E10 Transcript

Commercial Mediation - With Mark Kelly

E10 Transcript


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Transcript Commences

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**Chris Patterson**: Hello and welcome to the Law Down Under Podcast with barrister Chris Patterson. We will give you insights into the law in New Zealand and Australia, its application, and the law's future. Each episode features a new guest who will inspire interest in the law and give you a greater understanding of the legal issues that helped shape our justice system here down under. We thank you for tuning in and enjoy the podcast. I'm super excited today; I have with me in the studio Mark Kelly. Mark is a Commercial Mediator based in Auckland. He is the current president of the Arbitrators and Mediators Institute of New Zealand. He won the Mediator of the Year Award at the 2019 New Zealand Law Awards. He graduated with a law degree with honors and a BA from Auckland University back in 1993. And he was admitted to the New Zealand bar that year. He's a keen long-distance runner these days, mainly Off-Road and 2021. He placed second in his age group at the Routeburn Classic. He's also a keen but very much self-professed deeply average golfer. Hey, good morning, Mark. Thank you for coming along. How are you?

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**Mark Kelly**: Hey, Chris, thank you so much for having me. And I'm great on this beautiful Auckland autumn day. It's lovely to be here.

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**Chris Patterson**: It is a stunner. It's a little bit crispy out there today. But absolute stand-up, but we are stuck in a dark studio with one light.

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**Mark Kelly**: And the mics all was fantastic tech. I love it. All right.

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**Chris Patterson**: Well done. Well done. Hey, now we're going to talk about mediation. So let the first question really is, what is mediation?

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**Mark Kelly**: I'm pleased you asked. Mediation can simply be defined as an attempt to settle a dispute through a neutral third party. And at its heart, it's as simple as that: it's two or more parties in dispute who ask a neutral person to come and help them resolve the dispute.

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**Chris Patterson**: Okay, well, why would someone do that? Why would they ask you or any mediator to help them out if they're trying to negotiate a settlement?

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**Mark Kelly**: Well, it's a great question. And I think, look, the reality is that people in disputes of any kind can quite naturally get quite entrenched, quite positional, they get to a place where, as amongst themselves, they can't get out of the dispute. They're in almost a sort of a spiral of conflict that they can't escape. And in that context, sort of the idea of introducing a trusted neutral to help them to help them talk to each other to help them sort of find where the common ground might be makes a lot of sense. And interestingly, it's got a really long history. One of my favorites is that apparently back in the time of Henry the first right back in the 12th century, they even had mediation back then; it was a way of resolving disputes in the kingdom. But rather than call it mediation, they call them love days, which has a sort of berry widescreen to it.

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**Chris Patterson**: We need a bit of soul music in the background.

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**Mark Kelly**: But yeah, and if you think about it, you know, mediation has been utilized in all sorts of contexts since then, really famously by President Jimmy Carter to achieve the Camp David Accords between Egypt and Israel. And, you know, and you can think about the sort of Norwegians acting as mediators in the Sri Lanka conflict. So in an international political context, mediation is common, also really common domestically here in New Zealand, really in the legal scene, particularly took off in industrial relations in the 70s and sort of flowered into all aspects of legal disputes since then. Yeah, look, I think

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**Chris Patterson**: You made a good point. I mean, New Zealand was very much at the forefront and a leader of get you you mentioned industrial relations. New Zealand's got a long history of dating back to the original arbitration and conciliation Act, which survived, you know, nearly 80 odd years of a model where the unions and employers would first attempt to resolve matters between them and if necessary, the court would appoint a conciliation process. And that then followed itself through into I guess it was 19, all the way through to about 1987, with the Labor Relations Act still had that conciliation process to implement contracts that created a mediation service. So you know, New Zealand's had a very strong history of mediation. Hey, now, look, let's talk about your history. Because you started off life as a lawyer as an effect you still do a little bit of floor are you still doing a bit These days I'm

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**Mark Kelly**: These days I'm exclusively a mediator.

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**Chris Patterson**: Well, my sense, all right, well, look, what was the pathway from 1993 to the point where, I guess you said to yourself, Hey, I found this as my calling, I'm going to make this my full-time gig.

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**Mark Kelly**: I spent sort of the first 10 years of my career working at big firms in New Zealand and an island. And then in 2005, went to the bar. And so and then, so 10 years and firms and then 10 years at the bar, and I suppose in those 20 years, right through till about 2013 2014. I was practicing, as you say, exclusively as a lawyer and as a litigator. So I was working in commercial and civil disputes. And I really enjoyed that work on enjoyed the intellectual challenge of it, I enjoyed sort of, you know, meeting people and sort of the, you know, the dynamics and working in the justice system, and all of those sorts of things that really appeal to, to many of us as lawyers. But I also struggled a bit with aspects, I suppose of, of the role in terms of how it sort of worked for me. And I found myself often sort of fighting my way to Pyrrhic victories and tactical retreats and honorable drawers and just sort of wondering, gosh, am I sort of, Am I helping here? And in the, in that sort of, in over that 20 years, I'd been counsel and many mediations, as a no, you have Chris. And I'd really enjoyed that process, I'd enjoyed the immediacy of it, I enjoyed the opportunity to really get a result and get things sorted for the client. So I'd always had an interest in mediation. And then I went off and did some courses to cause here in New Zealand, and then I did a course up at Harvard. And it was a bit of a sort of, you know, Blues Brothers sort of doing Flick, flick through the triple Rock Church for me moment, I was just, ah, wow, this is great. And, and sort of, from that moment on, I was a zealous convert, and have been fortunate enough to mediate more and more and more until, as I say, it's now my full time gig.

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**Chris Patterson**: Okay, so tell me about these two courses. So the first one you did was one here in New Zealand? When was it? Tell us about it? That

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**Mark Kelly**: That was back in 2014. Resolution Institute, as it was then known, provided a five-day intensive course. And it was Eloquent and Carol Powell were the coaches on that course. And it was a very hands-on interactive, learning how to mediate course, and I just loved it. You know, went up to Harvard, was taught,

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**Chris Patterson**: I mean, was that the same year, 2014? Yeah, you picked on to

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**Mark Kelly**: say, I was suddenly sort of, wow, you know, I'd hit that lightning strike moment. And so we have to have it in was taught up there by Professor Bob Manoukian, who's a professor at the University there, and a very famous mediator, Gary Friedman, who's a California mediator, one of the godfathers of mediation in the US. And again, that was a five-day intensive course very practical, very hands-on, loved it, met some really amazing people doing all sorts of super cool things all over the world. And, and again, it really sort of fueled the passion in me. Yeah, look, I

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**Chris Patterson**: guess one of the, this is just one of my observations, as New Zealand has traditionally lacked, just before getting into the issue of quality, just simply a quantity of commercial mediators. To the point where if parties wanted mediation, there was only a few people that you could literally go to, that could hand on heart say that they had training and experience. And often they would be booked three or four months now, which doesn't really necessarily work when you're trying to get a prompt resolution to a very challenging problem. I mean, did you see a gap and kind of calling it a market? Did you see that there was a gap in the market?

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**Mark Kelly**: It's difficult, and I totally, I totally understand the problem that you're talking about there. And it's slightly strange because there are only a there's a very small handful of people who are sort of full-time professional, commercial and civil mediators. And in that sense, there's a small pool there. There is then and that that's probably only about half a dozen people at the moment. There are then a set of people who mediate some of the time, some of the retired judges mediate some of the time there are some arbitrators who sometimes mediate. And then there might be a dozen of those folk who are active. And then beyond that, there are a whole lot of people who sort of have mediation on their shingle, but for whom it's perhaps only an occasional gig. And so in a sense, it's not necessarily I don't think a supply issue in terms of people who are keen to do the work. But there's probably a supply issue in terms of those full-time commercial mediators who people want to use. And there's a chicken and egg aspect to that, I think because, you know, no one wants to go to someone for the first mediation, you know, you want the experienced hand, you want a bit of gray hair at the end of the table, and you want someone who, who, you know, either through your own experience or from hearing from others knows what they're doing and can help you.

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**Chris Patterson**: Yeah, okay. And then, like you mentioned, a few retired judges, and there are always exceptions. And we're not going to mention any names. But you know, some of the retired judges who have turned their hand to mediation have been okay at it. But it's not naturally a skill set of going from being a litigator and determining arguments that are put before you on sort of a black application of the law, that doesn't necessarily equate into the skill sets that a mediator may need to have. And, and one of them, of course, as the ability to understand interests, as opposed to rights is Yeah, so look, my experience, just going back to the supply issue. I mean, there's been times fortunately not in recent years, where I've been involved in mediations where the parties have had to bring mediators in from Australia, right, simply because the caliber of the mediator required because not all mediators come in the same shape and form or shall I say, have the same skill set or capability just simply required, bringing somewhat flying someone in from overseas? Because the matter just needed it? Have you ever got any aspirations for going sort of trans-Tasman?

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**Mark Kelly**: Yeah, look, I've I already do and have mediated international disputes, and happily so. And funnily enough, and perhaps we'll talk a bit more about this later, more easily. So now and times of Zoom, and we are internet media, you know, internet-based mediation is more common. So, yes, for me, and I enjoy the international dynamic. But I think, perhaps what your observations really speak to, and it's a really important point is that people need to be comfortable with a mediator, you know, you need to have confidence in your mediator because it's a huge trust that you that you are putting in this person to help you through a really difficult day through a really difficult process at a really difficult point. So, you know, I think that that's the number one sort of determinant of who you might pick as a mediator. It's got to be someone who you can have confidence in.

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**Chris Patterson**: Can we talk about that? Can we talk about how to build confidence with a participant? When I mean, I'm putting aside experience counsel, I mean, you may have had because I mean, you and I have had several mediations together. So we've already got that relationship. But often, the parties you've likely never met them before. And you're sitting in a room, you got the day set aside, how do you how do you start building that confidence and trust with them?

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**Mark Kelly**: Yeah, look, another great question. And it's very, it's sort of, you know, there's some good research around what sort of works in mediation and lots of people sort of take different angles on it and talk about various aspects of the mediator's toolkit. And there are all sorts of different interventions and different things that we can do to help the day along. But I think, and I'm not the only one who thinks this, that all of that is sort of a better toolbox, but that the critical thing is your ability to build good relationships. And so and that's what the party's, as much if not more, so then with the lawyers involved. And that isn't necessarily something that is a separate board or easy definition or is a function of any particular thing that one person might do. But I think it's really important to look from the very start to sort of build that relationship with participants. So as you know, what I typically do is start off meeting each group separately and privately. And in that context, I like to talk to the and to the participants to the clients, make sure that they're comfortable. Talk to them a bit about the process. I like to talk to people a little bit about other stuff as well, you know, hopefully, we can have a little bit of banter about, you know, whether it's the traffic or the weather or the day or whatever. Just something that I think personalizes the relationship and sort of gets people in a more comfy space with me. And so, so there's that. I think that you also build trust and confidence by demonstrating that you know what you're doing, and you've got a plan for the day, and you've got a plan for how we're going to roll and that you're, you're going to guide folks, I think sort of talking through what you're going to do and then doing what you say you're going to do is important in that regard as well. Yeah.

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**Chris Patterson**: Absolutely. Look, one issue that does pop up for me with clients every now and again in mediation is, I'll say, you know, is the mediator on? Is he or she, are they? Are they on the other side? Are they, are they going to relationship with the other party or parties? So that whole being impartial? What I will always point out is to say, Absolutely, they are neutral. Okay. Yeah, they will know some of the counsel involved in mediation. And they may have known them for a long time. But, you know, their role is very much neutral. And that's the focus. Have you come across that as an issue before?

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**Mark Kelly**: Look, I think impartiality is the absolute foundation of what we do, what I do. And I think there are, you know, it's central of itself, but I think there are also some push and pull dynamics to impartiality. And by that, in the push sense, I mean, that's what people are paying it for. No, that's what they're hiring for, hiring you for to be an impartial, neutral person.

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**Chris Patterson**: Some would say they're paying you to get a settlement.

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**Mark Kelly**: Are you doing well? That's another topic. But um, and they're bringing you into their process to fulfill that role. And so in that sense, that's what you sign up for, and then the pool sense then, look, you know, also we all as mediators, subject to various ethical obligations. You know, I'm a member, obviously, and current president of Emmons and Emmons has various ethical statements. There are other ethical regimes that cover mediators and other contexts. And then all of those ethical statements, impartiality is absolutely central to what we do. So we agreed to do that we're told to do that. And it's also I think, our major selling point is our impartiality. So that's the structure around impartiality. But You're absolutely right, New Zealand's a small world, you know, I know you and I might not know the other lawyer, you know, that I work with on a particular day. And, you know, and I think in that sense, you've obviously got to be careful, you got to be aware of, you know, in your own, he'd have, well, I know him, but I might not know her sort of, you know, in making sure that you as mediator are always maintaining your neutrality. And you also, I think, help give the parties in counsel confidence in your neutrality, by the way in which you run the process. So making sure that people get even air time intervening appropriately, if someone's being difficult, whether they're the person you know, or not, and generally, running the process in a fair and even-handed way.

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**Chris Patterson**: Yeah, it looks absolutely linear. You mentioned just in terms of ethical obligation obligations, and, you know, with the arbitrators and mediators Institute, so they have an ethical ethical code, got on the internet and had a look at it into the mediation service. Probably mediation service could probably do as a revision of this a polite way of putting it, but also had a good look at the law Council of Australia's ethical guidelines for mediators. And so we've kind of went through that one I've got actually they put a lot of time and effort is so great documents. I mean, listeners out there if you want to get on the internet and Google law Council of Australia ethical guidelines for mediators, is there's a wealth of commentary on some of the main ethical themes but your points well made there is there are common threads on the ethical obligations that most organizations will promote. But look, you're not just dealing with an AMC, which is the actress mediators Institute in New Zealand. One of the first ethical statements that they make is that prior to accepting an appointment, a member should have undertaken training and have appropriate experience in the relevant dispute resolution process. And I guess this is essential. Without the training, you could get yourself out of out of depths. And I mean, I've been in mediations where I felt the mediator has got themselves out of depths. And that hasn't helped.

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**Mark Kelly**: Yeah, yeah, absolutely. And look, happily, there are a whole variety of training opportunities for mediators, both in New Zealand and overseas. I've touched on a couple of them. Emmons has also has a five-day intensive, which is amazing, called MC, the Emmons mediation skills intensive. And then there are there are also various mediation and ADR courses taught at the universities. So there are various opportunities in New Zealand to upskill to sort of, to get trained in mediation. Yeah,

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**Chris Patterson**: now, just from the, you know, the training aspect of it. One thing that I've noticed within be sofa listeners, us as the ministry of innovation, business and employment, it's kind of the government department that's sucked up a whole lot of things. But in short, they have a mediation service for employment mediations, and employment. In the area of law, and New Zealand, where most mediations take places in the employment context, there are literally 1000s of media mediations that take place, really. So it's a mess of high volume, you know, they are here, they allocate three hours. So they'll have a mediator to two a day, five days a week, some of the mediators burnout, and some of the mediators that have gone through that service, or in some school, they're very, very good. One thing going back to training, though, is that occasionally you'll have a mediator say, hey, look, you know, we've got someone who wants to have sitting in the room, as an observer, there are there are new mediator or there are mediator wanting to observe. And from my perspective, that's a great training process to be able to, you know, sort of very well reading the books, and hearing the lectures. But it's really good to be able to observe a good talented mediator, actually an action, bearing in mind that counsel and the clients only tend to see one aspect of a mediators performance, or shall I say, two aspects, you know, there's the group caucusing aspect. And then there's the private breakout aspect, but they don't get to see what's going on in the other room, and in the skill set that's being applied there. Whereas when you're shadowing a mediator, you get to see the whole shootin match. And that can be quite informative and educator. I mean, have you gone through that process as part of your training?

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**Mark Kelly**: No, actually, I never had the opportunity to be an observer. But I 100% agree with you. And I think that giving young mediators the opportunity or starting out mediators, there aren't so many really young mediators, per se. But I think at 52, I'm one of the youngest conventional mediators in New Zealand. But giving starting out mediators observations is 100% agree and valuable experience. And at Emmons over the last two years, we've developed a scholarships program, we have a consensual scholar and a determinative scholar, and we find sort of younger superstars and dispute resolution. And we thought we'd look to find them through a diversity lens. So if you're a middle-aged white guy, you need not apply and rightly so because there are enough of us. But beyond that, we look with a diversity lens to find superstars. And our conceptual scholars. Part of the scholarship is to includes six observation days watching mediators do this stuff. So they'll I did three last year, and we'll do some more this year, having, as I say, aspiring mediators sit in with me totally silent, just sort of watching and shadowing me and, and certainly the feedback I've had in terms of those who have observed me, and the observations they've done. Other mediators is that it's been an invaluable experience. And you're absolutely right about, you know, parties and counsel don't necessarily see all that a mediator does. And in fact, ironically, the smoother it goes, you know, the less you might see a mediator do which actually means mediators doing a great job. It's that as it's swans or ducks who paddle a lot under the water, but are serene above it, hopefully.

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**Chris Patterson**: Completely. cruise along the water surface. Hey, look, let's move into another ethical, I guess, guideline for mediators, and that is this upholding integrity and fairness in the process. You know, can you give us some meaning to that? What does that mean to you?

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**Mark Kelly**: Well, I think the mediation is a really challenging day for the participants challenging, challenging day for counsel. And, you know, this is the day on which hopefully, they will resolve their dispute. But it's also the day on which, you know, they will hear from the other side how the other side sees things, and often they are hard conversations. And at towards the end of the day, there are some hard decisions to be made. So, to me, maintaining integrity and fairness are about making what is a difficult process, manageable and fair for the participants. So that means, as I sort of mentioned earlier, making sure that everyone gets a fair shake that everyone gets to have that say, making sure that if there are difficult personalities in the room that doesn't derail or unduly damage the process. Helping people to hear what's been said, you know, because often, you know, people will come to the process and very much prime to have their say, but not necessarily primed to have a listen as well. So helping them to hear in there are various ways in which we can help with that, be it through breaks, through reframing and the like. So helping people to hear what's being said, as well as get that say, also helping them to take a step back and realistically assess where they are, and what will happen if they don't settle. And, and sort of make good decisions. And some of that might be about the way that conversations structured, some of it might be about taking reasonable breaks, some of it might be about getting, you know, having some private time with their lawyers to get some more advice on points. So, for me, sort of integrity and fairness of the process are about making it as helpful as possible and as fair as possible for the parties with a view to helping them making good decisions about settlement. Okay, and

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**Chris Patterson**: Do you think there's probably two sides to the coin of this way of phrasing it in terms of, you know, the objective of mediation is often looked at in a very simplistic form of saying just reaching a settlement. Okay. But I mean, ultimately, for the mediator, and even myself as counsel, possibly, but more to a greater or lesser degree, is, once the deal's done, then we will just go on to the next solving the near the next dispute or resolving the next dispute. But these people have to live with that outcome. And in my experience, parties tend to be able to live with that outcome better, and at least difficult way, if they feel like they've had a fair shot and process and it's been a fair process. And that's what's resulted it as opposed to one where they go, the whole thing's been unfair, I've been forced to enter into a resolution that I just don't really agree with. I mean, has that been your experience?

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**Mark Kelly**: Yeah, look, I think people need to have their say. And that's really important. And it's interesting, actually, with some lawyers, who often experienced hands, they want to rush too quickly to the deal. And sometimes there are some sort of more hard-headed commercial parties who think that that's a good idea to let's, let's forget about all this conversation about our differences, let's get straight to the door, how we

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**Chris Patterson**: felt the emotion of it all and how you canceled the contract that really hurt study to talk about that, how to straight to the deal, and what happens.

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**Mark Kelly**: And so I try and encourage folks not to do that. Because what actually happens when you start when you if you do that, is you start going, you start talking about the deal. And all of a sudden people go well, hang on a second, they'd agreed to my number, if only they understood how terrible such and such was and how wrong they were in such in such a context. So what they really are saying is I need to have my say, you know, and then I can tell them, you know, all of these issues. So you're absolutely right, it's really important for people to have that say and to feel that they've had that say and and I think there's a really interesting contextual dynamic to that in terms of our justice system, because if you think about it in a civil dispute, once someone once two parties begin a dispute, so one goes to their lawyer and says, Hey, I think you know, so someone was negligent and towards me or whatever or so I've been wronged, yes, I've been wrong, someone's breached a contract with me. Like, I see the lawyer, the lawyer goes, right, you've got to crack your case, cool, I'm gonna write them a letter, and you know, and tell them how wrong they are, and that they need to pay some money. And the client goes great. And then that lever arrives and the intended defendant goes off to the lawyer and says, I never did anything wrong. And the lawyer goes, Great, okay, I'm gonna write them a letter telling them to go away. And then off you go, you're into incomes, a statement of claim is filed in court, and the statement of defense is filed in court.

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**Chris Patterson**: I'll just jump in there. Okay. You are right. But of course, there is always the risk that before the Statement of Claim there's this whole process of litigating by correspondence that could go on for quite some time, achieve absolutely nothing. Yes, other than cost a lot of money.

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**Mark Kelly**: Absolutely. And I guess my point with this is that, through none of that, did the parties talk to each other, you know, our system in terms of civil and commercial disputes tends to work in a way where that where it's, you know, your lawyer is your hired champion, and you send them off to do sort of, to do sort of a paper battle for you. And that might go on for two years that you never talked to the person on the other side. So the beauty, but also the stress of mediation is that folk actually, for the first and probably only time get to talk to the other person. And even in a trial, they don't get to do that in a trial, but ticket, particularly the parties, yeah, totally. And a trial, they'll get to tell the judge their story, but they won't get to tell each other the story. So in terms of sort of making it a good process, I mean, I think of itself, it's a good process. And that's one of the key reasons for that, as it's probably the first and only time that people get to tell each other. I think you did me wrong. I don't think I did. Here are the reasons why I think you did me wrong. Here are the reasons why I think I didn't. And, and that's those are really important conversations that people almost never get in our system, at least face to face. Yeah. And

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**Chris Patterson**: From my perspective, this is actually two things often that's going on through that talking process by by by the person speaking during the talk. It's, it's sometimes not so much about, I want to persuade you that you've got it wrong. And I'm right, that that's only one part of it. And that can cause lawyers tend to being advocates, it's 99% of often what the or doing worse for parties is actually something else that can often go on, which is I'm saying these words, because I need to get them off my chest, so that I'm then able to settle it, I'm not saying it so that you'll offer me more money, I'm actually saying it so that I'm more comfortable with the money you're offering me or, or a particular position. And that's because two parties and costs gets more complicated when you got multiple parties and mediation aren't necessarily as far down the settlement pathway as each other, or the road to settlement total. And that process of talking often brings parties, you know, a long way forward, it progresses them to the point where the reader settle, they've had the essay, and now they're ready to do the deal. What's your experience?

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**Mark Kelly**: I think there's a, you know, sometimes, I think that when folk discuss issues and mediation, they are persuaded by one another, or they're persuaded to a degree, or they realize that perhaps certain positions they had have more risk than they had previously appreciated. But only sometimes, and it's pretty rare that anyone goes actually now that you say that I realized I'm bang to rights, right? It's

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**Mark Kelly**: The dynamic that you're describing is absolutely right. It's there's a real catharsis to the process for people just to look across the table and say, You did me wrong, and it made me really miserable. And I And yes, it cost me money, but also it's cost me sleep. And you know, and perhaps a spouse will be there and say, Yeah, that's cost us both sleep and it's, you know, it's affected our relationship with our family, you know, this the stress of this thing. And those factors, which may not necessarily sort of transfer into a whole lot of legal remedies, but they're things that are really important for folks to say to one another. And we all know in our own lives, you know, even if you're having a disagreement with your spouse or otherwise, often it's just the saying of us that that you know, that's what you need to do. And having said that you can you can end being told that you're right or wrong or whatever it is. You're much freer and ready to move on and perhaps be practical and see, think about what life really looks like if we carry on this dispute versus how nice life might be if we could resolve it.

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**Chris Patterson**: Yeah, or or even that, uh, ability rather than focusing on the other party's got it wrong? Just say the opportunity to actually say, actually, you know what, I've got this part wrong, and I apologize. Yeah. You know, that whole, you know, it's almost like a form of restorative justice. We where their ability to actually communicate a genuine heartfelt apology can actually be the one thing that actually leads to a settlement that both parties are able to walk away with and live with us, rather than continuing, you know, what is a very blunt instrument, and that's an unresolved dispute handed over to a third party to hand the parties that resolution as the punishment for one or both of them being unreasonable. Totally.

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**Mark Kelly**: Yeah, yeah. And look, that's a great point. And, you know, I sort of hack back to the way that our system works. And, you know, you and I, as lawyers, one course that we were we never were offered was how to help clients with an apology. You know, and it's very rare for a lawyer's letter to begin with, my client wants to share a heartfelt apology for this, you know, that's just not how we're trained. We're trained to and that's not our culture, typically, as lawyers were trained in a combative, adversarial dynamic,

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**Chris Patterson**: that never met wrong.

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**Mark Kelly**: And, and you're absolutely right, it's really frequently common in a, in a mediation for an apology, which, in a sense, costs nothing, and it's in a legal sense, doesn't have any meaningful legal standing to make all the difference. Now, they're, they're a delicate, dynamic, you know, someone saying, I'm really sorry, that you feel that way doesn't necessarily advance you very much, right. And sometimes, you know, there might be a perception that the apology is self-serving. So apologies are hard, hard to do well, but done well, they can be hugely helpful in certain contexts. Yeah, look, you're

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**Chris Patterson**: absolutely right. I mean, I think and, you know, just looking at my career and 25 years, I've only had one instance where in court, I've had to read out an apology on behalf of a client, but there was a defamation matter. And, you know, it was appropriate at the time, it was the right thing to do. And you wonder whether the use of apologies earlier on, and a mechanism like mediation would actually resolve that a lot of grief and time and energy and cost that the parties would otherwise suffer. Let's move on to some other kind of ethical guidelines, mediators operate on one of them as this issue that a member should only accept an appointment. A mediator should only accept an appointment if they've got the ability to conduct the process efficiently, in a timely manner. Can you give us some meaning to that? How did how does how do you interpret that?

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**Mark Kelly**: Well, I think that's in the context of the airman's ethics, which apply to arbitrators as well. And timeliness is perhaps more of a challenge for arbitrators than it is for mediators. I mean, Grant Morris out of Victoria University has done some great research about the New Zealand mediation market, which tells us that I think about 95% of mediations in New Zealand are sort of one day or less. And so if we're thinking about timeliness and process and take your point about sometimes forget booked out, and that's great for us, but not so great for the people that are that want to use our services. But it but you're absolutely right that, you know, people don't want to one of the biggest problems, one of the biggest problems we have with access to justice in New Zealand is delay. And so, you know, if you can't take an appointment in a timely way, you shouldn't take it and if the parties, you know, want you to mediate in the next two or three weeks, then and you're not available for three or four months. And yet, you know, I don't think you should press that. But the market kind of sorts that out. I think in the mediation context, it's a little more difficult for arbitrators, particularly for an arbitrator. Not only might they be too busy to hear the matter sooner rather than later, but they might be too busy to to issue an award promptly, which is obviously important in the arbitration context as well, you know,

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**Chris Patterson**: look, I have come across Although, to be fair, it wasn't here in New Zealand, of mediators taking back and sort of backup bookings. In Minnesota, is that a practice that you follow?

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**Mark Kelly**: No, never. No, no. I've got if you've got me for a day, I'm with the

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**Chris Patterson**: next kind of ethical statement to look at as this issue of confidentiality and privacy and respecting that. How does that work? Well,

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**Mark Kelly**: Mediation is a confidential process. It's also without prejudice uncovered and that sense by the Evidence Act, but confidentiality is primarily driven by contract, any agreement to mediate will have a confidentiality clause in it. And also by statute when you are mediating in a statutory context, such as with employment or with tight homes or in family mediations. So all for that matter, farm debt mediation, so any statutory mediation regime will usually provide for the process to be confidential, confidential, as to, as I say, well, any agreement to mediate. So everyone agrees that this process is confidential, sort of what goes on this tour
stays on this tool. There are a few legal exceptions to that. But in large part, it's a confidential process. And there's a really good reason for that, the purpose of that is for to encourage folks to be candid about the strengths and weaknesses of their position to actually get some, you know, reasonable conversations about risk. And, you know, because nobody's got a perfect case, and also to be candid about what they can and can't do to settle so that that settlement offers they within the mediation context, and can't be brought up later on the trial saying, hey, now you you're denying liability. But you know, three months ago, at mediation, you said you had to pay us a million bucks. What how does that work? So So settlement offers are kept confidential. And for the mediator, confidentiality, sits right up there with impartiality in terms of absolutely central to what we do. You know, you've got to be a keeper of secrets. And that's a vital part of your role. It's a vital part of people having trust in you, as that you're a keeper of the secrets that are shared with you in that context. Yeah.

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**Chris Patterson 41:40**
I want to pick up on sort of moving more from the ethical stage to some of the challenges and mediation and you mentioned before about ability to settle the whole issue of authority, they can create a bit of a challenge, particularly in commercial mediations, in terms of what participants can and can't actually achieve. Is that been your experience as well?

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**Mark Kelly 42:09**
So in terms of authority disable, I think it's a really interesting issue. The certainly my standard form agreement to mediate, provides and parties contract through it, that those attending will have authority to settle. Now, if a person is attending in their own personal capacity, that's fine, we can usually bind ourselves to whatever we want to, it gets a little more challenging when you've got corporate entities attending, be they insurance, be they, you know, be they a law firm, which is a defendant to a negligence claim, or a construction company, which is prosecuting or defending some sort of construction defects claim.

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**Chris Patterson 42:50**
It's got multiple directors, and in different view in house, they have different views interests. Yeah. So look, I've been I guess, you know, what can happen is that someone can say, Yeah, I've got authority, they don't mention that their authority has kept Yes. And it's not until nine hours into the mediation, that suddenly it comes out there, I will actually I've got to go and start making telephone calls. Yeah. And those people who haven't been involved in the process, you're trying to bring them up to speed assuming and get in touch with them. And, and they may have their own interests, which so have you come across that before? Yeah,

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**Mark Kelly 43:27**
and it's a, again, it's a really delicate dynamic. And you're absolutely right, different people have different authority levels, by virtue of their position within a company. And then those authority levels may or may not be added to specifically for the purpose of the mediation. But even even a managing director of a company may not have authority to, you know, to bind the company to any possible result, they may need, you know, at least another director to support them in that decision, etc. And there are other, you know, and for instance, bodies corporate are quite challenging in terms of levels of authority.

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**Chris Patterson 44:03**
Well, it's also the the other, the other parts are not participants, but actors and within their own organizations. I mean, you mentioned the managing director, and, you know, the managing director can say, oh, that's fine, you know, Chief Executive Officer or do all these things, but not actually talking to the Chief Executive Officer about whether he actually is willing to do those things. You know, it can be another another issue.

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**Mark Kelly 44:24**
And it's also I think, you know, one of the other things that really interests me about authority to settle is that even if someone has authority to sign a settlement agreement, that it's unlikely they will have absolutely unfettered authority. And by that, I mean, it's unlikely that, you know, a corporate defendant representative will come to a mediation with authority to sign a deal that says they will pay 100% of the claim plus costs plus general damages, etc. And conversely, it's unlikely that a representative a plaintiff will come to mediation with authority to settle the claim on the basis that they pay the other side's costs, you know, those sort of absolute extremes, they won't have authority to do that, because that's unlikely to be how they see the case, you know, and sort of weird, but in those are the extreme ends, but we're the sort of the gray, but so that blur can be a little bit difficult. And look at, it's not ideal, but it's preferable in the evening, that, you know, if there's an opportunity to make a phone call to get more authority that the phone call is made, then the mediation is derailed. And often, those, those phone calls more often than not, are productive. Yeah.

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**Chris Patterson 45:40**
Okay. Now, just what are the issues? Again, it can be, you know, it's, I don't know whether you call it an ethical issue or a challenge issue or a combination of both of them as when this assessment evaluation process going on of parties, respective positions, or claims defenses? No, Professor James Stark out of the University of Connecticut's law school and back in 97, he wrote an article on the risk of poor evaluation assessments given by mediators, and not all mediators will provide a an evaluation assessment, what I find is a lot of retired judges will jump home, even before you ask, though, I'll give you one. But of course, you as counsel, you're always battling, you know, with the whole problem with the other side want to give you their assessment? And then we will look to the mediator and say, Well, what do you think about it? What's your approach with evaluations and assessments?

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**Mark Kelly 46:40**
I think, again, really interesting issue. And if I can take it back to sort of give that a bit more context, in New Zealand, Australia, the UK, the typical sort of expectation, philosophy, around mediation, at least in the civil and commercial context, and what you will most often see people write is that mediators ought not to pursue an evaluative style. Whereas in the US, quite the contrary, much more commonly, mediators are evaluative and are expected to be and what what's meant by evaluative in that context can be, can be somewhat hard to define, but at its most sort of extreme. evaluative, mediating is perceived to be mediating with a mediator says, I think X has a strong case, and Y has a weak case on this issue, I think X will win in court and why will lose?

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**Chris Patterson 47:45**
And it's almost a form of mid arbors.

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**Mark Kelly 47:48**
Yeah, it's sort of an opinion, given by the mediator as to the merits of the claim. Now, and it's interesting, you know, a lot of lay people actually expect that of a mediator because they think, hey, you know, I'm getting this lawyer with, you know, 28 years experience and experience lawyer, and we're paying them good money, and they're independent, independent.

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**Chris Patterson 48:12**
So they're not going to hopefully be suffering from confirmation bias.

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**Mark Kelly:** 48:12
They're independent, independent.

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**Chris Patterson:** 48:15
So they're not going to hopefully be suffering from confirmation bias. And thirdly, they're gonna listen telling you telling me what I want to hear, they're gonna listen to this dispute.

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**Mark Kelly:** 48:21
So of course, I want to hear what they think about it. And so, you know, a lot of lay people expect that. But in New Zealand, and as I say, Australia, in the UK, traditionally, the view has been, Hey, shouldn't do that. And there are some really good reasons why it's perceived that folks shouldn't have an evaluative approach. As good a lawyer as you might be, you know, you've only just come up to this dispute, you don't know all the details of it, you know, you don't know everything about it. So that's one sort of reason why you shouldn't be evaluative. Another is that as soon as you are evaluating, there's a perception that you're taking aside, you know, the folks that who the evaluation favors are gonna go great, fantastic. Kelly knows what he's talking about. But the folk who are on the other side of it are gonna go, Well, Kelly says got wrong. And now Now he's with the other guys, and how can he possibly help me going forward? And so you lose that sort of impartiality, that trust that the parties might have in you? And so there's a view that, you know, those who favor a solely facilitative approach, say, look, those things are too risky, too problematic, you're much better off to be an effective chair a person who guides the process in a fair and impartial way. Now, my personal view is that it's a little more subtle than that. And that's not an original view. There are others who have written on this and Bob Fisher QC has written some fantastic articles back in 2012 to this exact point. Because what we are trying to do as mediators is Reality taste, you know, we're trying to check in with people, sort of how realistic the expectations of the case are. And I reckon that anyone doing reality testing, the questions that you ask in that context are bound to be sourced in a level of evaluation, you know, when you're trying to check in with people, Hey, what are you, we really add on this limitation defense, it's probably because you can see there's a bit of risk, at least from what you're hearing attached to that aspect of the case. So I think it's a little greater than that. I don't think it's binary, I don't think it's evaluative or facilitative I think that heavily evaluative, you're wrong, you're you're right, approach is very unlikely to be effective. But I think there is scope to be a little more nuanced. And to track back to your question in terms of my personal approach. I'm never evaluative in the sense of when we're all together, saying anything that could be remotely perceived as favoring or even shining an extra light on a particular argument. But when I'm in private session with people, I might say something like this, the other side seem to think their limitation argument is really strong. And I think that's, that's really factoring in their risk assessment, and their approach to settlement? What are you guys saying about that? You know, is there more that you can say that you haven't seen there that might sort of change the dynamic there? So that's me. And there's an evaluative background to that, because obviously, I'm sensitive to the fact that limitation, defense is an issue. But I'm not painting anyone into a corner or embarrassing anybody or anything like that. And sometimes when I say things like that, people say to me, no, no, Matt, we've got it. We've got case, why, in fact, X that actually really get us across the line or limitation, we know we're strong. But other times they'll say to me, no, we know, we know privately that that's a weak part of our case. So. So in that sense, you know, we've sort of drawn out a little bit more of their risk analysis. And we've, we've reality tested their position a bit more. Yeah, a long answer to a short question.

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**Chris Patterson:** 51:55
No, no, no, very good. And look, I agree with you 100%. With that, I mean, the whole mediator, as an agent of reality is a real value add part of the process. Because often for parties, they've had, you know, the lawyer in the ear saying, "Well, this is the only way to see the world." And then, of course, the lawyer on the other side, who they're skeptical about, is saying, "Well, no, this is the only way to see the world." And it's good to have a mediator who can act as a bit of an agent of reality, maybe call a bit of BS, if there's a bit going on there. But really get the parties focused on at least understanding that, you know, these are the issues that they're going to have to confront, if they don't reach a resolution. And those issues aren't necessarily clear-cut, and guaranteed that they'll go one way or another. Let's talk about some of the challenges, you know, just in terms of, again, for mediators out there, one of them so, you know, getting and keeping clients, but that's a, you know, how does, how does that work? I mean, are you advertising your services? What are mediators do? Do they sort of stand outside court looking for very unhappy people. And so you need a mediator energetic.

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**Mark Kelly:** 53:24
Well, I guess, to be slightly pedantic, I'm not sure that mediators have clients in the sense in the sense that we usually do as lawyers, you know, clients to whom we owe described duties of loyalty and the like, but we certainly have a market and you know, we're in business so totally to that, to that extent, you're absolutely bang on. And I think, you know, different mediators have different markets and for some, you know, that works in a totally different way you talk about the NB folk doing employment work, you know, that they've just, that's that's a government dynamic, most people have got to go through there. And so they've got more work than they can possibly cope with bless them and it's wonderful that they do it. For me operate you know, I operate it largely in the private market, I do some sort of government panel work. So with a tight hiemstra be in all the sports and recreation Community Mediation Service, I do some work with those guys. They're amazing as well. And in terms of, you know, my market in that regard, and I guess for other mediators as well, building that market up and building up your connections and building up those people who are kind enough to refer work to you as a sort of, at least for me, I found that to be a sort of, was the right way of putting out a sort of across the board process. So I do lots of stuff. You know, as I know you do, you know, I do articles and do seminars, I love chatting to people about mediation, so I'm always happy to do So I'm obviously involved with Emin. So I sort of am involved in the sector as well. And, you know, etcetera, etcetera. And the neat thing for me personally, is that I really love it. And I think mediation is a great thing for people generally. So I'm very happy to talk about it. And I sort of talk about it in a variety of contexts. And hopefully, some people like what it says what

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**Chris Patterson:** 55:21
I'm loving having you on this podcast, just a great way to help with educating, you know, the wider business community about commercial mediation. Because I once upon a time, you'll recall, it was kind of part of the civil dispute resolution process through the courts was that the courts would offer judicial settlement conferences, you know, which is a form of mediation, that's where the judge, but that all fell by the wayside. I mean, I can think of instances where it wasn't particularly helpful. I mean, this retired judge will remain nameless, but I did have a judicial settlement conference where my client had a very strong case. And we were very confident of settling until the now retired judge came into the, into the judicial settlement conference room and set off speed looking over the pleadings here, I think, because we're saving for the plaintiff sort of directed to the parties. I think there's a defense that's missing a guy gave the defendant a defense they headed thought they were, I mean, it didn't quite go like this, but it was almost like this mediations over, you know, like we've we've the whole dynamics changed, you know, we're our risk assessment has gone from, we'll pay anything to get out of this to we'll see you in court. And unfortunately, we ended up in court and, and the Court of Appeal, but, you know, maybe that's just a mediation nightmare, that type scenario. This was particularly helpful. Sort of where evaluative goes to the other extreme, yeah, anyway. But that process has gone. And, of course, you know, there will be parties out there that just think, well, you've got to dispute, the only way to have it resolved is through the court system, or I just have to, you know, knock it down to a bad experience. So there's probably there's probably more scope when you think to educate the wider unity business community or that you know, what mediation is and what it can offer?

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**Mark Kelly:** 57:22
Totally, and like mediation is a lot more common, and I think many lay people would appreciate. So again, referring to Grant Morris, Associate Professor at Victoria has fantastic research. And Grant and Annabel Shore have written a great book to mediation in New Zealand. But Grant has done some sort of a series of surveys for the mediation market in New Zealand, and he reckons that there are about 800 to 1000 commercial slash civil mediations in New Zealand a year. And as I understand it, about 120 civil cases are resolved by trial per year in New Zealand. So you're getting what are we talking if six, sort of seven times as many cases are resolved through mediation, as are resolved through trial and the courts? And I reckon a little late people would appreciate that people like you who you know, savvy with your use of mediation, know how to how and when to use, it will well know, you probably resolve any more of your cases by mediation and trial, but I'm not sure that's well known out in the commercial world, much less than more general world. Well, look, you're

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**Chris Patterson:** 58:34
right. I mean, it's the lack of knowledge actually, surprises and concerns me at times when, you know, I sit down and I'll say to a commercial organization, well, okay, we're not getting this resolved through this way. How about we try a different approach? Why don't we think about mediation? And then it's almost like a not not really a look of shock, but almost a look of confusion of going well, what does that have to kind of walk them through it? I mean, I think most business people have a sense of what mediation is, but of course, it's far more nuanced than what most people would imagine.

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**Mark Kelly:** 59:15
Yeah, I think that's right. And, and to me, in terms of selling the process, if that's the right way of putting it, I think, you know, obviously, I'm a convert, but I think there are some really compelling reasons for people to look to mediate their their disputes. It's an incredibly effective process of settlement as you'll matric then mediation is a great way to go. And, you know, there's lots of international research which would suggest that commercial mediation generally 80% Plus case of cases settle and individual mediators will have their own sort of, you know, sort of metrics and numbers and the like, but as a general pro Opposition, the surveys will tell you that 80% plus of commercial mediations will achieve a result. But really interestingly, I think there are a couple of other and I'm quite into the stats in this context, there are a couple of other real positives to bear in mind. It was a great Scottish mediation pilot ran, oh 608, where 90% of the parties that settled at mediation, recorded, sorry, reported that the terms of their agreement had been carried out, while only 67% of litigants who otherwise settled during the course of litigation reported compliance with their agreement. So what that's telling you is you're actually getting better deals out of mediation deals that people stick to. And I think that's sort of what you were talking about before that cathartic dynamic, the chance for people to have their say, to actually sort of put it all in a package that has it all done in that way, gives you better buy in on your deal?

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**Chris Patterson:** 1:00:53
Well, you're right, I mean, if you think about it this way, I mean, often see it, direct settlements, will be done by a couple of lawyers exchanging some letters, or emails deal done. And then they go and close the file and hope that the deal is complied with. Whereas when you've got two people sitting across the room from each other, and they've been through a process that neither of them are found particularly easy or enjoyed, but at the end of it as is that they've signed a document together by eyeballing each other saying I will do this shaking hands, that that tends to instill more of a commercial. Yeah, to actually follow through with the deal. Because I mean, at the end of the day, a settlements worthless if no one's going to comply with that.

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**Mark Kelly:** 1:01:38
Totally. Yeah. And I think, you know, what, I talked about the parties getting the opportunity to talk to each other for perhaps the only time in the process. I think the parties also ultimately control mediation. And I certainly say this to people, they have to say it's essential, it's a consent, it's a consent that they've raised, as well. And that's, they'll only do a deal if they both agree to it. So So in that sense, the parties have a control that they never have in the litigation dynamic, because ultimately, as I think you said before, a third party is going to impose a solution on them. So So mediation, really high settlement rates, the deals, the states would suggest a stack to more readily. The other thing is that even if the mediation doesn't result in a settlement, in my view, typically there's still a positive and there are positive in the sense that I think and lawyers certainly report this, to me, they're useful in terms of refining the issues, finding out what's really important and where the real strengths and weaknesses of respective positions are. And that can help make any subsequent trial more efficient. In this step, there are stats around that as well. There's a nice EU study, 2001, that found that even those cases that didn't settle at mediation was shorter and less costly to the courts and the disputants. So you get that refining of issues, and that's helpful. And then that's even for a mediation that hasn't achieved a settlement. Yeah.

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**Chris Patterson:** 1:03:04
And also, there's that intermediate, and between the end of the mediation, no settlement reached, pre judge handing down a judgment, the party is actually reaching a settlement, which I think you can often say, probably wouldn't have been achieved, but for the fact that parties went through mediation, yeah. Okay. And so, like, I mean, I never get super disappointed or despondent or disheartened by a mediation not settling, it just means that one or more of the parties just weren't at that stage. They weren't really to settle. But the process has brought them a long way down that track. And it's truncated, what otherwise would be a much more lengthy, distressing, expensive process. Hey, look, Mark, what's the what's the future for you goals wise, was mediations, we're just continuing to crank them out. What are your plans moving forward? I mean, we're almost through mid 2022.

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**Mark Kelly:** 1:04:12
i, so this, in a sense is you know, gosh, this is terribly personal. This is my sort of second career if you like, and I love the way that in the world these days, we all have, you know, hopefully more than one career. And as I say on unmediated terms, I'm a young step at

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52. So look, NSA, I love it. So you know, I'm delighted to do it, and I want to keep doing it, and do as much as I can. And that'll probably take me I think if I'm being really sort of big picture big plans for until when I'm about 70. And then my third career is going to be as a sort of stumpy sort of hunchback mountain guide. That's what I really want to be. I want to be this old guy with a backpack on his back that's pointing out sort of dandelions and alpine heights to hopefully a gorg I guess that's my plan.

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**Chris Patterson:** 1:05:01
I guess you'll be able to help mediate for them which path to take the high road or the low road. Hey, Mark Kelly, Commercial Mediator. Thank you so much for joining me on the podcast today and all the best. We're looking forward to hopefully working with you again in the future.

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**Mark Kelly:** 1:05:16
Super pleasure. Thanks for having me, Chris. Really appreciate it. It's been lovely.

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**Chris Patterson:** 1:05:19
Thank you for tuning in and listening to this episode of The Law Down Under Podcast. You're welcome to join in on the discussion via my podcast page which you can access at patterson.co.nz That's at patterson.co.nz. Thanks for supporting the podcast and tune in again for more on the law, its application and the future of the law here down under.