Freehills’ Ken Adams taught me a lot in my first years as a solicitor. He used to delete the immunity clauses in mediation agreements before having his clients sign them. I have occasionally done likewise. Mary-Anne Noone wrote an article in the October Law Institute Journal riffing off Tapoohi v Lewenberg (No 2) (2003) VSC 410. It is titled ‘Liability Matters for Lawyer Mediators’, and its citation is (2007) 81(10) LIJ 52. Unless you are an LIV member, you won’t be able to access it, but its point is simple: that all those clauses which mediators pop into mediation agreements immunising themselves are void, if the mediator holds an Australian practising certificate and the mediation occurs in Victoria. They are void for infracting s. 7.2.11(2) of the Legal Profession Act, 2004, which says:
‘An Australian lawyer … must not make any agreement or arrangement with a client to the effect that the lawyer will not be liable to the client for any loss or damage caused to the client in connection with legal services to be provided on or after the date of the agreement … to the client for which, but for the agreement … the lawyer would be liable.’
Section 1.2.1 defines ‘client’:
‘”client” includes a person to whom or for whom legal services are provided’.
Ms Noone correctly concludes that lawyers who mediate provide legal services to the parties to the mediation.
Agreements entered into in contravention of the prohibition are void pursuant to sub-section (3). In addition, a point not made by Ms Noone, breach of the Act in the knowledge that the conduct in question contravenes the Act, or reckless as to whether or not it might be, is professional misconduct: s. 4.43, s. 4.4.4(a). If a complaint were made to the Commissioner and she were satisfied that there was such wilful or reckless contravention, she would be obliged to prosecute. Inclusion by a lawyer of such a clause in a mediation agreement, ignorant of the prohibition on such exclusion clauses, would amount to unsatisfactory professional conduct, and most likely a reprimand or caution.
Sub-section 4 makes the prohibition on limitations of liability subject to any other statute which allows such limitations. So the kinds of limitation of liability under Trade Practices Act, 1974 and the Fair Trading Act, 1999 specifically sanctioned by those Acts would not infract s. 7.2.11(2) of the Legal Profession Act, 2004. And there are numerous statutory and court-rule-based immunities enjoyed by mediators in relation to many court-ordered mediations. Ms Noone points out, though, that since the beginning of 2006, the Family Law Act, 1975 immunity accorded to mediators in mediations ordered by the Family Court has been abolished.
Further reading: J H Wade, ‘Liability of Mediators for Pressure, Drafting and Advice: Tapoohi v Lewenberg’  BondDRN 3; (2004) 16 Bond Dispute Resolution Newsletter 12. The President’s Page in the same issue of the Law Institute Journal is devoted to mediation, being subtitled ‘The Proposed New Rules for Mediators are Confusing and Onerous’.
- Applications to set aside costs agreements
- Costs agreement read contra proferentem
- Solicitor secretly records client then sues them for ‘consultancy fees’ under 6 year old oral agreement over dinner
- New English decision on without prejudice privilege and mediations
- No problems with right to costs contingent on recovery from other side on costs order?