An ADR process under the Code means conciliation or mediation. The process is a cost-effective dispute resolution option for franchisees and franchisors under the Code. Where parties are unable to resolve a dispute through mutual negotiation, either party may refer the matter to an ADR process.
The ADR process is a structured negotiation process in which an independent person, the ADR practitioner, assists the parties to identify and discuss options to resolve their dispute. The focus is on the interests of the parties rather than their adopted position and aims to avoid expensive and lengthy court proceedings.
Once an ADR process is requested, it becomes mandatory for both parties to attend and to genuinely try to resolve the dispute in good faith.
ASBFEO maintains a specialist panel of ADR practitioners across each state and territory. All practitioners are accredited under the National Mediator Accreditation Standards system. Whilst the majority of the practitioners are practising lawyers, they are not able to provide legal advice as part of the ADR process.
Our office will assist with arranging the ADR practitioner. If both parties cannot agree on an ADR practitioner, the Ombudsman can appoint an ADR practitioner for the dispute. This appointment is to be made within 14 days of the request being received by ASBFEO to appoint the ADR practitioner.
Once the practitioner has been chosen, the process is then passed on to them to manage fully, independently from our office. The parties share the cost of the ADR practitioner (unless the parties agree otherwise). The ADR practitioner will advise you of their costs. In general, the practitioner has a half day rate and a full day rate. The length of time the ADR process will take depends on the complexity of the issue. On average, our office has found that mediation costs around $4,000 ($2,000 per party for two parties to the dispute), but may vary widely. The ADR practitioner may also seek costs for any associated expenses (for example: room hire or travel expenses) and the cost of expert reports if necessary.
The ADR practitioner is obligated to report back to our office to confirm whether the ADR process has occurred, if parties acted in good faith, and if the dispute was resolved or remains unresolved. The details of the process remain confidential. You will be provided with a feedback form from the practitioner which you can provide either directly to the practitioner, or to our office.
Before, after or at any point during the ADR process, with the written agreement of both parties, there is an option to break off for arbitration.
Note that all parties must observe any confidentiality requirements relating to information disclosed or obtained in dealing with or resolving the dispute by an ADR process or arbitration.