Mandatory mediation: Is it really a contradiction in terms?

Voluntariness is the very essence of the mediation process.

Mediation provides a forum for disputants to freely and willingly discuss their dispute with a view to resolution on their own terms, as they see fit.

Conversely, ‘mandatory’ implies compulsion. The combination of these two concepts seems to be an unlikely partnership. Notwithstanding, experience shows that mandatory mediation is an effective tool in ensuring that disputes are resolved quickly, efficiently and in a cost-effective manner.

Certainly, Australian parliaments and policy makers have enthusiastically embraced the process in a wide range of jurisdictions,1 ordinarily mandating a facilitative, rather than evaluative, model of mediation.2

Parties are directed to mandatory mediation in a variety of ways. Certain legislative schemes require parties to engage in mediation, or some other form of focused negotiation, prior to commencing court proceedings. In addition, judicial officers have a wide discretion to order parties to mediation during litigation.

Commercial conflicts

One of the primary objectives of legislation regulating commercial litigation in Australia is the expeditious resolution of disputes. Delay can lead to insolvency, which denies a worthy plaintiff of their remedy or forces a defendant into bankruptcy or liquidation.

The early payment of debts protects business enterprise, stimulates the economy and alleviates the time and cost burden of litigation on the individual and on the State.3 In the commercial arena, mediation allows sensible, interest-based, commercial outcomes “rather than the rigorous and public application of legal principle to a factual context”.4

In the Federal Court, parties are required to engage in “genuine steps to resolve a dispute” before initiating civil proceedings.5 “Genuine steps” comprise settlement offers and replies, the exchange of information and documentary material, an evaluation of the potential utility of ADR, actual engagement in ADR, and/or drafting an action plan designed to facilitate the timely resolution of the dispute.6 The court evaluates the genuineness or otherwise of the parties’ efforts and may impose an adverse costs order where such efforts fall short of the required standard.

Once litigation is under way, the Federal Court is empowered to refer a proceeding to ADR “with or without the consent of the parties”, and accredited mediator registrars are available to conduct mediations as required.7

In Queensland, judicial officers of courts at every level are empowered to refer commercial proceedings to mediation in the absence of the parties’ consent.8 This power is reinforced by s43(3) Civil Proceedings Act 2011 (Qld), which provides that a court may refer a dispute to mediation as it sees fit.

In 2000, following an in-depth investigation extending over a six-year period, the Federal Court reported that settlement was reached in 55% of cases referred to mediation between 1994 and 1999, which figure excluded cases settled by way of private mediation. Anecdotally, practitioners in this arena report a success rate in mediation between 60% and 85%.9

In 2008 in Victoria, more than 43% of claims ordered to mediation were resolved.10 The following year, the Supreme Court of New South Wales reported favourable results in mediation compelled by court order, with resolution achieved in almost 60% of proceedings.11 Queensland’s experience is presumed to be largely consistent with that of other parts of Australia.

Family law matters

The damaging, long-term effects of family disputes on the children and adults involved are well documented. Mandatory mediation – referred to in this arena as family dispute resolution (FDR) – is therefore crucial in parenting disputes, facilitating their timely resolution so as to minimise the impact of a potentially prolonged and arduous adversarial process.12

FDR was embedded in the management of parenting disputes by the introduction of the Family Law Amendment (Shared Parental Responsibilities) Act 2006 (Cth). The Family Court of Australia is precluded from determining a child-related application until such time as the applicant produces certification from an FDR practitioner, to the effect that the parties have engaged in the resolution process “and that all attendees made a genuine effort to resolve the issue or issues”.13

FDR is not mandated where all parties consent to the terms of the orders sought in the application, or where the court determines that the dispute is characterised by actual family violence or child abuse, or the risk of such violence or abuse.14

This mandatory mediation process has been successful in reducing the volume of child-related applications before the courts, with a corresponding increase in participation in FDR programs.15

In 2013, an investigation commissioned by the Commonwealth Attorney-General reported substantially increased settlement rates for FDR in 2011-2012, with full resolution achieved in 51% of disputes and partial resolution in a further 28%. In addition, 76% of the participants endorsed the fairness of the process, with an overwhelming majority strongly supporting the contention that the process enabled their effective participation in problem-solving discussions.16

Neighbourhood disputes

Mediation is of real assistance where the parties seek more than just financial relief, as it allows creative, interest-based solutions. For this reason, the realm of neighbourhood disputes is one area of conflict that clearly calls for a compulsory DR process.

In this context, “mediation can result in an outcome not available by order of the court, such as an apology, an agreement as to future dealings or cooperation with a view to influencing the conduct of a third party”.17 The process can also assist parties to compromise their claims in respect of identifiable assets, such as dividing fences and trees.18

Disputes between neighbours can be acrimonious. In such cases, the mediation may be the first occasion on which the parties have a real opportunity to engage in useful and purposeful dialogue about the issues in dispute. The parties will likely need to continue living in close proximity to one another and mediation, in that it is a joint and collaborative enterprise, assists in restoring harmonious relationships.19

In the event of resolution of the claim, parties are more disposed to consider themselves bound by an agreement they have reached of their own volition and more inclined to view the process, and the outcome, as fair and just.

For these reasons, mediation is mandated by the legislation governing the resolution of neighbourhood conflict in Queensland.

The Neighbourhood Disputes (Dividing Fences and Trees) Act 2011 regulates disputes surrounding dividing fences and trees. A property owner who is unable to agree with their neighbour regarding the construction or maintenance of a dividing fence, or tree placed on or near the boundary, can seek assistance in resolving the altercation via the lodgement of an application with the Queensland Civil and Administrative Tribunal (QCAT). The conflict is then referred to a mediation process.20

The mediation may be variously convened by a QCAT member, a panel adjudicator, the principal registrar or a mediator qualified as required by the Dispute Resolution Centres Act 1990 (Qld).21 Any agreement reached at the mediation will be formalised by order of the tribunal and enforced accordingly.22 Since QCAT was established at the end of 2009, there has been a consistent rise in success rates of mediation of minor civil disputes.23

Addressing the concerns

As demonstrated above, mandatory mediation has been shown to be successful in the effective resolution of disputes in diverse arenas. Notwithstanding, opponents of compulsory ADR maintain objection to the practice, citing concern that removing the voluntary element of the process disempowers the participants, increases the risk of coercion and endangers the fairness of the procedure and any resulting settlement.24

These views ignore the power of mediation “in returning autonomy to the parties and suspending strict law as an alternative to court-based adjudication”.25 Although parties are compelled to embark on the process, that is as far as the compulsion extends.26 The freedom that is essential to the process is the freedom to hear and to be heard, and to make voluntary decisions about consensual resolution of the dispute.27

It is argued that imposing mediation on reluctant parties has the opposite of the desired effect as persons forced to mediate may be uncooperative and adopt an obstructive attitude, undermining the prospect of agreement. This concern is not borne out by the evidence. Rather, mediators consistently report that, where parties are compelled to mediate, they commonly engage effectively in the process, settlement rates are unaffected and beneficial outcomes are achieved regardless.28

Another complaint is that mandating mediation trivialises the process, making it just another obstacle to be overcome in the course of litigation, further prolonging the delay in determination of the claim.

There is a risk that parties exposed to liability may misuse the process to fend off the issue of proceedings,29 deliberately refrain from actively engaging in the process and/or treat the mediation as an information gathering exercise, rather than as a genuine opportunity to compromise the claim.

In order to prevent abuse of the process in this way, most jurisdictions impose “good-faith” requirements on parties referred to mediation.30

In Queensland, the court rules require parties to “act reasonably and genuinely” in the mediation process.31 The New South Wales Supreme Court has thoroughly analysed the core content of this requirement, concluding that it requires the parties to remain open-minded and willing to put forward or consider options for resolution.32

Helpfully, courts have the implied power to make ancillary orders designed to ensure that mediation is not derailed by the bad faith of one or more of the participants. The court also has the power to strike out or dismiss a proceeding; strike out pleadings; or make an adverse costs order, including for indemnity costs.33

Where parties are required to engage in ADR before a court proceeding can be filed or progressed, there is an unavoidable front-loading of costs and a delay in prosecution of the litigation. Opponents submit that this unfairly adds to the litigant’s already onerous burden.

However, this argument ignores the benefit to the litigants, the courts, governments and, ultimately taxpayers, that flows from the early resolution of disputes. Where resolution can be achieved as soon as possible in the life of the claim, there is a substantial financial benefit in the avoidance of legal costs, more amorphous advantages, including the immediate alleviation of the stress and anxiety associated with the court process, and savings in time and energy that would otherwise be devoted to the pursuit of the litigation.34

From a public policy perspective, early settlement reduces the burden on the court’s limited resources and ensures that those claims that require determination by the court, for example those that involve a factual contest, a novel legal question or a legal issue that should be ventilated in the public arena, can proceed quickly and efficiently to trial.

Even if settlement cannot be achieved at mediation, there may be fruitful discussion that often leads to resolution of some of the issues, and the clarification of those matters that require judicial adjudication. This is of significant assistance in ensuring that claims proceed in a timely and cost-effective way.35

No contradiction in terms

Mediation entered into by compulsion provides the same benefits as mediation entered into voluntarily. It provides a forum for resolution that is less formal and less threatening than the courtroom.

It enables disputants to preserve ongoing relationships and permits them to explore creative, interest-based solutions to conflicts. It promotes free discussion, while protecting confidentiality. It empowers parties, allowing them to retain control of their conflict.

In this way it reinforces their perception of the fairness of the process and the outcome, such that they are more inclined to consider themselves bound by any agreement.

Mediation has a proven track record in the successful resolution of disputes.36 Even where resolution is not achieved, a benefit still flows from the process where issues are narrowed, the trial is shortened, and costs are contained. Mediation facilitates early settlement of claims, avoiding or minimising the cost and delay of litigation, and can provide a final, binding and cost-effective determination.

Mandatory mediation is not a contradiction in terms. Although the parties are compelled to enter into the mediation, the integrity of the process is preserved.

Mandatory mediation is judiciously employed in Queensland, including in the disparate realms of commercial, parenting and neighbourhood disputes, where it both effectively resolves disputes and elevates general awareness of the inherent advantages of the process.

The mandating of mediation is a necessary means of helping disputants to help themselves, and achieve best outcomes within financial, relationship and societal constraints.

This article appears courtesy of the Queensland Law Society Alternative Dispute Resolution Committee. Julie Ruffin is the Resolution Registrar at the Brisbane Supreme Court and a member of the committee. The opinions expressed in this article are those of the author and should not be taken to express the views of Queensland Courts.

Footnotes
1 For some Queensland examples, see Body Corporate and Community Management Act 1997 (Qld), Farm Business Debt Mediation Act 2017 (Qld), Residential Tenancies and Rooming Accommodation Act 2008 (Qld), Residential Tenancies and Rooming Accommodation (COVID-19 Emergency Response) Amendment Regulation 2020 (Qld), Retail Shop Leases Act 1994 (Qld), Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Qld).
2 A facilitative mediator does not reveal their own views on the conflict whereas an evaluative mediator proposes solutions and expresses opinions in order to assist disputants to assess the prospects of their case. Mandated processes are largely facilitative in nature, albeit modified in some instances by the incorporation of advisory/evaluative elements.
3 Philip McNamara, ‘Mandatory and quasi-mandatory mediation’ Australian Bar Review (2019) 47, 215, 234-235.
4 Bartlet, M (2019), ‘Mandatory Mediation and the Rule of Law’, Amicus Curiae (Bicester, England), 1(1), 50, 65.
5 Civil Dispute Resolution Act 2011 (Cth) s3.
6 Ibid s4.
7 S53A Federal Court of Australia Act 1976.
8 See s29(3) Magistrates Courts Act 1921 (Qld), s97(3) District Court of Queensland Act 1967 and s102(3) Supreme Court of Queensland Act 1991.
9 Monica Del-Villar, ‘Mediation in Australia’, Australian Construction Law Newsletter (2005) 105 34, 36.
10 Tania Sourdin, Department of Justice of Victoria, Mediation in the Supreme and County Courts of Victoria (2009) 137 [figure 5.1].
11 Chief Justice Marilyn Warren, ‘Should Judges Be Mediators?’ (2010) 21 Australian Dispute Resolution Journal 77, 78.
12 Vicki Waye, ‘Mandatory Mediation in Australia’s Civil Justice System’, Common Law World Review 2016 Vol.45, Issue 2-3, 214, 215.
13 Family Law Act 1975 (Cth), s60I.
14 Ibid s601(9).
15 Helen Rhoades, ‘Mandatory Mediation of Family Disputes: Reflections from Australia’, Journal of Social Welfare and Family Law, (2010) 32:2, 183.
16 Research on Family Support Program family law services Final Report May 2013 Report to Australian Government Attorney-General’s Department, Allens Consulting Group, 35.
17 McNamara above n3, 227.
18 McNamara above n3, 219.
19 Queensland Law Reform Commission Review of the Neighbourhood Disputes (Dividing Fences and Trees) Act 2011, Report No.72 December 2015 220.
20 Queensland Civil and Administrative Tribunal, Practice Direction No.4 of 2011 — Arrangements for the mediation and determination of minor civil disputes, 1 November 2011, [4].
21 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s79.
22 Ibid s85, 88.
23 Ibid 218.
24 Jeff Rifleman, ‘Mandatory Mediation: Implications and Challenges’, December 2005 mediate.com/articles/riflemanJ1.cfm#comments.
25 Bartlet above n4 77.
26 Melissa Hanks, ‘Perspectives on Mandatory Mediation’ (2012) 35(3) UNSW Law Journal 929, 949.
27 Jacqueline Nolan-Haley, ‘Mediation Exceptionality’ (2009) 78 Fordham Law Review 1247, 1251-2.
28 Dorcas Quek, ‘Mandatory Mediation: An Oxymoron? Examining the Feasibility of Implementing a Court-Mandated Mediation Program’, Cardozo Journal of Conflict Resolution Vol.11.2 (Spring 2010) 479, 483.
29 McNamara above n3 220.
30 Timothy Hedeen, ‘Coercion and Self-determination in Court-Connected Mediation: All Mediations Are Voluntary, But Some Are More Voluntary than Others’, Justice System Journal (2005) 26:3, 273, 284.
31 Uniform Civil Procedure Rules 1999 (Qld), r325.
32 Aiton Australia Pty Ltd v Transfield Pty Ltd (1999) 153 FLR 236 at [156].
33 McNamara above n3 222.
34 McNamara above n3 226.
35 President Fleur Kingham, Land Court Queensland, ‘Evaluating Quality in Court-Annexed Mediation’ (paper presented at the 6th National Mediation Conference, Canberra, 19 September 2002) [2002] Queensland Judicial Scholarship 45, 54.
36 For example, the Victorian Small Business Commission reported a success rate of 75.4% for disputes during the period 1 July 2007 to 30 June 2008 (see the Victorian Small Business Commission, Annual Report 2007-2008 (2008) p31) and the Victorian Civil and Administrative Tribunal for 2007-2008 reported on an overall mediation success rate for the 2007-2008 year of 70%. (see the Victorian Civil and Administrative Tribunal, Annual Report 2007-2008 (2008) 43).

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