Early mediation of TFM disputes

 – and the challenges facing lawyers and mediators As a mediator I have in the past been involved in several Testator Family Maintenance (“TFM”) disputes so I thought that it might be helpful to share some observations in the hope that this article might assist in tackling mediations of that kind. Lawyers and mediators will no doubt be aware of the subtle, and sometimes not so subtle, differences between a commercial dispute and a TFM dispute, the latter, not unlike a matrimonial dispute, requiring some special skills. The story of an elderly gentleman who had serious hearing problems for a number of years is perhaps illustrative. His GP referred him for hearing aids. When he returned to the GP for review a month later the doctor remarked: “Your hearing is perfect. Your family must be really pleased that you can hear again”. The gentleman replied, “Oh, I haven’t told my family yet about the hearing aids. I just sit around and listen to their conversations but I’ve changed my Will three times since!” In Victoria Part IV of the Administration and Probate Act 1958 (Vic) was amended by the Justice Legislation Amendment (Succession and Surrogacy) Act 2014 (“Act”), to allow, inter alia, for claims by an “eligible person” who may now bring a claim where there is a dependency (wholly or partly) on the deceased for the person’s proper maintenance and support, and where at the time of death the deceased had a moral duty to provide for that person, and the distribution of the deceased’s estate failed to make such provision.ˆ The amended Act has now been in operation for just over 3 years. A lawyer’s dilemma often is to decide when to mediate. In a previous article in the LIJ,° I noted that early mediation can engender a spirit of cooperation between lawyers and obviate entrenched and polarised positions as opposed to the situation when significant amounts have been spent on legal fees, making the challenge much greater. Prior to the amendments to the Act, the Court could make costs orders which in its opinion were just.˜ (and which usually involved the plaintiff’s costs being paid out of the estate assets) but could order costs against the plaintiff if the claim was made frivolously, vexatiously or with no prospect of success.† The position in the preceding paragraph was repealed by the amendments to the Act and as a consequence costs are now be left to be determined on the basis that the unsuccessful plaintiff may likely be ordered to pay costs, rather than the costs being paid from the pool of estate assets. The defendant trustee’s position has presumably remained unchanged as a consequence of a trustee’s right to be indemnified out of a trust fund. These costs considerations alone are now more than likely a significant incentive for the plaintiff to consider embarking upon early mediation rather than risking a costs order in the event of an unsuccessful claim or, even if successful, risking considerably diminishing the asset pool by the colossal costs which could be incurred and which could otherwise be available for distribution to the beneficiaries. There are a variety of factors that might influence a plaintiff – or for that matter the parties generally – in deciding whether or not to mediate early. Some of those factors are: Certain new provisions contained in Section 91A‡ of the Act that the Court must have regard to in making a TFM provision order. What might be relevant here is the anecdote, were it true, of the testator with the hearing problem and what he might have...