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Mediation - what is still to be learned in Scandinavia?

This article originally appeared in the March 2014 Alternative Dispute Resolution Committee newsletter.

IN Denmark and the rest of Scandinavia, the idea of alternative dispute resolution-such as mediation--is still young and full of unutilized potential. Ten years have gone by since the mediator education giving lawyers the opportunity to become certified mediators was first introduced in Denmark. Therefore, it is season for a retrospect of the past decade of mediation in Scandinavia-how has the development been and where can we improve as we go forward?

The Development in Scandinavia

Since 2003, Denmark has promoted a mediation education program aiming at educating lawyers to become certified mediators. Mediators are members of the organization Danish Mediation Lawyers and, with the support of the Danish Bar and Law Society, this organization established the Danish Mediation Institute with a view to offer mediation solutions in private and commercial disputes. Since 2003, mediation has also been offered by the Danish Institute of Arbitration.

At the time when the education program was first introduced, no Danish lawyers were certified mediators or the like, and the number of commercial disputes settled by mediation was very limited. At that time, meditation was only used in a few family law disputes. Now, according to official sources, roughly 400 lawyers are certified mediators, and 20 disputes were settled by mediation in 2013, as compared to 15 in 2012.

These are the official figures provided by the official Danish Mediation Institute. To these figures must be added an unknown number of ad hoc mediation cases which have presumably also taken place.

Based on information provided by the official mediation institutes of the two other Scandinavian countries, Sweden and Norway, the situation is the same throughout the rest of Scandinavia.

The figures show that development is heading in the right direction. However, as compared to, for instance, the U.S., the number of disputes settled by mediation in Scandinavia is still insignificant and disappointing.

Mediation as a Cost-Saving Means

Mediation is time-saving and consequently cost-saving. Obviously, no court or arbitration tribunal can compete with a time frame of three months in which most mediation cases are concluded.

Contrary to litigation and arbitration, mediation implies resolving the dispute according to the interests and needs of the parties and, therefore, fundamental legal arguments, such as the liability for damages, the lack of notice or the calculation of the claim, lose the spotlight.

Mediation can be seen as a compromise solution leaving no winners and no losers. However, since the unchallengeable truth is that time is money, lawyers and their clients ought to make up their minds as to whether winning a case for them means a court approval of their legal arguments or a settlement of the case with an "as much as possible outcome", which the counterparty is willing to accept.

If both parties to a dispute would make up their minds on the latter--which 1 assume will often be the case--mediation could also be seen as leaving two winners. And by choosing mediation, the parties may, following a settlement, continue to do business with each other, which would have been completely compromised by any award or ruling.

Costs are of course involved when appointing the mediators and preparing the mediation meeting, but the savings are still very significant as compared to litigation and arbitration as approximately 70% of all mediation cases results in settlements. Only the remaining 30% of all mediation cases proceed to litigation or arbitration and, even then, the case has arguably been trimmed and the essence of the dispute is clearer than before the mediation, and therefore the costs have not been futile.

Difference in How We See Disputes?

It gives food for thought why, after a decade with all options open for resolving disputes by mediation, we Scandinavians still lag way behind the Americans.

Do the Americans do something that we do not? Or is it the collective mind-sets of the Scandinavians and the Americans that differ and find expression in the essentially different use of mediation?

I believe that it is fair to state that people in the U.S. are far more litigious than people in Scandinavia. This is due to various reasons and follows from a long history of general differences in the social and legal structures and traditions of the U.S. and Scandinavia.

Based on the allegedly more litigious nature of Americans, a theory to explain why mediation is far more used in the U.S. than in Scandinavia may be that Americans see commercial disputes as an integral part and natural element of doing business. Therefore, Americans do not consider disputes to be something exceptional and unexpected.

By extension, the Americans are probably more likely to initiate litigation as soon as their rights are violated, whereas Scandinavians are more reluctant to assert their rights and only initiate litigation when a ruling is of substantial importance to achieve restoration. Consequently, Scandinavians are possibly more exhausted with the dispute when it reaches the courtroom and would therefore rather risk losing the case completely than compromising by reducing the claim or having the case settled by mediation.

Another possible explanation of why Americans are less reluctant to use mediation may further be general apprehension in the U.S. for a wrongful judgment being passed by an emotionally charged jury. If there is a risk that a litigation process will end in a jury trial, the parties to the litigation and not least their lawyers will probably rather agree with mediation attempts out of court than continue the litigation since mediation will at least leave the parties with some control of the outcome of the dispute.

Since civil cases in the Scandinavian countries are never subject to a jury trial, the risk of wrongful or surprising judgments may not be as important in Scandinavia as in the U.S. By extension, there is fundamentally no difference in Scandinavia between the national judges of each of the Scandinavian countries and their way of interpreting the law. In summary, the Scandinavian lawyers and their clients are probably more confident with the ordinary courts than the American lawyers and their clients are.

What Can Scandinavians Learn?

Part of the explanation why mediation is not yet widely used in Scandinavia is doubtless that the Scandinavian lawyers take refuge in the system in which they have confidence. This would be either the court system or arbitration. The lawyers will not risk losing control of the dispute neglecting the primary responsibility towards the client.

However, an important job for lawyers when acting as the clients' trusted advisers is to inform their clients that initiating mediation should in itself not be seen as a small defeat, but rather as a cost-saving shortcut towards a resolution of the dispute. Consistent with this, the lawyers and their clients should focus more on the potential costs savings to be obtained by solving a dispute by mediation and leave their pride and their aspiration of feeling that justice has been done.

The total Scandinavian population amounts to only slightly more than 20 million. Therefore, the probability of being engaged in business relations with a former counterparty of litigation or arbitration proceedings is considerable. Consequently, Scandinavians may learn from the Americans and start considering disputes as an inevitable part of doing business and mediation as a resolution means enabling businesses to settle disputes faster in order for them to move on and focus on their core business instead of engaging in litigation or arbitration proceedings and fighting their former (or even existing) business partners.

A change of the mind-sets of lawyers is of course only half the solution. In the event that a lawyer actually suggests or even recommends mediation, another barrier will often present itself, and this time from within the client's organization. Therefore, it takes efforts from both lawyers and clients for mediation to become an accepted and confident alternative to litigation and arbitration in Scandinavia.

However, acting as the clients' trusted advisers, the Scandinavian lawyers must find confidence in mediation as a proper dispute resolution method and lead the way towards a wider use of mediation before any change may occur.

The above is a flow of thoughts consisting of allegations and unanswered questions that will probably remain unanswered. However, my thesis is that a general change of the mind-sets of Scandinavians and the context in which we see disputes may very well cause an increased use of mediation--and also have a positive impact on the bottom line of Scandinavian businesses.

Jes Anker Mikkelsen is a partner of Bech-Bruun Law Firm in Denmark and is the head of Bech-Bruun's Dispute Resolution Group. He focuses on litigation and international arbitration and has vast experience in mediation. He has been chairman of the Danish Mediation Lawyers as well as chairman of the Danish Mediation Institute. Jes Anker Mikkelsen has extensive experience in advising clients on maritime, transport and insurance law and Jinternational trade. He has conducted numerous court cases and arbitration proceedings within his area of expertise and has acted as mediator on a number of occasions in Denmark and abroad.
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Title Annotation:reprinted from Alternative Dispute Resolution Committee newsletter, March 2014
Author:Mikkelsen, Jes Anker
Publication:Defense Counsel Journal
Article Type:Reprint
Date:Jul 1, 2014
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