Can Mediators be Sued?
By Kim Lovegrove, Lovegrove Solicitors
“Dispute Resolution – Comparative Analyses on the Different Theatres of Dispute Resolution”
A question that is often asked in both the legal fraternity and commercial and is can mediators be sued?
“In Australia there are no known cases in which a mediator has been successfully sued”.
(Robyn Carroll (2001), “Mediator Immunity in Australia”, 23
Sydney Law Review 185 at page 192)
Page 80
The difficulty in suing mediators is probably because it is a new addition to the dispute resolution repertoire, somewhat of a dark and evolving art. As canvassed previously mediators are not supposed to make decisions and although a mediator never makes a decision, the errant mediator in making a recommendation or proffering an opinion that affects a settlement is influencing the decision to settle. If the decision is settled and compromised on the basis of a misconceived mediator`s expressed inclination, the conduct of the mediator should be actionable at law.
Yet actionable on what basis? The duty of the mediator in not codified or regulated rather it is ill-defined and speculative As some mediators are not remunerated by the parties does their duty to the party differ to circumstances where the mediator is remunerated by the parties, (presumably on a fifty- fifty basis)?
Interestingly the ACT proclaimed a Mediation Act in 1997 and this Act affords mediators an immunity of sorts in that section 12 provides that a “mediator, has in the exercise of good faith of his or her functions as a mediator, the same immunity as a judge of the Supreme Court”.
Unlike lawyers who are required to enter into cost agreements with their clients that are regulated by solicitor conduct acts, mediators do not explicitly contract with clients to dispense impartiality, ethical reverence or detachment. So in the absence of any contractual obligation for one to sue a mediator, one would have to imply certain duties, duties that are to reiterate ill-defined and opaque.
For the above reasons it is not surprising that mediators apparently have not been sued to date. Although a party in the absence of any mediator immunity would be at liberty to sue a mediator, success could prove elusive. There would have to be compelling evidence that the mediator, very forcefully recommended a course of action, based upon flawed rationale or pretext, resulting in a settlement that materially prejudiced a party`s interests.
Furthermore if the aggrieved was represented by lawyers it would be even more difficult to sue the mediator, because the question would be asked “Why did your lawyer not advise you to refuse to accede to the mediator’s recommendation?”
The disquieting consideration for lawyers, is that the lawyer must be ever vigilant and bold if need be, in ensuring that a bad deal that is put to the client is described as such in no uncertain terms, least the lawyer be implicated in a questionable outcome. The last thing the lawyer would want to become is a client “safety net” for a compromised settlement in circumstances where a forceful or vociferous mediator extolled the virtues of settlement and the lawyer meekly acquiesced or endorsed in that facilitation. For to do so could mean that the lawyer would be sued for a failure to emphatically reject the mediator`s recommended course of action.
Page 81-82
One of the greatest risks with mediations is that successful mediations in the author`s experience often go well into the night. In these circumstances many mediators instead of adjourning over to the following day put pressure on the parties to expedite the “wrapping up” of a settlement. In such circumstances mistakes can be made particularly in regards to the drafting of terms of settlement. The lack of formal structuring can compromise the quality of mediation services.
Lovegrove & Cotton Lawyers to the building industry
For thirty years, Lovegrove & Cotton have represented builders, building surveyors and building practitioners in Melbourne, Canberra, Sydney and Queensland. Doyles Guide ranks Kim Lovegrove as one of the leading construction lawyers in Australia. Justin Cotton, likewise, is a leading Australian construction lawyer and widely respected in the building fraternity as evidenced by his recent elevation to Chairperson of the HIA Industrial Relations and Legal Services Committee, and member of the Regional Executive Committee, for HIA Victorian Chapter. Lovegrove & Cotton can help practitioners resolve any type of building dispute and are preeminent in the area of building practitioner advocacy. If you wish to engage the firm, feel free to contact us via our website or by emailing enquiries@lclawyers.com.au.
