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Including alternative dispute resolution clauses in legislation
This is a single section from Chapter 29. Read the full chapter here.
Which elements of the ADR scheme should be included in the legislation?
Legislation should include those elements of the ADR scheme necessary to ensure that the appropriate desired outcomes and procedures are adopted.
The flexibility of ADR is one of its great strengths. However, if not properly constrained by the legislation, the processes and outcomes adopted may not accord with the original policy objective and may, in some cases, undermine it. The Parliamentary Counsel Office has produced model ADR clauses that should be used when designing an ADR process.
An Act that provides for an ADR process should:
- address the purpose and desired general outcome of the ADR process;
- describe the process clearly and consistently;
- set out sufficient safeguards to ensure that the principles of natural justice are adhered to, power imbalances are addressed, and the independence and impartiality of the third party is protected;
- identify the parties and any other bodies and people that might be consulted or involved;
- state whether the ADR process is subject to any legal privileges (such as self-incrimination), and whether the process and outcome are confidential;
- define when and in what manner the ADR process should commence, be suspended, and end;
- define the role, qualifications, powers, and protections of the third party (in particular, the third party should be prohibited from exercising more than one function—if a dispute is initially considered in a mediation, but later turns to formal arbitration, the mediator should not also act as an arbitrator);
- state clearly whether the ADR process is a pre-requisite to any other dispute mechanism (including court proceedings); and
- set out the status of the resolution (for example, whether it will be legally binding or enforceable in court).
 Parliamentary Counsel Office Model clauses for alternative dispute resolution.