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Mediation – Will Disputes & Family Provision Claims In NSW

This page provides information regarding when it is appropriate to apply for Mediation and the type of Mediation that would be required. 
Mediation – Will Disputes and Family Provision
General InformationFormalities of Mediation
General Information
  • Several types of mediation orders:
    • Private Mediation – expected where the estate is worth $1 million and over;
    • Court annexed Mediation – expected in estates worth $400,000.00 to $1 million (about 60% settle on the day of mediation);
    • Judicial settlement conference – expected for estates worth less than $400,000.00 (about 80-85% settle on day of mediation)
    • Hybrid Process – Listed for Court annexed mediation at 9:30am and if not resolved by 12:15 pm then lawyers and parties appear before Justice Hallen, to encourage discussion (lasting up to about 2-2:30 pm).
  • If the matter settles at mediation, the proposed orders can be sent to Justice Hallen to consider making orders in chambers to avoid the need for a further Directions Hearing.
  • Look at common problems with proposed orders.
  • Mediation involves and requires all parties to meet with the lawyers and a Court-appointed mediator to sit in a room to discuss the matter with the overarching purpose would be to resolve the matter where all parties are contempt with the outcome.
  • This alternative to Court vastly reduces the legal costs in a Court whilst also improving the successful rate of both parties agreeing to certain terms to the contested estate.
  • A Court will order that a claim may be mediated before a claim may be made out.
  • In 2012 the Supreme Court of NSW reported that 50% of all matters commenced in the Family Provision List were resolved on the day of mediation and that a further 10% settled shortly after.
Offers of Compromise
  • Where mediation has failed to achieve an outcome where both parties are in agreement than the parties may file a formal offer of compromise that reflects the last offer of settlement at the mediation.
  • The offer is made on a costs plus basis e.g. $100,000 plus costs as agreed or assessed. The offer is usually open for 28 days for acceptance.
  • The effect of an offer of compromise for the executor is that if the plaintiff does not obtain an award in excess of the monies that are offered by the executor in the executor’s offer of compromise, then the Plaintiff risks having an adverse costs order made against him or her in respect of the legal costs that were incurred by the estate after the offer of compromise was made.
  • If the plaintiff makes an offer of compromise to the estate and is awarded by the court the same or more monies than the plaintiff was willing to accept in its offer of compromise, then the estate is at risk of having an adverse costs order made against it arising from the estate’s failure to accept the plaintiff’s offer. The court may order the estate to pay the Plaintiff’s costs on an indemnity basis from the time the offer of compromise lapsed rather than the ordinary order that costs be paid on a party/party basis.
Settlement in Mediation
  • In Family Provision Applications, most matters settle during the Mediation process whereby both parties with their representatives essentially have a discussion over the issues in dispute and the appropriate amount that will resolve the proceedings.
  • If settlement occurs during Mediation then Justice Hallen is empowered to make orders based on the consent of both parties.
  • Both parties have the right to put forward a deed of release. A deed of release precludes a specific party from being able to claim on the same estate therefore finalising the matter in relation to that estate. Any release of rights would need to be set down by Justice Hallen pursuant to s 95 of the Succession Act 2006 (NSW).
Formalities of Mediation
Where is Mediation held?
  • Mediation is usually held in the Supreme Court depending on the amount of the estate.
  • It is important to note that Mediation may also be held at different locations depending if the parties have sought out a private mediator to sit through the proceedings and guide both parties to a resolution. This is will solely depend on the consent of both parties as well as the estate being over a specific amount.
Costs of Mediation
  • Mediation is a costs effective dispute resolution mechanism. The general costs of mediation is usually the costs of your legal council and any costs associated with hiring the mediation room. These costs are generally limited relative to the alternative of Court. As such it is an efficient mechanism which both parties must utilise in good faith to reach a resolution to the issues in dispute.
Role of Mediator
  • The role of a mediator is to guide both parties to reach a resolution to any issues in dispute.
  • The mediator will explain the rules and the confidentiality conditions which will be present throughout the mediation process.
  • The mediator will not be allowed to give legal advice and will simply give advice that is of a common nature to assist both parties throughout the mediation process.
How long is Mediation
  • When mediation is ordered, it is given an estimate time whereby both parties have an opportunity to discuss their issues.
  • Mediation is usually ordered for a half day. Mediation may be extended if there is a reasonable chance where the parties are able to agree on the issues in dispute.
Confidentiality of Mediation
  • Throughout the mediation process, everything that is said is confidential and cannot be taken out of the room or used against any of the parties in the proceedings.
  • Anything said both written or verbal cannot be taken from the mediation room and used in Court so it is a safe haven whereby both parties can speak their mind freely to resolve their differences and hopefully agree in order to settle the matter.
Why is Mediation successful?
  • Mediation is successful as it empowers both individuals to proceedings to determine their own fate as opposed to leaving it in the hands of a Court to make a determination.
  • Mediation is less formal and gives the opportunity of both parties to actually speak to see if the issues in dispute may be resolved as a means of compromise as opposed to having to rely on legal arguments in a Court room.