Mediation in the National Court is not voluntary in the way many litigants assume.
Section 7B
(1) In addition to the jurisdiction vested in the Court by Constitution section 166, and any other law, the Court may order a resolution of a dispute or a matter before it by mediation for an amicable resolution of the dispute, or may order or direct a proceeding or any part of the proceeding to be inquired into and resolved by an appropriately qualified and experienced person or an expert in the issue.
(2) At any stage of a proceeding, the Court may, whether with or without the consent of the parties, order that the proceeding or a part of the proceeding before it be referred to mediation.
(5) Unless the Court otherwise orders, an order for mediation shall not operate as a stay of the proceedings nor shall it be a cause for delaying in getting the case ready for trial.
Subsection (5) is easily overlooked and frequently relied on against a party who has let deadlines slip. An order for mediation is not a stay. Pleadings, discovery and preparation for trial continue.
Order 2 Rule 4(1)(c) of the ADR Rules 2022 says the same: a mediation order does not stay the steps the parties need to take to expedite the matter to trial should mediation result in no settlement.
Order 2 Rule 2(1)
Subject to subrule (2), after the commencement of these Rules no further step may be taken in any proceedings after —
(a) the filing of the Defence;
(b) expiry of the time for filing of the Defence; or
(c) the first appearance in Court.
(2) Unless one of the parties applies for and has been granted leave to dispense with the requirement for mediation, the proceeding may proceed to mediation, for which purpose the Court may issue appropriate orders under Order 2 rule 3 whether or not a formal application for mediation has been filed and moved.
The default is that the proceeding goes to mediation once the defence stage is reached. The Court may order it whether or not any application has been filed. A party who wants to avoid mediation must apply for leave to dispense with it.
This is a reversal of the position most practitioners were trained on, where mediation was something a party proposed. Under Rule 2 it is the litigation track that must be justified.
The ten categories
The lawyer’s affidavit must depose that the case falls within one or more of —
- Legal issues that have not previously been determined by a Court in Papua New Guinea.
- An out-of-court settlement is not in the interest of National security.
- There is no reasonable cause of action.
- A case warranting immediate declaratory relief where the facts are not contested.
- A case involving a history of violence.
- A case where a Court sanction or order is statutorily required.
- One or more parties are in a state of mind that renders them incapable of negotiating for themselves or others.
- There is a real dispute over the meaning and application of a particular provision in a contract or an instrument.
- A public sanction as in a criminal case or other case is required for public health, safety and good order.
- Subject to subrule (4), there is (A) a preliminary issue such as a question on jurisdiction, a condition precedent or a statutory time bar; or (B) an immediate protective order such as an injunction is required.
Subrule (4): where (x)(A) or (B) applies, the substantive matter shall be referred for resolution by mediation unless a question of the kind referred to in subrule (3)(b)(i) to (ix) is presented.
So a jurisdictional objection, a time bar, or the need for an injunction gets that issue determined — but the substance still goes to mediation.
What must be filed
An application for leave shall be by motion supported by —
(a) an affidavit from a person who has direct knowledge of the relevant facts of the case and who is able to demonstrate why the case should not be referred to mediation; and
(b) where a party is legally represented, an affidavit from the lawyer having carriage of the matter deposing, with the support of appropriate evidence, that they have discharged their duties under rule 8(7) of the Professional Conduct Rules 1989 and that the case falls within one or more of the ten categories.
Subrule (6): leave may not be granted unless —
(a) the parties establish to the Court’s satisfaction that a meritorious issue raising the listed kinds of issues exists; and
(b) the applicant establishes that it has made real and good faith effort to resolve the dispute either by direct negotiations or through a prior mediation.
Paragraph (b) is the one applications fail on. It is not enough to identify a category; the applicant must show a genuine prior attempt at resolution. Evidence of correspondence, without-prejudice offers and meetings should be before the Court.
Order 1 Rule 3: an issue that has merit and not previously the subject of any judicial determination in Papua New Guinea and raises the kinds of issues listed in Order 2 rule 2(3)(b)(i) to (x).
The novelty element is part of the definition, which narrows paragraph (a) considerably.
Three possible outcomes
On the hearing of an application for leave, the Court may —
(a) grant leave to proceed in the trial track; or
(b) dispense with the requirements of subrule (6)(b); or
(c) order that the matter be mediated and a mediator appointed.
And by subrule (7), in deciding, the Court shall take into account the matters set out in subrule (3)(b)(i) to (x).
Sources
- Alternative Dispute Resolution Rules 2022 — O 1 r 3; O 2 rr 2–4
- National Court Act (Chapter 38) — ss 7B, 7C, 7D
- Constitution — s 166
The ADR Rules 2022 are on PacLII as a PDF only. The Professional Conduct Rules 1989 and the Lawyers Act 1986 are not available on PacLII.
Before relying on anything here, read the current text of the National Court Rules 1983 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.