“In my view we can probably be ambitious and say that in 10 years mediation and arbitration won’t be the alternative form of dispute resolution; it will be the primary mechanism and litigation will be the alternative,” said Michelle Sindler, the CEO of the Australian International Disputes Centre (AIDC).
Sindler was one of six panellists that debated the topic of Commercial Dispute Resolution – The 2020 Vision at the Sydney office of Gilbert + Tobin last night.
The panel also included NSW chief justice Tom Bathurst; Craig Pudig, the head of litigation at the Macquarie Group and a former managing partner of the Sydney office of Clayton Utz; Tom Howe QC, chief counsel dispute resolution, Australian Government Solicitor; Gilbert + Tobin litigation partner Colleen Platford, and Frank Handy, a principal of The Trillium Group.
Gilbert + Tobin, conflict management experts The Trillium Group and Lawyers Weekly were joint sponsors of the conference, with Steve Lancken, a principal from The Trillium Group, the MC.
While Sindler’s clarion call to down litigation arms was endorsed by a strong portion of the 100-strong audience, which included prominent members of the judiciary, private practice law firm partners, general counsels of large corporations and the former Federal Attorney-General Robert McClelland, Bathurst sounded a warning to anyone who believed that ADR offered a panacea to the perceived ills bedevilling Australia’s dispute resolution system.
“The other misconception is that arbitration is necessarily more efficient than the court system, believe you me it is not,” said Bathurst. “In some cases the trade-off of transparency and open justice [in the courts] will be more attractive to people than privacy, ease of enforcement and no appeal [in arbitration].”
In recent years, the Australian political and legal hierarchy has sought to facilitate mediated settlements in commercial disputes.
In 2010, the Standing Committees of Attorneys-General adopted the United Nations Commission on International Trade Law (UNCITRAL) model to govern Australia's domestic commercial arbitration system and, that same year, the AIDC was opened in Sydney.
Last month, the former Commonwealth Attorney-General Robert McClelland announced that he was returning to the legal profession with State Chambers in Sydney. At last night’s conference he said that one of the the biggest changes in his 16 years away from the practise of law was the increase in the number of parties “embracing various means of ADR, and I think that is a very good thing”.
Out with the old
Craig Pudig (pictured) from the Macquarie Group stirred the pot by proposing a total overhaul of Australia’s dispute resolution system.
“If we don’t do something radical we will be sitting here in 10 years’ time; slightly older, slightly greyer, slightly more round shouldered, but we will be sitting here having the same debates,” he said.
Pudig’s “radical” suggestion was that a non-binding facilitative process should be open to disputing parties, with the facilitator coming from a commercial background.
Tom Howe QC from the Australian Government Solicitor said that such a system would be appealing to the Commonwealth.
“I would be quite attracted to it and enthusiastically recommend it to my client base, which consists of government departments and agencies,” he said.
The panel acknowledged that clients have an interest in limiting their litigation bills by seeking a settlement. However, Colleen Platford, a litigator for more than 20 years, said that clients in the past had been reticent to seek settlement for psychological reasons.
“There is sometimes a real issue about people not wanting to suggest mediation, they think it is a sign of weakness,” said Platford. “That sounds trite but it is a real issue in who is going to make the approach first for example.”
While this view was validated by Frank Handy from the Trillium Group, who said that a number of studies in the US showed that fear of being seen as “weak” was present in voluntary mediation systems but virtually eliminated in court-ordered mediation, Craig Pudig refuted the view that seeking a settlement was a sign of weakness.
“I have never ever been involved in any sort of case either as poacher or gamekeeper when someone has come to us to mediate and I have thought they are weak,” said Pudig.
No turning back the clock
Tom Bathurst acknowledged that the courts do direct parties towards mediation after a case has started, and this is preferable sooner rather than later. However, he was not in favour of forcing parties to mediation prior to the commencement of formal proceedings.
“There have been proposals for compulsory mediation before going to court, but at the level we are talking at now that certainly shouldn’t be imposed, and I am generally against it because access to the courts is very important,” he said.
“One of the reasons it is being increasingly looked at is due to the increasing influence of in-house counsel who are looking at alternative ways to deal with this before we go to a brawl.”
Despite defending the court system as still providing a transparent and open process, Bathurst conceded that the wheels of change were in motion in dispute resolution and that its momentum was only accelerating.
“I think by 2020 the traditional or recent forms of mediation will go by the board,” he said. “It will go by the board because of the increased levels of sophistication of clients, in-house counsel and the legal profession.
“They know the law. They will want a commercial outcome and they will go to a commercial mediator. Arbitration and the courts will remain on a complimentary basis to resolve disputes.”