Dispute Resolution - Alternatives to the Court

There have been a number of recent reports concerning the state of the NZ court system.  Like so much of the Government’s bureaucracy the civil and family courts are drastically underfunded, under resourced and understaffed.  This inevitably leads to significant delays being experienced by parties to legal proceedings. 

In the family court, relationship property proceedings can now often take up to three years to progress to a hearing.  Essentially parties are unable to get on with their lives during that time. Indeed, the disharmony and acrimony between separated partners or spouses often increases significantly as a result of the delays and ongoing stress, cost and uncertainty. 

The Employment Relations Authority and court have also been overwhelmed as a result of the COVID lockdowns in 2020 which in turn have led to a tidal wave of personal grievance claims now progressing through mediation, the Employment Tribunal and court system.  Even with the appointment of additional mediators and tribunal members the delays are now inordinate.

Mediation

The last twenty years have seen a significant growth in the popularity of mediation as an alternative to the traditional adversarial process available through the courts.  The reason for this are not only the prohibitive costs involved in progressing a dispute through the justice system but also the benefits of resolving conflict far more quickly and in a manner which significantly reduces the level of acrimony and disharmony which is otherwise invariably experienced.  Mediation is a consensual process requiring both or all parties to agree.  In addition, the parties have total control over the time and place of the mediation, the manner in which it is conducted, the selection of the mediator and, most importantly, the terms of any settlement or agreement reached.

It is an unfortunate consequence of the popularity of mediation that the number of cases now being determined by the courts have diminished significantly.  In a small jurisdiction such as New Zealand this in turn reduces the number of legal authorities available for the interpretation of legislation, the advancement of legal principles and general jurisprudence. The short point is that a number of important legal issues and uncertainty in legislation simply do not get to the stage where they are interpreted by the courts or if so, this only occurs after many years of uncertainty.

Arbitration

Another form of alternative dispute resolution (“ADR”) is the arbitration process.  An increasing number of commercial contracts direct that any disputes be resolved in this manner.  Contracts of this nature are legally binding and enforceable whereby arbitration clauses can have the result of precluding the civil courts and justice department becoming involved in private disputes between contracting parties where the arbitration clause has been drafted in a satisfactory manner. The advantages of arbitration (as opposed to traditional litigation through the civil courts) are as follows:

• Confidentiality - in the case of many commercial disputes, one or both parties may form the view that it is very much to their advantage to have the dispute determined outside the public arena and for the fact of the dispute any determination to be kept entirely confidential.
• Speed of resolution - civil courts can take many years to resolve a dispute. Arbitration can often achieve a resolution in a matter of weeks or months.  This is often the most compelling reason for parties to seek to have disputes determined by arbitration as the reduced time not only allows the parties to put the dispute behind them more quickly but also, invariably, results in significant cost savings.
• Choice of arbitrator - the parties can choose their own arbitrator thereby ensuring the person determining has the necessary experience and qualifications to deal with the facts or issues in question. Often a specialist in that particular area is appointed.
• Discovery and Disclosure - the onus of the parties in relation to discovery and disclosure is significantly reduced in the case of arbitration. The civil courts require very extensive discovery of all relevant documentation often at considerable expense.  This scope can be tailored specifically for the purpose of the arbitration thereby reducing that time consuming and inefficient part of the legal process.
• Witnesses and evidence – In arbitration, this is often produced by way of written statement with flexible opportunities for further evidence to be given by way of video conferencing (zoom, skype etc). In these times of regular lockdowns and the inability for overseas witnesses to travel to New Zealand this represents a very considerable advantage.  The civil courts often experience real difficulty in making arrangements for evidence to be given remotely.

The reality is that the time has now arrived where the vast majority of disputes are resolved by way of negotiation, mediation or arbitration with only a small percentage proceeding through the court system.  Ironically, the Ministry of Justice maintains that the courts are experiencing unprecedented demand and increasingly lack the ability to resolve those disputes in a timely manner.