Mediation as an instrument to solve conflicts in compliance related issues and international contracts
9 Aprile 2025
- Mediazione
- Arbitrato
- Contenzioso
Summary: Companies with international projection and global presence can count on mediation and its benefits in the different contexts of their business, both in the compliance of the code of conduct and internal rules as well as in the compliance of contracts and projects with third parties or public authorities. In the same way, it facilitates access to a saturated justice system, while at the same time improving the relationship between the parties, as they do not have to face the wear and tear of the judicial phase, which leads to emotional wear and tear.
I will focus on the intersection between compliance and mediation, as international corporations are increasingly interested in the potential of Mediation applied to compliance frameworks. Although there are a few important challenges that we need to mention, the benefits of international mediation are clear: costs savings, quick solutions and a good understanding between the parties. International mediation and compliance go hand in hand and, although they may not seem to have much in common, they complement each other. The purpose of this article is to illustrate with some practical examples the advantages of compliance mediation for small and medium-sized enterprises operating internationally, in order to demonstrate the potential that exists in this combination.
Mediation is a form of alternative dispute resolution (ADR) that involves the intervention of a neutral third party, known as the mediator, to help disputing parties reach a mutually acceptable agreement. Unlike litigation, which involves a judge making a binding decision, mediation allows the parties to control the outcome, facilitating a more collaborative and flexible approach to resolving disputes.
In the context of compliance issues and international contracts, mediation offers a unique advantage by addressing both legal and non-legal aspects of disputes, such as cultural differences, business practices, and organizational relationships. This flexibility is particularly important when dealing with international contracts, where cross-cultural understanding and respect for diverse legal systems are essential.
The key is still the same recipe as the initial negotiation of a contract. The parties objectively and in a neutral atmosphere and collaborative approach, find ‘solutions’ to their disagreements where both parties win. The so-called win-win is still the best scenario in which the parties should meet again in dispute resolution. I always insist on the word ‘reconnect’ because of its positive connotation in any relationship. Mediation allows the parties to negotiate a mutually acceptable outcome, preserving the relationship between them, with the additional value of cost and time efficiencies and confidentiality guaranteed throughout the process.
Mediation benefits compliance programmes in two keyways.
Resolving internal compliance issues
This is accomplished through facilitating communication and conflict resolution among employees, promoting a culture of dialogue, transparency and accountability. When a company uses mediation to resolve conflicts arising from internal compliance-related situations, it helps to prevent a conflict from escalating in proportions both in the form of legal action and disputes that may involve the public administration.
A clear example is conflicts related to the code of conduct, where disputes often arise at the HR level. Another example is that arising from conflicts of interest. In both cases the connection lies in the common goal of promoting ethical behaviour, improving communication and resolving conflicts in a way that helps the employee and the company to follow its internal rules and achieve the required standards.
Mediation opens a space for dialogue and amicable conflict resolution, facilitating employees’ professional and personal growth in a sustained way over time.
Another example can be conflicts related to cross-border labour issues applicable to the same company, whether private, non-governmental organisation or conflicts between private and public companies. The reasons for the conflict may be related to harassment issues or pay inequality issues. For example, the internal pay system within an international organisation should consider the following elements:
- Remuneration represents by far the most important and controversial element of the employment relationship and is of equal interest to the employer and the employee.
- The remuneration system should be based on and consistent with the principles of the organisation.
- The criteria for determining remuneration should be objective and measurable.
- The system should be equitable.
Conflicts often arise around these elements and companies should be transparent, through comprehensive policies, about their position on non-discrimination, harassment or inclusion of their employees within their organisation and the markets in which they operate.
Mediation can be a channel to help find solutions to equality and non-discrimination issues between employees within the same organisation. It also obliges companies to consider the standards of international legislation (e.g. CSRD) when implementing their policies. We are seeing that it is not a ‘nice to have’ but a ‘must have’.
Resolving disputes with external parties
Mediation can be used to enforce commercial contracts or in projects. It helps prevent disputes between companies or between companies and regulators, foster better relations, and ensure compliance standards are met without resorting to litigation. Mediation promotes cooperation between the parties and helps reduce the risk of future contractual violations.
A clear example of the benefits of the use of mediation in compliance arises in the international context where legal certainty is required for both parties, as well as fair and reasonable management of a long-term project. In some cases, there is a public-private element to the dispute as the public sector is involved (either in licensing issues or as a regulatory authority). This may create some confusion in the roles and rights of the parties, which makes perfect sense when the interests of the investor (private equity) and the community or private parties are very diverse.
For context, we might think of environmental, social and governance issues that are receiving serious attention from governments and regulators, given the impact on the planet and the people within the communities where they live. Mediation offers a way to resolve these conflicts by facilitating open communication between the parties involved. For instance, if a company is accused of breaching a country’s environmental regulations, mediation can provide a platform for the company and regulatory authorities to discuss the issues, share concerns, and negotiate a solution that satisfies both parties. Instead of pursuing punitive measures or resorting to lengthy legal battles, mediation can help parties find common ground and craft a solution that supports compliance while preserving business relationships.
A concrete example is mining activities, which contribute greatly to the involvement of foreign entities in resource-rich countries, involving, on a large scale, both foreign and domestic interests, and potentially resulting in pollution and damage to the environment. In addition, there are various problems, especially the use of land for mining activities, which causes friction between mining companies, communities and local governments where mining activities take place. Since these projects take place over a long period of time and involve various interests of both private and public actors as well as communities, mediation is undoubtedly a good way to prevent disputes during the whole process of project development and implementation, offering in conflict situations not only a quick solution for both parties but also a fair and reasonable management of a project in the long term.
Another tool, with elements of mediation, which is recommended for the successful completion of large projects, as for instance construction projects, are Dispute Boards, a panel of one to three members with extensive experience in the field of the contract, who accompany the execution of the contract until the work is completed on time and on budget. This method is not a pure and simple mediation, although it resembles it, because the Dispute Boards, in particular the so-called DAAB (Dispute Avoidance and Adjudication Board), permanently seek to avoid conflict and, if it arises, to encourage the parties to find a solution or to make it binding. I will go into more detail on this subject in another article.
Hereby, we can also mention internal control and auditability towards third parties, be they customers or suppliers. The EU directive (CSDDD) puts the emphasis on indirect suppliers in the supply chain. It is therefore important that when establishing a business or investment partnership, all parties involved have a similar level of compliance with standards. In this regard, framework compliance agreements, which are compliance agreements that regulate the compliance obligations of both parties’ subject to a service contract, are very common.
Aspects of compliance in such contracts may include, among others, anti-corruption policy, fee evasion, international sanctions, trainings, reporting requirements and ways to audit the compliance clauses agreed in the service contract, as well as the escalation clause to resolve disputes amicably, using the various existing ADR modes.
In the context of commercial contracts, mediation is used to resolve disputes related to non-performance, late deliveries, payment problems, interpretations of clauses or any other dispute arising from a commercial agreement, including any aspect of the compliance agreement as referred to above.
For an internationally developing company it would be advisable to promote mediation as the type of dispute resolution in conflicts with third parties. One way to promote mediation as an effective means of dispute resolution could be through a clause of voluntary submission to mediation in all transactions with third parties, followed by arbitration or submission to the courts of a certain jurisdiction, known as a tiered dispute resolution clause. These clauses provide for a gradual system of dispute resolution following various alternative methods of resolving disputes, usually culminating in arbitration if the outcome of the first alternative methods is unsuccessful.
The choice of conflict resolution through mediation is a ‘win-win solution’, whose confidentiality is guaranteed in the face of public attention. Based on these advantages, mediation is considered more suitable to be implemented (agreed, including with the escalation clause) in a contract.
Challenges of Mediation in International Contract Disputes
Despite its many advantages, mediation is not without its challenges. Some of the key obstacles include:
Lack of Enforcement Mechanisms: Mediation agreements are typically non-binding, meaning that parties are not legally required to adhere to the terms of the settlement. While mediation can result in a mutually agreed-upon solution, enforcing the agreement may require the parties to enter into further negotiations or even resort to litigation if one side fails to honour the agreement.
Cultural and Language Barriers: In international contract disputes, cultural differences and language barriers can complicate the mediation process. It is important to select mediators who have experience with cross-cultural communication and who understand the legal systems involved. Without such expertise, the mediation process may be ineffective.
Reluctance to Mediate: Some parties may be reluctant to mediate, especially if they perceive it as a sign of weakness or if they are unfamiliar with the process. This reluctance can be overcome with proper education and a clear understanding of the benefits of mediation.
Although we can say that there is a growth of mediation around the world and the level of satisfaction of the use of mediation is based on its core values, which are impartiality, confidentiality and self-determination, the promotion of the mediation is still an important challenge.
Conclusion
In the case of internal compliance, mediation usually takes a more reactive role, i.e. when the conflict has already surfaced within the company or organisation; whereas, in the case of third party compliance, mediation takes a preventive role, such as in the case of Dispute Boards, although it also helps to resolve a commercial conflict between parties who wish to continue to maintain a business relationship. In both cases the objective is the same, to try to find common ground between the interests of the parties in order to resolve or avoid a conflict that could lead the parties to a legal dispute.
As international trade continues to grow and the complexity of global regulations increases, businesses and organizations can benefit from adopting mediation as a strategic method for resolving conflicts. By fostering cooperation and understanding, mediation can help build stronger, more resilient business relationships and ensure long-term success in a global marketplace.
Companies need to adhere to their own compliance programmes, but also to the programme of their customers, suppliers or banks with whom they collaborate. Not only is there a need for expertise to know the legal framework applicable to the industry, but there is also a need for conflict resolution when conflicts arise or even to act pre-emptively. Legal battles are expensive, time-consuming and damaging to business relationships. Many jurisdictions and industries are already demanding an obligation for parties to exhaust alternative dispute resolution methods before moving to the litigation phase.
The year 2025 marks a milestone in the Administration of Justice in Spain with the publication of Organic Law 1/2025 of 2 January on measures to improve the efficiency of the Public Justice Service, which introduces important measures to modernise the judicial system.
Among these, the compulsory use of Appropriate Means of Dispute Resolution (ADR) as a prerequisite for initiating civil proceedings stands out. This change aims to improve the efficiency of the judicial system and encourage consensual solutions between the parties. The Law will enter into force on 3 April 2025.
In this preliminary post, we will explore what this novelty entails, the types of ADR envisaged, their characteristics and the consequences of their implementation.
What are Alternative Dispute Resolution (ADR)?
ADR are mechanisms that allow parties to resolve disputes out of court, either through direct negotiations or with the help of a neutral third party. These means include options such as mediation, conciliation, independent expert opinion, collaborative law, confidential binding offer and other legally recognised tools.
The main objective of ADR is to reduce the workload of the courts and to offer citizens a faster, more efficient, and personalized alternative for resolving their disputes. It also seeks to promote a settlement culture, fostering more harmonious relations between the parties involved.
ADR as a procedural requirement
One of the most innovative aspects of the new law is that it makes it mandatory to attempt to resolve disputes through ADR before filing a lawsuit in civil matters. This means that, for a claim to be admissible, the parties must demonstrate that they have attempted prior negotiation activity, whether through mediation, conciliation, or any other recognised ADR.
However, there are exceptions. This requirement is waived in cases involving:
- Fundamental rights,
- Urgent measures concerning minors,
- Disputes relating to filiation, paternity or maternity,
- Support measures for persons with disabilities,
- Proceedings for negotiable instruments,
- When one of the parties is a public sector entity, among others.
This obligation applies to declaratory proceedings in Book II and special proceedings in Book IV of the Civil Procedure Act, but does not include enforceable claims or requests for precautionary measures or preliminary proceedings.
Types of ADR recognized
The law identifies several types of ADR that meet the procedural requirement:
- Mediation: A neutral third party assists the parties to dialogue and reach an agreement.
- Conciliation: An impartial professional suggests possible solutions to the conflict
- Confidential binding offer: Any person who makes a confidential binding offer to settle a dispute.
- Independent expert opinion: A specialist evaluates the case and offers a recommendation.
- Collaborative law: Lawyers from both sides work together to find a solution without going to court.
- Other mechanisms: Any negotiating activity recognised by law, such as direct agreements between lawyers for the parties.
Key characteristics of ADR
- Voluntariness and good faith: Although the attempt to negotiate is mandatory, the parties are not obliged to reach an agreement
- Confidentiality: Everything discussed during the process is confidential and cannot be used in a possible trial, except, inter alia, by express written waiver of the parties.
- Suspension of deadlines: The initiation of an ADR interrupts the statute of limitations or suspends the expiration of legal actions.
- Flexibility: The parties can choose the ADR that best suits their needs.
Procedure and consequences of non-compliance
To prove that an ADR has been attempted, the parties must provide documentation demonstrating the negotiation effort, such as signed minutes or, if there is no agreement, a certification issued by the mediator, conciliator or expert. If this requirement is not met, the claim may be inadmissible.
In the event that the negotiation process ends without agreement, the parties may go to court, but the attitude of the parties during the negotiation may influence decisions on procedural costs or possible sanctions for abuse of the judicial system.
Advantages of ADR
The introduction of ADR as a prerequisite to litigation can offer multiple benefits:
- Judicial decongestion: It reduces the workload of the courts, allowing for a more streamlined resolution of cases
- Lower costs: ADR is often less expensive than a full court process
- Faster: Many disputes can be resolved in weeks rather than months or years.
- Tailored solutions: Settlements can be better tailored to the needs of the parties.
- Preservation of relationships: They foster dialogue and understanding, reducing conflict between parties.
Criticisms and challenges
Despite its advantages, the implementation of ADR is not without its challenges:
- Lack of knowledge: Many people do not know what ADR is and how it works.
- Mistrust: Some citizens may perceive them as an additional obstacle to accessing justice.
- Training: It is essential to train professionals who will act as mediators, conciliators and experts.
- Initial costs: Although cheaper in the long run, the fees of the professionals involved may be a barrier for some users.
Conclusion
The introduction of ADR as a procedural requirement in the civil sphere represents a significant change in the Spanish judicial system. This measure seeks not only to streamline dispute resolution but also to foster a culture of settlement that benefits the parties and society.
Although the transition to this new model may face certain obstacles, the long-term benefits promise a judicial system that is more efficient, accessible, and adapted to the needs of the 21st century. In this sense, ADR is a tool for resolving disputes and a step towards a more humane and sustainable justice system.
Summary: Since 12 July 2020, new rules apply for platform service providers and search engine operators – irrespective of whether they are established in the EU or not. The transition period has run out. This article provides checklists for platform service providers and search engine operators on how to adapt their services to the Regulation (EU) 2019/1150 on the promotion of fairness and transparency for commercial users of online intermediation services – the P2B Regulation.
The P2B Regulation applies to platform service providers and search engine operators, wherever established, provided only two conditions are met:
(i) the commercial users (for online intermediation services) or the users with a company website (for online search engines) are established in the EU; and
(ii) the users offer their goods/services to consumers located in the EU for at least part of the transaction.
Accordingly, there is a need for adaption for:
- Online intermediation services, e.g. online marketplaces, app stores, hotel and other travel booking portals, social media, and
- Online search engines.
The P2B Regulation applies to platforms in the P2B2C business in the following constellation (i.e. pure B2B platforms are exempt):
Provider -> Business -> Consumer
The article follows up on the introduction to the P2B Regulation here and the detailed analysis of mediation as method of dispute resolution here.
Checklist how to adapt the general terms and conditions of platform services
Online intermediation services must adapt their general terms and conditions – defined as (i) conditions / provisions that regulate the contractual relationship between the provider of online intermediation services and their business users and (ii) are unilaterally determined by the provider of online intermediation services.
The checklist shows the new main requirements to be observed in the general terms and conditions (“GTC”):
- Draft them in plain and intelligible language (Article 3.1 a)
- Make them easily available at any time (also before conclusion of contract) (Article 3.1 b)
- Inform on reasons for suspension / termination (Article 3.1 c)
- Inform on additional sales channels or partner programs (Article 3.1 d)
- Inform on the effects of the GTC on the IP rights of users (Article 3.1 e)
- Inform on (any!) changes to the GTC on a durable medium, user has the right of termination (Article 3.2)
- Inform on main parameters and relative importance in the ranking (incl. possible influence of remuneration), without algorithms or business secrets (Article 5.1, 5.3, 5.5)
- Inform on the type of any ancillary goods/services offered and any entitlement/condition that users offer their own goods/services (Article 6)
- Inform on possible differentiated treatment of goods / services of the provider or individual users towards other users (Article 7.1, 7.2, 7.3)
- No retroactive changes to the GTC (Article 8a)
- Inform on conditions under which users can terminate contract (Article 8b)
- Inform on available or non-available technical and contractual access to information that the Service maintains after contract termination (Article 8c)
- Inform on technical and contractual access or lack thereof for users to any data made available or generated by them or by consumers during the use of services (Article 9)
- Inform on reasons for possible restrictions on users to offer their goods/services elsewhere under other conditions (“best price clause”); reasons must also be made easily available to the public (Article 10)
- Inform on access to the internal complaint-handling system (Article 11.3)
- Indicate at least two mediators for any out-of-court settlement of disputes (Article 12)
These requirements – apart from the clear, understandable language of the GTC, their availability and the fundamental ineffectiveness of retroactive adjustments to the GTC – clearly go beyond what e.g. the already strict German law on general terms and conditions requires.
Checklist how to adapt the design of platform services and search engines
In addition, online intermediation services and online search engines must adapt their design and, among other things, introduce internal complaint-handling. The checklist shows the main design requirements for:
a) Online intermediation services
- Make identity of commercial user clearly visible (Article 3.5)
- State reasons for suspension / limitation / termination of services (Article 4.1, 4.2)
- Explain possible differentiated treatment of goods / services of providers themselves or users in relation to other users (Article 7.1, 7.2, 7.3), see above
- Set an internal complaint handling system, with publicly available info, annual updates (Article 11, 4.3)
b) Online search engines
- Explain the ranking’s main parameters and their relative importance, public, easily available, always up to date (incl. possible influence of remuneration), without algorithms or trade secrets (Article 5.2, 5.3, 5.5)
- If ranking changes or delistings occur due to notification by third parties: offer to inspect such notification (Article 5.4)
- Explain possible differentiated treatment of goods / services of providers themselves or users in relation to other users (Article 7.1, 7.2, 7.3)
The European Commission will provide guidelines regarding the ranking rules in Article 5, as announced in the P2B Regulation – see the overview here. At the same time, providers of online intermediation services and online search engines shall draw up codes of conduct together with their users.
Practical Tips
- The Regulation significantly affects contractual freedom as it obliges platform services to adapt their general terms and conditions.
- The Regulation is to be enforced by “representative organisations” or associations and public bodies, with the EU Member States ensuring adequate and effective enforcement. The European Commission will monitor the impact of the Regulation in practice and evaluate it for the first time on 13.01.2022 (and every three years thereafter).
- The P2B Regulation may affect distribution relationships, in particular platforms as distribution intermediaries. Under German distribution law, platforms and other Internet intermediation services acting as authorised distributors may be entitled to a goodwill indemnity at termination (details here) if they disclose their distribution channels on the basis of corresponding platform general terms and conditions, as the Regulation does not require, but at least allows to do (see also: Rohrßen, ZVertriebsR 2019, 341, 344–346). In addition, there are numerous overlaps with antitrust, competition and data protection law.
It is usually said that “conflict is not necessarily bad, abnormal, or dysfunctional; it is a fact of life[1]” I would perhaps add that quite often conflict is a suitable opportunity to evolve and to solve problems[2]. It is, in fact, a useful part of life[3] and particularly, should I add, of businesses. And conflicts not only arise at the end of the business relationship or to terminate it, but also during it and the parties remain willing to continue it.
The 2008 EU Directive on certain aspects of mediation in civil and commercial matters states that «agreements resulting from mediation are more likely to be complied with voluntarily and are more likely to preserve an amicable and sustainable relationship between the parties.»
Can, therefore, mediation be used not only as an alternative to court or arbitration when terminating distribution agreements, but also to re-organize them or to change contract conditions? Would it be useful to solve these conflicts? What could be the advantages?
In distribution/agency/franchise agreements, particularly for those lasting several years, parties can have neglected their obligations (for instance minimum sales targets not attained).
Sometimes they could have tolerated the situation although they remain not very happy with the other party’s performance because they are still doing acceptable business.
It could also happen that one of the parties wishes to restructure the entire distribution network (Can we change the distribution structure to an agency one?), but does not want to face a complete termination because there are other benefits in the relationship.
There may be just some changes to be introduced, or changes in the legal structures (A mere reseller transformed in distributor?), legal frameworks, legal conditions (Which one is the applicable law?), limitation of the scope of contract, territory…
And now, we face the Covid-19 crisis where everything is still more uncertain.
In some cases, it could happen that there is no written contract and the parties wish to draft it; in other cases, agreements could have been defectively drafted with incomplete, contradictory or no regulation at all (Was it an exclusive agreement?).
The contracts could be perfect for the situation imagined when signed several years ago but not anymore (What happen with online sales?) or circumstances, markets, services, products have changed and need to be reconsidered (mergers, change of directors…).
Sometimes, even more powerful parties have not the elements to oblige the weaker party to respect new terms, or they simply prefer not to impose their conditions, but to build up a more collaborative relationship for the future.
In all these cases, negotiation is the usual strategy parties follow: each one is focused in obtaining its own benefits with a clear idea of, for instance, which clause(s) should be modified or drafted.
Nevertheless, mediation could add some neutrality, and some space to a more efficient, structured and useful approach to the modification of the commercial relationship, particularly in distribution agreements where the collaboration (in the past, but also in the future if the parties wish so) is of paramount importance.
In most of these situations, personal emotional aspects could also be involved and make more difficult a neutral negotiation: a distributor that has been seen by the manufacturer as not performing very well and feels hurt, an agent that could consider a retirement, parties from different cultures that need to understand different ways of performing, franchisees that have been treated differently in the network and feel discriminated, etc.
In these circumstances and in other similar ones, where all persons involved, assisted by their respective lawyers, wish to continue the relationship although maybe in a different way, a sort of facilitative mediation can be a great help.
These are, in my opinion, the main reasons:
- Mediation is a legal and organized procedure that could help the parties to increase their awareness of the necessity to redraft the agreement (or drafting for the first time if it was not already done).
- Parties can be heard more easily, negotiation is eased in the interest of both of them, encourages them to act more reasonably vis-à-vis the other side, restores relationship if necessary, deadlock can be easily broken and, if the circumstances advice so, parties can be engaged separately with the help of the mediator.
- Mediation can consider other elements different to the mere commercial or legal ones: emotions linked to performance, personal situations (retirement, succession, illness) or even differences in cultural approaches.
- It helps to find the real (possibly new or not shown) interests in the commercial relationship of the parties, focusing in developments, strategies, new proposals… The mere negotiation between the parties and they attorneys could not make appear these new interests and therefore be limited only to the discussion on the change of concrete obligations, clauses or situations. Mediation helps to go beyond.
- Mediation techniques can also help the parties to face their current situation, to take responsibility of their performance without focusing on blame or incompetence but on a constructive and future collaboration in new specific terms.[4]
- It can also avoid the increasing of the conflict into a more severe one (breaching) and in case mediation does not end with a new/redrafted agreement, the basis for a mediated termination can be established, if the parties wish so, instead of litigation.
- Mediation can conclude into a new agreement where the parties are more reassured, more comfortable with, and more willing to respect because they were involved in their construction with the assistance of their respective lawyers, and because all their interests (not only new drafted clauses) were considered.
- And, in any case, mediation does not affect the party’s collaborative position and does not reduce their possibility to use other alternatives, including litigation or arbitration to terminate the agreement or to oblige the other party to respect its legal obligations.
The use of mediation does not need the parties to have foreseen it in the agreement (although it could be easier if they did so) but they can use it freely at any time.
This said, a lawyer proposing mediation as a contractual clause or, in case it was not included in the agreement, as a procedure to face this sort of conflicts in distribution agreements, will be certainly seen by his/her client as problem-solving attorney looking for the client’s interests rather than a litigator pushing them to a more uncertain situation, with unknown costs and unforeseeable timeframe.
Parties in distribution agreements should have this possibility in mind and lawyers have the opportunity to actively participate in mediation from the first steps by recommending it in the initial agreement, during the process helping the clients to express their concerns and interests, and in the drafting of the final (new) agreement, representing the clients’ and as co-author of their success.
If you would like to hear more on the topic of mediation and distribution agreements you can check out the recording of our webinar on Mediation in International Conflicts
[1] Moore, Christopher W. The Mediation Process: Practical Strategies for Resolving Conflict. Jossey-Bass. Wiley, 2014.
[2] Mnookin, Robert H. Beyond Winning. Negotiating to create value in deals and disputes (p. 53). Harvard University Press, 2000.
[3] Fisher, R; Ury, W. Getting to Yes: Negotiating an agreement without giving in. Random House.
[4] «Talking about blame distracts us from exploring why things went wrong and how we might correct them going forward. Focusing instead on understanding the contribution system allows us to learn about the real causes of the problem, and to work on correcting them.» [Stone, Douglas. “Difficult Conversations: How to Discuss What Matters Most”. Penguin Publishing Group]
In these times of insecurity about the future, we have nevertheless some certitudes. One of them, no doubt about it, is that “online intermediation services are key enablers of entrepreneurship and new business models”. EU Regulation 2019/1150 on promoting fairness and transparency for business users of online intermediation services is dealing with it. This Regulation shall apply from 12 July 2020.
The purpose of this Regulation is laying down rules to ensure that business users of online intermediation services and corporate website users are granted appropriate transparency, fairness and effective redress possibilities (art. 1). It applies to online intermediation services and online search engines provided to business users and corporate website users having their place of establishment UE and offering goods or services to consumers in the Union, irrespective of the place of establishment of the providers and the applicable law.
The rules shall apply, particularly, to online marketplaces, social media outlets, application distribution platforms, platforms for the collaborative economy and general search engines.
What I would like to underline in this post is that the Regulation foresees (art. 12) the use of mediation as a specific method of conflict resolution between online intermediation service providers and professional users. Mediation is promoted without prejudice to its voluntariness and the right to judicial claim.
In particular, the providers of the intermediation services shall identify in their general terms and conditions, two or more mediators with whom they are willing to engage to attempt to reach —in good faith— an agreement with business users on the settlement, out of court, of any disputes between the provider and the business user. Only service providers that are small companies would be exempted from assuming this obligation, without prejudice to being able to do so voluntarily.
The Regulation also contains the requirements these mediators must meet: some general ones (independence, with affordable services, act without delay, easily accessible) and others more specific or that will need special qualification (ability to mediate in the language of the general conditions and who have sufficient knowledge of intra-company trade relations).
It is also interesting to notice that the service providers shall bear a reasonable proportion of the total costs of mediation in each individual case, according to the indications of the mediator and to some criteria such as relative merits of the claims of the parties, their conduct, as well as the size and their financial strength.
The conclusion seems clear: Mediation, as an alternative to court or arbitral dispute resolution, is increasing its space in the EU regulations. It is always a voluntary way to solve conflicts, and it is worth considering its effectiveness in all business areas. This Regulation is expressly considering it.
Spain | Appropriate Means of Dispute Resolution (ADR) as a prerequisite for litigation
- Mediazione
- Contenzioso
-
Spagna
Francia 
Belgio 
Italia 
USA 
Ucraina 
The incorporation of limited liability companies in The Netherlands and in Spain
- Diritto societario
-
Paesi Bassi -
Spagna
Scrivi a Sonia
Spain | Appropriate Means of Dispute Resolution (ADR) as a prerequisite for litigation
6 Gennaio 2025
-
Spagna
- Mediazione
- Contenzioso
Summary: Companies with international projection and global presence can count on mediation and its benefits in the different contexts of their business, both in the compliance of the code of conduct and internal rules as well as in the compliance of contracts and projects with third parties or public authorities. In the same way, it facilitates access to a saturated justice system, while at the same time improving the relationship between the parties, as they do not have to face the wear and tear of the judicial phase, which leads to emotional wear and tear.
I will focus on the intersection between compliance and mediation, as international corporations are increasingly interested in the potential of Mediation applied to compliance frameworks. Although there are a few important challenges that we need to mention, the benefits of international mediation are clear: costs savings, quick solutions and a good understanding between the parties. International mediation and compliance go hand in hand and, although they may not seem to have much in common, they complement each other. The purpose of this article is to illustrate with some practical examples the advantages of compliance mediation for small and medium-sized enterprises operating internationally, in order to demonstrate the potential that exists in this combination.
Mediation is a form of alternative dispute resolution (ADR) that involves the intervention of a neutral third party, known as the mediator, to help disputing parties reach a mutually acceptable agreement. Unlike litigation, which involves a judge making a binding decision, mediation allows the parties to control the outcome, facilitating a more collaborative and flexible approach to resolving disputes.
In the context of compliance issues and international contracts, mediation offers a unique advantage by addressing both legal and non-legal aspects of disputes, such as cultural differences, business practices, and organizational relationships. This flexibility is particularly important when dealing with international contracts, where cross-cultural understanding and respect for diverse legal systems are essential.
The key is still the same recipe as the initial negotiation of a contract. The parties objectively and in a neutral atmosphere and collaborative approach, find ‘solutions’ to their disagreements where both parties win. The so-called win-win is still the best scenario in which the parties should meet again in dispute resolution. I always insist on the word ‘reconnect’ because of its positive connotation in any relationship. Mediation allows the parties to negotiate a mutually acceptable outcome, preserving the relationship between them, with the additional value of cost and time efficiencies and confidentiality guaranteed throughout the process.
Mediation benefits compliance programmes in two keyways.
Resolving internal compliance issues
This is accomplished through facilitating communication and conflict resolution among employees, promoting a culture of dialogue, transparency and accountability. When a company uses mediation to resolve conflicts arising from internal compliance-related situations, it helps to prevent a conflict from escalating in proportions both in the form of legal action and disputes that may involve the public administration.
A clear example is conflicts related to the code of conduct, where disputes often arise at the HR level. Another example is that arising from conflicts of interest. In both cases the connection lies in the common goal of promoting ethical behaviour, improving communication and resolving conflicts in a way that helps the employee and the company to follow its internal rules and achieve the required standards.
Mediation opens a space for dialogue and amicable conflict resolution, facilitating employees’ professional and personal growth in a sustained way over time.
Another example can be conflicts related to cross-border labour issues applicable to the same company, whether private, non-governmental organisation or conflicts between private and public companies. The reasons for the conflict may be related to harassment issues or pay inequality issues. For example, the internal pay system within an international organisation should consider the following elements:
- Remuneration represents by far the most important and controversial element of the employment relationship and is of equal interest to the employer and the employee.
- The remuneration system should be based on and consistent with the principles of the organisation.
- The criteria for determining remuneration should be objective and measurable.
- The system should be equitable.
Conflicts often arise around these elements and companies should be transparent, through comprehensive policies, about their position on non-discrimination, harassment or inclusion of their employees within their organisation and the markets in which they operate.
Mediation can be a channel to help find solutions to equality and non-discrimination issues between employees within the same organisation. It also obliges companies to consider the standards of international legislation (e.g. CSRD) when implementing their policies. We are seeing that it is not a ‘nice to have’ but a ‘must have’.
Resolving disputes with external parties
Mediation can be used to enforce commercial contracts or in projects. It helps prevent disputes between companies or between companies and regulators, foster better relations, and ensure compliance standards are met without resorting to litigation. Mediation promotes cooperation between the parties and helps reduce the risk of future contractual violations.
A clear example of the benefits of the use of mediation in compliance arises in the international context where legal certainty is required for both parties, as well as fair and reasonable management of a long-term project. In some cases, there is a public-private element to the dispute as the public sector is involved (either in licensing issues or as a regulatory authority). This may create some confusion in the roles and rights of the parties, which makes perfect sense when the interests of the investor (private equity) and the community or private parties are very diverse.
For context, we might think of environmental, social and governance issues that are receiving serious attention from governments and regulators, given the impact on the planet and the people within the communities where they live. Mediation offers a way to resolve these conflicts by facilitating open communication between the parties involved. For instance, if a company is accused of breaching a country’s environmental regulations, mediation can provide a platform for the company and regulatory authorities to discuss the issues, share concerns, and negotiate a solution that satisfies both parties. Instead of pursuing punitive measures or resorting to lengthy legal battles, mediation can help parties find common ground and craft a solution that supports compliance while preserving business relationships.
A concrete example is mining activities, which contribute greatly to the involvement of foreign entities in resource-rich countries, involving, on a large scale, both foreign and domestic interests, and potentially resulting in pollution and damage to the environment. In addition, there are various problems, especially the use of land for mining activities, which causes friction between mining companies, communities and local governments where mining activities take place. Since these projects take place over a long period of time and involve various interests of both private and public actors as well as communities, mediation is undoubtedly a good way to prevent disputes during the whole process of project development and implementation, offering in conflict situations not only a quick solution for both parties but also a fair and reasonable management of a project in the long term.
Another tool, with elements of mediation, which is recommended for the successful completion of large projects, as for instance construction projects, are Dispute Boards, a panel of one to three members with extensive experience in the field of the contract, who accompany the execution of the contract until the work is completed on time and on budget. This method is not a pure and simple mediation, although it resembles it, because the Dispute Boards, in particular the so-called DAAB (Dispute Avoidance and Adjudication Board), permanently seek to avoid conflict and, if it arises, to encourage the parties to find a solution or to make it binding. I will go into more detail on this subject in another article.
Hereby, we can also mention internal control and auditability towards third parties, be they customers or suppliers. The EU directive (CSDDD) puts the emphasis on indirect suppliers in the supply chain. It is therefore important that when establishing a business or investment partnership, all parties involved have a similar level of compliance with standards. In this regard, framework compliance agreements, which are compliance agreements that regulate the compliance obligations of both parties’ subject to a service contract, are very common.
Aspects of compliance in such contracts may include, among others, anti-corruption policy, fee evasion, international sanctions, trainings, reporting requirements and ways to audit the compliance clauses agreed in the service contract, as well as the escalation clause to resolve disputes amicably, using the various existing ADR modes.
In the context of commercial contracts, mediation is used to resolve disputes related to non-performance, late deliveries, payment problems, interpretations of clauses or any other dispute arising from a commercial agreement, including any aspect of the compliance agreement as referred to above.
For an internationally developing company it would be advisable to promote mediation as the type of dispute resolution in conflicts with third parties. One way to promote mediation as an effective means of dispute resolution could be through a clause of voluntary submission to mediation in all transactions with third parties, followed by arbitration or submission to the courts of a certain jurisdiction, known as a tiered dispute resolution clause. These clauses provide for a gradual system of dispute resolution following various alternative methods of resolving disputes, usually culminating in arbitration if the outcome of the first alternative methods is unsuccessful.
The choice of conflict resolution through mediation is a ‘win-win solution’, whose confidentiality is guaranteed in the face of public attention. Based on these advantages, mediation is considered more suitable to be implemented (agreed, including with the escalation clause) in a contract.
Challenges of Mediation in International Contract Disputes
Despite its many advantages, mediation is not without its challenges. Some of the key obstacles include:
Lack of Enforcement Mechanisms: Mediation agreements are typically non-binding, meaning that parties are not legally required to adhere to the terms of the settlement. While mediation can result in a mutually agreed-upon solution, enforcing the agreement may require the parties to enter into further negotiations or even resort to litigation if one side fails to honour the agreement.
Cultural and Language Barriers: In international contract disputes, cultural differences and language barriers can complicate the mediation process. It is important to select mediators who have experience with cross-cultural communication and who understand the legal systems involved. Without such expertise, the mediation process may be ineffective.
Reluctance to Mediate: Some parties may be reluctant to mediate, especially if they perceive it as a sign of weakness or if they are unfamiliar with the process. This reluctance can be overcome with proper education and a clear understanding of the benefits of mediation.
Although we can say that there is a growth of mediation around the world and the level of satisfaction of the use of mediation is based on its core values, which are impartiality, confidentiality and self-determination, the promotion of the mediation is still an important challenge.
Conclusion
In the case of internal compliance, mediation usually takes a more reactive role, i.e. when the conflict has already surfaced within the company or organisation; whereas, in the case of third party compliance, mediation takes a preventive role, such as in the case of Dispute Boards, although it also helps to resolve a commercial conflict between parties who wish to continue to maintain a business relationship. In both cases the objective is the same, to try to find common ground between the interests of the parties in order to resolve or avoid a conflict that could lead the parties to a legal dispute.
As international trade continues to grow and the complexity of global regulations increases, businesses and organizations can benefit from adopting mediation as a strategic method for resolving conflicts. By fostering cooperation and understanding, mediation can help build stronger, more resilient business relationships and ensure long-term success in a global marketplace.
Companies need to adhere to their own compliance programmes, but also to the programme of their customers, suppliers or banks with whom they collaborate. Not only is there a need for expertise to know the legal framework applicable to the industry, but there is also a need for conflict resolution when conflicts arise or even to act pre-emptively. Legal battles are expensive, time-consuming and damaging to business relationships. Many jurisdictions and industries are already demanding an obligation for parties to exhaust alternative dispute resolution methods before moving to the litigation phase.
The year 2025 marks a milestone in the Administration of Justice in Spain with the publication of Organic Law 1/2025 of 2 January on measures to improve the efficiency of the Public Justice Service, which introduces important measures to modernise the judicial system.
Among these, the compulsory use of Appropriate Means of Dispute Resolution (ADR) as a prerequisite for initiating civil proceedings stands out. This change aims to improve the efficiency of the judicial system and encourage consensual solutions between the parties. The Law will enter into force on 3 April 2025.
In this preliminary post, we will explore what this novelty entails, the types of ADR envisaged, their characteristics and the consequences of their implementation.
What are Alternative Dispute Resolution (ADR)?
ADR are mechanisms that allow parties to resolve disputes out of court, either through direct negotiations or with the help of a neutral third party. These means include options such as mediation, conciliation, independent expert opinion, collaborative law, confidential binding offer and other legally recognised tools.
The main objective of ADR is to reduce the workload of the courts and to offer citizens a faster, more efficient, and personalized alternative for resolving their disputes. It also seeks to promote a settlement culture, fostering more harmonious relations between the parties involved.
ADR as a procedural requirement
One of the most innovative aspects of the new law is that it makes it mandatory to attempt to resolve disputes through ADR before filing a lawsuit in civil matters. This means that, for a claim to be admissible, the parties must demonstrate that they have attempted prior negotiation activity, whether through mediation, conciliation, or any other recognised ADR.
However, there are exceptions. This requirement is waived in cases involving:
- Fundamental rights,
- Urgent measures concerning minors,
- Disputes relating to filiation, paternity or maternity,
- Support measures for persons with disabilities,
- Proceedings for negotiable instruments,
- When one of the parties is a public sector entity, among others.
This obligation applies to declaratory proceedings in Book II and special proceedings in Book IV of the Civil Procedure Act, but does not include enforceable claims or requests for precautionary measures or preliminary proceedings.
Types of ADR recognized
The law identifies several types of ADR that meet the procedural requirement:
- Mediation: A neutral third party assists the parties to dialogue and reach an agreement.
- Conciliation: An impartial professional suggests possible solutions to the conflict
- Confidential binding offer: Any person who makes a confidential binding offer to settle a dispute.
- Independent expert opinion: A specialist evaluates the case and offers a recommendation.
- Collaborative law: Lawyers from both sides work together to find a solution without going to court.
- Other mechanisms: Any negotiating activity recognised by law, such as direct agreements between lawyers for the parties.
Key characteristics of ADR
- Voluntariness and good faith: Although the attempt to negotiate is mandatory, the parties are not obliged to reach an agreement
- Confidentiality: Everything discussed during the process is confidential and cannot be used in a possible trial, except, inter alia, by express written waiver of the parties.
- Suspension of deadlines: The initiation of an ADR interrupts the statute of limitations or suspends the expiration of legal actions.
- Flexibility: The parties can choose the ADR that best suits their needs.
Procedure and consequences of non-compliance
To prove that an ADR has been attempted, the parties must provide documentation demonstrating the negotiation effort, such as signed minutes or, if there is no agreement, a certification issued by the mediator, conciliator or expert. If this requirement is not met, the claim may be inadmissible.
In the event that the negotiation process ends without agreement, the parties may go to court, but the attitude of the parties during the negotiation may influence decisions on procedural costs or possible sanctions for abuse of the judicial system.
Advantages of ADR
The introduction of ADR as a prerequisite to litigation can offer multiple benefits:
- Judicial decongestion: It reduces the workload of the courts, allowing for a more streamlined resolution of cases
- Lower costs: ADR is often less expensive than a full court process
- Faster: Many disputes can be resolved in weeks rather than months or years.
- Tailored solutions: Settlements can be better tailored to the needs of the parties.
- Preservation of relationships: They foster dialogue and understanding, reducing conflict between parties.
Criticisms and challenges
Despite its advantages, the implementation of ADR is not without its challenges:
- Lack of knowledge: Many people do not know what ADR is and how it works.
- Mistrust: Some citizens may perceive them as an additional obstacle to accessing justice.
- Training: It is essential to train professionals who will act as mediators, conciliators and experts.
- Initial costs: Although cheaper in the long run, the fees of the professionals involved may be a barrier for some users.
Conclusion
The introduction of ADR as a procedural requirement in the civil sphere represents a significant change in the Spanish judicial system. This measure seeks not only to streamline dispute resolution but also to foster a culture of settlement that benefits the parties and society.
Although the transition to this new model may face certain obstacles, the long-term benefits promise a judicial system that is more efficient, accessible, and adapted to the needs of the 21st century. In this sense, ADR is a tool for resolving disputes and a step towards a more humane and sustainable justice system.
Summary: Since 12 July 2020, new rules apply for platform service providers and search engine operators – irrespective of whether they are established in the EU or not. The transition period has run out. This article provides checklists for platform service providers and search engine operators on how to adapt their services to the Regulation (EU) 2019/1150 on the promotion of fairness and transparency for commercial users of online intermediation services – the P2B Regulation.
The P2B Regulation applies to platform service providers and search engine operators, wherever established, provided only two conditions are met:
(i) the commercial users (for online intermediation services) or the users with a company website (for online search engines) are established in the EU; and
(ii) the users offer their goods/services to consumers located in the EU for at least part of the transaction.
Accordingly, there is a need for adaption for:
- Online intermediation services, e.g. online marketplaces, app stores, hotel and other travel booking portals, social media, and
- Online search engines.
The P2B Regulation applies to platforms in the P2B2C business in the following constellation (i.e. pure B2B platforms are exempt):
Provider -> Business -> Consumer
The article follows up on the introduction to the P2B Regulation here and the detailed analysis of mediation as method of dispute resolution here.
Checklist how to adapt the general terms and conditions of platform services
Online intermediation services must adapt their general terms and conditions – defined as (i) conditions / provisions that regulate the contractual relationship between the provider of online intermediation services and their business users and (ii) are unilaterally determined by the provider of online intermediation services.
The checklist shows the new main requirements to be observed in the general terms and conditions (“GTC”):
- Draft them in plain and intelligible language (Article 3.1 a)
- Make them easily available at any time (also before conclusion of contract) (Article 3.1 b)
- Inform on reasons for suspension / termination (Article 3.1 c)
- Inform on additional sales channels or partner programs (Article 3.1 d)
- Inform on the effects of the GTC on the IP rights of users (Article 3.1 e)
- Inform on (any!) changes to the GTC on a durable medium, user has the right of termination (Article 3.2)
- Inform on main parameters and relative importance in the ranking (incl. possible influence of remuneration), without algorithms or business secrets (Article 5.1, 5.3, 5.5)
- Inform on the type of any ancillary goods/services offered and any entitlement/condition that users offer their own goods/services (Article 6)
- Inform on possible differentiated treatment of goods / services of the provider or individual users towards other users (Article 7.1, 7.2, 7.3)
- No retroactive changes to the GTC (Article 8a)
- Inform on conditions under which users can terminate contract (Article 8b)
- Inform on available or non-available technical and contractual access to information that the Service maintains after contract termination (Article 8c)
- Inform on technical and contractual access or lack thereof for users to any data made available or generated by them or by consumers during the use of services (Article 9)
- Inform on reasons for possible restrictions on users to offer their goods/services elsewhere under other conditions (“best price clause”); reasons must also be made easily available to the public (Article 10)
- Inform on access to the internal complaint-handling system (Article 11.3)
- Indicate at least two mediators for any out-of-court settlement of disputes (Article 12)
These requirements – apart from the clear, understandable language of the GTC, their availability and the fundamental ineffectiveness of retroactive adjustments to the GTC – clearly go beyond what e.g. the already strict German law on general terms and conditions requires.
Checklist how to adapt the design of platform services and search engines
In addition, online intermediation services and online search engines must adapt their design and, among other things, introduce internal complaint-handling. The checklist shows the main design requirements for:
a) Online intermediation services
- Make identity of commercial user clearly visible (Article 3.5)
- State reasons for suspension / limitation / termination of services (Article 4.1, 4.2)
- Explain possible differentiated treatment of goods / services of providers themselves or users in relation to other users (Article 7.1, 7.2, 7.3), see above
- Set an internal complaint handling system, with publicly available info, annual updates (Article 11, 4.3)
b) Online search engines
- Explain the ranking’s main parameters and their relative importance, public, easily available, always up to date (incl. possible influence of remuneration), without algorithms or trade secrets (Article 5.2, 5.3, 5.5)
- If ranking changes or delistings occur due to notification by third parties: offer to inspect such notification (Article 5.4)
- Explain possible differentiated treatment of goods / services of providers themselves or users in relation to other users (Article 7.1, 7.2, 7.3)
The European Commission will provide guidelines regarding the ranking rules in Article 5, as announced in the P2B Regulation – see the overview here. At the same time, providers of online intermediation services and online search engines shall draw up codes of conduct together with their users.
Practical Tips
- The Regulation significantly affects contractual freedom as it obliges platform services to adapt their general terms and conditions.
- The Regulation is to be enforced by “representative organisations” or associations and public bodies, with the EU Member States ensuring adequate and effective enforcement. The European Commission will monitor the impact of the Regulation in practice and evaluate it for the first time on 13.01.2022 (and every three years thereafter).
- The P2B Regulation may affect distribution relationships, in particular platforms as distribution intermediaries. Under German distribution law, platforms and other Internet intermediation services acting as authorised distributors may be entitled to a goodwill indemnity at termination (details here) if they disclose their distribution channels on the basis of corresponding platform general terms and conditions, as the Regulation does not require, but at least allows to do (see also: Rohrßen, ZVertriebsR 2019, 341, 344–346). In addition, there are numerous overlaps with antitrust, competition and data protection law.
It is usually said that “conflict is not necessarily bad, abnormal, or dysfunctional; it is a fact of life[1]” I would perhaps add that quite often conflict is a suitable opportunity to evolve and to solve problems[2]. It is, in fact, a useful part of life[3] and particularly, should I add, of businesses. And conflicts not only arise at the end of the business relationship or to terminate it, but also during it and the parties remain willing to continue it.
The 2008 EU Directive on certain aspects of mediation in civil and commercial matters states that «agreements resulting from mediation are more likely to be complied with voluntarily and are more likely to preserve an amicable and sustainable relationship between the parties.»
Can, therefore, mediation be used not only as an alternative to court or arbitration when terminating distribution agreements, but also to re-organize them or to change contract conditions? Would it be useful to solve these conflicts? What could be the advantages?
In distribution/agency/franchise agreements, particularly for those lasting several years, parties can have neglected their obligations (for instance minimum sales targets not attained).
Sometimes they could have tolerated the situation although they remain not very happy with the other party’s performance because they are still doing acceptable business.
It could also happen that one of the parties wishes to restructure the entire distribution network (Can we change the distribution structure to an agency one?), but does not want to face a complete termination because there are other benefits in the relationship.
There may be just some changes to be introduced, or changes in the legal structures (A mere reseller transformed in distributor?), legal frameworks, legal conditions (Which one is the applicable law?), limitation of the scope of contract, territory…
And now, we face the Covid-19 crisis where everything is still more uncertain.
In some cases, it could happen that there is no written contract and the parties wish to draft it; in other cases, agreements could have been defectively drafted with incomplete, contradictory or no regulation at all (Was it an exclusive agreement?).
The contracts could be perfect for the situation imagined when signed several years ago but not anymore (What happen with online sales?) or circumstances, markets, services, products have changed and need to be reconsidered (mergers, change of directors…).
Sometimes, even more powerful parties have not the elements to oblige the weaker party to respect new terms, or they simply prefer not to impose their conditions, but to build up a more collaborative relationship for the future.
In all these cases, negotiation is the usual strategy parties follow: each one is focused in obtaining its own benefits with a clear idea of, for instance, which clause(s) should be modified or drafted.
Nevertheless, mediation could add some neutrality, and some space to a more efficient, structured and useful approach to the modification of the commercial relationship, particularly in distribution agreements where the collaboration (in the past, but also in the future if the parties wish so) is of paramount importance.
In most of these situations, personal emotional aspects could also be involved and make more difficult a neutral negotiation: a distributor that has been seen by the manufacturer as not performing very well and feels hurt, an agent that could consider a retirement, parties from different cultures that need to understand different ways of performing, franchisees that have been treated differently in the network and feel discriminated, etc.
In these circumstances and in other similar ones, where all persons involved, assisted by their respective lawyers, wish to continue the relationship although maybe in a different way, a sort of facilitative mediation can be a great help.
These are, in my opinion, the main reasons:
- Mediation is a legal and organized procedure that could help the parties to increase their awareness of the necessity to redraft the agreement (or drafting for the first time if it was not already done).
- Parties can be heard more easily, negotiation is eased in the interest of both of them, encourages them to act more reasonably vis-à-vis the other side, restores relationship if necessary, deadlock can be easily broken and, if the circumstances advice so, parties can be engaged separately with the help of the mediator.
- Mediation can consider other elements different to the mere commercial or legal ones: emotions linked to performance, personal situations (retirement, succession, illness) or even differences in cultural approaches.
- It helps to find the real (possibly new or not shown) interests in the commercial relationship of the parties, focusing in developments, strategies, new proposals… The mere negotiation between the parties and they attorneys could not make appear these new interests and therefore be limited only to the discussion on the change of concrete obligations, clauses or situations. Mediation helps to go beyond.
- Mediation techniques can also help the parties to face their current situation, to take responsibility of their performance without focusing on blame or incompetence but on a constructive and future collaboration in new specific terms.[4]
- It can also avoid the increasing of the conflict into a more severe one (breaching) and in case mediation does not end with a new/redrafted agreement, the basis for a mediated termination can be established, if the parties wish so, instead of litigation.
- Mediation can conclude into a new agreement where the parties are more reassured, more comfortable with, and more willing to respect because they were involved in their construction with the assistance of their respective lawyers, and because all their interests (not only new drafted clauses) were considered.
- And, in any case, mediation does not affect the party’s collaborative position and does not reduce their possibility to use other alternatives, including litigation or arbitration to terminate the agreement or to oblige the other party to respect its legal obligations.
The use of mediation does not need the parties to have foreseen it in the agreement (although it could be easier if they did so) but they can use it freely at any time.
This said, a lawyer proposing mediation as a contractual clause or, in case it was not included in the agreement, as a procedure to face this sort of conflicts in distribution agreements, will be certainly seen by his/her client as problem-solving attorney looking for the client’s interests rather than a litigator pushing them to a more uncertain situation, with unknown costs and unforeseeable timeframe.
Parties in distribution agreements should have this possibility in mind and lawyers have the opportunity to actively participate in mediation from the first steps by recommending it in the initial agreement, during the process helping the clients to express their concerns and interests, and in the drafting of the final (new) agreement, representing the clients’ and as co-author of their success.
If you would like to hear more on the topic of mediation and distribution agreements you can check out the recording of our webinar on Mediation in International Conflicts
[1] Moore, Christopher W. The Mediation Process: Practical Strategies for Resolving Conflict. Jossey-Bass. Wiley, 2014.
[2] Mnookin, Robert H. Beyond Winning. Negotiating to create value in deals and disputes (p. 53). Harvard University Press, 2000.
[3] Fisher, R; Ury, W. Getting to Yes: Negotiating an agreement without giving in. Random House.
[4] «Talking about blame distracts us from exploring why things went wrong and how we might correct them going forward. Focusing instead on understanding the contribution system allows us to learn about the real causes of the problem, and to work on correcting them.» [Stone, Douglas. “Difficult Conversations: How to Discuss What Matters Most”. Penguin Publishing Group]
In these times of insecurity about the future, we have nevertheless some certitudes. One of them, no doubt about it, is that “online intermediation services are key enablers of entrepreneurship and new business models”. EU Regulation 2019/1150 on promoting fairness and transparency for business users of online intermediation services is dealing with it. This Regulation shall apply from 12 July 2020.
The purpose of this Regulation is laying down rules to ensure that business users of online intermediation services and corporate website users are granted appropriate transparency, fairness and effective redress possibilities (art. 1). It applies to online intermediation services and online search engines provided to business users and corporate website users having their place of establishment UE and offering goods or services to consumers in the Union, irrespective of the place of establishment of the providers and the applicable law.
The rules shall apply, particularly, to online marketplaces, social media outlets, application distribution platforms, platforms for the collaborative economy and general search engines.
What I would like to underline in this post is that the Regulation foresees (art. 12) the use of mediation as a specific method of conflict resolution between online intermediation service providers and professional users. Mediation is promoted without prejudice to its voluntariness and the right to judicial claim.
In particular, the providers of the intermediation services shall identify in their general terms and conditions, two or more mediators with whom they are willing to engage to attempt to reach —in good faith— an agreement with business users on the settlement, out of court, of any disputes between the provider and the business user. Only service providers that are small companies would be exempted from assuming this obligation, without prejudice to being able to do so voluntarily.
The Regulation also contains the requirements these mediators must meet: some general ones (independence, with affordable services, act without delay, easily accessible) and others more specific or that will need special qualification (ability to mediate in the language of the general conditions and who have sufficient knowledge of intra-company trade relations).
It is also interesting to notice that the service providers shall bear a reasonable proportion of the total costs of mediation in each individual case, according to the indications of the mediator and to some criteria such as relative merits of the claims of the parties, their conduct, as well as the size and their financial strength.
The conclusion seems clear: Mediation, as an alternative to court or arbitral dispute resolution, is increasing its space in the EU regulations. It is always a voluntary way to solve conflicts, and it is worth considering its effectiveness in all business areas. This Regulation is expressly considering it.
