NEW ZEALAND Law and Practice Contributed by: Shane Campbell and Thomas Westaway, Campbell Westaway
4.5 Confidentiality Mediation is conducted on a confidential and without prejudice basis. Communications made in the course of mediation are generally inadmissible in subsequent litigation or arbitration, and mediators are not compel- lable as witnesses in relation to anything said or done during the process. Negotiation conducted on a with- out prejudice basis attracts equivalent protections. 4.6 Costs The costs of ADR are generally borne equally by the parties in the absence of any contrary agreement, with each party bearing its own legal costs. Institutional providers such as AMINZ and NZDRC charge admin- istration and mediator fees in accordance with their New Zealand courts have long been supportive of ADR in principle, but the New Rules mark a more deci- sive institutional commitment. For the first time, ADR consideration is embedded as a mandatory structural feature of High Court proceedings rather than a dis- cretionary judicial tool. published fee schedules. 4.7 Courts and ADR Whether that structural shift translates into meaning- fully higher rates of ADR remains to be seen. The early indications are that the High Court intends to give the new framework genuine effect. New Zealand appears to be at the beginning of a period of closer institutional integration between the court process and ADR, and the direction of travel is clear even if the pace is not. Legal fees are regulated under the Lawyers and Conveyancers Act 2006 and the Lawyers and Con- veyancers Act (Lawyers: Conduct and Client Care) Rules 2008. Lawyers must charge fees that are fair and reasonable having regard to the circumstances of the matter, including complexity, the skill required, the results achieved, and the terms of the retainer. There is no general fee tariff. Fees are typically charged on an hourly or fixed-fee basis, and lawyers are required to provide fee information at the commencement of a 5. Costs, Fees and Funding 5.1 Legal Fees
ment, and many commercial disputes resolve through it alone. Adjudication under the Construction Contracts Act 2002 provides a statutory fast-track mechanism for construction payment disputes, with determinations ordinarily issued within 20 working days and binding on an interim basis. 4.2 Requirements to Engage in ADR There is no general legal requirement for commercial parties to engage in ADR before commencing litiga- tion or arbitration. Formal requirements and practical incentives do, however, apply in specific contexts. The most significant development is the New Rules, under which a Judicial Issues Conference is now mandatory in every defended ordinary High Court proceeding. At that conference, the Court must con- sider whether any steps should be taken to settle the dispute by means of ADR and, if not, why not. While parties cannot be compelled to participate, the obliga- tion to genuinely engage with the question is now a structural feature of High Court litigation rather than a discretionary one. Where a commercial contract contains a tiered dis- pute resolution clause, failure to comply before com- mencing arbitration or litigation may provide grounds for a stay of proceedings. Courts will generally enforce such clauses where the ADR obligation is sufficiently certain and mandatory in its terms. 4.3 Impact of ADR Engaging in ADR does not affect a party’s substantive right to litigate or arbitrate. A mediation that does not result in settlement leaves the parties free to pursue their dispute through the courts or by arbitration. 4.4 Timing of ADR ADR may take place at any stage of a dispute, though in practice mediation most commonly occurs after proceedings are filed but before trial. Engaging in ADR does not stop limitation periods running unless the parties expressly agree otherwise or a relevant statu- tory provision applies.
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