Mediation is widely used to solve commercial disputes in the United States – the use of mediation started by the demands of the business sector in the 70’s and nowadays, mediation is an organic part of resolving commercial disputes.
Recognizing the indisputable benefits of mediation for parties,
1) saving legal costs (which tend to be extremely high in long negotiations and years of litigation/arbitration),
2) ending the dispute quickly (it usually takes one day to mediate the dispute in comparison to years in litigation/arbitration) and
3) deciding the outcome of the dispute between the parties,
mediation is usually the most beneficial way to solve a dispute for a company. Mediation is also an excellent way to manage risks – both concerning costs and the outcome of the dispute. Further, important business relationships are saved.
In order to prevent it to take the same 30 years as it took in the U.S. for companies to widely recognize the benefits of mediation and to regularly use it, the U.S.’s leading mediator Honorable Judge Daniel Weinstein founded The Weinstein International Foundation. The foundation both promotes use of mediation worldwide and also provides mediation services for cross-border public interest disputes (such as environmental disputes and art thefts, where art has been taken from its country of origin to another country after a war). The foundation consists of pioneers of mediation in the U.S. and around the world, and I am the only member of the foundation from the Nordic countries.
During 2018, I was promoting mediation with other members of The Weinstein International Foundation in Rome, Singapore and Georgia. Here are two intriguing mediation developments around the world gained through these visits:
Italy’s “required initial mediation session” has cut real estate litigation by almost 50 %
- Italy struggled for over 10 years to get mediation used in any types of disputes, until regulating on a “required initial mediation session”
- This initial session is a pre-requirement in filing a case in court
- In the initial session, the mediator explains to parties and lawyers the process and the benefits of meditation for their case
- All parties and lawyers have to be in front of the mediator at the same time
- After this initial session, parties can “opt-out” and proceed with litigation or continue with the mediation procedure
- Over the last four years, the Italian opt-out mediation model has cut the number of new litigated cases by 30%, reaching almost 50% in certain types of disputes such as those involving real estate
- Roughly, this means 50 % saved legal costs in real estate disputes
Refusal to participate in mediation can result in cost sanctions in Singapore and in the UK
- According to landmark UK decisions, courts have accepted that both party’s refusal to participate in mediation and unreasonable behavior within mediation can result in cost sanctions
- Also in Singapore, refusal to participate in mediation can result in cost sanctions
As I have mediated some of the largest commercial disputes in the U.S. lately with the U.S. leading mediator Daniel Weinstein, I am happy to share my insights with you on how mediation can end your dispute. As the U.S. remains the only developed mediation market and Daniel Weinstein mediates some of the largest commercial disputes there, gaining similar experience from high-value and highly complex commercial disputes is almost impossible to get.
Any dispute can be mediated. As Italy's example has demonstrated, the first step is to have parties around the same table and to understand, what mediation really is and how it can be helpful to you.
In case you have any questions, I am happy to share what I know.
Warmest,
Pirita
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Pirita Virtanen Mediator, Founder & CEO Harvard Law School (LL.M.), University of Turku (LL.M.) +358 40 7766476 / pvirtanen(at)privatemediator.fi Private Mediator - Ending Disputes www.privatemediator.fi
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