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Mediators in Need of Momentum: ADR in Europe

by Michael Leathes, Avi Schneebalg
January 2003

First published by The Financial Times Limited (London) on December 16, 2002.

Mediation got off to a good start in Europe. Heralded as a solution to clogged-up courts, spiralling legal fees and business relationships torn apart by gladiatorial lawyers, it enjoyed a big initial take-up in some countries during the early and mid-1990s. With most mediation bodies around the world reporting that 80 per cent of deadlocked disputes typically are resolved within a few days of talks assisted by a trained neutral, the future of mediation in Europe seemed bright.

Today, that expectation is not being realised. Although mediation is well accepted by some leading corporations and law firms, many mediation bodies report having a hard time. The supply of mediators far exceeds demand. Subscribing members are getting hard to find and retain. So why are mediated outcomes still the exception across Europe? Why do many dismiss "alternative dispute resolution" the way some doctors see homeo-pathy - fringe, quaint, "alternative", not mainstream? The problem seems to have three roots:

No focus on promoting.

People will not come to support mediation through blind faith. They will accept only what they see will work. They also need to know why mediation works and how they can use it effectively.

Fortunately, it is not difficult to grasp: the mediator gets to know the private bottom lines and real interests of each party and arrives at the unique position of seeing solutions invisible to the parties individually; he or she can then, without violating confidences, steer the parties to their own win-win resolution.

But, for businesses even to consider it, good promotion is critical. The audience should be businesses, not lawyers. Promoting something new to sceptical chief executives requires special skills as well as time and money. Otherwise people will classify mediation as a euphemism for compromise and weakness.

Many mediation bodies are short of promotional skills and money, so focus instead on training, which earns fees. What promotion there is tends to be focused on practising lawyers, who may not in turn promote mediation to their clients.

Development has not been demand-driven.

Mediation in Europe (unlike the US) has been driven not by the businesses having the disputes but by mediation service providers. The Centre for Effective Dispute Resolution in the UK, for example, was set up in 1990 and is the largest mediation body in Europe with about 200 subscribing members. Some 75 per cent are law firms. Only 25 of the UK's 100 largest companies are members, yet 65 of the UK's 100 largest law firms are members.

To be sustainable, any market needs to be demand-driven. Businesses must tell counsel to devise early dispute resolution (EDR) strategies, not wait to be told by them. Businesses need to consider EDR as part of their wider goals in managing lawyers, costs and legal and reputational risk.

Reliance on membership subscriptions and the emergence of competition.

Many mediation bodies are recruiting fewer subscribing corporate members. Most businesses have stretched subscription budgets; these are the first to be raided when times, as now, are tough. Because of falling incomes, mediation bodies focus on tasks that will generate funds, such as training and consulting. Their strategies are driven by survival, not growth.

These are formidable problems but they are not insurmountable. We believe that the solution lies in creating a body charged specifically with promoting mediation. This would give European mediation the fresh impetus it needs.

The European Mediation Centre would be inspired in the first instance by a small group of leaders, corporate and governmental (particularly the European Commission). Its president could be a noted European business leader and its board could comprise a multinational selection of business opinion-leaders; this would give the EMC's staff access to Europe's chief executives.

The EMC's core objectives need to be simple but challenging: to promote mediation and EDR techniques to business leaders, including those in small and medium-sized companies; to ensure that mediation has a high profile in European business media; to become a multilingual source of best practice, free to all; and to emphasise the possibility of mediation in cross-border disputes. The EMC would not itself provide mediation services; to do so would dilute its main reason for existing.

To keep costs down, the EMC needs only a small staff with skills in communicating effectively at the highest corporate and governmental levels, in presenting publicly and in demonstrating the added value in EDR. It needs a website and a travel budget, not huge overheads.

Ultimately the EMC will use direct marketing, free publicity, education and discussion in appropriate forums to persuade, and support, the best promoters of all: business people, judges, arbitrators and business advisers, including professional bodies and business associations.

The EMC will need a strong and assured budget. Time and effort spent in pursuit of funds should be minimised to focus on core goals. Half the initial budget might be contributed by 20 or so big European companies; for credibility and prestige the remainder would ideally come from the EU. After a few years, corporate members alone, having come to understand and to value mediation, could foot the whole bill.

The EMC's aim would be ambitious: to change mindsets on a broad scale, across the European business community. But it can be done.

We can expect the visible, vocal leadership of a few companies to prompt broader understanding of EDR and therefore wider acceptance and use. The result will be more conflicts being referred to mediators throughout Europe. Momentum lost can be regained.

Biography



Michael Leathes is a co-founder and formerly a director of the International Mediation Institute (IMI). He spent much of his career as an in-house counsel for a number of international corporations in a variety of roles, including General Counsel of Pfizer International (1984-87), General Counsel of International Distillers & Vintners Limited (1992-97) and Head of Intellectual Property of BAT (1997-2006). He has spent much of that in-house career managing disputes around the world. Michael is the author of a book on negotiation, to be published by Wolters Kluwer in January 2017.


Avi Schneebalg is an attorney-at-law and commercial mediator based in Brussels. He has been lecturing on, teaching and practicing business mediation in several countries since many years. He is the co-author of the first book written in another language than English on mediation advocacy.

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