must be mutually available. Specific performance will not be ordered unless the remedy is available to both parties. For example, specific performance cannot be awarded against a minor because a minor may void the contract at any time during her or his minority. In such cases the successful party has no

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guarantee of performance, because the minor can void the contract at any time under common law. Presuming one party to a dispute resolution clause in a contract is not a minor, there should be nothing that should invoke this rule against the making of such an order. Contracts of personal service

[8.500]

The fourth rule is that specific performance is not available to enforce contracts of personal service. This is because such an order is an undue interference with personal liberty. The court does not wish to force one person to be the servant of another. Participation in a dispute resolution process would be classed as a professional not personal service and so it is unlikely that this rule against an order for specific performance would be invoked.

Defective contracts

[8.510]

The fifth rule is that specific performance is not available where the contract is otherwise defective. For example, if the contract is void for mistake, misrepresentation, illegality or duress, then the court will not seek to enforce it. Invoking this rule is more a matter of objective factors rather than the subjective nature of specifically performing a dispute resolution clause and therefore, this rule should not be of concern and its application will be straight forward.

Constant supervision

[8.520]

Finally, specific performance is not available for contracts that would require constant supervision. This is because the courts do not have the resources to provide constant supervision for such orders. In Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1, the court explained the meaning of the words “constant supervision” by stating (at 12): It may at first sight suggest that the judge (or some other officer of the court) would literally have to supervise the execution of the order … supervision would in practice take the form of rulings by the court, on applications made by the parties, as to whether there had been a breach of the order. It is the possibility of the court having to give an indefinite series of such rulings in order to ensure the execution of the order which has been regarded as undesirable.

Co-operative Insurance was considered by the High Court of Australia in Patrick Stevedores Operations No 2 Proprietary Ltd v Maritime Union of Australia (1998) 195 CLR 1, where the Maritime Union sought various orders seeking, amongst other things, the continuance by Patrick’s administrators of the running of the business and the employment of its members. The court noted that such orders sometimes contain the defect of the court being involved in constant supervision. The court referred to Co-operative Insurance, by stating (at 46-47): What is significant is the acceptance by the House of Lords that the concept of “constant supervision by the court” by itself is no longer an effective or useful

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criterion for refusing a decree of specific performance. Rather, Lord Hoffmann placed stress on other propositions. First, a person who is subject to a mandatory order attended by contempt sanction (which “must realistically be seen as criminal in nature”) ought to know with precision what is required; and second, the possibility of “repeated applications for rulings on compliance” with orders requiring a party “to carry on an activity, such as running a business over a more or less extended period of time” should be discouraged.

Co-operative Insurance and Patrick Stevedores can be distinguished when it comes to determining whether a court will enforce a dispute resolution clause by order for specific performance on the basis that, in both these cases, the issue was an order forcing the continued running of the business. In the case of enforcing a dispute resolution clause in a contract, an order for specific performance would seek to force the parties to participate in a dispute resolution process. However the legal principles espoused in Co-operative Insurance and Patrick Stevedores still apply in particular, whether ordering specific performance of a dispute resolution clause would create the possibility of repeat applications for rulings on compliance. Provided the dispute resolution clause is drafted with the requisite certainty as to the process to be followed by the parties, there is no reason why parties would need continually to move the court for directions on the execution of the order. Moreover, as in Co-operative Insurance, the difference between carrying on an activity and achieving a result becomes more acute. Enforcing a dispute resolution clause in a contract by way of an order for specific performance should be a case of the latter and not the former. Therefore, in a finite task such as performing a dispute resolution clause in contract, the sixth rule should not need to be invoked.

Conclusion as to remedies [8.530]

Finding a remedy for a breach of a dispute resolution clause is challenging but not impossible. Quantifying damages is probably the most challenging area for common law remedies. Compensating the nondefaulting party is the chief concern as the quantum of damages is uncertain given that nobody can accurately state the result of a dispute resolution process that did not occur. The solution of awarding nominal damages seems to be the way forward but may ultimately prove to be no incentive for parties to participate in dispute resolution processes. Making an order for specific performance of the dispute resolution clause is probably an easier alternative to damages as first, it forces the parties to honour their agreement and secondly, it is a more precise “science” in that it does not require a guesstimate of the quantum of losses suffered by the innocent party. Instead, it simply forces the parties to participate in a process that could yield a favourable result for the parties – participating on equal ground and sharing the cost. As with many issues in dispute resolution, we wait a superior court decision that fully explores the issue of appropriate remedies for a breach of a dispute resolution clause.

9

Ethics and Standards INTRODUCTION [9.10] As discussed in Chapter 1, formal dispute resolution developed from various professional groups, predominantly lawyers, psychologists and others. These groups developed a more consensual and client focused way of dealing with disputation. It developed from their professional practices and became part of those practices. Therefore, most of those professionals were bound by the ethics and standards of their professional groups and an additional set of ethical and practice standards were not really needed to cover the work that was seen as being part of those practices. However, the advent of the formalisation of dispute resolution has led to a group of professionals who practice dispute resolution outside of the profession in which they were originally trained or previously practiced. For this new generation of mediators, conciliators, arbitrators and others a code of ethics and practice standards may well assist them in observing a professional approach to their work, including an appropriate level of accountability. Other countries, such as the United States, have developed ethical codes that are usually state jurisdiction-based codes – because of this the American Bar Association (ABA) has not drafted a code of ethics for mediators and instead has produced an Ethics Code for Settlement Negotiations that relate to all such negotiations, for example settlement negotiations that occur as a result of litigation proceedings. In addition, the ABA does have an American Bar Association Model Standards of Conduct for Mediators (2005) and a code of ethics for commercial arbitrators. In Australia it has taken more than 30 years, since the formal advent of dispute resolution, to reach the point where ethical and practice standards were deemed important enough to act on. It is important to develop ethical and practice standards that adequately deal with dispute resolution as a vocation or profession and not to tack these requirements on to other professional codes of ethics and practice standards. Different professions have different ethical and practice standards and they develop in isolation of other professions because of their difference and the level of accountability and transparency expected by the clients of those professionals. In this respect the development of ethics and practice standards for dispute resolution practitioners is an important step in allowing the dispute resolution field to develop in a mature and client focused way. The only exceptions to this rule are when

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dispute resolution is being practiced as part of a profession – the law is a common example where under most head policies of insurance, barristers or solicitors practicing mediation are deemed to be doing so as part of their legal practice and are therefore covered by professional indemnity insurance. In such cases clients have an expectation that the lawyer mediator will adhere to the ethics and practice standards set out by the local law society, institute or bar association. F Blechman in an article entitled “Ethics and Field Building: The Chicken and the Egg” (2002) 19 Conflict Resolution Quarterly 373 raised the issue of whether the practice of dispute resolution is in itself a field of endeavour: I have often expressed doubt that those individuals and groups loosely associated under the umbrella “conflict resolution” constitute a field any more than the various plants and creatures in a wild meadow constitute a bounded, defined or managed field in the agricultural sense. We have no center [sic]. We have no boundary. We have no gate. We have no gate-keeper. We have no discipline for producing our products. We have no standards for our products when we take them to market. We have no standardized marketing or distribution networks.

Despite Blechman’s comments, which are over a decade old, dispute resolution is emerging as an area of practice in its own right and while there are more trained dispute resolution practitioners than there are disputes, there are still organisations whose core business is the provision of dispute resolution services and there are still employed staff within large national and multi-national organisations and government departments who are employed to provide dispute resolution for the benefit of their organisation.

DISPUTE RESOLUTION ETHICS Defining “ethics” [9.20] Defining what ethics are is not an easy task. Defining ethical approaches to the practice of dispute resolution is no less easy. At the simplistic end of the spectrum it means a common view of the aims, objectives and roles of the professional that binds all similar professionals. It is the inbuilt compass that professionals have that allows them to distinguish between what is right and wrong that assists them in their everyday practices. In Blechman’s article quoted at [9.10], the common phrase or catch cry of dispute resolution practitioners is to seek to “do no harm” when it comes to practising their skills. As an overriding ethical constraint, “do no harm” is not a bad guiding principle for dispute resolution practitioners. The Ethics Centre (formerly known as St James Ethics Centre) is an Australian independent not-for-profit organisation based in Sydney that provides an open forum for the promotion and exploration of ethical questions and defines “ethics” in the following way: Ethics aims to answer one big question. How should I live? Ethical beliefs shape the way we live – what we do, what we make, the world we create through our

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choices. Ethical questions explore what Aristotle called “a life well-lived”. Ethics isn’t just an exercise for philosophers or intellectuals. It is at the core of everyday life. We ask ethical questions whenever we think about how we should act. Being ethical is a part of what defines us as human beings. We are rational, thinking, choosing creatures. We all have the capacity to make conscious choices – although we often act out of habit or in line with the views of the crowd. We could all make conscious and conscientious ethical choices if we wanted to. Ethics provides a framework for answering these questions well. It allows us to be consistent in our judgements, provide reasons for our beliefs and to critically examine opinions. Most importantly, ethics allows us to act in a manner that accords with a set of core values and principles. Ethical people have what philosopher Thomas Aquinas called a “well-informed conscience”. They live what Socrates called “an examined life” – a life particularly associated with being human. Ethical people try to answer the question of how to live by reflecting on difficult situations. They then act in a way that is true to who they are and what they believe. (See http://www.ethics.org.au/about/what-is-ethics.)

In summary, “ethics” could be defined as knowing the difference between what is right and wrong. According to the Institute for Global Ethics: In our more than twenty years of doing research across the globe, we have discovered that while different people use different words to voice their values, the concepts nearly always can be distilled into a set of five or six shared values with a common subset: compassion, fairness, honesty, respect, and responsibility. (See https://www.globalethics.org/Who-We-Are/Fast-Facts.aspx.)

Accomplished dispute resolution academic and practitioner, Dr Rachael Field, in an article entitled “A Mediation Profession in Australia: An Improved Framework for Mediation Ethics” (2007) 18 Australasian Dispute Resolution Journal 178 views ethics in the following way: One of the purposes of such ethical standards, at a basic level, is to provide a quality benchmark against which a professional practitioner’s conduct can be measured so that, in the event that their practice departs “to a sufficiently marked degree” from the standards, that person can be excluded from their profession. There are significant factors implicit in a profession’s power to exclude members in such a way. These include: “ownership of a field of knowledge, autonomy over practices, control over entry and credentials, state recognition, and social status”.

Field’s paper identifies the hallmarks of a profession as its members being bound by an agreed set of ethical standards and concludes that ethics set a standard of conduct for the respective professional group. She also identifies for her reader: how to define a profession via the notion of expertise in the disciplinary field of knowledge, autonomy over their practice and control over qualifications and experience leading to entry in the profession. Further, ethics provide a benchmark for those seeking to join and stay in a profession that may be used punitively against those not wishing to comply with the stated benchmarks. Most importantly, these are

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elements that the public can measure the profession by. These are elements that can feasibly be applied to the area of dispute resolution.

Sample codes of ethics [9.30] The Law Council of Australia has drafted an Ethical Guidelines for Mediators (revised in 2011). These guidelines are intended to perform the following three major functions: 1) to serve as a guide for the conduct of mediators 2) to inform the mediating parties of what they should except, and 3) to promote public confidence in mediation as a process for resolving disputes. (See http://www.lawcouncil.asn.au/FEDLIT/images/Ethical_guidelines_for_ mediators.pdf, p 2.)

The Guidelines are a mix of ethical considerations, standards and processes for the conduct of mediation. The ethical elements of the Guidelines include the following matters: According to the Law Council of Australia, “… they [Guidelines] are offered in the hope that they will serve an educational function and provide assistance to individuals, organisations and institutions involved in mediation in all practice contexts”. The Guidelines are divided into 9 sections with commentary attached to assist in their interpretation. The Guidelines are reproduced below. 1. Impartiality A mediator may mediate only those matters in which the mediator can remain impartial and even handed. If at any time the mediator is unable to conduct the process in an impartial manner the mediator should withdraw. Accordingly, a mediator must avoid: (i) partiality or prejudice; and (ii) conduct that gives any appearance of partiality or prejudice. Comment (a) Whatever their own views and standards mediators should not only not be partial or prejudiced but should avoid the appearance of partiality or prejudice by reason of such matters as the parties’ personal characteristics, background, values and beliefs or conduct at the mediation. (b) Mediators should be conscious of behaviour which, however innocent, may be interpreted as indicating partiality or prejudice, such as spending more time with one party than another without good reason, socialising with a party and adopting different modes of address. (c) Even if all the disputants agree that they would like the mediator to express an opinion on the merits, there is a substantial risk in giving such an opinion that the mediator may no longer appear to be impartial. As a result the mediator may be obliged to withdraw. (d) Should the disputants agree to terminate the mediation and enter an alternative process, using the mediator, the mediator must consider the suitability of continuing as the appointed resolver and may need to withdraw altogether notwithstanding the parties’ wishes.

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2. Conflicts of interest Before the mediation begins, the mediator must disclose all actual and potential conflicts of interest known to the mediator. The mediator should: (i) discuss any circumstances that may, or may be seen to, affect the mediator’s independence or impartiality; and (ii) at all times be transparent about the mediator’s relations with the parties in the mediation process. Disclosure must also be made if conflicts arise during the mediation. After making disclosure the mediator may proceed with the mediation if all parties agree and the mediator is satisfied that the conflict or perception of conflict will not preclude the proper discharge of the mediator’s duties. The mediator must be certain of: (i) the parties’ agreement; and (ii) the mediator’s ability to undertake the mediation with independence and neutrality so as to ensure impartiality. Comment (a) Conflicts of interest may arise in recommending the services of others. It may be preferable to recommend referral services or associations which maintain rosters of qualified persons. (b) External pressures should never influence the mediator. The mediator’s commitment should be to the parties and the process. (c) Interests which should be disclosed include any association with a party or adviser or representative of a party, which could reasonably be seen to affect the impartiality of the mediator. (d) The mediator should disclose to the participants any circumstances which may cause, or have tendency to cause, a conflict of interest. In particular a mediator who is a partner or an associate of any representative retained by either of the parties should not act as mediator without the fully informed consent of all the parties. (e) The mediator should not establish a professional relationship with one of the parties in relation to the same dispute. 3. Competence A mediator must not mediate unless the mediator has the necessary competence to do so and to satisfy the reasonable expectations of the parties. A person who agrees to act as a mediator holds out to the parties and the public that she or he has the competence to mediate effectively. Comment (a) Competence comprises appropriate knowledge and skills which would normally be acquired through training, education, and experience. (b) Mediators should have available for the parties’ information regarding their training, education and experience. (c) When a person is appointed or nominated to a panel or list of mediators, the appointing court, tribunal, institution, or agency should ensure that the mediator has through training, education and experience acquired the necessary knowledge and skill for inclusion on the particular panel or list. (d) The qualifications for inclusion on a list of mediators should be made public and available to interested persons.

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4. Confidentiality Subject to the requirements of the law a mediator must maintain the confidentiality required by the parties. Comment (a) As the parties’ expectations regarding confidentiality are important, the mediator should discuss those expectations with the parties and endeavour to meet them. The mediator should clarify when the mediation begins and when it ends, and whether conversations on the telephone, in meetings and communications by email and other means are also confidential. (b) The parties’ expectations of confidentiality depend on the circumstances of the mediation and any agreements they, and any other persons present at the mediation, and the mediator may make. (c) A mediator should not disclose any matter that a party requires to be kept confidential (including information about how the parties acted in the mediation process, the merits of the case, any settlement offers or agreed outcomes) unless: (i) the mediator is given permission to do so by all persons attending at the mediation with an interest in the preservation of the confidence; or (ii) the mediator is required by law to do so. (d) The parties and the mediator may make their own rules with respect to confidentiality, or the accepted practice of the mediator or an institution may mandate a particular set of expectations. (e) If the mediator intends to hold private sessions with a party, the mediator should before such sessions discuss with the parties the confidentiality attaching to them. (f) Any reporting which requires a subjective judgment by the mediator of the conduct of the parties is likely to destroy the integrity of the mediation process. (g) Under appropriate circumstances, researchers may be permitted to obtain access to statistical data. (h) With the permission of all of the parties, researchers may be permitted access to individual case files, to observe mediations, and to interview participants. (i) A mediator should render anonymous all identifying information. When materials emanating from a mediation are used for research, supervision, or training purposes, the mediator should remove all identifying information from them..

[9.40] Other dispute resolution schemes have developed similar codes, the most organised being in the field of arbitration. There are numerous international arbitration regimes that prescribe rules and ethical standards for arbitrators acting under the respective regime. Most notable are: the London Court of International Arbitration; American Arbitration Association (AAA); and, the International Chamber of Commerce in Paris. Each of these organisations not only facilitates arbitration for willing parties but have their own set of rules for the conduct of their dispute resolution processes. However, not all providers have a code of ethics for the practice of arbitration. For example, the International Bar Association has Rules of Ethics for International Arbitrators however, of all the providers of arbitration services the AAA has the most comprehensive Code of Ethics. That Code was revised and came into effect on 1 March 2004. The AAA’s Code of Ethics for Arbitrators in Commercial Disputes sets out the following Canons of practice:

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• Canon I: An arbitrator should uphold the integrity and fairness of the arbitration process. • Canon II: An arbitrator should disclose any interest or relationship likely to affect impartiality or which might create an appearance of partiality. • Canon III: An arbitrator should avoid impropriety or the appearance of impropriety in communicating with parties. • Canon IV: An arbitrator should conduct the proceedings fairly and diligently. • Canon V: An arbitrator should make decisions in a just, independent and deliberate manner. • Canon VI: An arbitrator should be faithful to the relationship of trust and confidentiality inherent in that office. • Canon VII: An arbitrator should adhere to standards of integrity and fairness when making arrangements for compensation and reimbursement of expenses. • Canon VIII: An arbitrator may engage in advertising or promotion of arbitral services which is truthful and accurate. • Canon IX: Arbitrators appointed by one party have a duty to determine and disclose their status and to comply with this code, except as exempted by canon x. • Canon X: Exemptions for arbitrators appointed by one party who are not subject to rules of neutrality. Each Canon sets out in extensive detail the ethical boundaries arbitrators must observe and provides interpretive commentary to assist arbitrators to understand how ethics translate into behaviour. As an example of the detail and ethical approach taken by the AAA, the first Canon is reproduced below. Canon I: An arbitrator should uphold the integrity and fairness of the arbitration process. A. An arbitrator has a responsibility not only to the parties but also to the process of arbitration itself, and must observe high standards of conduct so that the integrity and fairness of the process will be preserved. Accordingly, an arbitrator should recognize a responsibility to the public, to the parties whose rights will be decided, and to all other participants in the proceeding. This responsibility may include pro bono service as an arbitrator where appropriate. B. One should accept appointment as an arbitrator only if fully satisfied: (1) that he or she can serve impartially; (2) that he or she can serve independently from the parties, potential witnesses, and the other arbitrators; (3) that he or she is competent to serve; and (4) that he or she can be available to commence the arbitration in accordance with the requirements of the proceeding and thereafter to devote the time and attention to its completion that the parties are reasonably entitled to expect. C. After accepting appointment and while serving as an arbitrator, a person should avoid entering into any business, professional, or personal relationship, or acquiring any financial or personal interest, which is likely to

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affect impartiality or which might reasonably create the appearance of partiality. For a reasonable period of time after the decision of a case, persons who have served as arbitrators should avoid entering into any such relationship, or acquiring any such interest, in circumstances which might reasonably create the appearance that they had been influenced in the arbitration by the anticipation or expectation of the relationship or interest. Existence of any of the matters or circumstances described in this paragraph C does not render it unethical for one to serve as an arbitrator where the parties have consented to the arbitrator’s appointment or continued services following full disclosure of the relevant facts in accordance with Canon II. D. Arbitrators should conduct themselves in a way that is fair to all parties and should not be swayed by outside pressure, public clamor, and fear of criticism or self-interest. They should avoid conduct and statements that give the appearance of partiality toward or against any party. E. When an arbitrator’s authority is derived from the agreement of the parties, an arbitrator should neither exceed that authority nor do less than is required to exercise that authority completely. Where the agreement of the parties sets forth procedures to be followed in conducting the arbitration or refers to rules to be followed, it is the obligation of the arbitrator to comply with such procedures or rules. An arbitrator has no ethical obligation to comply with any agreement, procedures or rules that are unlawful or that, in the arbitrator’s judgment, would be inconsistent with this Code. F. An arbitrator should conduct the arbitration process so as to advance the fair and efficient resolution of the matters submitted for decision. An arbitrator should make all reasonable efforts to prevent delaying tactics, harassment of parties or other participants, or other abuse or disruption of the arbitration process. G. The ethical obligations of an arbitrator begin upon acceptance of the appointment and continue throughout all stages of the proceeding. In addition, as set forth in this Code, certain ethical obligations begin as soon as a person is requested to serve as an arbitrator and certain ethical obligations continue after the decision in the proceeding has been given to the parties. H. Once an arbitrator has accepted an appointment, the arbitrator should not withdraw or abandon the appointment unless compelled to do so by unanticipated circumstances that would render it impossible or impracticable to continue. When an arbitrator is to be compensated for his or her services, the arbitrator may withdraw if the parties fail or refuse to provide for payment of the compensation as agreed. I. An arbitrator who withdraws prior to the completion of the arbitration, whether upon the arbitrator’s initiative or upon the request of one or more of the parties, should take reasonable steps to protect the interests of the parties in the arbitration, including return of evidentiary materials and protection of confidentiality. Comment to Canon I A prospective arbitrator is not necessarily partial or prejudiced by having acquired knowledge of the parties, the applicable law or the customs and practices of the business involved. Arbitrators may also have special experience or expertise in the areas of business, commerce, or technology which are involved in the arbitration. Arbitrators do not contravene this Canon if, by virtue of such experience or expertise, they have views on certain general issues likely to arise in the arbitration, but an arbitrator may not have prejudged any of the specific factual or legal determinations to be addressed during the arbitration.

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During an arbitration, the arbitrator may engage in discourse with the parties or their counsel, draw out arguments or contentions, comment on the law or evidence, make interim rulings, and otherwise control or direct the arbitration. These activities are integral parts of an arbitration. Paragraph D of Canon I is not intended to preclude or limit either full discussion of the issues during the course of the arbitration or the arbitrator’s management of the proceeding. (See https://www.adr.org/aaa/ShowProperty?nodeId=%2FUCM%2FAD RSTG_003867&revision=latestreleased.)

[9.50] In an article entitled, “Ethics and Professionalism in NonAdversarial Lawyering”, well-known dispute resolution academic, Professor Carrie Menkel-Meadow, developed an Aspirational Code of Conduct for lawyers in dispute resolution which states: 1. Lawyers should have an obligation to consider and inform the client about the possible methods of resolving a dispute, planning a transaction, or participating in legislative, administrative or other processes that might best address the client’s needs. Lawyers should educate themselves and their clients about all available options for handling the client’s matter. 2. Lawyers should promptly communicate all proposals to resolve disputes by any process suggested by other parties, clients or decision-makers. 3. Lawyers should consider and promptly communicate all substantive proposals for dispute resolution or transactional agreements to their clients, including both legally based remedies and resolutions and those that address other needs or interests. Lawyers should assist clients to consider non-legal concerns including social, ethical, economic, psychological and moral implications of any possible solutions or proposals. 4. Lawyers should not misrepresent to or conceal from another person, a relevant fact or legal principle (including opposing counsel, parties, judicial officers, third party neutrals or other individuals who might rely on such statements). 5. Lawyers should not intentionally or recklessly deceive another or refuse to answer material and relevant questions in representing clients. 6. Lawyers as representatives should not agree to a resolution of a problem or participation in a transaction that they have reason to know will cause substantial injustice to the other party. In essence, a lawyer should do no harm. 7. A lawyer serving as a third party neutral should decline to approve or otherwise sanction an agreement achieved by parties which the third party neutral has reason to know would effect an injustice on a party (or third party). 8. Lawyers serving as third party neutrals, such as arbitrators and mediators, should disclose all reasons the parties might consider relevant in determining if the neutrals have any bias, prejudice or basis for not acting fairly and without improper interest in a matter. 9. Lawyers serving as client representatives or as third party neutrals should fully explain to their clients and parties any and all processes and procedures that will be used to facilitate solutions, make claims, or plan transactions so parties can understand and participate in the decision about what procedures to use. 10. Lawyers should treat all parties to a legal matter as they would wish to be treated themselves and should consider the effects of what they accomplish for their clients. In essence, lawyers should respect a lawyers’ golden rule.

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(See, C Menkel-Meadow, “Ethics and Professionalism in Non-Adversarial Lawyering” (1999) 27 Fla St U L Rev 153 at 165-66.)

DISPUTE RESOLUTION STANDARDS [9.60] The former NADRAC formalised the debate on standards when in March 2000 it produced a discussion paper entitled, “The Development of Standards for ADR”. The discussion paper sought to address: • minimum standards for the provision of alternative dispute resolution services; • minimum training and qualification requirements for alternative dispute resolution practitioners including the need, if any, for registration and accreditation of practitioners and dispute resolution organisations; and • appropriate professional disciplinary mechanisms. (See https://www.ag.gov.au/LegalSystem/AlternateDisputeResolution /Pages/NADRACpublications.aspx.)

The discussion paper set up the need to create practice and accreditation standards and in particular (at 6.20-6.27) provided some legitimate but curious justifications for standards such as: 6.20 The accurate promotion of services – although this would already be covered pursuant to the Trade Practices Act 1974 (Cth) for corporations and the respective fair trading legislation for individuals. 6.21 Ensuring effective participation by parties – no document can prescribe effective participation and mediators can do only so much to ensure active engagement in the process by parties. 6.22 Eliciting information – this discussion item addresses the mediators role and is uncontentious as training courses already deal with this issue and again mediators can only do so much with parties that carry an agenda into mediation. 6.23 Effectively controlling the process – an aspirational discussion point that is limited to the behaviour of the parties themselves. 6.24 Exhibiting neutrality – some important issues raised here that are worthy of discussion but again covered by most basic mediation training. 6.25 Maintaining impartiality – some good discussion points worthy of consideration but difficult to codify in any meaningful way. 6.26 Maintaining confidentiality – interesting discussion points but adequately covered by the general law and the subject of mediation training. 6.27 Ensuring appropriate outcomes – a discussion point that is very much in the eyes of the beholder and difficult to codify in any meaningful way. (See https://www.ag.gov.au/LegalSystem/AlternateDisputeResolution /Pages/NADRACpublications.aspx.)

After the Discussion Paper was published, the Practice Standards for Mediators Operating under the National Mediator Accreditation System (Practice Standards) released in September 2007 and the National Mediator Accreditation System (NMAS) commenced operation on 1 January 2008. The Practice Standards apply to any mediator and specify competency requirements for mediators. Mediators voluntarily accredited under the

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Australian National Mediator Standards must comply with the Approval Standards as well as the Practice Standards. The Approval Standards apply to any person who voluntarily seeks to be accredited under the NMAS to act as a mediator. The requirement to be accredited pursuant to the NMAS and therefore to adhere to the Practice Standards only affects those mediation schemes that have adopted the NMAS as the standard by which to appoint mediators to court annexed and other mediation programs. The NMAS does not affect private mediation practice. Further, section 1.3 of the Practice Standards recognises that legislative frameworks for the conduct of mediation prevail over the NMAS where there is a conflict. To date there is no evidence that the standard of mediation has improved as a result of the introduction of the NMAS and the Practice Standards. However, the NMAS is well intentioned as it strives to ensure a consistent approach to the training of mediators and their concomitant practice.

Practice Standards [9.70] The Practice and Approval Standards were revised under a single NMAS document which became effective on 1 July 2015. The document contains the following sections: an Introduction; Approval Standards; Practice Standards; Recognised Mediator Accreditation Bodies; Register of Nationally Accredited Mediators; and, Mediator Standards Board. The purpose of the NMAS is stated in the following way in the Introduction: The NMAS promotes quality, consistency and accountability of NMAS accredited mediators within the diversity of mediation practice in Australia. It informs participants in mediation (participants) about what they can expect of a NMAS accredited mediator. (See http://www.msb.org.au/mediator-standards/standards, p 2.)

Section 1.2 of the Practice Standards state: The Practice Standards: (a) specify the minimum practice and competency requirements of a NMAS accredited mediator; (b) inform participants and others about what they can expect of the mediation process and of a NMAS accredited mediator; and (c) should be read in conjunction with the Approval Standards (Part II of the NMAS), with which a NMAS accredited mediator must also comply. (See http://www.msb.org.au/mediator-standards/standards, p 9.)

Section 2 of the Practice Standards describes a facilitative model of mediation although acknowledges and places the following proviso pursuant to section 10.2, on an evaluative approach to mediation: Where a mediator uses a blended process such as advisory or evaluative mediation or conciliation, which involves the provision of advice, the mediator must: (a) obtain consent from participants to use the blended process; (b) ensure that within the professional area in which advice is to be given, they

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(i) have current knowledge and experience; (ii) hold professional registration, membership, statutory employment or their equivalent, and (iii) are covered by current professional indemnity insurance or have statutory immunity, and (c) ensure that the advice is provided in a manner that maintains and respects the principle of self-determination. (See http://www.msb.org.au/mediator-standards/standards, p 9.)

Section 3 of the Practice Standards deals with the conduct of mediation and the preliminary conference or intake procedures. Most importantly it asks mediators to assess if the dispute is conducive to mediation giving examples of culturally sensitive matters or where violence has been part of the dispute where mediation may not be an appropriate method of resolution. Section 4 describes the mediation meeting and states that parties are required to communicate “directly” with each other which implies a face-to-face meeting. It also mentions the use of separate sessions and shuttle negotiation as methods that may assist parties to resolve their dispute during mediation. Section 5 of the Practice Standards provides guidance on suspending or terminating mediation and states, at 5.1: Where a mediator uses a blended process such as advisory or evaluative mediation or conciliation, which involves the provision of advice, the mediator must: (a) a participant is unable or unwilling to participate or continue in the mediation (b) a participant is misusing the mediation (c) a participant is not engaging in the mediation in good faith (d) the safety of one or more participants may be at risk (See http://www.msb.org.au/mediator-standards/standards, p 10.)

Section 6 discusses balancing power imbalances and gives some suggestions on how to achieve this and section 7 discusses procedural fairness (as to bias) and impartiality. Sections 7.1 and 7.5 listed respectively below create difficulties in terms of the conduct of separate sessions. A mediator must conduct the mediation in a fair, equitable and impartial way, without favouritism or bias in act or omission. A mediator must provide participants appropriate opportunities to speak to and be heard by one another in the mediation, and to articulate their respective interests, issues and underlying needs. (See http://www.msb.org.au/mediator-standards/standards, p 11.)

The conduct of separate sessions casts doubt over whether mediation can be conducted “fairly” (section 7.1) given the requirement for participants “to speak to and be heard by one another” (section 7.5) if they are in separate rooms with the mediator during separate sessions.

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Section 8 of the Practice Standards deals with ethical conduct and professional relations and requires mediators, among other things, to adhere to their respective ethical codes or standards and to not use information obtained at mediation for personal gain or advantage. Section 9 sets out standard confidentiality requirements found in statutory and non-statutory schemes. Section 10 provides that mediators must have requisite knowledge, skills and an understanding of the ethical principles of mediation. The section lists examples of the stated knowledge and skills and includes having an understanding of the nature of conflict. Section 11 of the Practice Standards deals with charging fees for service and requires mediators to obtain agreement about the level and apportionment as between the parties of fees for mediation. It also appropriately prohibits charging according to the outcome of mediation. Finally, section 12 ensures that mediators do not misrepresent their qualifications and experience and must not guarantee results when seeking work as a mediator. The Practice Standards are an aspirational set of ideas, but it is a folly to assume that “one size fits all”. The Practice Standards also ignore the fact that mediation is a process owned by the parties, not a separate set of standards and if the parties want the process to be conducted in a way that suits them, then a set of standards should not obstruct the process. This is partially recognised by the waiver contained in section 13 of the Practice Standards which states: In exceptional circumstances the MSB may, conditionally or otherwise, waive compliance with any provision of the Approval Standards on application by an RMAB. (See http://www.msb.org.au/mediator-standards/standards, p 15.)

A waiving of standards upon application by a recognised mediation accreditation body (RMAB) opens up the possibility of standards not being observed or being observed in an inconsistent way. This raises the concern over whether there can be a consistent application of the Practice and Approval Standards which is not a desirable outcome from the implementation of those standards, although the Mediator Standards Board (MSB) controls waivers that have to satisfy the “exceptional circumstances” test. It also raises the question of whether the standards are too prescriptive thereby holding back the natural development of dispute resolution for parties who want a more tailored approach to their dispute resolution process. This in turn raises the question, “Whether we need prescriptive standards at all?” Section 6 deals with confidentiality and does not appear to be consistent with current law. For example, subsection 6(7) states: Where the participants reach an agreement in a mediation process, the substance of the proposed agreement may, with the permission of participants, be

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disclosed to their respective representatives, advisors or others and may be used in a de-identified form for debriefing, research processes and discussion purposes.

Approval Standards [9.80] The Approval Standards apply to any person seeking accreditation and to a mediator already accredited. Section 1.2 of the Approval Standards state: The Approval Standards: (a) specify the training, assessment, personal qualities and experience required of a NMAS accredited mediator and for their renewal of accreditation (b) should be read in conjunction with the Practice Standards (Part III of the NMAS), with which NMAS accredited mediators must also comply. (See http://www.msb.org.au/mediator-standards/standards.)

Section 2 of the Approval Standards require applicants for accreditation to evidence their good character by two community references and numerous disclosures. Applicants are also required to comply with the Approval and Practice Standards and remain members of the RMAB. Further, applicants must agree to maintain professional indemnity insurance or have statutory immunity. Applicants must have completed a training and assessment programme that meets the requirements of the standards which is specified (at 2.3 and 2.4) as being: 2.3 The training requires: (a) a training course of a minimum of 38 hours in duration which may be conducted as a single course or in modules over a period of up to 24 months; (b) a training team of at least two trainers in which the principal trainer has more than three years’ experience both as a NMAS accredited mediator and as a trainer; (c) sufficient coaches for each trainee to be observed performing the role of mediator by different coaches in two simulated mediations each of at least 1.5 hours in duration; (d) coaches who are accredited as mediators under the NMAS and have at least two years or 50 hours mediation experience and who provide written feedback to the trainees they have observed; (e) each trainee participating in at least nine simulated mediations, in at least three of which they perform the role of mediator; (f) content that includes the knowledge, skills and ethical principles articulated in the Practice Standards. 2.4 The assessment requires: (a) an applicant, at a minimum, performing the role of a mediator in a simulated mediation of at least 1.5 hours; (b) an assessor observing a simulation (in real time or digitally or video recorded for later observation) without providing any coaching to the applicant during the simulated mediation; (c) an assessor who is a NMAS accredited mediator with at least 3 years mediation experience and with no conflict of interest with respect to the applicant and who is independent of the training team;

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(d) assessment criteria reflecting the knowledge, skills and ethical principles articulated in the Practice Standards; (e) an applicant being found competent by an assessor using an assessment form documenting the extent to which the applicant has met or has not met the assessment requirements; providing written feedback on the applicant’s performance and indicating the assessment outcome; (f) in so far as circumstances allow, a copy of the assessment form being supplied to the applicant a reasonable time prior to the conduct of the assessment. (See http://www.msb.org.au/mediator-standards/standards.)

Section 2.5 of the Approval Standards states that accreditation can also be achieved via the recognition of prior learning (RPL) which is probably aimed at mediators who have gained training and experience prior to the implementation of the NMAS and for mediators from overseas. The RPL requirements under the NMAS are based on the following three elements: comparable training; or, experience, education and assessment; or, knowledge, experience and assessment. Pursuant to section 2.6, accreditation is for two years. Section 3 states that renewal of accreditation must satisfy the Approval Standards and mediators must have conducted at least 25 hours of mediation within any two-year cycle. There is also a lesser requirement of 10 hours plus additional training or coaching given the lack of work opportunities available for some mediators. Section 3.5 states that all mediators must undertake 25 hours of continuing professional development that can fall within seven different listed categories. Another condition of renewal is payment of the MSB registration fee. The Approval Standards allow for a leave of absence from the list of accredited mediators pursuant to section 4 and section 5 states that mediators can be suspended for “significant non-compliance” of the standards and the MSB upon receiving a request, may advise the home RMAB of the mediator about such a suspension. Like the Practice Standards, the Approval Standards have a waiver of standards mechanism in section 7 which states, “In exceptional circumstances the MSB may, conditionally or otherwise, waive compliance with any provision of the Approval Standards on application by an RMAB”.

Mediator Standards Board [9.90] The Mediator Standards Board (MSB) was officially launched on 7 September 2010 and is responsible for the development of mediator standards and the implementation of the National Mediator Accreditation System (NMAS) in Australia. The MSB is a public company limited by guarantee. Section 3 of the Constitution of the Company states: Without limiting or derogating from the inherent powers of the company in any way, the objects of the company are: (a) to develop, maintain and amend the National Mediator Accreditation System (NMAS), which includes the Australian National Mediator Standards (the

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Standards). The documents that comprise the Standards as at the date of this constitution are the Practice Standards and the Approval Standards and are attached to this constitution as Attachment A; (b) to oversee the application of the Standards with a view to achieving consistency, quality and public protection regarding mediation services and mediation training; (c) to support, complement and encourage members in their efforts to meet their objectives in relation to the Standards; (d) to ensure the training and accreditation of mediators continues to develop; (e) to require records to be maintained of mediators who are accredited under the Standards and to facilitate access to accredited mediators; and (f) to carry out such other functions and purposes which are necessary or incidental to the objects listed above.

The MSB will have members that will contribute to the objectives of the organisation. Section 5.1 of the MSB’s Constitution states: (a) Unless otherwise resolved by the company in a general meeting, the membership of the company will consist of the following membership classes: (i) RMAB Organisation Member – being an organisation that is a Recognised Mediator Accreditation Body under the National Mediators Accreditation Standards; (ii) Professional Organisation Member – being a professional or service organisation that has at least 30 mediator members accredited under the NMAS and that is not a RMAB; (iii) Representative Organisation Member – being a national or state based representative organisation that has 3 or more RMAB members; (iv) Training Organisation Member – being an organisation that provides education and training as set out in the Approval Standards to at least 25 participants per year; (v) Government Member – being: (A) a Commonwealth government agency nominated by the Commonwealth Attorney-General’s Department and that is not an RMAB; or (B) a government agency from each State and Territory nominated by the Attorney-General or equivalent in each State or Territory and that is not an RMAB with ADR policy expertise; (vi) Community Organisation Member – being a community or state based mediation organisation that is not a RMAB; and (vii) Consumer Organisation Member – being an organisation that uses, but does not provide, mediation services. (b) Organisations that fulfil the requirements of one or more membership class may only become members under one membership class.

Part VI of the NMAS deals with the role and membership of the MSB and largely replicates the above quoted passages from the MSB’s Constitution.

Family Dispute Resolution Practitioner standards and accreditation [9.100]

In 2008 the Commonwealth announced a new scheme for accrediting Family Dispute Resolution Practitioners who are defined

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pursuant to s 10G(1) of the Family Law Act 1975 (Cth) as being: (a) a person who is accredited as a family dispute resolution practitioner under the Accreditation Rules; or (b) a person who is authorised to act on behalf of an organisation designated by the Minister for the purposes of this paragraph; or (c) a person who is authorised to act under section 38BD, or engaged under subsection 38R(1A), as a family dispute resolution practitioner; or (d) a person who is authorised to act under section 93D of the Federal Circuit Court of Australia Act 1999, or engaged under subsection 115(1A) of that Act, as a family dispute resolution practitioner; or (e) a person who is authorised by a Family Court of a State to act as a family dispute resolution practitioner.

Pursuant to s 10G(2), Family Law Act 1975, the Minister must publish a list of organisations designated for the purposes of paragraph (b) of the definition of Family Dispute Resolution Practitioner. Regulation 5 of the Family Law (Family Dispute Resolution Practitioners) Regulations 2008 (Cth) lists the following criteria for accreditation relating to qualifications and competencies: (1) It is an accreditation criterion for a person that the person has, or is entitled to, the award of a Vocational Graduate Diploma of Family Dispute Resolution from a registered training organisation. (2) It is an accreditation criterion for a person that the person has, or is entitled to, a certified postgraduate award. (3) It is an accreditation criterion for a person that the person: (a) either (i) has, or is entitled to, the award of an appropriate qualification; or (ii) has been accredited by a Recognised Mediation Accreditation Body under the National Mediator Approval Standards and remains accredited under those Standards; and (b) either (i) has been assessed as competent by a registered training organisation against the 6 compulsory units of competency for the award of a Vocational Graduate Diploma of Family Dispute Resolution; or (ii) has completed the units of a postgraduate degree or diploma certified by a higher education provider under subregulation 8(1). (4) It is an accreditation criterion for a person that the person: (a) is registered, until 30 June 2009, on the Family Dispute Resolution Register established under Part 4B of the other Regulations; and (b) has either: (i) been assessed as competent by a registered training organisation against the 3 specified units of competency; or (ii) completed the units of a postgraduate degree or diploma certified by a higher education provider under subregulation 8(2). (5) For subparagraphs (4)(b)(i) and (ii), a registered training organisation or higher education provider may only assess a person as competent against the 3 specified units until 30 June 2011.

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These new regulations provide for the granting, obligations, suspension and cancellation of accreditation of Family Dispute Resolution Practitioners, and while they refer to the NMAS, must be read alongside the Standards.

Standards for lawyers in mediation [9.110]

The Law Society of New South Wales is one of the early adopters of dispute resolution as part of the professional practice of lawyers. Its Dispute Resolution Committee was formed in 1986 and has been advising the Council of the Law Society of New South Wales and the general public on the appropriate approach to the promotion and facilitation of dispute resolution since then. Unsurprisingly, very early on in the development of dispute resolution schemes in Australia, the Society developed ethics and standards-based approaches for the practice of dispute resolution by its members. The Law Society became a recognised mediation accreditation body under the NMAS in 2008 and accordingly offers national accreditation to lawyers who are members of the Society engaged in mediation practice who meet the criteria set out in the Approval and Practice Standards. In keeping with its “community service and client-centred approach” to the practice of law, the Law Society of New South Wales granted permission for key documents from its well-established Dispute Resolution Kit to be reproduced in this text. The Kit is available to the public at https:// www.lawsociety.com.au/community/disputesandmediation/index.htm. Appendices 1-6 set out a range of important documents that assist in the proper facilitation of the use of dispute resolution. Appendices 1-3, in part, specifically deal with the standards the New South Wales Law Society expects its lawyer members to achieve when mediating or representing a client in mediation.

[9.120]

The Law Council of Australia also has sets of guidelines for: parties in mediation; lawyers in mediation; and, ethics in the conduct of mediation. The Guidelines for Lawyers in Mediation (August 2011) raises many of the same issues addressed in the Law Society of New South Wales, Dispute Resolution Kit but in addition has advice (at section 3) on when to mediate which states: Timing is an important factor in establishing a framework conducive to settlement. There is no conclusive rule as to whether, or when, a case is suitable for mediation. Various factors should be considered, including the nature of the dispute and the mindsets of the parties. Comment (a) Most cases are suitable for mediation at some point in time. Costs of litigation are a persuasive factor in favour of mediation. (b) Mediation may be undertaken at any time and should be considered: (i) before proceedings are commenced; (ii) after pleadings have closed, but before the costs of discovery are incurred;

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(iii) before an action is set down for trial and trial costs are incurred; and (iv) after a trial and before judgment. (See http://www.lawcouncil.asn.au/FEDLIT/images/Guidelines_for_ laywers_in_mediations.pdf.)

Like its New South Wales counterpart, the Council’s Guidelines remind all parties to mediation that the role of the lawyer is not to negotiate in an adversarial way by stating, at 6.1, “A lawyer who adopts a persuasive rather than adversarial or aggressive approach, and acknowledges the concerns of the other side, is more likely to contribute to a better result”.

Conclusion [9.130]

The drafters of the NMAS Standards probably approached their task with best intentions and in the hope that the standard of mediators and mediations would improve. What the MSB measures improvement against is anyone’s guess – because of the confidential nature of mediation it is almost impossible to determine what standard of mediators and mediations existed in the marketplace before the Standards were implemented. Measuring standards achieved in mediation is as hard as measuring success rates. Nevertheless, the Standards are utopian in their aims and objectives and it is probably the case that no harm will occur with their introduction. However, it is a pity that mediators, who already struggle to secure paid work, will have to pay more to not only become trained but now to be accredited and to maintain their accreditation. The Standards have probably benefitted the training providers more than the field of mediation. The Standards themselves have many provisions that would be impossible to enforce and there is the potential for litigation to arise when a mediator has their accreditation withdrawn because of a breach of a Practice Standard. The intake procedures set out in section 3 and the competency standards of mediators set out in section 7 of the Practice Standards are examples of largely unenforceable aspirations that provide punitive measures of withdrawal of accreditation, yet provide no objective standard by which to measure a breach. As the NMAS starts to take hold requiring accredited mediators to subscribe to the Practice and Approval Standards it will be interesting to observe whether the evolution of standards produces better quality mediators and mediations. The real issue is whether the money spent on the NMAS delivers a better quality mediator and mediation to the users of dispute resolution services thereby benefitting the entire community. Time will tell.

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The Future of Dispute Resolution INTRODUCTION [10.10]

Dispute resolution is a dynamic field. Hybrid forms of traditional dispute resolution processes are constantly developing, most commonly in organisations that adopt the principles of dispute management and resolution and tailor processes to suit their own needs. New formal processes such as collaborative law and restorative justice techniques have developed in recent times and dispute resolution boards and partnering are growing in popularity, particularly in the building and construction areas. From an initial flurry of enthusiasm, online dispute resolution is consolidating and taking its place, particularly in the realm of transnational transactions. The rise in the creation of tribunals in every jurisdiction of Australia further evidences the move to triage disputes away from the courts into specialist adjudicative bodies that can deal quickly and cost efficiently with jurisdiction-specific disputes. The increase in references to court-appointed referees that in some States and Territories of Australia has led to the demise of domestic arbitration, is evidence of a further diversion of disputes away from curial adjudication leaving courts free to only deal with disputes that are worthy of the their time. The rise in legislative court-annexed programs and the mirroring of the aims of s 56 of the Civil Procedure Act 2005 (NSW) in some other States that have as their overriding objective that in civil proceedings the court, lawyers and clients must facilitate the just, quick and cheap resolution of the real issues in the proceedings, are all signs that the landscape of litigating disputes has changed and will continue to change into the future. There are reports from the United States that in some jurisdictions there are vacant court rooms, judges appointed in the last 3-5 years that have not conducted a trial and lawyers with five years practice experience similarly who have not conducted a trial that evidence a reorganisation of the state’s method of dealing with disputes. While the “vanishing trial phenomenon” is a very real situation being experienced in the United States, in Australia its effects are only just beginning to be felt. The future of dispute resolution is likely to include a further readjustment of the curial methods of dispute resolution that will include further hurdles for civil disputes that will ensure only those disputes worthy of curial adjudication will reach the courts. Worthy disputes will include those matters that have the potential

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to change the law or adjust its application to certain factual scenarios and disputes that create new law for the dynamic society that it serves. The other unstoppable condition is the rise of disruptive technology and its effect on the future dispute resolution customers and practitioners. In the last decade society has seen and participated in online opportunities to resolve disputes and while the popularity of such opportunities has reached a plateau in the last five years, its future is still assured based on the generations of digital natives that are starting to appear as consumers. While the digital natives have only recently come of age, as a generation they will be the future customers and practitioners of dispute resolution in cyberspace that will be mobile in nature and have far greater just-in-time demands than any generation before them. In reflecting on the last 40 years of formalised dispute resolution and the heady days of the 1990s which saw the greatest rise in the adoption of dispute resolution processes and the training of dispute resolution practitioners, it has to be stated that dispute resolution itself has let down many of those who saw a bright new future in resolving conflict in our society. That decade, and beyond, produced more dispute resolution practitioners than disputes because many dispute resolution practitioners possessed a blinkered view of what disputation is really about and their potential role in its management and resolution. There is an opportunity to reconfigure the role of the dispute resolution practitioner and allow him or her to cast the net of their expertise wider than the mere ability, for example, to just mediate. There is an opportunity to provide a more fulsome and useful array of services to disputants than ever before. Law firms have, largely unconsciously, been providing these sorts of services for decades and remain the popular first choice for disputants who need help managing disputes. A “full service” dispute resolution practitioner or conflict coach or adviser is nowadays better placed to assist disputants with the array of options available as compared to just a conciliator or mediator. A person who can assist a client in avoiding disputes is probably of more value than a person who can help resolve the dispute once it has formally arisen. A combination of both is worth even more in the market place. While the future of dispute resolution is probably assured, it will need to realign its service provision base and be able to speak to the digital natives. In other words, like any other service or product, dispute resolution will need to, at the very least, move with the market and preferably be ahead of the market when it comes to the types of services being offered and the delivery of those services. That challenge waits the next generation of dispute resolution providers.

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THE VANISHING TRIAL PHENOMENON [10.20]

Data from the New South Wales Law Foundation’s former Civil Justice Research Centre in 1993 showed that somewhere between 60% and 80% of all civil disputes settle before a court hearing or if they commence to hearing, before judgment. In other words, significantly more disputes settle than are ultimately adjudicated by the courts. Such comparative data is no longer produced and many of the courts in Australia do not publically publish comparative data that tracks civil litigation once proceedings have commenced. However, the New South Wales District Court and the Victorian County Court track and publically publish this data that shows that in both courts there has been a decrease in new civil filings. In the New South Wales District Court there has been a decrease in new civil filings from 22,860 in 1990 to 5,297 in 2009 while the Victorian County Court shows a more dramatic drop in civil filings from approximately 8,000 in 2002/2003 to 5,388 in 2007/2008. The following commentary and data comes from an article by the author entitled, “The Decline of the Trial in Australia” (2011) 30(2) The Arbitrator & Mediator 1.

Figure 10.1 Civil cases disposed of in the Sydney Registry of the District Court of New South Wales by trial and settlement (1990-2009)

Figure 10.1 above shows the New South Wales District Court’s disposal rate and the manner in which cases are disposed of. Again, there are noticeable peaks and troughs, some of which coincide with the peaks and troughs experienced by the court regarding new filings. For example, the 1996 peak in disposals coincided with the introduction of the court’s civil case management system, which sought to ensure that as many matters as possible, both new and existing, were disposed of within 12 months from commencement and which set percentage quotas for the disposal of new filings. The number of cases disposed of by trial follows the overall

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disposal rates of the court. Disposal by hearing rates dropped from a peak in 1990 of 3,028 or 34% of all disposals, to 570 or 15% of all disposals in 2009. From the court’s figures it seems that there has been a reduction in the number of trials as a percentage of dispositions over 20 years, from 34% of disposed cases in 1990 to 15% of disposed cases in 2009. However, it is more realistic to observe that the peak of 34% of trials (as a percentage of disposed cases) in 1990 has no cause other than the court’s desire to deal with an influx of new filings in that year, and that the true percentage of trials as a percentage of all disposals is around 10%-20% over the last 20 years. In other words, the court’s data shows that trials in the court are diminishing but that may, in part, be due to the decrease in filings. Filings have decreased in the court from a high of approximately 18,644 in 1990 to 3,609 in 2009. Perhaps the better proposition is that filings are vanishing in the court, with a concomitant effect that trials are diminishing. Another interesting result from the court’s data is the post-1998 pattern that shows that when settlement rates increase, trial rates decrease. Most notable are the figures from 2002 that show that as settlements increased to 71% of all disposals, trials decreased to 10% of all disposals – a pattern that mirrors overall disposal rates. Figure 10.2 shows at what stage settled cases were disposed of in the Sydney Registry of the court. This gives an indication of the proactive nature of the District Court in giving litigants the opportunity to settle their cases before commencing a trial. The data shows an increase in cases settling once they have been listed before a judge for trial that corresponds to a decrease in cases disposed of by trial. Further, it shows this comparison in diagrammatic form with the cases settled after listing for hearing converging on the number of cases disposed of at trial. From this data we can see a similar pattern for cases settled by the parties themselves before listing for trial. The conclusion to be drawn is that the court is very efficient at disposing of cases by mutually agreed settlement, merely by listing them for trial. In fact so efficient is the court at disposing of cases in this manner that disposals, where settlement was induced by listing for trial, are nearly as frequent as cases being disposed of by trial. In 2005, the court was listing up to 12 long cases per week for trial, knowing that half of those cases would settle before trial.

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Figure 10.2 How settled cases are disposed of in the Sydney Registry of the New South Wales District Court (1990-2009)

The causes of the vanishing trial phenomenon are argued as being a combination of: 1) Better case management techniques that are enforced by the courts through legislation, subordinate legislation and court practice directions. For example, the introduction of the Civil Case Management System in 1996 and the subsequent passing of Pt 6 of the Civil Procedure Act 2005 (NSW) places the courts in the position of having to play a more pro-active role in case management than ever before. In this sense managerial judging is experienced throughout the Court and delivers disposal rates consistent with legislative demands; 2) The rise of court-annexed statutory dispute resolution schemes as already discussed in this text; 3) The creation of tribunals that divert disputes away from the courts to be discussed below; 4) The inclusion of dispute resolution in most Bachelor of Laws degree programs in Australian universities; and, 5) The continuing spiralling cost of litigation to be discussed below. These factors are exerting a downward pressure on the desirability to litigate every dispute that comes before the courts. In recent years, the United States has experienced a proliferation of adjudicatory bodies that complement the court system. The concept of adjudication grew to the point where alternative methods of adjudication had to emerge because of the inherent difficulties in having trials as the only form of adjudication. Therefore, it is argued that trials have been moved to other places, such as tribunals, commissions and private adjudicators within and outside the courts: “Under this approach, courts –

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not trials – are atrophying” (see, J Resnik, “Migrating, Morphing, and Vanishing: The Empirical and Normative Puzzles of Declining Trial Rates in Courts” (2004) 1 Journal of Empirical Legal Studies 783). Therefore, in the United States, “the claims and contests are there but they are in different forums” (see, M Galanter, “The Vanishing Trial: An Examination of Trials and Related Matters in Federal and State Courts” (2004) 1 Journal of Empirical Legal Studies 459. The experience in Australia is similar to that in the United States where there has been the creation of numerous tribunals and commissions since the 1980s that divert disputes and relieve the courts of the compulsion to conduct trials. For example, prior to 1 January 2014, in New South Wales there were 14 specialist tribunals and commissions that diverted disputes away from the courts. Of those, the Administrative Decisions Tribunal (ADT) and the Consumer, Trade and Tenancy Tribunal (CTTT) established in 1998 and 2002 respectively are the two specialist tribunals that mostly deal with disputes that were once the domain of the court. The ADT and CTTT were both consolidated into the NSW Civil and Administrative Tribunal (NCAT) on 1 January 2014. Figure 10.3 compares the number of new filings in the court with those of the ADT and CTTT. It can be seen that as new filings in the court began to rise between 1997 and 2001, the government established the CTTT and the ADT. The creation of these tribunals has coincided with a reduction in the number of new filings in the court between 2002 and 2009. It is apparent that the establishment of these tribunals and others have contributed to the decline in new filings and therefore trials in the Court. On 1 January 2014, the New South Wales Government consolidated 23 Tribunals into one, called the NSW Civil and Administrative Tribunal. The issue of the changing nature of the trial and its costs was raised by the Chief Justice of South Australia, John Doyle CJ in an address entitled “21st Century Advocacy” at the 2011 Advocacy Conference held at the University of Adelaide on 4 February 2011. His Honour asserted that because of the cost and inefficiency of the advocates appearing in court he anticipated that by the end of the century, judges will be running cases in a more directive fashion and in virtual court rooms. Doyle CJ opined that advocacy in its current form was under threat by costs imposed by lawyers and cost-recovery rules and regulations. His Honour noted that judges were under pressure to be more pro-active in identifying issues and shaping the case presented for trial. Further, Doyle CJ remarked that party autonomy would disappear and advocacy would no longer be the same. His Honour stated that because of the availability of better technology there is no need for everyone to be in the same room. His Honour’s comments are timely regarding the issues of the vanishing trial and the changing nature of the trial and are also a reminder of the dynamic nature of how society deals with disputes.

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Figure 10.3 Number of new filings in the New South Wales District Court and selected New South Wales tribunals, 1990-2009

The research conducted by the author on the vanishing trial phenomenon shows that while fewer disputes were being litigated, those disputes being litigated took longer than before and yielded higher damages. Therefore, only disputes worthy of litigation are being placed before the courts and those disputes are seemingly delivering a higher rate of return to those that embark upon a curial resolution to their dispute. For dispute resolution this means a changed role in the future. It is already apparent that there is a greater reliance on a wide range of dispute resolution processes as a triage method of determining if disputes can be resolved before court proceedings – which is seen today as a last resort solution. Clearly law graduates are better informed and better educated when it comes to dealing with disputation through non-curial methods. The courts themselves are pro-active in engaging lawyers and their clients in the triage of disputes. All of this means a greater role for dispute resolution in the overall strategy to reduce the number of disputes finding their way into the courts. It is not apparent that there are more private dispute resolution processes, such as mediations occurring rather, disputes are being dealt with either by courts or more commonly by lawyers who are the triage practitioners of disputes in our society.

THE NEW ROLE FOR DISPUTE RESOLUTION [10.30]

A common complaint among many mediators in Australia is that there are more trained (now trained and accredited) mediators than there are mediations. This complaint is a truism borne out by the number of

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people already trained and the plateau of the numbers of people currently being trained by various training providers. This of course does not include the resurgence of training brought about by the National Accreditation System, as discussed in Chapter 9, which has led to more training but no more mediations or evidence of any better quality mediations. The issue becomes what to do with all these trained conciliators, mediators, negotiators, arbitrators and other dispute resolution practitioners. If there were ever a pandemic of disputes in Australia, we would be well prepared to repel the disputants! There are several learned people that have addressed their minds to this vexing question and have suggested that trained (and accredited) dispute resolution practitioners should diversify and offer a broader range of services which their training will allow them to competently offer to disputants at large.

New advocacy [10.40]

In a learned article well ahead of its time entitled, “Lawyers and Mediation: Beyond the Adversarial System?” (1998) 9 Australasian Dispute Resolution Journal 72, Anne Ardagh and Guy Cumes recounted the dissatisfaction disputants had with the then current legal system which has not improved greatly with the effluxion of time. They were critical of how lawyers had appropriated dispute resolution and were astounded how current dispute resolution education taught facilitative mediation when law schools were pre-occupied with adversarial justice. They state (at 74), “Sir Laurence Street has observed that lawyers who do not understand that their role is not one of advocacy are ‘a direct impediment to the mediation process’”. While Ardagh and Cumes acknowledged the important role of lawyers and the court system and the fact that there will always be a place for curial proceedings, their concern was whether lawyer-delivered mediation will merely become a further tool and tactic in the adversarial process? They advocated (at 75), “as an ideal a distinct and separate process of facilitative mediation within a structure which is beyond the adversarial system, outside the control of legal practitioners and outside traditional legal processes. This structure could include lawyer-mediators, but not be restricted to them or controlled by them”. Ardagh and Cumes believed that early access to dispute resolution services within the court structure was required. However, they believed that in order for this to be an alternative to the adversarial system, it would need to be: accessible; free; community-based; informal; separate from adversarial legal processes; and, not merely a referral from legal proceedings to mediation, but a genuine first-instance attempt at dispute resolution involving non-court personnel. They stated (at 76-77) that such a structural change in the provision of mediation must include:

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• Non-extension of an initial chosen professional practice (for example, law) – The practice of mediation should be independent of (outside of) any other professional practice. • Provision of a philosophical rationale for mediation – Mediation is based upon a set of philosophical premises that are quite different from traditional lawyer practice. Lawyers are paid to fix other people’s problems, to manage and eliminate conflict, rather than to facilitate individual resolution processes. Conflict is categorised and compartmentalised by rules and legal remedies and resolution is sought through the tactics of law-based solutions. In contrast, mediators have no stake in the dispute or in the desirability of having it resolved. They view disputes as an opportunity for others to restructure or reframe their social, personal, business or organisational relationships. • Provision of specialised skills and training – Mediators are trained from the outset to facilitate discussion between disputants with a view to encouraging them to see the other person’s point of view and to negotiate a fair result, not a win/lose situation. Lawyers act on the instructions of, and in the interests of, their clients and their skills are developed to maximise their potential to win or to achieve the most favourable result for their client • Support for a system that is organisationally based – An organisational basis means that mediators are initially selected, employed with and responsible to a director or manager. They are given lengthy standardised training and if deemed suitable are selected for accreditation for an initial trial period. Reaccreditation may be possible. Such a model exists within the New South Wales Attorney General’s Department (Community Justice Centres) and in other Australian jurisdictions, for example, the Australian Capital Territory. This model could be either extended or it could be adapted within the organisational structure of courts. This would establish mediation as a form of free public ownership of dispute resolution which would involve a partnership between community and government, based upon the notion of public trust. • Lawyer-mediators are basically self-selecting and lawyer-mediation training has not been standardised or accredited. In fact, this was rejected by the New South Wales Law Reform Commission a few years ago. To quote one lawyer-mediator, “the absence of uniform standards and lack of any general standards or monitoring means that there is no guarantee of competence by people calling themselves specialists, nor any bar to any of us (lawyers) holding ourselves up as experts”. The same author notes that, in contrast, New South Wales Community Justice Centres do not allow mediators who were trained many years ago “to sit on a panel until kingdom come without any training or reassessment occurring”. • Institution of a legislative base – Legislation ensures accountability and control of the process of mediation and of the mediators. This includes supervision of mediators in the sense that they must account for each session which they conduct by way of a written report to a co-ordinator who is responsible for reading each report and following up where necessary. This is an important part of quality control, consumer protection and community service. • Lawyers are not supervised as mediators or accountable to an organisation in the sense that each mediation session they perform is overseen by a manager or regulatory process – Lawyer-mediation is essentially self-regulatory, although the legal profession and lawyer mediation in the broad sense is regulated by law societies which provide guidelines for lawyer-mediators.

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• Encouragement of community representatives as mediators and enhancement of the democratisation of the justice system – Wide community participation in dispute resolution is analogous to the jury system, employing people with non-legal backgrounds as direct participants in the justice system. It also ensures broader consumer confidence and trust in the system.

Ardagh and Cumes suggested that lawyers need to advise clients of dispute resolution options in order to empower them and, at the potential exclusion of their own income through the dispute, perhaps not proceeding to court. Further, they suggested that the lawyer’s role in dispute resolution should be minimal to the extent of not appearing for the client in the actual dispute resolution process. In limiting or better defining the role of lawyers in dispute resolution processes, the authors were suggesting what ultimately became the concept behind collaborative law and the separation of dispute resolution procedures and legal rights. They were concerned that lawyers’ training meant that clients’ legal rights always take precedence over clients’ needs and non-legal interests. They stated (at 79): Ultimately there needs to be fundamental change in the way lawyers proceed if we are to move beyond the adversarial system. Facilitative mediation is a process which addresses many of the deficiencies of the adversarial system. Lawyers have a critical role in fostering or hindering its development as a primary dispute resolution system. Presently the incorporation of mediation as a stage within the adversarial system retards meaningful reform of the legal system. Mediation must be realistically incorporated into primary dispute resolution processes at the earliest stages of a dispute, actively embody principles of fairness and ideally be structurally separate from adversarial processes, practices and institutions. We advocate a rethinking of the relationship between lawyers’ practice and mediation in order for real change to begin.

[10.50]

In an article entitled, “Collaborative Law: Dispute Resolution Competencies for the New Advocacy” (2008) 8(1) QUT Law and Justice Journal 213, Marilyn Scott also identified the fact that litigation is unavailable to most people because of its cost, emotional and destructive outcomes, and its inefficiencies. Scott quoted with approval the work of Macfarlane and Cameron who identified the potential of collaborative law to insert dispute resolution principles and competencies into legal advocacy. Scott stated (at 227): Previously the lawyer’s dispute resolution toolbox approach clearly distinguished traditional advocacy from the process pluralism of dispute resolution. Now the concept of process plurality is being extended to include settlement advocacy. This moves the idea of dispute resolution processes being reliant on a third person neutral to one where such a role is not required. This conceptualization provides a bridge for dispute resolution competencies into a “new” advocacy.

Scott reported that Macfarlane contextualised new advocacy by virtue of the vanishing trial phenomenon but did not reject rights-based advocacy, rather saw negotiation as being central to the advocate’s role. Scott affirmed Macfarlane’s view that to reclaim advocacy lawyers must recognise the importance of negotiation in legal practice, the use of interest-based negotiation and acceptance of the value of non-legal solutions. Macfarlane

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opined that few lawyers are trained and experienced in understanding their clients’ needs in relation to the legal and non-legal elements of their clients’ cases. Scott posited that new advocacy is largely about building a dialogue about legal parameters instead of being obsessed about rightsbased legal outcomes. In this respect Scott suggested (at 229), “lawyers offer direction without offering solutions”. Scott logically drew parallels with collaborative law and noted that this type of dispute resolution process required an understanding and agreement as to good faith negotiation, building collaborative dispute resolution processes and building solid communication skills for the duration of the process and perhaps beyond its conclusion. Further, Scott pointed to the educative role of collaborative law as new advocacy in that it sought to educate clients in how to advocate their own needs in the next phase of their life beyond the dispute that generated the collaborative law process. Both Ardagh and Cumes, and Scott suggested a new role for lawyers, and by corollary, for dispute resolution practitioners acting for disputants that involve looking outside the traditional advocacy role. The idea that lawyers, conciliators, mediators, arbitrators and others engaged in dispute resolution should cast their professional net wider to include other services to clients embroiled in disputation is also a common theme coming from the United States as will be seen below.

Beyond neutrality [10.60]

In a landmark text published in 2005 entitled Beyond Neutrality (Jossey-Bass, San Francisco, 2004), and affirmed in a presentation at the Resolution Institute ‘kon gres on 24 September 2015 in Melbourne, well-known American mediator Dr Bernard Mayer set out what he believed was the wider role for dispute resolution and a new working paradigm for dispute resolution practitioners. He saw the widening of the services able to be offered to clients in dispute as being a way to ensure dispute resolution has a sustainable and positive future. Mayer (at 284-285) suggested that given the training and experience of dispute resolution practitioners, they are well equipped to offer some or all of the following wide range of services: • Assessment: Working with disputants to evaluate the nature of a conflict or conflict procedure and to consider the alternatives they have in dealing with the conflict. • Coaching and Consultation: Providing advice, strategic consultation, and personal coaching to individuals or groups engaged in a conflict process. • Advocacy: Working with disputants as advocates in conflict processes. We do not offer legal representation or advice, but we will work as negotiators or representatives to help advocate for disputants in a constructive and powerful way. • Mediation and Facilitation: Acting as third parties to bring people together to discuss the issues that are of concern to them and, where appropriate, to consider means of resolving these issues.

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• System Design: Helping groups and organizations to design conflict systems that allow people to raise the issues they have clearly, safely, and effectively and that provide constructive mechanisms for dealing with these issues. • Evaluation: Providing systematic research and evaluation about the effectiveness of conflict systems and programs in dealing with disputes …

Mayer suggested that offering a wider range of services was consistent with the continuity of the purpose and values adopted by dispute resolution practitioners. He stated (at 289-290) the values of dispute resolution practitioners as being: • Being hard on the problem, easy on the people. We may articulate this as “separate the people from the problem,” “respect our adversaries,” or “love the sinner, hate the sin,” and for many of us, this has translated into a commitment to nonviolence. The underlying goal is to ensure that conflict is carried out in a way that does minimal damage to the basic well-being of any of the participants. • Empowering disputants. Underneath many of our activities and approaches is the belief that if disputants can be empowered to engage in conflict, they will do so productively. Rather than take over decision making for people in conflict, we try to find ways of enabling disputants to handle their own conflict. When they can’t, we work to minimize the degree to which they must cede power to others to deal with their issues. Implied here is the belief that people know what is best for them, and in the end they have the right to make what we might consider to be bad decisions. • Respecting diversity. We may not always actualize this the way we would like, but as a field, we have made a commitment to ensuring that our services are accessible to people from a diversity of backgrounds. This has meant working to increase the diversity of our field and being sensitive to the diversity of approaches people take to conflict based on their cultural experience and background. • Believing in communication. Much of what we do in almost every approach we take is to try to establish and nurture effective communication. Communication itself cannot solve all problems, but it is a sine qua non for people who want to handle conflicts effectively. • Promoting social justice. Conflict is a necessary part of social change, and if we are committed to a more just world – more peaceful, democratic, and egalitarian – then we must not suppress conflict. Part of a commitment to social justice (and to empowerment) is a belief that those who are vulnerable to exploitation and oppression need special forms of protection when they are in conflict, but they do not need to be shielded from conflict itself. • Valuing creativity. Much of our approach to conflict is about how to help people discover ways through what appears to be an intractable problem, and this means helping people be creative. When we talk about exploring interests, reframing problems, and paying attention to the integrative potential, we are mostly talking [p 291] about ways in which we can help people stay creative in the face of conflict, fear, anger, and stress. • Maintaining optimism. We might not state this as a value, but it is embedded in much of what [we] do. Conflict professionals often work in dismal situations, but we do so in the belief that good can come out of bad circumstances, that people can grow organizations can learn, bitter hatred and animosities can change. It is this optimism that fuels this book. There is a crisis. We can face it, and in the end we will be stronger because we have.

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Mayer’s central proposition was that dispute resolution practitioners should be more than just third party neutrals. He optimistically suggested that there is a continuity of purpose and beliefs in the work of the dispute resolution practitioner and the deeper they commit themselves to their purpose and values, the more flexible they will be about how to implement them. The key point to take away from Mayer’s learned text is that the future of dispute resolution may very well involve more of a focus on the client’s needs. Do clients need engagement? Do they need conflict strategies? Do they need resolution? Mayer’s point is, find out what the client needs and broaden the available repertoire of skills to be able to accommodate those needs.

Conflict coaching [10.70]

One of Bernard Mayer’s suggestions was that dispute resolution practitioners are well positioned to take on a wider advisory role for disputants. In fact, he expressly mentioned a role for dispute resolution practitioners that would include conflict coaching. Conflict coaching is a recognised process of dispute resolution or more accurately dispute management or prevention and this in itself is evidence of the potentially widening role of dispute resolution practitioners. Ross Brinkert in, “Conflict Coaching: Advancing the Conflict Resolution Field by Developing an Individual Disputant Process” (2006) 23(4) Conflict Resolution Quarterly 517 at 518, defined conflict coaching as: the process in which a coach and disputant communicate one-on-one for the purpose of developing the disputant’s conflict related understanding, interaction strategies, and interaction skills. The definition is broad in that it encompasses different forms of communication between the coach and disputant. Conflict coaching, as it is explored and refined here, is primarily understood as a face-to-face interaction with occasional use of printed activities and resources; however, it can also reasonably (co-)occur via the telephone, Internet, videophone, or another medium.

Brinkert observed that his definition is wide enough to permit a variety of conversations to take place about conflict including making sense of it, managing and formulating strategies to deal with it. Cinnie Noble in an article entitled, Conflict Coaching: A Preventative Form of Dispute Resolution (http://www.mediate.com/articles/noble1.cfm#), claimed that conflict coaching is a “flourishing field”. Noble defines the role of a conflict coach in the following way: The role of a coach in terms of preparing a party for mediation or negotiation is quite different from a client’s counsel whose preparation often has an adversarial approach that focuses more on strategy and result. In both mediation and negotiation the coach assists in a number of important ways, by, for example, preparing a client for the process and helping a party articulate his or her perspective and needs on the issues in dispute. In addition, coaching commonly includes helping the party to acknowledge the other party’s needs and interests.

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Guiding clients to explore alternatives, to assess options and to evaluate possible solutions that may be mutually acceptable are also functions of the conflict coach. Directing clients to consider possible reactions from the other side and to respond effectively are important aspects of both types of coaching.

Noble promoted a model of conflict coaching that is interest-based as described in Chapter 2, where interests are negotiated as opposed to positions. Noble discussed the benefits of conflict coaching that include opportunities to reflect on people’s own dispute resolution style and the interests at play in any given dispute. Further, to have the opportunity to resolve conflict in a positive atmosphere and replace counterproductive and negative behaviour patterns that occur when disputes arise. She emphasised the educative role of coaching where disputants are educated in how to manage and resolve conflict with the hope that subsequent conflict can be dealt with more productively than previously. In this respect, prima facie, conflict coaching is seen as being a preventative form of dispute management as opposed to resolution. Ross Brinkert, in another contribution to the topic entitled, “Conflict Coaching” (2002) 2(2) Conflict Management in Higher Education Report (available at http://www.campus-adr.org/CMHER/ReportArticles/ Edition2_2/Brinkert2_2a.html), suggests the following four main elements to conflict coaching. (Note: Brinkert makes the following acknowledgement in the article, “Below is an outline of the conflict styles coaching process, as used by CERT. The outline is borrowed with permission from Temple University’s Conflict Education Resource Team”.) Introduction • • • •

Personal introductions Introduction to CERT and UCS Confidentiality Coaching explanation (ie, focus on behavioral choices and behavioral interactions and not psychological issues • What to expect in this session • Participant hopes and expectations for the session Conflict Styles • • • • • •

Introduction to the conflict styles instrument Complete and score the instrument Participant reflections: ″What it was like to do the survey? The survey in perspective An explanation of each style (made in reference to the scored instrument) Participant shares example of using each style (do individual style explanation and example cycles) • Style choice factors • Emphasize the “collaborative perspective” (combining personal empowerment and concern for other even though the conflict might not end in a collaborative outcome) • Participant shares reactions on the styles and the style profile

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Developing Choices in a Particular Conflict • Introduction to a conflict exploration • Participant describes the conflict and, if helpful, the background to the conflict • Participant establishes what it would mean to approach the conflict from each of the five conflict styles • Participant evaluates the choices represented by the respective styles • Participant develops optimal choices • Participant determines next steps to take (ie, in the actual conflict) • General reflections, questions, and reworking • Summary of the conflict exploration process Close • Acknowledge the challenges and opportunities of conflict • Invite final reflections and questions, particularly on what was most valuable and/or useful • Briefly summarize the participant’s key points from throughout the session • Handout evaluation and exchange good-byes

Brinkert suggested that effective coaches should be: confident; self-aware; be concerned for others; have the ability to help disputants put things into perspective; and, have excellent communication and interpersonal skills. He thought that anybody competent in those areas can, “typically learn to be a competent coach after twelve hours of training”. He also recommended ongoing development in a community of coaches. There is no community of conflict coaches in Australia as yet, although there are a number of trained coaches in the marketplace and several training providers. However, there exists an Australian chapter of the International Coaching Federation for generalist coaching that among other things provides a philosophy and code of ethics for coaching.

OVERCOMING THE GREATEST OBSTACLE – OURSELVES [10.80]

In 1981 Professor Roger Fisher and William Ury published the international best seller Getting to Yes that explained the principled negotiation model. Ten years later, Ury published Getting Past No, arguably the sequel which dealt with approaches to collective bargaining and dealing with people who do not wish to negotiate. In 2015, Ury published Getting to Yes with Yourself (& other worthy opponents) which deals with understanding ourselves before trying to understand others we are in dispute with. His premise is that to effectively negotiate we have to understand and influence ourselves before being able to understand and influence others. Building on his lifetime of work in the field of negotiation, Ury suggests the following six steps that enable people to not be their own worst enemy when embarking upon negotiation: 1. Put yourself in your shoes.

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The first step is to understand your worthiest opponent, yourself. It is all too common to fall into the trap of continually judging yourself. The challenge instead is to do the opposite and listen empathetically for underlying needs, just as you would with a valued partner or client. 2. Develop your inner BATNA. Almost all of us find it difficult not to blame others with whom we come into conflict. The challenge is to do the opposite and to take responsibility for your life and relationships. More specifically, it is to develop your inner BATNA (Best Alternative to a Negotiated Agreement), to make a commitment to yourself to take care of your own needs independently of what the other does or does not do. 3. Reframe your picture. A natural fear of scarcity exists in almost everyone. The challenge is to change how you see your life, creating your own independent and sufficient source of contentment. It is to see life as being on your side even when it seems unfriendly. 4. Stay in the zone. It is easy in the midst of conflict to get lost in resentment about the past or in anxieties about the future. The challenge is to do the opposite and stay in the present moment, the only place where you have the power to experience true satisfaction as well as to change the situation for the better. 5. Respect them even if. It is tempting to meet rejection with rejection, personal attack with personal attack, exclusion with exclusion. The challenge is to surprise others with respect and inclusion even if they are difficult. 6. Give and receive. It is all too easy, especially when resources seem scarce, to fall into the win-lose trap and to focus on meeting only your needs. The final challenge is to change the game to a win-win-win approach by giving first instead of taking. (W Ury, Getting to Yes with Yourself (& other worthy opponents) (London: Harper Collins, 2015), pp 6-8.)

Ury draws on his individual and collaborative work on principled negotiation to move the metaphoric spotlight from one’s opponents in a dispute too one’s own perceptions and realities. For example, he advocates gaining an in-depth understanding of your own needs before entering a negotiation. Having such an understanding will enable you to better understand how you can meet those needs. Part of this process is to fully develop your own BATNA. As stated in Chapter 2, understanding your opponent’s BATNA is critical to knowing when a suggested settlement option will meet the needs of the other side to the negotiation. Similarly, having a clear understanding of your own BATNA enables you to know when an option for settlement becomes more attractive than continuing negotiating without a guarantee of settlement. With a greater understanding of your own needs and your own BATNA, it is possible to reframe the negotiation from an adversarial one to a collaborative approach to resolution. Critical to success in negotiation is the ability to capitalise on present opportunity rather than waste time and

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effort on historical events and playing the “blame game”. In other words, discover what it would take to move the negotiation forward rather than re-live who did what to whom and try and ascribe blame. In Ury’s words, “Accept the past, trust the future and embrace the present”. The next phase is best expressed directly by Ury (p 117), when he states: the cheapest concession you can make, the one that costs you the least and yields the most, is to give respect. To respect simply means to give positive attention and to treat the other with the dignity with which you would like to be treated … It is to see the other person with new eyes as a human being worthy of positive regard.

His advice comes with a caveat, that respect is warranted even if the other side does not act with respect towards you. His hypothesis is that respect breeds respect and acceptance can foster acceptance. Ury’s final step is to change the game from “taking” to “giving”. Again, drawing on his work in principled negotiation, he explains this element by promoting the idea of not always taking value for you, rather, creating value for others. He qualifies this notion by educating his readers to give for mutual gain. He states (p 167), “At first we may give in order to receive, then we learn to give without receiving a direct return, and finally we learn to give in fulfilment of our purpose.” One of Ury’s final summations (p 169) captures the point of his book and how he suggests that we change the focus from the other side to ourselves: In the morning when I look at myself in the mirror, I like to remind myself that I am seeing the person who is probably going to give me the most trouble that day, the opponent who will be the biggest obstacle to me getting what I truly want. I find it valuable to review in my mind, even for a few minutes, the six steps of the inner yes method in order to prepare myself for any challenges that may arise that day.

So Ury’s glimpse of the future for dispute resolution is to reconfigure the focus espoused by the model of principled negotiation on satisfying the needs of the disputants and to balance it with a better understanding of your own needs and how these needs impact on the dynamics of negotiation. This approach then allows you to deal with the substantive elements of negotiation in a more consensual and collaborative way than before.

CONCLUSION [10.90]

The future of dispute resolution will be characterised by a number of developing ideas and realities: first, the vanishing trial phenomenon; secondly, the changing and developing role of the dispute resolution practitioner where a more holistic view of the services that can be offered will become a reality; thirdly, the shift in focus to create a balanced view of the role of the ‘self’ in negotiation; and, finally the impact of online dispute resolution discussed elsewhere in this book.

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It seems inevitable that society will see a further decrease in the use of the trial because of cost, time and the unsatisfactory relational and emotional outcomes that litigation generally produces. As previously stated, a decline in the quality of advocacy together with constant improvements in technology will make the trial an anachronism except for those essential cases that develop new law or those that can afford them. Trials that are still run at the end of this century will be run by directive judges using technology that will make obsolete the need for face-to-face confrontations. The role of the dispute resolution practitioner will change with an emphasis on dispute management. Individuals and corporate entities are already seeking a more pro-active approach to conflict – in particular, the rise in partnering, dispute review boards and advisers and conflict coaching are indicators of the changing paradigm of dispute resolution. The emphasis is starting to be more focussed on managing people and difference to avoid conflict rather than resolving it when it arises. Dispute management and conflict coaching mean individuals and organisations are “front loading” their expertise to prevent disputes from arising in the first place. The move to recalibrate principled negotiation to better prepare parties to embark upon consensus building early on in the conflict cycle though a greater understanding of the ‘self’ will signal an effective shift in the dynamics of difference that could result in less conflict and more efficient resolutions. Finally, the future of dispute resolution is a future that will rely more heavily on technology to deliver dispute resolution services. Those services will be available on a global basis not dependent on geographical proximity and delivered largely through mobile devices that serve the disputants in a contemporaneous format. The use of avatars is likely to grow and technology will allow for better informed avatars with artificial and emotional intelligence at advanced levels that replicate the intellectual and emotional elements of the disputants themselves only with more consistency, creativity and predictability possibly leading to more efficient dispute resolution outcomes. There is a dynamic landscape for dispute resolution in the current century. The role of the dispute resolution practitioner will change and he or she will have advanced technological tools to effect that change. For disputants it will mean fewer disputes as they will be coached to avoid conflict arising and should disputes arise, they will be managed thereby avoiding resolution. The paradigm shift will be interesting and undoubtedly a bumpy ride at times but the future of dispute resolution will serve disputants particularly well as just, quick, cheap and effective avoidance and resolution of disputes will be delivered to a population that has been waiting a long time for such a result.

Appendix 1: Guidelines for Legal Practitioners who act as Mediators The responsibilities of legal practitioners when acting as mediators in the ordinary course of providing legal services in private practice are set out in the following Guidelines.1 A legal practitioner insured with LawCover and being the holder of an unrestricted practising certificate who, as part of carrying on business as a lawyer in private practice in Australia, acts as a mediator will be entitled to indemnity pursuant to the terms and conditions of the LawCover Professional Indemnity Insurance Policy issued to that legal practitioner or relevant law practice. In this capacity, mediation is considered a ″legal service″ within the meaning of the defined term in the LawCover Professional Indemnity Insurance Policy. A legal practitioner on a restricted practising certificate is covered only as an employee of an insured law practice where he/she is supervised when acting as a mediator. The Guidelines do not purport to prescribe the legal requirements which should be observed by a person who undertakes to act as a mediator. Legal practitioners who intend to practice as mediators in the area of alternative dispute resolution should inform themselves of the licensing provisions of any relevant legislative requirements, including any requirements for national accreditation or alternative insurance arrangements. Guidelines for Legal Practitioners 1. Introduction 1.1 These guidelines are intended to assist and guide legal practitioners acting as mediators. 1.2 These guidelines do not derogate from the usual obligations of legal practitioners. 2. Definition of Mediation 2.1 Mediation is a process in which the parties to a dispute, with the assistance of a dispute resolution practitioner (the mediator), identify the disputed issues, develop options, consider alternatives and endeavour to reach an agreement. The mediator has no advisory or determinative role in regard to the content of the dispute or the outcome of its resolution, but may advise 1 Reproduced with the kind permission of the Law Society of New South Wales, Australia with whom copyright vests. Unauthorised copying is not permitted. This information is intended for general information only and is not a substitute for legal or other professional advice. The Law Society hereby expressly denies any liability for loss to any person who relies on this information.

334 Appendix 1: Guidelines for Legal Practitioners who act as Mediators

on or determine the process of mediation whereby resolution is attempted. Mediation may be undertaken voluntarily, under a court order, or subject to an existing contractual agreement.2 3. Qualification 3.1 No legal practitioner shall act as a sole mediator unless he/she has satisfactorily completed an approved course and has obtained national mediator accreditation or has such appropriate mediation experience as may be approved by the Dispute Resolution Committee of The Law Society of New South Wales. 3.2 Italicised terms in 3.1 are defined in Schedule 1. 3.3 It is the responsibility of legal practitioner mediators to engage in annual continuing professional development in mediation as part of their CLE program to ensure that their mediation skills are current and effective. 4. Initial Duties of Mediators The mediator should define and describe the process of mediation and its cost to the parties before they reach an agreement to mediate. He/she should give an overview of the process and assess the appropriateness of mediation for the participants. Amongst the topics covered, it is recommended that the mediator should address the following: 4.1 The mediator should define the process in context so that the parties understand the differences between mediation and other means of conflict resolution available to them. It is important that the mediator stress that the process is “without prejudice” and that in general, unless both parties consent, communications during the course of the mediation process cannot be used as evidence in court proceedings. 4.2 The mediator should obtain sufficient information from the participants to enable them mutually to define the issues to be resolved in mediation. 4.3 The mediator in consultation with the parties, should establish the following procedures: 4.3.1 the right of each party to talk without interruption; 4.3.2 the order of presentation; 4.3.3 any other conduct protocols of the proceedings as may be appropriate. 4.4 It should be emphasised that the mediator may assist in generating options for the participants to consider, such as alternative ways of resolving problems, but that all decisions are to be made voluntarily by the participants themselves. 4.5 The duties and responsibilities that the mediator and the parties accept in the mediation process should be agreed upon. The mediator should inform the parties that either of them or the mediator has the right to suspend or terminate the process at any time. It is recommended that the mediator include in any written agreement to mediate, a provision that he/she has a discretion to terminate or suspend the process at any time. 2 This is the definition of “mediation” provided by the National Alternative Dispute Resolution Advisory Council (NADRAC).

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4.6 It s strongly recommended that a written agreement to mediate be entered into by the parties and the mediator prior to commencement of the process. The mediator may include a provision in the agreement excluding his/her liability.3 4.7 The mediator should explain the fees for mediation and reach an agreement with the parties regarding payment. 4.8 The mediator should explain to the parties that he/she might consult with each of them in separate sessions and that information divulged during such separate sessions will be kept confidential unless he/she has that party’s specific agreement to disclose to the other party. He/she should reach an understanding with the participants as to the circumstances in which he/she may meet alone with either of them or with any third party. 4.9 The mediator should inform the parties that they have the right at any time to obtain, and may need to obtain, independent legal or other professional advice during the mediation process. 4.10 The mediator should also raise the matters referred to in 6.5 and 6.6 below. 4.11 The good faith provision prevails in all cases, including mandatory referral to mediation. 5. Impartiality 5.1 The mediator shall maintain impartiality towards all participants at all times during the mediation process. Impartiality means freedom from favouritism or bias in word or action. The mediator shall not play an adversarial role. 5.2 If the mediator believes, or any one of the participants states, that the mediator’s background or personal experiences or relationships would prejudice the mediator’s performance or detract from his/her impartiality, the mediator shall withdraw from the mediation unless all parties agree to proceed following full disclosure of all relevant facts relating to the issue of neutrality.. 5.3 If the mediator has at any time prior to the mediation provided legal, counselling or any other services or has had any social or professional relationship with any of the participants, he/she shall not proceed with the mediation. However, if after full disclosure, all parties to the mediation agree, the mediator may proceed.. 5.4 The mediator shall disclose any circumstances to the participants which may cause, or have any tendency to cause, a conflict of interest. In particular a mediator who is a business partner or an associate of any legal counsel retained by either of the parties should not act as mediator. 6. Confidentiality 6.1 The mediator shall not voluntarily disclose information obtained during the mediation process without the prior consent of all parties. 6.2 The obligations of a legal practitioner relating to confidentiality as between legal practitioner and client shall apply as between the mediator and the participants. 3 The Law Society Agreement to Mediate provides for the exclusion of mediator liability in Clause 25.

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6.3 If subpoenaed or otherwise notified or requested to testify, the mediator shall inform the remaining participants immediately. 6.4 Information received by the mediator in private session shall not be revealed to the other parties without prior permission from the party from whom the information was received. 6.5 The mediator shall, prior to entering into the mediation process, obtain all parties’ agreement that the mediator shall not be required to give, in any subsequent legal proceeding, evidence of or to produce documents concerning the issues to be mediated upon. 6.6 The mediator shall inform the parties that, in general, communications between them, and between them and the mediator, during the preliminary conference and the mediation, are agreed to be confidential. In general, these communications cannot be used as evidence if the matter does not settle at the mediation and goes to a court hearing. The mediator shall also inform the parties that they should consult their legal practitioners if they want a more detailed statement or if they have any specific questions in relation to confidentiality. 6.7 The mediator shall render anonymous all identifying information when materials are used for research or training purposes. 6.8 The mediator shall maintain confidentiality in the storage and disposal of records. 6.9 The mediator shall determine from the parties whether they are required to make available a copy of the agreement reached and, if so, to whom. This should be documented in the Agreement to Mediate and/or the final agreement. 7. Disclosure 7.1 The mediator should if he/she considers it would facilitate settlement, recommend disclosure of relevant information. 7.2 The mediator may encourage participants to obtain independent expert information and advice 8. Conclusion of Mediation 8.1 Where full agreement has been reached, the mediator should discuss with the participants the process for formalisation and implementation of the agreement. 8.2 Where the participants have reached a partial agreement the mediator should discuss with them procedures available to resolve the remaining issues. 8.3 Where the mediator believes the agreement being reached may be impossible to uphold or may be illegal, he/she should recommend to the parties that they obtain independent legal advice. 9. Termination of Mediation 9.1 Each of the parties and the mediator has the right to withdraw from mediation at any time and for any reason. 9.2 If the participants reach a final impasse, the mediator should not prolong unproductive discussions, which will merely result in additional unnecessary costs to the participants.

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9.3 If mediation has terminated without agreement, the mediator should suggest that the parties obtain additional professional services as may be appropriate. 10. Responsibilities to Other Mediators A mediator may, if the parties desire, act where another mediator is already employed. He/she may consult with the other mediator with the parties’ consent. 11. Observers 11.1 The attendance of observers should occur only with the consent of all parties and the mediator. 11.2 Observers should sign a Confidentiality Agreement. 12. Support Persons 12.1 Support persons generally do not take part in the negotiations but are present to give moral support to the party. 12.2 Support persons should sign a Confidentiality Agreement. Schedule 1 1. “satisfactorily completed” means that the legal practitioner has been formally assessed during an approved course as able to act as a sole mediator. 2. “an approved course” is a mediation education and training course that: a) is conducted by a training team comprised of at least two instructors where the principal instructor[s] has more than three years’ experience as a mediator and has complied with the continuing accreditation requirements set out in section 6 of the Australian National Mediator Standards – Approval Standards for that period and has at least three years’ experience as an instructor; and b) has assistant instructors or coaches with a ratio of one instructor or coach for every three course participants in the final coached simulation part of the training and where all coaches and instructors are accredited; and c) is a program of a minimum of 38 hours in duration (which may be constituted by more than one mediation workshop provided not more than nine months has passed between workshops), excluding the written skills assessment process referred to below; and d) involves each course participant in at least nine simulated mediation sessions and in at least three simulations where each course participant performs the role of mediator; and e) provides written, debriefing coaching feedback in respect of two simulated mediations to each course participant by different members of the training team A mediator must also have completed to a competent standard a written skills assessment of mediator competence that has been undertaken in addition to the 38-hour training workshop referred to above, where mediator competence in at least one 1.5 hour simulation has been undertaken by either a different member of the training team or a person who is independent of the training team. The written assessment must reflect the core competency areas referred to in the Australian National

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Mediator Standards – Practice Standards. The final skills assessment mediation simulation may be undertaken in the form of a video or DVD assessment with role players, or as an assessed exercise with role players. The written report must detail: a) the outcome of the skills assessment (in terms of competent or not yet competent); and b) relevant strengths and how they were evidenced; and c) relevant weaknesses and how they were evidenced; and d) relevant recommendations for further training and skills development.4 3. “national mediator accreditation” means accreditation as a mediator under the National Mediator Accreditation System as administered by the National Alternative Dispute Resolution Advisory Council (NADRAC) and the Mediator Standards Board (MSB). 4. “appropriate mediation experience as may be approved by the Dispute Resolution Committee of The Law Society of New South Wales”: Factors which the Dispute Resolution Committee would take into account when exercising its discretion to approve experience and qualifications other than national mediator accreditation include any one or more of the following: a) b) c) d)

experience in representing parties at a mediation; regional factors, e.g. isolation; relevant legal experience; and/or public interest factors such as urgency.

Note: Before undertaking a mediation training course and continuing professional development, it is important that legal practitioners satisfy themselves as to whether the course fulfills the criteria in paragraph 2 of this Schedule.

4 This is the definition of the threshold training and education requirements for mediators as set out in the Australian National Mediator Standards – Approval Standards.

Appendix 2: Professional Standards for Legal Practitioners in Mediation The Law Society actively encourages legal practitioners to advise clients of the advantages of alternative dispute resolution.1 1. Preparing Clients for Mediation The legal practitioner’s role in preparing clients for mediation includes: 1.1 Explaining the process, including the mediator’s role (see Law Society Mediation Model); 1.2 Assisting clients to identify their needs, interests and issues. As well as the legal issues, the legal practitioner should explore with the client why an issue has arisen and what kind of things he or she would like to see happen. This is often wider than just the legal issues and this wider approach assists in generating options; 1.3 Encouraging the clients to prepare their opening statements. If necessary, assisting clients to prepare their opening statement; 1.4 Assisting the client in thinking through options for resolution that may be wider than those remedies available in a court. Ensuring the client has information about the feasibility of such options prior to the mediation commencing; 1.5 Discussing ways to achieve the client’s desired outcomes or priorities; 1.6 Explaining that the mediator will not be deciding the matter and that the settlement decision must be their own; 1.7 Explaining the nature of a “without prejudice” and confidential discussion; 1.8 Advising of the legal costs incurred to date and likely to be incurred if the matter does not settle; and 1.9 Discussing the issues that would be considered by the court and the range of possible outcomes. 2. Role of Legal Representatives during Mediation Essentially the role of the legal practitioner is: 2.1. To assist clients during the course of the mediation; 2.2. To discuss with the mediator, with the other party’s legal practitioner and with clients such legal and evidentiary, or practical and personal matters as the mediator may raise or the clients might wish. It is likely that once the client has heard the other party’s version, the legal practitioner may need to take further instructions from his/her client and perhaps review the legal advice; 1 Reproduced with the kind permission of the Law Society of New South Wales, Australia with whom copyright vests. Unauthorised copying is not permitted. This information is intended for general information only and is not a substitute for legal or other professional advice. The Law Society hereby expressly denies any liability for loss to any person who relies on this information.

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3.

4.

5.

6.

2.3. To participate in a non-adversarial manner. Legal practitioners are not present at mediation as trial advocates, or for the purpose of participating in an adversarial court room style contest with each other, still less with the opposing party. A legal practitioner who does not understand the non-adversarial settlement focus of their role and participate appropriately is a direct impediment to the mediation process; and 2.4. To prepare the terms of settlement or heads of agreement in accordance with the settlement reached at the end of the mediation for signature by the parties before they leave. Confidentiality Any words, act or omission by a mediator in private shall not be revealed to the other parties or legal practitioners without prior permission of the mediator. Good Faith Participation If the legal practitioner forms the view, either before or during the mediation, that the other party and/or their representative is not willing to negotiate in good faith, the legal practitioner should raise this issue with his/her client and/or the mediator. Mediation Conduct Standards A legal practitioner should: 5.1 cooperate with the mediator; 5.2 extend professional courtesies to both the mediator and other legal representatives; 5.3 act in good faith and advise their client of the obligations to act in good faith; 5.4 withdraw from acting when the client gives instructions or acts in a manner that indicates bad faith; and, 5.5 act by word or deed in such a manner as not to incite or condone a party to break the law. A comprehensive description of the mediator’s role is set out in the Charter on Mediation Practice and in the Guidelines for Legal practitioners who act as Mediators. It is not the mediator’s role to give advice or opinions, make suggestions which may disadvantage a party, propose or endorse outcomes or support either party’s view. If the legal practitioner is of the view that these standards, particularly those relating to impartiality, are not being met, he/she should request a private meeting with the mediator immediately. Mandatory Mediation Where a mandatory referral to mediation has been made, the legal practitioners should continue to adhere to the abovementioned mediation standards.

Appendix 3: The Law Society of New South Wales Charter on Mediation Practice

A Guide to the Rights and Responsibilities of Participants 1. Underlying assumptions for the Charter1 1.1 The majority of mediations conducted under The Law Society Mediation Program involve two-party disputes with a single mediator. It is acknowledged, however, that there are some disputes where more than one mediator, usually two, work together in co-operation. 1.2 Multi-party disputes may require a variation in the mediation process which is normally applied in The Law Society Mediation Program. 2. Objectives of the Charter 2.1 To set the highest standards of practice in accordance with the principles of mediation and to formulate guidelines consistent with the Law Council of Australia Ethical Guidelines for Mediators. 2.2 To inform parties of the principles and practice of mediation and of the role of mediators. 2.3 To provide guidelines to the parties for their role in mediation. 2.4 To provide opportunities for mediators and parties to give feedback on their experience as participants in mediation in order to foster and maintain the highest standards of mediation practice. 3. What parties can expect of the mediator 3.1 The mediator is experienced in assisting communication and negotiation The role of the mediator is to guide the communication process so that a useful discussion can take place. The mediator will do this by asking you questions to assist in identifying and clarifying the issues in dispute, to help you sort out misunderstandings and to talk about what is important to you. The mediator aims to help you talk and negotiate with each other directly. 3.2 The mediator must be impartial 1 Reproduced with the kind permission of the Law Society of New South Wales, Australia with whom copyright vests. Unauthorised copying is not permitted. This information is intended for general information only and is not a substitute for legal or other professional advice. The Law Society hereby expressly denies any liability for loss to any person who relies on this information.

342 Appendix 3: The Law Society of New South Wales Charter on Mediation Practice

The mediator is not there to establish facts or to decide which of you is right or wrong, nor to take sides. The mediator will therefore not agree or disagree with statements you make, nor put pressure on you to follow a particular idea or suggestion. The mediator must treat all parties equally. 3.3 The mediator is not a representative The mediator will not give legal or other professional advice. 3.4 The mediator respects confidentiality What is discussed in mediation is confidential unless disclosure is required by law. This means that in nearly all cases, confidentiality will be maintained. Mediators cannot be called as witnesses in any court proceedings which may take place in the future. The mediator will not mention anything discussed by you during a private session to other parties during the mediation (unless you request the mediator to let the other parties know), or to anyone else following the mediation. 3.5 Options for settlement The mediator will encourage you to consider a range of options for settlement and to evaluate them for the purpose of reaching a mutually satisfying outcome for all of you. The mediator will not express any opinion about the merits of the options but will encourage you to assess their implications. 3.6 The mediator is not a decision-maker 3.6.1 You need to decide what is best for you, as the mediator will not impose or suggest final outcomes for you. The mediator has nothing to gain in any way from the outcome of the mediation, whether agreement is reached or not. 3.6.2 The mediator controls the mediation process but not the content of the discussions or the outcome of the dispute. 3.6.3 The mediator will encourage you: • to take an active part in the mediation and to speak freely and with no interruptions from others present; • to discuss issues which are important to you, not issues which the mediator considers to be relevant or significant; and, • to treat each other with courtesy. 3.7 The role of your legal practitioner at mediation If your legal practitioner attends the mediation, the mediator will still encourage you to participate actively in the discussions and negotiations. You will, however, be given the opportunity, if you wish, to allow your legal practitioner to speak and negotiate on your behalf if you feel more comfortable with that arrangement. The mediator will also provide you with opportunities for breaks to allow you to consult with your legal practitioner in the course of the mediation or on the telephone if your legal practitioner is not present. 4. What parties can expect of the mediation process 4.1 The Law Society encourages mediators on its Mediators Panel to follow a standard mediation process. However the parties can suggest variations provided the important principles of mediation are adhered to. The Law Society mediation process normally consists of two sessions – a preliminary conference and a mediation session. Occasionally, the two sessions are merged into one. 4.2 What parties can expect at the Preliminary Conference. 4.2.1 What mediation is and the mediator’s role The mediator will explain the features of mediation – its confidential nature and the role of the mediator as a neutral third party facilitator, not a representative or decision-maker. Whether attendance at a mediation is

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voluntary or mandatory, it can be terminated at any stage by either party or the mediator without the need to give reasons. 4.2.2 The process of mediation The mediator will outline the stages of the mediation process and you will be able to ask questions about it. 4.2.3 Preparing for the mediation session The mediator will confirm that everyone is ready for the mediation session. An Agreement to Mediate will be signed by all participating in the mediation session. A timetable will be set for all outstanding matters relevant to the mediation to be finalised prior to the mediation session including documents to be prepared and exchanged, and arrangements for the payment of fees. The mediator will try to ensure that all parties to the mediation have authority to negotiate and settle. 4.3 What parties can expect at the Mediation Session. 4.3.1 Opening Statements The mediator will ask you to make a brief opening statement outlining your individual concerns and the issues which have brought you to mediation whether you are accompanied by your legal practitioner or not. If your legal practitioner is with you, you may, if you wish, ask him or her to make the opening statement on your behalf. The mediator will ensure that you get equal time to make your statement and that you do so uninterrupted. 4.3.2 Mediator’s Summaries The mediator will then summarise parties’ opening statements and extract issues for discussion which emerge from the opening statements. You will be able to correct any errors or omissions you believe the mediator may have made when summarising back your opening statement. You will also be asked to check and agree on the list of issues for discussion. 4.3.3 Direct Communication The mediator will then facilitate direct communication between you and the other party and discussion of the issues. You will be encouraged to communicate directly with the other party, asking each other questions to explore and clarify the issues extracted from your opening statements. The mediator will also facilitate your discussions so that you have the opportunity of becoming aware of each other’s point of view. 4.3.4 Private Sessions The mediator may hold private and confidential sessions with each of you. During any private and confidential session you may have with the mediator you can raise any matter you consider relevant to the mediation. 4.4 The mediator will facilitate negotiations, settlement and agreement formulation. You will be able to discuss options and negotiate freely with the other party in order to reach a mutually satisfying resolution of your dispute. 5. What the mediator can expect of the parties 5.1 Attendance at the mediation in good faith with the intention of seeking settlement The mediator expects that all parties are attending mediation in good faith with the intention of seeking settlement. 5.2 Attendance at both the preliminary and mediation sessions The mediator will expect you to attend the Preliminary Conference as well as the Mediation Session to ensure that the same information is imparted to all parties at the same time. 5.3 Preparing for the mediation session

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It is very helpful to the mediator if you maintain realistic goals when entering negotiations. You can prepare yourself for the negotiations by doing calculations and background work beforehand and bringing relevant documents to the mediation session. The mediator will expect you to have authority to negotiate and to settle. 5.4 Setting the scene for a constructive mediation session 5.4.1 It is easier for everyone if both parties observe the normal courtesies of listening to each other in a fair and open-minded way. Even if you do not agree with what is being said, it will be helpful to you to listen to and appreciate each other’s point of view. 5.4.2 It is very helpful if a positive, practical and forward looking approach is adopted when negotiating as this can assist in achieving agreement. An agreement which is satisfying to all parties is only possible if you agree to give and take rather than insist on one particular set of demands. 6. Observers 6.1 The attendance of observers should occur only with the consent of all parties and the mediator. 6.2 Observers should sign a Confidentiality Agreement. 7. Support Persons 7.1 Support persons generally do not take part in the negotiations but are present to give moral support to the party. 7.2 Support persons should sign a Confidentiality Agreement.

The Opportunity for Feedback As participants in a mediation conducted as part of The Law Society Mediation Program you may have the opportunity, if you wish, to comment on your mediation experience by forwarding your comments in writing to The Law Society of NSW. Your positive, constructive and informed feedback will help us to maintain the highest possible standard of service provided by the Mediation Program. For more information on any aspect of the Charter please contact the The Law Society’s Dispute Resolution Legal Officer on (02) 9926 0214.

Appendix 4: The Agreement to Mediate (Including a Confidentiality Agreement) This Agreement is provided by The Law Society as a guide only and should be modified to suit the dispute. It is the responsibility of the participants to the mediation to ensure that the agreement meets the needs of the dispute.

During the preliminary conference the participants are asked to sign the Agreement to Mediate (The Agreement).1 The Agreement (reproduced in full below) sets out the procedure followed during the preliminary conference and mediation. The Agreement details the role of the mediator; the parties’ commitment to co-operate with the mediator, the agreement to maintain confidentiality with respect to information disclosed during the mediation and agreement that certain matters will be privileged, including any settlement proposal. The Agreement may be modified with the consent of all parties. The Agreement to Mediate THIS AGREEMENT IS MADE ON (day) (month) (year) BETWEEN THE FOLLOWING PARTIES (In this Agreement called “the parties”) Name of party (please print): Address: Name of Address: Name of Address: Name of Address: Name of

party (please print): party (please print): party (please print): party (please print):

1 Reproduced with the kind permission of the Law Society of New South Wales, Australia with whom copyright vests. Unauthorised copying is not permitted. This information is intended for general information only and is not a substitute for legal or other professional advice. The Law Society hereby expressly denies any liability for loss to any person who relies on this information.

346 Appendix 4: The Agreement to Mediate (Including a Confidentiality Agreement)

Address: AND THE MEDIATOR/S (called “the mediator/s”) Name of mediator (please print): Address: Name of mediator (please print): Address: Appointment of the Mediator 1. The parties appoint the mediator to mediate, in accordance with the terms of this Agreement, the dispute between them. The dispute is briefly described in Schedule 1 to this Agreement (the “Dispute”). The mediator accepts the appointment as set out in Schedule 2 to this Agreement. Role of the Mediator 2. The mediator will be impartial. The mediator will assist the parties to attempt to resolve the Dispute by helping them to: 2.1 systematically isolate the issues in dispute; 2.2 develop options for the resolution of these issues; 2.3 explore the usefulness of these options; and 2.4 consider their interests and needs. 3. The mediator may meet with the parties together or separately. 4. The mediator will not: 4.1 give legal or other professional advice to any party; or 4.2 impose a result on any party; or 4.3 make decisions for any party. 5. The mediator will not accept an appointment or act for any party in relation to any proceedings concerning the Dispute. 6. Neither party will take action to cause the mediator to breach Clause 5. Conflicts of Interest 7. The mediator must, before the commencement of the mediation, disclose to the parties to the best of the mediator’s knowledge any prior dealings with any of the parties as well as any interest in the Dispute. 8. If in the course of the mediation the mediator becomes aware of any circumstances that might reasonably be considered to affect the mediator’s capacity to act impartially, the mediator must immediately inform the parties of these circumstances. The parties will then decide whether the mediation will continue with that mediator or with a new mediator appointed by the parties. Co-operation by the Parties 9. The parties will use their best endeavours to carry out the tasks set out in Clause 2 of this Agreement. 10. The parties will comply with reasonable requests and directions made by the mediator about the conduct of the mediation.

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Conduct of the Preliminary Conference 11. As part of the mediation the mediator may schedule a preliminary conference at a time and place convenient to the parties to establish an agreed timetable for the mediation. Many preliminary conferences are done via telephone, video conferencing or electronically. Authority to Settle and Representation at the Mediation Session 12. Parties must attend the mediation session. If a party is not a natural person it must be represented, at the preliminary conference and the mediation conference, by a person with full authority to make agreements binding on it in settling the Dispute (such authority to be evidenced by a written authority to participate). 13. At the mediation each party may have one or more other persons, including legally qualified persons, to assist and advise them. Communication between the Mediator and the Parties 14. Any information disclosed to a mediator in private is to be treated as confidential by the mediator unless the party making the disclosure states otherwise. Confidentiality of the Mediation 15. The participants will not disclose to anyone not involved in the mediation any information or document given to them during the mediation unless that person, has signed the prescribed Confidentiality Agreement in the form attached to this Agreement. 16. The participants agree that, subject to Clauses 22 and 23, the following will be privileged and will not be disclosed, or be the subject of a subpoena to give evidence or to produce documents, in any proceedings in respect of the Dispute: 16.1 any settlement proposal whether made by a party or the mediator; 16.2 the willingness of a party to consider any such proposal; 16.3 any statement made by a party or the mediator during the mediation; and, 16.4 any information prepared for the mediation that is communicated to another party during the mediation. Documentation 17. The mediator will return/destroy (delete as applicable) all documentation other than the Agreement to Mediate and the signed Settlement Agreement. Suspension or Termination of the Mediation 18. A party may terminate the mediation at any time after consultation with the mediator. 19. The mediator has a discretion to terminate or suspend the process at anytime. 20. The mediator may terminate the mediator’s involvement in the mediation if, after consultation with the parties, the mediator feels unable to assist the parties to achieve resolution of the Dispute. 21. If agreement is reached at the mediation, either the heads of agreement or terms should be written down and signed by the parties before they leave the mediation.

348 Appendix 4: The Agreement to Mediate (Including a Confidentiality Agreement)

Enforcement of the Settlement Agreement 22. If the Settlement Agreement is expressed to be binding on all parties, any party may enforce the terms of the Settlement Agreement by judicial proceedings. 23. For the purposes of enforcing an agreement of the mediation, any party may call evidence of the Settlement Agreement including evidence from the mediator and any other party engaged in the mediation. 24. Subject to Clauses 22 and 23 the Settlement Agreement is confidential unless otherwise agreed by the parties. Exclusion of Liability and Indemnity 25. The mediator will not be liable to a party for any act or omission in the performance of the mediator’s obligations under this Agreement unless the act or omission is fraudulent. 26. The parties, together and separately, indemnify the mediator against any claim for any act or omission in the performance of the mediator’s obligations under this Agreement unless the act or omission is fraudulent. The Cost of the Mediation 27. The parties together and separately will be liable to the mediator for the mediator’s fees described in Schedule 3. The parties will share equally all the other costs of the mediation described in Schedule 3. 28. The parties agree that if the mediation does not result in an agreement to resolve the Dispute, the costs of the mediation will be costs in the cause, i.e. costs of the mediation (including those of the legal practitioners to attend the mediation) will be treated as part of the overall costs in subsequent court proceedings which are generally payable by the losing party. 29. If the mediation does result in an agreement to resolve the Dispute, the costs of additional time (Schedule 3) in the mediation must be paid within 30 days from the receipt of the invoice. Schedule 1: Description of the Dispute The Dispute is the subject of proceedings (if applicable): No: …………………… of ……………… in the ………………………….. Court and/or a brief description of the Dispute: Schedule 2: Date and Venue of Mediation Conference The mediation of the Dispute will be held on : ………/………/……… (Date) at: ………………………………………………………………………….. (Venue of mediation)

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349

Schedule 3: Costs of the Mediation2 1. Mediator’s Fees and Expenses: For the preliminary conference, all preparation time and the first 3 hours of the mediation session. 2. Additional Time Fee Estimate: Time beyond the first 3 hours of the mediation session. 3. The Law Society’s Administration Fee: 4. Room Hire:

$660 per party (including GST), to be paid in advance (unless otherwise agreed).3 In the event that the mediation session exceeds 3 hours, the mediator’s fee will be $...............4 per hour thereafter. $165 per party (including GST), to be paid in advance (unless otherwise agreed).5 At cost.

Signing of the Agreement to Mediate The parties,6 legal practitioners and the mediator have signed this Agreement to Mediate as follows: Date: ………/………/……… Name of party

Signature

Name of Legal Practitioner

Signature

Name of party

Signature

Name of Legal Practitioner

Signature

Name of party

Signature

Name of Legal Practitioner

Signature

Name of party

Signature

Name of Legal Practitioner

Signature

Name of Mediator

Signature

2 Schedule 3, as written, is applicable to The Law Society Mediation Program. 3 The Mediator’s Fees and Expenses (incl. GST) are to be paid in advance to The Law Society unless otherwise agreed prior to the mediation. 4 The Mediator to complete this section with the applicable hourly rate. 5 The Law Society’s Administration Fee (incl. GST) is to be paid in advance to The Law Society unless otherwise agreed prior to the mediation. 6 Where a party is an authorized representative of a company and that party signs an Agreement to Mediate, a Confidentiality Agreement and/or a Settlement Agreement that party binds all servants and agents of the company.

350 Appendix 4: The Agreement to Mediate (Including a Confidentiality Agreement)

Confidentiality Agreement for observers or support persons Name of participant present at the mediation: (Please print) I UNDERTAKE to the parties to the mediation, in exchange for being permitted by them to participate at the mediation, as follows: 1. I will not disclose to anyone any information received by me during the mediation, unless required by law to make such a disclosure. 2. I will not disclose to anyone involved in the mediation any information received by me during the mediation from a party to the mediation unless expressly authorised by the disclosing party to do so. 3. To the extent that I am required to disclose any information either by law or otherwise, I will immediately notify the other participants of this requirement. (Signature of participant (Address)

(Date)

Appendix 5: The Model Clause 1 If a dispute arises from this contract, a party to the contract must not commence court or arbitration proceedings relating to the dispute unless that party has participated in a mediation in accordance with paragraphs 2 and 3 of this clause. This paragraph does not apply to an application for urgent interlocutory relief.1 2 A party to this contract claiming that a dispute has arisen from the contract (“the Dispute”) must give a written notice specifying the nature of the Dispute (“the Notice”) to the other party or parties to the contract. The parties must then participate in mediation in accordance with this clause. 3 If the parties do not agree, within seven days of receipt of the Notice (or within a longer period agreed in writing by them) on: 3.1 the procedures to be adopted in a mediation of the Dispute; and 3.2 the timetable for all the steps in those procedures; and 3.3 the identity and fees of the mediator; then: 3.4 the President of The Law Society of New South Wales will appoint the mediator and determine the mediator’s fees and determine the proportion of those fees to be paid by each party (to be in equal shares unless otherwise agreed by the parties); 3.5 the parties must mediate the Dispute: 3.5.1 with the mediator appointed under paragraph 3.4; 3.5.2 with a genuine commitment to participate; and 3.5.3 in accordance with the Mediation Guideliens of The Law Society of New South Wales. 4 If a party commences proceedings relating to the Dispute other than for urgent interlocutory relief, that party must consent to orders under section 26 of the Civil Procedure Act 2005 that the proceedings relating to the Dispute be referred to mediation by a mediator. 5 If the parties do not agree on a mediator within seven days of the order referred to in paragraph 4, the mediator appointed by the President of the Law Society of New South Wales will be deemed to have been appointed by the Court. 6 If a party: 6.1 refuses to participate in a mediation of the Dispute to which it earlier agreed; or 1 Reproduced with the kind permission of the Law Society of New South Wales, Australia with whom copyright vests. Unauthorised copying is not permitted. This information is intended for general information only and is not a substitute for legal or other professional advice. The Law Society hereby expressly denies any liability for loss to any person who relies on this information.

352 Appendix 5: The Model Clause

6.2 refuses to comply with paragraph 3.5 of this clause, a notice having been served in accordance with paragraph 2; then, 6.3 that party is not entitled to recover its costs in any court proceedings or arbitration relating to the Dispute, even if that party is successful; and, 6.4 that party is deemed to have consented to a decree of the Supreme Court of New South Wales that it will specifically perform and carry into execution paragraph 3.5 of this clause. Notes to the Model Clause The traditional remedy for failure to comply with an agreement to mediate was a stay of proceedings that were commenced in breach of the agreement to mediate. As a result of the enactment of section 26 of the Civil Procedure Act 2005, all Courts in New South Wales now have the power to order that proceedings be referred for mediation whether the parties consent or not. Accordingly, parties do not need to relay on the traditional remedy. Paragraph 4 provides that a party that commences proceedings in breach of the clause must consent to the making of an order under section 26. Where a party to a contract refuses to mediate a dispute but does not itself commence proceedings, the traditional remedy of a stay of proceedings is of no use. Further, in this situation there are no proceedings in which an order under section 26 can be sought. What is needed by the party who wishes to mediate is an order that the other party participate in a mediation. Cases decided since Hooper Bailie Associated Ltd v Natcon Group Pty Ltd2 and Elizabeth Bay Developments Pty Limited v Boral Building Services Pty Limited3 strongly suggest that the Court would grant specific performance of an agreement to mediate that does not require supervision by the Court. Paragraph 5 provides for deemed consent to an order for specific performance. Close analysis of Hooper Bailie Associated Ltd v Natcon Group Pty Ltd, Hooper Bailie Associated Ltd v Natcon Group Pty Ltd and later cases, and the existence of an obligation under section 27 of the Civil Procedure Act 2005 to participate in Court-referred mediation in good faith, both suggest that an agreement to mediate in good faith is enforceable. Paragraph 3.5.2 requires the parties to participate in the mediation in good faith. If not enforceable, the paragraph should be severable. This clause is applicable for use in Law Society documents. The language in paragraphs 3.4 and 4.2 should identify the President of The Law Society as appointor of the mediator. The language in paragraph 4 provides that a party in breach “must consent to” rather than “must not oppose” orders that the proceedings be referred to mediation.

2 Hooper Bailie Associated Ltd v Natcon Group Pty Ltd (1992) 29 NSWLR 194. 3 Elizabeth Bay Developments Pty Limited v Boral Building Services Pty Limited (1995) 36 NSWLR 709.

Appendix 6: Mediation Guidelines Functions of the Mediator1 1. The mediator will assist the parties to explore options for and, if possible, to achieve the expeditious resolution of their dispute (“the Dispute”) by agreement between them. 2. The mediator will not make decisions for a party or impose a solution on the parties.

Conflicts of Interest 3. The mediator must disclose to the parties to the best of the mediator’s knowledge any prior dealings the mediator has had with either of them and any interest the mediator has in the Dispute. 4. If in the course of the mediation, the mediator becomes aware of any circumstances that might reasonably be considered to affect the mediator’s capacity to act impartially the mediator will immediately inform the parties of those circumstances. The parties will then confer and, if agreed, continue with the mediation before the mediator.

Co-operation in the Mediation 5. The parties must co-operate with the mediator and each other during the mediation to seek a mutually satisfying outcome to their dispute. 6. Each party must use its best endeavours to comply with reasonable requests made by the mediator to promote the efficient and expeditious resolution of the Dispute.

Authority and Representation 7. If a party is a natural person, the party must attend the mediation conference. If a party is not a natural person it must be represented at the mediation conference by a person with full authority to make binding agreements. 8. Each party may also appoint one or more other persons, including legally qualified persons, to assist and advise the party in the mediation and to perform such roles in the mediation as the party requires.

Conduct of the Mediation 9. The mediation, including all preliminary steps, will be conducted in such manner as the mediator considers appropriate having due regard to the nature and circumstances of the Dispute, the agreed goal of an efficient and expeditious resolution of the Dispute and the view of each party as to the conduct of the mediation. 10. The mediation conference shall be held within such period as the parties may agree. 11. The mediator may give directions as to: 11.1 Preliminary conferences prior to the mediation conference. 1 Reproduced with the kind permission of the Law Society of New South Wales, Australia with whom copyright vests. Unauthorised copying is not permitted. This information is intended for general information only and is not a substitute for legal or other professional advice. The Law Society hereby expressly denies any liability for loss to any person who relies on this information.

354 Appendix 6: Mediation Guidelines

11.2 The exchange of experts’ reports, the meeting of experts and the subsequent preparation of a joint experts’ report with a view to identifying areas of agreement, narrowing the area of disagreement and clarifying briefly the reasons for disagreement. 11.3 The exchange of brief written outlines of the issues involved. 11.4 Service on the mediator prior to the mediation conference of any such reports and outlines.

Communication between the Mediator and a Party 12. The mediator may meet as frequently as the mediator deems appropriate with the parties together or with a party alone and in the latter case the mediator need not disclose the meeting to the other party. 13. The mediator may communicate with any party orally and/or in writing. 14. Any document relied upon by a party should be served by the party on the other party. 15. Information, whether oral or written, disclosed to the mediator by a party in the absence of the other party may not be disclosed by the mediator to the other party unless the disclosing party permits the mediator to do so.

Confidential Information 16. All confidential information disclosed during the mediation, or prior: 16.1 May not be disclosed except to a party or a representative of that party participating in the mediation or if compelled by law to do so; and 16.2 Mmay not be used for a purpose other than the mediation.

Privilege 17. The following will be privileged and thus not admissible in proceedings before any court or other body: 17.1 Evidence of anything said or of any admission made in a mediation conference; and 17.2 A document prepared for the purposes of, or as a result of, a mediation conference. Paragraphs 17.1 and 17.2 do not apply to any evidence or document if: 17.3 The persons in attendance at, or identified during, the mediation conference and, in the case of a document, all persons specified in the document, consent to the admission of the evidence or document; 17.4 There are reasonable grounds to believe that the disclosure is necessary to prevent or minimise the danger of injury to any person or damage to any property. 17.5 Disclosure is being sought merely to assert the fact that an agreement has been reached in mediation and/or to clarify the substance of the agreement.

Subsequent Proceedings 18. The mediator will not accept appointment as an arbitrator in, or act as an advocate in, or provide advice to a party to any arbitral or judicial proceeding relating to the Dispute.

Termination 19. A party may terminate the mediation immediately by giving written notice to each other party and to the mediator at any time. 20. The mediator may immediately terminate the engagement as mediator by giving written notice to the parties of that termination, if, after consultation with the parties, the mediator forms the view that the mediator will be unable to assist the parties to achieve resolution of the Dispute.

Appendix 6: Mediation Guidelines 355

Settlement 21. If settlement is reached at the mediation, heads of agreement or the terms of the settlement must be written down and signed by the parties and the mediator before any of the participants leave.

Enforcement 22. In the event that part or all of the Dispute is settled either party will be at liberty to enforce the terms of the settlement by judicial proceedings.

Exclusion of Liability and Indemnity 23. The mediator will not be liable to a party except in the case of fraud by the mediator for any act or omission by the mediator in the performance or purported performance of the mediator’s obligations in the mediation. 24. The parties shall jointly and severally indemnify the mediator against all claims, except in the case of fraud by the mediator, arising out of, or in any way referable to, any act or omission by the mediator in the performance, or purported performance, of the mediator’s obligations in the mediation.

Costs 25. The parties will share equally and be liable together and separately to the mediator for the mediator’s fees for the mediation. The mediator may, at any time and from time to time, require each party to deposit with the mediator such sum as the mediator considers appropriate to meet the mediator’s anticipated fees and disbursements. 26. If the mediation does not result in an agreement to resolve the Dispute, the costs of the mediation will be costs in the cause.

Index A

Victoria, ............................................. [7.340] voluntary mediation, ...................... [3.210] Western Australia, ........................... [7.390]

Aborigines — see Australian Aborigines Accreditation family counsellors, ............................ [7.60] family dispute resolution practitioners — see Family Dispute Resolution Practitioners Mediator Standards Board — see Mediator Standards Board NADRAC standards, ........................ [9.60] National Mediator Accreditation System (NMAS) — see National Mediator Accreditation System (NMAS) Recognised Mediation Accreditation Body (RMAB), ....................... [9.70] Active listening, ..................................... [2.80] Adjudication, ......................................... [5.110] application, ....................................... [5.110] definition, ......................................... [5.110] face-to-face conference, .................. [5.110] judgment debt, ................................ [5.110] NADRAC definition, ...................... [5.110] progress payment, entitlement, .... [5.110] sub-contractor, ................................. [5.110] uniform legislation, ......................... [5.110] Adjudicator appointment, .................................... [5.110] powers, .............................................. [5.110] Administrative tribunals administrative review, ...................... [7.20] Australian Capital Territory, ......... [7.100] case management, ........................... [7.390] Commonwealth, ................................ [7.40] compulsory conferences, ............... [7.290] Conference Registrar, ....................... [7.20] conferences, .............. [1.180], [3.40], [7.20] dispute resolution, definition, ........ [7.20] good faith, requirement, .................. [7.20] mandatory powers, ........................ [1.160] mediation, ........... [1.160], [1.180], [3.210], [7.20] natural justice, rules, ........................ [7.20] Queensland, ..................................... [7.240] South Australia, ............................... [7.290]

Adversarial negotiation — see also Negotiation assumptions, .................................... [2.110] benefits, ............................................. [2.110] consensuality, lack of, .................... [2.270] distributive negotiation and, ......... [2.10], [2.130] integrative negotiation and, .......... [2.120] overview, .......................................... [2.110] process, .............................................. [2.110] role of lawyers, ................................ [2.110] structure and process, .................... [2.110] zero sum game, ............................... [2.110] Agreement alternatives, ...................................... [2.170] arbitration, ............................ [1.50], [4.100] “best alternative to a negotiated agreement”, .......................... [2.170] consensual, ......................................... [1.10] early options for, identifying, ....... [3.100] enforceability, ..................... [8.250]–[8.260] good faith, .............................. [5.50], [5.70] joint, ..................................................... [2.20] LEADR — see Leading Edge Alternative Dispute Resolvers (LEADR) negotiation, ........................................ [2.20] reality testing, .................................. [3.120] Alternative dispute resolution definition, ......................................... [7.250] first use of, ......................................... [1.30] process, definition, ............................ [7.40] use of word “alternative”, ............... [1.20] Alternatives principled negotiation, in, ............. [2.170] American Arbitration Association, .... [9.10] Code of Ethics for Arbitrators in Commercial Disputes, .......... [9.40] American Bar Association Ethics Code for Settlement Negotiations, ................................................... [9.10] Model Standards of Conduct for Mediators, .............................. [9.10]

358

Principles of Dispute Resolution

Appraisals, ................................. [1.160], [5.10] arbitration, distinguished, ............... [5.80] case appraisal — see Case appraisal determinative case appraisal, ......... [5.80] distinguishing features, ................... [5.80] expert appraisal — see Expert appraisal key procedural elements, ................ [5.80] NADRAC definitions, ...................... [5.80] non-binding nature of, ..................... [5.80] procedural elements, ........................ [5.80] types, ................................................... [5.80] Arb-med, ................................................ [6.120] Arb-med-arb, ......................................... [6.120] Arbitral award appeals against, ................. [4.360]–[4.370] choice of law, ................................... [4.310] contents, ............................................ [4.320] definition, ......................................... [4.320] error of law, ..................................... [4.320] failure to choose governing law, .. [4.320] form and contents, .......................... [4.320] grounds for challenging, ............... [4.340] insufficient reasons, ........................ [4.320] making of award, ............................ [4.310] procedural error, ............................. [4.340] questions of law, ............................. [4.360] reasons for award, .......................... [4.320] recourse against, ............................. [4.340] setting aside, ...................... [4.320], [4.340] substance of dispute, ...................... [4.310] Arbitral tribunals competence to rule on its own jurisdiction, ............. [4.140]–[4.150] conduct of arbitral proceedings, .. [4.180] cross-examination, ............. [4.270]–[4.280] evidence additional, .................................. [4.260] admissibility, .............................. [4.250] materiality, .................................. [4.250] relevance, ...................... [4.250]–[4.260] rules of, ....................................... [4.250] taking, ......................................... [4.250] interim measures, ............................ [4.160] conditions for granting, ........... [4.160] interlocutory injunctions, .............. [4.170] jurisdiction, ...................................... [4.140] rules of procedure, determination of, ................................................. [4.180] termination of proceedings, ......... [4.310], [4.330] Arbitration adjudicative process, ........................ [1.50]

agreement, .......................... [4.190]–[4.200] primacy of, ................................. [4.190] appraisal, distinction, ....................... [5.80] arb-med, ........................................... [6.120] arb-med-arb, .................................... [6.120] awards between employers and employees, .............................. [1.50] beginning, ........................................... [1.50] clause, ................................................ [4.200] Commercial Arbitration Acts — see Commercial Arbitration Acts Commonwealth Constitution, enumerated power in, .......... [4.40] “conciliation and arbitration”, interpretation, ........................ [4.40] Costs of, ............................................ [4.380] courts and tribunals, ........................ [1.50] definition, ........................................... [4.10] determination, ................................... [1.50] flexibility, need for, ......................... [4.380] High Court case on breadth of term ........................................... [4.40] historical background, ...................... [1.50] industrial relations, ........................... [1.50] Institute of Arbitrators and Mediators Australia (IAMA), ... [1.60], [1.150] international development, ............. [1.50] legislative background, .................... [1.50] Lord Mustill’s view on, ................. [4.380] mandatory referral, ........................... [4.60] non-arbitral intermediaries, using, ................................................. [4.290] non-curial dispute resolution, ........ [1.50] formalisation, ............................... [1.50] online dispute resolution (ODR) — see Online dispute resolution (ODR) reasons, ............................................... [1.80] State and territory legislation, ........ [1.50] UNCITRAL Model Law, .................. [1.50] uniform legislation, .............. [1.50], [4.20] voluntary referral, ............................. [4.60] Arbitrator accreditation, ...................................... [1.60] appointment of, ............................... [4.110] grounds for challenge, ................................... [4.120]–[4.130] bias, ....................... [4.120], [4.130], [4.290] apparent bias, ............................ [4.300] conciliator, acting as, ........ [4.290]–[4.300] confidential legal advice, ............... [4.350] delegation of power by, ................. [4.210] mediator, acting as, ........... [4.290]–[4.300] non-arbitral intermediary, acting as, ................................... [4.290]–[4.300]

Index Arbitrator — cont opinions of others, substituting for own, ................................... [4.230]–[4.240] own opinion, ...................... [4.230]–[4.240] powers, ............................................. [4.180] act as mediator, conciliator or other non-arbitral intermediary, ................................... [4.290]–[4.300] arbitration clause, under, ......... [4.200] exercise of granted powers, .... [4.190] interpretation, ............................ [4.180] reasons for award, .......................... [4.320] insufficient, ................................. [4.320] special qualifications, ..................... [4.110] training, .............................................. [1.60] Atmosphere full and frank disclosures, for, ..... [3.180] non-judgmental, for option generation, ................................................. [2.160] Australasian Dispute Resolution Journal (ADRJ), ................................. [1.130] Australian Aborigines impartiality, ...................................... [3.230] mediation, ........................................ [3.230] neutrality, issue of, .......................... [3.230] Australian Capital Territory court-annexed dispute resolution children and young people, .... [7.120] Civil and Administrative Appeals Tribunal, ................................ [7.100] civil law, ...................................... [7.120] court procedure, ........................ [7.100] referral to mediation, ........ [7.100], [7.110] Australian Commercial Disputes Centre (ACDC), .................................. [1.70] Australian Conciliation and Arbitration Commission awards, ................................................ [1.50] settling industrial disputes, ............ [1.50]

359

functions, ............................................ [1.70] training programs, ............................ [1.70] Australian Human Rights Commission (AHRC) conciliation, ............................ [5.20]–[5.30] activities, ....................................... [5.30] complaints handling procedure, ................................................... [5.30] conciliation conference, .............. [5.30] directions to attend, .................... [5.30] face-to-face conference, .............. [5.30] facilitative approach, ...... [5.20]–[5.30] functions, ...................................... [5.30] options for settlement, ............... [5.30] privacy, .......................................... [5.30] production of documents, ......... [5.30] public inquiries, .......................... [5.30] reality testing, .............................. [5.30] representation, ............................. [5.20] statutory framework, ................. [5.30] Award — see Arbitral award

B Bar Settlement Week, ............................... [1.90] Bargaining — see also Distributive negotiation — see also Integrative negotiation equality of bargaining power, ........ [7.70] positional, ............. [2.130], [2.220], [2.230] Barristers early neutral evaluation, .................. [5.90] professional indemnity insurance, . [9.10] Best alternative to a negotiated agreement (BATNA) separate sessions, ............................ [3.110] what is, .................. [2.170], [3.110], [3.180]

Australian Dispute Resolution Association (ADRA) establishment, .................................. [1.100] key stakeholders, ............................ [1.100] objectives, ......................................... [1.100]

Bias arbitrators, ............ [4.120], [4.130], [4.290] apparent bias, ............................ [4.300] mediation, in, ................................... [3.230] mediators, ................. [3.60], [9.70], [9.110] reasonable apprehension, .............. [1.200]

Australian Disputes Centre accreditation procedures, ................. [1.70] accredited mediators, ....................... [1.70]

Body language eye contact, ...................................... [2.100] observing, ......................................... [2.100]

360

Principles of Dispute Resolution

Boulle, Professor Laurence, ................. [3.30] Brainstorming options, generating, ........................ [2.160] Building and construction industry adjudication, ..................................... [5.110] dispute review boards, .................... [5.60]

C Case appraisal — see also Appraisals definition, ........................................... [5.80] process of, .......................................... [5.10] Case management court system, in, ..... [1.40], [1.60], [1.190], [10.20] Institute of Arbitrators and Mediators, ................................................... [1.60] negotiation, ........................................ [2.10] State Administrative Tribunal, ..... [7.390] Supreme Court of Western Australia, ................................................. [7.410] vanishing trial phenomenon, ........ [10.20] Caucusing — see Separate sessions Civil Justice Research Centre data from, ............................. [2.30], [10.20] Co-mediation model Community Justice Centres, .......... [1.80], [7.150] native title, ......................................... [7.80] Collaborative law arb-med, ........................................... [6.120] Collaborative Professionals in NSW, ................................................... [6.30] combined processes, ....................... [6.110] definition, ........................................... [6.30] family law — see Family law Federal Government, endorsement, ................................................... [6.40] International Academy of Collaborative Professionals (IACP), ............ [6.40] med-arb, ........................................... [6.120] mediation, distinguished, ................ [6.30] ongoing communication, commitment, ................................................... [6.30] participation agreement, .................. [6.30]

restorative justice — see Restorative justice Stuart Webb, ........................... [6.30], [6.40] training, .............................................. [6.40] voluntary process, ............................. [6.30] “withdrawal” principle, ................... [6.30] Collective bargaining approaches to, ................................. [10.80] industrial relations, in, ..................... [1.50] Commercial Arbitration Acts advent of, ........................................... [4.40] application, scope of, ....................... [4.90] arbitration agreements, ...... [4.50], [4.100] arbitrators — see Arbitrator award — see Arbitral award “commercial”, interpretation, ......... [4.90] Commonwealth, powers, ................ [4.50] correcting an award, ...................... [4.330] costs, ........................ [4.80], [4.110], [4.380] cross-examination, ............. [4.270]–[4.280] definition, ............................... [4.40], [4.90] domestic arbitration, .................. [4.90] delegating power, .............. [4.210]–[4.220] event triggering arbitration, ...... [4.50] evidence, taking, ............................. [4.250] additional, .................................. [4.260] admissibility, .............................. [4.250] materiality, .................................. [4.250] relevance, ...................... [4.250]–[4.260] rules of, ....................................... [4.250] flexibility, .......................................... [4.380] independent opinion, ..................... [4.240] interim awards, ............................... [4.160] International Arbitration Act 1974, relationship, ........................... [4.90] Model Law on International Commercial Arbitration, and, ... [4.100], [4.290] natural justice, .... [4.180], [4.260], [4.280], [4.290] object of, ............................................. [4.80] paramount object, ............................. [4.80] powers appoint arbitrator, ..................... [4.110] confidentiality over documents, ................................... [4.290], [4.300] equitable relief, grant, ................ [4.60] procedural fairness, .......... [4.260], [4.350] termination of proceedings trigger mechanisms, ................. [4.330] “unnecessary” or “impossible”, ................................................. [4.320] third party opinion, ........................ [4.230] uniform legislation, .......................... [4.70]

Index Commitment parties planning for, ....................... [2.210] principled negotiation and, ........... [2.210] Common ground examples, ............................................ [3.90] identifying, ......................................... [3.90] seeking, ............................................... [3.60] Commonwealth court-annexed dispute resolution — see Court-annexed dispute resolution dispute resolution legislation, ...... [1.160] Commonwealth Constitution conciliation and arbitration, ............ [4.40] enumerated powers, ......................... [4.40] Communication active listening, ................................. [2.80] body language, ................................ [2.100] conflict, and, ...................................... [2.50] dealing with emotions, .................... [2.90] listening, ............................................. [2.80] open and closed-ended questions, ................................................... [2.60] principled negotiation, and, .......... [2.190] questions, ............................................ [2.60] reframing, ........................................... [2.50] silence, ................................................. [2.70] skills, ...................................... [2.40]–[2.100] sponging, ............................................ [2.90] Community Justice Centres (CJC) children at risk of significant harm, ................................................. [7.150] classes of disputes, ......................... [7.150] co-mediation, ....................... [1.80], [7.150] empowerment, ................................. [3.220] establishment, ...................... [1.80], [7.150] legislation, ........................................ [1.180] mediation, .......................... [3.220], [7.150] secrecy and confidentiality, ..... [7.150] New South Wales, ............................. [1.80] Northern Territory, ......................... [7.200] overview, ............................................ [1.80] Queensland, ....................................... [1.80] Victoria, ............................................... [1.80] Community sector legal aid schemes, .............. [1.80], [1.180], [3.220], [6.80], [7.60] neighbourhood disputes, ................. [1.80] transformative mediation, ............... [3.30]

361

Complaints Anti-Discrimination Board, ........... [1.160] Community Justice Centres, ......... [7.200] conciliation, ............................ [5.20], [5.30] health, ................................. [1.170], [7.330] human rights, .................................... [5.30] legislation, ........................................ [1.160] Conciliation Australian Human Rights Commission (AHRC) — see Australian Human Rights Commission (AHRC) Commonwealth Constitution, enumerated power in, .......... [4.40] “conciliation and arbitration”, interpretation, ........................ [4.40] conciliator, role, ................................. [5.20] definition, ........................................... [5.20] hybrid processes, .............................. [5.10] informality, ......................................... [5.30] meaning, ............................................. [5.20] mediation, distinction, ..................... [5.20] models, ................................................ [5.20] NADRAC definition, ........................ [5.20] options, generation of, ..................... [5.20] principled negotiator, comparison, ................................................... [5.20] process, ............................................... [5.20] proposals for settlement, ................. [5.20] settlement of complaints, ................ [5.10] statutory schemes, use in, ............... [5.30] termination, ........................................ [5.30] third parties, ...................................... [5.20] Conferencing, ... [3.40], [3.210], [5.30], [6.10], [6.110] Administrative Appeals Tribunal (Cth), ....................................... [3.40], [7.20] online dispute resolution, .............. [6.150] settlement in Supreme Court, ....... [7.220] teleconferencing, ............................. [7.410] victim-offender, .................... [6.50], [7.200] video, ................................................. [6.220] youth, .................................... [6.70], [6.100] Confidentiality communications, ............................... [8.10] admitting in to evidence, .......... [8.10] privileged, .................................... [8.20] contractual, ......................... [8.130]–[8.150] documents, ......................... [3.190]–[3.200] Law Society of New South Wales, ................................................. [3.180] legal professional privilege, ................................... [8.110]–[8.120]

362

Principles of Dispute Resolution

Confidentiality — cont limitations of without prejudice privilege, ................... [8.60]–[8.100] general law, .................................. [8.80] limits to, .............................. [3.190]–[3.200] mediation, and, .................. [3.180], [8.70], [8.170]–[8.180] privileged communications public policy rationale, ........ [8.20], [8.40] statutory privilege, ............ [8.160]–[8.180] without prejudice privilege, ....................................... [8.30]–[8.50] without prejudice privilege, limitations of, ................................ [8.60]–[8.110] Confidentiality agreement, .... [3.40], [3.180] Conflict coaching definition, ......................................... [10.70] model of, .......................................... [10.70] Costs arbitration, of, .................................. [4.380] Commercial Arbitration Acts, ........ [4.80], [4.110], [4.380] Dispute Review Boards, .................. [5.60] Federal Court of Australia, ............. [7.30] Court(s) case management, ............................. [1.40] expert determination or referral, ... [5.80] legislation for mandatory referral, ................................................. [1.160] mediation, role of, ........................... [1.200] mediation schemes, ........................ [3.210] referees, court appointed, .............. [5.100] referral, .............................................. [5.100] role, ...................................................... [1.40] Court-annexed dispute resolution Australian Capital Territory children and young people, .... [7.120] Civil and Administrative Appeals Tribunal, ................................ [7.100] civil law, ...................................... [7.120] court procedure, ........................ [7.100] Commonwealth, .................... [7.40]–[7.90] Administrative Appeals Tribunal, ................................................... [7.40] Family Court of Australia, ....................................... [7.60]–[7.70] Federal Circuit Court, ................ [7.50] Federal Court of Australia, ....... [7.40] National Native Title Tribunal, ................................................... [7.80]

mandatory, ....................................... [1.190] New South Wales civil procedure legislation, ...... [7.130] community justice centres, ..... [7.130], [7.150] farm debt mediation, .. [7.160]–[7.180] Joint Protocol Referral Information, ................................................. [7.130] mediators, ..................... [7.130]–[7.140] statutory framework, ............... [7.190] Supreme Court, ......................... [7.130] uniform civil procedures rules, ................................................. [7.130] Northern Territory community justice centres, ...... [7.200] Local Court, ............................... [7.210] statutory framework, ............... [7.230] Supreme Court, ......................... [7.220] Queensland Civil and Administrative Appeals Tribunal, ................................ [7.240] dispute resolution centres, ...... [7.270] District Court, ............................ [7.250] Magistrates’ Court, ................... [7.250] statutory framework, ............... [7.280] Supreme Court, ......................... [7.250] Uniform Civil Procedure Rules, ................................................. [7.260] regulation of dispute resolution, . [1.190], [1.210] South Australia Civil and Administrative Tribunal, ................................................. [7.290] District Court, ............................ [7.300] Magistrates’ Court, ................... [7.300] statutory schemes, .................... [7.310] Supreme Court, ......................... [7.300] Tasmania Alternative Dispute Resolution Act 2001, ....................................... [7.320] Magistrates’ Court, ................... [7.320] statutory schemes, .................... [7.330] Supreme Court, ......................... [7.320] Victoria Civil and Administrative Tribunal, ................................................. [7.340] County Court, ............................ [7.350] farm debt mediation, .. [7.360]–[7.370] Magistrates’ Court, ................... [7.350] statutory schemes, .................... [7.380] Supreme Court, ......................... [7.350] Western Australia industrial relations disputes, .. [7.430] Magistrates’ Court, ................... [7.420] State Administrative Tribunal, ................................................. [7.390]

Index

363

Court-annexed dispute resolution — cont statutory schemes, .................... [7.440] Supreme Court, ........... [7.390]–[7.410]

definition, ........................................... [1.10] determinative process, ..................... [1.10] development, ................................... [1.160] disruptive technology, .................... [10.10]

Criminal justice system restorative justice — see Restorative justice

draft dispute resolution clauses, ................................... [8.270]–[8.530] early neutral evaluation, ...... [1.30], [5.90] education, ........................................... [1.40] ethics — see Ethics facilitative process, ........................... [1.10] family law — see Family law flexible nature, ................................... [1.10] formal advent of, .............................. [1.40] formalisation, ..................................... [1.30] future of, ........................................... [10.10] historical development, ...... [1.10], [1.30], [1.70]–[1.180] hybrid forms, ....................... [1.10], [10.10] informality of process, ..................... [1.10] intervention level, ................. [1.10], [1.80] involvement of court, ....................... [1.40] involvement of disputants, ............. [1.10] judicial officer, .................................... [1.40] key developments, .......................... [1.180] landmark events, .............................. [1.40] lawyers, ............................................... [1.20] legal education, ............................... [1.170] specialisation, ............................. [1.170] legislation, ........................................ [1.160] meaning, ............................................. [1.10] mediation — see Mediation mini-trial, ............................................ [1.30] negotiation — see Negotiation new role for dispute resolution, ... [10.30] beyond neutrality, ..................... [10.60] conflict coaching, ...................... [10.70] new advocacy, .............. [10.40]–[10.50] overcoming the greatest obstacle – ourselves, .............................. [10.80] overview, .............................. [1.10], [1.180] regulation, ........................... [1.190]–[1.210] bias, and, .................................... [1.200] restorative justice — see Restorative justice schemes — see Court-annexed dispute resolution, ............................ [1.160] selection of process, .......................... [1.10] standards of practice — see Dispute resolution standards statutory schemes, .............. [1.160], [7.10] vanishing trial phenomenon, ....... [10.10], [10.20] causes, ......................................... [10.20] civil cases, ................................... [10.20] comparative data, ..................... [10.20]

Cross-examination arbitral tribunals, ............... [4.270]–[4.280]

D Damages causation, .......................................... [8.420] common law, at, .............................. [8.410] compensatory, .................................. [8.440] mitigation, ........................................ [8.450] remedy, ............................................. [8.410] remoteness, ....................................... [8.430] Determinations expert — see Expert determination nature of, ............................................ [5.80] Determinative process nature of, ............................................ [1.10] Dispute(s) theft of, ............................................. [3.220] valuable commodity, as, ................ [3.220] Dispute resolution — see also Online dispute resolution accreditation, ...................................... [1.40] additional dispute resolution, ........ [1.20] advisors, ............................................. [5.40] advisory process, .............................. [1.10] alternative, use of word, .................. [1.20] appraisal — see Appraisal atmosphere, ........................ [2.160], [3.180] bar, role of, ............................. [1.10], [1.90] clauses, ................................ [8.270]–[8.530] collaborative law — see Collaborative law Commonwealth involvement, ...... [1.160] conciliation — see Conciliation consensuality of processes, ............. [1.10] court-annexed schemes, — see Court-annexed dispute resolution creating an atmosphere, .... [2.90], [2.160], [3.180] criminal justice system — see Restorative justice

364

Principles of Dispute Resolution

Dispute resolution — cont complementary adjudicative bodies, ................................................. [10.20] settled cases, .............................. [10.10] virtual court rooms, ........................ [10.20] Dispute resolution advisers dispute resolution panel, referral, .. [5.40] energy industry, ................................ [5.40] Oil Code, ...................................... [5.40] Hong Kong, in, .................................. [5.50] Queen Mary Hospital Project, .. [5.50] neutral and independent, ................ [5.40] role and function, ............................. [5.40] technical knowledge, ........................ [5.50] Wholesale Energy Market, .............. [5.40] characteristics, ............................. [5.40] Dispute Resolution Board Foundation (DRBF) aims, .................................................... [5.60] international organisation, .............. [5.60]

minimum practice requirements, ... [9.70] NADRAC, .......................................... [9.60] practice standards, ............................ [9.70] Dispute Review Boards (DRB) advantages, ........................................ [5.60] Australian and New Zealand projects, ................................................... [5.60] building and construction projects, ................................................... [5.60] consensual problem solving, .......... [5.60] costs of running, ............................... [5.60] panel, ................................................... [5.60] partnering, distinguished, ............... [5.70] quick and cost efficient, ................... [5.60] Sydney Desalination Plant, ............. [5.60] Distributive negotiation model of negotiation, ......... [2.10], [2.130] phases of, .......................................... [2.130]

E Dispute Resolution Board Australasia (DRBA) establishment, .................................... [5.60] Dispute Resolution Centres (Qld), .. [1.120] Dispute resolution clauses enforceability of, ................ [8.270]–[8.530] good faith, avoiding, ........ [8.380]–[8.390] remedies for breach — see Remedies requisite certainty, ............. [8.310]–[8.380] Scott v Avery form, ........... [8.280]–[8.300] Dispute resolution practitioners conflict coaching, ............................ [10.70] Family Dispute Resolution Practitioners — see Family Dispute Resolution Practitioners Mayer, Dr Bernard, ........... [10.60]–[10.70] new role for dispute resolution, ... [10.30] beyond neutrality, ..................... [10.60] conflict coaching, ...................... [10.70] new advocacy, .............. [10.40]–[10.50] overcoming the greatest obstacle – ourselves, .............................. [10.80] third party neutrals, ......... [3.230], [8.190] Dispute resolution standards accreditation standards, ................... [9.60] approval standards, .......................... [9.60] family dispute resolution practitioners — see Family Dispute Resolution Practitioners

Early neutral evaluation (ENE), .......... [1.30] NADRAC definition, ........................ [5.90] non-binding adjudicative process, . [5.90] statutory definition, .......................... [5.90] statutory framework, .......... [1.160], [5.90] Education and professional training Australian Dispute Resolution Association Inc (ADRA), ... [1.100] Australian Disputes Centre, ............ [1.70] formal dispute resolution, ............... [1.40] Law Society of New South Wales — see Law Society of New South Wales legal education, ............................... [1.170] Mediator Standards Board — see Mediator Standards Board NADRAC standards, .......... [1.140], [9.60] National Mediator Accreditation System (NMAS) — see National Mediator Accreditation System (NMAS) practice standards, .............. [9.70], [9.130] Recognised Mediation Accreditation Body (RMAB), ....................... [9.70] E-mediation — see Online dispute resolution Empowerment commercialisation of dispute resolution, ................................................. [3.220]

Index Empowerment — cont Community Justice Centres, .......... [1.80], [3.220] dispute thieves, ............................... [3.220] larceny of disputation, ................... [3.220] legislation, ........................................ [3.220] mediation, ........................................ [3.220] native title, ......................................... [7.80] overview, .......................................... [3.220] State-funded mechanisms, ............ [3.220] State power, change in nature, ..... [3.220] Ethics — see also Practice standards American Bar Association, .............. [9.10] Code of Ethics for Arbitrators in Commercial Disputes, .......... [9.40] Model Standards of Conduct for Mediators, .............................. [9.10] defining, .............................................. [9.20] dispute resolution, ............................ [9.20] Ethics Code for Settlement Negotiations, ................................................... [9.10] Institute of Global Ethics, ................ [9.20] Law Council of Australia, ............... [9.30] Ethical Guides for Mediators, .. [9.30] Law Society of New South Wales, . [9.20] overview, ............................................ [9.10] Rules of Ethics for International Arbitrators, ............................. [9.40] United States approach, ................... [9.10] Evidence arbitral tribunals — see Arbitral tribunals commercial arbitration, in — see Commercial Arbitration Acts Expert appraisal process of, .......................................... [5.10] Expert determination advantages, ........................................ binding nature of, ............................. disadvantages, ................................... process of, .............................. [5.10],

[5.80] [5.80] [5.80] [5.80]

Eye contact negotiations, in, ............................... [2.100]

365

F Facilitative process — see Collaborative law — see Dispute resolution — see Mediation Facilitator, ...................... [1.100], [6.10], [6.70] Family Court of Australia ........ [1.160] — see also Family law collaborative law, .............................. [6.40] Family Dispute Resolution Practitioners — see Family Dispute Resolution Practitioners lawyers, obligations, ......................... [7.60] legislative framework, ...................... [7.60] Family Dispute Resolution Practitioners accreditation, criteria, ..................... [9.100] cancellation of accreditation, ........ [9.100] confidentiality, ................................... [7.70] duties, .................................................. [7.70] list of organisations, ....................... [9.100] obligations, ....................................... [9.100] qualifications and competencies, .. [7.70], [9.100] statutory framework, ..................... [9.100] suspension, ....................................... [9.100] Family law collaborative law, .............................. [6.10] confidential and transparent negotiations, ........................... [6.20] definition, ..................................... [6.30] interest-based, .............................. [6.20] lawyers, role, ............................... [6.20] negotiated settlements, .............. [6.20] process, ......................................... [6.30] family and child mediation, ......... [3.230] family consultants, ............................ [7.60] family counselling, ........................... [7.60] Family Dispute Resolution Practitioners — see Family Dispute Resolution Practitioners Family Law Reform Act 1995, ...... [1.180] primary dispute resolution, .......... [1.180] Farm debt mediation accreditation of practitioners, ....... [7.180] New South Wales scheme, ........... [1.160], [1.180], [1.210], [7.160]–[7.170] NSW Rural Assistance Authority (NSWRAA), .......................... [7.160] Victoria, scheme, ................ [7.360]–[7.370]

366

Principles of Dispute Resolution

Federal Circuit Court legislative framework, ...................... [7.50]

G

Federal Court of Australia arbitration, ............................ [1.50], [1.160] conciliation, ........................................ [5.30] court appointed referees, ............... [5.100] court-annexed dispute resolution — see Court-annexed dispute resolution disclosure of information, ............... [7.30] discretion as to costs, ....................... [7.30] adverse findings, ......................... [7.30] “genuine steps statement”, ............. [7.30] mediation, .............. [1.160], [3.210], [7.40] mandatory, ..................... [3.210], [4.60] referrals, ............................ [7.30], [7.40] NADRAC, ........................................ [1.140]

Getting to Yes, ........................ [2.140], [10.80]

options for alternative dispute resolution, ................................................... [7.40] referencing out, ............................... [5.100] statutory schemes, .......................... [1.160] Fisher and Ury Getting to Yes, ................................. [10.80] interest based negotiation, ..................... [2.230]–[2.240], [2.260] objective criteria, approach to, ..... [2.230] Future of dispute resolution dispute management, ..................... [10.90] dispute resolution and digital natives, ................................................. [10.10] disruptive technology, .................... [10.10] global delivery, ................................ [10.90] new role for dispute resolution, ... [10.30] beyond neutrality, ..................... [10.60] conflict coaching, ...................... [10.70] new advocacy, .............. [10.40]–[10.50] overcoming the greatest obstacle – ourselves, .............................. [10.80] online dispute resolution — see Online dispute resolution technology, ....................................... [10.90] vanishing trial phenomenon, ....... [10.10], [10.20] causes, ......................................... [10.20] civil cases, ................................... [10.20] comparative data, ..................... [10.20] complementary adjudicative bodies, ................................................. [10.20] settled cases, .............................. [10.10] virtual court rooms, ........................ [10.20]

Good faith Administrative Appeals Tribunal, . [7.20] agreement, .............................. [5.50], [5.70] contractual clauses, ........... [8.380]–[8.390] dispute resolution clauses, ................................... [8.380]–[8.390] mediation, ........................................ [3.210] negotiation, avoid reference to, ................................... [8.380]–[8.390] partnering, .......................................... [5.70]

H Harvard Negotiation Project, ............ [2.140] Hybrid hearing advantages, ...................................... [6.130] disadvantages, ................................. [6.130] evidence and submissions, ............ [6.130] mediation, ........................................ [6.130] Queensland Civil and Administrative Tribunal, ................................ [6.130]

I

Immunity common law, ...................... [8.200]–[8.220] statutory, ............................. [8.230]–[8.240] Impartiality overview, .... [3.50]–[3.60], [3.230], [4.120], [4.130], [5.40], [8.240], [9.30], [9.70], [9.110] Institute of Arbitrators and Mediators Australia (IAMA), .. [1.60], [1.150] Integrative negotiation, ........................ [2.10] Interest-based negotiation — see Principled negotiation Interests principled negotiation and, ........... [2.150]

Index International Academy of Collaborative Professionals (IACP), .......... [6.40] International Institute for Restorative Practices (IIRP), .................... [6.50] Internet — see Online dispute resolution

J Joint sessions, ......................... [3.160], [6.130] Judicial officers bias, ................................................... [1.200] case management, ............................. [1.40]

L

Larceny disputation, of, ................................ [3.220] Law Council of Australia Ethical Guidelines for Mediators, .. [9.30] Guidelines for Lawyers in Mediation, ................................................. [9.120] Law Societies areas of discussion, ........................... [1.90] dispute resolution Committee, ....... [1.90] New South Wales — see Law Society of New South Wales Queensland, ....................................... [1.90] Settlement Week, ............................... [1.90] Law Society of New South Wales Dispute Resolution Committee, .... [1.90], [9.110] Charter on Mediation Practice-A Guide to the Rights and Responsibilities of Participants, ................................................. [9.110] Guidelines for Legal Practitioners who Act as Mediators, ....... [9.110] NMAS accreditation, ................ [9.110] Professional Standards for Legal Practitioners in Mediation, ................................................. [9.110] ethics, .................................................. [9.20] mandatory ADR, ............................. [3.180] ongoing mediation programme, .... [1.90] Scott v Avery form, ........... [8.280]–[8.300]

367

Settlement Weeks, ............................. [1.90] Lawyers adversarial negotiation, .................. [2.110] Charter on Mediation Practice-A Guide to the Rights and Responsibilities of Participants, ..................... [9.110] confidentiality, ................................. [3.180] Family Dispute Resolution Practitioners — see Family Dispute Resolution Practitioners Guidelines for Legal Practitioners who Act as Mediators, ................ [9.110] legal professional privilege, ..................... [8.100]–[8.120], [9.110] Professional Standards for Legal Practitioners in Mediation, ................................................. [9.110] role, .................................................... [2.110] standards in mediation, ................. [9.110] Leading Edge Alternative Dispute Resolvers (LEADR) aims, .................................................. [1.110] chapters, ............................................ [1.110] merger, .............................................. [1.150] purpose, ............................................ [1.110] Legal aid, ........ [1.80], [1.180], [3.220], [6.80], [7.60] Legal issues confidentiality, ...................... [8.10]–[8.180] dispute resolution clauses, enforcement of, ............................. [8.270]–[8.530] liability and immunity, ..... [8.190]–[8.200] common law immunity, ................................... [8.200]–[8.220] settlement agreements, enforcement of, ................................... [8.250]–[8.260] Legal professional privilege case note, .......................................... [8.120] common law, .................................... [8.110] dominant purpose test, .................. [8.110] Legislation, ............................................ [1.160] Legitimacy principled negotiation, ................... [2.180] Liability and immunity common law immunity, ... [8.200]–[8.220] statutory immunity, .......... [8.230]–[8.240]

368

Principles of Dispute Resolution

Listening skills, ................... [2.80] — see also Communication skills

M

Mandatory ADR advantages, ...................................... court-annexed schemes, ..... [1.70], disadvantages, ................................. Law Society of New South Wales, ................................................. legislation for, ..................................

[3.210] [3.210] [3.210] [3.180] [1.180]

Med-arb, ................................................. [6.120] Mediation agreements to mediate, .................... [3.40] appropriateness, .................. [3.40], [3.250] arrangement of facilities, ................. [3.40] changing role of State in, .............. [3.220] child abuse cases, .............................. [3.40] classical mediation model, . [3.20]–[3.30], [3.50]–[3.140], [3.160] commercial contracts, ..................... [3.140] commercialisation, .......................... [3.220] Community Justice Centres, ......... [3.220] confidentiality, ................................. [3.180] costs for expansion, ........................ [3.220] court-based — see Court-annexed dispute resolution court connected mediation, ........... [3.210] definition, ........................................... [3.10] disputes unsuitable for, ................. [3.250] elements, ............................................. [3.10] empowerment, ................................. [3.220] enforceability of agreements, ........ [3.140] evaluative mediation, ....................... [3.30] facilitative mediation, ........... [3.30], [9.70] failure to settle, ................................ [3.150] family law, — see Family law good faith, ........................................ [3.210] hallmarks, ........................... [3.170]–[3.240] historical development, ................... [3.30] hybrid forms, ................................... [3.170] impartiality, ............. [3.50]–[3.60], [3.230], [8.220], [9.30]–[9.70] key elements, ..................................... [3.10] listening, ............................................. [2.80] mandatory mediation, .................... [3.210] models of mediation — see Mediation models multi-door, ........................................ [1.210] NADRAC definition, ........................ [3.10] National Mediator Accreditation System

(NMAS) — see National Mediator Accreditation System (NMAS) natural justice and, ......................... [4.290] nature, ..................................... [3.10]–[3.20] negotiation process, .......................... [3.20] neutrality, .............................. [3.50], [3.230] new advocacy, ................................. [10.40] opening statements, .............. [3.60]–[3.70] parties’ own solution, .................... [3.240] payment for, ....................................... [3.40] power issues, ..................................... [9.70] practice standards, .............. [9.70], [9.130] preparing for, ..................................... [3.40] private, .............................................. [3.210] procedural fairness, ........................ [1.210] process — see Mediation process Recognised Mediation Accreditation Body (RMAB), ....................... [9.70] reframe — see Reframing settlement mediation, ....................... [3.30] styles — see Mediation models termination, .......................... [3.150], [9.70] transformative mediation, ............... [3.30] voluntariness, .................................. [3.210] Mediation models Boulle, Professor Laurence, ............. [3.30] evaluative, .......................................... [3.30] facilitative, .......................................... [3.30] settlement, .......................................... [3.30] shuttle, ................................... [3.60], [3.110] transformative, .................................. [3.30] Mediation process Boulle, Professor Laurence, ............. [3.30] common ground, seeking, ... [3.60], [3.90] final joint meeting, .......................... [3.130] identifying early options for agreement, ................................................. [3.100] issues and interests, .......................... [3.80] mediator’s opening statement, ....... [3.60] neutrality, .................. [3.50]–[3.60], [3.230] opening statements, .............. [3.60]–[3.70] parties’ opening statements, ....................................... [3.60]–[3.70] reality testing, .................................. [3.120] separate sessions, ................ [3.60], [3.110] advantages, ................................. [3.110] settlement agreements, .................. [3.140] shuttle negotiating, ............. [3.60], [3.110] Mediator Standards Board, .................. [9.90] constitution, ....................................... [9.90] functions, ............................................ [9.90] NMAS, implementation, .................. [9.90]

Index Mediator Standards Board, — cont public company limited by guarantee, ................................................... [9.90] objects, .......................................... [9.90] Mediators accreditation — see Accreditation evaluative mediation, ....................... [3.30] facilitative mediation, ....................... [3.30] impartiality, . [3.60], [3.230], [9.30]–[9.40], [8.220] legal practitioners as — see Lawyers Mediator Standards Board — see Mediator Standards Board National Mediator Accreditation System (NMAS) — see National Mediator Accreditation System (NMAS) neutrality, .......................................... [3.230] practice standards, .............. [9.70], [9.130] Recognised Mediation Accreditation Body (RMAB), ....................... [9.70] Register of Nationally Accredited Mediators, .............................. [9.70] role of, ................................................. [3.10] settlement mediation, ....................... [3.30] transformative mediation, ............... [3.30] Menkel-Meadow, Professor Carrie models, .................................. [2.10], [2.270] overview, ............................................ [2.10] principled negotiation, .................... [2.10], [2.140]–[2.260] relationship of parties, ......... [2.20], [2.50] selecting a model, ........................... [2.270] shuttle, ................................... [3.60], [3.110] skills required, ......... [2.10], [2.40]–[2.100] without prejudice, ........................... [3.180]

369

issues advised on, ........................... [1.140] National Mediator Accreditation System (NMAS) — see National Mediator Accreditation System (NMAS) objectives, ......................................... [1.140] online dispute resolution — see Online dispute resolution partnering, .......................................... [5.70] standards, ........................... [1.140], [1.180] National Mediator Accreditation System (NMAS), ..................... [9.60], [9.70] approval standards, .......................... [9.80] assessment, ................................... [9.80] leave of absence of accredited mediators, ............................... [9.80] renewal of accreditation, ........... [9.80] suspension for significant non-compliance, .................... [9.80] training, ........................................ [9.80] Mediator Standards Board — see Mediator Standards Board practice standards, .............. [9.70], [9.130] quality, consistency and accountability, ................................................... [9.70] Recognised Mediator Accreditation Bodies, ..................................... [9.70] suspending or terminating mediation, ................................................... [9.70] National Native Title Tribunal, ....... [1.180], [7.80] Natural justice, ........ [4.180], [4.260], [4.280], [6.120], [6.190], [7.20] meaning of, ...................................... [4.290] mediation and, ................................ [4.290] separate sessions and, ...... [4.290], [6.120]

Mini trial, ................................................. [1.30] Misconduct arbitrator, by, .................................... [4.130] Multi-door court house approach, .......................................... [1.210]

N

National Alternative Dispute Resolution Advisory Council (NADRAC) charter, .............................................. [1.140] dispute resolution defined, ............. [1.10] establishment, .................................. [1.140]

Negotiation advantages, ........................................ [2.30] adversarial — see Adversarial negotiation alternatives, ...................................... [2.170] attributes, ............................................ [2.20] best alternative to a negotiated agreement (BATNA), .......... [2.170] client’s legal rights, and, .................. [2.10] communication skills, ......... [2.40]–[2.100] active listening, ........................... [2.80] body language, .......................... [2.100] creating an atmosphere, ............. [2.90] dealing with emotions, .............. [2.90] open and closed-ended questions, ................................................... [2.60]

370

Principles of Dispute Resolution

Negotiation — cont reframing, ..................................... [2.50] silence, ........................................... [2.70] sponging, ...................................... [2.90] comparison of models, ..................... [2.10] definition, ........................................... [2.20] distributive, .......................... [2.10], [2.130] adversarial negotiation, and, .. [2.130] phases of negotiation, .............. [2.130] elements, ................................. [2.10]–[2.20] empowerment, ................................... [2.10] fundamentals, .................................... [2.20] Getting to Yes, ................................. [2.140] Harvard Negotiation Project, ........ [2.140] integrative, ........................... [2.10], [2.120] adversarial negotiation, and, .. [2.120] trade-offs and concessions, ..... [2.120] zero sum negotiation, ............... [2.120] interest based, .................... [2.130], [2.140] “three Ps” approach, ...................... [2.210] Neutral evaluation courts, in, .......................................... [7.110] definition, ......................................... [7.110] early — see Early neutral evaluation (ENE) process of, .......................................... [5.10] Neutrality — see also Impartiality Australian Aborigines, ................... beyond, ............................................. contextual nature, ........................... elements, ........................................... impartiality, distinction, ................. landmark text, ................................. Mayer, Dr Bernard, .........................

[3.230] [10.60] [3.230] [3.230] [3.230] [10.60] [10.60]

New South Wales civil procedure, ................................ [1.160] Collaborative Professionals in NSW, ................................................... [6.30] Community Justice Centres, ........... [1.80] court-annexed dispute resolution civil procedure legislation, ..... [7.130], [10.10] community justice centres, ..... [7.130], [7.150] farm debt mediation, .. [7.160]–[7.180] Joint Protocol Referral Information, ................................................. [7.130] Land and Environment Court, ................................... [1.160], [1.180] mediators, ..................... [7.130]–[7.140] NSW Civil and Administrative Tribunal (NCAT), ................ [10.20]

statutory framework, ............... [7.190] Supreme Court, ......................... [7.130] uniform civil procedures rules, ................................................. [7.130] early neutral evaluation, .................. [5.90] farm debt mediation — see Farm debt mediation Law Society, ............ [1.90], [8.280]–[8.300] legislation, ........................................ [1.160] mandatory ADR, ............................. [3.180] referencing out, ............................... [5.100] referral, .............................................. [7.130] statutory confidentiality and privilege, ................................................. [8.160] statutory schemes, ......................... [1.160], [7.130]–[7.140] Supreme Court, .. [1.160], [3.190], [4.260], [4.380], [8.170] NMAS — see National Mediator Accreditation System Northern Territory, ................................. [8.45] court-annexed dispute resolution community justice centres, ...... [7.200] Local Court, ............................... [7.210] statutory framework, ............... [7.230] Supreme Court, ......................... [7.220]

O

Online dispute resolution (ODR) advantages, ...................................... [6.210] arbitration, ........................................ [6.190] advantages, ................................ [6.190] choice of law, ............................. [6.190] face-to-face, ................................ [6.190] procedural steps, ....................... [6.190] assisted negotiation, ....................... [6.170] automated dispute resolution processes, ................................................. [6.150] automated negotiation, .................. [6.160] definition, ......................................... [6.150] “digital immigrants”, ..................... [6.140] “digital natives”, ............... [6.140], [6.200] digital revolution, ........................... [6.140] disadvantages, ................................. [6.220] flexible processes, ............................ [6.200] future prospects, ............................. [6.230] advances in technology, ........... [6.200] overcoming difficulties, ............ [6.230] interactive communication, ........... [6.150] networks, .......................................... [6.150] online mediation, ............................ [6.180]

Index

371

Online dispute resolution (ODR) — cont joint problem solving, .............. [6.180] option generation phase, ......... [6.180] statistics, ........................................... [6.140] streamlined dispute resolution, .... [6.200] usage levels, ..................................... [6.140] virtual dispute resolution advantages, ................................ [6.200] artificial intelligence, ................ [6.200] avatars, ........................................ [6.200]

Mediator Standards Board — see Mediator Standards Board practice standards, .............. [9.70], [9.130]

Open-ended questions, ......................... [2.60]

Primary dispute resolution, . [1.180], [10.40]

Opening statements mediators, by, .................................... [3.60] parties, by, .......................................... [3.70]

Principled negotiation

Options developing, ........... [2.160], [2.260]–[2.270] generating, ............ [2.160], [2.260]–[2.270] National Native Title Tribunal, ...... [7.80] principled negotiation, and, .......... [2.160] reality testing, .................................. [3.120]

P

Parties non-curial dispute resolution process, ................................................... [1.10] third — see Third parties unrepresented, ................................... [3.50] Partnering charter, ................................................ [5.70] common characteristics, ................... [5.70] dispute review boards, distinguished, ................................................... [5.70] good faith relationships, .................. [5.70] NADRAC definition, ........................ [5.70]

quality, consistency and accountability, ................................................... [9.70] Recognised Mediator Accreditation Bodies, ..................................... [9.70] suspending or terminating mediation, ................................................... [9.70]

adversarial negotiation, distinction, ................................................. [2.270] best alternative to a negotiated agreement, ............................ [2.170] brainstorming, ................................. [2.160] commitment, .................................... [2.210] communication, ............................... [2.190] conduct of negotiation, .... [2.140]–[2.210] criticisms of model, ........................ [2.240] dominance of model, ..................... [2.270] generation of options, ................... [2.160], [2.260]–[2.270] Getting to Yes, ................................. [2.140] integrative negotiation, and, ......... [2.270] interest-based bargaining, ............. [2.150] interest of parties, ............ [2.220], [2.250], [2.270] legitimacy of settlement, ................ [2.180] objective criteria, ............................. [2.230] option generation, .......................... [2.160], [2.260]–[2.270] overview, ............................. [2.140]–[2.210] positional bargaining, and, ................................... [2.220]–[2.230] positions versus interests, ............ [2.150], [2.220], [2.250] relationship with other side, ......... [2.200]

Power imbalances dealing with, .................................... [3.220] mediation, in, ................................... [3.250]

separating people from the problem, ................................................. [2.240] role reversals, ............................. [2.240]

Practice Standards — see also Ethics approval, ............................................. [9.80] assessment, ................................... [9.80] leave of absence of accredited mediators, ............................... [9.80] renewal of accreditation, ........... [9.80] suspension for significant non-compliance, .................... [9.80] training, ........................................ [9.80]

seven elements of negotiation, ................................... [2.140]–[2.210] alternatives, ................................ [2.170] commitment, .............................. [2.210] communication, ......................... [2.190] interest, ....................................... [2.150] legitimacy, .................................. [2.180] options, ....................................... [2.160] relationship, ............................... [2.200] voluntariness, .................................. [3.210]

372

Principles of Dispute Resolution

Privacy, ................................................... [8.140] Private sessions, ..................................... [9.30] Problem solving consensual, ................. [1.10], [5.60]–[5.70] co-operative, .................................... [2.130] Publicity adverse, ............................................. [2.170] mediation and, ................................ [3.250]

mandatory referral, ......................... [1.160] referees, to, ....................................... [5.100] voluntary nature, ............................ [1.160] Reframing, ............................................... [2.50] Regulation of dispute resolution bias, ................................................... [1.200] court-annexed schemes, ................. [1.190] blurring of roles of courts, ...... [1.210] criticisms, .......................................... [1.190]

Q Queensland court-annexed dispute resolution Civil and Administrative Appeals Tribunal, ................................ [7.240] dispute resolution centres, ...... [7.270] District Court, ............................ [7.250] Magistrates’ Court, ................... [7.250] statutory framework, ............... [7.280] Supreme Court, ......................... [7.250] Uniform Civil Procedure Rules, ................................................. [7.260] Law Society, ....................................... [1.90] legislation, ........................................ [1.160] referral to mediation, ..................... [7.240] statutory schemes, .......................... [1.160]

R Reality testing mediation, in, ................................... [3.120] settlement, of, .................................... [5.30] Recognised Mediation Accreditation Body (RMAB), ................................. [9.70] Referencing out advantages, ...................................... [5.100] challenging findings, ...................... [5.100] cost efficiency, .................................. [5.100] court orders, ..................................... [5.100] process of, .............................. [1.10], [5.10] referees powers, ....................................... [5.100] report, .......................................... [5.100] statutory framework, ..................... [5.100] Referrals Community Justice Centres, ......... [3.220] legislation, ........................................ [1.160]

Remedies damages — see Damages overview, .......................................... [8.530] specific performance — see Specific performance Resolution Institute establishment, .................................. [1.150] merged organisation, ...................... [1.150] training opportunities, ................... [1.150] Restorative justice advantages, ........................................ [6.80] basic principles, ................................. [6.50] circle sentencing, ............................... [6.50] collaborative sanctioning, ................ [6.50] community accountability, .............. [6.50] consensual decision-making, .......... [6.60] criticisms, ............................................ [6.90] cultural, ethnic and religious diversity, ................................................... [6.50] definition, ........................................... [6.50] development, ..................................... [6.60] dispute resolution, ............................ [6.50] diversionary processes, .................... [6.50] effectiveness, .................................... [6.100] facilitator, appointment, ................... [6.70] family group conferencing, ............. [6.50] fundamental premise, ...................... [6.50] impact statements, ............................ [6.50] in-person meeting or conference, .. [6.70] International Institute for Restorative Practices (IIRP), ..................... [6.50] procedure, .......................................... [6.70] programs, ........................................... [6.70] repair or restore harm done, ........... [6.50] restorative practice, distinguished, ................................................... [6.50] victim-offender mediation, .............. [6.50] victims playing a role, ..................... [6.50]

Index

S Scott v Avery form, ................ [8.280]–[8.300] Separate sessions BATNAs, discovering, .................... [3.110] caucusing, ............................. [3.60], [3.110] conduct of, ......................................... [9.70] discretion of mediator and parties, ................................................. [3.160] natural justice, breaching rules of, ................................... [4.290], [6.120] option generation during, ............. [3.130] resolution, to reach, ........................ [3.120] use of, ......... [3.20], [3.60], [3.110], [3.150], [4.290], [6.130], [6.180], [7.20], [9.70] Settlement assisted negotiation, ....................... [6.170] enforceability of agreements, ................................... [8.250]–[8.260] setting aside, .................................... [3.180] Settlement Week State and Territory law societies and institutes, ................................ [1.90] Shuttle mediation, ....... [3.60], [3.110], [9.70] Silence, ..................................................... [2.70] Skills active listening, ................................. communication, ................................. dealing with emotions, .................... reframing, ...........................................

[2.80] [2.40] [2.90] [2.50]

South Australia arbitration, ........................................ [1.160] conciliation, ...................................... [1.160] court-annexed dispute resolution Civil and Administrative Tribunal, ................................................. [7.290] District Court, ............................ [7.300] Magistrates’ Court, ................... [7.300] statutory schemes, .................... [7.310] Supreme Court, ......................... [7.300] legislation, ........................................ [1.160] referral to mediation, ..................... [7.290] statutory schemes, .......................... [1.160] Specific performance, .......................... [8.460] constant supervision, ..................... [8.520]

defective contracts, ......................... mutual availability, ......................... personal service, contracts, ........... sufficiency of damages, .................. undue hardship, ..............................

373 [8.510] [8.490] [8.500] [8.470] [8.480]

Sponging communication skill, ...................... [2.240] technique of, ...................................... [2.90] using, ................................................. [2.200] Subpoenas, ....... [3.60], [5.80], [7.110], [7.180] System design, ...................................... [10.60]

T Tasmania court-annexed dispute resolution Alternative Dispute Resolution Act 2001, ....................................... [7.320] Magistrates’ Court, ................... [7.320] statutory schemes, .................... [7.330] Supreme Court, ......................... [7.320] referral to mediation, ..................... [7.320] Technology future of dispute resolution, and, — see Future of dispute resolution online dispute resolution — see Online dispute resolution Theft disputes, of, ...................................... [3.220] Third parties beyond neutrality, ........................... [10.60] common law immunity, ................. [8.200] confidentiality agreement, ............... [3.60] contractual confidentiality, ............ [8.130] independent advice, ....................... [7.260] liability and immunity, ..... [8.190]–[8.240] neutrals, .............................. [3.230], [8.190] opinion, ............................................. [4.230] statutory immunity, .......... [8.230]–[8.240] wider role, ........................................ [10.60] without prejudice privilege, ......................... [8.50]–[8.60], [8.100] Transformative mediation, ................... [3.30] Trials data about, ....................................... [10.20]

374

Principles of Dispute Resolution

Trials — cont “vanishing trial phenomenon”, ... [10.10], [10.20], [10.90]

U UNICTRAL Model Law international arbitration, .................. [1.50] United Kingdom London Court of International Arbitration, ............................. [9.40] United States of America ethical approach, ............................... [9.10] Harvard Negotiation Project, ........ [2.140] International Academy of Collaborative Professionals (IACP), ............ [6.40] online dispute resolution, .............. [6.200] principled negotiation, ................... [2.140] restorative justice, ................. [6.60], [6.90] vanishing trial phenomenon, ....... [10.10], [10.20], [10.90] voluntariness, .................................. [3.210] “Vanishing trial phenomenon”, ...... [10.10], [10.20], [10.90] Victoria Community Justice Centres, ........... [1.80] court-annexed dispute resolution Civil and Administrative Tribunal, ................................................. [7.340]

County Court, ............................ [7.350] farm debt mediation, .. [7.360]–[7.370] Magistrates’ Court, ................... [7.350] statutory schemes, .................... [7.380] Supreme Court, ......................... [7.350] dispute resolution clauses, enforceability, ................................................. [8.270] legislation, ........................................ [1.160] mediation, ........................................ [1.160] referral to mediation, ..................... [7.350] statutory schemes, .......................... [1.160] Victorian Civil and Administrative Tribunal (VCAT), ............... [7.340] Voluntariness, ....................................... [3.210]

W Webb, Stuart, .............................. [6.30], [6.40] Western Australia court-annexed dispute resolution industrial relations disputes, .. [7.430] Magistrates’ Court, ................... [7.420] State Administrative Tribunal, ................................................. [7.390] statutory schemes, .................... [7.440] Supreme Court, ........... [7.390]–[7.410] legislation, ........................................ [1.160] settlement agreements, .................. [8.260] Without prejudice privilege, ............ [3.180], [8.30]–[8.110]