Mediation and Financial Institutions

The global financial crisis of 2008-2009 increased the litigation caseload of financial institutions. The broad array of claims included debt recovery, foreclosure actions over collateral and claims based on negligence or breach of duty of care. It is generally thought that such claims placed substantial new pressure on legal departments at financial institutions and has prompted these traditionally conservative institutions to consider enhanced use of alternative dispute resolution (“ADR”) methods to resolve disputes in a short timeframe. Last year, the International Chamber of Commerce prepared a report on financial institutions and ADR that underscored the potential advantages to financial institutions of referring disputes to ADR. Avoiding the time and expense of extensive discovery, maintaining confidentiality of proceedings and appearing before neutrals with financial expertise are some of the advantages to an ADR program for financial institutions.

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New York Law Journal