Two different payments arise, and they are governed by different rules of the ADR Rules 2022.
Order 2 Rule 6
(1) Unless the Court otherwise orders, all parties shall pay an ADR Service processing fee in equal shares for a proceeding ordered to mediation, as prescribed in Schedule 3.
(2) Each party shall, prior to the commencement of the mediation, pay their share to consolidated revenue for the credit of the ADR Service and provide proof of payment to the Assistant Registrar ADR no later than seven days from the date of the mediation order.
(3) Where a proceeding has more than two parties, only the parties who have been correctly named and are actively participating in the proceeding and the mediation shall pay.
(4) The State is exempt from paying the ADR Service processing fee.
| Estimated value of the claim | First day | Each additional day |
|---|---|---|
| K10,001 – K50,000 | K400 | K400 |
| In excess of K50,000 | K600 | K600 |
Order 2 Rule 7
(1) External mediators are entitled to charge reasonable fees and outgoings having regard to the complexity of the matter, the time and skill(s) involved; any scale of costs that might be applicable; and the standing and experience of the mediator.
(2) All the parties shall pay those fees, which may be apportioned equally between the parties or as they may agree or as the Court may direct.
(3) Where there are more than two parties, only those correctly named and actively participating pay.
(a) how the mediator’s fees and outgoings are calculated and charged;
(b) the mediation process, its usefulness and any related costs; and
(c) the parties’ joint responsibility to meet the costs.
And the mediator shall obtain agreement from the participants as to the fees and outgoings … how they will be shared, when and how they become payable and the method of payment — which shall be incorporated in a written agreement or written arrangement to enter into mediation (r 7(6)).
No contingency. Rule 7(8): external mediators shall not base their own fees on the outcome of the mediation — though they may act pro bono or leave payment to the parties’ discretion.
No referral fees. Rule 7(10): mediators shall not give or receive an allowance in the nature of an introduction fee or spotter’s fee for introducing professional business.
No unnecessary work. Order 4 Rule 9(3): a mediator shall not take unnecessary steps or do work in such a manner as to increase costs to the participants. See a mediator’s duties.
Internal mediation
Where a party wishes the mediation to be conducted by an internal mediator, the Court may appoint an internal mediator where one is available or failing such availability, appoint an external mediator to conduct the mediation as an internal mediator.
But no appointment shall be made … unless the Court is satisfied that one or all the parties in the proceeding is or are impecunious or it is in the national interest.
And the party seeking it shall provide comprehensive evidence of their financial position, including their sources of income and assets held by them or in which they hold an interest and all liabilities.
Rule 7(11): where an impecunious party is entitled to receive a monetary settlement in consequence of a mediation conducted by an internal mediator, the first obligation of that party shall be to pay a mediator’s fees at the highest reasonable fee charged by an external mediator for a comparable mediation, payable to Consolidated Revenue.
So the cost is deferred and taken out of the recovery, not waived. Advise clients of that before applying.
Rule 7(12): where an internal mediator is appointed in a national interest case, the fee shall, if the Court so orders, be K5,000.00 per day or such other amount as the Court may order, paid to Consolidated Revenue.
Rule 7(15) and (16)
(15) Where the State is a party to a mediation conducted by an external mediator, the parties shall discuss, agree and pay the mediator’s fees in accordance with the parties’ agreement.
(16) For that purpose, the State does not include any State-owned enterprise in which the State owns an asset or in which any of the share capital is owned by the State or which otherwise engages in commercial activity, and it includes subsidiaries of those enterprises.
The Rule 6(4) exemption from the processing fee, and the special treatment in Rule 7(15), apply to the State as defined — the Independent State of Papua New Guinea and entities and bodies that are funded and or controlled by the State — but Rule 7(16) carves commercial State-owned enterprises out of that for fee purposes. See suing the State.
Two further provisions
Rule 7(7) — amounts due under a fee agreement shall become a debt due to the mediator and may be enforced in the event of non-payment as a liquidated debt using the process provided for under Order 2 rule 13.
Rule 7(9) — where fees have been collected for a mediation that is terminated, so much of the fees as are unearned and the outgoings unused shall be returned promptly to the person who paid them, subject to a deduction for reasonable administration costs, which may include the mediator’s time committed to the mediation process.
Rule 7(14) — upon full payment of the fees and expenses, the mediation conference shall commence on the date nominated in the mediation order.
These fees are distinct from the costs of the proceeding. A party whose bad faith wasted the mediation may face costs on an indemnity or lawyer and client basis under Order 2 Rule 11(2)(e) — see failing to participate.
Sources
- Alternative Dispute Resolution Rules 2022 — O 1 r 3; O 2 rr 3, 5–7, 11, 13; O 4 r 9; Sch 3; Sch 4
- National Court Rules 1983 — O 22
The ADR Rules 2022 are on PacLII as a PDF only. Fee figures are those in Schedule 3 as made; they may be varied by the Chief Justice in consultation with the Judges.
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.