EVALUATING ALTERNATIVE DISPUTE RESOLUTION IN TAXATION DISPUTES
USER EXPERIENCE SURVEY IN ADR
PROFESSOR TANIA SOUR DIN AND ALAN SHANKS
AUSTRAL IAN CENTRE FO R JUSTICE INNOVATION
MONASH UNIVERSITY
Evaluating Alternative Dispute
Resolution in Taxation Disputes
Exploring Selected ADR Processes that took place
From 1 July 2013– 30 June 2014
Final Report – 23 February 2015
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EVALUATING ALTERNATIVE DISPUTE RESOLUTION IN TAXATION DISPUTES
USER EXPERIENCE SURVEY IN ADR
Table of Contents
Table of Contents ................................................................................................... 2
Abbreviations ......................................................................................................... 5
1. Background and Methodology ......................................................................... 7
About This Report .................................................................................................. 7
About This Project .................................................................................................. 8
Ethics Approval ...................................................................................................... 9
Methodology.......................................................................................................... 9
Types of ADR Processes Used............................................................................... 15
Timing of ADR ...................................................................................................... 19
Demographic Information about Disputes ........................................................... 22
Location of Disputes ..................................................................................... 22
Type of Disputants ........................................................................................ 23
Statistical Analysis and Statistical Significance ..................................................... 27
2. Is ADR Effective? ............................................................................................ 29
Introduction ......................................................................................................... 29
Did the ADR Process Resolve the Dispute?........................................................... 30
What Would Have Made the Process More Effective? ......................................... 36
Conclusions .......................................................................................................... 39
2 Fairness.......................................................................................................... 41
Introduction ......................................................................................................... 41
Was the Process Perceived to Be Fair? ................................................................. 43
Perceptions About Fairness .......................................................................... 43
Perceptions About Outcome......................................................................... 44
Participation in the Process .................................................................................. 45
Formality Preferences................................................................................... 49
Impartial Treatment ............................................................................................. 50
Conclusions .......................................................................................................... 51
3 Cost .............................................................................................................. 53
Introduction ......................................................................................................... 53
Did the ADR Process Reduce Cost? ...................................................................... 54
Contents
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EVALUATING ALTERNATIVE DISPUTE RESOLUTION IN TAXATION DISPUTES
USER EXPERIENCE SURVEY IN ADR
Time and Cost ...................................................................................................... 55
Time Taken to Resolve the Dispute ...................................................................... 56
Conclusions .......................................................................................................... 61
5 Conclusions and Future Options ..................................................................... 63
Introduction ......................................................................................................... 63
The Research Approach ................................................................................ 65
6 Appendices .................................................................................................... 67
Appendix A: Survey Recruitment Instruments ..................................................... 67
Invitation letter – email version.................................................................... 67
Invitation letter – post version ..................................................................... 69
Explanatory statement ................................................................................. 72
Opt out form – email .................................................................................... 73
Opt out form – post ...................................................................................... 73
Appendix B: Survey Recruitment Instructions ...................................................... 74
Method for applying participant codes ......................................................... 74
Method for sending invitations by post ........................................................ 75
Method for sending invitations by email ...................................................... 76
Method for forwarding contact details to ACJI ............................................. 77
Appendix C: Survey Instruments .......................................................................... 79
ADR coordinator survey ................................................................................ 79
ADR participant survey ................................................................................. 85
Appendix D: ATO Terminology Summary ........................................................... 131
Resolution and Settlement ......................................................................... 131
Contents
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EVALUATING ALTERNATIVE DISPUTE RESOLUTION IN TAXATION DISPUTES
USER EXPERIENCE SURVEY IN ADR
Abbreviations
AAT
Administrative Appeals Tribunal
ABS
Australian Bureau of Statistics
ACJI
Australian Centre for Justice Innovation
ADR
Alternative Dispute Resolution
ALRC
Australian Law Reform Commission
ATO
Australian Taxation Office
CATI
Computer-Assisted Telephone Interview
MUHREC
Monash University Human Research Ethics Committee
SPSS
IBM SPSS Statistics (version 20) software
RDR
Review and Dispute Resolution (previously Legal Services Branch)
Contents
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EVALUATING ALTERNATIVE DISPUTE RESOLUTION IN TAXATION DISPUTES
USER EXPERIENCE SURVEY IN ADR
1
1. Background and Methodology
About This Report
1.1. This is the Final Report in the ATO ‘Evaluating ADR’ project. 1 The Report focuses
on a sample of taxation and superannuation disputes involving 118 finalised
Alternative Dispute Resolution (ADR) processes that were conducted between
July 2013 and June 2014.This Report considers the effectiveness, cost,
perceptions and approaches used in the ADR process. The Report explores data
about disputes (de-identified) as well as structured survey material (qualitative
and quantitative) from all who were involved in ADR processes – taxpayers,
representatives, experts, ATO staff and ADR practitioners.
1.2. The Project has involved a project design stage (including ethics approval and
survey creation), a surveying stage (concluded in September 2014) and regular
incremental quarterly reporting about findings. Past reporting has assisted the
ATO to consider how ADR can be used more effectively and this Report is
iterative in that it builds upon and extends the material in the previous three
quarterly reports.
1.3. An important objective of this Project is to support, evaluate and consider user
experiences to help understand how ADR processes can be used more effectively
and to evaluate more generally the use of ADR in disputes involving the ATO. The
Project is also oriented towards assisting the ATO to evaluate ADR use into the
future, and as a result, a survey methodology has been suggested and survey
instruments drafted (see Appendix C).
1.4. The evaluation has involved considering the effectiveness of ADR by reference to
the time spent, cost, outcome and perceptions of justice. Material on
effectiveness has been considered by considering case and disputant
characteristics through a de-identified case base of information together with
other qualitative and quantitative material. Where possible, comparable report
material has been considered. An Executive Summary that is linked to this Report
sets out the key findings. This Report is intended to provide a more detailed and
supportive analysis.
1
This updated version of the Final Report (23 February 2015) includes some minor clarifications to
paragraphs 4.8, 4.9 and 4.12. These clarifications do not represent a material change to the findings.
Chapter One - Background and Methodology
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About This Project
1.5. The Australian Centre for Justice Innovation (ACJI) based at Monash University
was engaged by the Australian Taxation Office (ATO) to design and implement a
mechanism for independently evaluating the ATO’s use of ADR in taxation
disputes.
1.6. The aim of the Project has been to design and implement an independent
mechanism for obtaining timely feedback from all participants involved in ADR
processes regarding taxation disputes. The Project has considered people’s
experiences in a range of (ADR) dispute resolution processes in relation to
taxation and superannuation disputes that include conciliation, mediation,
neutral evaluation and case appraisal. Conferencing at the Administrative
Appeals Tribunal (AAT) was not considered, and only those matters noted on the
ATO ADR Register of Matters were considered.2
1.7. ACJI surveyed (online or by telephone) all participants who have been involved in
the sample of finalised dispute resolution processes, including taxpayers and
their advisors, ATO staff and dispute resolution practitioners. Surveys were
undertaken in respect of matters concluded over a 12-month period
commencing on 1 July 2013 and concluding on 30 June 2014. In each dispute,
data from the ATO was sent to ACJI, together with contact details of participants
in those processes who had not ‘opted out’ of the survey process.
1.8. This means that people were surveyed about their ADR experience about one to
three months after the ADR process was completed (the longer time-frame was
the result of holiday periods where participants are not available to be surveyed
or the limited availability of participants, particularly legal representatives and
taxpayers who often run small businesses). In some instances, there was also a
time delay as a consequence of ADR as settlement negotiations continued
beyond the ADR event.
1.9. Over the life of the Project, results were collated and analysed in order to assess
the effectiveness of current processes and to identify opportunities to improve
future processes and enhance ATO dispute resolution capability. Quarterly
reports were provided to the ATO throughout the Project.
2
This is significant because conferencing is by far the most commonly used process at the
AAT. Conferencing is focussed on case management as well as settlement. 2013-14, 1,020
tax matters were finalised by agreement betweem the parties. 82% of all tax matters finalised
in 2013-14 were finalised by the consent of the parties or the applicant withdrawing. See
table A4.5 of the AAT Annual Report 2013-14 at
http://www.aat.gov.au/Publications/AnnualReport/AnnualReport2014.htm (accessed 19
November 2014). In the same period 1053 conferences were held in tax matters. The ADR
processes considered in this report therefore represent less than 10% of what the AAT would
consider are ADR processes convened at the AAT (as the AAT would include conferencing as
an ADR process).
Chapter One - Background and Methodology
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USER EXPERIENCE SURVEY IN ADR
1.10. The ATO established a small project team that helped to gather internal data
and ensure survey material was sent out by the ATO. The ATO Team was led by
Sirla Jafri until October 2014.
1.11.
The ACJI Research Team for this Project consisted of:

Professor Tania Sourdin (Director of ACJI, project director)

Wendy Gaddie (part-time senior researcher to April 2014)

Adrien March (part-time senior researcher, April–July 2013)

Serena Beresford-Wylie (part-time senior researcher, April–July 2013)

Tov Telle (part-time researcher to March 2014)

Alan Shanks (ACJI Centre Manager, expert qualitative and quantitative
analyst).
Ethics Approval
1.12. At the commencement of this Project, each aspect of the research conducted
was approved by Monash University Human Research Ethics Committee
(MUHREC). Ethics approval included recruitment methods, survey instruments
and data-handling protocols.
1.13. In accordance with MUHREC guidelines, the ATO contacted potential survey
respondents by post or email, inviting them to participate either in a telephone
interview or via online survey. The mail-out documents included details of the
Research Project and a unique code for each party to the dispute. Potential
participants were given the option to complete the survey online via a link set up
on the ACJI website, to be telephoned by a researcher, or to opt out of the
survey. To opt out of the survey, potential participants could ‘opt out’ by return
email or send an ‘opt out’ form to the ATO. Potential participants were also
informed that they would have the opportunity to opt out when they were
contacted by a telephone interviewer.
1.14. An important part of the Project has involved gathering base data from the
ATO. The base data was entered via an online process (see Appendix C). This
information and telephone and online survey material was de-identified, which
enabled the researchers to have data about all matters in the sample that
progressed through ADR processes. The base data collection also ensured that
the perceptions data is representative of the entire sample. For example, the
researchers are able to consider if only a few participants comment about large
value disputes or if perceptions about process fairness or cost are influenced by
negative outcomes.
Methodology
1.15. Apart from the de-identified data base referred to above and below, the
methodology to ascertain user perspectives in this Project involved a voluntary
Chapter One - Background and Methodology
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USER EXPERIENCE SURVEY IN ADR
computer-assisted telephone interview (CATI) and an online survey. Participants
were given the opportunity to select how they would prefer to do the survey –
either online or by telephone interview. Both online and telephone surveys were
identical, although they had slightly different introductions in accordance with
Ethics Approval requirements. Additional data regarding each dispute was also
sourced from the ATO’s files, in order to gather standardised information about
the dispute and reduce the number of questions required of each participant.
1.16. The target population was all parties present at an ADR process regarding
taxation and superannuation disputes that took place between 1 July 2013 and
30 June 2014. A total of 833 invitation letters were sent out to potential survey
particiapnts. Invited participants were made up of the following groups:

A: ATO internal people (including case officer, debt officer and others)
(165 invitations)

B: Taxpayers (105 invitations)

C: ADR practitioners (including private practitioners engaged by the
taxpayer and/or ATO, AAT and Federal Court representatives) (118
invitations)

D: Taxpayer representative (including taxpayer’s lawyer, taxpayer’s
accountant, taxpayer’s tax agent, etc.) (191 invitations)

E: ATO representative (including Review and Dispute Resolution (RDR)
officer and/or an externally engaged barrister or solicitor) (254
invitations).
Table 1.1: Survey response rates
Total number of responses (n)
A: ATO internal people
97
B: Taxpayers
19
C: ADR practitioners
41
D: Taxpayer representative
58
E: ATO representative
125
Total (all survey respondents)
340
ADR Coordinator Survey
118 processes
1.17. The lowest participating group was taxpayers themselves. There were some
issues with this group, as contact details were often lawyer contact details and
the research team had to rely on lawyers or other representatives to pass on
survey information to the taxpayers. There were also some issues involved in
contacting taxpayers directly (these are referred to below and also in Chapter 5
of this Report).
1.18. The results below and the statistical responses indicate the percentage
response in relation to the number of disputes. Up to 19 September 2014 (the
final cut-off date), the number of total survey responses received by ACJI was
340 responses. Overall this is a statistically valid sample (accurate to .005
reliability level) in respect of the common question pool however some cohorts
were less represented than others (taxpayers) and therefore it cannot be
concluded that the views in respect of some targeted questions would represent
those of the entire population. In view of this the characteristics of the cohort of
Chapter One - Background and Methodology
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each responding group was considered (compared with base data) and were
found to be roughly representative of the entire population. However in keeping
with reporting protocols, the results of some cohorts is expressed as ‘opinion’
results throughout this Report.
1.19. A total of 118 disputes progressed through the defined forms of ADR in the
survey period, but not all potential respondents were surveyed in all disputes if
an ‘opt-out’ process took place. The ATO Coordinator Survey provides base data
from ATO files for each process.
1.20. There were issues that have had a minor impact on reporting and analysis. On
2 December 2013, eight invitations were sent out relating to one dispute using
the incorrect code of 1007 instead of 1107. The ATO picked up the error and
indicated that it was simply a transcribing error and only confined to the issuing
of invitations and did not affect participant contact details previously sent out for
the November period.
1.21. The ATO also noted that code 1007 had previously been correctly used (for a
different group of people) for survey invitations that issued on 1 November 2013.
1.22. The coding error has been considered in the cleaning and analysis of material
in this Report. Surveys with the wrong ‘coding’ have been considered by the
Research Team, and where possible, allocated the correct code. There were two
instances where, because of this coding error, it was not possible to know if two
of these disputes related to the month of October or November.
Notwithstanding this, while any recorded online survey data for these two
matters cannot be used for comparison purposes (and has been screened for
this), the individual data is credible and has been utilised.
Table 1.2: Participation rates among survey groups, 1 July 2013 to 19 September
2014
Respondent role
n
A: ATO internal people (including case
officer, debt officer and others)
B: Taxpayers
C: ADR practitioners (including private
practitioner engaged by the taxpayer
and/or ATO, AAT and Federal Court
representatives)
D: Taxpayer representative (including
taxpayer’s lawyer, taxpayer’s accountant,
taxpayer’s tax agent etc.)
E: ATO representative
Total
97
Percentage of all cases in
which this survey group is
represented (n=118)3
66%
19
41
14%
31%
58
36%
125
340
69%
3
This statistic describes the percentage of the total number of cases (or ADR processes) where one or
more respondents from each survey group participated.
Chapter One - Background and Methodology
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1.23. The name and contact details of all potential interview participants were
stored separately from all other data in secure locations within Monash
University. When telephone interviews were completed, the personal details of
all participants were destroyed using an approved secure document destruction
contractor. This ensured that data collected during telephone interviews was
unable to be linked in any way to the participants. The material gathered through
the online process was delinked from any identifying data through the use of a
coding system.
1.24. Qualitative data was collected as part of the evaluation, both through the
telephone interview and the online survey, and recorded as narrative. In this
area, the qualitative data obtained through the telephone interview process
tended to be more complex, and additional commentary was recorded.
1.25. The various participant experience surveys were employed to obtain
quantitative and qualitative data using a combination of Yes/No, Agree to
Disagree variables, Satisfaction to Dissatisfaction variables as well as freeform
comment options. A four-point Likert scale was mostly used in relation to the
Likert items that were used. A Likert scale measures preferences, attitudes and
subjective responses.
1.26. A four-point Likert scale tends to be used by the ACJI Research Team when
conducting telephone interviews. Generally, it does not have a ‘don’t know’ or
neutral point but provides for a scale of responses. The questions used were
developed by ACJI from past survey work and in response to the key areas of
interest identified in the Project objectives and approved by the ATO. Using this
approach means that there is potential for the responses in this study to be
compared and contrasted with user perspectives previously obtained by ACJI and
Professor Sourdin in other dispute resolution domains.
1.27. The survey incorporated a range of questions in key areas of interest to the
Research Team and provided participants with the opportunity to give general
feedback about the process they were involved in.
1.28. The online survey was built using a platform called Qualtrics
(http://qualtrics.com/). This platform has been used by ACJI before. Qualtrics
was selected as the best fit for the needs of this Project, because it was critical
that the survey could be readily and quickly accessed (with fast download and
switch-over periods) and it was essential that confidential material could be
retained, stored and destroyed without records being kept by an independent
web server.
1.29. As part of the web survey approach, a web entrance was constructed and
populated. In addition, as part of the background information for interview and
survey respondents, material was published on both the ATO and ACJI websites.
1.30. Telephone interviews were conducted by expert ACJI researchers who have
experience in conducting interviews of this nature and in the dispute resolution
area. The survey introduction was read from an Ethics Approved script. Following
this, the remainder of the survey was read from, and entered into, the online
survey by the researchers.
Chapter One - Background and Methodology
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1.31. For any participants who might become distressed during the course of
surveying, counselling services were made available at ACJI expense with
RTKResolutions telephone counselling service (this is an Ethics Approval
requirement).
1.32. Researchers who conducted telephone interviews held internal trials of the
interview instruments to test responses among the Research Team. This was
undertaken to ensure the development of a consistent approach to the delivery
of the interview and the recording of data. It was noted that some interview
participants wished to talk (sometimes at length) about issues concerning their
experience, and ACJI researchers were able to respond in an appropriate manner
because they have previous experience in the dispute resolution sector.
1.33. The interview and survey tools were developed by the Monash University ACJI
Research Team. Feedback on the instruments was obtained from the ATO, the
AAT, the Federal Court of Australia, ADR practitioners and other stakeholders.
The feedback led to modifications and additions to the instruments.
1.34. The surveys were tailored to each of the five groups, with a different question
bank for ATO internal people, taxpayers, ADR practitioners, taxpayer
representatives, ATO RDR officers and external representatives. Some questions
were common to each group, while other questions were asked of individual
groups only.
1.35. At the closure of each ADR case in the specified date range, the ATO collected
contact details for all parties present in the ADR process (as specified above). The
ATO then sent an invitation to each party, explaining the Project and inviting
them to complete the survey online, opt out or wait to be telephoned by an ACJI
interviewer. Three weeks after the initial mail-out, the ATO checked to see which
parties had opted out and removed these persons from the contact list, including
removing their names, unique codes and contact details. The ATO then
forwarded the remaining list of codes, names and contact information to the ACJI
Research Team.
1.36. Upon receipt of the contact list and codes for each case, ACJI researchers
checked whether or not any of the codes had been used to access the online
survey. If it was identified that participants had completed the online survey,
their details were removed from the contact list for telephone interviews.
1.37. If there was no record of a participant with that unique code accessing the
online survey, the ACJI researchers telephoned and/or emailed that person and
asked them whether they would like to:

do the survey by telephone at the time or at another convenient time;

do the survey online; or

opt out.
1.38. Some comments can be made about the research approach. First, some
people chose to opt out of the research when ACJI researchers contacted them.
Many of these people received several invitations to take part in the survey, and
their position of opting out remained the same for each matter. It is suggested
Chapter One - Background and Methodology
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USER EXPERIENCE SURVEY IN ADR
that, in any future approaches, a process could be put in place where the opt out
letter is amended to give people the option to choose a ‘blanket opt out’ from
the research. This would mean that people who do not want to be part of the
research do not get invited or contacted in the future, saving time for both the
ATO and ACJI.
1.39. ACJI researchers found it difficult to contact AAT and Federal Court
representatives (Group C), as the contact details provided were the general
numbers and emails for the Registries and Courts. Furthermore, some Registrars
and Members work part-time, and when they are at work, they are usually
engaged in conferences. After consultation with the AAT, the process was
adjusted so that ACJI researchers could email AAT Members directly using
personal email addresses instead of the generic one. There were some other
issues as this cohort was concerned about confidentiality and surveying, which
impacted on response rates.
1.40. Most of the potential survey respondents required multiple contacts and/or
emails. Following a telephone contact, most potential survey respondents
requested a reminder email with the link and their code. These emails resulted in
the completion of numerous online surveys. To address this, ACJI implemented a
participant follow-up procedure (illustrated in Table 1.3). For all participant
groups (except taxpayers), an email was sent as a first point of contact. The email
embodied the link to the survey and the participant code, and also provided
participants with the option to opt out or be contacted by a researcher to do the
survey on the telephone if preferred. This procedure resulted in increasing
numbers of online surveys being completed.
1.41. ACJI researchers attempted contact with all potential survey respondents at
least once, with a majority having two to three contact attempts. Difficulties
encountered included that some people advised that they had no knowledge of
the Project and/or receipt of any invitation from the ATO and other people
indicated that they did not attend the ADR event, were no longer at the place of
employment listed as their contact, or were on extended periods of leave from
their employment with the work phone number being the only contact provided
and disconnected phone numbers.
1.42. In relation to the taxpayer survey responses and the difficulties encountered
in contacting this group when the only contact details were via the
representative, ACJI established a process for contacting the taxpayer’s
representatives by email to confirm whether or not they had forwarded the
invitation to their clients, and if so, whether they could assist the research and
provide ACJI with the taxpayer’s direct contact details. However, the taxpayer’s
representative details are not always available to ACJI in circumstances where
the representative has personally opted out, that is, chosen not to do the survey
for their group. Furthermore, there are potential ethical issues in contacting a
representative about a dispute where the client has personally opted out. There
were numerous taxpayers who were unable to be contacted directly as a result
of this issue.
Chapter One - Background and Methodology
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1.43. As can be seen from Table 1.3 below, up to four contact attempts were made
in respect of each possible telephone respondent. Often, on the first or second
contact and following a discussion, survey respondents opted to complete the
survey online. Only a minority opted to complete the survey by telephone. On
each occasion, ACJI expert telephone researchers ensured that they
inconvenienced respondents as little as possible.
Table 1.3: Survey participant telephone contact procedure
Group
A: ATO internal
B: Taxpayer
C: ADR practitioner
D: Taxpayer representative
E: ATO RDR officer or
external representative
st
direct
via rep
internal
external
1 attempt
Email
Phone
Email
Email
Email
Email
Email
nd
2 attempt
Phone
Phone
Phone
Phone
Phone
Phone
Phone
rd
3 attempt
Phone
Email
Phone
Phone
Phone
Phone
Phone
th
4 attempt
As needed
Types of ADR Processes Used
1.44. The processes used to deal with disputes in the sample involved ‘external’
ADR (conciliation, mediation, evaluation) that was conducted at either the AAT,
Federal Court or by private ADR Practitioners. Most processes (72.3 per cent)
used in the period involved external conciliation at the AAT (Figure 1.1). Some
AAT and Federal Court processes were not explored. For example, where a
conference took place at the AAT, this was not noted as an ADR event on the
ATO Register. Conferencing can focus on case management as well as facilitation
and there is little information about the frequency of conferences. This means
that some of the most common forms of ADR used in tax matters once
proceedings commence (such as conferencing) have not been considered in this
Project.4 It is also noted that referral to mediation, conciliation and evaluation
from conferencing has not been considered and would be a worthwhile exploring
in future discussions with the AAT. There were some representative and other
comments that suggested it was rare to have referral to conciliation, mediation
or evaluation from a conference.
1.45. Other events that may not be ‘ADR’ but can influence outcomes include
outreach and supportive processes that may be used by the AAT or even the ATO
were also not considered (except in broad terms). In terms of the definitions of
process used, it is possible that under some circumstances hybrid dispute
4
This is particularly relevant as at the AAT matters are usually only referred to conciliation,
mediation or neutral evaluation if the matter has not finalised after one or more conferences.
This also means that the processes considered in this study are likely to be those that are
more complex or intractable. Based on AAT data, in 2013-14 1053 conferences were
convened in Tax matters as compared with the next most frequest ADR process (conciliations)
of which 113 were held.
Chapter One - Background and Methodology
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USER EXPERIENCE SURVEY IN ADR
resolution processes may be used and there may be confusion in definitions. For
example, a process may be described as mediation; however, it may have a
strong evaluative component and therefore could more properly be described as
either conciliation or evaluation. In this Report, the process definitions and
descriptions used by the AAT have been adopted.
1.46. The AAT definitions of the processes included on the ADR register are set out
below (note conferencing was not included):

Conciliation is defined by the Tribunal as:


Mediation is defined by the Tribunal as:


A process in which the parties to a dispute, with the assistance of
a Tribunal member, officer of the Tribunal or another person
appointed by the Tribunal (the conciliator), identify the disputed
issues, develop options, consider alternatives and endeavour to
reach an agreement. The conciliator has no determinative role
on the content of the dispute or the outcome of its resolution,
but may advise on or determine the process of conciliation
whereby resolution is attempted may make suggestions for
terms of settlement and may actively encourage the participants
to reach an agreement which accords with the requirements of
5
the statute.
A process in which the parties to a dispute, with the assistance of
a Tribunal Member, officer of the Tribunal or another person
appointed by the Tribunal (the mediator), identify the disputed
issues, develop options, consider alternatives and endeavour to
reach an agreement. The mediator has no advisory or
determinative role in regard to the content of the dispute or the
outcome of its resolution, but may advise on or determine the
6
process of mediation whereby resolution is attempted.
Neutral Evaluation is understood by the Tribunal as:

An advisory process in which a Tribunal member, officer of the
Tribunal or another person appointed by the Tribunal, chosen on
the basis of their knowledge of the subject matter, assists the
parties to resolve the dispute by providing a non-binding opinion
on the likely outcomes. Neutral Evaluation is used when the
resolution of the conflict requires an evaluation of both the facts
and the law. The opinion may be the subject of a written report
7
which may be admissible at the hearing.
1.47. It is notable that in both the AAT and the Federal Court mandatory referral to
ADR can take place. The way in which referral took place is discussed further
below, and it seems that, in the sample, a number of matters were referred to
5
See
http://www.aat.gov.au/LawAndPractice/AlternativeDisputeResolution/ConciliationProcessModel.htm
(accessed 5 November 2014).
6
See
http://www.aat.gov.au/LawAndPractice/AlternativeDisputeResolution/MediationProcessModel.htm
(accessed 5 November 2014).
7
See
http://www.aat.gov.au/LawAndPractice/AlternativeDisputeResolution/NeutralEvaluationProcessModel.
htm (accessed 5 November 2014).
Chapter One - Background and Methodology
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ADR following a request for a form of ADR by either the taxpayer/representative
or the ATO.
1.48. The material below shows how the ATO categorised the dispute resolution
processes in the sample (note: AAT conferencing was not included on the ADR
Register).
Figure 1.1: Types of ADR processes used
1.49. The graph in Figure 1.2 below shows that most disputes in the sample (92 per
cent) involved disputes that had already commenced in the AAT or the Federal
Court. There was a small percentage of disputes where no court or tribunal
processes had commenced (8 per cent). Where proceedings had already
commenced, survey respondents were asked why they did not use ADR before
starting proceedings and the responses varied according to survey groups.
Taxpayers tended to indicate that their lawyers advised them to commence
proceedings, and lawyers tended to respond that either the ‘other side took too
long’ or ‘would not negotiate.’ An important issue considered later in this Report
is whether ADR could be conducted at an earlier time in the dispute.
Chapter One - Background and Methodology
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Figure 1.2: Was a date recorded for when any AAT or Federal Court proceedings
commenced?8
1.50. In terms of how disputants became aware of the ADR process, it seems that
many used the ADR process because of a legal referral, or the ATO made an
initial contact. Some others used ADR because of past use or referral from either
the AAT or the Federal Court. Taxpayer’s representatives often became aware of
the ADR process through past use or referral from either the AAT or the Federal
Court.
Table 1.4: How disputants became aware of the ADR process (respondent could
select all answers that applied)
How did you become aware of the
ADR process?
The ATO told me or wrote to me about
it.
I have used this type of process
before.
I read about it on the ATO website.
Taxpayer (%)
The AAT/Federal Court told me about
it.
My lawyer told me about it.
17%
My accountant told me about it.
0%
My tax practitioner told me about it.
0%
My other expert told me about it.
0%
17%
17%
4%
30%
8
Note that the reduced sample size (n = 117) is as a result of responses not being provided against this
variable for all of the 118 processes that finalised over the June 2013 to July 2014 period.
Chapter One - Background and Methodology
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I asked what could happen.
4%
Other
9%
Total number of respondents (n)
16
Table 1.5: How taxpayer’s representatives became aware of the ADR process
(respondent could select all answers that applied)
How did you become aware of the
ADR process?
The ATO told or wrote to me/my client
about it.
I have used this type of process
before.
I read about it on the ATO website.
Taxpayer’s
representative
(%)
21%
32%
4%
The AAT/Federal Court told me about
it.
I asked what could happen.
26%
Other
12%
Total number of respondents (n)
57
4%
Timing of ADR
1.51. It is clear that many of the disputes that went to the forms of ADR that were
included on the ATO register were ‘old’. The tables below track the age of the
disputes in the sample. The age of dispute has been tracked from the date the
dispute arose (via the lodgement of an objection) and the date that any
proceedings commenced to the date of the identified ADR process. Most
disputes were more than 400 days ‘old’ if the date of lodgement of an objection
to the date of the identified ADR event is considered.
1.52. If the date from commencement of court and tribunal processes is
considered, most disputes did not reach the ADR event until more than 200 days
had elapsed. Past research suggests that disputants may consider that a process
and system are unfair if it takes too long to resolve a dispute.
1.53. Importantly, if other ADR activities are considered many matters may have
involved a conference at the AAT which took place at an earlier time. The AAT
has noted that the average number of days to a first conference (not a
conciliation, mediation or evaluation) in this reporting period was 70.26 days
although the average number of days to a ‘last conference’ was 190 days and to
Chapter One - Background and Methodology
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last ADR event was 207 days. The AAT does not measure time from the date the
dispute arose (and uses the date that proceedings commenced).
Figure 1.3: Time between commencement of AAT or Federal Court proceeding to
date ADR conducted
Figure 1.4: Date objection lodged to date ADR conducted
Data about Dispute Complexity
1.54. Data about dispute complexity was available from the ATO data. The base
data suggests that three-quarters of the disputes that progressed to ADR were
assessed as being of medium (52%) or high (25%) complexity. Dispute complexity
can impact on the ADR timing, and this is discussed later in this Report. It is
probable that lower complexity disputes are more likely to be resolved by direct
negotiation or at an AAT conference event (and will therefore not be referred to
mediation, conciliation, evaluation or other forms of ADR).
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Figure 1.5: Estimate of case complexity by ATO
1.55. The measurement of dispute complexity was undertaken and a rating of
dispute complexity (case complexity) applied by the ATO in relation to each
dispute. This information has been supplemented and linked to other data (for
example, the number of taxpayers involved in a dispute ranged from 1 – >10 and
it is anticipated that higher taxpayer numbers may result in higher levels of
dispute complexity). At present, in the context of dispute complexity, no clear
findings can be made about the extent to which dispute complexity impacts on
the likelihood of settlement, settlement behaviour or other variables such as
time and cost. Findings and basic information about the impact of complexity in
disputes is explored below.
1.56. The relationship between case complexity, resolution (ADR outcome) and
time factors (date objection lodged to date ADR conducted and date where any
AAT or Federal Court proceedings commenced to date ADR conducted (in days))
was investigated using more sophisticated data measurement tools such as the
Spearman’s Rho Correlation Coefficient (Table 1.6).
Table 1.6: Spearman’s Rho correlations between case complexity, ADR outcome
and time factors
Scale
1
2
3
4
.036
.193
.151
–
.004
-.074
1. Case complexity
–
2. ADR outcome
3. Date when any AAT or Federal
Court proceedings commenced to
date ADR conducted (days)
4. Date objection lodged to date ADR
conducted (days)
**Correlation is significant at the 0.01 level (2-tailed)
–
Chapter One - Background and Methodology
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–
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1.57. The analysis of the ATO base data indicates a small positive correlation
between case complexity and both time factors: the number of days elapsing
between the commencement of AAT or Federal Court proceedings and the date
ADR was conducted (rho = .193, n = 65, p < 0.01); and the number of days
elapsing between when the objection was lodged and the date the ADR was
conducted (rho = .151, n = 67, p < 0.01). This means that the more complex a
dispute, the more likely it is that the ADR process will take place at a later time. It
may be that there are benefits in referring these more complex disputes to ADR
at an earlier time (particularly if the ADR process results in issue identification
and narrowing).
1.58. The relationship between two time factors (date objection lodged to date
ADR conducted and date when any AAT or Federal Court proceedings
commenced to date ADR conducted (in days)) was investigated using the Pearson
Product-Moment Correlation Coefficient (Table 1.7). This test indicated a
medium, positive correlation between the two time factors (r = .412, n = 108, p <
0.01). This data also suggests that more complex matters are likely to result in
later commencement of court or tribunal proceedings. Again, earlier pre-filing
ADR may assist to manage disputes and to avoid delay and increased cost.
Table 1.7: Pearson Product-Moment correlations between two time factors: date
when any AAT or Federal Court proceedings commenced to date ADR conducted
(days); and date objection lodged to date ADR conducted (days)
1
2
Scale
–
.412**
1. Date when any AAT or Federal Court
proceedings commenced to date ADR
conducted
.412**
–
2. Date objection lodged to date ADR conducted
(days)
Demographic Information about Disputes
Location of Disputes
1.59. The ATO data provides some information relating to the location of disputes
by reference to taxpayer postcodes. Most disputes have involved taxpayers
based in NSW or Victoria (58.3 per cent in total), and nearly all are located in
metropolitan rather than regional areas. The overrepresentation of taxpayers
from these states is consistent with the Australian Bureau of Statistics (ABS)
population figures for the year ending September 2013. The proportion of
disputes with taxpayers based in Queensland has increased to 22.2 per cent (up
from 16 per cent) since the July 2013 to December 2013 quarterly report, which
is consistent with ABS resident population data.
Chapter One - Background and Methodology
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Figure 1.6: Location of disputants by state/territory compared with ABS resident
population statistics
Type of Disputants
1.60. The majority of taxpayers who provided demographic data were Australianborn males who fall over a wide age range (18 to 65+ years old). All of these
taxpayers indicated that they had completed a level of education at TAFE or
above. The business segments that the taxpayers came from were ‘individuals’
and ‘corporations’.
1.61. The ATO file data for the ADR processes conducted during the survey period
(July 2013 to June 2014) provides an assessment of the market segment that the
taxpayer represents.
1.62. The first and statistically significant segment is micro-enterprises, which are
defined by the ATO as being businesses (mostly operating as sole traders or
family businesses) with an annual turnover of under $2 million or
superannuation funds with less than $2 million in assets. This segment
represents the majority of disputes (59%).
1.63. Individuals and non-businesses with an annual turnover of under $2 million or
superannuation funds with less than $2 million in assets comprise the second
segment, representing 26 per cent (26%) of disputes.
1.64. The segment defined by the ATO as large businesses represents 8 per cent
(8%) of the disputes and is an economic group with combined turnover
exceeding $250 million.
1.65. The small-to-medium enterprises segment represents a significantly small
proportion of the disputes (5%), notwithstanding that this segment comprises
three sub-segments defined by the ATO as:
Chapter One - Background and Methodology
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
Highly wealth individuals – Australian resident individuals who, together
with their associates, effectively control an estimated net wealth of $30
million or more.

Wealthy Australians – Australian resident individuals who, together with
their associates (often including micro-enterprises), effectively control
an estimated net wealth of between $5 million and $30 million.

Small-to-medium enterprises – economic groups with turnover of $2
million to $250 million.
1.66. The data suggests that micro-enterprise disputes are most likely to resolve at
the ADR stage. In addition, they are more likely to be resolved more quickly
(referral to ADR is more likely at an earlier time). Large complex business
disputes were also more likely to resolve at the ADR event, although they will
usually not be referred to the ATO ADR evet until a year after proceedings have
commenced in the AAT or Federal Court (see Table 1.8 for a summary – note it is
likely that case management events would have been attended and conferences
at the AAT (these may have been focussed on representatives only)). The market
segment proportions are explored in more detail in Figure 1.7.
Figure 1.7: Market/segment from which the dispute arises
Chapter One - Background and Methodology
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Table 1.8: Summary of case complexity, timeliness and ADR outcome data for each
market segment
Individual and
Non Business
Large
Micro
Enterprise
Small to
Medium
Enterprise
Not for Profit
Government
Case complexity
(% of processes)
Timeliness
(Date AAT or
Federal Court
proceedings
commenced to
date of ADR)
ADR outcome
(% of processes)
Low
Med.
High
Average
Median
Resolved
Partially
resolved
No result
n
30%
52%
18%
287
223
33%
12%
55%
33
0%
30%
9%
54%
91%
16%
397
251
418
193
55%
49%
0%
2%
45%
49%
11
57
0%
67%
33%
219
183
27%
0%
73%
15
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
1.67. ATO base data highlights the association between case complexity and the
amount in dispute in the survey period (Table 1.9). Eighty-six per cent (86%) of
low complexity cases (n=27) involved amounts in dispute of $100,000 or less.
Seventy-nine per cent (79%) of medium complexity cases (n=61) involved
amounts in dispute between $20,001 and < $10 million. Eighty per cent (80%) of
high complexity cases (n=30) involved amounts in dispute between $100,001 and
> $10 million.
Table 1.9: Comparison of the amount in dispute for low, medium and high
complexity cases during the survey period (July 2013 to June 2014)
Amount in dispute
Case complexity
Low (%)
Medium (%) High (%)
< $10,000
26%
8%
10%
$10,001 - $20,000
19%
7%
0%
$20,001 - $100,000
41%
21%
7%
$100,001 - $1 million
11%
38%
17%
> $1 million - < $10 million
0%
20%
37%
> $10 million
0%
3%
27%
Not applicable
4%
3%
3%
n
27
61
30
1.68. ATO file data was examined to identify any association between case
complexity and the type of ADR process used. The percentages of cases using
each ADR type vary across the subsets of low, medium and high complexity cases
in the sample (Figure 1.8). Conciliation was employed in the majority of low
complexity (89%) and medium complexity (75%) cases in the sample. Mediation
was used more frequently as the complexity of the case increases, with 40 per
cent of high complexity cases employing this ADR type. However, conciliation
continued to be the most used form of ADR even for high complexity cases.
Neutral evaluation was used more frequently as the complexity of the case
increases. However, in each case it remained the least used ADR approach.
Chapter One - Background and Methodology
25
0
1
EVALUATING ALTERNATIVE DISPUTE RESOLUTION IN TAXATION DISPUTES
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Figure 1.8: Comparison of the type of ADR process used and the estimated level of
case complexity (ATO file data)
1.69. Figures 1.9 and 1.10 compare case complexity data with timeliness factors
such as the date of commencement of AAT or Federal Court proceeding to date
ADR conducted (Figure 1.9) and the date objection lodged to date ADR
conducted (Figure 1.10). For each of these timeliness factors, the average and
median number of days increase as the level of case complexity increases.
Figure 1.9: Timeliness (date of commencement of AAT or Federal Court proceeding
to date ADR conducted) by case complexity (ATO file data)
Chapter One - Background and Methodology
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Figure 1.10: Timeliness (date objection lodged to date ADR conducted) by case
complexity (ATO file data)
Statistical Analysis and Statistical Significance
1.70. Most data in this Report is reported using descriptive statistics, such as
percentages, means or medians. The mean is a measure of central tendency and
is calculated by adding all values and dividing the sum by the number of values. It
is sometimes referred to as the ‘average’ amount. The median is also a measure
of central tendency and is the middle value in a set of values. For example, in the
following sample – 3, 10, 22, 30, 45 – the median is 22. The median is particularly
useful in samples with extreme values, which may skew the mean value.
1.71. Where the sample size and data characteristics are suited to more
sophisticated statistical inference, the analysis was conducted using IBM SPSS
Statistics (version 20) software (SPSS) and Qualtrics software. Statistical
techniques such as the Pearson Product-Moment Correlation Coefficient (r) or
Spearman Rank Order Correlation (Spearman Rho) were used to explore the
relationship between variables. Pearson Product-Moment Correlation is used to
describe the strength and direction of linear relationship between two variables.
Spearman Rho is a non-parametric test designed for use with data collected
using intervals with attributes that can be ordered (for example, very satisfied –
fairly satisfied – fairly dissatisfied – very dissatisfied), known as ordinal data in
SPSS.
1.72. At times, statistical significance testing has been carried out to determine
whether or not the relationship between variables or the difference between
groups is real or likely to be observed by chance. If the probability that a
relationship or a difference is observed by chance is small, the results are
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deemed ‘statistically significant’. Statistically significant differences in the
Compendium’s tables are marked with an asterix (*) for easy identification.
Differences or relationships reported are not statistically significant unless it is
specified that they are significant.
1.73. Where data is reported using percentages, data labels in graphs and figures in
tables are recorded using the Microsoft Excel rounding function. Each element of
X is rounded to the nearest integer. Where an element falls exactly between two
integers, Excel rounds away from zero to the integer with larger magnitude. For
instance, a data point of 1.5% is rounded up to 2%. A consequence of this
approach is that in some cases, the sum of all responses in a chart or table may
not resolve to 100%. Therefore, all percentage data reported should be viewed
as having a level of precision of ± 1 per cent.
Chapter One - Background and Methodology
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2
2. Is ADR Effective?
Introduction
2.1 The Australian Law Reform Commission (ALRC) has noted that, when considering
dispute resolution processes and their objectives, efficiency and effectiveness can
be viewed from a number of perspectives including:
The need to ensure appropriate public funding of courts and dispute
resolution processes that avoid waste.
The need to reduce litigation costs and avoid repetitive or unnecessary
activities in case preparation and presentation.
The need to consider the interests of other parties waiting to make use
9
of the court or other dispute resolution process.
2.2 In addition, effectiveness can also refer to long-term gains, rates of compliance,
behavioural impacts and the broader costs of unresolved conflict. This Chapter
considers whether or not processes are ‘effective’ using a range of measures.
2.3 Criteria used to evaluate whether or not the ADR processes were effective
included whether the processes:
1. resolved or limited the dispute;
2. were considered by the parties and representatives and other stakeholders to
be just or fair;
3. were accessible;
4. used resources efficiently10 and promoted lasting outcomes;
5. achieved outcomes that were effective and acceptable.
2.4 This Chapter considers the data collected that relates to the resolution of disputes
and material relating to other effectiveness criteria, including whether or not the
process assisted in clarifying facts or issues. Material in respect of fairness is
considered more specifically in Chapter 3 of this Report.
9
Australian Law Reform Commission, Issues Paper 25: Review of the Adversarial System of Litigation.
ADR – Its Role in Federal Dispute Resolution (ALRC, Sydney, June 1998), 27.
10
This is an adaptation of the ALRC criteria. The process should be efficient.
Chapter Two - Is ADR Effective?
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Did the ADR Process Resolve the Dispute?
2.5 To determine whether or not the ADR process was effective, one measure is
whether or not the dispute was resolved. As noted previously, some disputes in
the sample group are ‘complex’, old and involve multiple issues which can skew
results (see also Table 4.9 in Chapter 4 of this Report, which considers dispute and
‘case’ age in the context of cost).
2.6 In the longer term, effectiveness criteria can be linked to these characteristics and
criteria to determine if predictive patterns arise. For example, some material
suggests early ADR use is more effective in some complex disputes involving small
business.
2.7 In addition, past research suggests that often mediation (which takes longer than
conciliation) can be more effective than conciliation in terms of the resolution of
disputes. In this sample, most matters were conciliated or the subject of a
conference process (not mediated).
2.8 The ATO base data indicates that ADR processes resulted in an agreed outcome
within the ADR process in 42 per cent of cases (Figure 2.1). However this figure
appears to be incomplete as many matters settled shortly after the ADr process
had taken place. Survey respondent perceptions vary about what additional
percentage settled the dispute as a result of the ADR event with between 19 per
cent to 37 per cent of respondents in survey groups A, D and E indicating that ADR
prompted settlement in the period following the ADR/dispute resolution
conference (see Table 2.1).
2.9 It is clear that in some instances the settlement of disputes occurred following the
ADR process and occurred prior to surveying (surveying took place up to three
months following the ADR intervention).This later settlement may have occurred
because an option was being considered. In other circumstances the ATO event
may have led to another meeting. For instance, when asked to elaborate on how
the dispute was settled, an ATO Internal (Group A) survey respondent said:
More advice or information was exchanged between ATO and taxpayer
and we then attended a further ADR process.
2.10 Tables 2.1 and 2.2 below suggest that about a quarter of disputes resolved
following the ADR process and that, in these types of disputes, it was often
important for more information to be exchanged that could assist the parties to
negotiate or better understand the situation. Using this combined resolution data
(from the ATO data base and from the survey), it seems that the ADR event was
significant in producing agreed outcomes in 60 – 70 percent of matters. The
findings may also suggest that, in tax disputes, it is more likely that settlement will
take place following the ADR event than in other types of disputes (this may also
be linked to the need to obtain expert advice or to consult to consider options).
Chapter Two - Is ADR Effective?
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Table 2.1 Survey respondent perceptions about how the dispute was finalised
(survey groups A, B, D and E)
A: ATO
Internal
At the ADR/dispute
resolution
conference
Following the
ADR/dispute
resolution
conference
After more advice or
information was
exchanged between
ATO and taxpayer
B:
Taxpayers
D:
Taxpayer
reps.
E: ATO
reps.
44%
25%
59%
44%
22%
0%
19%
37%
11%
0%
8%
8%
6%
0%
3%
0%
0%
13%
3%
2%
9%
13%
0%
6%
2%
13%
5%
0%
6%
38%
3%
3%
54
8
37
63
After expert advice
In a court or tribunal
Through negotiation
with the other side
Lawyer negotiated
on behalf of client
Other
n
Table 2.2 Survey respondent perceptions about how the dispute was finalised
(survey group C)
C: ADR
Practitioners
At the ADR/dispute resolution conference
57%
Following the ADR/dispute resolution conference
22%
After more advice or information was exchanged
between ATO and taxpayer
After expert advice was received
13%
0%
Following negotiations
4%
Don’t know
0%
Other
4%
n
23
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2.11 It seems that, in some matters, further action followed the ADR event, which
meant that those surveyed considered that the matter was settled. The ATO base
data that captures information up to the timing of the ADR event does not reflect
this significant cohort (however, the survey data does: see Figure 2.1). This means
that the ‘settlement rate’ is higher than the ATO base data suggests.
2.12 The ATO base data outcomes may reflect the use of different terminology
within the ATO in relation to settlement and finalisation. In this regard, it is
notable that the ATO uses the terms ‘resolution’ and ‘settlement’ in different
ways. The meaning of these terms from the ATO perspective is set out in their
settlement policy documentation, which is summarised in Appendix D. In this
Report, the terms ‘finalisation’ or ‘resolved’ have been used to refer to situations
where the ADR process led to the finalisation of the dispute. This difference in
terminology may also have led to the ATO data showing a lower resolution rate
than the survey data. We would suggest that the finalisation rate gleaned from
the survey sample portrays the most accurate outcome data in the context of
effectiveness.
2.13 Further action as a result of the ADR process varied. In some instances, the
further action required consideration and submission of other material that could
then be dealt with in a different manner. For example, one ATO survey
respondent in a comment noted that:
… many elements of the dispute were settled, there are remaining
issues that should now be resolved under our normal administrative
processes.
Figure 2.1: What was the ADR outcome? ATO base data only.
Chapter Two - Is ADR Effective?
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2.14 The variation in settlement rates was also considered from the perspective of
market segment. This material suggests that large and micro-enterprise disputes
were most likely to resolve at ADR, and small to medium and individual taxpayer
disputes were less likely to resolve. The individual disputes were more likely to
‘partially resolve’ than all other groups.
Figure 2.2: Effect of market segment on ADR outcome
2.15 Resolution rates also varied by state and territory. Although the sample size is
too small to draw definitive conclusions, it seems that ADR was less likely to be
successful in Queensland and most likely to be successful in Victoria. The reasons
for this difference could be numerous and are explored further below.
Figure 2.3: ADR outcome by disputant location (state/territory)
Chapter Two - Is ADR Effective?
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2.16 The reasons for the different settlement rates may include later ADR referral
in some states as well as other factors including practitioner behaviours.
Practitioner behaviour can refer to legal and other experts who may not engage in
the same way with ADR in different states and may also refer to ADR practitioner
approaches. A larger sample would indicate what factors may be more relevant;
however, given the state differences in the sample, it is suggested that it may be
useful to have focus group or internal ATO interviews to explore the reasons for
these differences. It may also be useful to discuss these matters with the AAT and
Federal Court to determine whether a lack of preparation was a factor.
Figure 2.4: Respondent perceptions about whether the dispute has been
completely finalised
2.17 Another measure of effectiveness is whether the ADR process reduced
complexity or narrowed issues (see Figures 2.5 and 2.6). The ATO base data
suggests that ADR could play an important role in clarifying facts (which may have
longer-term impacts and reduce litigation and other costs). In about half of the
ADR cases, ADR was seen as important in clarifying issues, which suggests that the
ADR process may assist to narrow issues in dispute where the matter does not
resolve and may result in later settlement or reduce the number of issues that
proceed to litigation.
Chapter Two - Is ADR Effective?
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Figure 2.5: Did the ADR process assist in clarifying facts? 11
Figure 2.6: Did the ADR process assist in clarifying issues? (n=73) 12
11
Note that the reduced sample size (n = 68) is as a result of responses not being recorded for this
variable for all of the 118 processes recorded in the ATO Coordinator Survey.
12
Note that the reduced sample size (n = 73) is as a result of responses not being recorded for this
variable for all of the 118 processes that finalised over the July 2013 to June 2014 period.
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Figure 2.7: Did the ADR process assist with anything else? (n=65) 13
2.18 The ADR processes assisted with other matters in about 30 per cent of cases
(see Figure 2.7). This is an important outcome and indicator of ADR effectiveness.
For example, where a taxpayer declares bankruptcy following an ADR event (see
below), there may be considerable cost and time savings for both the taxpayer
and the ATO. In relation to this cohort of disputes, it was noted in the survey
responses from ATO staff members that:
While the process as a whole was not successful due to lack of
engagement by the other party, some useful information was obtained
which will enable the matter to progress closer to resolution.
When used correctly, ADR (conciliations/mediations) is a way of
articulating each party’s relative strengths and weaknesses when it
comes to a dispute. It can then be used to narrow which issues there
are scope to move on.
All substantive issues except for one were resolved in the process.
It encouraged the Applicant to make an offer of settlement.
The taxpayer declared bankruptcy shortly afterwards.
What Would Have Made the Process More Effective?
2.19 In terms of process effectiveness and possible improvement areas, a number
of factors were considered. First, this issue was considered from the perspective
of fairness. Secondly, resolution rates were considered. The research shows that
there were high levels of satisfaction with the processes (see Chapter 3, which
relates to perceptions of processes). However, in some disputes, there were
issues with the level of preparation undertaken by taxpayers, representatives or
13
Note that the reduced sample size (n = 65) is as a result of responses not being recorded for this
variable for all of the 118 processes recorded in the ATO Coordinator Survey.
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the ATO, which may have impacted on effectiveness. It is also the case that, when
considering comments made, it is important to understand that at times the
comments can reflect the reality that the survey respondent did not achieve the
outcome they wanted.
2.20 Some of the comments regarding preparation are relevant as lower levels of
preparation may have impacted on perceptions of process as well as outcomes.
Some comments suggested that a lack of preparation meant that resolution was
less likely or did not take place. Many of the comments concerned the taxpayer’s
lack of preparation rather than that of the ATO, although there were some
negative comments about ATO preparation.
2.21
Factors influencing outcomes were said to include:
[A] lack of preparation on the other side, they had to go away and get
more information (about a taxpayer and their representatives).
The problem in this case is that the applicant talks about evidence but
doesn’t produce any. The ADR process seemed to make it clearer to him
that he must provide evidence not just say what happened. Would have
been useful if he had provided evidence beforehand but reality is that
he was not going to do so.
The taxpayer participating was not prepared and did not seem to
understand the requirements of the process.
The taxpayer was self-represented and not at all prepared for the
mediation. The taxpayer was also unwilling to consider a compromise
position given his strongly held views, and as such, mediation was not
particularly effective in this case.
The ATO’s representatives were unprepared and appeared to not know
the details of my case, as they got me confused with other people or
cases several times. They also attempted to make an argument in their
defence that was based on a case unrelated to mine in any way, and
when I challenged that, they argued they had never meant to say that
and I must be confused.
… the applicant wasn’t fully prepared and wasn’t prepared to listen at
times …
[The] Tax office to be better prepared earlier …
[The] ATO Legal representative was under prepared …
The taxpayer participating was not prepared for the mediation and did
not seem to understand the requirements of the process.
[A] lack of preparation by the ATO. It is a common problem which I have
experienced before, you show up and the ATO hasn’t prepared.
The other side didn’t prepare and didn’t come to settle, just to get more
information from us.
2.22 These comments must be weighed against the majority of views expressed in
matters proceeding to ADR where the preparation undertaken was regarded as
adequate and helpful with one senior ADR practitioner remarking:
The ATO is really leading the field. The staff are the most prepared and
engaged of all the government Departments.
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2.23 However, there are a sufficient number of comments to suggest that more
attention needs to be paid to preparation in respect of ADR events. For example,
one survey respondent noted that an area for improvement related to
preparation requirements:
[The process would be improved if there was] more information in
advance as to the process and preparation expected.
2.24 There were several suggestions that the success of the process was influenced
by direct face-to-face contact with the parties who have authority to settle. It was
noted by survey participants that the process could be improved by always
requiring the attendance of those parties with authority to settle:
Both parties should be required to attend. No point sending a
representative who doesn’t know the facts, can’t clarify the issues and
can’t respond to offers.
If all parties are able to attend in person (which was not possible in this
case) it would promote better communication between the parties.
The applicant did not attend, only their representative, and was not
available to provide instructions by phone.
Taxpayer applicant did not attend the ADR. His representative was
unable to answer any questions or engage properly in the discussion.
We made a proposal to settle the matter but the taxpayer’s
representative was unable to contact the taxpayer to ascertain his
response.
2.25 Some respondents suggested that there should be more guidelines for
selecting appropriate cases for ADR. In this regard, it is notable that the AAT
published Guidelines in December 2013 in relation to ADR and the requirement to
engage in ‘good faith’.14 However, more may need to be done at the Tribunal,
Court and ATO levels to ensure that guidelines are supported. One legal
representative noted that:
[The] ATO should be cautious of which matters they take to mediation,
that is to say, the taxpayer has to show some element of good faith
beforehand – a blanket policy to mediate isn’t going to do well – will be
seen as a method of delaying and running up costs for some parties.
2.26 Similarly, in response to any suggestions for improving these types of
processes, survey respondents noted:
A document setting out how the process will work and what is expected
of the parties [would improve the process].
Ensure that all parties have the necessary information to adequately
review the dispute otherwise the proceedings can be wasteful.
Costs of legal representatives attending these processes are significant.
There should be costs penalties for parties who fail to attend or engage.
14
See
http://www.aat.gov.au/LawAndPractice/AlternativeDisputeResolution/DutyToActInGoodFaith.htm
Published 13 December 2013 (accessed 5 November 2014).
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Conclusions
2.27 The qualitative and quantitative data that is available indicates that ADR is
effective in more than 70 per cent of disputes in either fully resolving the dispute,
partly resolving the dispute or enabling facts or issues to be clarified. The
outcome data reflects that more than 40 per cent of matters resolve completely
in the ADR process, and about 25 per cent appear to resolve following the ADR
process.
2.28 In some disputes, it appears that a lack of preparation and inadequate
authority had an impact on the effectiveness of the process. In addition, it
appears that it is more likely that ADR processes in some states will lead to a
settlement of issues. Exploring why ADR appears to be more effective in some
states rather than others will be important to determine how effectiveness can be
enhanced. For example, higher settlement rates may be linked to legal culture,
ADR practitioner skill levels and other factors. The characteristics of the taxpayer
may also be important, and it may be more likely that a lack of preparation leads to
lower prospects of settlement and that this is a factor with small and medium-sized
business disputants. In such circumstances, it may be more useful for the ADR
process to take place earlier, involve intake sessions and ensure that clearer
preparation guidelines are available and understood.
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3
2
Fairness
Introduction
3.1 Fairness can be described in a number of ways, including the following:

Fairness can be expressed in terms of general community standards or
expectations. Community expectations of a ‘fair’ dispute resolution
system may include expectations about the pursuit of truth and
reasonable levels of cost and delay (including equality of access).

Fairness may be based upon the observance of procedures and
procedural rules.

Fairness may relate to the outcome and perceptions of outcome.

Fairness may be based upon the impartiality of a third party (for
example, a mediator) and their personal indifference in the outcome of
the process.

Fairness may relate to ensuring that inequalities between the parties do
not unduly influence the outcome of the process.

Fairness may be related to party control over the dispute resolution
process and providing parties with an opportunity to be heard.

Fairness may relate to party consent to enter into the dispute resolution
process.
3.2 Ideas about fairness may conflict. For example, a comprehensive and exhaustive
dispute resolution process may be fair in terms of its pursuit of truth and the
possible outcome achieved, but may produce unfairness if the expense of the
process has an unequal effect on the parties. In addition, if it takes too long to
resolve a dispute (regardless of the outcome), people may consider that the
process was unfair, particularly if there have been negative economic, social and
health impacts.
3.3 In terms of outcome fairness, past research has suggested that perceptions of
whether or not a process is ‘fair’ can be influenced by the outcome reached.
However, often people consider that, even if the outcome (from their
perspective) was ‘unfair’, the process that was used was ‘fair’.
3.4 Fairness can also be defined by reference to broader concepts. Allowing the direct
participation of parties may make a process fairer for some disputants. Changing
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the objectives or focus of a process may make it fairer. There is extensive
research to suggest that, where a disputant is able to have their voice ‘heard’ and
where there is respect and impartiality shown, it is much more likely that the
disputant will perceive the process to be ‘fair’ or ‘just’. Perceptions may also vary
amongst those who attend the ADR event. For example lawyers may consider that
a process is fair where much of the discussion is directed by lawyers however
disputants and decision makers may not.
3.5 A shift towards facilitative processes may assist to enhance perceptions of
fairness. This is because those involved in the process may have an opportunity to
put their viewpoint forward. The material in this Report provides some useful
data about the perceptions of those who used ADR processes in relation to ATO
disputes. The findings suggest that there are very positive perceptions about the
fairness of the ADR processes used in relation to ATO matters; however, the
extent to which people considered they were ‘heard’ varied.
3.6 In the course of the telephone interviews and online surveying of those in the
sample group, the survey respondents were asked a number of questions relating
to how they perceived the role of the ATO and whether they considered that the
ADR process took place in a fair manner.
3.7 Perceptions about what is a fair process can also be shaped by previous
experience in dispute resolution and whether or not disputants had past
experience with the ATO and in dispute resolution. In this research, this factor
was considered and appeared to have little impact, although in freeform
comments, some considered that the ATO adopted a more proactive and positive
approach to the settlement of disputes via ADR and that this was ‘fairer’. The
material also shows that in relation to this survey group there is a strong link
between the time taken to deal with a dispute and perceptions of fairness. That
is, if the dispute took a long time to be dealt with, people were less likely to think
it was fair.
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Was the Process Perceived to Be Fair?
3.8 The survey responses showed a high level of agreement that the processes used
to deal with most ATO disputes were fair. In general, it seems that those who
attended more ‘formal’ processes with limited discussion and enagagement were
less likely to be procedurally satisfied than those who attended processes where
more open dialogue took place.
3.9 Overall, 95 per cent of those surveyed agreed or strongly agreed that the process
was fair. This finding is regarded as very high in the context of past studies. For
example, in past studies relating to fairness, the percentage of those considering
mediation processes conducted by mediators in the Supreme Court and County
Court of Victoria, 74 percent of survey respondents considered that the process
was ‘fair’. In other studies, the fairness rates have also been lower.15
3.10 Past studies internationally have found that what is important in shaping
perceptions of fairness is:
… the manner in which the procedure is enacted, rather than with the
distribution of control mandated by the procedure. Dignitary process
features involve the belief that disputants are treated with respect and
politeness and that the dispute is treated as a serious matter worthy of a
dignified hearing. Field studies of procedural justice judgments have
shown that dignitary process features are at least as important as control
16
issues in determining whether a procedure is seen as fair.
3.11 That is, people are likely to think that a process is a fair one if they are treated
with respect and dignity.
Perceptions About Fairness
3.12 In line with past studies of ADR processes, a fair proportion of those who
thought that the outcome was ‘unfair’ still thought that the process used was fair
(see Figures 3.1 and 3.2 below). That is even when the agreed outcome was not
what was expected or was ‘not just’, people still considered that the ADR process
was fair. Perceptions about outcome can be linked to broader perceptions about
systems. For example, if a taxpayer considers that the tax system is ‘unfair’, they
may also consider that the outcome reached was ‘unfair’, although it complied
with legislative and other requirements.
15
See the discussion in T. Sourdin and N. Balvin, ‘Lessons from the “Mediation in the Supreme and
County Courts of Victoria” Research Project’ (2009) 20(3) Australasian Dispute Resolution Journal 142.
16
R.J. MacCoun, E.A. Lind and T.R. Tyler, Alternative Dispute Resolution in Trial and Appellate Courts
(RAND Corporation, Santa Monica, 1992), 100, referring to studies reported in E.A. Lind, R.J. MacCoun,
P.A. Ebener, W.L.F. Felstiner, D.R. Hensler, J. Resnik and T.R. Tyler, ‘In the eye of the beholder: Tort
litigants’ evaluations of their experiences in the civil justice system’ (1990) 24 Law and Society Review,
953–996, E.A. Lind and T.R. Tyler, The social psychology of procedural justice (Plenum, New York, 1988)
and T.R. Tyler Why citizens obey the law: Procedural Justice, legitimacy and compliance (Yale University
Press, New Haven, 1990).
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Figure 3.1: Survey respondent perceptions about whether the ADR process was
fair by survey group
Perceptions About Outcome
3.13 Survey respondent perceptions about whether the outcomes of the ADR
process were fair suggest the view that about 50 per cent of taxpayers (B) and 65
per cent of taxpayer’s representatives (D) considered the outcomes were fair. (A
much higher proportion considered that the process was fair). This suggests that
those surveyed were able to distinguish between outcome and process fairness.
However, the relatively small sample size for these two participant groups may
have skewed this result, with only 17 per cent of survey respondents being either
taxpayers or their representatives. In comparison, between 91 per cent and 96
per cent of participants from the remaining survey groups (A, C and E) indicated
that they considered that the outcomes of the ADR process were fair.
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Figure 3.2: Survey respondent perceptions about whether the outcome of the ADR
process was fair by survey group
Participation in the Process
3.14 Fairness perceptions are often linked to participation perceptions – that is,
processes can sometimes be viewed as more fair if people can participate or give
voice to their concerns. As noted previously, there can be variations among
cohorts in terms of perceptions about the extent to which it is considered that a
process is fair or the extent to which participation was supported. For example,
representatives may consider that they could participate in an ADR process, but
taxpayers may think that they could not. There may also be a correlation between
these perceptions and the demographic characteristics of disputants; for
example, small business disputants may consider that direct disputant
participation in the dispute resolution process is very important, while big
business disputants may consider this to be less important (and may be more
comfortable to have lawyers participate more).
3.15 There are also differences in terms of the impact of participation and the type
of participation on the ADR practitioner and the impact on the representatives
and taxpayer. For example, the process might be regarded as fair and survey
respondents may consider that they could participate; however, some
participants may consider that the behaviour of the other people in the dispute
affected their own participation and they would have liked to have participated
‘more’.
3.16 On the whole, the perceptions of those involved in ATO ADR processes and
‘participation’ were very positive, with more than 90 per cent of survey
participants agreeing that they could participate in the ADR (see Figures 3.3 and
3.4). However, some survey respondents made comments about the perceived
willingness of the other side to genuinely and fully participate in the process. A
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small number of negative comments were made by both the ATO and taxpayers
about participation, and these were mainly linked to behaviours within the ADR
process. That is, on a few occasions, the ATO was critical of the taxpayer (or their
representatives) or the taxpayer or their representative was concerned about
ATO or representative behaviour.
3.17
The comments made included:
Conceptually I think ADR is a fairer way to resolve disputes when an
independent umpire/facilitator is involved. This was not the case in the
most recent ADR I was involved with as the ATO resisted ADR, came
with a barrister and a very legalistic approach (putting the taxpayer to
proof) …
… the ATO representatives on the day indicated that their hands were
tied and they were unable to really participate. I didn’t understand why
they bothered turning up, or what purpose the ADR was to serve …
… the ATO indicated a preference for negotiating and settlement, but
ultimately refused to participate in the process …
… [there] should be a stated willingness of both parties to move from
their position in order for negotiation to go ahead. I felt the other side
was not genuine.
As a general rule this type of process is usually the better option, but
both parties need to attend in good faith. In this instance this was not
the case. In my experience this is not common though.
The other side didn’t turn up wanting to resolve it so [it] was a waste of
time.
3.18 Some comments about participation may be relevant, although they can be
taken out of context and need to be considered against the background of the
very positive responses overall. One survey respondent, for example, commented
on the attitude of representatives in the ADR session (rather than the ADR
practitioner), and the extent to which this is an issue may possibly be explored in
later research:
Both representatives came across as condescending, and one of the
representatives in particular sat slumped forward in his chair with his
elbows resting on his knees and he refused to make eye contact, which I
found immensely disrespectful. They also appeared to have limited
knowledge of the area of law relating to the dispute …
3.19 In some past studies, it has been noted that participation of disputants can be
reduced if lawyers ‘take over’ (and this in turn may result in lower levels of
satisfaction). However, the extent to which this is relevant in the context of ATO
dispute participants may be questionable and depend on demographic and
dispute characteristics. It is of interest and a significant finding that, in the
taxpayer groups, a sizable proportion indicated that they could participate but
wanted to participate ‘more’. This finding suggests that, despite the small survey
size, more efforts could be made to engage with and support taxpayer
participation in the ADR process.
3.20 It would be interesting to consider these perceptions in the context of other
ADR processes used to deal with ATO disputes. For example, AAT conferencing
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which is also focussed on case management may not have taxpayers or others
present and this may be effective for some tax disputants but not others.
3.21
Factors that may influence perceptions of participation can include:

The formality of the process (see later discussion). If the process is
perceived to be ‘too formal’, it may be that some participants do not
consider that they can participate adequately.

The way in which roles are explained in the ADR process. If lawyers’
roles are explained in the context of advice and support (rather than
advocacy), parties may perceive that they have been included more in
the discussion and it may be less likely that exchanges are dominated by
representatives.

Who speaks after the ADR practitioner introduction? Parties or their
representatives? If parties speak first, they may be more likely to
consider that their participation was important and supported in the
process.

The extent to which there is an exploration, discussion and clarification
of issues may influence participation perceptions. If parties quickly
break to a private session, they may not consider that they have had an
adequate opportunity to speak with those in the process.

The extent to which parties can make settlement proposals to one
another. If shuttle negotiation processes are used, parties may consider
that participation in the agreement and negotiation stages of the ADR
process have been reduced. If options are generated in a facilitated
meeting with all participants present, it is probable that parties are
more likely to consider that they were able to participate.
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Figure 3.3: Survey respondent perceptions about being able to participate in the
ADR process by survey group
Figure 3.4: Survey respondent perceptions about wanting to participate more in
the ADR process by survey group
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Formality Preferences
3.22 The surveys sought views about the formality of the process from survey
respondents (see Figure 3.5) and preferences about whether it could be more or
less formal than what was experienced (see Figure 3.6). Formality preferences
and perceptions can influence satisfaction with a process and assist in
understanding if those involved in the ADR process considered that they had a
‘fair’ process.
3.23 Most facilitative and advisory ADR processes are conducted in a meeting or
conference setting, and some enable or support direct participation, while others
support representative participation. In some ADR processes, there is more open
discussion, while in others there may be less (with an earlier shift to private
meetings). Most people surveyed thought that the mix of formality and
informality was ‘about right’ (see Figure 3.6). The smaller disputant survey
respondents were more likely to find that the process was too ‘formal’ and some
would have preferred a less formal approach.
3.24 The sample size is too small to draw definitive conclusions about formality;
however, many people will find a court and tribunal setting to be ‘formal’ and
stressful particularly if they have had limited exposure to the legal system. More
preparation and guidance material directed at disputants may assist them to
better understand the processes they are involved in and it may be that
adjustments to ADR processes are warranted in some instances.
3.25 It may be that formality perceptions are influenced by the extent to which
small group discussions take place. That is, where ADR supports a good group
conversation, participants are more likely to consider that they could participate
at an appropriate level and also that the formality level was ‘about right’. In the
context of formality and engagement, one legal representative stated that:
In my extensive ADR experience, successful ADR involved both formality
and informality – in that order. Informality generally takes the form of a
small group conversation between the taxpayer itself and most senior
ATO officials in attendance.
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Figure 3.5: Survey respondent perceptions about the level of formality of the ADR
process by survey group
Figure 3.6: Survey respondent preference for the level of formality of the ADR
process by survey group
Impartial Treatment
3.26 Perceptions of impartiality were recorded and considered (see Figure 3.7). In
general, the survey responses show very positive results in terms of impartiality
perceptions, with more than 90 per cent of survey respondents considering that
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both sides were treated ‘equally’. This finding is higher than in some comparable
studies.17
Figure 3.7: Survey respondent perceptions about the impartiality of the ADR
process by survey group
Conclusions
3.27 In general, there were very high levels of satisfaction with the fairness of the
process. As discussed in Chapter 2, some perceptions that can be linked to key
fairness variables may be influenced by the behaviour and preparation of those
involved the ADR process. For example, in a small number of survey responses
(ATO, taxpayer and representatives), it was suggested that the behaviour of the
other side meant that it was difficult to participate effectively. This was, however, a
minority view.
3.28 There are other factors apart from representative or party behaviour that can
be considered in the context of fairness. For example, where participants consider
that they can adequately participate in ADR and where the formality level is
‘about right’, it may be that perceptions are likely to be more positive about the
ADR process. In some disputes in the sample, participants wanted to engage
‘more’ and considered that the process was ‘too formal’. These findings reflect
the views of a small cohort; however, they are important when considering how
17
See T. Sourdin, Evaluating Mediation in the Supreme and County Courts of Victoria, The Department of
Justice (DOJ) and ACPACS (Released by the Victorian Attorney General in April 2009). In the DOJ study,
survey respondents were asked whether both sides to a dispute were treated equally by a judge (in a
hearing or other process) or mediator. Overall, 71 per cent of respondents said both sides were treated
equally and 29 per cent said the other side was favoured. In mediation, the perceptions of fairness were
higher, with 83 per cent reporting that both sides were treated equally and 17 per cent reporting that the
other side was favoured by the mediator.
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effective forms of ADR can be used into the future and how improvements can be
made.
3.29 Effective ADR in this context will support participant engagement, and
processes may need to be varied according to the needs of the disputants, with
particular attention being paid to the demographics of the disputants (some small
business operators and individual taxpayers may require additional support from
the ADR practitioner to allow for engagement and participation).
3.30 The additional good faith guideline material prepared by the AAT in December
2013 may have an impact into the future if it is understood and discussed within
and outside ADR processes and where behavioural issues are present. It may also
be that more attention needs to be paid to the attitudes and behaviours of those
engaged in ADR (although the AAT guidelines consider that respect and courtesy
are core components of the good faith requirement).
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4
3
Cost
Introduction
4.1 The cost of ADR can be considered by reference to:

any direct monetary costs incurred by disputants as a result of the
requirement (whether or not the requirement led to or supported
finalisation and including any litigation costs where litigation, or
‘satellite litigation’, was related to the requirement);

whether or not costs were saved (public and private);

the direct and indirect costs that may be experienced if a dispute is not
resolved or finalised in a timely manner. Clearly, where disputes are not
resolved within a reasonable timeframe, there can be significant impacts
on disputants relating to cost, loss of opportunity, loss of profit and
associated health and family impacts.18
4.2 Cost can also be assessed or considered by reference to notions of
proportionality. Proportionality can require that:
… legal and other costs incurred in connection with the proceedings are
minimised and proportionate to the complexity or importance of the
issues and the amount in dispute.
Cost minimisation and “proportionality” are key elements of recent civil
19
justice procedural reforms.
4.3 In addition, the cost of ADR cannot be considered in isolation from other impacts.
In assessing the utility of ADR, blunt measures that emphasise only short-term
quantitative impacts or benefits (such as time and cost) may not accommodate
other qualitative factors that assist to determine effectiveness (client satisfaction
and impact on behaviour and compliance). As a result, effectiveness (explored in
Chapter 2) has been considered using a broader range of measures – not just by
reference to time and cost savings.
18
T. Sourdin, Dispute Resolution Processes for Credit Consumers (La Trobe University, Melbourne, March
2007), 93.
19
Victorian Law Reform Commission, Civil Justice Review Report (Victorian Law Reform Commission,
Melbourne, March 2008), 188.
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4.4 This Chapter explores the cost of ADR as well as the cost savings that it may
produce.
Did the ADR Process Reduce Cost?
4.5 A number of questions were asked about cost and time savings. Some testing of
perceptions material is represented below (see Figure 4.1 and Table 4.1). In past
research, there has been a strong correlation between delay and dissatisfaction.
Below, in those matters where survey respondents have expressed
dissatisfaction, there will be exploration of the time taken to deal with the dispute
and the actual time taken in the ADR process. The time taken can be one
indicator of cost and is explored further below.
4.6 In this research, the time taken within the ADR process was explored, that is,
whether the ADR meeting session was of an adequate length. Most of those
surveyed (with no statistically significant difference between survey groups)
considered that the time taken at the ADR event met expectations. Some survey
respondents did indicate that the ADR session took longer than expected, and it
may be that more information about the possible time that will be taken in ADR
could be made available so that expectations are realistic and informed.
4.7 Overall, the perceptions in relation to the time taken by the ADR process were
fairly positive; however, some survey respondents suggested that this was an area
where improvements could take place. In particular, it was noted that the time
taken could be reduced if all those attending had negotiation or mediation
training. In this regard, it is notable that only a small proportion of lawyers have
had negotiation and mediation training (this is not a law education requirement).
In relation to time taken by the ADR process, one ADR practitioner suggested
that:
Whilst the mediation resolved a substantive part of a significant
dispute, the process was longer than it needed to be. ATO lawyers might
benefit from negotiation and mediation training to hone skills and
encourage clearer and more productive communication.
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Figure 4.1: All survey respondent perceptions about the time taken by the ADR
process
Table 4.1: Respondent perceptions about the time taken by the ADR process by
survey group
More time
than
expected
A: ATO
B:
C: ADR
D: Taxpayer
E: ATO
internal
Taxpayer
practitioner representative representative
(n=96)
(n=11)
(n=41)
(n=57)
(n=123)
20%
36%
29%
28%
24%
Less time
than
expected
7%
9%
10%
7%
9%
About as
much time
as
expected
63%
55%
56%
58%
61%
Not yet
resolved
10%
na
5%
7%
7%
Time and Cost
4.8 In the survey research, some estimates were made about the costs incurred and
costs saved. There were, however, some significant variations in the survey
responses, which is not surprising given that the disputes involved different levels
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of complexity and that the timing of the ADR events varied. Therefore, this data
must be viewed with some caution.
4.9 On the basis of the data presented, overall the survey respondents (ATO, taxpayer
and representatives) indicated that the ADR process resulted in significant cost
savings. Many survey respondents did not report on costs incurred or saved in the
survey, and as a result the findings must be expressed with some caution.
However, for many who were surveyed, the median value of costs saved by
successful resolution equated to around $70,000 per matter. Lower cost savings
were linked to attendance at the AAT or the Federal Court (where significant cost
variation is to be expected).
4.10 It should be noted that costs that had been expended already were
relatively large. Again, in complex matters, it could be expected that significant
legal and expert costs could be incurred. However, the late use of ADR may
mean that some costs for both the ATO and the taxpayers could have been
reduced had ADR been undertaken at an earlier time. In future work it would be
useful to analyse what the impact of case conferencing might be – how it can
impact on costs and how and what sorts of disputes appear to benefit most
from conferencing processes or other early ADR interventions (eg, pilot
facilitation within the ATO).
4.11 There are some factors that appear to drive cost increases. Where a matter
does not resolve at ADR, costs can increase. However, the research suggests
that even where finalisation did not take place (around 30 to 35 per cent of
matters), issues were narrowed or there were some other benefits that would
result in overall reductions in cost.
4.12 Significantly, a feature of the costs expenditure involved costs for external
non-lawyer professionals. The average cost estimates made by ATO Legal
Services Branch and external representatives (n=56) was around $55,000 in
respect of valuers, accountants or other expert fees. For taxpayers, the sample
size was reduced; however, for some the expenditure in this category was
considerable. It may be that an earlier clarification of issues could reduce these
costs.
Time Taken to Resolve the Dispute
4.13 The timing of ADR process interventions can be linked to the overall
effectiveness of the ADR process and can have an impact on costs incurred as well
as cost savings. Sometimes, the earlier the ADR intervention takes place, the
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more likely that a matter will be resolved and with a greater cost saving. This is
not always the case, however, as in some instances, further documentation may
be required and cost savings will not be reduced. It is also the case that there may
be incentives to delay ADR, as in some instances, delay can benefit a disputant (if,
for example, it means that payment does not need to be made).
4.14 However, later referral to ADR can lead to higher costs and the adoption of
more positional and entrenched views. A lengthy period of communication that
responds to court and tribunal case management requirements and one that is
conducted mostly by lawyers may not foster a collaborative problem-solving
approach that supports ADR. As a result, later ADR may in some circumstances be
less effective than earlier ADR.
4.15 It also seems that, in the sample, in many cases costs were increased as a
result of external valuer and other fees (rather than only via professional legal
fees) and it may be that some of these fees can be reduced in some way or so
that questions that are referred to external professionals can be limited through
the use of earlier ADR (thus resulting in cost and time savings).
4.16 Based on previous work, in the sample many matters progressing to ADR were
‘old’ matters where disputes were longstanding. The median length of time from
objection to the ADR process taking place was 607 days (see Table 4.2 below). The
date of objection was taken as a referable date from the ATO, and it is probable
that many disputes had arisen before objection and were therefore even ‘older’
when the ADR event took place.
4.17 In the context of time, the date from objection to ADR event and the date at
which court proceedings were commenced were each considered as separate
variables. The ‘newer’ matters in the context of court or tribunal days elapsed
appeared to be more likely to resolve at ADR.
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Figure 4.2: Impact on ADR outcome of time (in days) between commencement of
AAT or Federal Court proceeding and the date ADR was conducted
4.18 The research suggests that, the earlier that the AAT or Federal Court held an
ADR event, the more likely it was that a matter would settle. However, this
finding must be considered in the context of other material (including case
complexity) that may mitigate against finalisation of some matters. Interestingly,
the findings in respect of the other measure of time taken (using the objection
date) also suggests that later referral is less likely to result in settlement although
the relationship between the variables is not as strong. In addition, it must be
noted that most matters at the AAT will pass through a conference process before
being referred to mediation, conciliation or evaluation. The conference process
results in the finalisation of a significant proportion of matters commenced at the
AAT. Further work which also considers this significant cohort of matters could
assist to determine whether earlier referral is more successful in respect of some
case types.
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Figure 4.3: Impact on ADR outcome on time (in days) between the date the
objection lodged and the date ADR was conducted
4.19 In most cases where the ADR process (as defined by the ATO Register) took
place at the Federal Court or the AAT, about nine months had elapsed before the
ADR intervention occurred. The case file activity undertaken in the AAT and
Federal Court can vary extensively. For example, in the Federal Court, individual
case management events (in court) were likely to have taken place. At the AAT,
case conferencing (usually involving representatives only) is used to manage
disputes. A proportion of all disputes will resolve at the Federal Court and AAT at
case management events (and before more intensive and focussed ADR is used).
4.20
It has been noted in previous research that ADR referral may occur more
quickly in some states of Australia than in others. This was explored using the
data set information. The table below suggests that in general ADR events
occurred more quickly in NSW, although as noted previously, finalisation of issues
(settlement via ADR) was more likely in Victoria. These state differences can be
explained by a range of factors including the cultures that operate, the ATO
approaches as well as approaches within the AAT and Federal Court and whether
there are ‘ADR champions’ that support earlier referral.
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Figure 4.4: Time elapsed (days) between commencement of AAT or Federal Court
proceeding and date ADR conducted by location of disputant (ATO file data)
4.21 However, as noted below, although referral to ADR was faster in NSW, it was
also more likely that people commenced proceedings in NSW more quickly. These
figures must also be considered in the context of effectiveness and outcomes.
Younger disputes were less likely to resolve in NSW than younger disputes in
Victoria. Queensland disputes were less likely to resolve overall, and age
appeared to have little impact.
Figure 4.5: Time elapsed (days) between commencement of AAT or Federal Court
proceeding and date ADR conducted by location of disputant (ATO file data)
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4.22 Some comments made by survey respondents included that an ADR process
may be more beneficial at an earlier stage. In particular, it was noted that:
(ATO staff) ADR needs to be incorporated in case management earlier
on. End of audit or stage of objection. This would get a better
understanding earlier.
4.23
These comments and views about earlier ADR referral were also supported
by statements made by legal representatives in response to whether there was
anything that the ATO could have done to make their contact easier, including:
Yes, personal meeting during the objection process.
Face to face contact through the objection process.
Table 4.2: ADR timing of intervention (ATO file data)
Date objection lodged to date
ADR conducted (days)
Median
Average
Range:
n
607
539
Range: 54 to 1,951 days
113
Date where any AAT or Federal
Court proceedings commenced
to date ADR conducted (days)
267
209
Range: -234 to 1,326 days
108
Conclusions
4.24 In the context of cost, there is data that suggests that the ADR processes
resulted in significant cost savings, even though many had already incurred
substantial costs prior to the registered ADR event. One relevant factor may
relate to the types of costs incurred and the significance of external professional
costs. It is possible that these could be reduced by earlier narrowing of issues.
4.25 There was considerable support for the finding that ADR saved time and
money; however, the sample included many matters where significant costs had
already been expended by the time the ADR event took place.
4.26 Many of the disputes that went to the formal ADR process were relatively old
by the time they resolved when one considers age from the date the dispute
arose. There are some differences between states in terms of ADR timing. The
relatively small sample size makes it difficult to draw comparisons between states
and cohorts other than in very basic terms, and these issues could usefully be
explored further by the ATO.
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5
5
Conclusions and Future Options
Introduction
5.1 The resolution or settlement rates in respect of the ATO sample of disputes that
went to conciliation, mediation and evaluation from 1 July 2013 to 30 June 2014
are consistent with past studies of settlement rates in conciliation (although at
the lower end – mediation settlement rates often cluster well above 60 per cent)
and the perceptions of those involved in these ADR processes were very positive.
Generally, people thought that the processes were fair, and if a settlement did
not occur at the ADR event, the ADR event had an impact on finalisation of the
dispute within a short time-frame. The earlier that ADR was used, the more
positive the perceptions seem to be; however, this factor needs to be considered
in the context of case complexity and cost of dispute factors.
5.2 There is also significant survey evidence to suggest that the ADR processes were
perceived to be cost and time-effective. The forms of ADR that were used
appeared to be more effective for some types of taxpayers than others. In this
regard, individual and small – medium sized business taxpayers were less likely to
resolve disputes at the ADR events and large business and micro businesses were
more likely to. It may be that more preparation and intake processes could
support some taxpayers.
5.3 The formal ADR processes occurred reasonably late in the life cycle of most
disputes. The research tracked disputes from the date an objection was made to
the date of the ADR event and also considered the date that any court or tribunal
proceedings were commenced.
5.4 As noted in the Report, many disputes were ‘old’ by the time the ADR event took
place and a fair proportion was more than two years old. Considering this from
the perspective of court or tribunal filing dates, the majority of disputes were
more than nine months old by the time the intensive ADR event took place and
this is often an acceptable measure within Courts and Tribunals (that is,
finalisation takes place within 12 months of filing) particularly where case
management or some form of conferencing which may only involve
representatives) has taken place. Many External Dispute Resolution Schemes have
shorter time frames that are used with conciliation or mediation proceeses being
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5.5
5.6
5.7
5.8
used within a few weeks of initial referral and contact. In this regard, the
timelines for referral noted in this Report are not inconsistent with ADR referral
arrangements in courts and tribunals around Australia; however, given the time,
stress and costs involved in dealing with disputes, the question must be asked:
could ADR take place at an earlier time?
ACJI has previously considered the timing of ADR interventions in other reports
(see the ‘Pre-action Protocols Report’ 201320 and the ‘Timeliness Report’ 201421).
In addition, the timing of ADR interventions has been considered in the Supreme
Court and County Courts of Victoria22 and (some time ago) ADR use in the
Supreme and District Courts of NSW.
Much of the work in the ‘Pre-action Protocols Report’ suggested that early and in
many cases pre-filing ADR can be effective in narrowing issues and resolving
disputes (settlement rates in complex and non-complex matters remain high
where pre-filing ADR is used). One issue is whether there are impediments to
earlier use of ADR in taxation disputes and how those impediments might be dealt
with. It may be that the documentation required in taxation disputes means that
earlier ADR is not appropriate or possible. On the other hand, the factors
influencing whether earlier ADR use can take place may also be linked to culture,
preference and standard approaches in the taxation area. It also appears that
commencing proceedings was the trigger for ADR use.
It may be that the ATO could trigger ADR use at an earlier time in respect of some
disputes and recent work on in house facilitation by the ATO has been directed at
this. It must also be borne in mind that a large number of matters settle at the
AAT after a conferencing process has taken place and that on average, around 70
percent of matters have a conference within 70 days of proceedings being
commenced and with the bulk of matters being resolved at conference within 140
days.23 There may however be potential to refer larger more complex cases to
earlier intensive ADR or to use earlier intensive ADR with micro business cases.
Some of the possible benefits of earlier use of ADR are difficult to measure. The
increased use of earlier ADR may, for example, lead to a decrease in litigious or
adversarial behaviour,24 foster better relationships between parties to disputes or
result in higher levels of compliance with outcomes. In this research, it is unclear
20
See http://www.law.monash.edu.au/centres/acji/projects/pre-action-protocols.html (accessed 6
November 2014).
21
See http://www.law.monash.edu.au/centres/acji/projects/timeliness/index.html (accessed 6
November 2014).
22
2009 See http://www.civiljustice.info/adreval/1/ (accessed 6 November 2014).
23
Interview with AAT ADR Director Justin Toohey 18 November 2014.
24
It has been suggested that those exposed to cooperative dispute resolution processes develop more
constructive communication patterns and less obstructive behaviour: P. Wanger, ‘The Political and
Economic Roots of the “Adversary System” of Justice and “Alternative Dispute Resolution”’ (1994) 9(2)
The Ohio State Journal on Dispute Resolution 203.
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why in some instances intensive ADR was not used earlier in respect of some
disputes; however, as noted previously, this may be a feature of some tax
disputes where the gathering and exploration of documentation may require
more time. In terms of future research, it is suggested that the timing of ADR use
be explored further with focus groups from the various survey cohorts as well as
key referrers to better understand whether there are impediments to earlier
referral.
5.9 The research showed that there was a perception among some survey
respondents that, in order for an ADR process to be beneficial, everyone has to
‘come to the table with an open mind’ and it was suggested that in some
circumstances participants had not engaged in good faith or appropriately. It was
also noted that there should be clear guidelines as to when ADR is appropriate as
it may not be appropriate for all cases.
5.10 There were some comments made that did not only relate to the view of the
law but also were directed at whether people engaged in an ‘adversarial’ manner:
All parties including mediator should not assume one side will always
win, they should remain open to all discussions.
The ATO officers who attend need to come with an open mind, a less
adversarial approach and the preparedness to test their views of the
facts and the law.
(ADR practitioner) [In response to what the issues were] Lack of
preparedness of the ATO to alter its view of the facts, and how the law
applied to that view.
5.11 Overall, there were positive perceptions and feedback about the ADR
processes, with a number of survey respondents (non-ATO) commenting that it
was a ‘good process’ and that it was effective in resolving disputes in a fair
manner.
The Research Approach
5.12 In the context of future research in this area, it is noted that an important
part of this Project was to develop a methodology and a set of tools that could be
used by the ATO to conduct sampling and evaluation work into the future. The
tools used in this research are located in the Appendices. It is noted that there are
some benefits in conducting this work outside the ATO (external researchers are
seen as independent, comply with ethical approvals and are therefore able to
adequately separate confidential information and survey responses from data
bases and other operational inputs). However, if work is to be conducted by the
ATO, it is suggested that surveying could take place for a three-month period
(perhaps annually) to determine and track differences with the findings in this
study. Such an approach would support the continuous improvement of ADR use
in taxation disputes.
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5.13 It may also be that surveying could be conducted collaboratively (perhaps
with the AAT) and could include a focus on outreach and conference activities.
One suggested change to the methodology would include ‘on the spot’ surveying
of taxpayers which was not possible in this project (as the Researchers did not
have access to ADR practitioners in advance of an ADR event). This approach
might assist to ensure that the taxpayer voice is heard more often.
5.14 Finally it should be noted that some ADR processes were not evaluated.
Where the ADR process was not recorded as an ADR event on the ATO Register it
was not considered. This is partly because details for surveying and in respect of
case characteristics were not recorded. This meant that ADR that included
conferencing or internal facilitation was not evaluated. In the context of future
work, these processes could be assessed and tracked using base data from this
research project as a guide and also to assist to determine whether any
improvements could be usefully implemented into the future.
5.15 There is some useful follow-up work that could be considered in the near
future. Issues in respect of the timing of ADR and perceptions of fairness could be
usefully explored in ADR focus groups. Focus group input could inform the ATO
about specific improvement opportunities as well as informing those who work
with ADR about the outcomes of this research.
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6
6
Appendices
Appendix A: Survey Recruitment Instruments
Invitation letter – email version
Please send email responses to EvaluatingADRintaxationdisputes@ato.gov.au.
[date]
[salutation] [insert participant name]
[street Address]
[location / state / postcode]
Participant code: [unique numerical code eg. XXXX] [alphabetical letter code eg. Xx]
Dear [name]
Evaluating Alternative Dispute Resolution in taxation disputes
I am writing to advise you that the ATO has engaged independent researchers from
Monash University Australian Centre for Justice Innovation (ACJI) to conduct a survey
of people who have used alternative dispute resolution processes in relation to
taxation disputes. We understand that you were a party to a process that occurred on
[date].
Please find enclosed an Explanatory Statement from Monash University about the
research for your information.
We invite you to take part in the survey either by telephone or online. Both telephone
and online surveys are the same. Participation in this survey is entirely voluntary. If
you choose not to participate in the survey, your name and contact details will not be
shared with Monash University.
Chapter 6 – Appendicies
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If you choose to participate in the survey, any information that you provide will be
de-identified by the Monash University research team and kept strictly confidential.
Monash University will not report any identifiable information back to the ATO.
The ATO will be sharing additional de-identified details about the dispute with
Monash University. The details will not be linked to your name or address.
There are two ways you can become involved in this research:
Option 1 - Telephone Survey
If you take this option then you will be contacted by telephone during office hours by
a Monash University ACJI researcher. You will have the opportunity to opt out of the
survey at that time if you choose, and you do not have to answer all of the questions
asked.
Option 2 – Online Survey
The online survey can be accessed through the Monash University website by taking
the following link: http://www.law.monash.edu.au/centres/acji/projects/evaluatingalternative-dispute-resolution-in-taxation-disputes/index.html
A link to the survey can be found under the heading “About the Project”
•
Your unique numerical code is XXXX
•
Your alphabetical letter code is Xx
Applying this code to the online survey is designed to direct you to the correct
questions, and ensure that you are not later called by the researchers to do the
survey by telephone. All data will be de-identified for analysis.
Alternatively, you can search the internet for Monash ACJI, select the Australian
Centre for Justice Innovation website and follow the links on our homepage to the
Evaluating Alternative Dispute Resolution in taxation disputes survey.
(http://www.law.monash.edu.au/centres/acji/).
If you need any assistance with online surveys, please contact the ACJI office on (03)
9903 8528.
If you prefer not to take part in the research, please reply to this email with the words
‘Opt Out’. Alternatively, you can print the attached opt out form indicating that you
do not wish to be contacted and return this to the Australian Taxation Office:
Sirla Jafri
Review and Dispute Resolution
Chapter 6 – Appendicies
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Law Design and Practice Group
Australian Taxation Office
GPO box 9990
Canberra, ACT, 2601
If you do not exercise your option to opt out within two weeks from the date of this
invitation the ATO will provide your contact details to the researchers.
Thank you for your time.
Yours sincerely,
Sirla Jafri
Director, Review and Dispute Resolution
Law Design and Practice Group
Australian Taxation Office
Invitation letter – post version
[insert date]
[title] [first name] [last name]
[address]
[suburb] [state] [postcode]
Participant code: <Insert unique participant code>
Dear [insert first name]
Evaluating Alternative Dispute Resolution in taxation disputes
I am writing to advise you that the ATO has engaged independent researchers from
Monash University Australian Centre for Justice Innovation (ACJI) to conduct a survey
of people who have used alternative dispute resolution processes in relation to
taxation disputes. We understand that you were a party to a process that recently
finalised.
Chapter 6 – Appendicies
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USER EXPERIENCE SURVEY IN ADR
Please find enclosed an Explanatory Statement from Monash University about the
research for your information.
We invite you to take part in the survey either by telephone or online. Both telephone
and online surveys are the same. Participation in this survey is entirely voluntary. If
you choose not to participate in the survey, your name and contact details will not be
shared with Monash University.
If you choose to participate in the survey, any information that you provide will be deidentified by the Monash University research team and kept strictly confidential.
Monash University will not report any identifiable information back to the ATO.
The ATO will be sharing additional de-identified details about the dispute with
Monash University. The details will not be linked to your name or address.
There are two ways you can become involved in this research:
Option 1 - Telephone Survey
If you take this option then you will be contacted by telephone during office hours by
a Monash University ACJI researcher. You will have the opportunity to opt out of the
survey at that time if you choose, and you do not have to answer all of the questions
asked.
Option 2 – Online Survey
The online survey can be accessed through the Monash University website by taking
the following link http://www.law.monash.edu.au/centres/acji/projects/evaluatingalternative-dispute-resolution-in-taxation-disputes/index.html
A link to the survey can be found under the heading “About the Project”
Your unique code is: [insert numerical code eg. XXXX and alphabetical letter code eg
Xx]
Applying this code to the online survey is designed to direct you to the correct
questions, and ensure that you are not later called by the researchers to do the
survey by telephone. All data will be de-identified for analysis.
Alternatively, you can search the internet for Monash ACJI, select the Australian
Centre for Justice Innovation website and follow the links on our homepage to the
Evaluating Alternative Dispute Resolution in taxation disputes survey.
(http://www.law.monash.edu.au/centres/acji/).
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If you need any assistance with online surveys, please contact the ACJI office on (03)
9903 8528.
If you prefer not to take part in the research, please complete the enclosed form
indicating that you do not wish to be contacted and return this to the Australian
Taxation Office in the reply paid envelope provided. If you do not exercise your option
to opt out within two weeks from the date of this invitation the ATO will provide your
contact details to the researchers.
Thank you for your time.
Yours sincerely
[name]
[position]
[organisation] (ATO)
Encl.
Explanatory Statement
Opt Out Form
Reply Paid Envelope
Chapter 6 – Appendicies
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Explanatory statement
Chapter 6 – Appendicies
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Opt out form – email
Opt out form
Evaluating Alternative Dispute Resolution in Taxation Disputes
[insert date]
If you do not wish to be contacted regarding this research, please mail this form,
within two weeks, to the Australian Tax Office.
I do not wish to be contacted regarding the research.
Participant code: __ __ __ __ __ __
Opt out form – post
Opt out form
Evaluating Alternative Dispute Resolution in Taxation Disputes
[insert date]
If you do not wish to be contacted regarding this research, please mail this form,
within two weeks, to the Australian Tax Office using the reply-paid envelope
provided.
I do not wish to be contacted regarding the research.
Participant code: __ __ __ __ __ __
Please mail to:
Sirla Jafri
Review and Dispute Resolution
Law Design and Practice Group
Australian Taxation Office
GPO Box 9990
Canberra ACT 2601
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Appendix B: Survey Recruitment Instructions
The survey process in this project has been approved by the Monash University
Human Research Ethics Committee (MUHREC). The attached paperwork complies
with research rules relating to recruitment of participants. Invitations, consent forms,
explanatory statements and surveys are carefully designed to provide accurate and
sufficient information without coercion.
If you require any assistance with the recruitment process, please do not hesitate to
contact at the Australian Centre for Justice Innovation on 03 9903 8013 or by emailing
alan.shanks@monash.edu. We are very happy to provide you with any assistance you
may need.
Invitations are to be sent to each party to an ADR case following closure. They can be
mailed or emailed.
Method for applying participant codes
For system verification purposes, we would like to use a 6 digit code.
1.
Case Number - A case code is made up of (month finalised) and (matter
number that month). That is, for the first matter in July the code would be 0701. The
second matter would be 0702.
2.
Participant Code part 1

A = ATO people (includes case officer, debt officer and others but NOT
LSB officer)

B = Taxpayer

C = ADR Practitioner (includes private practitioner engaged by taxpayer
and/or ATO - also includes AAT and Federal Court Representatives
where a practitioner is not utilised)

D = Taxpayer representative (includes taxpayer's lawyer, taxpayer's
accountant, taxpayer's tax agent etc)

E = ATO representative (includes Legal Services Branch officer and/or an
externally engaged barrister or solicitor)

3. Participant Code part 2

a = first person in that group

b = second person in that group

c = third person in that group

d = fourth person in that group
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4.
Final code – (Case Number) and (PARTICIPANT CODEperson in that coding
group)
5.
Adding these together – Samples

The first taxpayer survey code will be 0701Ba. If it is a married couple,
their partner will be 0701Bb.

The code for the mediator for the third case in December will be
1203Ca.

The code for the taxpayer’s barrister in the seventh case in February will
be 0207Da and the code for the taxpayer’s accountant in the same case
will be 0207Db.

And so on.
Method for sending invitations by post
1.
Use the letter of invitation for post version (contains information about
returning the opt out form by mail)
2.
Please amend the letter of invitation in the following ways:
a.
Insert your letterhead into the top section of the document
b.
Insert each party’s addresses (it may be useful to use mail merge)
c.
Insert date
d.
Insert each individual client code (e.g. 0701B) in the place specified on
the invitation
e.
Insert party’s first name in the greeting/salutation section
f.
Insert ATO sender’s name and details in the sign-off section at the
bottom of the invitation (we will leave it to ATO to identify an appropriate
representative).
It is very important that no further amendments are made to the invitation beyond
these instructions, especially not to the wording of the invitation. The wording of this
invitation has been approved by the Monash University Human Research Ethics
Committee (MUHREC), and is subject to the strict ethical requirements that have
been set out.
3.
Please amend the opt-out form by applying each individual code to the form
(e.g. 0701Ba). This will help you to identify who has opted out if the form is returned
to you, while avoiding the need to put the party’s name on the form.
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4.
The envelope which contains the invitation must be blank (although it can
have a return to sender address on the back if desired. If the sender is identified in
this case, it should be the person doing the inviting, not the ATO). Ethics approval
requires that the Tax Office logo NOT be present on the outside of the letter people
will receive. This is to avoid any possible sense of alarm at receiving communication
from the ATO. If any letters are marked ‘Return to Sender’ the ATO should re check
the address and determine whether they can contact the person by other means to
send them the information.
5.
Include in each envelope:
a.
The letter of invitation, amended as instructed above
b.
A reply paid envelope (addressed to ATO)
c.
Explanatory statement
d.
Opt-out form, amended as instructed above
Method for sending invitations by email
1.
Use the letter of invitation for email version (contains information about how
to opt out either electronically or by mail)
2.
Please amend the letter of invitation in the following ways:
a.
The letter of invitation will be in the body of the email
b.
Insert each individual client code
c.
Insert party’s first name in the greeting/salutation section
d.
Insert ATO sender’s name and details in the sign-off section at the
bottom of the invitation
3.
Attach the following documents to the email
a.
Explanatory statement
b.
Personalised opt out form
4.
Ensure that the message is emailed from an address that can also receive
replies, such as queries or opt-outs. Participants need to be able to click ‘reply’ on the
email and message the correct person. If any emails are returned or undeliverable the
ATO should re check the address and determine whether they can contact the person
by other means to send them the information.
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5.
NOTE – participants who are invited by email will have the option to opt-out
by replying ‘opt out’ to the email. They will also be able to print up their opt-out form
and mail it to the ATO if they prefer the added level of anonymity this affords. ATO
will need to put in place procedures for checking both mail and email opt-outs before
forwarding contact details to ACJI.
Method for forwarding contact details to ACJI
1.
Participant contact details will be forwarded to ACJI three weeks following the
initial mail out (assuming mail could take up to one week to arrive and be opened).
This gives people time to opt out if they should choose to.
2.
Three weeks following the initial mail out, check if any opt-out forms or
emails have been returned
a.
For those who opt out, remove contact details from list of contacts
and mark parties accordingly (do not send us contact details for those who
opt out).
b.
If opt-out forms will take time to move through internal mail, please
allow more time from mail out accordingly.
c.
Please DO NOT forward the contact details of any party who has
returned an opt-out form or opt-out email.
3.
Using the details of all parties who have NOT opted-out, complete the Excel
Spread-sheet provided to you by ACJI. Fields will include party code (e.g.0312Aa),
name and contact telephone number.
4.
Email completed spread-sheet as an attachment to Alan Shanks
alan.shanks@monash.edu with the following information in the subject header
‘CONFIDENTIAL ACJI project compliance DD/MM/YYYY’.
5.
NOTE – ACJI will check to see who has completed the online survey before
making telephone calls to participants. However we will not forward this information
to ATO, except in de-identified, aggregate form.
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Appendix C: Survey Instruments
Note: The surveys are laid out below in the question order in which they appeared to
the respondent. The survey numbering in Qualtrics software (also included below)
reflects the order they were created in rather than the order they appear to the
survey participant.
ADR coordinator survey
Q27 Please review and indicate your agreement to the following statements:
1. I have read and understood the explanatory statement
2. I am aware that doing this survey is voluntary
3. I know that answering every question in this survey is voluntary
4. I understand that the answers I give will not be identified or linked back to me in
publication
5. I consent to the use of my de identified responses to contribute to the research
into Taxation Disputes
 I agree and wish to complete the survey (1)
 I do not agree and wish to exit the survey (2)
Q1 Case Code:
Q21 Did the disputant request to have this matter heard in private?
 Yes (1)
 No (2)
Q34 Date objection lodged (date the objection form is received by ATO) or earlier
date:
 DD/MM/YYYY (1) ____________________
Q35 Assessment Year:
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Q24 How many taxpayers were involved in this process?











1 (1)
2 (2)
3 (3)
4 (4)
5 (5)
6 (6)
7 (7)
8 (8)
9 (9)
10 (10)
> 10 (11)
Q4 Disputant Gender - insert number of each gender involved (please use numeral
form, e.g '2')
 Male/s (1) ____________________
 Female/s (2) ____________________
 Additional participant/s - gender not recorded (3) ____________________
Q5 Disputant Postcode (if multiple postcodes, please select only one):
Q6 Market Segment:






Individual and Business (1)
Large (2)
Micro Enterprise (3)
Small to Medium Enterprise (4)
Not for Profit (5)
Government (6)
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Q7 Amount in dispute (not including General Interest Charge):







< $10,000 (1)
$10,001 - $20,000 (2)
$20,001 - $100,000 (3)
$100,001 - $1 million (4)
> $1 million - = < $10 million (5)
> $10 million (6)
Not applicable (7)
Q8 Case Complexity:
 Low (1)
 Medium (2)
 High (3)
Q9 Was the taxpayer represented?
 Yes (1)
 No (2)
 Don't know (3)
Q10 Were experts engaged?
 Yes (1)
 No (2)
 Don't know (3)
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Q11 How many experts were engaged?













1 (1)
2 (2)
3 (3)
4 (4)
5 (5)
6 (6)
7 (7)
8 (8)
9 (9)
10 (10)
11 (11)
12 (12)
> 12 (13)
Q12 Type of ADR:






Conciliation (1)
Mediation (2)
Neutral Evaluation (3)
Case Appraisal (5)
Facilitation (6)
Other (please specify) (4) ____________________
Q14 Duration of ADR event:





1 hour or less (1)
1 -3 hours (2)
4 - 6 hours (3)
7 - 9 hours (4)
> 9 hours (5)
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Q15 Number of Participants in ADR event:





















1 (1)
2 (2)
3 (3)
4 (4)
5 (5)
6 (6)
7 (7)
8 (8)
9 (9)
10 (10)
11 (11)
12 (12)
13 (13)
14 (14)
15 (15)
16 (16)
17 (17)
18 (18)
19 (19)
20 (20)
> 20 (21)
Q16 Date ADR conducted:
 DD/MM/YYYY (1) ____________________
Q22 What date were any AAT or Federal Court proceedings commenced?
 DD/MM/YYYY (1) ____________________
Q17 ADR outcome:
 Resolved (1)
 Partially resolved (2)
 No result (3)
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Q30 Did the ADR process assist in clarifying facts?
 Yes (1)
 No (2)
Q31 Did the ADR process assist in clarifying issues?
 Yes (1)
 No (2)
Q32 Did the ADR process assist with anything else?
 Yes. If so, please specify: (1) ____________________
 No (2)
Q36 When were Legal Services engaged?
 DD/MM/YYYY (1) ____________________
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ADR participant survey
Introduction (all participants)
Q164. Monash University is conducting independent research into Alternative Dispute
Resolution (ADR) processes used in taxation disputes. Your answers will help us to
understand whether these processes are effective so we want to ask you about your
experience of the dispute resolution process and then try to identify if there are any
areas in which improvements can be made. Responses are de-identified, so that you
as an individual or your business cannot be recognised. Your cooperation in this
important survey is voluntary. It will take approximately 10-15 minutes to complete
the survey.
Q179 Please enter your unique numerical participant code (found on your invitation
letter)
Q220 You must enter your alphabetical letter code (found on your invitation letter) to
be taken to the correct survey for your role
a (1)
b (2)
c (3)
d (4)
e (5)
f (6)
g (7)
h (8)
A (1)








B (2)








C (3)








D (4)








E (5)








Q180 If you experience any distress in the course of surveying, we have arranged for
counselling to be made available at no charge.
 Please click here if you would like more details about how to access counselling
services (1)
Q219 Please contact ResolutionsRTK Call 1300 687 327 or email
eap@resolutionsrtk.com.au and quote ‘Tax office research’
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Q166. Please review and indicate your agreement to the following statements:
1. I have read and understood the explanatory statement
2. I am aware that doing this survey is voluntary
3. I know that answering every question in this survey is voluntary
4. I understand that the answers I give will not be identified to the ATO or linked back
to me in publication
5. I consent to the use of my de identified responses to contribute to the research
into Taxation Disputes
 I agree and wish to complete the survey (1)
 I do not agree and wish to exit the survey (2)
A: ATO Internal people (Case Officer, Debt Officer)
Section 1 - Background and Timing
We are going to ask some general questions about a dispute resolution process
meeting that was chaired by a third person – a mediator, evaluator, conciliator or
facilitator where that person was helping to resolve the dispute. Sometimes these
processes are referred to as Alternative Dispute Resolution (ADR).
Q92 Overall, did the ADR / dispute resolution process take more or less time than
expected?




More time than expected (1)
Less time than expected (2)
About as much time as expected (3)
Not yet resolved (4)
Q93 Do you think that the dispute has been completely finalised?
 Yes (1)
 No (2)
 Not sure / Don't know (3)
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Q94 How was the dispute finalised?








At the ADR / dispute resolution conference (1)
Following the ADR / dispute resolution conference (2)
After more advice or information was exchanged between ATO and taxpayer (3)
After expert advice (4)
In a Court or Tribunal (5)
Through negotiation with the other side (6)
Lawyer negotiated on behalf of client (7)
Other, please specify: (8) ____________________
Q95 What will happen now?
 Take the issue up again (1)
 Drop the issue (2)
 Take the issue up again with someone else, please specify: (3)
____________________
 Go to a Court or Tribunal hearing (4)
 Do something else, please specify: (5) ____________________
Q96 Would the ADR / dispute resolution process have been more useful had it
happened earlier?
 Yes (1)
 No (2)
Q97 When could it have taken place?





During audit (1)
During objection (2)
Between objection and when proceedings started (3)
A short time after proceedings had started (4)
Some other time, please specify: (5) ____________________
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Section 2 – Outcomes and Perceptions
Q98 How formal was the process you attended?




Very formal (1)
Somewhat formal (2)
Somewhat informal (3)
Informal (4)
Q99 Would you have preferred it was:
 More formal (1)
 Less formal (2)
 Level of formality about right (3)
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Q100 For the next few questions, please indicate how strongly you agree or disagree
with the following statements in relation to the ADR / dispute resolution process:
Strongly
Disagree (1)
Disagree (2)
Agree (3)
Strongly Agree
(4)
The process
assisted in
resolving the
dispute (1)




I was able to
participate during
the process (2)




The process was
fair (3)




I had control
during the process
(4)




I would have liked
to participate
more during the
process (5)




I had control over
the outcome of
the process (6)




There was enough
time in the
process to
present/discuss all
necessary
information (7)




I was treated with
respect during the
process (8)




The outcomes of
the process were
fair (9)




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Q101 The following statements are about your satisfaction with the ADR / dispute
resolution process. Overall, how satisfied were you with the following:
Very Dissatisfied
(1)
Dissatisfied (2)
Satisfied (3)
Very Satisfied
(4)
The dispute
resolution
process (1)




How the process
was handled (2)




The time it took
to deal with the
dispute (3)




The way the
system operated
for this dispute
(4)




The outcome of
the dispute (5)




Q102 Did you experience any issues with inappropriate behaviour or conduct or a lack
of preparation in relation to the participants, the representatives or the person
conducting the conference?
 Yes (11)
 No (12)
Q122 Can you please tell us what the issues were:
Q103 During the ADR / dispute resolution process, were both sides treated equally or
was one side favoured?
 Both sides were treated equally (1)
 Our side was favoured (2)
 The other side was favoured (3)
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Q104 Do you think that discussion with the other side in a process (eg. like the
process you attended) is a better way to resolve a dispute like this?
 Yes (1)
 No (2)
Q105 Why do you say that? Would you say that discussions with the other side (click
all that apply):







Are fairer (1)
Allow everyone to present all relevant information (2)
Provides a chance to understand the other party's side (3)
Saves time (4)
Saves money (5)
Helps both sides to understand the situation (6)
Other, please specify: (7) ____________________
Q106 Why do you say that?
Q107 Did you do anything to try to finalise the dispute with the other side before
attending the dispute resolution conference (click all that apply)?






Did not try anything (1)
Tried talking to the other side (2)
Provided further information (3)
Participated in a different conference or mediation (4)
Started Tribunal or Court proceedings (5)
Something else, please specify: (6) ____________________
Q108 Why were proceedings at the Administrative Appeals Tribunal (AAT) or the
Federal Court started before the ADR / dispute resolution process was used?





The other side was not prepared to negotiate (1)
The other side was taking too long (2)
The other side started the AAT / Federal Court proceedings (3)
There was more than one party on the other side and it was complicated (4)
This matter was linked to another case that was already at the AAT or Federal Court
(5)
 Other, please specify: (6) ____________________
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Q109 Before you were involved in the process, what did you think your chances of
success in a Court or Tribunal hearing for your side were? Do you think you had:






No chance (1)
A small chance (2)
A range of possible outcomes (3)
A reasonable chance (4)
There was a near certainty that we would be successful (5)
I did not know (6)
Q110 In the end, was the outcome of the dispute in the ADR / dispute resolution
process:
 Better than you expected (1)
 Worse than you expected (2)
 About the same as you expected (3)
Q111 In the end, who do you believe was successful as a result of the process?




Our side (1)
The other side (2)
Both sides (3)
No one (4)
Q112 Did you have any difficulties in the ADR / dispute resolution conference that
related to the location or timing of the conference or any other matter?






No difficulties experienced (1)
The room was not sufficiently private (2)
The location was inconvenient (3)
The time was inconvenient (4)
Security was insufficient (5)
Other, please specify: (6) ____________________
Q113 Do you have any suggestions for improving these types of dispute resolution
processes?
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Q235 Estimate how much, if anything, you think was saved in legal costs because of
the dispute resolution process:
If you are able to estimate,
If you are unable to estimate,
please enter amount: (1)
please click here: (1)
Our side (1)

Other side (2)

Q116 Would you like to make any other comments about the process you were
involved in?
Section 3 – Demographic Information
Finally, we would like to ask a few general questions about you. Answering these
questions is optional however, they are important to our research. Your answers will
be used only to further our understanding of dispute resolution in taxation matters.
We will not be reporting your individual responses.
Q118 What is your gender?
 Male (1)
 Female (2)
Q119 What is your age?






18 - 24 years (1)
25 - 34 years (2)
35 - 44 years (3)
45 - 54 years (4)
55 - 65 years (5)
65+ years (6)
Q120 What is the postcode of your office?
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B: Taxpayer questions
Section 1 – Background and Timing
We are going to ask some general questions about a dispute resolution process
meeting that was chaired by a third person – a mediator, evaluator, conciliator or
facilitator where that person was helping to resolve the dispute. Sometimes these
processes are referred to as Alternative Dispute Resolution (ADR).
Q2 Firstly, can you tell me if you have ever been involved in an alternative dispute
resolution (ADR) / dispute resolution process with the Australian Taxation Office
(ATO) before this one?
 Yes (1)
 No (2)
Q3 Before attending, did you understand how the ATO would be involved in the
process?
 Yes (1)
 No (2)
Q5 How did you find out about the ADR / dispute resolution process that was used in
this dispute? (Click all that apply)










The ATO told or wrote to me about it (1)
I have used this type of process before (2)
I read about it on the ATO website (3)
The Administrative Appeals Tribunal (AAT) / Federal Court told me about it (4)
My lawyer told me about it (5)
My accountant told me about it (6)
My tax practitioner told me about it (7)
My other expert told me about it, please specify: (8) ____________________
I asked what could happen (9)
Other, please specify: (10) ____________________
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Q6 How long did it take to resolve this dispute from when the dispute first started?






3 months or less (1)
3 - 6 months (2)
7 - 12 months (3)
1 - 2 years (4)
3 years or more (5)
Not yet resolved (6)
Q7 Overall, did the dispute resolution process take more or less time than expected?
 More time than expected (1)
 Less time than expected (2)
 About as much time as expected (3)
Q7 How much of your time, or that of your company, has been spent on this dispute
since you were first contacted by the ATO about the issues? (include time spent
photocopying, attending meetings, travel etc)






Less than a day (1)
About a day (2)
2 - 3 days (3)
1 - 2 weeks (4)
3 - 4 weeks (5)
More than 4 weeks (6)
Q8 Do you think that the dispute has been completely finalised?
 Yes (1)
 No (2)
 Not sure / Don't know (3)
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Q9 How was the dispute finalised?
 At the ADR / dispute resolution conference (1)
 Following the ADR / dispute resolution conference (2)
 After more advice or information was exchanged between the ATO and the
taxpayer (3)
 After expert advice (4)
 In a Court or Tribunal (5)
 Through negotiation with the other side (6)
 Lawyer negotiated on behalf of client (7)
 Other, please specify: (8) ____________________
Q10 What will happen now?





Take the issue up again (1)
Drop the issue (2)
Take the issue up with someone else, please specify: (3) ____________________
Go to a Court or Tribunal hearing (4)
Do something else, please specify: (5) ____________________
Q11 Would the ADR / dispute resolution process have been more useful if it had
happened earlier?
 Yes (1)
 No (2)
Q12 When could it have taken place?





During audit (1)
During objection (2)
Between objection and when proceedings started (3)
A short time after proceedings had started (4)
Some other time, please specify: (5) ____________________
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Section 2 - Outcomes and Perceptions
Q13 How formal was the ADR / dispute resolution process you attended?




Very formal (1)
Somewhat formal (2)
Somewhat informal (3)
Informal (4)
Q14 Would you have preferred it was: More formal (1)
 Less formal (2)
 Level of formality was about right (3)
Q15 How well did you understand what was going on during the process?




Not at all. If so, can you please tell us why? (1) ____________________
A little. If so, can you please tell us why? (2) ____________________
Quite well (3)
Very well (4)
Q16 Were you represented by a lawyer or other expert, or did you represent yourself
during the process?
 Had legal representation (1)
 Had other representation, please specify: (2) ____________________
 Represented self (3)
Q17 Do you think representing yourself worked well?
 Yes (1)
 No (2)
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Q18 For the next few questions, please indicate how strongly you agree or disagree
with the following statements in relation to the ADR / dispute resolution process:
Strongly
Disagree (1)
Disagree (2)
Agree (3)
Strongly Agree
(4)
The process assisted
in resolving the
dispute (1)




I was able to
participate during
the process (2)




The process was fair
(3)




I had control during
the process (4)




I would have liked
to participate more
during the process
(5)




I had control over
the outcome of the
process (6)




I was pressured to
settle (7)




There was enough
time in the process
to present/discuss
all necessary
information (8)




I was treated with
respect during the
process (9)




I understood the
outcomes of the
process (10)




The outcomes of the
process were fair
(11)




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Q178 The outcomes of the process have lasted





Strongly Disagree (1)
Disagree (2)
Agree (3)
Strongly Agree (4)
Not sure / Don't know (5)
Q19 The following statements are about your satisfaction with the ADR / dispute
resolution process. Overall, how satisfied were you with the following:
Very Dissatisfied
(1)
Dissatisfied (2)
Satisfied (3)
Very Satisfied
(4)
The dispute
resolution
process (1)




How the process
was handled (2)




The time it took
to deal with the
dispute (3)




The way the
system operated
for this dispute
(4)




The outcome of
the dispute (5)




Q20 Did you experience any issues with inappropriate behaviour or conduct or lack of
preparation in relation to the participants, the representatives or the person
conducting the conference?
 Yes (1)
 No (2)
Q21 Can you please tell us what the issues were:
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Q22 During the ADR / dispute resolution process, were both sides treated equally or
was one side favoured?
 Both sides were treated equally (1)
 Our side was favoured (2)
 The other side was favoured (3)
Q23 Do you think that discussion with the other side in a process (eg. like the process
you attended) is a better way to resolve a dispute like this?
 Yes (1)
 No (2)
Q24 Why do you say that? Would you say that discussions with the other side (click all
that apply):







Are fairer (1)
Allow everyone to present all relevant information (2)
Provides a chance to understand the other party's side (3)
Saves time (4)
Saves money (5)
Helps both sides to understand the situation (6)
Other, please specify: (7) ____________________
Q25 Why do you say that?
Q26 What impact did the ADR / dispute resolution conference have on your
relationship with ATO? Would you say:
 It improved (1)
 It remained the same (2)
 It got worse (3)
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Q27 Did you do anything to try to finalise the dispute with the other side before
attending the dispute resolution conference? (click all that apply)







Did not try anything (1)
Tried to talk to the other side (2)
Provided further information (3)
Sought legal advice (4)
Participated in a different conference or mediation (5)
Started Tribunal or Court proceedings (6)
Something else, please specify: (7) ____________________
Q28 Why were proceedings at the Administrative Appeals Tribunal (AAT) or the
Federal Court started before the ADR / dispute resolution process was used?







We were advised to do this (1)
The other side wouldn't give us what we wanted (2)
The other side was not prepared to negotiate (3)
The other side was taking too long (4)
The other side started the AAT / Federal Court proceedings (5)
There was more than one party on the other side and it was complicated (6)
This matter was linked to another case that was already at the AAT or Federal Court
(7)
 Other, please specify: (8) ____________________
Q29 Do you prefer a private process like mediation or a public process like a Court to
deal with a dispute like this?
 Private process (1)
 Public process (2)
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Q30 Is it because a private process (click all that apply):










Enables us to talk about non legal issues (1)
Enables us to be future focussed (2)
Ensures the matter is dealt with as a personal affair (3)
Saves embarrassment (4)
Is less intimidating (5)
Is fairer (6)
Is faster (7)
Is cheaper (8)
Produces a better outcome (9)
Other, please specify: (10) ____________________
Q31 Is it because a public process (click all that apply):







Can create a precedent (1)
Sets an example to others (2)
Is fairer (3)
Is faster (4)
is cheaper (5)
Produces a better outcome (6)
Other, please specify: (7) ____________________
Q32 Before you were involved in the process, what did you think your chances of
success in a Court or Tribunal hearing for your side were? Do you think you had:






No chance (1)
A small chance (2)
A range of possible outcomes (3)
A reasonable chance (4)
There was a near certainty that we would be successful (5)
I did not know (6)
Q33 In the end, was the outcome of the dispute in the ADR / dispute resolution
process:
 Better than you expected (1)
 Worse than you expected (2)
 About the same as you expected (3)
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Q34 In the end, who do you believe was successful as a result of the process?




Our side (1)
The other side (2)
Both sides (3)
No one (4)
Q35 Did you have any difficulties in the ADR / dispute resolution conference that
related to the location or timing of the conference or any other matter? (click all that
apply)






No difficulties experienced (1)
The room was not sufficiently private (2)
The location was inconvenient (3)
The time was inconvenient (4)
Security was insufficient (5)
Other, please specify: (6) ____________________
Q218 If you tried to resolve your dispute any other way (eg. at a hearing or by
negotiation), did you experience any difficulties with these processes?







No difficulties experienced (1)
Costs were too high (2)
The process overall took too long (3)
The location of the negotiation/hearing was inconvenient (4)
The time of the negotiation/hearing was inconvenient (5)
Difficulty getting legal advice (6)
Other, please specify: (7) ____________________
Q54 Is there anything the ATO could have done to make your contact with them
easier?
Q36 Do you have any suggestions for improving these types of processes?
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Q236 Estimate how much, if anything, you think was saved in legal costs because of
the dispute resolution process:
If you are able to estimate,
If you are unable to estimate,
please enter amount: (1)
please click here (1)
Our side (1)

Other side (2)

Q55 Would you like to make any other comments about the process your were
involved in?
Section 3 - Demographic Information
Finally, we would like to ask a few general questions about you. Answering these
questions is optional however, they are important to our research. Your answers will
be used only to further our understanding of dispute resolution in taxation matters.
We will not be reporting your individual responses.
Q44 What is your gender?
 Male (1)
 Female (2)
Q45 What is your age?





18 - 24 years (1)
25 - 35 years (2)
35 - 44 years (3)
45 - 54 years (4)
65+ years (5)
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Q46 What is the highest level of formal education you have completed?






School Certificate (4th Form/Year 10) (1)
Higher School Certificate (6th Form/Year 12) (2)
TAFE qualifications (3)
College / University Bachelor Degree (4)
College / University Postgraduate Degree (5)
Other, please specify: (6) ____________________
Q47 Are you:




An individual (1)
A corporation (2)
A partnership (3)
Other organisation, please specify: (4) ____________________
Q48 Can you tell us in which of the following ranges your personal taxable income
was at the time of the dispute?






Nil - $20,799 (1)
$20,800 - $41,599 (2)
$41,600 - $67,599 (3)
$67,600 - $103,999 (4)
$104,000 or more (5)
Prefer not to answer (6)
Q49 Can you tell us in which of the following ranges your organisation's gross income
was in the last tax year?









Nil - $41,599 (1)
$41,600 - $67,599 (2)
$67,600 - $103,999 (3)
$104,000 - $200,000 (4)
$200,001 - $500,000 (5)
$500,001 - $1million (6)
$1 - $5 million (7)
$5 million or more (8)
Prefer not to answer (9)
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Q50 What is your postcode or that of your business?
Q51 Were you born in Australia
 Yes (1)
 No (2)
Q52 Where were you born?
Q53 Was your ability to contact or gain access to the ADR / dispute resolution process
limited or made difficult due to any of the following circumstances? (click all that
apply)










No limiting conditions (1)
Difficulty reading / writing English (2)
Difficulty understanding English (3)
You live remotely (4)
Could not understand ATO material or other material (5)
You do not have access to transport (6)
Limited internet access (7)
Needed more advice and had insufficient funds (8)
Needed to prepare documents and had insufficient funds (9)
Other, please specify: (10) ____________________
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C: ADR Practitioner (Private Practitioner, AAT & Federal Court
Representatives)
Section 1 - Background and Timing
We are going to ask some general questions about a dispute resolution meeting that
was chaired by you as a mediator, evaluator, conciliator or facilitator.
Q123 Firstly, can you tell me if you have ever mediated / conciliated / facilitated an
Australian Taxation Office (ATO) dispute before this one?
 Yes (1)
 No (2)
Q124 Overall, did the dispute resolution process take more or less time than you
expected?




More time than expected (1)
Less time than expected (2)
About as much time as expected (3)
Not yet resolved (4)
Q125 Do you think that the dispute has been completely finalised?
 Yes (1)
 No (2)
 Not sure / Don't know (3)
Q126 How was the dispute finalised?







At the ADR / dispute resolution conference (1)
Following the ADR / dispute resolution conference (2)
After more advice or information was exchanged between ATO and taxpayer (3)
After expert advice was received (4)
Following negotiations (5)
Don't know (6)
Other, please specify: (7) ____________________
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Q127 Would the ADR / dispute resolution process have been more useful if it had
happened earlier?
 Yes (1)
 No (2)
Q128 When could it have taken place?





During audit (1)
During objection (2)
Between objection and when proceedings started (3)
A short time after proceedings had started (4)
Some other time, please specify: (5) ____________________
Section 2 - Outcomes and Perceptions
Q129 For the next few questions, please indicate how strongly you agree or disagree
with the following statements in relation to the ADR / dispute resolution process:
Strongly
Disagree (1)
Disagree (2)
Agree (3)
Strongly Agree
(4)
The process
assisted in
resolving the
dispute (1)




The process was
fair (2)




I was treated
with respect
during the
process (3)




The outcomes of
the process were
fair (4)




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Q130 The following statements are about your satisfaction with the ADR / dispute
resolution process. Overall, how satisfied were you with the following:
Very Dissatisfied
(1)
Dissatisfied (2)
Satisfied (3)
Very Satisfied
(4)
The way the
system
operated for
this dispute (1)




The time it took
to deal with the
dispute (2)




Q131 Overall, how satisfied do you think the parties were with the outcomes?




Very Dissatisfied (1)
Dissatisfied (2)
Satisfied (3)
Very Satisfied (4)
Q132 Did you experience any issues with inappropriate behaviour or conduct or a lack
of preparation in relation to the participants or the representatives?
 Yes (1)
 No (2)
Q133 Can you please tell us what the issues were:
Q134 How formal was the process that was used?




Very formal (1)
Somewhat formal (2)
Somewhat informal (3)
Informal (4)
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Q135 Would you have preferred it was:
 More formal (1)
 Less formal (2)
 Level of formality was about right (3)
Q234 Estimate how much, if anything, you think was saved in legal costs because of
the dispute resolution process:
If you are able to estimate,
If you are unable to estimate,
please enter amount: (1)
please click here: (1)
One side (1)

Other side (2)

Q137 Do you think there were other cost savings, for example, management,
opportunity or loss of profit cost savings?
 No (2)
 Yes. If so, please specify: (1) ____________________
 Don't know (5)
Section 3 - Process Characteristics
Q139 Did you talk with the parties or lawyers before your ADR / dispute resolution
process meeting?
 Yes (1)
 No (2)
Q140 Did someone else talk with them?
 An ATO person if it was internal process (1)
 Another conference officer or registry staff (2)
 Someone else contacted the parties or their lawyers, please specify: (3)
____________________
 No interview meetings were conducted before the process started (4)
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Q142 Was the intake or pre-conference conducted in person or over the phone?
 In person (1)
 Over the phone (2)
 Don't know (3)
Q143 Did you think the parties understood the ADR / dispute resolution process
before the conference began?
 Yes (1)
 No (2)
Q144 In your conference, who made any opening remarks after your introduction?






The legal representatives (1)
The tax practitioners (2)
The accountants (3)
The parties (4)
A combination of, please specify: (5) ____________________
No opening statements were made (6)
Q145 Did you hold private meetings as part of the ADR / dispute resolution
conference?
 Yes (1)
 No (2)
Q146 Can you identify when any private meetings were held? If so, was it: (click all
that apply)






After the opening statements (1)
After the exploration stage (2)
After some clarification had taken place (3)
After issues had been explored (4)
After an impasse had been reached (5)
At some other time, please specify: (6) ____________________
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Q147 If you held private meetings, why did you do so? (click all that apply)









To reality test (1)
To explore alternatives to a settlement (2)
To discuss issues (3)
Open sessions were no longer productive (4)
To explore options (5)
To explore something that had been said in the joint session (6)
One party was very emotional (7)
It's part of the dispute resolution model I use (8)
Any other comments, please specify: (9) ____________________
Q148 Did a listing of issues/topics/common ground/an agenda take place?
 Yes (1)
 No (2)
Q149 Did you express any view to the parties as to the likely outcome if the matter
was litigated?
 Yes (1)
 No (2)
Q150 If you were to deal with another dispute like this one, would you do anything
differently?
 No (2)
 Yes (1)
Q151 If so, what would you do differently?
Q152 Would you like to make any other comments about the process you were
involved in?
Section 4 - Demographic Information
Finally, we would like to ask a few general questions about you. Answering these
questions is optional however, they are important to our research. Your answers will
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be used only to further our understanding of dispute resolution in taxation matters.
We will not be reporting your individual responses.
Q160 Have you previously responded to a survey relating to this research?
 Yes (1)
 No (2)
Q155 What is your gender?
 Male (1)
 Female (2)
Q156 What is the postcode of your office?
Q161 What is your previous ADR / dispute resolution experience? Please indicate
approximate number of mediations, concilations and/or conferences conducted and
other relevant experience:
Q162 What year did you first start conducting ADR / dispute resolution conferences?
Q163 Are you accredited under the National Mediator Accreditation Standards
(NMAS)?
 Yes (1)
 No (2)
 Application in progress (3)
Q177 Are you or have you been a legal practitioner?
 Yes (1)
 No (2)
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D: Taxpayer Representative (Lawyer, Accountant, Tax Agent & Valuer)
Section 1 - Background and Timing
We are going to ask some general questions about a dispute resolution process
meeting that was chaired by a third person – a mediator, evaluator, conciliator or
facilitator where that person was helping to resolve the dispute. Sometimes these
processes are referred to as Alternative Dispute Resolution (ADR).
Q56 Firstly, can you tell me if you have ever been involved in an ADR / dispute
resolution process with the Australian Taxation Office (ATO) before this one?
 Yes (1)
 No (2)
Q57 Before attending, did you understand how the ATO would be involved in the
process?
 Yes (1)
 No (2)
Q58 How did you find out about the ADR / dispute resolution process that was used in
this dispute? (Click all that apply)






The ATO told or wrote to me / my client about it (1)
I have used this type of process before (2)
I read about it on the ATO website (3)
The Administrative Appeals Tribunal (AAT) / Federal Court told me about it (4)
I asked what could happen (5)
Other, please specify: (6) ____________________
Q59 Overall, did the dispute resolution process take more or less time than expected?




More time than expected (1)
Less time than expected (2)
About as much time as expected (3)
Not yet resolved (4)
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Q60 Do you think that the dispute has been completely finalised
 Yes (1)
 No (2)
 Not sure / Don't know (3)
Q61 How was the dispute finalised?








At the ADR / dispute resolution conference (1)
Following the ADR / dispute resolution conference (2)
After more advice or information was exchanged between ATO and taxpayer (3)
After expert advice (4)
In a Court or Tribunal (5)
Through negotiation with the other side (6)
Lawyer negotiated on behalf of client (7)
Other, please specify: (8) ____________________
Q62 What will happen now?





Take the issue up again (1)
Drop the issue (2)
Take the issue up with someone else, please specify: (3) ____________________
Go to a Court or Tribunal hearing (4)
Do something else, please specify: (5) ____________________
Q63 Would the ADR / dispute resolution process have been more useful if it had
happened earlier?
 Yes (1)
 No (2)
Q64 When could it have taken place?





During audit (1)
During objection (2)
Between objection and when proceedings started (3)
A short time after proceedings had started (4)
Some other time, please specify: (5) ____________________
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Section 2 - Outcomes and Perceptions
Q65 How formal was the process you attended?




Very formal (1)
Somewhat formal (2)
Somewhat informal (3)
Informal (4)
Q66 Would you have preferred it was:
 More formal (1)
 Less formal (2)
 Level of formality was about right (3)
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Q67 For the next few questions, please indicate how strongly you agree or disagree
with the following statements in relation to the ADR / dispute resolution process:
Strongly
Disagree (1)
Disagree (2)
Agree (3)
Strongly Agree
(4)
The process
assisted in
resolving the
dispute (1)




I was able to
particulate during
the process (2)




The process was
fair (3)




I had control
during the process
(4)




I would have liked
to participate
more during the
process (5)




I had control over
the outcome of
the process (6)




There was enough
time in the
process to
present/discuss all
necessary
information (7)




I was treated with
respect during the
process (8)




The outcomes of
the process were
fair (9)




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Q68 The following statements are about your satisfaction with the ADR / dispute
resolution process. Overall, how satisfied were you with the following:
Very Dissatisfied
(1)
Dissatisfied (2)
Satisfied (3)
Very Satisfied
(4)
The dispute
resolution
process (1)




How the process
was handled (2)




The time it took
to deal with the
dispute (3)




The way the
system operated
for this dispute
(4)




The outcome of
the dispute (5)




Q69 Did you experience any issues with inappropriate behaviour or conduct or lack of
preparation in relation to the participants, the representatives or the person
conducting the conference?
 Yes (1)
 No (2)
Q121 Can you please tell us what the issues were:
Q70 During the ADR / dispute resolution process, were both sides treated equally or
was one side favoured?
 Both sides were treated equally (1)
 Our side was favoured (2)
 The other side was favoured (3)
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Q71 Do you think that discussion with the other side in a process (eg. like the process
you attended) is a better way to resolve a dispute like this?
 Yes (1)
 No (2)
Q72 Why do you say that? Would you say that discussions with the other side (click all
that apply):







Are fairer (1)
Allow everyone to present all relevant information (2)
Provides a chance to understand the other party's side (3)
Saves time (4)
Saves money (5)
Helps both sides to understand the situation (6)
Other, please specify: (7) ____________________
Q73 Why do you say that?
Q74 Did you do anything to try to finalise the dispute with the other side before
attending the dispute resolution conference (click all that apply)?






Did not try anything (1)
Tried talking to the other side (2)
Provided further information (3)
Participated in a difference conference or mediation (4)
Started Tribunal or Court proceedings (5)
Something else, please specify: (6) ____________________
Q75 Why were proceedings at the Administrative Appeals Tribunal (AAT) or the
Federal Court started before the ADR / dispute resolution process was used?





The other side was not prepared to negotiate (1)
The other side was taking too long (2)
The other side started the AAT / Federal Court proceedings (3)
There was more than one party on the other side and it was complicated (4)
This matter was linked to another case that was already at the AAT or Federal Court
(5)
 Other, please specify: (6) ____________________
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Q225 Can you estimate how much your side spent on the following during the whole
dispute (from the time the dispute crystallised, that is from the audit or objection
stage or at some other time to the end of the ADR process).
If you are able to estimate,
If you are unable to estimate,
please enter amount: (1)
please click here: (1)
Professional fees (legal or
accounting): (1)

Disbursements (eg. Court
filing fees, hearing fees, ADR
process fees): (2)

External valuer, expert
accountant or other expert
report fees: (3)

Internal or client costs (eg
staff time including legal or
accounting staff, management
costs, loss of profit or
opportunity costs). Please
specify: (4)

Q237 Estimate how much, if anything, you think was saved in legal costs because of
the dispute resolution process:
If you are able to estimate,
If you are unable to estimate,
please enter amount: (1)
please click here: (1)
Our side (1)

Other side (2)

Q76 Before you were involved in the process, what did you think your chances of
success in a Court or Tribunal hearing for your side were? Do you think you had:






No chance (1)
A small chance (2)
A range of possible outcomes (3)
A reasonable chance (4)
There was a near certainty that we would be successful (5)
I did not know (6)
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Q77 In the end, was the outcome of the dispute in the ADR / dispute resolution
process:
 Better than you expected (1)
 Worse than you expected (2)
 About the same as you expected (3)
Q78 In the end, who do you believe was successful as a result of the process?




Our side (1)
The other side (2)
Both sides (3)
No one (4)
Q88 How well do you think your client understood the ADR / dispute resolution
process?




Not at all (1)
Somewhat (2)
Well (3)
Very well (4)
Q79 Did you have any difficulties in the ADR / dispute resolution conference that
related to the location or timing of the conference or any other matter? (click all that
apply)






No difficulties experienced (1)
The room was not sufficiently private (2)
The location was inconvenient (3)
The time was inconvenient (4)
Security was insufficient (5)
Other, please specify: (6) ____________________
Q91 Is there anything the ATO could have done to make your contact with them
easier?
Q80 Do you have any suggestions for improving these types of processes?
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Q83 Would you like to make any other comments about the process you attended?
Section 3 - Demographic Information
Finally, we would like to ask a few general questions about you. Answering these
questions is optional however, they are important to our research. Your answers will
be used only to further our understanding of dispute resolution in taxation matters.
We will not be reporting your individual responses.
Q87 What is your gender?
 Male (1)
 Female (2)
Q89 What is your age?






18 - 24 years (1)
25 - 34 years (2)
35 - 44 years (3)
45 - 54 years (4)
55 - 65 years (5)
65+ years (6)
Q90 What is the postcode of your office?
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E: ATO Representative (LSB Officer, External Solicitor or Barrister) questions
Section 1 - Background and Timing
We are going to ask some general questions about a dispute resolution process
meeting that was chaired by a third person – a mediator, evaluator, conciliator or
facilitator where that person was helping to resolve the dispute. Sometimes these
processes are referred to as Alternative Dispute Resolution (ADR).
Q183 Firstly, can you tell me if you have ever been involved in an ADR/ dispute
resolution process with the Australian Taxation Office (ATO) before this one?
 Yes (1)
 No (2)
Q186 Overall, did the dispute resolution process take more or less time than
expected?




More time than expected (1)
Less time than expected (2)
About as much time as expected (3)
Not yet resolved (4)
Q187 Do you think that the dispute has been completely finalised
 Yes (1)
 No (2)
 Not sure / Don't know (3)
Q188 How was the dispute finalised?








At the ADR / dispute resolution conference (1)
Following the ADR / dispute resolution conference (2)
After more advice or information was exchanged between ATO and taxpayer (3)
After expert advice (4)
In a Court or Tribunal (5)
Through negotiation with the other side (6)
Lawyer negotiated on behalf of client (7)
Other, please specify: (8) ____________________
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Q189 What will happen now?





Take the issue up again (1)
Drop the issue (2)
Take the issue up with someone else, please specify: (3) ____________________
Go to a Court or Tribunal hearing (4)
Do something else, please specify: (5) ____________________
Q190 Would the ADR / dispute resolution process have been more useful if it had
happened earlier?
 Yes (1)
 No (2)
Q191 When could it have taken place?





During audit (1)
During objection (2)
Between objection and when proceedings started (3)
A short time after proceedings had started (4)
Some other time, please specify: (5) ____________________
Section 2 - Outcomes and Perceptions
Q193 How formal was the process you attended?




Very formal (1)
Somewhat formal (2)
Somewhat informal (3)
Informal (4)
Q194 Would you have preferred it was:
 More formal (1)
 Less formal (2)
 Level of formality was about right (3)
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Q195 For the next few questions, please indicate how strongly you agree or disagree
with the following statements in relation to the ADR / dispute resolution process:
Strongly
Disagree (1)
Disagree (2)
Agree (3)
Strongly Agree
(4)
The process
assisted in
resolving the
dispute (1)




I was able to
particulate during
the process (2)




The process was
fair (3)




I had control
during the process
(4)




I would have liked
to participate
more during the
process (5)




I had control over
the outcome of
the process (6)




There was enough
time in the
process to
present/discuss all
necessary
information (7)




I was treated with
respect during the
process (8)




The outcomes of
the process were
fair (9)




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Q196 The following statements are about your satisfaction with the ADR / dispute
resolution process. Overall, how satisfied were you with the following:
Very Dissatisfied
(1)
Dissatisfied (2)
Satisfied (3)
Very Satisfied
(4)
The dispute
resolution
process (1)




How the process
was handled (2)




The time it took
to deal with the
dispute (3)




The way the
system operated
for this dispute
(4)




The outcome of
the dispute (5)




Q197 Did you experience any issues with inappropriate behaviour or conduct or lack
of preparation in relation to the participants, the representatives or the person
conducting the conference?
 Yes (1)
 No (2)
Q198 Can you please tell us what the issues were:
Q199 During the ADR / dispute resolution process, were both sides treated equally or
was one side favoured?
 Both sides were treated equally (1)
 Our side was favoured (2)
 The other side was favoured (3)
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Q200 Do you think that discussion with the other side in a process (eg. like the
process you attended) is a better way to resolve a dispute like this?
 Yes (1)
 No (2)
Q201 Why do you say that? Would you say that discussions with the other side (click
all that apply):







Are fairer (1)
Allow everyone to present all relevant information (2)
Provides a chance to understand the other party's side (3)
Saves time (4)
Saves money (5)
Helps both sides to understand the situation (6)
Other, please specify: (7) ____________________
Q202 Why do you say that?
Q203 Did you do anything to try to finalise the dispute with the other side before
attending the dispute resolution conference (click all that apply)?






Did not try anything (1)
Tried talking to the other side (2)
Provided further information (3)
Participated in a different conference or mediation (4)
Started Tribunal or Court proceedings (5)
Something else, please specify: (6) ____________________
Q204 Why were proceedings at the Administrative Appeals Tribunal (AAT) or the
Federal Court started before the ADR / dispute resolution process was used?





The other side was not prepared to negotiate (1)
The other side was taking too long (2)
The other side started the AAT / Federal Court proceedings (3)
There was more than one party on the other side and it was complicated (4)
This matter was linked to another case that was already at the AAT or Federal Court
(5)
 Other, please specify: (6) ____________________
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Q222 Can you estimate how much your side spent on the following during the whole
dispute (from the time the dispute crystallised, that is from the audit or objection
stage or at some other time to the end of the ADR process).
If you are able to estimate,
If you are unable to estimate,
please enter amount: (1)
please click here: (1)
External professional fees
(legal or accounting) (1)

Disbursements (eg. Court
filing fees, hearing fees, ADR
process fees): (2)

External valuer, expert
accountant or other expert
report fees: (3)

Internal costs (eg. staff time
including legal or accounting
staff, management costs, loss
of profit or opportunity costs).
Please specify: (4)

Q238 Estimate how much, if anything, you think was saved in legal costs because of
the dispute resolution process:
If you are able to estimate,
If you are unable to estimate,
please enter amount: (1)
please click here: (1)
Our side (1)

Other side (2)

Q205 Before you were involved in the process, what did you think your chances of
success in a Court or Tribunal hearing for your side were? Do you think you had:






No chance (1)
A small chance (2)
A range of possible outcomes (3)
A reasonable chance (4)
There was a near certainty that we would be successful (5)
I did not know (6)
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Q206 In the end, was the outcome of the dispute in the ADR / dispute resolution
process:
 Better than you expected (1)
 Worse than you expected (2)
 About the same as you expected (3)
Q207 In the end, who do you believe was successful as a result of the process?




Our side (1)
The other side (2)
Both sides (3)
No one (4)
Q212 How well do you think the ATO staff understood the ADR / dispute resolution
process?




Not at all (1)
Somewhat (2)
Well (3)
Very well (4)
Q208 Did you have any difficulties in the ADR / dispute resolution conference that
related to the location or timing of the conference or any other matter? (click all that
apply)






No difficulties experienced (1)
The room was not sufficiently private (2)
The location was inconvenient (3)
The time was inconvenient (4)
Security was insufficient (5)
Other, please specify: (6) ____________________
Q209 Do you have any suggestions for improving these types of processes?
Q213 Would you like to make any other comments about the process you attended?
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Section 3 - Demographic Information
Finally, we would like to ask a few general questions about you. Answering these
questions is optional however, they are important to our research. Your answers will
be used only to further our understanding of dispute resolution in taxation matters.
We will not be reporting your individual responses.
Q215 What is your gender?
 Male (1)
 Female (2)
Q216 What is your age?






18 - 24 years (1)
25 - 34 years (2)
35 - 44 years (3)
45 - 54 years (4)
55 - 65 years (5)
65+ years (6)
Q217 What is the postcode of your office?
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Appendix D: ATO Terminology Summary
Resolution and Settlement
In the broader disputes context, settlement and resolution are sometimes used
interchangeably and are understood to mean the same thing. The ATO uses
settlement in a more specific context, as explained below.
In the ATO, Dispute resolution is an inclusive term for all processes where parties
attempt to resolve the issues between them, and includes:

negotiating with another party directly

asking a court or tribunal to make a decision
A settlement involves an agreement between parties to resolve matters in dispute
where one or both parties make concessions on what they consider is the legally
correct position. In this context, a dispute can be about a:

tax or superannuation liability or entitlement

tax or superannuation debt

decision under a tax or superannuation law.
A dispute that would be considered for settlement would ordinarily be one where the
taxpayer has (or will have) a right to challenge the Commissioner’s decision, although
settlement should be considered as potentially a way to resolve a wide range of
disputes and disagreements. Where the ATO or the taxpayer decides that the other
party has the preferred position and agrees to adopt that position, this is not a
settlement.
The key factors considered by the ATO in delivering whether or not to settle are:
Relative strength of the parties’ position
The relative strength of the party’s position involves an evaluation of the evidence,
the application of the law to the facts and the quantum of the tax in dispute and the
possible litigation outcome.
Costs v benefits
In determining the costs and benefits of continuing the dispute an objective
assessment of internal and external ATO legal costs and the cost and risk in collecting
the liability (including a taxpayer’s ability to pay), and the financial position of the
taxpayer and related entities needs to be made.
If the costs exceed the benefits then settlement is likely a preferable option.
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Future compliance
Settlement involving concessions on past liabilities may be beneficial where it will
achieve compliance by the taxpayer, group of taxpayers, or a section of the public, for
current and future years, in a cost effective way.
For more information see:
The Plain English Guide to DR: https://www.ato.gov.au/About-ATO/About-us/Indetail/Key-documents/ATO-plain-English-guide-to-alternative-dispute-resolution/
Code of Settlement: https://www.ato.gov.au/General/Correct-a-mistake-or-disputea-decision/In-detail/Avoiding-and-resolving-disputes/Settlement/Code-of-settlement/
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