This post was co-authored by Matthew Rushton and Natasha Mellersh
Lack of diversity is no secret in the arbitration world. It is regularly discussed at conferences, cast into the spotlight by organisations like Arbitral Women, users of arbitration and practitioners themselves. If the first step towards recovery is acknowledging the problem, that step has been taken and measurable, if modest, progress has been achieved. Furthermore, the focus has moved from accepting the problem to identifying the causes and looking at possible solutions.
At a recent conference in Milan, held at the University of Milano-Bicocca University, on M&A and dispute resolution, mediation was a hot topic. Panellists discussed a number of areas ranging from mandatory mediation to arbitrating M&A disputes.
One of the key issues discussed was that of caucusing, a process in which the mediator speaks to the parties separately and privately during a mediation, away from the main meeting room. Caucusing is often combined with a joint session where both parties are present. However, some mediators prefer to keep both parties separate for the whole duration of the mediation, performing what is termed as “shuttle diplomacy”.
In a saturated market, many believe they possess the training, background, analytical capabilities and interpersonal skills to be a best-of-breed mediator. But they’re not.
Are these individuals deluded or simply excluded? If the latter, then who makes this market, and on what basis?
One route into this question is via another, arguably more esoteric but equally unregulated profession: that of the professional artist. As befits a $45bn market, the artworld has some rather better thought-through answers to the related but more challenging question of “who decides what is good art?”
The European Parliament recently adopted a Resolution on the implementation of the EU Mediation Directive (2008/52/EC). The new legislation contains recommendations further encouraging the use of mediation in the EU for civil and commercial disputes.
Initiatives include increasing the number of cases where courts invite parties to use mediation; urging a greater focus on best practice - including requiring parties to state that ADR has been attempted before proceeding in court, and financial incentives to make mediation more economically attractive.Other areas of focus include information campaigns, an emphasis on quality standards and the development of national registers of mediators.
On 17 October 2017, the UK’s Civil Justice Council’s ADR Working Group issued an uncompromising 98-page interim report featuring the word “fail” 40 times, “failure” 21 times and “failed” nine times.
The report is mercifully less ominous than the foregoing might suggest, deftly pulling together the threads of patchwork of the UK's ADR coverage, and inviting responses by 15 December 2017.
As a keen advocate of mediation, I have always been somewhat frustrated by the resistance to the concept by certain sections of the legal profession, who regard this as just as expensive an option as litigation, with no guarantee of finality.
The Irish Mediation Bill which came into law on the 2nd October 2017, will hopefully drive coach and horses through such tenuous and ill-conceived reasons for not embracing ADR at an early stage of legal proceedings.
The Act is a welcome development, particularly for the business community, as it encourages the use of an alternative effective and efficient method of dispute resolution to the traditional, costly litigation system. It reinforces existing provisions recognising mediation in the Irish Courts and places a party’s obligation to consider mediation on a statutory footing, giving greater structure and clarity to a method of dispute resolution which the Irish Courts have often encouraged.
While international arbitration is generally expected to be a faster and more cost-effective alternative to litigation, this is not always the case. Although there are many other advantages to arbitration such as confidentiality and a greater degree of client influence, it can still be lengthy and at times very expensive.
The good news is, there are several ways for parties to minimise the cost of international arbitration. These might be directly within their own control, e.g. the selection of legal counsel, while others may be managed by lawyers and arbitrators.
Multi-tiered dispute resolution clauses - also referred to as ‘hybrid clauses’ - typically combine adjudicative and non-adjudicative processes such as arbitration or litigation with mediation or conciliation. A multi-tiered dispute resolution process such as a ‘med-arb' gives parties the opportunity to go to mediation, but if the dispute remains unresolved they can move on to arbitration.
In international arbitration, one of the biggest issues is enforcement. This is not surprising, because when a dispute involves different jurisdictions things can get very messy very fast.
Obtaining an arbitration award is one thing, but if this award cannot be enforced effectively the whole ordeal may have been for nothing. One of the main characteristics that makes international arbitration so attractive is that it provides a neutral forum for parties from different states, minimising the risk of national bias.
Enforcement of an arbitration award however requires the cooperation of national courts, this is governed by the framework of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention), to which 154 of the 193 United Nations member states are parties.