Waugh, Joseph --- "The Heartburnings of Imperfect Justice: is Mediation the ANSWer?" [2004] ALRCRefJl 15; (2004) 84 Australian Law Reform Commission Reform Journal 62

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Reform Issue 84 Autumn 2004

This article appeared on pages 62 – 66 of the original journal.

The heartburnings of imperfect justice: Is mediation the answer?

By Joseph Waugh*

The New South Wales Law Reform Commission is currently reviewing the Community Justice Centres Act 1983 (NSW) and has published an Issues Paper (No 23) as part of the review. One of themes raised in the paper is that of the accountability of mediators.

Community Justice Centres (CJCs) were established in New South Wales in 1980 to provide a means of settling the sort of disputes that conventional court-based procedures are unable to resolve satisfactorily. These include disputes between family members, partners, friends, workmates, members of social groups and other organisations, neighbours, landlords and tenants, flatmates and so on. At the time, CJCs’ use of mediation to resolve disputes was a pioneering effort. Since then there has been an explosion in the number of mediation schemes available. Far from being one of the few providers of mediation services, CJCs are now one of many. For example, most courts and tribunals in New South Wales make provision for mediation with each body maintaining its own list of suitable mediators. Mediation is also conducted under the auspices of various government instrumentalities, including, for example, the New South Wales Rural Assistance Authority, the Legal Aid Commission, the Department of Agriculture, the Department of Fair Trading and the Office of the Legal Services Commissioner.

In many respects the reasons for establishing mediation schemes are much the same as those for establishing some tribunals; that is, to deal with matters that are not easily dealt with by the traditional court system and procedures. Like some tribunals, mediation often has an emphasis on informality, accessibility, lower cost and efficiency.^[1] In some cases, mediation is also intended to redress systemic problems, to help overcome social and economic power imbalances between disputants in addition to avoiding the expense and frustration of court proceedings. As one 19^th century New South Wales politician put it, such mediation schemes aim at the “peaceful substitution of equitable custom for the heartburnings of imperfect justice”.^[2]

Despite the imperfections of the courts and tribunals that mediation schemes seek to alleviate, both courts and tribunals provide certain protections to their disputants, and are much more amenable to scrutiny. Their proceedings are usually open, they often provide written judgments and their decisions are subject to appeal. This is not so with mediation, which is characterised by closed sessions; confidentiality of proceedings; and no avenues of appeal because there is no decision, just an agreement between the parties.

Because mediation lacks many of the procedural protections associated with formal adjudication it has been suggested that mediation, particularly compulsory mediation, might be seen as forcing some people into “second class justice”^[3] and that it may further disadvantage those who are already disempowered.^[4]

Indeed, there may be a strong pressure to participate in mediation and to reach a settlement, perhaps to the disadvantage of one or both of the parties. It has been suggested that the degree of coercion to mediate is, among other things, “a function of the social and political circumstances in which the parties must make decisions associated with their dispute”.^[5]

This problem may be compounded if lawyers are excluded from the process, as is the case with many ‘community’ schemes. Although disputants in community mediation are usually encouraged to seek legal advice many will not have ready access to lawyers.

Mediator misconduct?

What happens when a mediator fails to perform satisfactorily or engages in misconduct? For example, when a mediator fails to identify a power imbalance and a party suffers as a result, or when a mediator bullies the parties into a resolution, or has a conflict of interest, is not impartial or is racist or sexist in their dealings with the disputants?

There is a potential for harm if mediators do not adhere to appropriate standards, codes and guidelines. Astor and Chinkin have observed:

“The practice of ADR [alternative dispute resolution] is not without potential for harm. Individuals and organisations can suffer if ADR is badly conducted, fails to protect vulnerable parties or neglects the interest of vulnerable third parties ... Bad practice may also involve risks to practitioners and to the public interest.”^[6]

The National Alternative Dispute Resolution Advisory Council (NADRAC) has identified some of the risks associated with mediation. The risks to participants include “violence, unfair or unjust outcomes, non-resolution or escalation of disputes, being referred to the wrong process, needs not being addressed and coercion by another party or the ADR practitioner”. Risks to mediators and organisations include loss of credibility and complaints from consumers. Risks to the public interest include “undermining public interest, increased litigation, loss of faith in the justice system and loss of international credibility”.^[7]

Such issues become more pressing as the push towards mandatory mediation increases^[8]—in New South Wales, mandatory mediation may be ordered in the Supreme Court, District Court and the Consumer, Trader and Tenancy Tribunal, and is also available in relation to farm debts.^[9] In Queensland, Dispute Resolution Centres must deal with situations where mediation has been court-ordered.^[10]

Some protections

Most mediation schemes are governed by principles and provisions that ensure a certain level of protection for disputants. The provisions discussed in the following paragraphs apply particularly to CJCs.

Parties free to leave at any time: It is an important principle that the continued participation of parties in a mediation session is voluntary. The Community Justice Centres Act 1983 (NSW) (CJCs Act) ensures that such principles are adhered to by stating that a party may withdraw from a mediation session at any time.^[11] However, this is essentially a self-help remedy and relies on the parties to the mediation being aware of any problems in order to exercise their right to withdraw. There will sometimes be circumstances in which parties, particularly those in a weaker position, may feel that they cannot withdraw, particularly if, for example, a court has strongly urged the parties to attempt mediation.

Discretion of the mediator: A mediator will usually have a discretion to commence or continue a mediation session. The CJCs Act allows mediators to terminate a mediation session at any time. Guidelines are in place to determine whether termination is necessary. The grounds listed include where:

• one or both of the parties is engaged in bad faith bargaining; and

• there is such an inequality of power that mediation would serve to disempower the weaker party further.

Other examples include family law mediations where the Family Law Regulations 1984 (Cth) list the matters that a mediator must consider before a mediation can be commenced, including whether the “ability of any party to negotiate freely in the dispute” is affected by such matters as:

• a history of family violence (if any);

• the equality of bargaining power among the parties (for example, whether a party is economically or linguistically disadvantaged in comparison with another party); and

• the emotional, psychological and physical health of the parties.^[12]

The regulations also provide that a mediator must terminate the mediation if requested to do so by either party or if the mediator is “no longer satisfied that mediation is appropriate”.^[13]

Co-mediation: Co-mediation, where two mediators take part, is a practice invariably adopted by CJCs. Benefits of co-mediation that were identified in submissions to the NSW Law Reform Commission include that it ensures greater consistency in service, it ameliorates potential or perceived bias and false accusations of partiality, harassment and other inappropriate behaviour and it ensures checks and balances. However, co-mediation is not a practice generally adopted by other mediation schemes. Even with CJCs, co-mediation is not mandated in the CJCs Act and single mediator mediations have been mooted from time to time.

Non-enforceability of mediation agreements: Agreements arrived at in CJC mediations are unenforceable in “any court, tribunal or body”.^[14] One of the aims of this provision is to encourage agreement between the parties without unnecessary complication, including the need to refer to lawyers.

Codes of practice: There are increasing numbers of policies, guidelines, codes of practice and standards that govern the way that mediators conduct mediations. This is largely the result of the increasing professionalisation of the mediation industry. These documents serve not only as guides for the conduct of mediators but also educate and protect consumers and promote public confidence in mediation.^[15]

These documents may be internal like those used by CJCs, for example the CJCs’ Code of Professional Conduct for Mediators, or they may be contained in more formal regulations. The Family Law Regulations 1984 (Cth) require certain procedures to be followed where a conflict of interest arises between a mediator and one or other of the parties.^[16]

While regulations are publicly available, the internal documents adopted by some organisations may not be so readily accessible. In any case there would also appear to be few formal procedures for dealing with infractions of such codes.

Dealing with grievances

Few schemes have any sort of procedure for dealing with grievances about the performance and conduct of mediators. The Law Society of New South Wales could conceivably discipline solicitors who breach their mediation guidelines. The courts will also have a supervisory role in relation to the mediators who have been included on their lists. For example, in New South Wales the Chief Justice may amend the Supreme Court’s list of mediators “for any reason that the Chief Justice considers appropriate”.^[17] A similarly informal process is presumably available to CJCs whereby it could be decided simply not to use or re-accredit particular mediators. However, there is no clearly identified procedure in place, and no clearly defined rights for mediators or disputants when complaints are made.

In Victoria in 1990, an Attorney-General’s working party on alternative dispute resolution considered the question of the accountability of alternative dispute resolution practitioners. It proposed an “ADR services ombudsman” to provide quality and accountability controls and to “provide the public with a quick and cheap means of having any complaints (well founded or otherwise) properly addressed”.^[18] The proposal was subject to the maintenance of principles of confidentiality and it was suggested that the role could be carried out by the State Ombudsman. However, no such scheme was implemented in Victoria. In New South Wales the CJCs Act specifically excludes conduct of CJC mediators from the jurisdiction of the Ombudsman.^[19] Lawyers who act as mediators in court schemes are also not subject to the complaints regime under the Legal Profession Act 1987 (NSW) because they are not acting as legal practitioners when conducting a mediation.^[20]

There are a number of barriers to the effective handling of complaints about mediators, including provisions relating to the confidentiality and admissibility of evidence and immunity of mediators from liability.

Confidentiality and admissibility of evidence

Confidentiality has been said to lie at the heart of the mediation process. It can be provided for in a number of ways, including in an agreement to mediate, by a code of conduct and by legislation. Courts may also be prepared to treat the mediator’s duty of confidentiality as fundamental to the process of mediation without the need for express provision.^[21] Some legislative provisions also state that evidence obtained at a mediation session is not admissible in any legal proceedings.^[22]

Such provisions are necessary to gain the trust of the parties to the mediation process and allow the parties to be completely open when dealing with the mediator either in private or in the mediation session itself.

However, there are also exceptions to the principle of confidentiality. For example, CJC mediators, who are otherwise bound by secrecy provisions, may disclose information “where there are reasonable grounds to believe that disclosure is necessary to prevent or minimise the danger of injury to any person or damage to any property”.^[23] Provision is also often made allowing disclosure (or use in court proceedings) in circumstances where some or all of the parties to the mediation agree.^[24]

A comparison may be drawn here with client legal privilege in relation to investigations by the New South Wales Legal Services Commissioner into the conduct of lawyers. Client legal privilege aims to encourage clients to make full and frank disclosure to their lawyers of circumstances that may be relevant to their case. However, lawyers may disclose information that would be in breach of confidentiality if it is necessary to rebut an allegation in a complaint.^[25] The New South Wales Law Reform Commission suggested that concerns about confidentiality during an investigation could be ameliorated by placing investigators under an obligation to preserve the confidentiality of information obtained for the purposes of the investigation.^[26]

Immunity from liability

Mediators are usually granted some form of immunity from civil liability arising from the performance of their role. For example, CJC mediators and staff are exonerated from liability arising from the execution of the CJCs Act so long as they act in good faith. Some Commonwealth statutes grant a more extensive immunity, giving mediators “the same protection and immunity as a Judge has in performing the functions of a Judge”.^[27]

Such immunities are considered necessary for a number of reasons including that they allow mediators to act impartially without fear of legal action from either side and they ensure finality of mediation in so far as they prevent litigation arising from the process of mediation.^[28]

NADRAC has proposed that the protections offered by immunity provisions be reduced in favour of increased consumer protection. It has suggested that immunity should only be available to providers with an appropriate code of practice in place, including a mechanism for consumer redress.^[29]

Helping parties know their rights

In the absence of adequate protections there will still be circumstances where parties must fall back on self-help. But how can parties even know their entitlements so that they can exercise their right to withdraw from a mediation session?

Current practice is generally that mediators must ensure that the parties are informed and understand the mediation process.^[30] However, a more prescriptive approach might be to adopt a version of the requirements in the Family Law Regulations 1984 (Cth) whereby a mediator must, at least one day before the mediation takes place, furnish the parties with certain information including information about the process of mediation, the mediator’s role (including what the mediator must not do), that a party has the right to obtain legal advice at any stage of the mediation, that a party may terminate the mediation at any time, and confidentiality and disclosure obligations.^[31] Another useful requirement might be to require that the mediator advise the parties that they are not legally required to make concessions or to reach an agreement in the mediation.^[32]

Conclusion

Both CJCs and other parts of the mediation industry have moved on from their pioneering efforts. At this stage of development all parts of the industry face the issue of accountability in some degree as they strive to provide the best solution to the “heartburnings of imperfect justice”.

* Joseph Waugh is a Legal Officer with the New South Wales Law Reform Commission.

Endnotes

{1} See H Astor and C Chinkin, Dispute Resolution in Australia (2^nd edition, 2002), 13-14.

{2} NSW, Parliamentary Debates (Hansard) Legislative Council, 3 August 1881, 432.

{3} See J Schwartzkoff and J Morgan, Community Justice Centres: A Report on the New South Wales Pilot Project, 1979-81 (1982), 195.

{4} See Australian Law Reform Commission, Review of the Federal Civil Justice System (Discussion Paper 62, 1999) [9.36]; H Astor and C Chinkin Dispute Resolution in Australia (2^nd edition, 2002), 9-10.

{5} H Astor and C Chinkin Dispute Resolution in Australia (2^nd edition, 2002), 274.

{6} Ibid, 205.

{7} NADRAC, A Framework for ADR Standards (2001), 31-32.

{8} See NSW Law Reform Commission, Community Justice Centres (IP 23) (2003), [2.36-2.42].

{9} Supreme Court Act 1970 (NSW) s 110K, s 110L; District Court Act 1973 (NSW) s 164A, s 164B; Farm Debt Mediation Act 1994 (NSW) s 8, s 9B, s 11.

{10} See amendments to the Dispute Resolution Centres Act 1990 (Qld) introduced by the Courts Reform Amendment Act 1997 (Qld) Pt 5.

{11} Community Justice Centres Act 1983 (NSW) s 23(2).

{12} Family Law Regulations (Cth) reg 62(2)(a), (c), (e).

{13} Family Law Regulations (Cth) reg 64(c).

{14} Community Justice Centres Act 1983 (NSW) s 23(3).

{15} NSW Law Reform Commission, Community Justice Centres (IP 23) (2003), [3.39-3.42].

{16} Family Law Regulations 1984 (Cth) reg 65(1).

{17} Supreme Court Act 1970 (NSW) s 110O(5).

{18} Victoria, Attorney-General’s Working Party on Alternative Dispute Resolution, Report (1990), [4.27].

{19} Ombudsman Act 1974 (NSW) Sch 1 cl 18 and s 12. See also Ombudsman Act 2001 (Qld) s 16(2)(f).

{20} See NSW Law Reform Commission, Complaints Against Lawyers: An Interim Report (Report 99) (2001), [2.14-2.15].

{21} See Harris v Alspach (NZ High Court, M18/01, Harrison J, 23 June 2003, unreported) [12]; C Powell, ‘Confidentiality in Mediation’ [2003] New Zealand Law Journal 327.

{22} See, eg, Community Justice Centres Act 1983 (NSW) s 28(4) and s 28(5).

{23} Community Justice Centres Act 1983 (NSW) s 29(2)(c).

{24} See, eg, Community Justice Centres Act 1983 (NSW) s 29(2)(b); Mediation Act 1997 (ACT) s 10(2)(b).

{25} Legal Profession Act 1987 (NSW) s 171S(2). See also NSW Law Reform Commission, Complaints Against Lawyers: An Interim Report (Report 99) (2001), [4.48-4.49].

{26} NSW Law Reform Commission, Complaints Against Lawyers: An Interim Report (Report 99) (2001), [4.56].

{27} Federal Court of Australia Act 1976 (Cth) s 53C; Family Law Act 1975 (Cth) s 19M.

{28} H Astor and C Chinkin, Dispute Resolution in Australia (2^nd edition, 2002), 205-219.

{29} NADRAC, A Framework for ADR Standards (2001), [4.28, 4.36].

{30} See, eg, CJCs Code of Professional Conduct for CJC Mediators.

{31} Family Law Regulations 1984 (Cth) reg 63(1).

{32} Victoria Law Foundation and Victoria, Attorney-General’s Law Reform Advisory Council, Standards for Court—Connected Mediation in Victoria (1994), [3.15].