This article was prepared for Irwin Legal by Mr Anthony Aristei.
'A bird in the hand'!!!
When it comes to commercial disputes in Western Australia, the major forms are resolved by either the Supreme Court, the Federal Court or the District Court.
This blog will refer to the Supreme Court and the use of Court-ordered mediation to resolve conflicts. Civil proceedings before the Court generally consist of a variety of commercial disputes between individuals, businesses or companies.
Examples include:
- Adverse possession claims
- Building and construction disputes
- Caveat and similar disputes
- Company and insolvency matters
- Contract disputes
- Deceased estate matters
- Lease and tenancy disputes
- Mortgage and guarantee disputes
- Other property disputes
While only 2-3% of the Supreme Court's civil cases proceed to a trial hearing, there is still much to be said for a mediation conference being listed early in the life of a Court action.
In general terms, the longer a case remains in dispute, the greater the cost incurred by the opposing parties.
If a mediation conference is not listed for hearing sufficiently early in an action, then the cost which has been incurred by the respective parties becomes a major stumbling block towards a settlement.
The delay causes the parties to try to recover as much of their money spent on the action as possible, when they finally negotiate the terms of a settlement. This problem renders the prospect of reaching a settlement even more difficult.
In addition, the opposing parties often become more entrenched in their views as a Court action progresses. That hampers the prospects of a settlement (i.e. reaching an agreement without the need for a trial hearing).
BUT.. it doesn't have to be that way!
The answer is to seek an early listing of a mediation conference. The Court generally supports such listings. The solicitors for opposing parties are also encouraged to co-operate in an early mediation listing. After all, their own clients bear the same risks!
In some cases it might be necessary to complete some Court procedures before the listing of a mediation conference.
By doing so, the filed Court documents will assist the Court Registrar to understand the legal issues before conducting such a conference.
But it often depends on the circumstances. For instance, an action for a declaration may not require significant interlocutory procedures before a mediation listing is ordered.
In some cases, short pleadings or statements of issues might firstly be ordered to be exchanged between the parties. Yet such orders can be completed, without necessarily involving more cumbersome procedures (such as the discovery of documents, or the provision of further and better particulars).
The question of whether to seek a mediation listing should be asked BEFORE the case is commenced.
Once the case is started (ie by the filing of a Writ of summons or an Originating summons), the parties are placed on a 'train line track', which heads slowly but surely towards a trial hearing.
At the first opportunity, such as at the initial directions hearing, the prospect of a mediation conference being ordered by the Judge, Master, or Registrar should be raised on a client's behalf.
Of course, there may be exceptional cases where a mediation conference might not be sought from the outset. For example, you may be eligible to apply for a summary judgment order if the opposing party's case has no merit. But the exception proves the rule!
A seasoned commercial dispute lawyer would be well aware of the risk of loss, no matter how strong their client's case seems at the outset.
It is also a truism that a mediated settlement will eliminate the risk of loss.
By contrast, a trial will result in a judgment that involves at least one party being successful ('winning') and at least one party being unsuccessful ('losing')!
Added to the risk of loss are the attendant risks of:
- Continued uncertainty and delay;
- Significant cost outlay, and;
- Negative impact on your family or business (while your case slowly winds its way through the Court system).
What is the best option?
A mediation conference is the ideal way to bring a commercial dispute to a swift conclusion. Unlike private negotiations or mediations, it is controlled and conducted by a Registrar of the Court.
The Registrars are:
- Trained in reaching consensual outcomes;
- Well experienced in the complexity and costs of civil commercial disputes, and;
- Willing and able to help both parties to form a suitable agreement based on the circumstances of their particular case.
Why is this option recommended?
There are numerous advantages to this process, as compared to the continuation of the dispute towards a trial.
- A mediation conference can be listed (usually) within about three months, whereas a trial can take a number of years to be listed for a hearing;
- A mediation can usually be heard within a period of a half or full day;
- By contrast, a trial is more likely to take 3 to 5 days (depending upon the number and complexity of the legal issues), and;
- The progression of a dispute through to trial generally causes greater stress, cost and delay. (Not to mention the impact on your business and personal health).
In conclusion, we recommend the option of mediation to all of our clients.
The terms of settlement may not always be entirely satisfactory to both parties, but they are generally much more favourable than if the parties went on to a trial hearing.
It is often said by senior lawyers that a good settlement is one where both parties are not particularly happy with the result, but are not necessarily unhappy that their case is over!
In our experience, Supreme Court mediation conferences also carry a particularly high prospect of settlement (often in the order of 60% or 70%).
This seems counter-intuitive as clients often insist that their opponent would never settle, or that they would not do so. Yet, the process of actually sitting down at a face-to-face mediation, often proves them to be wrong!
With the assistance of professional advisers and a trained Registrar, the parties receive an unparalleled opportunity to settle their dispute - without taking one further step.
In some cases, we are aware of mediation conferences that have been convened up to 2 or 3 times in a row. In those cases, the matters did settle, just not on the first time around!
Contact Us
If the issues discussed in this blog are relevant to you and/or you require legal assistance, you can contact Tony or Andrew at Irwin Legal on admin@aristei.com.au or by contacting 08 92218337.