Beyond the courtroom

The role of mediation and arbitration in relationship property disputes

Written by Will Story for the Family Advocate

In a recent conversation with a leading legal academic, one comment piqued my curiosity. It is often assumed that most relationship property mediations in New Zealand are carried out by judges, based primarily on the results of a commercial mediation survey. In the study from 2015, fewer than 12% of respondents said they mediated relationship property disputes.¹ Based on an estimated 800 to 1,000 commercial mediations each year,² that would equate to a maximum of 96 to 120 relationship property mediations being conducted by private commercial mediators. By comparison, the estimated number of Judicial Settlement Conferences (JSCs) across the civil and family jurisdictions in New Zealand is much higher, at an estimated 1,500 to 2,000 each year.

This made me pause. As a survey of commercial mediators, it won’t have counted specialist family law mediators who also deal with relationship property disputes. That makes it hard to know exactly how many private relationship property mediations are actually taking place. But we know collaborative practice is becoming more common, and I would suggest we can therefore assume that there is a preference for mediation. Data released by the Ministry of Justice in 2023 reveals there have in fact only been an average of 51 JSCs annually for relationship property matters across the period 2011-2023.³ Based on this, we can now say with reasonable certainty that the number of private relationship property mediations in 2026 is higher than the number of JSCs. But what is the difference between these processes anyway, and why does it matter?

Judicial settlement conferences

JSCs are commonplace in relationship property cases, in the less than 8% of relationship property disputes which make it to Court.⁴ They give the parties a chance to try to reach agreement with the judge’s assistance. If a settlement is reached, a full hearing is not needed.

But as Robert Fisher KC has suggested, practitioners who provide “opinions as to what would be reasonable” or who make “suggestions for settlement” are more technically defined as ‘conciliators’ than as mediators.⁵This raises an important question on which there has been various commentaries offered - are JSCs really a form of mediation or are they closer to arbitration? 

The answer often depends on the judge and how they choose to run the conference. Although there are rules governing JSCs in the High Court, practice in the Family Court can vary. Some judges may have mediation training before appointment, but many do not. For that reason, the shift from decision-maker to neutral facilitator may not always sit comfortably.

So, what are the main differences between mediation and arbitration?

Mediation

In New Zealand, relationship property is mainly governed by the Property (Relationships) Act 1976. The Act starts from the principle that both partners contribute equally to a relationship, even in different ways, so relationship property is usually divided equally when the relationship ends.

Mediation does not replace that legal framework. It gives the parties a structured way to negotiate within it. The mediator does not decide the outcome, but helps the parties identify the issues, exchange information, and work towards a resolution that reflects both the law and their practical circumstances. Some mediators take a facilitative approach, while others are more evaluative, particularly in JSCs.

Before mediation, the parties need to gather the relevant financial information. Full and frank disclosure is essential, because without it any agreement may later be challenged.

During mediation, the mediator guides the discussion rather than making a decision. The parties may meet together, separately, or both, depending on what has been agreed. If they reach agreement, it must be recorded in writing and reviewed by each party’s independent lawyer to be enforceable.

A key advantage of mediation is that it gives the parties more control over the outcome than court proceedings. It can also be faster, less expensive, and less draining. In cases where children are involved, it importantly may help preserve a workable co-parenting relationship after separation. In my experience, mediated outcomes are often more practical and more durable than court orders.

Mediation can also benefit by its flexibility - distinguishing between strict legal entitlement and practical preference. For example, a party may wish to remain in the family home for a limited period even where the long-term resolution is likely to involve sale or transfer. Entering mediation with realistic expectations, a willingness to engage constructively, and the benefit of legal advice substantially enhances the likelihood of achieving a fair and durable resolution.

Notwithstanding its advantages, mediation is not suitable in every case. It may be inappropriate where there is family violence, a significant power imbalance that cannot be managed in a safe manner, or where parties are deliberately concealing assets.

Arbitration

Although mediation and arbitration are both private ways of resolving disputes, they serve quite different purposes in relationship property cases. While mediation is a voluntary and facilitated process in which the parties keep control over the outcome by reaching agreement, arbitration is distinct in that it is a decision-making process. 

The parties agree to refer issues to an arbitrator, who considers each side’s case and makes a binding decision in accordance with the arbitration agreement (which may be incorporated in a section 21 Relationship Property Agreement) and the law. In New Zealand, arbitration is governed by the Arbitration Act 1996, but in relationship property matters any agreement to arbitrate must also meet the requirements of section 21A of the Property (Relationships) Act 1976, including independent legal advice and lawyer certification for each party.

For parties in significant conflict, arbitration can provide more finality than mediation, although it gives the parties less control over the outcome. Arbitration may be more suitable where the parties want a clear and enforceable decision but wish to avoid the delay, publicity, and procedural formality of court proceedings. It can also be useful where the parties want a specialist decision-maker, or where the dispute is likely to turn heavily on documents, valuations, and other expert material.

Mediation, by contrast, is generally better suited to cases where there is still enough goodwill for the parties to negotiate constructively. Its main advantage is that the parties retain control over both the process and the result.

Another option in the mix is the ‘best of both’. The parties can agree to an arb-med process, where any unresolved issues from mediation move to arbitration for determination. This can save the parties court costs and help them avoid lengthy delays.

Conclusion

Each process has its own strengths. Compared with court hearings, all three can offer greater privacy, faster resolution and more flexibility, especially in private mediation. They also allow the parties to keep some control over both the process and the outcome, while still getting independent legal advice before any agreement is finalised.

It is encouraging to see the growing role of relationship property mediation in New Zealand. It is often an effective and constructive way to resolve disputes with less conflict and greater efficiency. 

Services such as Fair Way’s relationship property offering, together with the large number of mediations taking place privately, suggest that an increasing number of cases are being resolved without ever entering a courtroom, including for JSCs. Given the specialist skills that trained mediators bring, that may well be a good thing. And in any event, if a settlement conference is run by a judge, is it really mediation?

About the author

Will Story BA LLB ([email protected]) is an experienced family lawyer (not practising) and Head of Family Services at Fair Way.

References

1. ^ LEADR/Victoria University Commercial Mediation in New Zealand Project Report (June 2015).
2. ^ Ibid.
3. ^ Ministry of Justice Official Information Act 1982 request OIA 106383 (28 August 2023).
4. ^ Megan Gollop and Nicola Taylor, Knowledge and Understanding of Relationship Property Division (Research Highlight 1, Michael and Suzanne Borrin Foundation, Wellington, New Zealand, 2022).
5. ^ Robert Fisher, “When mediators should bite their tongue” NZ Lawyer Magazine (New Zealand, 26 November 2010) at p.18.