ADR viewpoints explored
by Resolve Editor, Kate Tilley
A panel session at the NZILA conference offered varied views on the advantages and disadvantages of alternative dispute resolution methodologies.
Moderator John Swan, a specialist claims consultant with Vero Liability, asked whether court rules should be amended to require compulsory conferences.
David Heaney QC, from William Martin Chambers, in Auckland, was keen. “Anyone who goes to trial without trying to settle first is completely nuts. All trials are about getting a settlement. It’s important to get people talking to try to resolve the issues.”
Mr Heaney suggested compulsory conferences may be required “if the parties are not intelligent enough to do it anyway”.
“Get everyone into the same room and, once there, they can think seriously about settlement,” he said.
Nina Khouri, a mediator and academic fellow at the University of Auckland law faculty, said NZ was unusual because comparable jurisdictions had compulsory mediation. However, as a mediator, “I like not having compulsory mediation because, if I get a call, the parties have already decided it may work”.
Roydon Hindle, principal arbitrator, evaluator and mediator with the NZ Disputes Resolution Centre, who also teaches dispute resolution at AUT University, Auckland, said: “I’m agnostic about [pre-trial compulsory mediation], it’s a matter for the court. But, if you make it a blanket rule, where will you get case law from? It’s undesirable for everything to settle because we need the case law.”
Mr Swan asked whether courts should require mediators to certify that efforts had been made to settle before matters went to trial.
Mr Heaney was concerned about that option. “There may be a good reason why [parties] don’t want to settle. [Certification] would go against the grain of mediation because it’s confidential.”
Ms Khouri agreed, saying it could fundamentally change the dynamics of the mediation. However, she said the UK had cost consequences for unreasonable refusals to mediate.
Mr Hindle said a problem with NZ’s High Court was not knowing which judge would be assigned to a matter. “At least with an arbitrator, you know. You may get a judge who has no experience with the problem you have.”
He said arbitration was no longer “just an alternative dispute resolution technique”. There were likely as many arbitrations in a year as civil trials heard by the High Court.
Mr Swan said many insurers perceived they “start behind the eight ball with litigation. Are there black-letter-law judges? If not, shouldn’t insurers choose arbitration?”
Mr Heaney said some judges were “too black-letter law, so I have the opposite problem. There’s a high level of variation, it can be a lottery. Comparing judges with arbitration, I am not keen on arbitration and would rather take my chances in a court, unless I was comfortable with the arbitrators, and I’d want three not one”.
Mr Swan queried whether parties forfeited appeal rights by using arbitration.
Mr Hindle said parties could not appeal on questions of fact but could agree at the outset to appeal on questions of law. “You need to apply to the High Court for leave but it’s not given easily. It’s given in about a third of cases and about a third of those are successful. Sometimes you want finality, not appeal rights,” he said.
The panel discussed arbitrators’ costs and Mr Hindle said parties could “set up a pre-arbitration interview with the arbitrator or get a beauty parade and ask them how they deal with costs, what their fees are, and whether they charge cancellation fees.
Lawyers spend years learning how to cross examine but don’t spend the same time learning to settle by negotiation”.
Ms Khouri agreed with Mr Swan’s suggestion NZ had its own style of mediators.
“We keep the parties together more than in the US, where there are interpersonal dynamics. They express conflict more but [that] may make it harder to settle. In NZ we’re more polite, more British. We’re better at separating the people from the problem,” she said.
Mr Swan sought panelists’ views on facilitative versus evaluative mediators.
Mr Hindle said: “They’re at both ends of the spectrum. A facilitator runs the process and offers no opinions on the outcome. I am committed to being facilitative. If you choose an evaluative mediator, ensure they’re prepared. They need to understand all the documents, not just go on the views of each party.”
Mr Swan asked how mediators managed client expectations.
Mr Heaney said: “You need flexibility, that’s what mediation is all about. I have an open mind with no fixed view on the outcome.”
Mr Swan suggested the first day of multi-day mediations was perhaps “just a waste of time”.
Mr Heaney said: “I prefer one day, even if it takes until 4am. I don’t like to leave them time to reflect on their mistakes so far. It’s a psychological process, you need to let them tell why they think they’ve got a rotten deal. Each party needs to understand the other’s first.”
Ms Khouri said: “Sometimes the work expands to fill the time you have, but there are often good reasons to schedule more than one day.”
Mr Swan said if insurers were obliged to disclose insurance cover, that impacted on litigation, arbitration and mediation strategies. He said plaintiff lawyers “tailor their cases, depending where the money lies”.
But Mr Heaney countered: “Why shouldn’t a plaintiff know how much insurance cover is available? If you have a good defence, you shouldn’t worry about that.”
Mr Swan asked whether mediation forced people to “take a better look at their case and therefore it settles. Is there still a place for old-fashioned discussions?”
Mr Heaney said: “Yes and I encourage that. There’s a tendency, especially with younger people, to not want to talk about settlement early. But it would save costs. Lawyers should talk to each other more ... to get a better feel for the other side.”
And he suggested the parties themselves could resolve more issues without involving lawyers. “Clients shouldn’t be spending big dollars on lawyers to sort out things they could sort out themselves.”
Responding to a question from the floor about the potential for mediations via video conferencing, Mr Swan said: “Personally, I’m against it. There’s value in human interactions and it’s not the same if someone’s on TV on the other side of the world.”
Ms Khouri said online dispute resolution was a big topic, and perhaps best left to another panel session. “However, if it helps to find a path to settlement, I’m definitely in favour,” she said.