Much Obliged: When could a lawyer mediator be liable for breaching their obligations?

Mediation is an increasingly popular form of dispute resolution in Australia especially in last few decades. While mediators may possess a variety of skills and may come from a range backgrounds, lawyers and barristers are frequently engaged in mediations either in their capacity as legal representatives of the parties, or as mediators.

In this article, Queensland barrister Polina Kinchina of Murray Gleeson Chambers examines the specific obligations of lawyer mediators, and the opportunity of redress for aggrieved parties. 

Lawyer mediators are often engaged because of their legal skills, such as the ability to negotiate and resolve disputes, analyse facts and law, assess the prospects of success if the matter was to go to court, and to provide legal advice in relation to the matters at hand.

But what are the specific obligations and liabilities of lawyer mediators? Are they expected to uphold a different standard of care than a mediator from a non-legal background?

By examining the ethical and legal obligations that apply to lawyer mediators, it is possible to see how they may be breached, and what the avenues - and difficulties - of seeking redress may be for aggrieved parties.

Besides a duty of care, what are the ethical and legal obligations of a lawyer mediator?

Mediators may owe legal and ethical duties to persons and groups that may be directly or indirectly affected by the mediation. These may include duty to the court, duty to facilitate access to justice, or duty of confidentiality.

They also owe duties to be honest in the marketing of their practice, provide participants with information about the conduct of mediation, how to prepare for the mediation, and how to provide feedback or lodge a complaint about the mediation.

It is important to note that in the mediation process, lawyer mediators will owe duties to two or more clients who have divergent interests and as such, some duties normally owed by a lawyer (such as the duty to carry out the client’s lawful instructions, or a duty of loyalty) do not apply.

What are the sources of the ethical and legal obligations which apply to mediators who are lawyers or barristers?

Numerous sources of ethical and legal obligations may apply to lawyer mediators and barristers, including

• Mediation agreements, whether oral or written, entered into to conduct mediation.
• General legislation such as the Australian Consumer Law.
• Standards such as those implied by the National Mediator Accreditation System (NMAS).
• Additional obligations imposed by the ‘laws of lawyering’, such as holding current practicing certificates, general and specific legislation, and rules of conduct issued by lawyers’ professional associations
• Barristers who engage in dispute resolution are generally governed by Barristers’ Rules published by Bar Associations in various jurisdictions, notably Queensland, NSW and Victoria.

Under what circumstances could a mediator be liable for a breach?

Negligent malpractice, breach of contract and failing to disclose a conflict of interest are the most obvious areas of law giving rise to a mediator’s legal liability. However, there are various areas of law which can give rise to a mediator’s liability. These may include:

• Breaching confidentiality by releasing information about what was said or done at the mediation, or, disclosing what was said in a private session by one party to the other party.
• Exerting undue influence or inappropriate pressure on a party to settle.
• Providing incorrect legal advice.
• Breaching a specific contractual promise regarding the structure of the mediation or its outcome.
• Drafting the terms of settlement incorrectly.
• Failing to prepare for mediation or using the mediation process inappropriately.

Nonetheless, mediators possess much more knowledge about the mediation than the parties, making it difficult for any party to know if wrongdoing has occurred. Similarly, mediations are also frequently protected by confidentiality agreements which may stifle public or private scrutiny of the mediator’s actions.

In fact, there has been only one reported case in Australia where proceedings have been instituted against a mediator - the Victorian Supreme Court case of Tapoohi v Lewenberg.

Is there a circumstance where mediators may enjoy immunity against liability?

In some circumstances, mediators may enjoy limited immunity against liability. The immunity may be conferred by statute in, for example, tribunal or court-referred mediations. The mediation agreement may also seek to limit a mediator’s liability in relation to civil wrongs such as negligence, breach of contract and defamation. However, the protection afforded by such clauses is likely to be limited.

Where to next?

Yet, despite the prevalence of mediations in the last two decades, there is not one successful reported case against a mediator.

This lack of successful lawsuits is not necessarily indicative that mediators’ conduct is never substandard - it may simply be indicative of the difficulties faced in recognising this conduct, as well as all the obstacles in proving each element of the relevant causes of action.

Consequently, it is imperative that a carefully drafted written agreement exists between all parties in order to adequately set out obligations and expectations and ultimately minimise the likelihood of conflicts resulting from the mediation process.

Subscribers can read the full article inside Australian Alternative Dispute Resolution Law Bulletin (newsletter) here.

Contact your Relationship Manager for more in depth information on our Dispute Resolution Law resources which are available as part of an online subscription to Lexis Advance. Alternatively email Sales.Enquiries@lexisnexis.com.au or call us on 1800 772 772.

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