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
6	For a comparative analysis of mediation, see N. Alexander, “Global Trends in Mediation: Riding the Third Wave”, supra n 1.
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.
9	On Canada: A. Prujiner, “Développements Récents en Médiation au Canada et au Québec” in N. Alexander (ed) Global Trends in Mediation, supra n 6 at 93; H. Genn and Hazel, “Court-based ADR Initiatives for Non-Family Civil Disputes: an Evaluation of the Ontario Mandatory Mediation Program.” http://www.attorneygeneral.jus.gov.on.ca/english/courts/manmed/exec_summary_ recommend.pdf
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.

iii.	 the natUre OF cOUrt-reFerred mediatiOn and mediatiOn reFerraL SyStemS

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) 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)
98 ALR 659.

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.