Mediating International Commercial Disputes: Differences in U.S. and European Approaches

Dispute Resolution Journal, Aug-Oct 2005 by Cairns, David J A

Notwithstanding these positive developments, problems and uncertainties remain about international mediation. An important consideration not addressed in the Proposed European Directive is the enforceability of obligations to mediate, whether in a mediation clause or a multi-tier clause. The novelty of mediation in continental Europe makes it difficult to predict whether a contract provision calling for mediation prior to arbitration will be enforceable. The principle of competence/competence is well established in Europe, so the question of whether a mediation clause creates a mandatory condition precedent to the commencement of arbitration will be a question for the arbitral tribunal to decide. However, there is little case law (and therefore uncertainty) in most European jurisdictions as to whether this is a question of substantive or procedural law. Moreover, there is also no law as to whether a failure to mediate, if not a bar to arbitration, might have consequences on the amount of damages or costs assessed against the party who failed to mediate, or entitle the party who desires to mediate some form of interim relief.10

Cultural Aspects of International Mediation with European Parties

From the above discussion, it is clear that an important consideration for U.S. corporations doing business with continental Europeans is that the European understanding and experience with mediation is limited. Mediation is a consensual process and consent requires understanding, which is spread very unevenly in Europe.

Another complication is that the fundamental differences between trial processes in common law and civil law jurisdictions have shaped lawyers' perceptions of their role in dispute resolution. Common law judges have historically refrained from actively encouraging settlement in order to preserve their neutrality. So any settlement initiative has to come from one of the parties. In contrast, the Swiss and the German legal systems have strong traditions of judge-led settlement initiatives.11

Another difference between U.S. and European practice is that in litigation in the United States, attorneys are accustomed to having contact with the other party's legal advisers during discovery and depositions. There is also sustained interpersonal contact with both the adversary's counsel and witnesses. In contrast, continental European practice has substantially more written than oral (sometimes exclusively written) communications and it lacks the disclosure and exchange mechanisms of discovery and depositions in the United States. Thus, European lawyers prepare and present their clients' cases to the court in written form within fixed time frames. This means that there is substantially less lawyer-to-lawyer contact.

Continental European lawyers are also less accustomed to watching their clients speak at length, as either witnesses in court or as participants in mediation. Moreover, in some jurisdictions, to prepare them for such appearances might violate professional ethics rules. So continental lawyers from Europe might not be comfortable with clients playing an active role in mediation.