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TIAD, 24 April 2013 Mugur Bogdan Mitroi Chairman 1 Mediation, tool of management.

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Presentation on theme: "TIAD, 24 April 2013 Mugur Bogdan Mitroi Chairman 1 Mediation, tool of management."— Presentation transcript:

1 TIAD, 24 April 2013 Mugur Bogdan Mitroi Chairman 1 Mediation, tool of management

2 2 Goal of presentation Efficient approach for maintaining control over selecting the appropriate dispute resolution (ADR) procedure: early dispute analysis preventing escalation of business problem into legal disputes choosing the conflict-specific resolution procedure

3 3 Why companies cannot afford to loose control Business problems turn into legal battles Courts and arbitral tribunals decide for the parties External counsels take drivers seat away from parties Time and costs are unmanageable Litigation and arbitration are often games of luck Parties tend to overestimate chances of success in litigation and arbitration External counsels have a commercial incentive to litigate and arbitrate Judges and arbitrators have an incentive to settle in between, instead of writing a verdict Popular misconception of one size fits all No single dispute resolution process fits to every fuss

4 4 Stop fighting legal battles, start business-wise conflict management Early Dispute Analysis: Focus on understanding the real underlying business issues Dispute Prevention: Actively prevent un-necessary escalation of business problem into legal dispute Process Selection: Choose an appropriate procedure to solve the business issue In essence: A business problem needs a business-wise solution.

5 5 Prevent un-necessary escalation of business problems into legal disputes Companies need to face reality: legal disputes mean loss of control over the process and outcome legal remedies seldom solve the underlying business problem Companies need to change their minds: litigation and arbitration are only forums of last resort mediation and other ADR processes are the default mechanism do not let external counsels decide on process selection draft contractual dispute resolution clauses in a multi-tiered manner

6 Mediation 6 a method of amicable settlement of disputes, with the help of a specialized third party, acting as mediator, in conditions of neutrality, impartiality and confidentiality and having the free consent of the parties Both natural and legal persons can turn to Mediation voluntarily, before starting the trial or after its initiation Fields : matters from civil, commercial, family, penal matter, work disputes, consumer protection, disputes regarding the neighbourhood reports, professional responsibility caused by malpractice

7 Mediation, tool of management for inter- cultural and cross-border differences 7 Control of parties over the mediation procedure The parties are able to set the duration of mediation sessions, the venue and the date of the sessions. Also, the solution will belong to the parties, it is not imposed by a third party (such is the case for litigation). Confidentiality and Reputation The dispute submitted to mediation, just like the aspects debated during the procedure, are totally confidential, cannot be known by third parties, business partners/collaborators, press, media etc. Simplifying the procedure Means a lack of formalism, as well as simplifying the legal applicable frame. For instance, in cases where cross-border elements are involved, the parties are able to choose the law of dispute or may agree not to refer to a specific law. Reduced time to settle The dispute may be settled via mediation long time before even the first court appointment or even on-line.

8 Is there a relationship between dispute-wise business management practices and favorable economic and non-economic outcomes? 8 The Price/Earnings ratios for the most dispute-wise companies averaged 28% higher than the mean for all publicly-held companies in this survey And 68% higher than the mean for companies in the least dispute-wise category. See American Arbitration Association

9 Key Findings of the Cornell Study on why Companies use ADR: 9 Economic reasons Lower cost & faster than litigation/arbitration Process Control reasons parties desire to control their own destinies allows parties to resolve the dispute themselves mediation, a more satisfactory process 67% said it provided more satisfactory settlements For a summary see:

10 10 Mediation, tool of management COST RISK CONTROL

11 Conclusion: Global trend go mediation because it is human 11 Source: the need to survive and develop attracts the need to choose the most simple and economical solutions for dispute resolution European Union: the conclusion is directly reflected in the legislation where the mediation gains more ground than ever: March 12, 2013 was the adoption date of two new Directives on B2B and B2C fields; new rules to come in every market sector Countries worldwide adopted mediation regulations over the past years – see "International Mediation Guide", study by Clifford Chance for 25 countries tml?utm_source=lexology&utm_medium=newsfeed&utm_campaign=lexology tml?utm_source=lexology&utm_medium=newsfeed&utm_campaign=lexology

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