ADR

THE ROLE OF A LAWYER IN ADR



Abstract

Alternative Dispute Resolution ‘ADR’ has been evolving with social and legal reforms associated with access to justice.  To provide an expressly defined role of a lawyer in ADR is as difficult as limiting ADR itself. The contemporary climate of ADR evolving and expanding throughout the legal system with emphasis shifting from position driven adversarial litigation to incorporating and adopting an interest driven approach in encouraging dispute resolution requires a dynamic approach by lawyers.

Introduction

This research paper examines the traditional and contemporary role of lawyers in ADR including consideration of the Australian National Mediator Standards[1] regulated by the Mediator Standards Board[2] through the National Mediator Accreditation System ‘NMAS[3] and how it applies to Lawyers today.

This issue is significant for the legal profession with the emerging growth of ADR in distinguishing the role of the lawyer in comparison with the accredited mediator as well as from the perspective of the lawyer as a mediator.

 

The legal profession has always had as one of its functions a role of engaging in negotiations with the other party in seeking to resolve disputes and achieving out of court settlements.

 

This position has advanced with the profession appropriating the role of mediator by default without necessarily being part of NMAS.

 

The author contends that whilst all practicing lawyers may be mediators and accredited mediators may not necessarily have legal qualifications, the legal profession ought to consider with the expanding role of ADR in the legal system that lawyers and law students alike obtain appropriate industry accreditation.

Literature review

The Appropriation of ADR by the Legal Profession

As late as 21 May 2015 an article titled, “Proposed uniform r 15 — definition of barristers’ work” appeared in the Australian Dispute Resolution Bulletin[4] discussing whether ADR was part of the role of a barrister.

This discussion was pertaining to the Australian Bar Association ‘ABA’ examining the Legal Profession Uniform Law ‘UL[5] and in particular the proposed Uniform Bar Rules[6] not expressly recognizing as “barristers’ work” that they act as mediators, arbitrators, referees, etc, in ADR.

The rule adopted by the ABA omitting express recognition of a barrister acting as an ADR provider meant that ADR wasn’t a barristers’ role, unless it was “other work as is from time to time commonly carried out by barristers”.

 

To complicate matters it would appear for a barrister to engage in ADR could have placed them in breach of r 14. which stated:

  1. A barrister may not use or permit the use of the professional qualification as a barrister for the advancement of any other occupation or activity in which he or she is directly or indirectly engaged, or for private advantage, save where that use is usual or reasonable in the circumstances.

Ultimately a recommendation was made to amend “The work of a barrister” under Legal Profession Uniform Conduct (Barristers) Rules 2015[7] r 11(d) from reading as:

(d) representing a client in a mediation or arbitration or other method of alternative dispute resolution;

to

(d) representing a client in or conducting a mediation or arbitration, reference or other method of alternative dispute resolution[8];

With this change the ABA formally shifted their position from distancing itself from the role of conducting ADR to appropriating the role.[9]

Traditional Roles of Lawyer Integrating with ADR

Creating Certainty with ADR in Contracts

Joachim Delaney in his paper “Dispute Resolution Clauses: Risks, Options and Drafting Tips”[10] identifies the challenges contemporary contract law faces when it comes to accommodating ADR highlighting the dangers of poorly drafted agreements and enforceability. A mediation clause must include certain elements for it to be enforceable[11].

 

Agreements to agree or to negotiate in good faith have been found to be unenforceable[12] however they could be enforceable in the frame of reference of a dispute resolution clause providing the clause is sufficiently certain.

 

For example, a clause to “meet and undertake genuine and good faith negotiations with a view to resolving the dispute or difference” has been upheld by the courts[13]

 

Whereas the clause can’t provide for negotiations on the method of resolving a dispute[14], for instance a clause stating “in the event the parties have not resolved the dispute then within a further 7 days a senior executive representing each of the parties must meet to attempt to resolve the dispute or agree on methods of doing so”[15] has been held to be unenforceable.

 Climate Change

With ADR becoming embodied in State and Commonwealth legislation, Regulations and Court Rules it means there is an accelerated shift from litigation to ADR being imposed upon the legal profession, which must adjust to this dynamic legal climate[16].

Legislation such as the Federal Court of Australia Act[17] and the Victorian Civil Procedure Act[18] have ‘Overarching purpose’ and ‘pre-action’ provisions that require parties to facilitate the timely and efficient resolution of civil disputes. For example, s 7(1)[19] states that the ‘overarching purpose is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute’.

Use of an ADR process, which includes mediation, is explicitly referred to as one method of achieving the overarching purpose[20].

Liability of Lawyers to Advise on ADR Options

Lawyers who fail in their duty to advise clients have faced various sanctions.  It is a duty that must be considered by Federal Court judges when awarding costs[21] and both parties must file ‘genuine steps’ statements prior to litigating[22] with participation in ADR considered as ‘genuine steps’ that can be taken to resolve a civil dispute[23].

 

Personal Costs Orders Against Lawyers

There is a statutory duty for lawyers to advise and assist clients with genuine steps statements[24], and failure may result in lawyers not only subjected personally to costs orders[25] but the lawyer must not recover the costs from the client[26].

Misconduct Sanctions Foreseeable

It was argued by David Spencer, Senior Lecturer at Sydney University[27] that at the nexus of ADR and the legal profession the governing bodies dealing with growing regulations and rules of professional conduct faced position where ADR was not part of substantive law yet part of the legal profession.

Whilst encouraging ADR absent substantive law regulating it, there may be other heads of liability, such as negligence, where if a Lawyer fails to advise their client it could breach Rules of Professional Conduct.  It is foreseeable that Australian legal practitioners may find themselves liable if they do not advise their clients of ADR options.

In Adamson v Queensland Law Society Inc[28], the test for professional misconduct was: –

“…whether the conduct violates or falls short of, to a substantial degree, the standard of professional conduct observed or approved by members of the profession of good repute and competency”

This was dealing with matters of “Unprofessional conduct or practice” considering a standard of professional conduct expected of the profession.

It is foreseeable as Legislation, Regulations and Rules provide for ADR processes and they become part of the standard of professional conduct expected of lawyers, one who fails to adequately advise their client on ADR may well find themselves liable in a tort of negligence or disciplinary proceedings for malpractice.

As held in Adamson[29]:-

The lawyer should put the client’s interests first and treat the client fairly and in good faith, giving due regard to a client’s position of dependence upon the practitioner, and the clients dependence on the lawyer’s training and experience and the high degree of trust clients are entitled to place in lawyers …particularly with respect to compromise.”

This would suggest there is a duty of care to the client to advise of ADR.

Costs Penalty in Success

There are risks of lawyers getting adverse cost orders imposed by the Courts for failing to negotiate even if they succeed at trial[30], as Mansfield J of the Federal Court of Australia, warned:

“To decline to negotiate in relation to an informal offer when it might have been reasonable to have done so might have

adverse costs consequences to the successful party.”[31]

Collaborative practice — “a new wrinkle”[32]

Collaborative law refers to a process of bringing together the parties and their lawyers in mediation with a desire to resolve the dispute in an open round-table forum recognizing that civil disputes can be resolved between the parties amicably and lawyers can play a role in giving their client confidence that they are getting an equitable result or at least understanding the legal implications of what they are conceding.

 

The negotiations are interest-based and the lawyers are retained purely for collaboration only, if negotiations fail the lawyers involved do not participate in litigation.

 

This sets the scene for open and frank ‘without prejudice’ negotiations and discussions, whilst giving the parties confidence that they are acting upon legal advice, if they should agree, their interests are protected.

 

In collaborative law during mediation, if required, experts are brought in such as financial specialists, auditors, medical experts, child psychologists etc, so all aspects of the dispute are considered.

 

The term “collaborative lawyers” is significant as the legal representatives will be asked to work in unfamiliar ways, in a group environment, giving legal advice in a collaborative as part of the team working to resolve the dispute, so the parties hear the legal advice given to each other as part of an interest-based process that can explore issues and options outside the limited parameters of the legislative framework.

 

Ultimately if talks break down, nothing is held against the parties and they would need to find alternate legal representation for the litigation process.

Discussion

It can be gleaned that the traditional role of a lawyer to advise and represent a client has been complicated by and is evolving with the development of ADR in the Australian legal framework.

 

The Alternative Dispute Resolution Advisory Council ‘NADRAC’ suggests that ‘it may be desirable for legal professional bodies to amend their codes of conduct or issue guidelines to define standards of practice for lawyers participating in ADR.’[33]

 

Legal professional bodies appear to have taken note, for example the Guidelines for Legal Practitioners who act as Mediators[34] issued by the Law Society of New South Wales ‘LSNSW’ and the Guidelines for Lawyers in Mediations issued by the Law Council of Australia ‘LCA[35] address those NADRAC concerns.

LCA Guideline 1 deals with the role of the lawyer in mediation and states that ‘[a] lawyer’s role in mediation is to assist clients, provide practical and legal advice on the process and on issues raised and offers made, and to assist in drafting terms and conditions of settlement as agreed’[36] continuing to say a lawyer’s role will vary greatly from merely advising the client before mediation to representing the client at mediation, but omitting conducting mediation.[37]

 

Worthy to note is the Comment in Guideline 4 on Selecting a mediator:

first look to a mediator’s skill and experience as a mediator, and then to any additional qualifications that may be helpful, such as accreditation or expertise in the subject matter of the dispute or law;”

From this commentary, there is a startling position of the LCA, in that a mediator need not necessarily have qualifications or be accredited and the primary consideration is experience.

In contrast looking to the LSNSW Guidelines it starts with ‘the responsibilities of legal practitioners when acting as mediators in the ordinary course of providing legal services’[38], meaning conducting mediation is an ordinary part of the role and they go on to confirm that it is covered by the Professional Indemnity Insurance.

 

The LSNSW Guidelines qualify that by adding Legal practitioners who intend to practice as mediators in alternative dispute resolution should inform themselves of the licensing provisions of any relevant legislative requirements, including any requirements for national accreditation or alternative insurance arrangements.’

 

Most significant is LSNSW Guideline 3 which goes on to cover the issue of Qualifications of a Mediator, stating in 3.1 ‘No legal practitioner shall act as a sole mediator unless he/she has satisfactorily completed an approved course and has obtained national mediator accreditation or has such appropriate mediation experience as may be approved by the Dispute Resolution Committee of The Law Society of New South Wales.

This position contrasts with that of the LCA where the LSNSW requires a lawyer to have completed an approved course and obtained accreditation, whereas the LCA doesn’t even consider accreditation or completion of an approved course a primary consideration in selecting a mediator.

 

Reviewing the LSNSW Guidelines further in Schedule one[39], it goes further to explicitly define in Section 2 what is an “an approved course”, which happens to be the “gap” identified in the Deakin University MLL328 – Alternative Dispute Resolution: Principles and Practice subject and what is required under NMAS for a student to become an accredited mediator.

 

This “approved course” under LSNSW Guidelines requires that it be conducted by suitably qualified instructors[40] and have coached simulation mediations[41]during a program of a minimum of 38 hours in duration[42] and consists of at least nine simulated mediation sessions, where in at least three, the participant performs the role of mediator[43] and provides written debriefing coaching feedback to two simulated mediations[44] and a written skills assessment reflecting core competencies in the Australian National Mediator Standards ‘ANMS[45] to comply with the National Mediator Accreditation System.

 

The LSNSW Guidelines are issued by the Law Society of NSW, in application of and in compliance with the Legal Profession Uniform Law[46], this law has been adopted in Victoria with the Legal Profession Uniform Law Application Act ‘Application Act,’[47] and confirms in Schedule 1 that the Victorian adoption of the UL includes NSW Rules and Regulations.

 

Thus, LSNSW Guidelines developed in application of and compliance with UL ought to apply in Victoria.  This position is supported by the fact that the Law Institute of Victoria ‘LIV’ has become a Registered Mediator Accreditation Body under NMAS, Registered Mediator Accreditation Bodies ‘RMAB’s have the role of accrediting mediators in accordance with the Australian National Mediator Standards.

Conclusion

In examining the question of the Role of a Lawyer in ADR, the traditional view of the lawyer being there to advise and represent is being challenged by a rapidly evolving legal environment.

 

The lawyer now needs to consider the legislation, regulations and rules that encourage ADR in civil litigation matters and how it affects enforceability of contracts and clauses that invoke ADR in the event of disputes.  The pre-trial processes and ADR being invoked or Court ordered, after trial has commenced, complicate traditional adversarial roles, alter practices of prelitigation discovery and provide pitfalls and costs sanctions for those that are not staying abreast of changes with continuing professional development.

 

The LCA refers to the lawyer’s role in ADR in a traditional perspective of advising and representing the client, conducting mediation is omitted as part of that role.

 

In contrast the ABA has adopted a position of appropriating the “work of a barrister” to include the “conduct of mediation”.  Whereas the LSNSW considering the UL has moved towards the position of the ABA with the role of Lawyers including the conduct of mediation whilst recognizing shortfalls in traditional legal training suggesting additional licensing and accreditation may be required.

 

The position outlined in the LSNSW Guidelines ought to apply in Victoria under the UL however as these are guidelines, there is no compulsory requirement for a lawyer to undergo such training and accreditation to represent a client in or conduct mediation or other forms of ADR but as discussed LIV are a RMAB provider and as such they also endorse the position of continuing professional development in this field, the author contends that the “gap” in the training at Law School compared to the NMAS requirements ought to be filled to ensure law students as they complete their degrees and obtain practicing certificates are properly prepared for ADR.

 

Evolving trends that challenge traditional roles and shift the position based adversarial lawyer to consider interest based collaborative team work in ADR to resolve the dispute without the need to go to Court other than to register the agreement reached provide sufficient foresight that the role of the lawyer in ADR will continue to be dynamic reinforcing the need to have adequate training in this growing field of alternative dispute resolution.

[1] Australian National Mediator Standards, Practice Standards, For Mediators Operating Under the National Accreditation System, September 2007, http://www.fedcourt.gov.au/services/ADR/mediation/mediation_standards.pdf accessed 23/8/2017 at 11.45am.

[2] Mediator Standards Board https://www.msb.org.au/ accessed 23/8/2017 at 11.17am.

[3] National Mediator Accreditation System, https://www.msb.org.au/mediator-standards/standards accessed 23/8/2017 at 11.46am.

[4] Australian Dispute Resolution Bulletin, Proposed uniform r 15 — definition of barristers, Nigel Cotman SC 9 Wentworth Chambers. May 2015.

[5] Legal Profession Uniform Law (NSW) 2014.

[6] Australian Bar Association Proposed Legal Profession Conduct Rules: Barristers (November 2014).

[7] Legal Profession Uniform Conduct (Barristers) Rules 2015 r 11(d) (Published on VicBar accessed here https://www.vicbar.com.au/sites/default/files/Legal%20Profession%20Uniform%20Conduct%20%28Barristers%29%20Rules%202015.pdf on 28/08/2017 at 9.54pm.)

[8] Ibid cf Current version of Legal Profession Uniform Conduct (Barristers) Rules 2015 (Published on Austlii accessed here http://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/nsw/consol_reg/lpucr2015509/s11.html on 28/008/2017 at 9.55pm.).

[9] Australian Dispute Resolution Bulletin, Conducting an ADR process and the Legal

Profession Uniform Conduct (Barristers) Rules — recent developments, Nigel Cotman and Mary Walker SC 9 Wentworth Chambers. September 2015.

[10] Dispute resolution clauses: Risks, options and drafting tips, Joachim Delaney, Australian Dispute Resolution Bulletin, July 2014.

[11] Aiton Australia Pty Ltd v Transfield Pty Ltd (1999) 153 FLR 236; 16 BCL 70; [1999] NSWSC 996.

[12] Baldwin & Anor v Icon Energy Ltd & Anor [2015] QSC 12 (3 February 2015).

[13] United Group Rail Services Ltd v Rail Corp (NSW) (2009) 74  NSW LR618; [2009] NSWCA177; Plenary Research Pty Ltd v Biosciences Research Centre Pty Ltd [2013] VSCA 217; BC201312046.

[14] WTE Co-Generation  & Anor v RCR Energy Pty Ltd & Anor [2013] VSC 314 (21 June 2013).

[15] Plenary Research Pty Ltd v Biosciences Research Centre Pty Ltd [2013] VSCA 217 at [12].

[16] The Role of Lawyers in Mediation: Insights from Mediators at Victoria’s Civil and Administrative Tribunal, Kathy Douglas and Becky Batagol, Monash University Law Review 2014 (Vol 40, No 3).

[17] Federal Court of Australia Act  1976 (Cth) s.37M

[18] Civil Procedure Act 2010 (Vic)

[19] Ibid s 7(1).

[20] Ibid s 7(2)(c).

[21] Federal Court of Australia Act  1976 (Cth) s 37N(4).

[22] Civil Dispute Resolution Act 2011 (Cth) ss 6–7.

[23] Ibid s 4.

[24] Ibid s 9.

[25] Ibid s 12. See, e.g., Superior IP International Pty Ltd v Ahearn Fox Patent and Trade Mark Attorneys

[2012] FCA282 (23 March 2012), where no genuine steps had been undertaken, and the Federal Court

ordered the legal representatives of the parties be joined for the purposes of costs.

[26] Ibid s 12(3).

[27] Spencer, David L., Liability of Lawyers to Advise on Alternative Dispute Resolution Options (November 2, 1998). Australian Dispute Resolution Journal, Vol. 9, No. 292, 1998.

[28] Adamson v Queensland Law Society Inc [1990] 1 Qd R 498.

[29] Adamson v Queensland Law Society Inc [1990] 1 Qd R 498.

[30] Are you being too bullish in settlement negotiations and refusing to mediate? Be warned, Michael Hollingdale,  Australian Dispute Resolution Bulletin September 2015.

[31] Australian Competition and Consumer Commission v Harris Scarfe Australia Pty Ltd (No 2) [2009] FCA433 at [33].

[32] Collaborative practice — “a new wrinkle”, Nigel Nicholls, Australian Alternative Dispute Resolution Law Bulletin, June 2017.

[33] National Alternative Dispute Resolution Advisory Council, Maintaining and Enhancing the Integrity of

ADR Processes (2011) 38.

[34] Law Society of New South Wales, Guidelines for Legal Practitioners who act as Mediators 2012.

[35] Law Council of Australia, Guidelines for Lawyers in Mediations (2011).

[36] Ibid Guideline 1.

[37] Ibid.

[38] Law Society of New South Wales, Guidelines for Legal Practitioners who act as Mediators 2012.

[39] Law Society of New South Wales, Guidelines for Legal Practitioners who act as Mediators 2012.

[40] Ibid Schedule 1, S.2(a).

[41] Ibid S.2(b).

[42] Ibid S.2(c).

[43] Ibid S.2(d).

[44] Ibid S.2(e).

[45] Ibid.

[46] Legal Profession Uniform Law (NSW) 2014.

[47] Legal Profession Uniform Law Application Act 2014 (Vic).



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