Chapter 7.2

Question 1

alternative dispute
resolution methods

Answer 1

ways of resolving or
settling civil disputes
without having a court
or tribunal hearing (e.g.
mediation, conciliation
and arbitration); also
known as appropriate
dispute resolution
methods

Question 2

dispute resolution methods

Answer 2

• mediation
• concilation
• arbitration

Question 3

Mediation

Answer 3

Mediation is a cooperative method for resolving disputes, commonly used by courts and tribunals. In this structured process, conflicting parties engage in discussions to identify issues, explore options, and negotiate an agreement with the help of an independent mediator. The mediator facilitates communication but does not advocate for either side. Any agreement reached is voluntary and can be formalized in terms of settlement or a deed of settlement, which may be enforceable in court if one party fails to adhere to the agreement.

Question 4

mediator

Answer 4

an independent third
party who does not
interfere or persuade
but helps the parties in
a mediation as they try
to reach a settlement of
the matter

Question 5

terms of settlement

Answer 5

a document that sets
out the terms on which
the parties agree to
resolve their dispute

Question 6

How mediation is used

Answer 6

When a plaintiff files a claim in court, the court typically orders mediation before the final trial, with or without the parties’ consent. A mediator can be appointed by the court or agreed upon by the parties, and mediation costs are usually shared. Judicial mediation can also be conducted by associate judges in the County Court and Supreme Court. The Victorian Civil and Administrative Tribunal (VCAT) frequently refers claims to mediation as well. Parties can also choose to mediate at any time before or after initiating a claim, accessing mediators through organizations like the Dispute Settlement Centre of Victoria or private providers.

Question 7

Victorian Civil and
Administrative Tribunal
(VCAT)

Answer 7

a tribunal that deals with
disputes relating to a
range of civil issues heard
by various lists (sections),
such as the Human Rights
List, the Civil Claims
List and the Residential
Tenancies List

Question 8

How conciliation is used

Answer 8

Courts typically prefer mediation over conciliation but have the authority to order conciliation for civil disputes. Conciliation is commonly used by organizations like Consumer Affairs Victoria (CAV) and is also utilized by VCAT, which can mandate parties to attend a compulsory conference to clarify issues and promote settlement before a tribunal hearing. Additionally, parties can arrange conciliation independently at any time, similar to mediation.

Question 9

Conciliation

Answer 9

Conciliation is a cooperative dispute resolution method involving an independent third party, the conciliator, who helps the disputing parties negotiate and reach a compromise. Unlike a mediator, the conciliator has more influence over the outcome, offering suggestions and possible solutions based on their specialist knowledge. While their role is more directive, the process is similar to mediation. Parties can also create terms of settlement to document their agreed resolution.

Question 10

conciliator

Answer 10

the independent third
party in a conciliation,
who helps the parties
reach an agreement
that ends the dispute
between them. The
conciliator can make
suggestions and offer
advice to assist in
finding a mutually
acceptable resolution,
but the parties reach
the decision themselves

Question 11

strengths of mediation and conciliation

Answer 11

• Mediation and conciliation involve an
  independent, impartial third party (the mediator
  or conciliator) who does not take sides but
  facilitates the discussion and may assist the
  parties to reach a resolution themselves.
• Mediation and conciliation are much less
  formal than a court hearing, and therefore are
  likely to be much less intimidating, stressful
  and daunting for parties, particularly those
  who do not have experience in civil disputes.
• Mediation and conciliation are conducted in a
  safe and supportive environment, in a venue
  that is suitable for both parties rather than
  a venue such as a courtroom, which one or
  both parties may find confronting or difficult
  to attend.
• If successful, mediation and conciliation can
  save significant time in waiting for a final
  hearing or trial. They also save the costs
  of the final trial or hearing, which can be
  significant. This can also be a saving for the
  civil justice system itself.
• Mediation and conciliation are normally
  conducted in private. This can be beneficial
  particularly for a party who wishes to keep
  the settlement confidential.

Question 12

weakness of mediation and conciliation

Answer 12

• The decision reached may not be enforceable,
  or may be difficult to enforce, depending on
  the terms of settlement. If that is the case,
  there may be a lot of money and time spent
  on reaching a resolution, but the plaintiff will
  need to continue with their case anyway if the
  defendant fails to comply with the terms.
• Because the court is not deciding the case,
  one party may compromise too much, or one
  may be more manipulative or stronger, so
  that the other party may feel intimidated.
• One of the parties may refuse to attend, or if
  they do attend, they may refuse to participate,
  in which case it may be a waste of time and
  money.
• If the matter does not resolve, then it may
  be a waste of time and money. Often the
  parties have to spend money on legal fees
  preparing for and attending the mediation or
  conciliation, only for it to be unsuccessful.
• Particularly for high-profile disputes where
  the community may have an interest in the
  outcome, there is no ‘open justice’ or no ability
  to know what the outcome was, or whether
  the defendant admitted that they were liable.

Question 13

Arbitration

Answer 13

Arbitration is a method of resolving disputes outside of formal court processes, where an independent arbitrator listens to both sides and makes a binding decision known as an arbitral award. This process is typically private, less formal, and often more cost-effective than court trials, allowing parties greater control over procedures, such as evidence submission and timelines.

Question 14

arbitrator

Answer 14

The arbitrator is not bound by strict rules of evidence but must ensure equal treatment of both parties and provide them a fair opportunity to present their cases. In Victoria, arbitration can occur when parties agree to it, when a court orders it with the parties’ consent, or when a claim under $10,000 is filed in the Magistrates’ Court, which usually resolves such cases through arbitration.

Question 15

arbitral award

Answer 15

arbitral award
a legally binding
decision made in
arbitration by an
arbitrator

Question 16

How arbitration is used

Answer 16

Courts and VCAT can refer disputes to arbitration before a final hearing or trial, provided the parties consent, except for small claims in the Magistrates’ Court. For small claims under $10,000, the court can refer disputes to a magistrate for arbitration. Generally, arbitration is arranged privately by the parties, often based on a contractual agreement to arbitrate in case of a dispute. Arbitrators can be sourced from institutions like the Resolution Institute or the Victorian Bar, and facilities for arbitration can be booked at the Melbourne Commercial Mediation and Arbitration Centre.

Question 17

strengths of arbitration

Answer 17

• The decision is binding and is fully enforceable
  through the courts. This means that there is
  certainty in the outcome.
• The arbitration is normally held in private and
  will be confidential, which can be beneficial
  for parties wishing to avoid the publicity of
  a trial.
• The parties have control over how the
  arbitration is conducted, by determining how
  evidence is to be presented and when steps
  are to be undertaken.
• The arbitrator is generally an expert on
  the subject matter and is required to act
  impartially when making a binding decision.

Question 18

weakness of arbitration

Answer 18

• The parties have no control over the outcome,
  which will be imposed on them by the
  arbitrator. This means that a party could
  ‘lose’ or ‘win’, without feeling like they have
  both won and lost (as can be the case in a
  mediation).
• It is not available if the parties have not
  agreed to this form of dispute resolution,
  or if the claim is not a small claim in the
  Magistrates’ Court.
• It can be costly and take a long time
  depending on the nature of the dispute and
  the way the parties have decided to resolve
  it. For example, if the parties have agreed
  to exchange evidence and have a hearing,
  this will be much more expensive than a
  mediation.
• Arbitrations can be formal if the parties have
  agreed on a formal method of arbitration,
  adding to the stress, time and costs.

Question 19

Appropriateness of conciliation​

Answer 19

Where parties are willing to attend and engage in the process​

Where parties are open to accepting the conciliator’s legal advice​

Where parties open to considering options for a resolution and are willing to compromise​

Where parties are willing to abide by the outcome​

Where parties have an ongoing relationship to preserve​

Question 20

appropriateness of mediation

Answer 20

Where parties are willing to attend and engage in the process with a mutual interest in keeping the matter out of court and reducing cost and time

Where parties are open to considering options for a resolution and are willing to compromise ​

Where parties are willing to abide by the outcome​

Where parties have an ongoing relationship to preserve​

Where parties prefer confidential settlement than public court outcomes​

Where a court has referred the parties to mediation​

Question 21

mediation would not be appropriate

Answer 21

Where there is violence in the relationship​

Where there is a power imbalance (unless parties have legal representation) ​

Where parties are unwilling to attend and engage in the process​

Where parties are not open to considering options for a resolution and are unwilling to compromise​

Where there is a history of broken promises​

where an urgent court ruling is required to prevent a breach of law

Question 22

Conciliation may not be appropriate:​

Answer 22

Where there is violence in the relationship​

Where there is a power imbalance (unless parties have legal representation) ​

Where parties are unwilling to attend and engage in the process​

Where parties are not open to considering options for a resolution and are unwilling to compromise​

Where there is a history of broken promises​

where an urgent court ruling is required to prevent a breach of law​

Question 23

Appropriateness of arbitration

Answer 23

Where parties cannot reach a decision using cooperative methods such as mediation and conciliation but still want a less formal process than court​

Where parties require a legally binding decision that is final​

Where parties prefer a private and confidential process​

Where parties have agreed to use the process of arbitration in their business contracts​

Question 24

Arbitration may not be appropriate where

Answer 24

the parties want greater control over the outcome​

parties have not agreed to arbitrate the dispute​

where parties would rather a court conduct the process with its more formal rules of evidence and procedure ​

Where a test case in court is required to develop legal precedent for future disputes​