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The International Challenge

The International Challenge

Source: Inside Counsel
Date: July 12, 2012

The International Challenge BY KIMBERLY TAYLOR, ESQ. AND MATTh Ew R u Sh TON July 12, 2012 BuSINESS INSIghTS fOR LA w DEp ARTMENT LEADERS Reprinted with permission from InsideCounsel The need for more streamlined court procedures and more flexible and cost- effective dispute resolution is a global concern. As ADR providers have begun expanding worldwide, a global shift towards ADR has gained momentum. Change at this pace generates interest- ing challenges and worthwhile debate as new entrants bring fresh ideas and new methodologies to the market. Europe is an interesting case in point. Most of the 27 EU Member States im- plemented the European Union Direc- tive legislation in 2011, which provided a harmonised approach to matters like confidentiality and the recognition and enforcement of mediation agreements. Nevertheless, different states, for different reasons, chose to implement the Directive differently. Italy took the most radical approach, with the result that mediation is now a mandatory precursor to the use of the courts for a wide range of civil disputes. The Italian model raises taxing ques- tions for mediation globally, being born of a broken civil justice system rather than the more familiar need to save time and legal costs. By 2011, the civil courts in Italy had a backlog of 5.4 million cases and an average process- ing time of eight years. Mediation was touted as the best available solution to these problems. By contrast, ADR in the United States has risen in prominence precisely because it is complimentary to the courts: a credible threat of judicial determination is the elephant in many of mediation rooms. Given such different starting points, different mediation styles inevitably follow, which raises some practical chal- lenges in managing cross-border and cross-continental disputes. Fortunately mediation can respond and including a mediation clause in business contracts is becoming a more attractive and popular option. Among media- tion’s advantages are total procedural flexibility and the ability to evolve as the market requires. At a practical level therefore, in cross-continental matters mediators are encouraged to develop a “mid-Atlantic” style. At its most basic, this involves throwing away the rule book, and adapting an approach to suit either side. It means being tough enough on the legal merits to engage U.S. clients, but leaving scope for parties to determine the outcome themselves. As business becomes more “glocal” and jurisdictions become blurred, charting out ahead of time what is important to you or client can prevent a lot of wasted time and money. Additionally, media- tion has proven effective at not only resolving all types of conflicts, but more importantly, leaving the business relationship intact so future business can still occur. Therefore, inserting a mediation clause, indicating both the name of the mediation service provider and the city where the procedure will take place, can aid in the process of an effective and efficient resolution. With more than 20 official languages and radically different legal traditions, the EU can still look like a daunt- ing place to resolve business disputes quickly and cost-effectively. With some creative thinking and appropriate infrastructure, most challenges can be overcome. Traditional barriers of lan- guage and culture have been successfully managed using co-mediation; process and style are on-going and fascinating challenges, but mediation is adept at evolving to meet market demands. Cross-border and cross-continental mediation is still in its infancy. How experiments like those in Italy impact the theory and practice of mediation over the next decade make these excit- ing times for global ADR. Kimberly Taylor, Esq. is the Chief Operating Officer at JAMS, the largest private provider of mediation and arbitration services worldwide. She oversees JAMS operations in the United States. Working directly with the President and CEO, and leading a team that spans nearly 25 resolution centers nationwide, Taylor is responsible for the company’s day-to-day oper- ating activities. She can be reached at ktaylor@ jamsadr.com. Matthew Rushton is the Deputy Managing Director for JAMS International. He assists with identifying and selecting panelists, devel- oping the JAMS International client list and creating marketing opportunities. He can be reached at mrushton@jamsinternational.com.
The need for more streamlined court procedures and more flexible and cost-effective dispute resolution is a global concern. As ADR providers have begun expanding worldwide, a global shift towards ADR has gained momentum. Change at this pace generates interesting challenges and worthwhile debate as new entrants bring fresh ideas and new methodologies to the market.

Europe is an interesting case in point. Most of the 27 EU Member States implemented the European Union Directive legislation in 2011, which provided a harmonised approach to matters like confidentiality and the recognition and enforcement of mediation agreements. Nevertheless, different states, for different reasons, chose to implement the Directive differently. Italy took the most radical approach, with the result that mediation is now a mandatory precursor to the use of the courts for a wide range of civil disputes.

The Italian model raises taxing questions for mediation globally, being born of a broken civil justice system rather than the more familiar need to save time and legal costs. By 2011, the civil courts in Italy had a backlog of 5.4 million cases and an average processing time of eight years. Mediation was touted as the best available solution to these problems. By contrast, ADR in the United States has risen in prominence precisely because it is complimentary to the courts: a credible threat of judicial determination is the elephant in many of mediation rooms.

Given such different starting points, different mediation styles inevitably follow, which raises some practical challenges in managing cross-border and cross-continental disputes.

Fortunately mediation can respond and including a mediation clause in business contracts is becoming a more attractive and popular option. Among mediation's advantages are total procedural flexibility and the ability to evolve as the market requires. At a practical level therefore, in cross-continental matters mediators are encouraged to develop a "mid-Atlantic" style. At its most basic, this involves throwing away the rule book, and adapting an approach to suit either side. It means being tough enough on the legal merits to engage U.S. clients, but leaving scope for parties to determine the outcome themselves.

As business becomes more "glocal" and jurisdictions become blurred, charting out ahead of time what is important to you or client can prevent a lot of wasted time and money. Additionally, mediation has proven effective at not only resolving all types of conflicts, but more importantly, leaving the business relationship intact so future business can still occur. Therefore, inserting a mediation clause, indicating both the name of the mediation service provider and the city where the procedure will take place, can aid in the process of an effective and efficient resolution.

With more than 20 official languages and radically different legal traditions, the EU can still look like a daunting place to resolve business disputes quickly and cost-effectively. With some creative thinking and appropriate infrastructure, most challenges can be overcome. Traditional barriers of language and culture have been successfully managed using co-mediation; process and style are on-going and fascinating challenges, but mediation is adept at evolving to meet market demands.

Cross-border and cross-continental mediation is still in its infancy. How experiments like those in Italy impact the theory and practice of mediation over the next decade make these exciting times for global ADR.