First time at commercial mediation?

The Victorian Small Business Commission arranges mediations between disputing landlords and tenants for premises that are subject to the Retail Leases Act 2003. Their offices and mediation rooms are at 100 Exhibition Street in the Melbourne CBD and the cost is $195 per party. They offer a mediation service also to non retail tenants under section 5 of the Small Business Commission Act 2017. I have not yet had an opportunity to attend a non retail mediation.  They also offer a rarely used facilitation service which is slightly different and applies when there are multiple parties to a dispute or the parties are deeply divided. It may be done in house at no cost or by an external facilitator which commands a different fee structure. A check of the V.S.B.C. website at  www.vsbc.vic.gov.au confirms an 80% success rate for the 1,000 approximate cases each year. It is a low cost dispute resolution service that takes about 4 – 6 weeks from application to the date of hearing. Once you are advised of the claim you are then advised who the mediator will be. The mediator is usually a solicitor or experienced mediator appointed by the V.S.B.C. who can assist the parties to resolve matters but cannot provide legal advice. Anything you say is without prejudice so by all means speak your mind as any statements are not admissible at V.C.A.T. if the matter is not resolved. It was not a practice in the past but now you will be asked to outline your side of the claim. This may help you to construct your argument before you attend. You are also able to examine the other parties claim to give you time to prepare a defence. Personally I am not always keen to outline my points of defence as I don’t want the mediator to form an opinion before the hearing.

For the mediations I have attended they have included compensation for loss, refusal to transfer a lease, disputes over the maintenance of buildings, refusal to amend or renew leases, supposed unconscionable terms and the like. The conduct of the mediations is such that the parties sit in a room opposite each other and present their various points of claim. In some instances either or both parties are legally represented however this is unusual in a low cost jurisdiction unless the stakes are high or a party may have a poor command of English for example. Once each side has put their case, you usually break and the mediator then spends time with the parties on an individual basis to examine the strong and weak arguments of each side.

 

The mediator will also point out the cost of litigation at V.C.A.T. if the matter is not resolved. This is often quoted as $10,000 per day per party when legally represented. Therefore most cases are resolved. The cases I have been involved with in the main are genuine. They are the result of long running disputes which highlight the need to get on top of problems early. Some cannot be helped however and the longer it drags on, the higher the compensation sought will be. There are always vexatious claimants too. For $195 they are hopeful of some sort of optimistic result usually without a working knowledge of the Act. Your case normally highlights these flaws and the mediator is always supportive when you act within the legislation. Most cases are resolved in 2 – 3 hours. Some have gone for over five hours and finished well into the evening. Allow yourself time for this. With regard to the terms of settlement, they are recorded for the parties to sign and are binding. It is not unusual for a tenant to start at a claim of say $50,000 to see that whittled down to $10,000 or below because they are not fully aware of the law or are not experienced enough to engage in brinkmanship and want to push the matter on to V.C.A.T. The mediator is also in their ear reminding them of the costs to go to V.C.A.T. Nonetheless, some of the cases do proceed to V.C.A.T. and we can enjoy reading the various decisions made at some else’s vast expense. A mediation can act as a sobering up experience for petty litigants as it involves considerable time and expense and thus sort out the genuine claimants. It can and does work when people are hard headed and a common sense negotiation earlier is rejected. By the time they arrive at the hearing they are usually over it rather than fired up. Once a mediation is settled, the parties usually reflect on their loss. One party is rarely the winner outright and compromise is the order of the day. If you dig you heels in and refuse to negotiate you will want to hope that your opponent is not up for the next round at V.C.A.T.