Dispute Resolution Methods: KK4

types of dispute resolution methods

• mediation

• conciliation

• arbitration

can resolve or settle a civil dispute without having a court or tribunal hearing

mediation

• a methods of dispute resolution, that uses an independent third party (i.e mediator) to help the disputing parties reach their own resolution

• Mediation is a co-operative methods of dispute resolution, where the parties in conflict sit down to discuss the issues involved, develop solutions and reach an agreement through negotiation and compromise.

• The role of a mediator is to facilitate discussion between the negotiating parties, and encourage them to reach their own own mutually acceptable agreement.

• Any decision reached is voluntarily made by the parties (not the mediator).

• If the parties come to a decision, they may sign a terms of settlement which reflect their agreement. This terms of settlement may be enforceable through a court if a party does not follow through with a promise made.

  

how is mediation used?

• Courts generally order parties to go to mediation before the final trial or hearing, with or without their consent

• VCAT also often refer a claim to mediation before a final hearing

• Alternatively, parties may attempt to mediate a dispute at any time, such as through a private mediator or the Dispute Settlement Centre of Victoria.

conciliation

• conciliation is a method of dispute resolution, that uses an independent third party (i.e conciliator) to help the disputing parties reach their own resolution

• The role of the conciliator is to listen to the facts and makes suggestions about possible solutions to resolve the dispute.

• The conciliator generally has specialist knowledge. 

• However, the conciliator does not make the final decision to resolve the dispute – the parties ultimately try to reach their own mutually acceptable agreement.

• A conciliator has more influence over the outcome of a decision, in contrast to a mediator.

• Similar to mediation, if the parties come to a decision, they may sign a terms of settlement to make it legally binding.

How is conciliation used?

• courts generally do not use conciliation, prefer mediation

• however all courts have the power to order any civil dispute to attend conciliation

• CAV use conciliation

• VCAT can order parties to take part in a compulsory conference, which is a conciliation-like process

• otherwise, parties can arrange a conciliation at any time

appropriateness of mediation and conciliation

disputes suitable for mediation and conciliation

• parties wish to preserve the relationship after the dispute is resolved (e.g. ongoing relationship between neighbours, friends or family members, employee and employer)

• parties are prepared and willing to compromise and stick to the agreement reached

• parties seek privacy and confidentiality in resolving the dispute which mediation and conciliation are conducted in private

• parties wish to avoid the costs associated with a court hearing or trial

• offer a non-confrontational and less intimidating environment, appropriate for parties that wish to remove the formalities of a court

disputes not appropraite for mediation and concilation

• one or both parties not willing to work cooperatively to negotiate to find solutions

• history of broken promises or lack of trust

• history of violent or threatening behaviour it is not an appropriate setting

• imbalance between parties

• dispute involves complex or technical legal matter

• parties are too emotional

• plaintiff wants a public record of what occurred

strengths of mediation and conciliation

• involves an independent third party who does not take sides, facilitates discussion and may assist parties reach a resolution themselves

• much less formal therefore less intimidating, stressful and daunting for parties

• safe and supportive environment, venue suitable for both parties (not confronting or difficult to attend)

• saves significant time, as well as costs as a court trial and hearing is not needed

• conducted in private, benefit cake is a party wishes to keep the settlement confidential

weaknesses of mediation and conciliation

• decision may not be enforceable, depending on terms of settlement

• unfairness between parties

• one of the parties may refuse to attend to or participate

• if the matter is not resolved, then it may be a waste of time and money

• no ‘open justice’ or no ability to know what the outcome was

arbitration

• arbitration is a method of dispute resolution, where an independent third party (ie. arbitrator) is appointed to listen to both sides of a dispute and make a decision that is legally binding on the parties

• the arbitrator usually has specialist knowledge in the field.

• Unlike mediation and conciliation, the arbitrator makes a final and binding decision.

• This decision is known as an arbitral award, and is enforceable in court.

• Arbitration is often conducted in private, and is less formal and cost-effective than a court hearing/trial.

• Parties have greater control over the process and are free to agree on the procedure – e.g., agreeing on how evidence is to be submitted, or the time in which steps are to be completed.

how is arbitration used?

• The courts and VCAT have power to refer disputes to arbitration prior to a final hearing or trial, as long as the parties consent (with the exception of small claims in the Magistrates’ Court).

• For small claims in the Magistrates’ Court (less than $10 000), the Magistrates’ Court can refer a dispute to arbitration by a magistrate.

• Otherwise, arbitration is commonly used in a private setting, where it is arranged by the parties themselves (e.g., there is a term in the contract which states that the parties must arbitrate if a dispute arises).

appropriateness of arbitration - suitable

• parties have agreed to arbitrate the dispute

• if the plaintiff is seeking $10,000 or less, and the claim is filed in the Magistrates Court, the Court will normally refer the case to arbitration by a magistrate

• parties seeking a binding and enforceable arbitral award made by an impartial third party

• parties want evidence to be presented to a third party subject to come rules of evidence

• parties want the dispute to be resolved privately and confidentiality

appropriateness of arbitration - not suitable

• parties are not willing to arbitrate the dispute

• parties would prefer to have control over the outcome and reach and mutually agreeable outcome

• plaintiff wants a public record of what occurred, or to ‘make a point’ about the defendant’s conduct

strengths of arbitration

• decision is binding and enforceable through the courts, therefore ensures certainty in the outcome

• held in private and will be confidential, which can be beneficial for parties wishing to avoid the publicity of a trial

• parties have control over how the arbitration is conducted, by determining how evidence is to be presented and what the steps are to be undertaken

• the arbitrator is an expert and is required to act impartially

weaknesses of arbitration

• parties have no control over outcome, this means that parties can ‘lose’ or ‘win

• 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

• can be costly and time consuming

• arbitrations can be formal if the parties have agreed on a formal method of arbitration, adding to the stress, time and costs

principles of justice

fairness

• achieves

  • methods like mediation and conciliation allow both parties to agree on a decision that benefits them both

• doesn’t achieve

  • parties may compromise too much

  • lack of rules of evidence may mean the truth doesn’t emerge

equality

• achieves

  • both parties must agree to enter into any alternative method

  • strong rules of process ensure both sides are heard equally

• doesn’t achieve

  • one party may engage legal representation, meaning the parties are not on equal footing

  • power imbalances may be taken advantage of

access

• achieves

  • reduces costs associated with a court case, enabling more people to resolve disputes

• doesn’t achieve

  • arbitration is generally not accessible for private individuals