Some Ideas on Law Reforms That Could Cut the Cost of Domestic Dispute Resolution in the VCAT
In addition to being a construction and planning lawyer, I am the secretary of the dispute resolution coalition of the International Building Quality Centre (“IBQC”). In this capacity I have been afforded the privilege of interacting with some pre-eminent international jurists from the antipodes, the United Kingdom, the United States of America, and Africa; All of whom have a passion for making construction dispute resolution more accessible to main street. This paper draws some of it’s inspiration from IBQC Good Practice Guidelines for the Development of Construction Dispute Resolution Tribunals and Decision Making Institutions. The guidelines were developed by said experts.
Compulsory front end mediation
Mediation is mandatory in the Victorian Civil and Administrative Tribunal (“VCAT” or “Tribunal”) and is often required as ‘first cab’ off the rank in a proceeding. Question, whether it can continue to be adequately resourced if the government has to continue to underwrite the funding of mediation? The most important thing is to have a critical mass of mediators.
Look no further than some of the higher courts in Victoria, where the parties share the cost of mediator intervention in equal parts.
Recommendation number one
If joint remuneration of mediators will boost the number of mediators available, then do it. The critical thing is to be able to provide a critical mass of mediators at the earliest possible opportunity.
In my construction law practice, I have come across clients (property owners) who desperately wanted their cases heard sooner than the mediation dates provided to them by the VCAT. I’m sure that if they had the option of funding 50 percent of the cost of mediator deployment with the other side funding the balance they would jump at it. In the overall reckoning the costs saved with an early settlement would dwarf the longer term costs of a protracted dispute resolution journey.
Recommendation number two
Legislate to allow for front end mediation before legal proceedings are issued. One of my colleagues at Lovegrove & Cotton Lawyers, Professor Kim Lovegrove informed me that the Law Institute of Victoria (“LIV”) and the Victorian Law Reform Commission (“VLRC”) in the early nineties published a ‘plain English building contract’ and it had a mandatory mediation clause. He was intimately au fait with the contract as the VLRC and the LIV jointly engaged him as the principal draftsperson.
The provision dictated that in the event of any dispute, the parties had to go to compulsory mediation, they could not ‘up the ante’ and issue legal proceedings, unless the mediation failed.
It contractually behoved the parties to agree upon and nominate a mediator before they signed the contract. Whenever there was any flare up, the mediator could be ‘summonsed’ as it were, to mediate to effect a settlement. Granted the parties under the contract had to share the cost of the mediation on a 50/50 percent basis, but a small price to pay to front end a resolution and keep a project on the rails.
Further such an innovation would have the effect of taking the pressure off the Domestic Building Dispute Resolution Victoria (“DBDRV”), in fact could even replace it, which would minimise the budgetary pressures that currently are being visited upon treasury and loosen up the bottle necks.
As is the case with the DBDRV if the parties prove unable to settle through this mediation avenue, then the mediator would sign a declaration to that effect to enable the parties to issue proceedings in the dispute resolution theatre (“DRT”).
Recommendation number three
Legislate to allow standard industry building contracts to be amended to make mediation contractually compulsory as the first step in the dispute resolution process.
Recommendation number four
Legislate to promulgate a mechanism to accredit and appoint mediators and prescribe a remuneration scale that is consumer price indexed. The remuneration amount must be such that it is competitive with respect to that which mediators would ordinarily charge. Good mediators need to be soundly remunerated and there needs to be sufficient remuneration to ensure that they are incentivised to populate this space.
Recommendation number five
Legislate to have a mechanism for the accreditation of independent expert witnesses to be deployed by the VCAT to investigate, assess, diagnose cause, and quantify cost of rectification of defect.
Legislate to remove expert adversarialism and replace it with a system where the VCAT requires applicants to appoint a single expert witness to provide the Tribunal and the parties with a technical assessment and diagnosis. Said assessment will be the key technical evidential report to be tendered at mediation and trial.
Special leave will also permit the parties to avail themselves more than one accredited expert if the complexities are such that more than one skill set is required. The cost of that retention will be shared equally.
Said experts will be required to attend the mediations and the trials and the parties will jointly remunerate same for that attendance.
Parties will be legislatively embargoed from deploying their own expert witnesses in order to cut the cost of expert retention and remove partisanship.
This innovation alone will half the cost of expert evidence as the amount of expert deployment will be halved.
Furthermore, in light of the fact that the parties will jointly remunerate the experts, and the experts will be accredited by an appropriate governmental agency, impartiality will be a given and adversarial technical advocacy will be repudiated.
As a construction and planning lawyer, whether I am representing owners or builders, it is always my wish to keep my clients out of lengthy, stressful, and costly litigation.
I appreciate that the Tribunal handles a high volume of cases and endeavours to facilitate dispute resolution processes at the earliest possible times, however it is fair to say that we need to look to additional best practice dispute resolution mechanisms to bring better access to outcome to main street; regardless of whether ‘the consumer’ of the dispute resolution system is a builder or an owner.
For further Lovegrove and Cotton articles on construction law reform, please see:
This article is not legal advice and discusses it’s topic in only general terms. Should you be in need of legal advice, please contact a construction law firm. The experienced team at Lovegrove & Cotton can help property owners and building practitioners resolve any type of building dispute.