MEDIATION IS

"The process by which the participants, together with the assistance of a neutral person or persons, systematically isolate disputed issues in order to develop options, consider alternatives and reach a consensual agreement that will accommodate their needs."

MEDIATION IN COMMERCIAL SETTINGS

Mediation is a co-operative problem-solving process, designed to help the parties to a dispute find constructive solutions to problems. Those solutions may or may not involve enforcement of the legal rights of the parties. From a commercial perspective, mediation is an extension of the usual commercial process of negotiating an agreement. If business can negotiate the entry into commercial arrangements, there is no logical reason why they cannot negotiate to end or modify those arrangements. By taking responsibility for difficulties that arise in their commercial arrangements, businesses are much more likely to end up with a satisfactory solution in which not only one but all parties benefit.

THE MEDIATOR

During mediation an independent third party, chosen by the disputing parties from a list of accredited mediators, facilitates the negotiation by the parties of their own solution to the dispute. A mediator who is respected and trusted by all parties and, if necessary, has expertise in the area of the dispute, can be of great benefit in helping the parties reach a solution satisfactory to all of them.

The NSW Rural Assistance Authority has accredited a number of experienced mediators as part of its Panel of Mediators. All the accredited mediators have received special training in the Act.

SELECTING A MEDIATOR

A farmer has the initial right to nominate a mediator from the list of accredited mediators provided by the NSW Rural Assistance Authority. If the creditor rejects that nomination, the farmer is then required to nominate a panel of at least three mediators, from which the creditor must then select one.

ROLE OF THE MEDIATOR

The mediator assists the parties:

ÿ systematically isolate the issues in dispute (which, if the mediation is unsuccessful, may prove of assistance to the parties in any other form of dispute resolution, such as arbitration or litigation, which they may later pursue);
ÿ develop and explore options for the resolution of the issues in dispute, enabling the parties to play an active role in the decision-making process and to exercise control over the terms of settlement;
ÿ reach a consensual agreement, which accommodates their needs and interests.

REMEDIES AVAILABLE AT MEDIATION

The range of remedies available in mediation is unlimited. Consensual agreements tend to provide greater satisfaction procedurally and psychologically and are consequently more readily and comfortably adhered to than those, which have been imposed by a judge or an arbitrator. Agreements reached are usually final and binding contractual agreements. The mediator will not impose a solution on the parties but may assist in the generation of options for settlement. The mediator will not coerce the parties into agreement nor make decisions for them. The mediator will not give legal advice nor direct the parties' decisions based on the mediator's interpretation of the law. One of the fundamental principles of mediation is that, parties properly informed of their rights and fully prepared for negotiation, can reach agreements which satisfy their needs. Those needs may involve a consideration of the legal rights of each of the parties but any solution is determined by reference to criteria including, but not limited to, those legal rights.

FEATURES OF MEDIATION

Mediation is a voluntary and confidential process. It will not be binding on any party unless and until agreement is reached. Mediation is conducted without prejudice to any legal rights which the parties may have. If mediation is unsuccessful, other means of dispute resolution may be used or continued.

WHAT HAPPENS BEFORE MEDIATION?

Before mediation the parties will have:
ÿ decided to use mediation as an appropriate method of endeavouring to resolve the dispute;
ÿ selected a suitable mediator, from the panel of mediators supplied by the NSW Rural Assistance Authority;
ÿ reached agreement on how the costs of mediation are to be shared and where and when the mediation will be held.

It is usual for the costs of the mediator and venue hire to be shared equally between the parties. The venue for the mediation, to be agreed upon by the parties, can be either in the nearest large provincial city, or in Sydney.

Once the parties have reached agreement on their mediator, when and where they will hold their mediation and the sharing of costs, the mediator will assume control of the process. The mediator will convene a preliminary conference between the parties. This may take the form of a face to face meeting but will usually be by way of a telephone conference. Farmers should ensure that any adviser engaged by them also participates in the conference.

During the conference the mediator will cover a fixed agenda of topics. These include, an explanation of the mediation process, the agreement to mediate document, timings for the mediation session, mediators’ fees, mediators’ reporting obligations, preparation required by the parties prior to mediation as well as who will attend the mediation. The mediator will also give an explanation of the confidentiality provisions of the Act, the requirement for the parties to have the authority to settle the matter on the day, what constitutes satisfactory mediation, the need for both parties to act in ‘good faith' and the farmers’ rights under section 11A - the cooling off period.

HOW LONG WILL MEDIATION TAKE

To allow for all options to be thoroughly discussed at mediation, parties must allow a minimum of six (6) hours for the process. If necessary, the time can be extended, or the parties may agree to reconvene at a later date.

HOW DOES MEDIATION WORK?

For the mediation itself, a neutral venue including a main room large enough to accommodate all participants and separate rooms for each group, will need to be arranged. Once the participants have been introduced, the mediator will open the mediation by making a short statement explaining the mediation process, its essential features and objectives and the mediator's role in the process.

After opening, the mediator will ask each party, in turn, to explain what it is that has brought them to mediation. From the parties' statements, the mediator will identify the issues, which are in dispute and the common ground between the parties. Then, after checking with the parties, the mediator usually will write those issues, and the common ground, on a whiteboard and will set an agenda for the discussion of those issues.

PRIVATE SESSIONS

During the mediation, the mediator may meet with each of the parties separately. The aim of such private sessions is to enable the mediator to explore any underlying issues and to ensure that the parties are content with the process. It is during the private session that proposed settlement options are often fully explored and tested. The mediator will not, unless specifically authorised to do so, disclose anything said in a private session to the other parties.

HEADS of AGREEMENT

If it appears to the mediator that the parties have agreed, or are about to agree, on an issue between them, the mediator will personally prepare for the consideration of the parties a document setting out the main points of agreement on the issue.

If the parties are satisfied that the document sets out the main points agreed by them during, or within 24 hours of the end of a mediation, the parties may enter into Heads of Agreement by signing the document.

A contract, deed, mortgage or other instrument entered into as a result of, or pursuant to, Heads of Agreement between a farmer and a creditor must reflect the relevant Heads of Agreement.

If a mediator wishes to enter the mediation session with any part of the final agreement already drafted, the parties must be given ample notification and opportunity to consider the contents before the mediation. Ideally, this should happen at the time of the preliminary conference.

WHAT HAPPENS IF THE PARTIES DON’T REACH AGREEMENT?

Under the Act, the parties are required to make reasonable attempts to negotiate a settlement to their dispute at mediation.

If, after reasonable attempts, an agreement cannot be reached by mediation, the creditor/bank may apply to the NSW Rural Assistance Authority for a Section 11 certificate. Once is possession of a Section 11 certificate a creditor/bank may commence enforcement action under their mortgage.

Settlement by mediation is voluntary and neither party can be forced to agree to anything at mediation.