The Future of Mediation and Litigation
The following is offered by The Federal Court’s website:
What cases are suitable for mediation?
All cases, regardless of their complexity or number of parties, are eligible to be referred to mediation. The types of matters commonly mediated at the Federal Court include corporations law, intellectual property, industrial law, consumer law, human rights, admiralty, tax and costs.
Some factors about your dispute may indicate that it is particularly suited to mediation, such as:
- A willingness to participate in mediation;
- The possibility that a judge’s decision will not end the dispute;
- The need for parties to find a way to preserve their relationship;
- The existence of non-monetary factors; and
- The potential for a negotiated outcome that better suits the needs and interests of the parties than a judge’s decision.
Mediation offers many benefits over a trial by a judge, including:
- Time: ordinarily a dispute can be resolved more quickly through mediation than through a trial.
- Cost: if a dispute can be resolved through mediation, the costs of preparing and running a trial can be avoided. Additionally, after a trial the unsuccessful party may be ordered to pay the legal costs of the successful party.
- Flexibility: mediation offers parties more control over the outcome. A mediation process which is customised to your needs can be arranged with the mediator.
- Stress: mediation is less formal and less intimidating than appearing in court.
- Confidentiality: mediation is private. The judge is not informed of the contents of the mediation. It is also usually unable to be used against a party if the case goes to trial. (The Court recommends you discuss mediation confidentiality with your lawyer).
- Satisfaction: because the parties decide and agree on the outcome of their dispute they are more likely to be satisfied with the result and to comply with what has been agreed.
- Finality: settlement agreements can usually only be modified with the agreement of all parties
A clearer statement of the Federal Court’s attitude would be difficult to fathom. Further, a clearer statement of the benefits to litigants of avoiding litigation, when and where appropriate, would be hard to draft.
The simple reality in litigation in any superior or intermediatory Court is, as Bridge has observed,42 that:
The culture of mediation is so strong and judges are so inclined to order mediations even over the objection of parties that many mediations take place by consent although one party or another does not wish the mediation to occur. Its consent is brought about by a belief that it is almost inevitable that the court will order mediation at the request of one party or another. Most objections come down to a question of timing i.e. the matter is not yet ripe for mediation because certain steps need to be taken first. The most common response of a judge in those circumstances is to order the steps to be taken and then order the mediation….
….in the real world of Australian litigation in 2012….virtually no case proceeds to trial without at least one round of mediation and is and sometimes more than one
From a government perspective clearly mediation is here to stay as it offers value for money or “bang for buck”. That is always readily measurable and near guaranteed to be so, as against the cost of a judicial determination of a dispute. In reality it is far from comparing apples with oranges. To continue the funding analogy it is in reality comparing apples with, at best, sultanas (if not comparing bananas with onions). The cost base of the two is never comparable and the focus should, perhaps, be upon the justice obtained (especially from the perspective of the disputant and, in a family law context, the child) rather than the money saved.
There is always the potential, in such an economically driven analysis, to seek to “value” justice in a mathematised way. To do so devalues not only justice but the importance and value of the rule of law as a principle for government of civil affairs.
Mediation has a fundamental role and value in the proper administration of both justice and society. However, when it is seen in isolation from the system of which it is part, a justice system in which the Court and lawyers play a fundamental role, it is mischaracterized.
One aspect of the value of mediation relies, at least in part, in the failure of the “traditional” justice system to respond to the needs of litigants or consumers. The facilitation of negotiation though mediation is in no way a novel concept. The role of mediation has, to a significant extent, been a response to the failure of the litigation and lawyer assisted negotiation processes, to allow and enable an early resolution of disputes.
The litigation process has traditionally been dependant upon the role of the lawyer as an officer of the Court to identify issues in dispute. If this is consistently done then the Court is able to focus upon those issues and thus clearly identify and work towards resolution of issues in dispute. If this model was not operating effectively then the rise and rise to primacy of mediation, is entirely explicable. In areas of the law such as family law, where in up to 40% of cases one or both parties is self represented, this is all the more explicable.
Perhaps, to some extent, the rise of mediation to prominence, indeed indispensability, is readily explained by such changes and shortcomings of the litigation process. But this cannot be the most significant basis for the pre-eminence of mediation.
To the extent that mediation is a means of negotiation its purpose, across areas of the law, changes. In commercial disputes parties are more likely to be represented. Thus the traditional wisdom that the reluctance to negotiate at an early stage, for fear of showing or suggesting weakness, might be a stronger motivation for a private, confidential and non-Court-connected (or Court facilitated process) to be favoured.
Ultimately one issue that resonating with the value and importance of mediation in the modern context is the inherent uncertainty of litigation and the natural desire for certainty (and with it expeditious determination of disputes).
Uncertainty arises on many levels in the litigation context including:
- The potential for uncertainty in the law (such as from repeated and non- identical appeal decisions on the same or similar points);
- Inconsistency in the quality of service (whether lawyers, mediators, judicial officers or otherwise);
- Uncertainty as to cost and delay.
To some extent these matters are within the control of the judiciary and Courts (at least as regards consistency of decision making, the common law system being based on a system of clear and certain legislation and precedent interpreting it). If the “market place” (as regards commercial transactions) and society broadly (as regards all other disputes) are clear as to the law and the outcome or likely outcome of disputes, then the potential for disputes is limited and the need for dispute resolution services (including the Court) substantially reduced.
Perhaps if we are more conscious of the reality that negotiation occurs in the shadow of the law43 rather than the shadow of the Court then two consequences will follow. Firstly, there will be less “dispute”. Secondly, any “dispute” will more amenable to, and more appropriate for, a negotiated resolution within clear and readily identified parameters of law and justice. Thus the greater clarity in the law the greater ability of lawyers to negotiate without external intervention (whether mediation or Court) and, if external intervention is required, the greater efficacy of mediation. Indeed, if the law were always “clear” the judicial determination of disputes would be rare.
Litigation is, however, here to stay. There are and will always be cases that are not capable of resolution whether at a given point or ever, irrespective of how clear the law may be. Such matters require judicial determination and access to justice by the litigants involved.
That being said the capacity and willingness of Courts to order or require mediation, let alone the expectation that it will occur without judicial intervention and simply as a matter of best practice, cannot be realistically questioned even if judicial enthusiasm for mediation is not entirely consistent. There are no longer any “nay sayers” amongst the judiciary – merely gradients of enthusiastic proponents.
As Justice Bergin astutely observes:44
Since 2000, courts in New South Wales have had the power to refer civil proceedings to mediation, with or without the consent of the parties. A similar power now exists in all Australian jurisdictions.45
The unanimous and overwhelming result of any evaluation of mediation services has been a high settlement rate delivered at a far lower cost that judicial determination.
Thus, one is struck by both:
- The inherent value and purpose of mediation; and,
- The potentially perceived lack of value and relevance of the remainder of the process to their dispute.
However, one is best focused on the role and value that each element of the process may bring. In this sense, the embedding of mediation within the psyche of litigants and the litigation process is fundamentally valuable. It allows the litigation process to ensure address of disclosure and discovery and the affording the opportunity, to the extent that lawyer assisted negotiation has not been able to conclude the dispute, for the parties to use mediation as an adjunct to litigation and resolve matters between themselves.
Felstiner, Abel and Sarat identified that “viewing disputes as things creates a temptation to count them”. This very temptation creates one of the real conundrums in accurately assessing the use of mediation services, especially those which are voluntarily accessed – the difficulty in accurately measuring or counting the number of disputants using services.
Additionally, the far more philosophical question arises – how does one measure the success of mediation? Whilst the execution of an agreement at the mediation session is, simplistically, a fairly ready measure that the mediation was “successful” there is a dearth of research (and explicably so) as to the “success” of mediation measured by:
Limiting issues in dispute (e.g. a litigated matter in which the parties attend mediation shortly before a hearing and in reaching some better understanding of the other’s case or in agreeing to some issues, reduce the hearing time from three days to one day)
Not settling immediately but settling some time later as a consequence of, or influenced by, that which occurred in the mediation process;
Not settling at all (and the matter continuing to a judicial determination) but as a consequence of the mediation and that which occurred in the process the judicial determination “sticking”.
Similarly, whilst clearly Court ordered mediation is now common, statistics on such referrals and their effectiveness in addressing the dispute (at least to the extent that the dispute does not then require determination by the Court) are more difficult to locate.
In a submission to the Australian Productivity Commission in October 2013, Family Relationships Services Australia indicated:
Evidence from the Australian Institute of Family Studies (AIFS) evaluation of the 2006 law reforms and from court system reports has shown that FRCs have been effective in the first five years of operation with overall parenting applications to the courts dropping by approximately 32%, and public use of mediation and counselling services increasing (Kaspiew, 2009: 304-5).
According to Professor Patrick Parkinson…the significant decline in court applications since the introduction of FRCs shows how ‘a well-organised and funded system of mediation and other family support, away from the court system, can have collateral benefits to the courts’ (Parkinson, 2013: 209)…Thus FRCs represent ‘a modest level of expenditure to address issues that [if unsolved] will create other costs for government in one way or another’ (Parkinson, 2013: 211).
The December 2009 Evaluation of the 2006 Family Law Reforms46 found:
…the overall number of [parenting] applications declined by 22% from 18,752 in 2005-06 to 14,549 in 2008-09…
The reality is that, consistent with trends from the annual reports of both the Family and Federal Circuit Courts, the number of applications has increased annually (leading up to the 2006 reforms). Thus, if one considers this reality also, the contribution made by FDR [in resolving matters without the need for litigation] is more probably a reduction in filings, in real terms, of over 30%.
By reference to the 2011-12 Annual Report of the NSW Legal Aid Commission, 2,586 FDR sessions were conducted in Family Law matters before Federal Courts in that year (being a mix of pre litigation and litigation intervention conferences and litigation intervention conferences representing approximately half of the conferences undertaken).
The contribution of this form of mediation, occurring during and bringing a conclusion to litigation, cannot be accurately gauged due to an absence of reliable statistics. However, on the assumption of an approximately 80% resolution of “some or all issues”47 arising from such conferences this would represent approximately 1,300 matters settled in whole or in part.
The resolution of matters by agreement, subsequent to commencing litigation, occurs at a high rate.48 Within the context of the Family Law Act mediation or FDR49 is relevant as both a “Pre Action procedure” and a Court referred mediation regime.
In an excellent paper Chief Justice Bathurst observed, as regards the NSW Supreme Court jurisdiction:50
There have been significant successes in court-referred mediation schemes. Statistics from the NSW Supreme Court evidence significant success in court annexed mediation. In 2009, almost 60 per cent of cases referred to a mediation program in NSW settled during mediation. A report from Victoria in the same year found that the 43.2 per cent of cases surveyed that were referred to mediation finalised the dispute, along with another 27.4 per cent that settled through negotiation; only 7 per cent were resolved at trial.
Boulle speaks of the role and future of mediation in the following terms:51
ADR and mediation provide another vision of justice that emphasises the direct participation of parties in the dispute resolution process and the focus on personal and commercial needs and interests rather than on legal rights. In the early days of mediation’s life story we referred in particular to the procedural benefits of mediation: its informality and flexibility, its lack of technicality or rigidity, the direct and continual involvement of the parties in the resolution of their problems, and the like.
The value is fundamentally proven both as an alternative to and an integral part of litigation as a means of dispute resolution. The social, financial and systems based benefits of mediation cannot be seriously questioned even with the shortcomings we have in data collection and analysis.
Perhaps as we move into the next decade, building upon the successes that mediation has amply demonstrated, what is called for is a more nuanced approach towards the use of various dispute resolution mechanisms including both litigation and mediation, seeing the two not as mutually exclusive but as different strategies to address the same dispute.
So much is envisioned by Part II of the FLA in the context of parenting disputes wherein the legislation requires the use (or consideration of) mediation prior to litigation and empowers the Court to order mediation (and family counselling and other services) during the proceedings.52 It is beyond the scope of this paper to address how those powers might best be used within a therapeutic jurisprudential framework.
Justice Bathurst also addresses the use of mediation at different and potential serial occasions as follows:53
If it is accepted that ordering mediation is appropriate in some circumstances, one of the challenges faced by the courts is how to ensure a consistent use of such powers. Consistency is an important aspect of justice and can be beneficial for efficient case management by allowing parties to foresee potential orders and accommodate these prior to their hearing. Ensuring consistency is not merely a matter of singling out certain types of disputes that are deemed appropriate for ADR, although this may be a starting point. It involves considering the nature of the dispute, the relationship of the parties and the complexity of the issues in question…
It is evident that there will be cases where the issues are not complex and mediation prior to the dispute even being filed may be in the parties’ best interests. On the other hand, where there are complex factual or legal issues, it may be more appropriate for parties to attempt ADR at a later stage, once they have a better understanding of the strengths and weaknesses of each side’s legal case and of the key issues that are in dispute
Similarly Justice Bergin54 reflects upon the observations of one of Australia’s most experienced and pre-eminent mediators and jurists:
In 2003, Sir Laurence Street AC, KCMG, QC made the following observation about the appropriate time for mediation:
“It is impossible to generalise as to the time when a dispute is ripe for mediation. Some are ripe very soon after they erupt and before the parties become deeply entrenched in oppositional positions and incur expenditure on costs in consolidating those positions. Some are not ripe until the parties have fought them out to the point of judgment or award in a court or arbitration.
Between these two extremes is a continuum.”
I will happily leave the last word to Justice Bergin in summarising the present state of play:55
Long gone are the days when mediation could be accurately described as “alternative” dispute resolution. It is now an integral component of the civil justice system in Australia.
Read more here from Judge Joe Harman
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