Tim McFarlane of McFarlane Legal traces the development of mediation in Victoria, Australia.
THE BIRTH OF MEDIATION
The role of mediation in civil disputes in Australia has a relatively short history. However, the steepness of the developmental curve is fundamental to understanding the acceptance of the process and the impact it has had upon resolving matters before the courts and tribunals in Victoria. The focus of this article is the development and acceptance of mediation in the last 20 years in Victoria, and its shift from a little-known concept to an entrenched part of the legal system.
Mediation first appeared in the mid-1980s as an adjunct to arbitration and as an alternative way of resolving building disputes in the County Court of Victoria. The principal genesis for court involvement in mediation occurred in 1992 in the Supreme Court of Victoria. Due to a significant backlog in cases, the then-Chief Justice, John Harber Phillips, established a list of experienced barristers and solicitors to conduct mediations on a pro bono basis. This was given the somewhat militaristic title of the “Spring Offensive” and was successfully repeated four years later, in 1996’s “Autumn Offensive”. While not all matters were settled, it significantly reduced the backlog and, most importantly, exposed the mediation process to a wider group within the legal profession and introduced the concept to the community at large. The success of these offensives created a path for the development of the “Portals Protocol” whereby the three tiers of Victorian courts, Supreme, County and Magistrates offered, in appropriate cases, non-compulsory mediation by court-appointed mediators drawn from the legal profession.
Parallel to the early developments by the courts, the legal profession was also taking steps to embrace the mediation process and to encourage its development and acceptance by both the profession and the community.
In 1993, the Specialisation Board of the Law Institute of Victoria established a category of solicitors who sought to specialise in alternative dispute resolution (ADR) as either arbitrators or mediators. This initiative built upon a policy endorsed by the Law Institute Council emphasising the need for solicitors to adopt a flexible approach to dispute resolution. Mediation was seen to be an important part of that policy.
In 1990, during this early period of development, Mr Justice de Jersey referred to mediation as a “remarkable phenomenon” and other judicial officers made comments along similar lines. One of the earliest judicial supporters was Sir Laurence Street, former Chief Justice of the New South Wales Supreme Court. At a forum in Melbourne on ADR in November 1993 he described ADR as “the silent revolution” and was the first to refer to ADR as “additional” not “alternative” dispute resolution.
THE FIRST TENTATIVE STEPS
At the state government level, developments were taking place through the Victorian state attorney general’s Law Reform Advisory Council and the Victorian Law Foundation. In 1994 those organisations published “Standards for Court-Connected Mediation in Victoria”. This development was seen as further support for the use of mediation in the Victorian courts.
A very interesting initiative was taken in 2004 as part of Justice Statement No 2. In an Australian first, the then-Victorian attorney general, Mr Rob Hulls, announced that the Supreme Court and the County Court would introduce judge-led mediations in which a judge would assist parties to resolve disputes using ADR techniques. Judicial mediation is now occurring in both jurisdictions and, in the Supreme Court, Associate Justices are also mediating matters before the court.
THE COST OF ACCESSING JUSTICE
Whilst this silent revolution was unfolding, the constant concern of government, the judiciary and many members of the legal profession has been to ensure that justice is accessible to all against the background of the ever escalating cost of litigation.
The conduct of litigation has become increasingly prohibitive. The increasing cost is partly due to the complexity of the issues in dispute and the large number of parties involved leading to mega litigation. It is also partly due to expensive interlocutory steps. For example, controlling discovery has been aptly described as “taming the Leviathan” by the Honourable Justice Peter Vickery in a recent paper on the challenges facing the court on this complex cost issue.
Governments clearly operate under budgetary constraints. Justice requires funding – to pay judges, build courts, provide staff and provide legal aid to those unable to fund themselves. The challenge for any government is how to best deliver a cost effective system and mediation has become pivotal to achieving that in Australia.
GOVERNMENTS AND LEGISLATIVE CAMPAIGNS
In October 1995 the federal attorney general established the National Alternative Dispute Resolution Council (NADRAC) which was charged with the responsibility of advising the Federal Attorney-General on the development of high-quality, economic and efficient ways of resolving disputes without the need for a judicial decision and by promoting the use of ADR.
The federal government also established a policy requiring government departments and agencies to conduct themselves as “model litigants”, primarily by seeking to reduce litigation where possible and to encourage the use of ADR avenues to resolve matters. This approach was supported by a publication from NADRAC entitled “Legislating for Alternative Dispute Resolution – A Guide for Government Policy Makers and Legal Drafters.”
It is important to recognise that in the growth of mediation, lay professionals were also becoming mediators and likewise fulfilling a role in resolving disputes in areas such as workplace disputes, franchising matters and neighbourhood disputes. This increase in the number of mediators was highlighted in part with the release by NADRAC in March 2000 of a discussion paper entitled “The Development of Standards in ADR”.
After a number of years of consultation under the auspices of NADRAC, the National Mediator Standards and Approval Standards were implemented in January 2008. Ultimately this implementation resulted in the establishment of the national Mediator Standards Board (MSB) which was launched on 7 September 2010.
At the launch of the board, the then chairperson of NADRAC, the Honourable Justice Murray Kellam AO said:
“The time is right for mediation to assume a strong position as a best practice conflict resolution process. Nationally consistent standards of practice and the existence of the MSB provide the basis for mediation to develop in this way. Having standards in place enhances the quality and ethics of ADR practice, facilitates consumer education and builds consumer confidence. Standards improve the capacity and coherence of the ADR field and most importantly improve the credibility of mediation as an alternative to litigation and as a dispute resolution system in its own right.”
The Board will continue to play an important role in the development and application of standards for mediators throughout Australia. Its role is to ensure that the training and accreditation of mediators continues to develop and to achieve consistency and quality and to ensure protection for the users of mediation services, whether the dispute commenced in courts or tribunals or outside the adversarial system.
In 2009, as part of the response to the development of mega-litigation and escalating costs, changes were introduced to the Federal Court Act. Those changes were designed to improve case management to ensure public resources are used responsibly and to place an obligation on all parties to facilitate the resolution of disputes quickly, inexpensively and as efficiently as possible.
The most recent and interesting legislative developments in ADR have been the introduction of the Victorian Civil Procedure Act 2010 and the Federal Civil Dispute Resolution Act 2011.
The main focus of the Victorian Act is to provide that an overarching purpose in the conduct of civil proceedings is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. When the bill was introduced to Parliament, the attorney general Rob Hulls said that the legislation “will promote a culture that focuses on achieving the best outcome in a timely and cost effective way for disputants, whether they are global corporations or individuals going about their daily business”.
The overarching purpose is to be achieved either by a decision of the court, agreement between the parties or any appropriate dispute resolution process agreed to by the parties or ordered by the court. The overall thrust of the legislation is to encourage early settlement of the dispute by the parties and if this does not occur, then the timely and efficient determination of the proceeding.
These overarching obligations are imposed on any person who is party to the proceeding and also applies to the legal practitioners representing them. Every person to whom the overarching obligations apply has a paramount duty to the court to further the administration of justice in relation to the proceeding in which they are involved, including any appropriate dispute resolution undertaken.
The legislation enforces the concepts of these overarching obligations and paramount duty by requiring all litigants to personally certify that they have read and understood the obligations. The certificate is filed with the court, with the first substantive document in the proceedings. In conjunction with the parties’ obligations, a legal practitioner is also required to certify that there is a proper basis for each allegation of fact or denial or non admission in a court document. This Proper Basis Certificate places an onus upon a legal practitioner to ensure that the client understands what is involved in either bringing or defending the claim. The court may take into account any failure to comply with the certificate in determining costs in the proceedings.
The push to encourage ADR continued in the federal arena with the Civil Dispute Resolution Act 2011. The underlying philosophy was described by Attorney General McClelland as seeking a “cultural shift – moving away from an adversarial culture towards a resolution culture”. The object of this Act is to ensure, as far as possible, that people take genuine steps to resolve disputes before proceedings are instigated. In drafting the legislation, parliament provided helpful examples of what constitutes genuine steps. The steps are to encourage the use of alternative dispute resolution processes and the most commonly utilised process is mediation. A duty is imposed upon lawyers under the Act to advise parties of the requirements of the Act and to assist them in complying by encouraging the use of an ADR process.
Similar to the Victorian situation, under the Federal Act a party must file a Genuine Steps Statement at the time of filing an application and the respondent must do likewise before the hearing date of the application. Upon the exercise of discretion by the court on the question of costs, the court may take into account whether genuine steps were taken to resolve the dispute. The court may also take into account any failure by a lawyer to comply with the duty imposed under the Act and may order costs personally against the lawyer.
THE FUTURE GROWTH OF MEDIATION
Mediation is here to stay. It has become an entrenched part of the adversarial system in Australia. Initially some lawyers and judges regarded the process with scepticism – but time and the overwhelming success of the process has changed that negative response. Now the prevailing culture is clearly willing to embrace mediation as a concept that works and can deliver the certainty of an outcome in a timely and cost-effective fashion for the parties.
As litigation has become more complex and expensive, Parliament and the courts are constantly reviewing the changes that can be made to enable effective and efficient justice to be provided to those who seek redress from the courts. Mediation is ideally placed to assist everybody, from self-represented parties to large corporations or the individual members of a class action.
It is, however, important that legislative changes do not occur in a vacuum. Judges must support the emerging concepts embedded in the facilitating legislation through a willingness to make cost orders against parties and legal practitioners in breach of their new obligations, so that the value of mediation is upheld and the intent of Parliament is achieved.