There has been a move to encourage parties who are in dispute, to seek assistance outside of the formal court processes. What are some of the options available and what are the benefits of each?

Arbitration

An arbitration clause is often included in commercial contracts as a way to address any problems that may arise during the commercial relationship. Arbitration works well in the construction industry where parties cannot afford to hold up projects due to disputes, because missing deadlines can result in penalties. Commercial disputes are also suited to arbitration because the parties have an ongoing commercial relationship and need to know quickly the answer so they can move forward with doing business.

Depending on the availability of the chosen arbitrator, and the process desired, parties generally get a determination much faster via arbitration than going through the courts.

Arbitration has the benefit of letting the parties determine the process which works for them (for instance will there be witnesses giving oral evidence, will there be cross-examination, will there by written submissions only, will there be site visits, will there be expert opinions, will there be one or several arbitrators, etc.).

In addition, arbitration is closed and private, whereas court proceedings are usually open to the public.

The parties, however, have no control over the outcome. The determination of an arbitrator or panel of arbitrators will be binding and enforceable as if it is a judgment of the court.

The costs of arbitration will need to be covered by the parties. Arbitration can be expensive, when compared to some of the other options, but that will depend on who the parties appoint as the arbitrator/s. An arbitrator can be anyone that the parties agree to appoint, including a lawyer, retired judge, or an expert in the relevant industry.

Many parties prefer to appoint an expert, who is familiar with industry terms, standards procedures and practices, and so on. This can cut down in time required to get a decision maker 'up to speed'.

Mediation

Mediation is where an independent third party helps the parties involved in a dispute to achieve a mutually acceptable resolution. Mediation is required under several laws for instance in the areas of Employment Law and Family Law, Residential Tenancies and Resource Management.

Parties have control over the outcomes in a mediation.  If the parties cannot agree, then the dispute will remain active. If there are multiple issues, parties may agree to dispose of some issues but not others, and decisions can be made as to how disputes will be handled between the parties in the future. The types of outcomes that can be agreed to in a mediation are more varied and flexible compared to what is available via proceedings.

Sometimes mediation is funded by the government, for instance for employment disputes. Otherwise, parties will have to pay the mediators fee, but mediation is often much less expensive than going to court.

If the parties decide to have a lawyer attend with them, they will also have to pay for their lawyer.

Mediation can often be arranged very quickly, and can result in resolution much faster than going through the formal process of a hearing in the court.

A great benefit of mediation is that the process is confidential and 'without prejudice'. That means the process is low risk, because anything discussed at mediation cannot subsequently be used in court proceedings.

Negotiation

Negotiation is where parties, either themselves or represented by their lawyers, formally discuss matters of mutual concern and attempt to resolve the dispute that has arisen between them.

This method of resolving disputes is usually quicker and cheaper than going to court and provides another potential way to resolve the dispute in private.

Judicial Settlement conferences

This is where the dispute has been taken to court.

A Judge will meet with both parties and their lawyers in an attempt to get a resolution without the need for a full hearing. If the dispute is not settled, the full hearing will take place before a different Judge.

Tribunal Claims

There are various Tribunals that aim to resolve disputes between parties in a cost-effective and timely manner. Specialist Tribunals available include the Tenancy Tribunal and Motor Vehicle Disputes Tribunal, that can hear claims of larger amounts than the non-specialist Disputes Tribunal, which can only hear claims up to $15,000 (or $20,000 with the consent of the parties).

These dispute resolution Tribunals are usually quicker and cheaper than litigation in Court, but may be open to the public. Lawyers can appear in the Tenancy Tribunal if the Tribunal considers the issues to be complicated, the dispute is over $6,000, or one of the parties is unable to present their case adequately. The Tribunal may also allow legal representation if the parties agree. 

Lawyers are not allowed to appear in the Disputes Tribunal, or Motor Vehicle Disputes Tribunal (unless they are one of the parties or a witness). Therefore, you will have to present your own case, but lawyers can assist you to prepare for the hearing by drafting briefs of evidence, assisting with questions to ask the witnesses, explaining the process, and so on.

If a party is unable to represent their case adequately (because of a disability, or due to age) a Tribunal may allow a lawyer, or other person, to assist that party at the hearing. 

The disputes resolution method that is best for your situation, will depend on the nature of the dispute, the amount involved, the remedies you seek and the complexity of the facts. Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.




Jaenine Badenhorst
Associate Lawyer
Wellington