Mediation is often an appropriate way to resolve contractual
disputes. However, Mediation Clauses are not necessarily appropriate
for all contracts and for all issues of dispute in contracts.
When negotiating and drafting contracts careful consideration should
be given as to whether a mediation clause should be inserted at all.
In some circumstances the obligation to mediate can be abused by one
party or the other.
Mediation can be used as a delaying tactic so any clause should
include clear processes and time limits.
Clauses need to be carefully drafted to ensure certainty and
enforceability. It is unproductive to fight about the process of
dispute resolution rather than negotiating around the substance of
the dispute.
Key issues to consider include:
- Which disputes and issues should be subject to mediation in a
- Contract;
- When the mediation process is activated;
- Who can activate the mediation process and how can it be
- activated;
- How is the mediator to be chosen and what is the process for
- appointment when the parties can’t
agree on a mediator, e.g.
- should the President of The Law
Institute of Victoria have the
- power to appoint a mediatorWhat qualifications should the mediator have:
- General qualifications such as National Accreditation, Law
- Institute Specialisation, Advanced
Accreditation;
- Specialist qualifications – engineer, lawyer, member of a
- particular organisation
- The cost apportionment between the parties;
The process of mediation:
- How long will it take;
- Should particular rules or standards apply e.g. NADRAC and
- national standards, LIV ethical rules
or LEADR standards;
- Information and evidence to be provided to the mediator;
- Confidentiality
Avoid undue complexity, it might be better to
ensure consistency by agreeing to comply with the guidelines of a
representative mediation body,
Be specific – avoid “agreements to agree”
LEADR Model Clause for Mediation
(Short Form)
Note: This is a model clause and needs to be adapted for the
specific purpose or circumstances in which it is to be used.
1.1 Mediation
The parties must endeavour to settle any dispute in connection with
the contract by mediation. Such mediation is to be conducted by a
mediator who is independent of the parties and appointed by
agreement of the parties or, failing agreement within 7 days of
receiving any party's notice of dispute, by a person appointed by
the Chair of LEADR, ACN 008 651 232, level 9, 15-17 Young Street
Street, Sydney; phone: 02 9251 3366, fax: 02 9251 3733, e-mail:
leadr@leadr.com.au, or the Chair's designated representative.
1.2 Rules
The LEADR Mediation Rules shall apply to the mediation.
1.3 Arbitration or Litigation
It is a condition precedent to the right of either party to commence
arbitration or litigation other than for interlocutory relief, that
it has first offered to submit the dispute to mediation.
LEADR Model for Dispute Resolution
Dispute Resolution
1.1 Before court or arbitration proceedings other than for urgent
interlocutory relief may be commenced, the following steps must be
taken to attempt to resolve any dispute that arises out of or in
connection with this contract (including any dispute as to the
validity, breach or termination of the contract, or as to any claim
in tort, in equity or pursuant to any statute).
1.2 Notice (the notice of dispute) must be given in writing by the
party claiming that a dispute has arisen to the other party (or
parties) to this contract specifying the nature of the dispute.
1.3 Upon receipt of the notice of dispute, the parties must attempt
to agree upon an appropriate procedure for resolving the dispute.
1.4 If within 10 business days of receipt of the notice of dispute
the dispute is not resolved or an appropriate alternative dispute
resolution process is not agreed, then the parties shall refer the
dispute to LEADR, ((ACN 008 651 232) level 9, 15-17 Young Street,
Sydney NSW 2000; email: leadr@leadr.com.au; telephone: (61-2) 9251
3366; fax: (61-2) 9251 3733) for facilitation of a mediation in
accordance with LEADR's Mediation Rules. LEADR shall act in
accordance with its Facilitation Rules (available at LEADR or
www.leadr.com.au).
1.5 The parties must co-operate with LEADR as facilitator.
1.6 If within 10 business days after referral of the dispute to
LEADR the parties have not agreed upon the mediator or other
relevant particular the mediator and any other relevant particular
will be determined in accordance with LEADR’s Facilitation Rules.
1.7 This clause will remain operative after the contract has been
performed and notwithstanding its termination.
IAMA MEDIATION AND ARBITRATION CLAUSES
MEDIATION - ARBITRATION
‘Any dispute or difference whatsoever arising out of or in
connection with this contract shall be submitted to mediation in
accordance with, and subject to, The Institute of Arbitrators &
Mediators Australia Mediation and Conciliation Rules.’
Add the following if you require the matter to go onto arbitration
if not settled.
‘If the dispute or difference is not settled within 30 days of
the submission to mediation (unless such period is extended by
agreement of the parties), it shall be and is hereby submitted to
arbitration in accordance with, and subject to, The Institute of
Arbitrators & Mediators Australia Rules for the Conduct of
Commercial Arbitrations’.
‘Notwithstanding the existence of a dispute or difference each
party shall continue to perform the Contract’. Where
to now?
Speak to a mediation expert
Often the best way to get the answers you need is to speak to an
expert. Click here to contact one of our
mediation experts via our contact forms or please call us on +61 3
9642 4552.
Organise an initial consultation
A face-to-face consultation gives you the opportunity to discuss
your mediation issue with professionals who deal with and resolve
these issues on a daily basis.
It gives you a chance to ask any questions you may have and for a
member of our team to gain background and provide you an insight
into the issues that you are facing.
For more information please call us on +61 3 9642 4552 or send us an
e-mail at
info@tiernanmedation.com.au. We are here to help you resolve
your problems.
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