Alternative Dispute Resolution C omcover Legal Services Information Forum Series

1. Alternative Dispute ResolutionComcover Legal Services Information Forum Series John Solomon, PartnerTuesday, 26 November 2013

2. Alternative dispute resolution • Objectives • Resolving dispute • Mutually acceptable outcomes • Maintain / repair relationships • Cost effective • Finality and certainty

3. Types of ADR • Self guided resolution • Interactive problem solving • Conflict coaching • Facilitated conversation • Conciliation

4. Types of ADR (cont) • Neutral evaluation • Expert appraisal • Mediation • Arbitration • Collaborative law

5. Is ADR appropriate? • When should it be considered? • Capacity of parties • Legally represented • Attitude of parties • Emotional / financial cost • Ready? • Complexity • Urgency

6. Case appraisal • There is a dispute in relation to an evidentiary or factual issue • The hearing is likely to be lengthy • Additional independent investigation may assist in resolving the dispute • Availability of an expert opinion may further negotiations • The convenience of conducting an appraisal on the papers without the need for the parties to be present

7. Neutral evaluation • Identification of a legal and / or factual issue that is decisive (such as the correct interpretation of a legislative provision) • Agreement about the nature and impact of the issue • Willingness to have the application or identified issue evaluated • Most investigations have been completed and evidence obtained • The convenience of conducting an appraisal on the papers without the need for the parties to be present

8. Conciliation • Commercial considerations are important for the parties • Desire of the parties to keep the dispute and settlement negotiations confidential • The parties would benefit from advice in relation to possible settlement options • There is a conflict in expert evidence or opinion

9. Mediation • The matter is complex or likely to be lengthy • The matter involves more than two parties • Confidentiality and / or commercial considerations important • There will be an ongoing relationship • An apology, concession or explanation from one party could assist in resolving the dispute • A range of different settlement options could be explored

10. Advantages of ADR • Increased settlement • Improved satisfaction with the outcome – ‘win / win’ • Reduced time in dispute, therefore reduced costs • Increased compliance with agreed solutions • Assist in maintaining / recovering relationship • Finality / certainty

11. Disadvantages of ADR • Difficulties enforcing an outcome agreed during an ADR process • The use of and ADR process as a delaying tactic • No right of appeal • Increased delay and costs if the matter does not settle

12. Civil Dispute Resolution Act 2011 • Must take genuine steps to resolve dispute • What is a ‘genuine step’? • Must state what steps taken • Applies to all matters of federal law except where specifically excluded • Sanctions

13. Civil Dispute Resolution Act 2011 (cont) • Aims • To change the adversarial culture often associated with disputes • Consider resolution before becoming entrenched in a litigious position • Crystallising true areas of dispute if matter does not resolve

14. ADR QUESTIONS?

15. Discretionary compensation and waiver of debt mechanismsComcover Legal Services Information Forum Series Scott Moloney, Special CounselTuesday, 26 November 2013

16. Introduction • What are discretionary compensation and waiver of debt mechanisms? • Administrative mechanisms providing decision makers with the ability to provide compensation or waive debts in certain circumstances. They are known as: • The Scheme for Compensation for Detriment caused by Defective Administration (the CDDA scheme) • Act of Grace payments • Ex gratia payments • Waiver of debt

17. Introduction (cont) • How were the mechanisms created? • The CDDA and Ex gratia schemes have been established under the executive power of section 61 of the Constitution • Act of Grace payments are authorised by section 33 of the Financial Management and Accountability Act 1997 (the FMA Act) • The ability to waive debts is authorised by section 34(1)(a) of the FMA Act

18. Introduction (cont) • Characteristics of the mechanisms: • The mechanisms are available to all FMA Act agencies • They are mechanisms of last resort and are not available if the claim has at least a ‘meaningful prospect of liability’ being established against the Commonwealth • Based on a moral obligation to provide compensation in appropriate circumstances • Whether a particular mechanism is available will depend on the circumstances of the claim

19. Introduction (cont) • There are no time limits, or limitation periods, that apply to the making of a claim under each mechanism • The mechanisms are permissive and based on general principles allowing both flexibility and consistency of decisions • They are different from statutory compensation schemes • Claims involving the discretionary mechanisms are not handled by Comcover or Gallagher Bassett • Guidelines for each mechanism can be found in Finance Circular 2009/09 – Discretionary Compensation and Waiver of Debt Mechanisms

20. Introduction (cont) • Who makes a decision? • CDDA – the Minister of the relevant agency (or his or her delegate) • Act of Grace – the Minister for Finance (or his delegate) • Ex gratia – the Prime Minister of Australia and/or Cabinet • Waiver of Debt – the Minister for Finance (or his delegate)

21. Introduction (cont) • Are decisions reviewable? • Decisions made under CDDA or via the Ex gratia power are not reviewable. However, claimants that are not satisfied with decisions made under these mechanisms may approach the Commonwealth Ombudsman to investigate their claim • Decisions made under the Act of Grace mechanism and Waiver of Debt power may be the subject of judicial review pursuant to the Administrative Decisions (Judicial Review) Act1977

22. CDDA Scheme • Key points: • Claims for compensation determined by relevant agency • Allows decision makers to provide compensation to individuals and organisations that have suffered detriment as a result of ‘defective administration’ • The ‘detriment’ complained of must be directly caused by the defective administration to be compensable • There is no limit on the amount of money that can be paid by way of compensation under the CDDA Scheme

23. CDDA Scheme (cont) • ‘Defective administration’ is defined as: • A specific or unreasonable lapse in complying with existing administrative procedures • An unreasonable failure to institute appropriate administrative procedures • An unreasonable failure to give to (or for) an applicant, the proper advice that was within the officer’s power and knowledge to give (or reasonably capable of being obtained by the officer to give) • Giving advice to (or for) an applicant that was, in all the circumstances, incorrect or ambiguous

24. CDDA Scheme (cont) • ‘Detriment’ is also defined for the purposes of the scheme to be either: • Detriment relating to a personal injury including a mental injury (personal injury loss) • Economic loss • Detriment relating to damage to property

25. CDDA Scheme (cont) • Compensation: • Paid on the basis of what is fair and reasonable • Aim to restore the claimant to the same position she/he was in prior to defective administration occurring • Claimant’s own actions are relevant to take into account in determining amount to be paid • Appropriate documents/information should be made available to support claim • Some categories of compensation are generally not payable

26. CDDA Scheme (cont) • Examples of claims for compensation made under the CDDA Scheme

27. Act of Grace payments • Key points: • Claims for compensation determined by the Minister for Finance or his delegate • Payments can be either one-off or periodic • There is no limit on the amount of compensation payable • The Minister or his delegate must be satisfied there are ‘special circumstances’ justifying the payment of compensation and it is appropriate to do so • A claimant will generally need to have exhausted all other avenues of redress prior to making a claim

28. Act of Grace payments (cont) • The term ‘special circumstances’ is not defined, but examples of situations that are taken to satisfy the phrase are given in the Guidelines

29. Act of Grace payments (cont) • Examples of what will not be considered under Act of Grace include: • Where it is reasonable to conclude a legislative mechanisms will provide a remedy • Applications relating to a privacy complaint • To compensate a person for a debt owed to the Commonwealth • Where the proposed payment would have the effect of supplementing payments set by other specific legislation which cap the amount a beneficiary will receive

30. Act of Grace payments (cont) • Examples of claims considered under the Act of Grace payments mechanism

31. Ex gratia payments • Key points: • Ex gratia payments made by the Government without recognition of any legal liability or obligation to pay • The Ex gratia power provides flexibility to the Government to allow it to provide financial relief in appropriate cases at short notice • Payments under the Ex gratia power are only considered after all other avenues for redress have been explored • Policy and guidelines surrounding Ex gratia payments is currently being reviewed

32. Waiver of debt • Key points: • A ‘waiver’ is a special concession granted to an individual or organisation that extinguishes a debt owed to the Commonwealth • The debt must be an ascertainable amount that is payable now or will become payable in the future as a result of a present obligation, and could be recovered in an action for debt • It is appropriate to waive the debt, rather than writing it off, if recovery would be inequitable or cause ongoing financial hardship

33. Waiver of debt (cont) • Examples of when it may be appropriate to waive a debt

34. Practical tips for complex claims • Acknowledge all correspondence in a timely fashion • Keep the claimant informed in relation to the progress of his or her claim • Maintain good records or notes, particularly of conversations with the claimant • If necessary, obtain legal advice as to whether any legal liability of the Commonwealth arises

35. Practical tips for complex claims (cont) • Be wary of additional or further claims and consider them carefully • List the documents and information that you have considered in dealing with the claim • Write correspondence in a factual way without excessive emotive language or criticism • Refer to the relevant parts of the Finance Circular when outlining the reasons for your decision

36. Practical tips for complex claims (cont) • Deal with each issue raised by the claimant and provide substantive reasons for your decision in relation to each issue • When working on complex claims consider developing a spreadsheet to keep track of each issue and associated information • Provide the claimant with procedural fairness as outlined in the Finance Circular

37. Practical tips for complex claims (cont) • Indicate in your decision letter whether you will reconsider any aspect of the claim upon receipt of further information or not, noting that the Finance Circular indicates there is no automatic right of review • Include a reference to any appeal rights that apply or further avenues of complaint that may be relevant

38. Reference material • Commonwealth Ombudsman’s Better Practice Guide to Managing Unreasonable Complainant Conduct • Commonwealth Ombudsman’s Better Practice Guide to Complaint Handling • Commonwealth Ombudsman’s report – Putting things right: compensating for defective administration (August 2009) • Administrative Review Council – Better Practice Guidance to Decision Making

39. QUESTIONS?