Chapter 7.2 Flashcards
dispute resolution methods
alternative dispute
resolution methods
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
dispute resolution methods
- mediation
- concilation
- arbitration
Mediation
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.
mediator
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
terms of settlement
a document that sets
out the terms on which
the parties agree to
resolve their dispute
How mediation is used
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.
Victorian Civil and
Administrative Tribunal
(VCAT)
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
How conciliation is used
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.
Conciliation
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.
conciliator
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
strengths of mediation and conciliation
- 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.
weakness of mediation and conciliation
- 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.
Arbitration
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.
arbitrator
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.
arbitral award
arbitral award
a legally binding
decision made in
arbitration by an
arbitrator
How arbitration is used
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.
strengths of arbitration
- 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.
weakness of arbitration
- 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.
Appropriateness of conciliation
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
appropriateness of mediation
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
mediation would not be appropriate
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
Conciliation may not be appropriate:
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
Appropriateness of arbitration
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
Arbitration may not be appropriate where
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
