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New Zealand Yearbook of New Zealand Jurisprudence |
Last Updated: 24 April 2015
Mediating in the Shadow of Australian Law:
Structural Influences on ADR
Professor Nadja Alexander*
i. INTRODUCTION1
Mediation has grown rapidly in many Anglophone jurisdictions such as USA,
Australia, Canada, New Zealand and England. The current
state of mediation
practice in many of these jurisdictions can be traced back to the establishment
of community justice centres in
the 1970s and 1980s. Mediation is practised in
the private sector as well as in a wide range of court-referred programs. In
many
common law jurisdictions mediation is no longer a form of alternative
dispute resolution, it has become primary dispute resolution.
In contrast, civil law countries have displayed, until recently, a greater reluctance to embrace the practice of mediation to resolve legal disputes. Compared with the common law experience, mediation in countries such as Germany, Denmark, Belgium, Italy, France, Poland, Switzerland and Yugoslavia has travelled, and some are still travelling, a more difficult and winding path to recognition as a legitimate and valuable alternative to litigation. The European Union, however, has signalled a strong focus on ADR and, in particular, mediation. It has declared ADR a “political priority”, published a Green Paper on Alternative Dispute Resolution in Civil and Commercial Law2 and contributed to the development of online dispute resolution infrastructure.3
At the time of writing a proposal for a European Directive on Mediation4
is under discussion at the European Commission in Brussels and a
European
* Professor of Dispute Resolution, Australian Centre for Peace and Conflict Studies, The University of Queensland, Adjunct Professor of Law, Murdoch University (Australia) and Humboldt Fellow, Europa University Viadrina (Germany). The author would like to thank George Fox for his comments on an earlier version of this paper and Serge Loode for editorial assistance.
1 Parts of this article are drawn from N. Alexander, “Global Trends in Mediation: Riding the Third Wave” in N. Alexander (ed.) Global Trends in Mediation (2003; see also the second edition 2006) and N. Alexander, “Mediation on Trial: 10 Verdicts on Court-related ADR” Law in Context (2004) with the kind permission of the publishers.
2 The Green Paper is available at: www.europa.eu.int/eur-lex/de/com/gpr/2002/com2002_
0196de01.pdf
3 In 2001 the European Extra-Judicial Network (EEJ-Net) was established with the purpose of settling cross-border consumer disputes out of court using online technology. www.eejnet. org
4 Proposal for a Directive of the European Parliament and of Council on
certain aspects of mediation in civil and commercial
matters (SEC) (2004)
1314.
Code of Conduct for Mediators has been prepared by a number of ADR
organisations with the support of the European Union.5 While the
European mediation rhetoric is getting stronger, the reality is that mediation
practice, subject to a number of exceptions,
is piece-meal and very
limited.
While the differences between the common law/civil law jurisdictions are very
pronounced, there are significant structural differences
in ADR design even
amongst Anglophone jurisdictions. Understanding these differences helps to
explain why mediation and other forms
of alternative dispute resolution have
developed differently throughout the world. In addition these differences
demonstrate that
the import or export of mediation services is a complex matter
and cannot be undertaken successfully without an understanding of
the legal,
political and cultural structures of the relevant jurisdictions.
This article will explore structural issues in Australian mediation. It does
not engage in a comparative analysis of jurisdictions
where mediation is
practised.6 It does, however, provide a structural framework for
Australian lawyers and mediators seeking to export Australian ADR know-how to
the rest of the world.
Structural issues are most valuably addressed in the context of the legal
system in which the structures are embedded. They refer
to the supply side of
legal behaviour which Blankenburg describes as “a set of institutional
arrangements and patterns of professional interaction.”7
Recurring structural issues include how aspects of the regulatory
framework such as mediation referral systems, case management processes, civil
procedure
rules, laws on mediation and mediators, payment structures, and
accreditation and training impact upon the mobilisation and actual
practice of
mediation. Here structural issues will be addressed in terms of: the reasons for
and development of the court-referred
ADR movement; types of court-referred ADR
and mediation referral systems; and legalisation of ADR through case law and
legislation.
5 A text of the European Code of Conduct for Mediators is available at: www.europa.eu.int/
comm/justice_home/ejn/adr/adr_ec_code_conduct_en.pdf
7 E. Blankenburg, “Civil Litigation Rates as Indicators for Legal Cultures” in D. Nelken (ed.)
Comparing Legal Cultures (1997).
ii. THE REASONS FOR AND DEVELOPMENT OF
COURT-REFERRED ADR
IN AUSTRALIA
The litigation crisis as catalyst
The emergence and development of mediation in Australia has occurred largely
as a result of pressure on politicians and governments
to respond to an
inefficient, protracted and, for most citizens, unaffordable and highly
unsatisfactory litigation process.
The common theme that emerges in many common law countries including
Australia is that mediation as a movement and as an institution
begins to grow
only when the political voices of the day express an urgent need to overhaul and
remedy the inadequacies of the existing
judicial system such as excessive cost
and delay. In this context, it is no surprise that mediation success in common
law jurisdictions
has often been measured by quantitative indicators such as
settlement success rate and reduction in court waiting lists.
Trends in court-referred ADR
The establishment and development of court-referred mediation schemes in
Australian jurisdictions generally follow a four-phase pattern.8
These four phases can also be identified in other common law jurisdictions
such as the US and Canada.9 In terms of the Australian statistics,
information for this article has been sourced from court annual reports and the
website of
the National ADR Advisory Council as well as secondary
sources.10
8 There are, of course, exceptions to this pattern, which can generally be explained by local structural differences. See, e.g., the comments on Tasmania in N. Alexander, “Mediation on Trial: 10 Verdicts on Court-related ADR” in Law in Context (2004) 5.
On the USA: R. Birke and L. Teitz, “US Mediation in the Twenty-first Century: The Path that Brought America to Uniform Laws and Mediation in Cyberspace” in N. Alexander (ed) Global Trends in Mediation, supra n 6 at 359: http://www.caadrs.org/statistics/background.htm and http://www.ned.uscourts.gov/ mediation/medweb/page4.html
10 See, e.g., the Supreme Court of Queensland Annual Reports, http://www.courts.qld.gov.
au/publications/annual/default.htm and the Supreme Court of New South Wales
Annual Review http://www.lawlink.nsw.gov.au/sc/sc.nsf/pages/ar_index.
See also NADRAC’s published statistics on ADR in Australia available at http://www.nadrac.gov.au. For a useful
secondary source, see T. Sourdin “Mediation in Australia: The Decline of
Litigation” in N. Alexander (ed)
Global Trends in Mediation, supra
n 6 at 33.
Phase 1. Initial scepticism and a slow build-up of court
referrals
Phase 1 is characterised by the introduction of a court-referred mediation scheme. In most cases the scheme is introduced by legislation, sometimes through practice directions.11 The use of mediation as prescribed by the legislation is typically either voluntary (that is with the agreement of the parties) or discretionary mandatory (that is at the discretion of the court). Today most of the schemes that were initially voluntary are now discretionary mandatory, although some are routine mandatory (that is without court discretion).12
During this first phase the term ‘mediation’ is widely recognised
by the profession and the judiciary but specific knowledge,
a good understanding
of how mediation works and practical experience in the process is limited to a
few. Lawyers lacking personal
experience in mediation are less likely to refer
their clients to ADR.13 In short, most lawyers and judges, having
had little or no exposure to mediation are reluctant to embrace a process, which
they fear
might impact negatively on their legal practice or judicial role. As
the success of newly-minted mediation schemes is often dependent
on the efforts
of a minority of committed supporters in the judiciary and the legal profession,
its general uptake is initially hesitant
and slow.
Phase 2. A sudden surge in court referrals
As the initial scepticism retreats and the gatekeepers to mediation
(particularly the case managers and judges in court-referred mediation
schemes)
enjoy their first success stories, the scene changes dramatically. The court
experiences a rapid clearing of cases pending
trial, better case management and
sometimes even positive feedback from users of the justice system and the media.
Politicians, court
registrars and chief justices quote statistics indicating
that access to justice is improving and disputants who go to mediation
are
satisfied with it as a speedy and less expensive alternative to
court.14
Phase 3. Stabilisation in the number of court referrals
Having reached a certain critical number, court referrals seem to stabilise.
One can speculate on the reasons for this development.
One possible explanation
is that the number at which the referrals flatten out represents the optimum
number of referrals, allowing
matters that are best managed by means of
a
11 D. Spencer, “Mediation practice notes — around the grounds” (2004) 15 ADRJ 149.
12 On court-referral models, see L. Boulle, Mediation: Principles, Process, Practice (2005)
377-385.
13 N. Spegel, “Queensland Lawyer Attitudes Towards Mediation: Implications for Training and Education” (1998) NLR 1.
14 See, e.g., P. de Jersey, “Use Of Alternate Dispute Resolution in Commercial Disputes
Seminar.” www.courts.qld.gov.au/publications/articles/speeches/dj030999.htm
judicial decision to go to court. Another suggestion is that gatekeepers in
discretionary mandatory schemes learn to distinguish between
cases that are
suitable for mediation and those that are not. If this hypothesis is true it
would mean that the actual number of
suitable referrals is increasing and the
number of unsuitable cases being referred to mediation is decreasing, resulting
in an overall
stabilisation of numbers. Yet another explanation is that judges
are not referring more matters to mediation because they fear a
loss of
adjudicative work and a cut in their allocated budget if they do so. There is,
however, no data to support any of these reasons
– only anecdotal evidence
to support each.
Phase 4. Signs of a drop in court-referred mediation
In some Australian jurisdictions, there is a drop in the numbers of mandatory court referrals. In the Supreme Court of Queensland, for example, there has been a steady decrease in mandatory mediation orders without consent since
1999. Where this trend does occur, it typically follows a period of a
sustained number of referrals as described in phase 3 and as
such potentially
indicates a future trend for jurisdictions currently experiencing phase 3. Where
there is a drop in referrals, it
is important to ask questions about the reasons
behind it. Are courts are changing their referral patterns and, if so, how? Are
courts
simply referring fewer matters to mediation or are they referring parties
to processes other than ADR? Specifically, questions need
to be asked about the
correlation between the court-referral model, the rate of usage of court
mediation and settlement rates at
mediation.
Alternatively, a fall in the number of court referrals to mediation could be
triggered by a change on lawyer/client side rather than
a change in the nature
of court referrals. In jurisdictions like Australia there is growing body of
case law and legislation establishing
first, the professional duties of lawyers
in advising clients about dispute resolution options and second, their duties
within a
mediation.15 Anecdotal evidence suggests that where courts
have been very active in referring matters to mediation over a period of years,
the
legal profession is more likely to engage in the voluntary and early use
mediation where appropriate. In other words, the culture
of the legal profession
may be changing.
This hypothesis is illustrated in the jurisdiction of Queensland, Australia.
The mediation referral system in the Supreme Court of
Queensland was established
by the Courts Legislation Amendment Act 1995 (Qld) and is regulated by the
legislation in conjunction
with the Uniform Civil Procedure Rules 1999.
15 J. Wade, “Liability of Mediators for Pressure, Drafting and Advice” (2004) 6 (7) ADRB
131.
Judges possess a discretionary power to refer matters to mediation. At the same time, recent case law in Queensland and other Australian jurisdictions16 suggests that the judiciary takes into account inter alia the attitude of the parties to mediation and the likelihood of good faith participation in the mediation in determining whether to refer the matter to mediation – a kind of
‘soft mandatory’ model. The Queensland judiciary is supportive of
mediation initiatives, clauses, agreements and referrals.
A small number of
senior barristers now earn most of their income from conducting mediations,
rather than trials. A litigation lawyer
was recently heard saying that that the
last time he was in court was more than three years ago. As indicated above
there has been
a fall in the number of non-consent referrals to mediation in
Queensland. This has been accompanied by an increase in referrals by
consent,
with the result that the overall official referral rate has remained stable. An
increase in consent orders may indicate
that lawyers are encouraging their
clients to go to mediation because they know a court referral is likely.
However, it could also
indicate the development of a different disputing
culture, which has come to know the benefits of mediation in appropriate cases.
Further, on the basis of this trend, one could speculate that if more parties
and their lawyers are consenting to mediation through
orders, then it also
likely that others are going to mediation before the matter is even filed in
court.
The nature of court-referred mediation
Most court-referred ADR schemes in Australia offer mediation as an alternative to litigation. In the legislation establishing mediation referral schemes, the mediation process in most cases is defined very broadly, if at all. In other words, mediators are free to adopt a practice model of their choice
– from the one extreme of a highly evaluative mediation style to the
other extreme of a committed transformative practice. Furthermore,
no specific
requirements are set out for training and accreditation. In most court-referred
schemes, mediators can apply to be placed
on a panel of court mediators. Their
appointment to the panel is at the discretion of the court. As a matter of
practice most applicants
who have completed a 20 to 40 hour training course or
otherwise have ADR experience are accepted as panel members. While
16 In this regard, see generally Australian Competition & Consumer
Commission v Collagen Aesthetics Australia Pty Ltd [2002] FCA 1134;
Finikiotis v Sandhurst Trustees Ltd [2002] FCA 341 (27 February 2002);
George Andrew Harrison & Anor v Delcie Joan Schipp [2002] NSWCA 27
(15 February 2002); Remuneration Planning Corp Pty Ltd v Fitton; Fitton v
Costello [2001] NSWSC 1208 (14 December 2001); Trelour v J H McDonald Pty
Ltd [2001] QDC 053.
there is generally no requirement for court-appointed mediators to be legally
qualified, most mediations referred out by the Supreme
and District Courts in
the Australian States are conducted by senior lawyers.
Australian mediators, whether or not they have undergone accreditation
training, tend to mediate in a manner that reflects their previous
profession,
whether as lawyers, engineers, social workers, psychologists or academics.
Practice models reflect:
1. the nature of training,
2. the professional background of the mediator, and
3. the legal and organisational structures within which the mediation is
conducted.
Training programs in Australia and other Anglophone jurisdictions are
typically too short to have a major effect on mediators’
previous
disciplinary training or experience. Marketplace structures such as the role of
community, private and government ADR organisations
respectively will impact on
how mediators mediate. For example, if most mediation is court-referred under a
mandatory scheme, more
lawyer-mediators conducting evaluative mediations are
likely to be found in practice than in a region with a history of strong
community-
based organisations and no formal court-referral programs. Australia
enjoys a diverse marketplace for mediation services from community
mediation to
institutionalised court-referred mediation. Therefore, the combination of
minimal training models and diverse marketplace
structures means that, for the
most part, Australian lawyer-mediators continue to mediate as lawyers in
court-referred situations,
social worker-mediators tend to mediate as social
workers in family, youth and community contexts and so on.
In court-referred mediation programs, the Australian experiences warns that
mediation practices, particularly in schemes that do not
specify mediation
values and specific process requirements, will lack a value-centred base. In
concrete terms this means that there
is a tendency for ‘anything
goes’ mediation, which in turn leads to consumer and practitioner
uncertainty about the nature
of the mediation process and inadequate quality
management of ADR processes. In the absence of a clear set of informed values
upon
which mediation services are based, case law and legislation have responded
to the need for quality assurance and standards by increasingly
legalising the
mediation process. As part of the move to bridge the gap between mediation
values and practice, mediation programs
and organisations need to assume a
greater responsibility for the service they are offering by making an informed
choice about process
quality and communicating this choice to their
clients.
Models of court mediation referral systems
The ability of the courts in Australia and other Anglophone jurisdictions to
change their court rules (which is in stark contrast
to the legislative monopoly
over court rules in most civil law countries) has enabled Australian courts to
integrate mediation into
the litigation process on a court-by-court basis. This
means that there has been scope for enormous variety in court referrals.
Today all court-referred mediation schemes in Australia are legislatively
based. They vary, however, according to who is qualified
to mediate (judges,
court staff, external mediators approved by the court or other non-approved
external mediators) and the nature
of party participation. In terms of the
latter, the traditional voluntary/mandatory dichotomy is no longer an adequate
tool for describing
and analysing mediation developments. So-called
‘voluntary’ mediation can vary dramatically from court-recommended
referrals
where courts actively encourage parties to participate in
‘voluntary’ schemes to schemes in which parties are simply
informed
in writing about the option of mediation and left to pursue it of their own
accord.
Despite a great deal of debate about the legitimacy of mandatory court
referrals to mediation, the reality today is that mandatory
mediation cases make
up the collective bulk of court-referred mediation. If one surveys the mediation
landscape carefully, different
shades of mandatory will emerge. Consider the
pre-filing mediation set out in South Australia’s Rule 20A
Magistrates’
Court (Civil) Rules and section 27 of the Magistrates’
Court Act 1991 (SA), which mandates mediation of all cases before they can be
filed in the Magistrates Court and the Federal Court’s routine
mandatory
referral to mediation by the National Native Title Tribunal for all native title
claims lodged with the Court.17 Although the timing and nature of
mediation is different in both these referral models, parties cannot get a
hearing without first
going to mediation. Compare this with the soft mandatory
referral model described above, where courts will take into account the
attitude
of the parties towards mediation before deciding whether to
‘mandate’ the process.
Despite much experimentation with forms of court-referred mediation in
Australia, current trends indicate a move towards the following
court-referral
design features in the Supreme and District Courts of the various Australian
States:
1. Mandatory referrals usually at the discretion of the court;
2. External mediators, typically barristers;
17 Native Title Act 1993 (Cth), ss 86B (2), (3) and (4).
3. Parties select mediator;
4. User pays system with fees set by mediators.
These features represent a marketplace model of mediation in which the court
system extends its arm into the private sector. In doing
so it has contributed
to the creation of a new industry – private court-referred
mediation.
However, there are other courts and tribunals which do not follow this model
at all. They are typically tribunals and lower courts
in which the tenets of the
adversarial system are not as entrenched and in some cases not required. Here
the influence of civil law
procedures, such as judicial case management and
settlement techniques, have been the greatest and we have seen the influence
civil
law court mediation models which focus on the judge as mediator (justice
model). In contrast to the marketplace model, the justice
model contains the
following features:
1. Mandatory referrals (often routine mandatory, that is all matters that meet
certain specified criteria must go to mediation),
2. Internal mediators, often judges,
3. Court selects mediator, and
4. Court/ tribunal system pays the costs of the mediation.
The justice model views mediation as an extension of the service of the
courts. It is consistent with the civil law notion of the
settlement judge
– the judge must as a matter of law attempt to settle a matter before
him/her before trying the case. Two
Australian examples of courts and tribunals
that employ the justice model of court referral are the Queensland Commercial
and Consumer
Tribunal and the Commonwealth Administrative Appeals
Tribunal.
The user pays principle has implications for access to justice
As indicated above, in relation to the marketplace model of court-referred
mediation, litigants typically pay for mandatory mediation.18 An
interesting development in the jurisdiction of Queensland has been the
significant rise in litigants-in-person since the introduction
of mandatory
mediation schemes linked to courts and legal aid. Where litigants are required
to mediate as part of a court-referred
mediation scheme or as a requirement of
receiving legal aid, they may not have the funds to engage legal representation
to pursue
the matter in court. As a result there may be increased pressure to
reach a settlement at
18 Note, according to Order 29.2 Rules of Supreme Court 1971 (WA) parties
cannot be ordered to go to mediation where they are responsible
for mediator
remuneration.
mediation. Although the courts are no longer congested, the cost of
litigating with legal representation remains beyond the reach
of most once-only
litigants. Anecdotal evidence suggests that those who choose to litigate in
person are frequently poorly advised
clients or litigants with limited financial
means disputing on a matter of principle, and having exhausted the legal aid
funding
available to them at a mandated mediation. This unintended consequence
of strongly encouraging and mandating mediation creates a
difficult situation
for the judges, for the unrepresented litigant as well as the lawyer on the
other side. Rather than increase
access to justice, it hinders it.
Gatekeepers influence the type of cases that are referred to
mediation, who mediates and the timing of mediation
In the context of legal disputes, court-referred mediation initiatives have
been the primary vehicle for the encouragement and mobilisation
of mediation. At
the crossroads between ‘out-of-court’ and ‘in-court’
dispute resolution, the judiciary and
the legal profession occupy an influential
position as the gatekeepers of many ADR procedures and accordingly they play a
key role
in the mobilisation of mediation.
As a matter of practice, gatekeepers have enormous influence over who
mediates and when mediation occurs. Anecdotal evidence suggests
that in most
cases gatekeepers within the legal system will tend to refer matters to
lawyer-mediators and gatekeepers outside the
legal system will refer to other
professional mediators with whose work and disciplinary background they are
familiar. The impact
of training and disciplinary background of the mediator has
been discussed above.
In Supreme Court jurisdictions in Australia, judges or registrars have the
discretion to refer parties to mediation or other forms
of ADR. All civil
matters that fall within the court’s jurisdiction are eligible for
referral. In the early days of court referrals
judicial discretion varied
greatly. Some judges referred virtually every case to mediation, others none at
all, and still others
referred cases to mediation according to self-determined
criteria such as lower monetary sum, family-related dispute, too expensive
to
litigate, straightforward, non- complex matter and so on. Over the years
referral schemes have become more sophisticated in terms
of their referral
criteria and a body of case law has developed identifying the following criteria
as relevant:19
1. Nature of relationship between the parties: bitter animosity or history
of working things out,
19 See, e.g, Rajski v Tectran Corp Pty Ltd [2003] NSW 477 (unreported, J. Palmer, 27 May
2003).
2. Outcome of previous structured settlement attempts,
3. Complexity of litigation proceedings if matter does not settle,
4. Investment of resources – time, money, emotional – in
mediation versus litigation,
5. Effect on resources of court,
6. Effect on resources of parties compared to value of dispute and to
litigation,
7. Manner/attitude of the parties to litigation/ dispute resolution
processes so far; attitude of parties to mediation and to mediator,
8. Health of participants, and
9. Ability to negotiate.
The type or legal classification of a legal matter has not proven to be a useful
indicator of the utility of mediation.
In terms of timing, empirical evidence is mixed as to the ideal timing for
mediative intervention. In Australia Supreme and District
Court referrals
generally occur after the close of pleadings. Mediation can occur at any stage
of proceedings and as a matter of
practice tends to occur after discovery,
despite legislative encouragement to resolve dispute earlier rather than
later.20 In terms of mediation’s effect on statutory limitation
periods, post-filing referrals will not affect the limitation period.
iv. the regULatiOn OF adr
There has been a proliferation of regulatory ADR instruments in Australia
during the last 15 years. This section outlines the emerging
law of mediation in
Australia and demonstrates how it creates a framework, which regulates both the
process and the participants.
The regulation of ADR stems from four primary
sources:21
1. National laws (comprising legislation and case law),
20 See, e.g., Order 29.2 Rules of Supreme Court 1971 (WA) and Section 95 of Supreme Court of Queensland Act 1991 (Qld). Both provisions encourage the early resolution of disputes in a post-filing referral scheme.
21 This categorisation is based on the Draft Recommendation on Online Alternative Dispute
Resolution (ODR), developed by UN/CEFACT, December 2002.
2. International legal instruments such as the UNICITRAL Model Law on
Conciliation insofar as it is adopted by national jurisdictions,
dispute
resolution agreements of bi-lateral and multi-lateral agreements, EU directives
and so on,
3. Private contractual instruments, and
4. Standards, benchmarks and professional ethics insofar as legal systems
draw upon them to interpret industry standards of professionalism
and quality
processes and performance.
These source instruments of ADR regulation outlined above can be further
classified in terms of the issues they regulate.22
1. Pre-mediation process issues,
2. Issues arising during the mediation process,
3. Post-mediation process issues, and
4. Regulation of participants in the mediation process.
Pre-mediation issues
Pre-mediation issues refer to issues that typically arise before the
mediation session proper. These include the interpretation and
enforceability of
dispute resolution clauses and agreements to mediate, the criteria according to
which courts may refer disputing
parties to mediation and finally how
participation in mediation affects the limitation periods on initiating legal
proceedings. The
last two issues have been discussed above. With respect to
enforceability issues, the much cited cases of Hooper Bailie and Elizabeth
Bay23 established the principle that the court would be prepared to
recognise an agreement to mediate or a mediation clause, provided contractual
principles were followed.
22 Compare the classification of mediation legislation into procedural (dealing with the nature of the mediation process), regulatory (regulating the practice of mediators in mediation) and beneficial (to protect mediators and consumers) legislation: D. Clapshaw and S. Freeman- Greene, “Do we need a mediation Act?” (2003) 6 (4) ADRB 61.
23 Hooper Bailie Associated Ltd v Natcon Group Pty Ltd (1992) 28 NSWLR 194, 209; Elizabeth Bay Developments Pty Ltd v Boral Building Services Pty Ltd (1995) 36 NSWLR 709. Other more recent cases include Computershare Ltd v Perpetual Registrars Ltd (No.2) [2000] VSC
233 [14], Aiton Australia Pty Ltd v Transfield Pty Ltd (1999) NSWSC, 55020 OF 1999, 1
October 1999 and The Heart Research Institute v Psiron Ltd [2002]
NSWSC 646.
Issues arising during the mediation process
In terms of issues arising during the mediation, Australian courts have
focused on the scope and implications of confidentiality in
mediation. In
Australia the confidentiality of aspects of the mediation process may be
protected by:
1. Legislation;
2. An agreement to mediate; or
3. Common law in the form of the without prejudice privilege and legal
professional privilege.
Most Acts of Parliament that provide for mediation protect the
confidentiality of statements made and documents prepared during the
course of
the mediation.24 Agreements to mediate generally contain
confidentiality clauses that require the parties and the mediator not to
disclose to persons
outside the mediation any information or document used in
the mediation. Harman, referring to the case law, points out that the parties
should clearly state their intentions in relation to confidentiality and
privilege.25 Accordingly, the agreement to mediation should
specify:
1. the parts of the mediation to which the obligation of confidentiality
attaches;
2. any exceptions to the confidentiality and privilege; and
3. the obligations of the mediator, during and after the mediation in
relation to the confidential material received during the course
of the
mediation including both joint and separate sessions.
Regulation of participants in mediation
The regulation of parties, legal representatives and mediators in mediation
has become an increasing focus of Australian case law.
A duty on the part of the parties and their legal representatives to
participate in mediation in good faith can have a statutory or
a contract law
basis. Australian courts now consider dispute resolution clauses containing good
faith components enforceable, although
concern has been expressed as to the
nature of remedies for breach and the type of evidence that could be
adduced
24 See, e.g., Supreme Court of Queensland Act 1991 (Qld), ss 112-114.
25 L. Harman, “Confidentiality in Mediation” in G. Raftesah and S. Thaler (eds.) Cases for
Mediation (1999) 29.
to prove breach.26 In a number of cases, courts have defined the
meaning of good faith in negotiation and mediation contexts.27
Parties found not to have participated in mediation in good faith have in
some cases been subject to costs orders against them.28
Issues of professional liability for mediators29 and legal
representatives30 are also the subject of an increasing amount of
case law. In this context courts draw upon the standards of professional bodies
and
ADR organisations to assess claims of professional negligence.
Post-mediation issues
Post-mediation issues in Australia focus on mediator’s reporting back
duties, the enforceability of settlement agreements and
the ability of mediators
to be subpoenaed in this context. In terms of reporting back, mediators are
typically limited to reporting
on the presence of the parties at mediation and
the nature of the outcome – full, partial or no settlement. In other
words,
mediators are not usually asked to report on the behaviour of the
participants in mediation. In cases where, for example, one party
does not
attend the mediation, mediators’ reports may result in costs implications
for the non-attending party.
Settlement agreements are generally treated as private contracts and the
general law of contract applies, including the ability to
challenge the
settlement agreement on grounds such as misleading and deceptive conduct, duress
and unconscionability. In this context,
mediators have been subpoenaed to give
evidence in subsequent legal proceedings about what took place at the mediation.
In other
words, the cloak of confidentiality can be lifted to gather evidence of
alleged improper conduct.31
National approaches to regulation
Countries such as Australia and the USA have benefited greatly from early
experimentation with mediation models and marketplace structures.
It would be a
mistake to assume that solutions from these common law countries could be easily
exported elsewhere. Despite sharing
the common law system, the Australian and
American responses to the diversity versus consistency debate have been
dramatically different.
In a move towards developing consistency,
26 Rajski v Tectran Corp Pty Ltd [2003] NSW 477 (unreported, Palmer J 27 May 2003).
27 See, e.g., Australia v Taylor [1996] NNTTA 34; (1996) 134 FLR 211, 224, 225.
28 See, e.g., Capolingua v Phylum Pty Ltd (1991) 5 WAR 137, 140.
29 Tapoohi v Lewenberg [2003] VSC 410, 21 October 2003.
30 Studer v Boettcher [2000] NSWCA 263, 24 November 2000.
31 See, e.g., Quad Consulting Pty Ltd v David R Bleakly & Associates Pty Ltd (1990-1991)
the US Model Law Uniform Mediation Act (UMA) was approved in May of
2001 in the hope that US states would adopt its provisions creating
uniformity across jurisdictions.32 The US drive towards a national
uniform solution reflects the vast and complicated web of regulation relating to
mediators and mediation
of which Birke and Teitz write that has led to a great
deal of confusion about rights and obligations of the mediator, clients, lawyers
and courts.33 However, as the Model Law represents the ultimate
compromise with certain issues such as training and accreditation not canvassed
at all and others dealt with very broadly, its attractiveness and utility have
been the subject of much critical comment.34 Will it serve to
establish national standards on certain issues such as confidentiality and
admissibility, while leaving other areas
to continue to develop in an ad hoc
fashion? The jury is still out on this question.
Australia has taken a very different approach. A report to the Commonwealth
Attorney General in 2001 recommended that all Australian
ADR service providers
adopt a code of practice dealing with specific issues, while at the same time
encouraging diversity by leaving
the particular choice of standard up to
specific practice areas and service providers. This is called the framework
approach –
developing a national framework for standards within which
diversity and consistency can co-exist.35
In 2006 a national mediation accreditation initiative set out to establish a
national minimum standard for mediator accreditation.36 Consistent
with the framework approach and the promotion of diversity in quality mediation
practice, the standard will be voluntary
and, as a minimal standard, co- exist
with more demanding or specialist standards of specific professions,
organisations and industry
groups. Several ADR organisations and state-based bar
associations have, for example, established regular and advanced panels of
mediators, with the advanced panels requiring a higher standard than the
proposed national mediation standard.37 In addition, Australian law
societies are in the process of developing a national specialist mediator
accreditation for solicitors
and legal practitioners, which will comprise
education and practice requirements beyond the proposed national
standard.
32 The following US states have either enacted or are in the process of enacting the UMA: District of Columbia, Minnesota, Indiana, New Jersey, Ohio, Vermont, Washington, Connecticut, Iowa, Massachusetts.
33 See R. Birke and L. Teitz in N. Alexander (ed.) Global Trends in Mediation, supra n 6 at
Part 4.
34 Ibid.
35 T. Sourdin, supra n 10 at Part 2.
36 http://www.mediationconference.com.au/html/Accreditation.html
37 For example, the Queensland and Victorian Bar Associations and, in terms of ADR
organisations, LEADR and the Institute of Arbitrators and Mediators
(IAMA).
Approaches to regulation can therefore stimulate or stifle the diverse
markets for mediation training and practice. Mediators and
trainers need to be
aware of national policy and legislative initiatives before launching into a new
market.
v. cOncLUSiOn
This article has demonstrated how the legislative and policy structures imposed on court-referred mediation in Australia influence its practice. With the global trend towards the institutionalisation and regulation of mediation, law and legal systems will continue to exert a greater influence on the practice of mediation. The structural framework within which mediation is embedded impacts directly on the nature and quality of process and the ability of mediation to achieve its goals whether they be improved service delivery, access to justice, self-determination, reconciliation or transformation. Understanding national structural frameworks forms the basis for comparative mediation studies and is essential for the successful export of mediation skills, services and programs.
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URL: http://www.nzlii.org/nz/journals/NZYbkNZJur/2006/21.html