Chief Magistrates' Direction No 4 of 2010 was published this week.
It introduces a pilot ADR programme to run at Melbourne Magistrates' Court from the start of next month. It's exclusively for civil claims. The findings of the magistrate who presides over the hearing will not be binding on the parties. The name that has been given to the pilot is Early Neutral Evaluation (ENE).
Something similar has been running in the Supreme Court for a year. Non-judicial ADR (referred to as court-annexed mediation) has been going on at some sittings of the Magistrates' Court for a couple of years now.
How much difference there will be between the running of an ENE and a regular arbitration hearing will probably depend on the individual magistrate. The hearing will take place in a courtroom but it's not expected that oral evidence will be received in most cases.
The direction provides at point 9(3) that the hearing will not be sound-recorded. (It's probable that the hearing would be privileged as an attempt at settlement negotiation under s 131 Evidence Act 2008 anyway: see, for example, Wilson and Anor & Roberts and Anor (No. 2)  FamCA 734.)