Who’s Who Legal brings together Phillip Howell-Richardson of Independent Mediators, Mercedes Tarrazón of Disputes Management SL and Bennett Picker of Stradley Ronon Stevens & Young to discuss the trends affecting the practice of mediation in their respective jurisdictions.
Phillip Howell-Richardson: Over the last year the full range of commercial disputes have been appearing in mediations, as has been the case for some time as mediation continues to gain universal acceptance. However, the effects of the crash in 2008 are finally coming to an end with financial and professional negligence claims arising out of that crisis starting to show signs of dropping away as the numbers of cases decline through the work that has already been done to mediate or negotiate settlements and the onset of the expiry of limitation periods. The rise of the use of mediation in settling international disputes continues, with mediation being used by parties who are already in an international arbitration as a complementary process or being used by international organisations who are aware of mediation’s ability to cross borders and provide a flexible and focused environment for successful negotiations.
Mercedes Tarrazón: We should point out, first of all, that, in Spain, we are at the start of the development of civil and commercial mediation as an “official” practice. Both domestic and cross-border mediations in civil and commercial matters are governed by Act 5/2012, of 6 July 2012, on mediation in civil and commercial matters (Act 5/2012), which implemented Directive 2008/52/EC of the European Parliament and of the Council, of 21 May 2008, on certain aspects of mediation in civil and commercial matters in the Spanish legal system. And Act 5/2012 has been developed by Royal Decree 980/2013, of 13 December 2013 and Order JUS/746/2014, of 6 May 2014.
Prior to this, mediation existed as a private practice by some professionals and, since 2010, the governing body of the Spanish judiciary has initiated pilot projects for intra-judicial mediation.
There is not, therefore, so much mediation in civil and commercial matters in Spain. The most frequent types of disputes involving mediation are conflicts within family businesses, conflicts between business partners and conflicts where at least one of the parties is foreign.
Bennett Picker: In the past year, I have seen an increase in mediation of disputes in the areas of intellectual property, employment and claims for breaches of fiduciary duties among partners and shareholders. For the most part, however, patterns remain the same as in previous years.
Phillip Howell-Richardson: The Civil Court Rules and the Judges in cases that stretch back to the Civil Justice reforms in 1999, and indeed earlier, require the parties and their lawyers to consider the use of ADR and mediation and to have a very good reason for it not being used if they do not wish to run the risk of adverse costs. The result is that now with the support of judicial encouragement and the increasing awareness by parties and lawyers of the opportunities that are available in mediation, mediation is used frequently by those in disputes at all stages, whether prior to or during the litigation process. In addition, policymakers in government have recognised that mediation can bring significant benefits, not least when it is applied to family and smaller value civil disputes. The initiatives taken in family mediation have been successful but are in danger of being undone by funding issues and the government has been considering applying mediation techniques to planning issues and procedures, an area that is in much need of reform. As mediation has been accepted and promoted by judges and government more wide-spread awareness of it is taking place.
Mercedes Tarrazón: Mediation is becoming increasingly well known in Spain, but it is still far from being the usual mechanism for resolving civil and commercial differences.
There are many mediation services, both private and those created by chambers of commerce and professional governing bodies, and some of them hold outreach sessions to publicise mediation.
Also of note is the work carried out by those judges who champion mediation and invite the parties to try to resolve their disputes through mediation. The usual practice is not to suspend the judicial procedure ex officio, although if the parties require, they always have the option of requesting suspension themselves.
Bennett Picker: The rhetoric about mediation exceeds its actual use in many parts of America. In some jurisdictions, such as Florida, Texas and California, mediation is an integral part of the culture of dispute resolution and is embraced by the courts, in-house counsel and most litigators. Regrettably, however, there is still resistance to mediation in many parts of America and the full promise of the process has not been realised. Some of the resistance comes from law firms, which see mediation as a threat to the all-important litigation profit centre within the firm. Within corporations there is still a great deal of lack of awareness. And while some companies have champions for ADR and mediation, when the champion leaves the company, that company is often left without any understanding of or appreciation for ADR.
Fortunately, law schools, courts, government agencies, the American Bar Association and provider organisations such as the American Arbitration Association and the CPR International Institute for Conflict Prevention and Resolution continue to promote the institutionalisation of mediation with programmes of education and training and corporate and law firm pledges to consider use of mediation.
Phillip Howell-Richardson: An experienced mediator will use the full range of styles and techniques as a mediation proceeds and as the parties themselves need. At the commencement of a mediation before the parties have met in the first negotiation meeting the parties need the mediator to build trust and demonstrate a high level of active listening. How that is done is very important. Also at this stage, the mediator has a role in providing guidance on the design of the mediation process that is to be used. This can be straightforward in one-day mediations but the role becomes more important the more complex the dispute. For example in multiparty international disputes with a wide range of facts and issues, complicated decision-making procedures and different negotiation cultures and languages at work, the leadership on designing the mediation process given by the mediator is essential to ensure that the decision-makers arrive in the negotiations with the best chance of securing a successful result. As to the whether a mediator should be facilitative or evaluative or otherwise in style, the short answer is that any style is used as the circumstances and the parties need.
Mercedes Tarrazón: The mediator should organise the mediation process and apply the appropriate techniques depending on the type of case and the nature of the parties and the attorneys who advise them.
The mediator must, from the beginning, build a relationship with the parties that helps them to play a proactive role in the mediation. This is particularly important in jurisdictions such as Spain, where, in most cases, the parties and their attorneys are looking at their first case of mediation. It is therefore often very useful to hold prior private sessions with each of the parties. These initial meetings also make it possible to thoroughly explore the interests of the parties on which a suitable negotiation of options can be built and, where possible, a specific agreement reached.
No particular style of mediation is better than another - every expert mediator knows that it is the mastery of the different styles that allows them the necessary versatility to be able to contribute value depending on the specific details of the case and the personality of the parties involved.
Bennett Picker: In America, models (or styles) of mediation are like flavours of ice cream. Consumers of mediation select their preferred flavour, or style, for each particular dispute depending upon whether they believe the dispute calls for a mediator who employs a more facilitative, a more evaluative or a more transformative approach. However, there is clearly a growing trend favouring mediators who employ a more directive and more evaluative approach. As litigators understand the process better, they often will insist on a greater focus upon the merits issues. The best mediators understand the need to employ appropriate evaluative techniques. At the same time, they also understand the need to promote effective communication, to dig deep to uncover the hidden relational and cognitive barriers to resolution and to explore the underlying interests of the participants. As a consequence, the best mediators employ a mixture of styles depending upon the demands of the dispute.
Phillip Howell-Richardson: There has been a steady development of case law that has in most cases been supportive of the mediation process and the principles under which it operates. We do not have a Mediation Act in the UK but we have developed a relatively secure and predictable legal framework by using and adapting existing principles. In the last year we have seen clarification of the requirements necessary for the enforcement of a contractual stepped ADR dispute resolution clause, the consideration of what good faith can mean in certain circumstances and further consideration of one of the core principles of the mediation structure, without prejudice privilege. It would be very useful to have a leading case on the approach that the court will take in preserving the confidentiality and privilege involved in mediating.
Mercedes Tarrazón: Spain is still in the process of transposing Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution for consumer disputes and amending Regulation (EC) No. 2006/2004 and Directive 2009/22/EC. Although this refers to mediation in the area of consumer affairs, its transposition may lead to modifications in the current regulation of mediation.
A commitment to rigorous, quality mediation driven by legislation would unquestionably help to properly steer the development of mediation in Spain.
Bennett Picker: In the past year, we have seen a number of changes in mediation practice as it has existed over the past few decades – some regrettable and some beneficial. The single most dramatic change is the “disappearing joint session.” Today, in many parts of California, mediators are acceding to the demands of users who insist upon commencing a mediation with caucus sessions and getting to the negotiations quickly. Unfortunately, we are also seeing an increase in such demands more frequently in other parts of the country. Given the enormous benefits of a joint session to the mediator and the participants, this trend to dispense with the joint session is quite alarming.
Another growing trend is the increasing acceptance by mediators of the practice of med-arb, where a neutral agrees to serve as an arbitrator in the event a mediation does not resolve a dispute. While many mediators refuse to participate in a med-arb because of the belief that the process will chill openness in mediation, some mediators believe consumers should be able to design any process that serves their needs.
We have also seen growing interest in a promising new process called “Guided Choice”. In this process, a mediator designs a settlement process to overcome potential impasses diagnosed by confidential discussions with the parties in advance of any negotiations.
Phillip Howell-Richardson: The continued growth in the number of mediators trained and available as well as the increasing awareness of mediation has led to specialist providers of mediators for certain sectors and specialised mediators who market themselves either to certain sectors or as possessing certain legal skill sets. The market is able to understand the difference between an experienced expert mediator and a mediator who is an expert in a particular area. In the UK there is a large group of trained mediators and as the numbers of mediations expand the numbers of mediators who are increasing their skills through the experience of doing mediations is expanding, but still exceeds the market needs and many newly trained mediators find it difficult to obtain the early experience that is essential.
Mercedes Tarrazón: In Spain, we are beginning to see increasing numbers of collective practices that offer mediation services as a specialist area. This phenomenon should be viewed both in light of the approval of Act 5/2012, mentioned above, and the fact that the financial crisis has led to a major fall-off in work for many professionals, who have seen mediation as a way to relaunch themselves on the market.
Although this type of increase would not appear to be optimum, it still indicates an increase in awareness by the market of the possibility of mediation as an option for resolving conflicts.
If Spain can find a way to commit to the quality of the mediators and the number of mediation cases increases, it is to be expected that the market will become sufficiently mature to choose the right mediator for each case.
Bennett Picker: Throughout America, interest in serving as a mediator has increased dramatically, especially among more senior litigators, corporate counsel and judges leaving the bench. Many simply announce they are accepting work as a mediator even though they have had no formal training. They mistakenly believe that their prior skill sets have prepared them for the process. Even though mediation is, in part, an intuitive process, negotiation and mediation process skills can be learned and the best mediators continue to learn even after decades of serving as a neutral.
Because the number of mediators now substantially exceeds the available amount of available work in most jurisdictions in America, many individuals holding themselves out as mediators get very little or no work in a given year. Many do not recognise that building a mediation process takes an enormous commitment and a great deal of perseverance. As a consequence, many simply give up and move on to other work or to retirement.
The popularity of mediation also has an impact on the many highly skilled mediators who have been serving in the profession for years. Given the highly competitive environment, even the most established mediators now spend a substantial amount of time writing, lecturing, networking and in other ways marketing their mediation services to potential consumers.
Phillip Howell-Richardson: There has been a useful growth in international mediations in the last year. Firstly, London still retains its prominence in the world as a dispute resolution centre and in addition to being a location of choice for arbitration and litigation it is also becoming a location of choice for international mediation disputes that have no natural connection with the UK. The parties, the applicable law, the events and the money may well all or mostly be centred outside the UK but the parties choose the London dispute resolution experience and the experienced mediators who are based in London. Secondly, there is some growth in European mediations being brought to London by international companies with several bases in Europe and elsewhere at least for the first meeting if not for the entire process. Thirdly, the experienced international mediators of the UK are increasingly mediating in disputes in other parts of the world whether through mediation panels or organisations or as requested by the parties directly. All of these trends are expected to continue.
Mercedes Tarrazón: The number of international mediations is gradually increasing and it is often the foreign parties, who know about mediation because it is more common in their jurisdiction, who propose mediation.
It is reasonable to suppose that there will be an increasing number of international mediations in Spain. First, because it is a reasonably mediation friendly jurisdiction: (i) both domestic and cross-border mediation are regulated within the same legal framework; (ii) the enforceability of mediation and multi-tiered dispute resolution clauses is laid down by law; (iii) there is a comprehensive protection of confidentiality; and (iv) the options for enforceability of mediation settlements are quite effective. And second, because of the perception of neutrality associated with Spain as a venue in conflicts between Latin-American parties or between European and Latin-American parties.
Bennett Picker: More and more disputants seem to be considering the use of mediation together with international arbitration as a possible way of resolving cross-border disputes more rapidly and cheaply. There also seems to be a greater willingness to consider process design as a preliminary first step before embarking on any one traditional ADR process. This trend was captured at a conference on Shaping the Future of International Dispute Resolution that was organised by the International Mediation Institute (IMI) at the Guildhall in London in late 2014. As a result of that conference, where users, providers, advisers and other stakeholders were asked to vote electronically on a number of issues relating to the future of ADR, the IMI will be organising a series of meetings (called the “Global Pound Conference”) around the world in 2016 to discuss how to improve access to justice in domestic and international disputes. Already, over 30 cities have expressed an interest in organising one of these meetings locally. Although the data generated in London is interesting (and can be found on IMI’s website), it is too soon to say whether it reflects any global trends. The Global Pound Conference Series, however, is likely to get different ADR service providers to work more closely together, and provide greater choices to disputants so that they can tailor their procedural needs to each dispute. The past year or so has also seen the launch of international mediation centres in Singapore and Florence and we are likely to see more in the coming years.