1.0 Preamble

1.1 Early Neutral Evaluation is a consensual, confidential and relatively informal process, in which Parties to a dispute use the services of an independent neutral Evaluator to provide a non-binding Evaluation of the facts, evidence and legal merits of the matters in dispute.

1.2 Early Neutral Evaluation is quick, inexpensive and confidential. Early Neutral Evaluation allows an extraordinary amount of flexibility and informality that blends the advantages of a judicial settlement conference, mediation, and independent expert determination of the dispute and allows the Parties to effectively choose their own ‘judge’.

1.3 The Evaluator is an independent and impartial person in whom the Parties to a dispute repose trust, respect and confidence to provide guidance as to the likely outcome if the dispute were to be heard by a court. Generally the Evaluator will be a retired Judge, senior Barrister or senior Arbitrator.

1.4 Generally, all types of disputes are suitable for Early Neutral Evaluation, provided that the Parties and their representatives are committed to the prompt and cost effective resolution of the dispute, and they are prepared and committed to participating in the process in good faith. Cases with the following characteristics may be particularly appropriate:

• (a) Lawyers and/or the Parties are far apart on their view of the law and/or the value of the case.
• (b) The case involves technical or specialised subject matter and it is important to have a Neutral Evaluator with expertise in that subject.
• (c) Communications between Parties about merits and/or procedure could be improved.
• (d) The case has the potential for a prolonged period of interventions by the court before a hearing.
• (e) The case has the potential for a long and costly hearing.

1.5 The Objective of Early Neutral Evaluation is to position the case for early resolution by settlement or trial by providing the Parties with guidance as to the likely outcome if the dispute were to be heard by a court in the form of an independent Evaluation of the facts, evidence and legal merits of the matters in dispute.

1.6 Although settlement is not the primary objective, the Purpose of Early Neutral Evaluation is to promote settlement discussions at an early stage in the litigation process, or at the very least to assist Parties avoid the significant time and expense associated with further steps in litigation of the dispute by:

• (a) Enhancing communication between the Parties about their claims and supporting evidence.
• (b) Identifying, clarifying and focusing on the key matters at issue.
• (c) Assisting with discovery and serving as a cost effective alternative to formal discovery by requiring and facilitating the cost effective and informal exchange of key information.
• (d) Providing an objective and independent evaluation of the merits of the case by a respected, independent neutral.
• (e) Providing a reality check for the Parties and their lawyers on the probable outcome if the dispute were to be heard by a court and the cost of that process.
• (f) Facilitating settlement negotiations.
• (g) Empowering Parties by leaving decision making in their hands.

1.7 Early Neutral Evaluation of a dispute enables Parties to:

• (a) Resolve disputes faster, more economically and with less intervention from the courts.
• (b) Resolve disputes confidentially rather than having a decision imposed upon them by a judge.
• (c) Negotiate flexible and creative solutions which need not conform to strict legal rights or general community standards with the assistance of an unbiased Evaluation on relative positions and guidance as to the likely outcome should the case be heard in court.
• (d) Avoid the significant time and expense associated with further steps in the litigation of the dispute.
• (e) Avoid the destructive effect of ongoing litigation and delay in having the dispute resolved on businesses and individuals.
• (f) Free up corporate resources to focus on core business

1.8 The purpose of this Protocol is to promote and encourage the negotiated settlement and early and cost effective resolution of disputes under NZDRC’s Early Neutral Evaluation Rules (Rules).

1.9 The objective of this Protocol is to provide a guide to the rights and responsibilities of all participants in the Early Neutral Evaluation process under the Rules.

1.10 This protocol is incorporated into the Early Neutral Evaluation process by reference in Recital B of the Agreement for Early Neutral Evaluation.

2.0 Initiating of Early Neutral Evaluation

2.1 Any party to a dispute in respect of which the parties have agreed to refer such dispute to Early Neutral Evaluation by NZDRC may apply to NZDRC to appoint an Evaluator by completing the simple on-line application form on the NZDRC website at nzdrc.co.nz and attaching a copy of the parties’ agreement to refer the dispute to Early Neutral Evaluation.

2.2 Once NZDRC receives the Application for Early Neutral Evaluation and payment of the relevant security for the Evaluator as set out in Appendix 3 to the Agreement for Early Neutral Evaluation, NZDRC will make the necessary administrative arrangements for the Evaluation, including appointing the Evaluator.

3.0 Appointment of the Evaluator

3.1 Parties may select an Evaluator from NZDRC’s panel by agreement, or if the Parties are unable to reach agreement as to an Evaluator or simply wish to leave the appointment process to NZDRC, the Registrar will appoint the most appropriate available Evaluator to provide an Evaluation in respect of the particular dispute.

3.2 Where the Parties wish to exercise their discretion to select an Evaluator, they are requested to provide up to three (3) names of any persons on NZDRC’s panel whom the Parties prefer to provide the Evaluation of the dispute.

3.3 Where the Parties are unable or elect not to agree on any person(s) to act as Evaluator and NZDRC is requested to appoint an Evaluator, the Parties will accept the appointment of that Evaluator as final.

3.4 If the Evaluator becomes in fact or in law unable to perform the functions of that office, NZDRC will appoint a replacement Evaluator within five (5) working days of receipt of a request by a party to appoint a replacement Evaluator.

3.5 If an Evaluator resigns or is replaced, the proceedings will resume at the stage where the Evaluator who resigned or was replaced ceased to perform the Evaluator’s functions, unless the replacement Evaluator decides that any part of the prior proceedings are to be repeated.

3.6 If an Evaluator resigns or is replaced all time limits under these Rules will be extended by the period of time that elapses between the Evaluator’s resignation or removal, and the appointment of a replacement Evaluator unless that replacement Evaluator decides that any part of the prior proceedings are to be repeated. In that event, the period of time that elapses will run from the date of the earliest action to be taken by any Party that is to be repeated and the appointment of a substitute Evaluator.

4.0 The Evaluator’s role and the evaluation process

4.1 The Evaluator is an independent and impartial person in whom the Parties to a dispute repose trust, respect and confidence to provide guidance as to the likely outcome if the dispute were to be heard by a court.

4.2 An Evaluator must not accept an appointment to act as Evaluator in a dispute if any circumstances past or present exist that would be likely to give rise to justifiable doubts as to the Evaluator’s impartiality or independence in the eyes of any of the Parties to the Evaluation or to prejudice or impair the performance of the Evaluator’s duties in the conduct of the Evaluation. The only exception to this rule is where, after full disclosure of all relevant facts, the Parties to the Early Neutral Evaluation agree to the appointment of the Evaluator.

4.3 In accepting an appointment, the Evaluator assumes a continuing duty to disclose immediately to the Parties to the Early Neutral Evaluation any circumstances arising in the future likely to give rise to justifiable doubts as to the Evaluator’s impartiality or independence in the eyes of any of the Parties or to prejudice or impair the further performance of the Evaluator’s duties in the conduct of the Early Neutral Evaluation, until the process is concluded. The Evaluator must immediately inform NZDRC of any such disclosure made to the Parties to the Early Neutral Evaluation.

4.4 If during the course of the Early Neutral Evaluation, the Evaluator discloses to the Parties to the Early Neutral Evaluation any circumstances that arise which the Evaluator considers might reasonably be likely to give rise to justifiable doubts as to the Evaluator’s impartiality or independence in the eyes of any of the Parties to the Early Neutral Evaluation or to prejudice or impair the performance of the Evaluator’s duties in the conduct of the Early Neutral Evaluation, the Parties must confer and unless the Parties agree to continue the Early Neutral Evaluation with the Evaluator, the Evaluator must withdraw from the Early Neutral Evaluation and advise NZDRC immediately.

4.5 The Evaluator will maintain impartiality towards all participants at all times during the Early Neutral Evaluation process.

4.6 The Evaluator has no power to impose a result on any Party.

4.7 The Evaluator will not make decisions for any Party.

4.8 The Evaluator will not conduct investigations independently of the Parties.

4.9 The Evaluator will not obtain advice or an opinion on any aspect of the dispute from any person independent of the Parties.

4.10 The Evaluator will not attempt to direct or coerce the Parties into agreement.

4.11 The Evaluator may suspend or terminate the Evaluation at any time if the Evaluator feels unable to assist the Parties in providing an Evaluation of the dispute.

4.12 The Evaluator will not accept any subsequent appointment in any proceedings related to the dispute.

4.13 The Evaluator’s role is to manage the conduct of the Early Neutral Evaluation process.

4.14 The Evaluator may conduct the Early Neutral Evaluation in such manner as the Evaluator thinks fit, having regard to the nature and circumstances of the participants and the matters in dispute.

4.15 The Evaluator will schedule a Preliminary Conference with the Parties and their representatives within five (5) working days of the date of acceptance.

5.0 The Preliminary Conference

5.1 The Parties and their representatives who will attend the Evaluation Conference must attend the Preliminary Conference, unless otherwise agreed with the Evaluator.

5.2 Representatives of the insurers of any Party must attend the Preliminary Conference (and the Evaluation Conference) if their agreement would be necessary to achieve a settlement.

5.3 The Evaluator, in consultation with the Parties, will establish basic rules and guidelines for procedure at the Preliminary Conference. If agreement cannot be reached, the Evaluator’s directions will prevail.

5.4 Procedural directions may include, but are not limited to, any or all of the following:

• (a) A timetable for the submission of case summaries and supporting documents.
• (b) Whether submissions are to be simultaneous or sequential.
• (c) Whether there should be one round or two rounds of submissions.
• (d) The extent of the submissions.
• (e) The time, date and venue for the Evaluation Conference.
• (f) The number of representatives that may attend the Evaluation Conference.
• (g) The length of time for the Evaluation Conference and the time for each Party to present a summary of its case, its evidence and relevant supporting material.

6.0 The Evaluation Conference

6.1 The Parties and their representatives must attend the Evaluation Conference including representatives of the insurers of any Party if their agreement would be necessary to achieve a settlement.

6.2 Any person representing a Party other than an individual for the purpose of the Early Neutral Evaluation must have settlement authority and knowledge of the facts and be able to make final and conclusive decisions for or on behalf of that Party.

6.3 The Evaluator, in consultation with the Parties will establish basic rules and guidelines for procedure at the outset of the Evaluation Conference. If agreement cannot be reached, the Evaluator’s directions will prevail.

6.4 The conduct of the Evaluation Conference requires a constructive and problem solving approach to be taken by the Parties.

6.5 The ground rules and guidelines include basic common courtesies and would typically include, but not be limited to: the order of presentation, the right to speak without interruption, that all participants are to treat each other with courtesy, that all oral communications are privileged, that the process is private and confidential, that the Conference is informal, the rules of evidence do not apply and there is no testimony or cross-examination, the presentations and discussions are not recorded and the Evaluation may be terminated by a Party at any time after consultation with the Evaluator.

6.6 Each Party may in turn present a summary of its case, its evidence and relevant supporting material. Each Party may refer to any documents or other evidentiary material during the summary of its case if appropriate to explain or support its contentions or to refute the contentions of any other Party.

6.7 The Evaluator may ask clarifying questions at any time.

6.8 At the conclusion of the presentation of each Party’s summary of its case, each Party may in turn, and in reverse order to the earlier presentations, make a closing submission in reply to the submissions of any other Party.

6.9 The Evaluator may then engage in a working session with the Parties exploring the areas of dispute (including joint fact finding) and asking questions about the strengths and weaknesses of the evidence of each Party.

6.10 The Evaluator will clarify and focus the issues and identify actual or potential areas of substantial agreement and disagreement.

6.11 The Evaluator will identify any key facts that are either unknown to the Parties, or are disputed, and that have not been established.

6.12 The Evaluator will help the Parties realistically assess litigation costs

6.13 The Evaluator will identify further key documents or additional information required to be disclosed.

6.14 The Evaluator may assist the Parties to establish a plan for sharing additional information and/or conducting the key discovery that will allow them to enter into meaningful settlement discussions or position the case for resolution by trial.

6.15 The Evaluator may determine whether some form of follow up session would contribute toward case development or settlement.

6.16 The Evaluator may request any Party to provide further information or evidential material which must be provided to the Evaluator and every other Party within three (3) working days of receipt of any such request and in the manner requested by the Evaluator.

6.17 Any other Party may file a submission in response with the Evaluator and every other Party within a further three (3) working days.

7.0 Settlement negotiations / Mediation option

7.1 The Evaluator will encourage the Parties to enter into settlement negotiations either chaired by the Evaluator or mediated by an independent Mediator from NZDRC’s Panel of Mediators.

7.2 After the Evaluation Conference concludes, the Parties may agree to participate in a follow-up Conference with the Evaluator if it would be productive, or the Parties may request the Evaluator to chair settlement negotiations, or they may request NZDRC to appoint an independent person to act as Mediator, or they may proceed to receive the Evaluation.

7.3 Where agreement has been reached to settle the dispute in whole or in part, the Evaluator will discuss with the Parties the process for recording and implementing the agreement.

7.4 Where a partial agreement has been reached, the Evaluator will discuss with the Parties the procedures available to them to resolve the remaining issues.

8.0 The Evaluation

8.1 The Evaluation must be made in writing and must state the reasons upon which it is based unless the Parties have agreed that no reasons are to be given.

8.2 The Evaluation must record the Evaluator’s opinion as to the likely incidence of liability, and where appropriate, a range of damages if the dispute were to be resolved by a court based on the material put forward by the Parties for the purposes of the Early Neutral Evaluation.

8.3 The Evaluation is not binding on the Parties.

8.4 Unless a Party requests the return of any documents provided to the Evaluator for the purpose of the Evaluation, the Evaluator will destroy all documents and records provided by the Parties for the purpose of the Evaluation within 3 calendar months of the date of termination of the Evaluation.

8.5 The Evaluator will maintain the confidentiality of the Evaluation save only for where publication, disclosure, or communication is necessarily required to prevent the safety of any person from being endangered.

9.0 The role of a representative

9.1 The role of a representative is to assist the Party they represent to prepare for the Evaluation and to participate effectively in the process.

9.2 A representative must co-operate with the Evaluator and be courteous to the Evaluator and all other participants.

9.3 A representative should act in good faith and advise the Party they represent to act in good faith.

9.4 The role of a representative in preparing a Party for Early Neutral Evaluation includes:

• (a) Explaining the meaning of the terms of the Agreement for Early Neutral Evaluation.
• (b) Explaining the process including the Evaluator’s role.
• (c) Explaining the meaning and nature of without prejudice and confidential discussions and negotiations.
• (d) Assisting the Party to define the problem and the issues.
• (e) Assisting the Party to identify the Party’s needs and interests.
• (f) Exploring with the Party why an issue has arisen and what kinds of things the Party would like to see happen to assist with generating possible settlement options.
• (g) Assist the Party to evaluate the strengths and weaknesses of its case.
• (h) Discuss how the issues would be dealt with by a court and the possible range of outcomes.
• (i) Assisting the Party to consider creative settlement options that would not be available in a court and the legality and feasibility of such options.
• (j) Advising the Party of the costs that will be incurred up to and including the Evaluation and the likely costs if the dispute cannot be settled by Early Neutral Evaluation.
• (k) Ensuring that the Party has arranged for the persons representing it at the Evaluation Conference to be able to make final and conclusive decisions and to have full authority to settle.
• (l) Attending the Preliminary Conference.
• (m) Preparing the Party’s submission of case and supporting documents and other evidentiary material and serving the same on the Evaluator and the other Parties to the Evaluation.

9.5 The role of a representative during and after the Evaluation Conference includes:

• (a) To participate in a constructive and problem solving manner and co-operate with the Evaluator and other representatives, participants and Parties during the Evaluation Conference and any settlement negotiations or mediation that might occur.
• (b) To present a summary of the Party’s case, its evidence and relevant supporting material and to reply to the submissions of other representatives and to answer any questions that the Evaluator may put.
• (c) To assist the Evaluator and the Parties define the issues in dispute and identify actual or potential areas of substantial agreement and disagreement.
• (d) To assist the Evaluator identify any key facts that are either unknown to the Parties, or are disputed, and that have not been established.
• (e) To assist the Evaluator to realistically assess litigation costs.
• (f) To assist the Evaluator identify further key documents or additional information required to be disclosed.
• (g) To provide any further information or evidential material that the Evaluator requires to the Evaluator and every other Party within three (3) working days of receipt of any such request and in the manner requested by the Evaluator.
• (h) To assist in the preparation of a Settlement Agreement for signature by the Parties if settlement is reached on any or all of the disputed matters during the Early Neutral Evaluation process.

9.6 All representatives of the Parties will be required to sign the Confidentiality Agreement (Appendix 1 to the Agreement for Early Neutral Evaluation Rules) by the Evaluator as a condition of their participation in the Evaluation Conference.

9.7 All representatives must maintain the confidentiality of the Early Neutral Evaluation save only for where publication, disclosure, or communication is necessarily required:

• (a) enforce any settlement agreement reached during the course of the Evaluation, or any proceedings related to it, or to pursue a legal right;
• (b) respond to legitimate subpoena, governmental request for information, or other compulsory process;
• (c) seek legal, accounting or other professional services, or satisfy information requests of potential acquirers, investors or lenders, provided that in each case the recipient agrees in advance to preserve the confidentiality of the Confidential Information; or
• (d) comply with the order of a court of competent jurisdiction, or the law of any State which is binding on the Party making the disclosure.
• provided always that such publication, disclosure or communication is no more than what is reasonably required for those purposes and is properly disclosed to NZDRC, the Evaluator and all other Parties.

10.0 The role of a party

10.1 The Parties must sign the Agreement for Early Neutral Evaluation and pay the required security for the Evaluator’s fees and expenses as set out in Appendix 3 to the Agreement for Early Neutral Evaluation in order to initiate the process.

10.2 NZDRC will appoint the Evaluator. Any election made by the Parties will be treated as an agreement to nominate.

10.3 A Party must provide NZDRC with the names of those persons who will be representing that Party for the purposes of the Evaluation no less than three (3) working days prior to the Preliminary Conference.

10.4 A Party must appoint a legally qualified person to represent that Party for the purposes of the Early Neutral Evaluation.

10.5 A Party must attend the Preliminary Conference.

10.6 A Party must ensure that its insurers attend the Preliminary Conference and the Evaluation Conference if the insurer’s agreement would be necessary to achieve a settlement.

10.7 A Party must cooperate with the Evaluator and be courteous to the Evaluator and all other participants.

10.8 A Party must comply with reasonable requests and directions made by the Evaluator to promote the fair, prompt and cost effective Evaluation of the dispute before and during the Evaluation Conference.

10.9 A Party must attend the Evaluation Conference. If a Party is not a natural person it must be represented at the Evaluation Conference by a person who has full knowledge of the background facts of the dispute and is able to make final and conclusive decisions and who has full authority to settle the dispute.

10.10 A Party must maintain the confidentiality of the Evaluation save only for where publication, disclosure, or communication is necessarily required:

• (a) For the purpose of enforcing any settlement agreement reached in the mediation; or,
• (b) When compelled to by court order or subpoena; or,
• (c) To a professional or other adviser of any of the Parties after that person has executed the Confidentiality Agreement for Representatives of Parties to Early Neutral Evaluation for Representatives of at Appendix 1 to this Agreement; or,
• (d) Where publication, disclosure, or communication is necessarily involved for the protection of a Party’s legal rights in relation to a third Party, or
•       provided always that such publication, disclosure or communication is no more than what is reasonably required for those purposes and is properly disclosed to NZDRC, all Parties and the Evaluator.

10.11 To the extent that a Party is required to disclose any information either by law or otherwise, the Party must immediately notify all other Parties.

10.12 Unless otherwise agreed by the Parties, each Party will meet its own costs of the Evaluation regardless of the outcome.

11.0 The role of an observer

11.1 NZDRC is committed to delivering professional and effective Early Neutral Evaluation services to the Parties and to the ongoing training, support, mentoring and professional development of its Evaluators.

11.2 Accordingly, NZDRC will, as a function of its overarching quality assurance and training programme, from time to time send a person or persons to observe the conduct of Evaluations conducted under its aegis.

11.3 An Observer may observe the whole, or part, or any number of parts of any Early Neutral Evaluation event, but an Observer has no powers or rights whatsoever in relation to the conduct of the process and no aspect of the matters at issue or the Evaluation process should be discussed by any participant with an Observer.

11.4 The sole function of an observer is to report to NZDRC for the purpose of measuring and monitoring the professional development and performance of its Evaluators.

11.5 Any observer must sign the Confidentiality Agreement (Appendix 1 to the Agreement for Early Neutral Evaluation) as a condition of their attendance at the Evaluation.

12.0 The role of NZDRC

12.1 The role of NZDRC is to manage and administer the Early Neutral Evaluation process in a professional, consistent and certain manner and to provide support and guidance to the Parties, their representatives, and the Evaluators in relation to the Early Neutral Evaluation process.

12.2 In pursuit of those objectives, NZDRC will:

• (a) Maintain a comprehensive, informative and effective website; and
• (b) Maintain a panel of competent, experienced and respected Evaluators; and
• (c) Provide a fully administered nationwide Early Neutral Evaluation service through the office of its Registrars, who will:
  • (i) Select suitably qualified, experienced and respected persons for its panels; and,
  • (ii) Appoint Evaluators who are competent, experienced and capable of discharging their duties to the Parties independently and impartially in any particular case, and in the event that an Evaluator becomes unable to act for any reason, appoint a substitute Evaluator; and,
  • (iii) Provide all administrative functions necessary for the professional and competent delivery of its Early Neutral Evaluation services.

12.3 NZDRC will advise the Parties and the Evaluator of the names and details of those persons who will be representing the Parties for the purposes of the Early Neutral Evaluation, prior to the Preliminary Conference.

12.4 NZDRC, its agents and servants, will maintain the confidentiality of the Early Neutral Evaluation.

13.0 Termination of the Early Neutral Evaluation

13.1 The Early Neutral Evaluation may be terminated at any time by a Party after consultation with the Evaluator.

13.2 The Early Neutral Evaluation may be terminated by the Evaluator at any time if the Evaluator feels unable to provide the Parties with an Evaluation of the dispute.

13.3 The Early Neutral Evaluation will be terminated upon the signing of a settlement agreement in respect of the dispute referred to Early Neutral Evaluation, or upon the provision of the Evaluation to the Parties.

13.4 The Termination of the Early Neutral Evaluation will not relieve the Parties of their obligation to pay the fees and expenses of the Evaluator incurred to that date in accordance with the schedule of fees and the conditions in Appendix 2 to the Agreement for Early Neutral Evaluation.