Mediation, Arbitration and ADR
“Companies can save up to 65-68%
in proceedings costs”
An interview of Isabelle Vaugon
Why do you think mediation is a profitable way of dispute resolution for companies?
The official statistics on the conventional mediation process, published by different mediation centres, are eloquent. The rate of success is 80%. At the end of the process, the agreements reached by the parties are followed by 100% of spontaneous executions. We estimate a saving of 65 to 68% in proceedings costs.
Such consistent results are primarily achieved by reducing the average duration of the process. In the case of conventional mediation, it lasts between two days and two months, compared to several years in jurisdictional proceedings.
Furthermore, there is an added value in preserving the relationships between the parties in the future, after a win-win solution. Conventional mediation can be used in every commercial case applied to all the market segments. Every national or international company using it reaches the same conclusion: mediation saves a lot of time and money.
How can you anticipate mediation?
Anticipating obviously means allowing for a mediation clause when the contract is signed. At the time of signature, this strengthens the parties’ resolution to find an agreement during the execution of the contract. When the incident occurs, it gives the parties the best possible chance of resolving the occurrence quickly and effectively.
By including mediation clauses in their contracts, the parties are also sure, at the least try, to agree before taking legal action. As they can halt the mediation process at any time, there is nothing to lose by introducing mediation clauses.
Which clauses should be included in the contract?
The parties can easily find models of clauses in the brochures of the Mediation Centres.
If the complexity of the contract is high and/or if the parties are of different nationalities, they could ask a specialised lawyer to advise them in such redaction. He or she could notably propose them step clauses, including some other alternative dispute resolution process that is very efficient in the long-term for complex contracts, for instance.
The lawyer could also help them determine the appropriate Mediation Centre to be mentioned in consideration of the nationality of the parties, or the execution place of the contract. In any case, it is recommended to insert a reference to a Mediation Centre in the clause. This institution provides two services to the parties, which are a guarantee of the good conduct of the mediation process: mediation rules, and professional mediators.
How could you set up a mediation process?
Companies can go directly to a Mediation Centre to set up the process, or contact specialised lawyers who can provide precious support particularly when it comes to choosing the mediator, thanks to their knowledge of disputes and mediation techniques, and capability to discuss matters on a professional basis with the Centre.
Moreover, specialised lawyers can make it easier to set up the process. At the same time, they can convince the other party or its advisers to take part in the mediation. Finally, they can help the company choose the right moment to start the mediation if they have no clause of mediation. They can prepare the documents, and also advise on the approach to be adopted in dealing with the mediator, and with the other party.
Isabelle Vaugon is a Partner, and Head of the ADR and Arbitration team at Fidal International, the French arm of the KPMG Tax global network. Before that, she assumed a similar position at Landwell & Associés until July 2005. She is also an approved and experienced arbitrator at several mediation centres in the world, of which the International Chamber of Commerce (CCI), the Paris Centre of Mediation and Arbitration (CMAP), and the American Arbitration Association (AAA) in New-York.