A mediated settlement has to be recorded properly to be worth anything. Order 2 Rules 9 and 13 of the ADR Rules 2022 set out how.
Rule 9(6) and (8)
(6) Where the parties reach a mediated agreement, the mediator shall with the assistance of the parties’ lawyers if any, ensure that the agreement is reduced into writing and signed and dated by the parties.
(8) Where the proceeding is fully or partially resolved, the certificate in Form 3A or 3B shall be accompanied by copies of —
(a) the signed mediated agreement — unless the parties mutually agree in writing that the terms of settlement should remain confidential; and
(b) a draft order by consent for endorsement or consideration by the Court.
The obligation to reduce the agreement to writing falls on the mediator, but it is the parties who suffer if it is not done. A settlement recorded only in the mediator’s notes, or in an exchange of emails afterwards, invites a dispute about its terms — and the confidentiality and admissibility rules make such a dispute hard to prove either way.
Decide the confidentiality point at the same time. If the terms are to stay off the Court file, the agreement to that effect must itself be in writing under Rule 9(8)(a).
Order 4 Rule 16
(a) the parties reaching agreement in writing on all the issues presented in the proceedings; or
(b) the matter not having been fully settled or has only partially settled but the parties have agreed on how to resolve matters in accordance with any Court order; or
(c) termination of the mediation by the mediator or by any one of the parties with the Mediator’s approval; or
(d) agreement by the parties to terminate the mediation with the Mediator’s approval.
In each case, the Mediator shall file an appropriate Mediator’s certificate — within three business days of the completion of the mediation or before the matter returns to Court.
Paragraph (b) recognises that a mediation may resolve some issues and narrow others. Order 2 Rule 3(8) then requires the parties, with the assistance of the mediator, to identify what meritorious legal issues remain, to demonstrate why any other issue is beyond resolution by mediation, to confirm after reasonable enquiry that the issues have not already been determined by a Court in Papua New Guinea, and to agree and settle the relevant facts on which the issues arise.
That is valuable in itself: it produces an agreed statement of facts for the issues that go on.
Order 2 Rule 13(1)
An agreement reached during mediation shall have the same force and effect and may be enforced in the same manner as if it were an agreement or contract reached in the ordinary cause of business or conduct of parties — except only for —
(a) a lack of an essential element for the existence of a legally binding and enforceable contract; or
(b) where legislation specifically prohibits the parties from negotiating and resolving the subject of their dispute.
Paragraph (a) — the ordinary requirements of a contract still apply. Agreement on essential terms, certainty, and authority to bind. A representative who lacked full authority to settle under Rule 10(4) may leave the agreement vulnerable.
Paragraph (b) — some matters cannot be compromised. Where a statute requires a Court sanction or order, that is also one of the grounds for dispensing with mediation in the first place.
Rule 13(2) and (3)
(2) Subject to subrule (3) and any prevailing custom, where a mediation involves a group or groups dealing with the collective interests of the group, an agreement by the majority of the members shall be binding on all members and any such agreement shall be enforced notwithstanding any dispute by an individual member.
(3) Where the dispute involves customary land, the agreement shall not be binding unless the majority includes persons who have the right to make decisions according to the relevant custom.
A numerical majority is not enough where customary land is involved. The majority must include persons who have the right to make decisions according to the relevant custom. That is consistent with the position that customary land disputes belong before mediation and the Local Land Court under the Land Disputes Settlement Act (Chapter 45).
See also representative proceedings.
Rule 13(4) to (6)
Any party may apply for an order endorsing or giving effect to the agreement by —
(a) notice of motion if the proceeding is current; or
(b) originating summons if the proceeding has been concluded.
The applicant shall file an affidavit deposing to the relevant facts, which may include a copy of the mediated agreement (if any) or other information evidencing the agreement.
Rule 13(6): where a question of enforcement or opting out of a mediated agreement arises, the paramount duty of the Court shall be to have regard to the provisions of subrule (1) and to always seek to uphold the agreement of the parties.
A party hoping to escape a mediated agreement faces that starting point.
Section 7D(3) of the National Court Act (Chapter 38): where a mediation results in a settlement, the Court may with the consent of the parties embody the terms of the settlement in a consent order disposing of the proceedings or that part of the proceeding to which it relates.
That is what the draft consent order required by Rule 9(8)(b) is for. A consent order is generally the better outcome, because it is enforceable as an order of the Court under Order 13 rather than as a contract.
Sources
- Alternative Dispute Resolution Rules 2022 — O 2 rr 3, 9, 10, 13; O 4 r 16; Sch 2 Forms 3A–3D
- National Court Act (Chapter 38) — s 7D
- Land Disputes Settlement Act (Chapter 45)
The ADR Rules 2022 are on PacLII as a PDF only.
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.