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Can Mandatory Mediation Work?

Can Mandatory Mediation Work?

The notion of mandatory mediation rubs right up against some of the core principles of mediation. So why have Argentina decided to introduce categorical attendance at mediation? What’s their experience and could it work elsewhere? Should we enter this debate or should we lock it away in a dark vault never to see the light of day? Diana Paraguacuto-Maheo explores the Argentinian experience to see if there are lessons to be learnt.

This is PART 2 of a 2-Part interview with Diana. If you missed Part 1, watch it now and learn about Mediation in France and how to get started as a French Mediator.

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Transcript

Full Transcript

Aled: Okay folks, coming up. A bit of a hot potato, mandatory mediation. Could it work for some cases? Should we just give it a try? Well that’s what they’ve done in Argentina. How is it working for them and are we really listening to what user want? You know, we keep promoting the benefits of mediation but, is it really what they want? Do they know what they want? Has anyone even thought of asking them? All this and more with, Diana Paraguacuto-Maheo.

But Argentinean legislature enacted the mediation and conciliation law, which effectively requires almost all types of litigants, to attend mediation. Now from my basic understanding, this law mandates categorical attendance of mediation. So, I know this idea might send tremors through the mediation field. But tell me a bit more about, how this works?

Diana: As I understand it, in Argentina, parties’ attendance is mandatory. Well, there are a few things, first maybe, I’m going already in the mediation and here you’re asking, whether or not, mediation is mandatory on the outset? As I understand it, you must civil, commercial and financial matters, mediation in Argentina, is mandatory. Meaning the judge is, would decline his jurisdiction, if you presented your case without being able to prove that you’ve attempted successfully, or well, unsuccessful I guess, the mediation. And parties are invited to go to mediation prior to submitting their claim before the courts. And that of course, raises the issue of, whether or not mandatory mediation is really helpful and what’s the success rate of those proceedings, when we know that, one of the characteristics of mediation is probably, the fact that it is, on a voluntary basis and that’s the factors that we think, increase the chances of success.

Aled: Okay so first of all, is this unique to Argentina or is this, does this notion of mandatory mediation exist elsewhere, in Latin America?

Diana: As I understand and I haven’t reviewed and analysed all the laws of the countries in Latin America. But I think, it is the only country in Latin America, which mandates the use of mediation.

Aled: Okay. What’s your personal view on mandatory mediation?

Diana: I would say that, at first, I tend to be a bit reluctant but maybe, but my feeling is evolving over time and I guess, after reading a little bit about the Argentinian experience, I wonder if it is not, maybe, a necessary step, in order to force people to learn, experience, mediation. And then, these mandatory aspects won’t be needed anymore. I always draw this parallel between mandatory mediation and I guess, these laws on gender equality. We are always debating France on you know, now we have a law that states that 40% of board members in a company needs to be women.

There was this debate on, whether or not that should be mandatory, just should try to take measure that foster that kind of, undertaking from companies. But after trying for so many years, those kind of, you know, soft measures, we really thought that there was no result. And at the end, France adopted this quota. I was very much against the quota but, I do find that, maybe, it’s required because, otherwise it would take way too long, for people to change their way of thinking and their way of behaving. Yes, I mean, it just strikes me, that certain changes need to be forced on people . . .

Aled: That’s it.

Diana: . . . and otherwise, we’ll be here, 25 years from now and nothing would have really, much changed. And I wonder if we shouldn’t pass, if mandatory mediation is not a necessary pass, not an ideal pass, but a necessary pass to try to impose mediation and force people to learn about it and open their mind to it. And it seem, that in Argentina, they managed to do that to a certain extent.

Aled: Okay and there’s a paper that you’d sent through, to me about mandatory mediation in Argentina. And one of the commentators, remarked on the difference between coercion intermediation or the difference between coercion intermediation and coercion in mediation. And that coercion intermediation, isn’t necessarily a bad thing because it gets people involved in something, that is good for them. That they don’t know about and they don’t know how good it is, until they’re actually in it. So, at least it gets them involved in mediation, rather than coercion taking place during the course of mediation. But, from what I’ve read, I mean, there are I guess, some concerns about making mediation mandatory. I mean, who gets to mediate in Argentina? Who can mediate, who can’t mediate?

Diana: Who can or who cannot mediate?

Aled: Yes.

Diana: You’re talking about parties?

Aled: No, I’m talking about the mediators themselves.

Diana: Well, I understand, I understand in Argentina, mediators have to be lawyers. . .

Aled: Okay.

Diana: . . . that’s my understanding and again, I can be wrong but, my understanding is that mediator have to be, have to be lawyers from training and then they have to register, be trained, of course, to mediation and then be registered, in a list, that’s held by the Ministry of Justice.

Aled: Okay. And I also read about this idea of a mediator assistant. That, this notion of, this concept of mediator assistance they have in Argentina, whereby, the mediator assistant isn’t the co-mediator but, is someone that has some technical expertise in, substantive matters of the mediation. Were you, any awareness of that?

Diana: Well, I know very little about it. Well, I know indeed, that it is used fairly broadly in Argentina and it probably comes from the fact really that, mediators are mostly lawyers from training and that, on technical aspects, they need this report and the assistant of somebody, who is more of a technical background. And I do believe actually, that this approach is very complimentary to their system. In our system, in France and I believe it is the same in the U.K and in the U.S, we don’t have to be lawyers by training, in order to become a mediator and therefore, parties have a wide area of choice, when choosing the perfect mediator for their case.

I would say that, a non-lawyer can do maybe, potentially even a better job than a lawyer, in being a mediator. And because, it brings his technical knowledge and as well you know, it’s not formatted, as lawyers sometimes are.

Aled: Yeah. . .

Diana: Into positions, that they have to defend.

Aled: . . . yeah. Earlier on, you also talked about the tension I think, between mandatory mediation and the ideological perspective of mediation being a voluntary process. I mean where does, from your perspective, where does it sit ideologically, then in Argentina because if it’s compulsory, then the voluntary element no longer exists because you’d obviously get penalised if you don’t participate. And also, where does free and informed consent, where does that sit, within this concept of mandatory mediation?

Diana: Well, I would think that, since mediation is mandatory of course, mainly at first parties, where they just were not interested, they were just going to mediation, just to check the box. ‘I went to mediation, so I now I can submit my claim to the court.’ And that probably happened and was probably not efficient. But with time, when you’re forced to do something, maybe, you have to stop and say, ‘Well, since I have to waste that time, why not make the most of it?’ And change your frame of mind and maybe, question yourself and your company because lawyers are trained over there and presence of lawyers is mandatory as well.

Maybe they were forced to learn about the added value of mediation and I would say that, very few people who are open to the arguments of mediation, and how it works and why it works and why it should be, at least considered. Usually, people don’t stay fully insensitive to it. And if they are a bit reasonable, you know, they are probably, quickly convinced that they should try it, at least give it a try. . .

Aled: Yeah.

Diana: . . . So, I think that the distinction that you were drawing early on, on forcing somebody to go into a process and once the process is there, you know, open the mind of that person, who is there anyway, needs to be there. So, why not take advantage of the process? I think, it is what’s going on, a little bit, although it took a lot of time, in Argentina.

Aled: Yeah. I interviewed Mike Lind, he was the former CEO of ADR Group. Lovely guy and we talked about, the idea of mediation being an opt out process, rather than an opt in process. So, a bit like the concept of, have you heard of the concept of, I think it’s called ‘Nudge.’ Is it nudge? Where you, in order to get a change in behavior, you do something really, really small but, the consequences, rather than, I’m not explaining this very well. Let’s just take mediation. At the moment you can choose to mediate or not. If the base assumption was, that you, you were, regardless of what your dispute was, you had to go through or you were on track to mediate and the choice was not, whether to mediate but, whether not to mediate.

So, the assumption is, you will mediate, unless you opt out of mediation. There are no penalties but, it kind of just, slightly encourages a change of behavior. So, the assumption that, you will mediate, is the assumption, rather than, it’s an option you can take. So, coercing people into it, ever so slightly but, not penaliSing them, if they choose not to? I really didn’t explain that very well. [laughs]

Diana: No, you absolutely did and I think that’s a very good point. The opt out option, it does exist in Argentina and I guess it puts back the responsibility on the parties, to give it a try or not to give it a try. But, that they are not forced to find a solution, we’re not talking about that. . .

Aled: Yeah.

Diana: . . . and I guess the only fact of knowing, that they have the option of not, of opting out, is very important and again, I mean, I think, there is a big distinction. Once you are in the process between, again, being forced into the process and how you enroll [sounds like 13:46] yourself in the process, once you have to be in the process.

Aled: Yeah. I mean it’s very, I’ll be very interested to see, just almost, experiment with that notion, for a period of time, just to see what the results were, because, when you look at some of the results from Argentina, it’s quite staggering. So, they reckon that, between April. 1995, when the mediation law, went into effect until October, 1998, there were over 100,000 cases that were presented for mediation, at the Ministry of Justice. The number of those cases that were actually mediated were, about 70,000 and approximately 45% of those reached a mediated settlement. So, roughly, of a 100,000, about 30,000 reached a mediated settlement.

The only, the only interesting aspect, another interesting aspect of this system, that they’ve got in Argentina, which I think, creates a problem and creates some unintended consequences, negative unintended consequences, are the way the mediators are paid. Or the way that, well, if all mediators are lawyers in Argentina, the way they’re enumerated so, if the case is successful, if they reach a mediated settlement, the parties pay the mediator the fee immediately. If they don’t reach a mediated settlement, the mediator doesn’t get paid, until the case is settled in litigation. Now that seems to incentivize the mediator, to get a mediated settlement and what I read about the behavior of some of the lawyers in mediation, is that they treat the mediation as litigation, in terms of their behavior and the level of directedness that it brings out in the mediators, when they’re managing the process. Because of that incentive to reach an outcome, means they get paid quicker.

Diana: That’s clearly your problem you know, I fully agree and I’m not fully sure and that would be, I think, interesting to explore, why. What are the trying to achieve by tying like that, the remuneration of the mediators, with the immediate result? Because I do believe that it doesn’t foster the right atmosphere because interests of the mediators are way too threatened by the failure of reaching an agreement, in the mediation session, between one or two or three. And I do believe, that’s clearly a problem.

Aled: Okay. So, I’m going to wrap this up. I want to come back to where we started, around sort of, mediation in France and the French culture being pre-disposed or not to you know, mediate or accept the position of authority. It sounds like you know, one could conclude that, maybe a system of a mandatory mediation might actually work and be complementary of the culture in France. I mean, what would you say?

Diana: I would say that, most mediators in France are against the mandatory mediation. I think the major position here, among mediators and probably lawyers, is that it should not be mandatory, although I think that it could be clearly, a tool that should, probably be explored. What is being explored right now, is still more of a soft, kind of, a tool. We, for example, are thinking in including as a mandatory mention in the submission, that clients are aware that mediation is an option and that they have considered it and that, that statement needs to be signed by the client.

And so, right now, we are still trying in this, I guess, we need to mature as well and be convinced ourselves that, we need to go to mandatory mediation because we’ve tried everything else. And we are right now, in that process of trying other things and we are still at the early stages of trying other things. So, we are looking right now, for new laws in mediation, we have submitted a few proposals, to incentivize the use of mediation, notably the fact that, the service provided by the mediators and maybe, the attorney’s fees are not submitted to VAT etc. etc. All kinds of mechanisms to make mediation more attractive.

So, I think the effort in France right now, is to try, not to go as far, as having to make mediation a mandatory process and but, then, will that be enough? I don’t know and will the ultimate solution be to impose a mandatory mediation, maybe. And whether that, we work or not, in France, I do believe that could probably work. But right now, politically, we clearly don’t have somebody who carries that project. So, we are far far away from that.

Aled: Yeah, yeah interesting. I think it would be one heck of a brave soul to, to introduce or propose an introduction of mandatory mediation. I imagine there will be a huge resistance to it, certainly in the U.K. from certain parties and I guess, other parties, other mediators might feel actually, it’s the way forward to, you know, put all these redundant mediators to good use. To utilise all this wasted resource, as I can see it. But again, doing it in the right way, that doesn’t, trample on the values of volunteer process, free and informed consent, doesn’t incentivize mediators, to reach mediated agreements but rather, just encourages parties to get interested in mediation.

And you know, I’m really interested in pursuing this notion of opting out, rather than opting in, to mediation, just to see, you know, once you get people in the room, you have a skilled mediator, who is working with, both the clients and their legal representatives, to get them interested in a process, that might be unfamiliar, to see what the results are.

Diana: Oh, absolutely, absolutely. And I think that goes to what we started discussing, which is really, an understanding of what mediation really is and that goes through education, in the broad sense of the world. Be it, education in the companies, not only lawyers but also, clients. Because another aspect that we didn’t speak about but, I guess is a resistant of time themselves because of the dynamic within certain companies.

Why a General Council wouldn’t want to go through mediation? I mean, there are clearly real reasons of why a General Council would rather go to arbitration or, to a judge, as opposed to a mediator. Because in mediation, you need to take ownership in the solution and maybe you know, it’s not a matter of authority, but it’s a matter of then being able to defend the choices that he would have made, in that mediation, to its hierarchy. And that represents a risk and also requires the client to be much more active in the resolution of its dispute. And that’s not easy either, to overcome.

Aled: Very interesting, yeah. I hadn’t thought of that perspective, I hadn’t thought of that perspective. So, you know, from a commercial perspective, you’ve got General Council, as you say, having to, it’s almost the personal risk, the stakes are high on that individual, having to justify any outcome or any decision, that they’ve reached, in the absence of any participation from the principals of that organization. So it’s you know, and I’ve seen that a number of times, where Finance Directors, who’ve come to a mediation, with a particular level of authority, just really really concerned, not so much about, the outcome but actually, how they’re going to have to sell this decision or this solution, to the CEO, to their boss. And what, you know, and losing face or just looking, coming across as, not necessarily incompetent but, as you say you know, you’ve used the word, weak.

You know, if you’ve got a CEO expecting a certain type of behavior, particularly if there’s a culture in that organisation that, is very adversarial, to come back and having acquiesced or how that might be perceived, in a mediation, that might back fire on someone’s, it might be a ‘Career Limiting Move’, as they say.

Diana: Absolutely, because mediation is still seen too much as, a system which forces parties to concede, to make concessions. To drop certain claims or, it’s too much perceived as being a middle way or middle ground. When, it is not yet perceived as a process which helps parties broaden the pie. And I think, that what we need to explain to management, to General Councils, to lawyers everywhere. So again, I do believe that it will take time and that we’re talking more of a, generational change, as opposed to just you know, very quick change. I do not believe that quick change.

Aled: See, I’m wondering, whether actually, mediators are to blame, partly to blame for the lack of appetite for mediation? You know, mediators going into mediation, not really interested in exploring or maybe not really skilled enough, to enlarge the pie but actually, you know, are more interested in shuttling between parties, making a concession here, get a concession there, almost a facilitated negotiation rather than being really creative, helping the parties be creative. So you know, people’s experience of mediation doesn’t match up with the vision that’s, you know, that exists, of mediation. You know, people get disappointed maybe. I’d be really interested to interview parties actually, that have gone through the process of mediation. How did it stack up compared to what they thought it was going to be?

That’s what I’m going to do. I’m going to try and find some parties to come on Mediator Academy and talk about their experience. Because it’s possible, that their experience of mediation isn’t all as cracked to be. And they think, ‘You know what, actually, I’m not so sure that this is adding value to my, it’s just another day out of the office. Whereas I could be making better decisions about how to spend my time.’ Who knows?

Diana: It’s a very interesting point, Aled, that you’re raising right now because actually, there’s some discussion, notably with, some people from the JAMS, you know, this American Institution, where mediators are mostly judges. And as you know, JAMS does very very well in the U.S. and is, right now, finding a little more difficult to sell mediation in Europe. And, what they were telling me, that probably in Europe, we are over selling the added value of mediation. And that the expectation of course of, of users, are not met because at the end, as you said, we’re may be not, creating enough value or broadening the pie enough and what we really do, is just, cut the apple in two. And that can only disappoint somebody who enters into mediation, thinking that they will have a better solution.

However, and it would be fabulous and I look forward to your next interviews in Mediator Academy, on that topic. Because the person at JAMS was also telling me that, the need of the market today, is more that, of actually what JAMS is offering. JAMS is offering the service of, generally, retired judges, who have an idea of, where the settlement point really is and try, by shuttling you know, from one party to the other, to bring in those parties to that settling point, they have in mind.

And to use, of course, their authority as former judges to get to that point, which might be a totally reasonable point, but it is, a point still, which still uses as a standard solution, that they would have got to, through litigation. Now, they go much faster, etc. etc. so there’s still a lot of value add there but, it’s not really the concept of mediation that we are trying to build, right now. And that person at JAMS was telling me, that the European market is again, overselling and overselling really, what mediation really is and that we should be much more upfront and say, ‘Look, mediation, that’s not really what it is. Look at what’s going on in the U.S. that’s how we need to handle it. And that’s it, be ready to just get closer to what you would get, in litigation. I’ll help you get there, faster [laughs]. But, that’s what you will get, we’re not going to broaden the pie, that much more.’

Aled: Litigation on Steroids.

Diana: Right [laughs]. . .

Aled: And this is a very interesting topic, for another conversation because…. I wrote a paper, last year I think, for a mediation conference, where I compared the growth of the mediation industry with or, the advancement of the mediation industry, paralleled with, how a technology start up, would create a product or a service? And using the Lean Start Methodology, so Lean Methodology, where you iterate many, many times to eventually create a product or a service, that people need and want, not a product or service, that you think people need and want.

Diana: . . . right, fascinating, yup.

Aled: And there are many, many big, big companies, particularly during the dot com era, that had grand ideas. Someone came up with a bright idea, raised you know, $50 million, created a product that, nobody wanted, didn’t solve anybody’s problems. It solved the problems that we thought it solved . . .

Diana: Right.

Aled: . . . but, we hadn’t really checked out to see whether other people wanted those problems solved in that way? And you know, you could be talking about the very same thing. We, you know, in Europe, we might have this notion that, you know, ‘It’s all about expanding the pie’ and I think, particularly with Commercial Mediation. When actual fact maybe, they just want litigation on steroids, they just want a quicker outcome, so they don’t have to waste all this time and money and pain. You know, they’d rather sort of, reduce that pain, having a more concentrated pain point but, its over and done with, quicker. Maybe, that’s what they want.

Diana: Maybe that’s what they want and I think, I do believe that actually, we should probably ask users, as you said, very, very accurately, I think, and try to ask them, ‘What do you really want?’ And maybe also, open our mind to using mediation, maybe to actually, limit the number of issues or other claims and not necessarily with the ambition of solving all the issues. And we are, sometimes I find, and I’m guilty of that as well, I think we all are because we are so enthrilled [sic] about mediation, that you know, we hope it will solve everything. But, I mean we ought to do a reality check and say, ‘Well, you know, what do we really want to achieve and what is really achievable.’

Aled: You know, one of the things, one of the little voices in my head, that surfaced earlier on, when you talked about education and we need to educate, users and lawyers and clients and so on. I mean, in U.K., they’ve been banging the education drum in mediation. You know, we need to educate people, no, we need to listen to what people want [laughs] and then we need to think actually, ‘Does this help them solve that problem?’ . . .

Diana: Yeah.

Aled: . . . rather than go, ‘No, this is what you need, it has helped me, so it will help you.’

Diana: [laughs]

Aled: You know, a bit like those self-help books. You read a book and you think, ‘Oh, wow, I had some real insights into my own you know, childhood traumas and now, I’m clear of that. Read this Diana, it’ll help you.’ ‘Well no, I don’t have these problems Aled you know, I had a great childhood’, you know.

Diana: No, you’re probably right, you’re probably right. So, we should actually, probably enquire more about the needs and try to find what the project is. And actually, that would solve their problem and in the most efficient way. It’s true, it adds the right perspective, I think and keep an open mind, as well, in the way, we practice mediation, as mediators, mostly but also, as lawyers accompanying clients, in mediation.

Aled: And there’s an irony, isn’t it. We need to educate, which is all about advocacy, right? We need to tell.

Diana: [laughs] . . .

Aled: Rather than enquiry and listen.

Diana: . . . yeah, I think it’s a combination, probably of those three.

Aled: Yeah, [laughs] All right look, we went off track but I think we got to a really interesting, really, really meaty subject. You know, we could have gone off in a number of directions and I’ve definitely got some topics now, for at least, half a dozen other interviews and another few papers I can write as well.

But look, I know, we’ve had a few technological issues and I’ve appreciated you, you know, persevering through that and sticking with me. So, thank you very much, I really appreciate your time Diana and your thoughts and your knowledge and wisdom and experience, and thank you for sharing that with everyone that will be watching this.

Diana: Well, thank you very much Aled.

Aled: If people want to reach out to you, say thank you, find out a bit more about what you do, what’s the best way for them to do that?

Diana: I guess, it’s probably going to the website of my law firm, which is unpronounceable in English, Ngo Cohen Amir-Aslani & AssociÈs but, I guess people can put just a link somewhere.

Aled: Well, I’ll put a link underneath the interview to your website, so they can contact you. I wanted to say, thank you and I think I might be seeing you, soon, right?

Diana: Absolutely, in July, early July.

Aled: Early July. Well I look forward to that and you’re presenting at that conference as well?

Diana: Yes, I will be presenting actually, continuing on this tour of the world. I actually will, I will speak about mediation in France, mediation in Latin America and I will explore some more of the issues that we’ve discussed today.

Aled: Fantastic. I look forward to it.

Diana: Likewise.

Aled: All right, thank you very much.

Diana: Thank you, Aled, my pleasure, bye.

About the mediator

Diana Paraguacuto Profile Pic

Diana specialises in international litigation, arbitration and alternative dispute resolution. She has served as counsel in international arbitration proceedings held under the auspices of the International Chamber of Commerce, the International Centre for Settlement of Investment Disputes, the London Court of International Arbitration and UNCITRAL arbitration rules. She has expertise in international disputes involving state entities, as well as... View Mediator