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Home , Mediation

Commercial Mediation: The and Europe The view through practitioners’ eyes By Claire Mulder

ll across the United States and Europe, par- regarded,1 and today mediation is just one of a range ties engaged in commerce are increasingly of available ADR tools. A sophisticated in their understanding and use is a good example of this diversifica- of mediation. But how does commercial mediation tion. Whereas many in the United States may see compare across boundaries? To help answer this conciliation as equivalent to mediation (and often question, I interviewed experienced mediators who use the phrase to describe mediation, if in a slightly work in the United States and Europe. more evaluative form), in many European countries I contacted 10 individuals, each of whom has people see conciliation as a distinct concept, with worked in ADR for decades, and talked with them by deep roots in their civil- countries’ legal systems. telephone, e-mail, and Skype. Their experience and Switzerland’s Code of , for example, range make them impressive commentators. considers conciliation procedurally distinct from mediation: conciliation is a -led form of Cultural and Legal Backgrounds non-binding , whereas mediation is a Any international assessment of mediation requires non-evaluative process that involves not an appreciation of countries’ different social and legal but accredited professionals from a wider range of norms. Compare, for example, the United States and disciplines.2 The two processes may have similar the Netherlands. When Frank Sander first introduced goals (i.e., settling disputes), but the neutral has dif- the idea of the “multi-door courthouse” at the Pound ferent roles.3 Conference in St. Paul, Minnesota, in 1976, suggest- Jeremy Lack, who has worked throughout Europe ing that people in would benefit from choos- and is based in Geneva, explains. “When you litigate ing among various options for resolving their dispute, in a commercial case in Switzerland, you often have there was a strong and unmet need for alternative to do a conciliation before a will hear the in the United States. America matter in a final audience.” This works well in certain had a relatively litigious culture, generating a high Swiss ; settlement rates in Zurich commercial volume of disputes, many of them potentially suited courts are over 70 percent. As a result, mediation to other means of resolution, but few well-established is used less often to resolve commercial disputes in extra-judicial dispute resolution mechanisms were Switzerland. Its use depends on whether the parties available. In the Netherlands, however, the polder- seek a settlement proposal from a magistrate or an model of consensus-based decision-making, which interest-based outcome with the help of a mediator, was identified by that name after unions, employers, who is not evaluative. Similarly, in Germany and the government agreed on a comprehensive are held in high esteem and are able to broker settle- plan to revitalize the economy in the early 1980s, ments between parties as conciliators. Decisions in sprang from the everyday culture of the time; only the courts are reached quickly and at relatively low a small proportion of disputes ever made it to the cost. Conversely, Italy has a current backlog of 4.5 civil courts. The Netherlands also had — and still million pending legal cases, and enforcing a legal has — a wide range of extra-judicial dispute resolu- through the courts takes an average of 1,185 tion mechanisms that are technically strong and well days — or more than three years.4 With this kind of

8 DISPUTE RESOLUTION MAGAZINE | FALL 2017  Axel Boesch represents  Benjamin Lundström, is German and overseas clients a and mediator in in cross-border commercial dealings Denmark who has worked with com- with an emphasis on corporate and mercial mediation for 17 years. He distribution law. He also teaches com- chaired the Association of Danish mercial law and mediation. Mediation for six years, trains mediators, and has been appointed by the Danish Courts as mediator since 2008.

 Michael E. Dickstein has  Judith Meyer, who has helped resolve complex worked as a mediator and disputes across North America for arbitrator for more than 25 years, more than two decades, and teaches resolves commercial mediations and , mediation and ADR at involving a wide range of Stanford University as well as in issues. She has taught at Cornell Law Canada, China France, , and School and is a contributor to this many other countries. magazine’s regular feature “On Professional Practice.”

 Thierry Garby, who prac-  Eva Schutte is a lawyer ticed law in Paris for 30 based in the Netherlands years, now teaches, mediates, and who practiced law for 25 years before arbitrates full time. He has worked on joining colleagues to launch an inde- cases from simple commercial dis- pendent commercial mediation firm. putes to those involving intellectual A trainer for the Dutch property and post-merger and acquisi- Association and other organizations, tion matters. she specializes in mediating conflicts within collaborative relationships.

 Maša Kociper is a Slovenian  Leonardo D’Urso is the lawyer and politician who led CEO and Cofounder of ADR the Public Relations and Alternative Center, a -based consulting firm Dispute Resolution at the that focuses on international District Court in Ljubljana from 2000 disputes. With almost two decades of to 2007. She is now a city councilor of experience in ADR, he manages the Ljubljana and a member of the center’s activities, has opened nearly National Assembly of the Republic 30 resolution centers in Italy, and has of Slovenia. created a cloud platform to manage the mediation process.

 Jeremy Lack specializes in  Tony Willis, who was a part- commercial dispute preven- ner in a London law firm for tion and resolution, especially in more than 25 years, now works full- international or cross-cultural settings. time as a mediator, negotiator, and He is an international technology and dispute resolution process designer. IP lawyer, admitted in New York, He has worked on or served as an London and Geneva, and works with advisor for cases in the United start-ups and multinationals. Kingdom, the United States, Belgium, Romania, The United Arab Emirates, Ireland, and elsewhere.

FALL 2017 | DISPUTE RESOLUTION MAGAZINE 9 backlog, it is hardly surprising that the Italian govern- 2008 EU cross-border Mediation Directive.6 Italy ment has been an enthusiastic recent supporter of is one example: In 2013, Italian legislators made it mediation and conciliation. mandatory for both parties and their lawyers to attend an initial mediation session with a court-appointed Mediation Referral mediator in 8 percent of all civil and commercial In private commercial mediations in both the cases.7 The meeting is inexpensive (about €40), there United States and Europe, it is relatively rare for par- are material penalties for non-attendance, and there ties to approach a mediator directly. Lawyers typically is no obligation to pursue mediation after this initial act as gatekeepers for their clients, making referrals meeting. Should the parties go ahead with mediation, to mediators. the government provides tax credits for the first €500 Michael E. Dickstein, who has worked on disputes of fees. throughout North America and has taught in many Leonardo D’Urso, whose organization has countries, explains the usual referral process in US opened dispute resolution centers throughout Italy, commercial mediations: “Lawyers don’t look on explains. “This simple meeting allows us to bring all websites or do Google searches,” he says. “They the decision makers into one room, together with basically choose mediators they have either worked professional mediators. Sixty percent of the time the with before or who are within one link of someone parties voluntarily choose to go ahead with a full who has worked with them.” Eva Schutte, a principle mediation.” Today Italy conducts more than 200,000 in an independent commercial mediation firm in the mediations a year,8 and legislators are evaluating Netherlands, agrees that the process is similar in her whether to expand the proportion of all cases that practice: “Lawyers are repeat players,” she notes. are referred to an initial mediation meeting. “This “If they have a good experience at your mediation is successfully changing the conversation table, then they will come back.” A smaller number of in Italy,” D’Urso says. “For example, companies are mediators gain referrals through organizations such as starting to adopt mediation clauses into their stan- the International Mediation Institute or JAMS. dard .” Court-annexed and court-referred mediations are England and Wales have opted for softer incen- an important part of the overall mediation landscape tives to promote mediation. The 1999 Civil Procedure in the United States and Europe. In some jurisdic- Rules established a stable and supportive framework tions, courts can either refer cases for mandatory for judicial referral to mediation with a high degree mediation or conciliation or actively encourage of institutional buy-in. Courts can “encourage but not disputing parties to settle. Legislators have taken a compel” parties to mediate, with powerful potential wide range of approaches to referring civil disputes penalties for parties that have not attempted to settle to mediation and/or conciliation as part of judicial prior to going to court.9 proceedings, pursuing full mandatory processes, opt- Tony Willis, based in England, says, “This has out processes, and voluntary processes with incen- proved very successful. Major firms tives and penalties as well as leaving extra-judicial now espouse mediation, use it regularly, and use mediation as an entirely voluntary alternative outside it very well.” Slovenia has followed a similar path. the court system.5 As Maša Kociper, a Slovenian lawyer and politician, Some US states and district courts were quick to explains, “Slovenian courts are obligated to offer use incentives to relieve court burdens and promote mediation unless the judge thinks it is really not mediation/ADR. In 1988, Florida enacted compre- suitable. This referral system works well in a country hensive state legislation allowing judges to refer civil with a high degree of trust in public institutions.” cases to mediation, stimulating the growth of what Other countries, however, have opted for fewer has become a highly developed mediation market incentives for ADR. In France, judges can suggest there. More recently, several European countries mediation, but the parties are not obligated to pur- have chosen to overhaul their legislation on domestic sue it. Thierry Garby, who has practiced law in Paris mediation, prompted by the European Parliament’s and now works full time in ADR, says, “Although the

10 DISPUTE RESOLUTION MAGAZINE | FALL 2017 first legislation on mediation in France came out in As Judith Meyer, a US-based arbitrator and 1995, it has been slow progress. Mediation is still mediator, puts it, “You don’t need a law degree, pretty new. More and more companies are starting you certainly don’t need a license, and with few to use it now.” exceptions there is no minimum competency testing.” Training ranges from a basic, practical The Mediator 40-hour course to yearlong graduate programs. The background and training of commercial media- Most countries have shied away from government tors is relatively uniform internationally; approximately certification and instead use public or private bod- 70 percent to 80 percent of commercial mediators ies to manage, guide, and promote the mediation initially trained as lawyers, but many are architects, industry. Organizations such as the International notaries, business executives, consultants, or psy- Institute for Conflict Prevention & Resolution (CPR), chologists. Many mediators are solo practitioners (in the Centre for Effective Dispute Resolution (CEDR), countries where there is enough business to support or the Mediators Federation Netherlands (MfN) an independent practice) or they combine their have all played significant roles in providing training mediation work with other activities, such as working and setting standards. Several people I spoke with as a lawyer at a law firm. With the exception of some observed that mediation training is becoming a cot- court-annexed mediation programs, commercial tage industry in its own right. mediators are lightly regulated, if at all. One common As one puts it, “There are almost as many people dissatisfaction across the mediators I spoke with was training mediators as there are doing mediations how challenging it is to set and maintain high stan- right now.” Each country seems to be teaching dards for mediators. and training mediation differently, although the International Mediation Institute (IMI), a nonprofit

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FALL 2017 | DISPUTE RESOLUTION MAGAZINE 11 global public service initiative to increase transpar- guidance on legal issues. Across Continental Europe, ency and raise competency standards in mediation however, lawyers often play a smaller role: they can practice across all fields worldwide, is trying to attend the mediation, but the parties themselves are establish universal standards, a code of conduct, the key players.10 Some French mediators actually for- and regular obligations to seek feedback from bid the presence of lawyers in mediations. Technical mediation participants. experts and expert witnesses are commonly used across geographies. Thierry Garby, however, explains The Mediation that in his experience, “Technical expertise is rarely The legal requirements for court-recognized an issue — if it were, they would have resolved the mediation to function effectively are largely in place dispute long ago.” across Europe and the United States. Some countries The format of a mediation also matters. In the have formally legislated for mediation confidentiality, United States and the United Kingdom. mediators mediator , and the suspension of of may schedule one initial day for a mediation. Then, limitation periods while mediations are taking place. depending on the case, the mediation can continue While others have been less explicit, they have been over consecutive days. In mainland Europe, however, extremely reluctant to “pierce the veil” of mediation. parties may have a series of shorter meetings, operat- Mediated settlement agreements are automatically ing with less time pressure and a greater focus on enforceable in a minority of ; in most process, taking on average six to 30 hours in all. others, these agreements must be ratified by the Irrespective of geography, most experienced media- courts or transformed into legally binding acts by tors are extremely persistent. “I’m hired until I’m lawyers or notaries. fired” is the mentality several mediators describe. Mediation’s procedural flexibility is one of its great- In the United States and the United Kingdom, est strengths. Its versatility is especially valuable in the most mediations start with a joint session, moving commercial world, where cases are diverse and can to private as the mediation enters the explo- be highly complex. Mediators develop personal styles, ration phase, although many in the United States which are the product of experience as much as train- have noted a trend for commercial mediations to ing or regional bias and are tailored to their specific skip the joint session completely and use private field (such as class action or meetings as the structure for the entire mediation, disputes). Most experienced commercial mediators with a directive mediator operating as a “bridge.”11 know how to be evaluative and non-evaluative and This trend is most evident in areas with the most are free to shape their styles to the needs of each experience with commercial mediation, such as case. One should, therefore, be extremely cautious California and Florida. about comparing and contrasting how mediators work Michael E. Dickstein suggests that this move may in different regions. There is no clear national model be motivated by clients’ negative experience of of mediation. That being said, however, some high- opening statements, which he notes can descend level observations may be interesting and accurate, into “opening litigation arguments.” In this private- especially when considering extra-judicial or private meeting model, with the help of a mediator, parties mediations (since court-annexed mediations can be and lawyers can focus more on the negotiation of tightly prescribed). a deal than on what will happen if they cannot find It is natural that the parties who are attending a agreement. In Continental Europe, however, an ini- mediation will influence the path that it takes. In the tial opening statement from both parties is followed United States, lawyers are key decision-makers and by a mediated joint session that continues until it is typically attend mediations with their clients. Lawyers no longer productive. Private meetings frequently start the mediation by making opening or are used sparingly in these jurisdictions, statements and can also be the primary negotiators. as mediators prefer to keep all the decision makers In the United Kingdom, lawyers normally also attend together and focus on mediation as a social and make statements, so that parties can receive process — helping parties share information

12 DISPUTE RESOLUTION MAGAZINE | FALL 2017 regarding their future needs and interests more unimaginable. “My biggest reward is my ability to directly with each another. In parts of mainland provide solutions for clients,” he says. “Clients want to Europe, mediators tend to frown on caucusing, find a solution, and I am proud to have helped solve and people generally expect everything to happen cases which were simply not possible to resolve with in joint session. classic lawyering. Seeing happy faces at the end of a There is a strong facilitative philosophy in mediation is extremely rewarding.” ■ Continental Europe. Benjamin Lundström, who is based in Denmark, sums this up by saying, “The Endnotes DNA of mediation in Denmark is very grounded in 1 Machteld Pel, of Dispute Resolution in the the facilitative approach and rules out the use of Netherlands, Does Regulation Support or Hinder the Use evaluative measures.” Lundström emphasizes the of ADR?, in Regulating Dispute Resolution: ADR and Access to at the Crossroads Felix. (Felix Steffek & Hannes value of exploring personal and emotional factors that Unberath eds., 2013). underlie a dispute and the importance of the parties’ 2 This distinction between mediation and conciliation is self-determination.12 still blurred in many other parts of the world. In France, mediators operate within a strong 3 Isaak Meier, Regulation of Dispute Resolution in conceptual framework, often asking “What? Why? Switzerland: Mediation, Conciliation and Other Forms of How? How practically?” Dutch mediations are seen to ADR in Switzerland, in in Regulating Dispute Resolution: ADR and Access to Justice at the Crossroads Felix. (Felix Steffek & be pragmatic, although the basic philosophy remains Hannes Unberath eds., 2013). facilitative. Mediations in the United States and the 4 Judicial System Reform in Italy: A Key to Growth United Kingdom appear to be somewhat more evalu- (International Monetary Fund working paper, 2014). ative and outcome-oriented. 5 Giuseppe De Palo et al., Rebooting the Mediation While significant differences persist across borders, Directive: Assessing the Limited Impact of Its Implementation and Proposing Measures to Increase the Number of there are enduring similarities in mediation, wherever Mediations in the EU (European Parliament Think Tank, it is practiced. Michael E. Dickstein speaks for many 2014). See also, Klaus J. Hopt & Felix Steffek, Mediation: of those I talked with. “There may be differences Comparison of , Regulatory Models, Fundamental Issues, between Europe and North America in how people in Mediation: Principles and Regulation in Comparative Perspective are negotiating and mediating,” he says, “but at an (Klaus J. Hopt & Felix Steffek eds., 2012). individual level, it is more enlightening and more 6 See, Council Directive 2008/52 (EC). 7 Leonardo D’Urso, The Italian Mediation Law on Civil valuable to look at what is in front of you in each & Commercial Disputes, https://gpcseries.files.wordpress. and every mediation.” Tony Willis makes another com/2017/06/the-italian-mediation-law1.pdf. observation that crosses international borders. “One 8 Not all of these are commercial mediations. hour you’re being facilitative,” he says, “another 9 Even if successful, a party who has rejected ADR can be you’re being evaluative. And an hour later, you may obligated to pay the cost of litigation. 10 In Italy, the presence of lawyers is mandatory. be tearing your hair out, wondering what on earth to 11 Eric Galton & Tracy Allen, Don’t Torch the Joint Session, do next.” Disp. Res. Mag. Vol. 21 no. 1, 2014. Despite such occasional frustration, however, the 12 I adopt Manon Schonewille & Jeremy Lack’s “modified work often brings enormous satisfaction. Echoing many Riskin Grid” for comparing mediation styles. For a full discus- practitioners, Axel Boesch, who works with German sion, see Manon Schonewille & Jeremy Lack, Mediation in the and overseas clients in cross-border commercial deal- European Union and Abroad: 60 States Divided by a Common Word?, in The Variegated Landscape of Mediation, Manon ings, says his greatest satisfaction comes from helping Schonewille & Fred Schonewille eds., 2014). people move toward an agreement that once seemed

Claire Mulder, currently based in Geneva, is an accredited mediator, trainer and external PhD researcher at the Montaigne Centre of Judicial Administration and at Utrecht University. She can be reached at [email protected].

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