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法国
France | Reform of Arbitration law
2025年5月21日
- 仲裁
- 诉讼
Introduction: A Paradigm Shift in Conflict Resolution
The approval of Organic Law 1/2025, of January 2, on measures for the efficiency of the Public Justice Service, marks a turning point in the Spanish judicial system. This legislation is not limited to introducing procedural changes, but reflects a profound transformation in the very concept of justice. The legislator has made a firm commitment to promoting alternatives to the judicial resolution of disputes, making prior negotiation a central element of the system.
The saturation of the courts, the costs associated with judicial proceedings, and the search for more satisfactory solutions for the parties have prompted this reform, which places the so-called “appropriate means of non-jurisdictional dispute resolution” as the cornerstone of a new justice model oriented towards dialogue and agreement.
The philosophy behind alternative means of dispute resolution
Beyond the decongestion of the courts, this reform responds to a philosophy that understands that not all conflicts necessarily require a judicial response. Alternative means of dispute resolution are based on the premise that many conflicts can find more satisfactory and lasting solutions, adapted to the needs and interests of the parties, when they actively participate in their construction.
Organic Law 1/2025 defines these means as “any type of negotiating activity, recognized in this or other laws, state or autonomous, to which the parties to a conflict resort in good faith with the aim of finding an extrajudicial solution to it, either by themselves or with the intervention of a neutral third party”. This broad and flexible definition is intended to cover various forms of negotiation whose common denominator is the protagonism of the parties in the resolution of their own disputes.
A range of possibilities: Diversity of mechanisms for diversity of conflicts
One of the most noteworthy aspects of the new regulation is that it does not rely on a single model of alternative dispute resolution but recognizes the diversity of situations and the need to offer different tools adapted to each particular case.
Mediation, already consolidated in our legal system through Law 5/2012, maintains its relevance as the preferred method, but other modalities such as conciliation in its various variants (notarial, registry, before a lawyer of the Administration of Justice or judicial), the opinion of independent experts, confidential binding offers, or the novel process of collaborative law are added to it.
This plurality of mechanisms reflects the complexity of contemporary legal relationships and the need to provide tailored responses to each type of conflict. Resolving a neighborhood dispute is not the same as resolving a complex business dispute, and the legislator has been aware that “one size fits all” would not be effective for the diversity of situations that may arise.
The controversial commitment to enforceability: The requirement of procedural validity
Undoubtedly, the most innovative -and probably the most controversial- aspect of the new regulation is the configuration of these means as a mandatory prerequisite for resorting to judicial proceedings in certain areas. This decision represents a qualitative leap with respect to the previous regulation, which mainly favored the voluntary nature of these mechanisms.
From the entry into force of Organic Law 1/2025, April 3, 2025, the claim in the civil jurisdictional order will not be admitted if it is not justified that the resolution of the conflict has been previously attempted by any of the recognized alternative ways. Not only that, but also the identity between the object of the previous negotiation and the object of the litigation to be initiated must be established.
This mandatory nature has been the subject of intense debate. Its advocates argue that it is necessary to promote cultural change in a traditionally litigious society, while its detractors warn of the risk of turning these mechanisms into mere formalities that distort their true purpose.
The truth is that the legislator has tried to find a balance, excluding from this obligation certain particularly sensitive matters or those which, by their nature, require an immediate judicial response. Thus, issues such as the judicial protection of fundamental rights, measures for the protection of minors, or the request for precautionary measures, among others, are exempted from the requirement of prior negotiation.
The guiding principles: Autonomy and confidentiality as pillars of the system
The effectiveness of alternative dispute resolution rests mainly on two fundamental principles: the autonomy of the parties and the confidentiality of the process.
The principle of private autonomy recognizes that the parties themselves best know their interests and needs and are, therefore, in the best position to find solutions adapted to their situation. The law establishes that the parties are free to settle, if they respect the law, good faith, and public policy. This freedom is essential for the solutions reached to be truly satisfactory and lasting.
The principle of confidentiality is crucial to creating a climate of trust that allows the parties to express themselves freely during the negotiation process. The law establishes that the information and documentation disclosed during the negotiation must be kept confidential, with very specific exceptions, such as express waivers by the parties, court orders in criminal matters, or reasons of public order.
This duty of confidentiality extends to all participants in the process: the parties, their lawyers, and, where appropriate, the neutral third party involved. The aim is to ensure that what is said or proposed during the negotiation cannot be used later in a possible judicial process, thus promoting a sincere and constructive dialogue.
The Negotiation Process: Relevant Procedural Aspects
The regulation of the procedural aspects of the different means of dispute resolution also reflects the legislator’s desire to combine the necessary flexibility with the minimum guarantees required.
As regards standing, the initiative to resort to these mechanisms may come from either party, from both by mutual agreement, or even from a judicial referral. This recognizes both the parties’ autonomy and the possibility that the judicial system itself may encourage the use of these alternative channels.
Regarding the involvement of professionals, the law generally prefers a non-mandatory approach to legal assistance, except in specific situations like the preparation of binding offers (with exceptions for smaller amounts). This flexibility aims to enhance access to these mechanisms; however, the complexity of many legal disputes often makes it wise to seek professional guidance.
A particularly relevant aspect is the effect that the request for these mechanisms has on the statute of limitations and expiration periods. The law establishes that such a request interrupts the statute of limitations or suspends the expiration of actions from the date of communication to the other party, thus avoiding the attempt of an amicable solution that may prejudice the rights of the party that promotes it.
In terms of form, the preferred method is face-to-face, although the use of telematic means is permitted by agreement of the parties or in the case of claims for amounts of less than 600 euros. This flexibility is particularly appropriate in a context of increasing digitalization of legal relations.
Specific Modalities: Diversity of mechanisms for diversity of conflicts
Among the different modalities recognized by the law, it is worthwhile to focus on some that present particularly novel or relevant characteristics.
Private conciliation involves the intervention of a person with technical or legal expertise related to the dispute’s subject matter. The law requires this person to be registered in a recognized professional association or in a register of mediators and to act impartially and confidentially. This mechanism takes advantage of the specialized knowledge of certain professionals to facilitate agreement in technically complex matters.
The confidential binding offer is a particularly interesting mechanism for certain types of disputes. One of the parties makes an offer that is binding on it in the event of acceptance by the other party. The law requires that the identity of the offeror, the actual receipt by the other party, and the detailed content of the offer be recorded. This instrument can be particularly useful in financial claims, where the main obstacle to settlement is often the amount.
The independent expert opinion consists of commissioning an opinion from an expert in the subject matter of the dispute. Unlike other mechanisms, this opinion is not binding, but may serve as a basis for agreement if the parties accept it, or at least to clarify the technical aspects of the dispute. Following the issuance of the opinion, the parties may accept it as an agreement, propose improvements or reject it, in which case the procedural requirement is deemed to be fulfilled.
Finally, the collaborative law process represents perhaps the most innovative aspect of the new regulation. It is a structured negotiation in which the parties, assisted by their respective lawyers, work together to reach a satisfactory solution, being able to integrate other professionals (psychologists, economists, etc.) when the complexity of the case requires it. At the end, minutes are drawn up with the participants, the sessions held and the agreements reached.
The challenge of implementation: From theory to practice
The real effectiveness of this new system will depend largely on how it is implemented in practice. It is not enough to make it compulsory to attempt out-of-court settlement; this attempt must be genuine and not become a mere formality.
In this regard, the law requires that the negotiation attempt be “real and credible; it cannot be fictitious.” To this end, it establishes documentation requirements that vary depending on whether or not a neutral third party is involved but always include a responsible statement that the parties have intervened in good faith in the process.
Likewise, the law regulates in detail when the negotiation process is understood to be concluded, whether it concludes with or without an agreement. In the event of an agreement, it must be formalized by identifying the parties and, if applicable, their lawyers and the neutral third party, indicating the place and date, as well as the obligations assumed by each party.
The possibility of converting the agreement into a public deed to convert it into an enforceable title reinforces its value and facilitates its compliance, avoiding the possibility of non-compliance with the agreement, forcing the initiation of a declaratory judicial proceeding.
A horizon to be explored: Perspectives and challenges
Organic Law 1/2025 represents a turning point in the conception of justice in Spain, bringing us closer to models already consolidated in other countries with a long tradition in alternative means of conflict resolution. The United States, Canada and the Nordic countries have been using these mechanisms for decades, with generally positive results in terms of user satisfaction and decongestion of the courts.
However, each legal system has its particularities, and the success of these mechanisms depends not only on their legal regulation but also on cultural, sociological, and organizational factors. Spanish society’s traditional litigiousness, the poor negotiating culture in certain areas, and the lack of specific training of many professionals are challenges that must be faced.
The commitment to obligatory nature as an initial impulse may be understandable in a context of paradigm change, but the real success of these mechanisms will come from their capacity to generate satisfactory solutions that will progressively make them the preferred option on their own merits, beyond their obligatory nature.
Conclusion: Between Hope and Caution
The new regulation of the appropriate means of non-jurisdictional dispute resolution is in line with a clear international trend towards the promotion of alternatives to judicial dispute resolution. This trend responds both to practical needs – decongesting the courts, reducing costs – and to a philosophy that values the protagonism of the parties in the management of their own conflicts.
In this sense, Spanish legislation joins a global movement that has shown positive results in many jurisdictions. However, only time will tell whether the legislative technique used, especially the commitment to mandatory nature as a procedural requirement, is the most appropriate to achieve the true purpose of encouraging agreement in order to avoid litigation.
The success of this reform will depend not only on its regulatory design, but also on factors such as adequate training of the professionals involved, public awareness of the advantages of these alternative routes, and the system’s capacity to evaluate and adapt according to the results obtained.
In short, we are facing an ambitious and necessary reform, which opens up a hopeful horizon but which will have to overcome important challenges in order to consolidate itself as a true paradigm shift in the administration of justice in Spain. The true criterion of success will not be the number of negotiation attempts made, but the quality of the agreements reached and the satisfaction of citizens with a more participatory, efficient justice system adapted to their real needs.
On April 8, 2025, during the Paris Arbitration Week, France’s Ministers of Justice Gérard Darmanin, announced a significant reform of French arbitration law. The aim of this reform is to clarify, modernise and consolidate the regulatory framework, the last substantial revision of which dates back to 2011.
It is set to culminate in the adoption of an Arbitration code by autumn 2026. This code is envisioned as a unifying legal instrument that will enhance the clarity, autonomy and international appeal of French arbitration law.
Structural proposals: building an autonomous and coherent legal framework
The creation of a standalone Arbitration Code
The proposal n°1 calls for the unification of all legislative and regulatory text governing arbitration within a dedicated code, structured into several parts and decoupled from the approximately 20 existing codes currently housing arbitration provisions.
This codification process is not purely technical, it serves pedagogical, symbolic and strategic purposes namely, enhancing the clarity, accessibility and international attractiveness of French arbitration law.
Common provisions for domestic and international arbitration
Proposal n°3 and 4 suggest reorganising French arbitration law around a set of common rules applicable to both domestic and international arbitration with limited derogation for the former. This represents a shift from the current dualistic system to a more unified and clearer and framework without eliminating the particularities of either.
As an instance, a preliminary article would define the international nature of arbitration, abandoning outdated reference to “commercial” character in favour of a more inclusive in realistic standard.
However, it does not mean a division summa divisio of those two types of arbitration because of the stable wish to preserve the dissociation between ordre public interne and ordre public international.
Codification of guiding principles
Proposal n°5 aims to enshrine as guiding principles (“principes directeurs”) those considered to embody the core values of French arbitration law such as the autonomy of the arbitration agreement, the competence-competence principle, the independence and impartiality of the arbitral tribunal, and the respect for the adversarial principle and party equality.
Others, though not considered fundamental, nonetheless shape the legal framework, such as good faith, loyalty, the principle of effectiveness (“effet utile”), confidentiality, proportionality, procedural loyalty and celerity, parties’ autonomy in choosing applicable law and procedure rules, amiable composition and access to justice (prevention of denial of justice), which form the broader ethical and procedural framework of arbitration in France.
Over the 19 principles elected to be enshrined, the report highlights and develop only few:
- Regarding the principle of independence and impartiality of the arbitral tribunal, it is given a particular prominence in the reform, both through its inclusion in the preliminary article of the Code and its designation as a guiding principle. However, the reform does not aim to consolidate the jurisprudence that has recognised exceptions such as the notoriety or the parties’ duty of curiosity (which exempt the arbitrator from disclosing allegedly well-known facts). Instead, it adopts a strict approach according to which, arbitrators must disclose any circumstances that, in the eyes of the parties, could affect their independence or impartiality, and cannot rely on the fact that such information might be publicly known. Parties are not expected to be in a state of constant investigation.
- Regarding the equality of the parties, this principle is reaffirmed at the stage of the constitution of the arbitral tribunal and throughout the arbitral proceedings. It ensures that the parties are treated equally and fairly.
- Regarding the confidentiality of proceedings, the reform extends this principle (already established in domestic arbitration) to international arbitration, while allowing for necessary exceptions, particularly in the context of investment arbitration. However, its application ultimately remains subject to party autonomy.
- Regarding the proportionality, article 14 serves both as an encouragement and support for the arbitral tribunal. It urges the tribunal to “adopt a procedure adapted to the complexity and stakes of the dispute”. In response to certain issues and recurring criticisms regarding the cost and duration of arbitration, this is a call for moderation on all fronts (time, volume of submissions, document production requests, length of hearings, number of witnesses to be heard, and the cost for the parties).
- Regarding the prohibition of denial of justice, this principle introduces a new role for the supporting judge (“juge d’appui”), who becomes the judge overseeing the prevention of denial of justice in a broader sense. His role extends both materially, in cases where it is impossible to appoint an arbitrator, and substantively, when the timely delivery of an award is at risk.
These principles are presented not merely as procedural standards but as fundamental values that shape and distinguish the French approach to arbitration.
Unification of judicial control and support
Proposals N°6 to 9 aim to unify and rationalise the judicial handling of arbitration disputes by several objectives such as exclusive jurisdiction of the judicial courts (“tribunal judiciaire”) over all challenges and enforcement of international arbitral awards, including those involving public entities, thereby ending the long-standing jurisdictional duality exposed in the Inserm case (2010), where the recognition and enforcement of international awards involving French public entities was scattered between judicial and administrative Courts.
Exclusive jurisdiction is awarded to the Paris Judicial Court to decide on all international arbitration matters. Another purpose is the specialisation of domestic courts in handling arbitration matters, and the elimination of residual competence formerly existing in favour of commercial courts presidents as supporting judges (“juges d’appui”).
This restructuring is intended to foster efficiency, consistency, and international credibility.
Substantive changes: a more flexible, protective and efficient arbitration framework
Promotion of flexibility
Several proposals aim to liberalize and modernize arbitration procedures like the elimination of the references to “commercial” matters in determining the international character of arbitration and the tribunal’s ability to apply to trade usages.
It will also serve this purpose by simplifying the formal requirements for arbitration agreements, removing the requirement that the clause be in writing and aligning domestic arbitration on international standards.
In this regard, the reform aims to abolish the written form requirement for arbitration agreements to align domestic and international arbitration rules. As arbitration agreements are typically written in practice, this formal requirement is now seen as outdated and inconsistent with general contract law.
However, the requirement of written form will remain solely a matter of evidence. At the stage of enforcement or annulment proceedings, the arbitration agreement (or a copy thereof) will need to be produced. In practice, this means that the arbitration agreement will still have to be recorded in a document, even if it does not meet the strict definition of a written instrument.
Party protection and procedural safeguards
The reform also seeks to bolster procedural guarantees such as the necessity for tribunal’s seated in France to be composed of an odd number of arbitrators.
According to the proposition of code, arbitrators should be natural persons, through these does not hinder recognition of awards rendered abroad by legal entities and the contractual nature of relationships between parties, arbitrators and arbitral institution will be formally recognised.
A mechanism for financial hardship (“impécuniosité”) is introduced to prevent abuses and ensure access to justice. Jurisprudence has confirmed that impecuniosity does not render the arbitration agreement manifestly void or inapplicable. While ensuring access to arbitration lies with the “arbitration actors” (i.e arbitrators, institutions, parties) the authority of the supporting judge (“juge d’appui”) to intervene in support of an impecunious party remains unsettled.
The reform proposal aims to expressly empower the juge d’appui to facilitate arbitral proceedings in such circumstances by ordering “any appropriate measures” (art. 33): this would serve to prevent a genuine denial of justice. Measures may include procedural actions (e.g., convening a case management conference) or substantive adaptations (e.g., amending the arbitration agreement to reduce costs, appointing a sole arbitrator, selecting a less expensive arbitral institution, or streamlining proceedings by limiting document production, written submissions, or hearings).
It also proposes a clarification of arbitration rules applicable in labour, family, and consumer fields:
- Regarding Family Law, the working group clarified that arbitration is allowed for patrimonial issues in family law but excluded for matters related to personal status. Divorce remains under state Courts’ jurisdiction. For patrimonial matters, additional safeguards are proposed, such as a written agreement, lawyers counter-signature, appeal options. Family judges will also have exclusive jurisdiction on recognition and enforcement of the awards.
- Regarding Labour Law and Consumer Law, the proposed measures aim to emphasize that while an arbitration agreement is permissible in these areas, it cannot be imposed by the “strong” party on the “weak” party. The latter will always have the option to exclude its application and revert to State Courts. Furthermore, in these areas, the principle of competence-competence is excluded, meaning that the consumer or the employee will not be obliged to establish an arbitral tribunal in order to invoke the jurisdiction of the State Court.
A protection of third-party rights is also specified through accessory intervention before the Court of Appeal and rule for third party opposition (tierce opposition), prohibited against arbitral awards but allowed against the Court decision related to them, such as decisions related to annulment proceedings or requests for exequatur.
Procedural efficiency
To promote procedural efficiency, the reform proposes the codification of the negative effect of the competence-competence principle, the authorization of consolidation of arbitral proceedings.
It entails the following modification and few others:
- Rewriting of the article 1448 of the Code of civil procedure and elimination of its last paragraph. This article currently states that “where a dispute falling within the scope of an arbitration agreement is brought before a State court, the court shall decline jurisdiction unless the arbitral tribunal has not yet been seized and the arbitration agreement is manifestly null and void or manifestly inapplicable”. Its second and third paragraph state that “the state court may not raise its lack of jurisdiction ex officio” and that “any provision to the contrary shall be deemed unwritten”.
Contrary stipulations would therefore be permitted, and parties could expressly provide in their arbitration agreement that the court is authorized to conduct a full review of the arbitration clause, or that the parties waive the principle of the arbitrator’s priority. However, such a deviation to be valid, it must be explicit and unequivocal.
- In order to consolidate procedures, unless the parties agree otherwise, in cases involving claims based on multiple contracts or related to multiple contracts, these claims should be made in a single arbitration proceeding under one or more arbitration agreements. However, two conditions are required: the compatibility of the arbitration agreements and the existence of a connection between the claims such that it is in the interest of efficiency and justice to have them heard and decided together by the arbitral tribunal.
- Under the current law, the arbitral tribunal can impose a penalty (“astreinte”), but there is not provision regarding its authority to liquidate it. The future code would allow the tribunal to do so “as long as it remains seized of the case”. However, it does not mean that the tribunal to retain jurisdiction for the purpose of liquidating the penalty after it has rendered its final award.
In addition to this, the project lays the groundwork for class arbitration, poses principles of procedural loyalty and concentration of arguments and expanding the powers of the supporting judge to address denial of justice, financial hardship, evidence production, enforcement and interim measures, and constitution of tribunals.
The efficiency objective also extends to recognition and enforcement of arbitral awards in clarifying recognition procedures and deadlines, removing the suspensive effect of appeals in domestic arbitration, allowing incidental annulment or refusing of enforcement to apply to related awards, and revisiting annulment grounds and enabling award correction or classification to avoid annulment or enforcement refusal.
Regulatory adjustments and technical reforms and promoting transparency
This reform includes adjustment proposals to ensure consistency across existing legislation and regulation.
Lastly, this reform addresses the promotion and dissemination of French arbitration law by increasing transparency in the appointment of arbitrators by supporting judges, including publication of the names and an annual public list. It is planned to reinforce judicial training in arbitration through enhanced ENM (“Ecole Nationale de la Magistrature”, which is the national school of judges) programs, internships with the ICC, and digital tools.
Promoting French arbitration law domestically and internationally through multilingual commentaries, outreach events, and strategic communication will be a way to extend the project.
In conclusion, the 2025 reform constitutes a major step toward modern, readable, and globally competitive French arbitration law. By consolidating legislation, strengthening procedural safeguards, and fostering accessibility and transparency, the proposed arbitration code is poised to elevate France as a leading venue for arbitration.
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.
PFAS are chemicals that have been used in industry for over 50 years. Between 4,000 and 5,000 varieties are used for various everyday consumer applications, and they are renowned for their non-stick, waterproofing, and heat-resistant properties. They have come under scrutiny in recent years, and are covered by European regulations, as they are in the USA, where the public authorities have imposed maximum use values, as well as reporting obligations. EU Regulation 2019/1021 (POP) restricts the production and use of certain categories of PFAS in specific industries or above certain values and their use with food products. France has gone further, regulating the levels of discharges into watercourses.
Scientific research suspects that PFAS cause illnesses such as cancer and reproductive disorders. Given the extent of contamination not only in everyday products but also in the environment, particularly waterways, the issue is likely to pose major public health problems in the years to come. This concern is more pressing given that PFASs are considered ‘eternal pollutants’, as there is currently no way of eliminating them from the environment.
The impact on companies’ and insurers’ liability is already significant. In the USA, more than 6,000 lawsuits have been filed since 2005. Three groups have already paid more than USD 1.2 billion in settlements due to contamination, and another group has paid more than USD 10 billion to end a class action.
In France, the Metropole of Lyon has brought a summary expert appraisal action against two chemical companies before considering bringing a liability action. In addition, several criminal complaints have been lodged for endangering the lives of others and damaging the environment.
Under French law, companies and their insurers could be liable on various legal grounds. In addition to ordinary civil liability law – based on article 1240 of the Civil Code – the special system of liability for defective products could also serve as a basis for a liability action (articles 1245 et seq. of the Civil Code), with French law defining a defect as any product that does not offer the safety that can legitimately be expected.
Although it is currently difficult to identify a causal link with an identified disease, asbestos-related case law has shown in the past that victims can take action if they can demonstrate that they suffered anxiety-related harm as a result of their exposure to the product, even if they are not positively suffering from a disease at the time of their claim.
In addition, the reporting obligations imposed by the public authorities will undoubtedly facilitate the filing of liability actions by facilitating the identification of the emitters and users of these pollutants.
Insurers are directly affected by this phenomenon, which for them constitutes an “emerging” risk (“silent cover”) because, for the most part, this risk was not identified when the policy was taken out, which exposes them directly and is all the more problematic because insurance premiums have not been able to take such a risk into account.
Civil liability or professional indemnity insurance policies, especially if they are drafted with “all risks except” clauses (“tous risques sauf” in French legal vocabulary, i.e. covering all liability risks vis-à-vis third parties except those strictly listed), as well as those including clauses relating to environmental risks, are particularly targeted.
Lloyd’s has already published model exclusion clauses for the attention of insurers, although such clauses can obviously only cover future insurance contracts or endorsements:
https://www.lmalloyds.com/LMA_Bulletins/LMA23-039-SD.aspx
The clauses contained in insurance policies must be drafted with particular care, considering each country’s specific features. In France, for example, to be enforceable against the insured, clauses must be “formal and limited”, which means that the exclusion must be both clearly expressed and that it must be possible to determine its content perfectly.
For example, the Court of Cassation recently ruled that the use of the terms “such as” or “in particular” (“tells que” “en particulier”) in an exclusion clause led to confusion in the interpretation of the exclusion clause, rendering it invalid (Civ. 2e, 26 Nov. 2020, no. 19-16.435). There was also a debate on the validity of an exclusion clause relating to bodily injury caused by asbestos, a risk which at the time had not been identified by insurers, who subsequently excluded it from most policies (Cass. 2e civ., 21 Sept. 2023, nos. 21-19801 and 21-19776). Similarly, policies should clearly indicate whether cover is provided based on a harmful event or based on a claim (i.e “base dommage” or “base reclamation”, which indicates if the risk is covered, depending on if the damage happened during the policy was valid, or if it depends on the moment when the risk was notified by the insured during such period).
One thing is sure: the risks associated with PFAS and claims are only just beginning to emerge in Europe, where the conditions for group actions have recently been extended with EU Directive 2020/1828, which came into force on 25 June 2023 and is currently the subject of a draft law under discussion in the French Parliament with a view to its transposition.
Dealing with unpaid invoices can be challenging for any business. In Belgium, where judicial processes can seem daunting, understanding how to manage debt collection effectively is crucial. This article offers practical guidance derived from a comprehensive legal guide to help your company navigate Belgium’s judicial debt recovery landscape.
Understanding Your Options
Assess the Situation: Before taking legal action, evaluating the amount owed and the debtor’s financial status is essential. This assessment will guide you in choosing the appropriate legal avenue, as Belgium offers different courts and procedures based on the dispute’s value. For instance, for claims up to € 5,000, the local court or ‘justice de paix’, which is a court of first instance for minor civil cases, is typically used due to its cost-effectiveness and efficiency.
Send a Notice of Default: Under Belgian law, a notice of default is mandatory before initiating legal proceedings. This step adheres to legal requirements and gives the debtor one last chance to settle their dues without further legal complications.
Efficient Legal Procedures
Use Simplified Procedures for Small Amounts: A simplified legal procedure can be utilized for undisputed money debts up to €1,860, which expedites the payment request process significantly. This approach can be particularly advantageous for recovering smaller debts quickly.
Consider Direct Bailiff Intervention: For undisputed amounts, irrespective of their size, between companies, creditors can authorize a bailiff to recover the debt directly without a court judgment. This procedure reduces legal fees and speeds up the debt collection process.
Leveraging Legal and Financial Advice
Consult with a Belgian Attorney: Navigating the Belgian legal system can be complex. Consulting with a local attorney can provide insights into the most effective procedures tailored to your case. This is especially true for international debt collection, where regulations and guidelines vary significantly.
Prepare Necessary Documentation: Ensure you have all necessary documents, such as contracts, invoices, and payment records, organized. These documents are essential to support your claim, whether you are dealing with local or international debt recovery.
After Initiating Debt Recovery
Use Interim Measures: If immediate action is needed, interim measures like seizing bank accounts or assets may be applicable. These measures, which are temporary and can be requested even before legal proceedings, can ensure that the debtor’s assets are secured while the legal process unfolds.
Conclusion
Recovering debts through judicial means in Belgium requires understanding the legal landscape and an appropriate strategy based on the debt’s nature and amount. While this article provides practical guidance, it is important to note that each case is unique, and professional legal advice is recommended for complex debt recovery cases. Businesses can enhance their chances of successful debt recovery while maintaining financial stability by utilizing simplified procedures for smaller or undisputed debts and consulting with legal experts. This proactive approach ensures that your business can continue to thrive even in the face of financial adversity.
What do the mythical Vega Sicilia wines, El Cid Campeador and the abuse of rights have in common? If you read on, you will find out.
The Vega Sicilia Único was for many years considered the best, the most prestigious and the most expensive Spanish wine.
The abuse of rights is a legal institute that allows the defense of situations in which the opponent acts with (apparent and formal) subjection to the law, but making a spurious use of the law with the intention of harming the injured party.
Last October, the Supreme Court handed down a judgment declaring certain agreements adopted by Bodegas Vega Sicilia S.A., producer of Vega Sicilia Único wine, to be null and void based on the principle of abuse of rights.
The judgment in question is doubly interesting.
Firstly, because it highlights the endemic evil of Spanish justice: it declares the nullity of resolutions adopted at a meeting held in March 2013, which were the subject of a lawsuit in February 2014, with a first instance ruling that same year, appealed to the Provincial Court of Valladolid who issued its judgement on 2019 and four years later the Supreme Court has put an end to the lawsuit: nine years after the shareholders meeting whose resolutions were the subject of the challenge.
As the Constitutional Court very recently reiterated in its ruling dated last October, “judicial slowness has no place in the Magna Carta”. But, although it has no place, or should not have a place, our courts continue to insist that it does and, as an example, this case that we are commenting on is, unfortunately, no exception.
Beyond the barbarity of a litigant having to wait for nine years to find a final solution to his claim, the judgment we are commenting on is of interest for other reasons.
The plaintiffs sought the nullity of certain resolutions adopted at a shareholders’ meeting, basing their claim on the fact that these resolutions constituted an abuse of rights since, through them, the shareholders of Bodegas Vega Sicilia S.A. sought to take control of Bodegas Vega Sicilia away from the company of which the plaintiffs were in turn shareholders.
The legislation in force at the time the meeting was held (prior to the 2014 reform) established that “resolutions that are contrary to the law, oppose the articles of association or harm the corporate interest to the benefit of one or more shareholders or third parties” could be challenged, adding that those contrary to the law would be null and void and the remaining resolutions could be annulled.
Following the 2014 reform, article 204 considers that “corporate resolutions that are contrary to the law, are contrary to the articles of association or the regulations of the company meeting or harm the corporate interest to the benefit of one or more shareholders or third parties” can be challenged and no longer distinguishes between null and voidable resolutions; although it partially recovers the concept of radical nullity in the case of resolutions contrary to public order by establishing that in such cases the action does not have a statute of limitations or lapse.
But both with the regulations prior to the reform and with those currently in force, the controversy resolved by the ruling we are commenting on is the same: when the legislator requires the agreement to be contrary to “law” in order to be able to challenge it, does he mean that it contravenes a precept of the Capital Companies Act (LSC), or can it be considered a requirement for challengeability if it contravenes any other positive precept of any other legal text? And finally, if the resolution in question is classified as constituting an “abuse of rights”, can such a situation be considered as “contrary to law” for the purposes of the application of article 204 LSC?
The Chamber reminds us of the requirements for the concurrence of abuse of rights in corporate matters:
- formal or outwardly correct use of a right
- causing damage to an interest not protected by a specific legal prerogative, and
- the immorality or antisociality (sic) of that conduct manifested subjectively (intention to damage or absence of legitimate interest) or objectively (abnormal exercise of the right contrary to the economic and social purposes of the same).
And it then refers to the numerous occasions on which its case law has reiterated that, although the regulation on challenging corporate resolutions does not expressly mention abuse of rights, this is no obstacle to annulling resolutions in such cases, since according to article 7 of the Civil Code (which prohibits abuse of rights), they must be deemed as contrary to the law.
The interest and peculiarity of this case lies in the fact that the contested resolutions were neither adopted in the interests of the company nor did they cause any harm to it, since the alleged harm was caused to a third party formally outside the company.
And on these premises, the Supreme Court reiterates and insists that the expression “contrary to the law” in article 204 LSC must be understood as “contrary to the legal system”, which includes those agreements adopted in fraud of the law, in bad faith or with abuse of rights, all of which are included and regulated in the Preliminary Title of the Civil Code. For these reasons, the judgment of the Provincial Court upholds the claim and declares the nullity of the contested agreements.
And what has El Cid got to do with all this? Is it a typo? No, not at all. Legend has it (invented, it seems, by a monk of the monastery of San Pedro de Cardeña to attract visitors) that Rodrigo Diaz de Vivar won a battle on the walls of Valencia against the Almoravids, after his death, saddling his corpse on his legendary horse Babieca.
It turns out that his almost fellow countryman, David Alvarez, buyer of the winery in the 1980s, the latter from León, the former from Burgos, but both old Castilians, also won his last battle after his death; David Alvarez was, together with one of his daughters, a plaintiff against the agreements of Bodegas Vega Sicilia and died in 2015; seven years later the Supreme Court has given him the right against the Almogavars, in this case, his own children.
And two lessons: first, justice is not justice if it is slow, a phrase apocryphally attributed to Seneca; it was not in this case for David Alvarez. Secondly, the abuse of rights is not only an “in extremis” recourse when one does not find frank legal support for one’s claims; on the contrary, it is, on many occasions, the solution.
Every employer should manage the risk of employee lawsuits. Many companies believe that they treat their workers well and that their employees are happy. As a result, they believe that they are not at risk of a lawsuit. But in my work, I frequently see employment relationships sour and employees surprise management by retaining a lawyer.
Employers should proactively manage this risk instead of hoping lawsuits never come. Defending a business against litigation by a current or former employee takes a lot of time and can be very expensive. It can also be incredibly frustrating to see an employee the company once trusted making false and damaging allegations. But employers can take steps before a dispute arises to reduce the impact of a lawsuit. I discuss eight such steps below.
First, employers should consider purchasing insurance that may cover employee claims. In the United States, this insurance is called Employment Practices Liability (“EPLI”) Insurance. These kinds of insurance policies may pay for a lawyer to defend the company in the event of a lawsuit. They may also pay the employee the amount he or she demands or that a court awards. Although insurance costs money, many companies prefer to pay regular and foreseeable premiums than sudden, steep, and unpredictable legal fees and employee payouts.
Second, employers should implement and enforce sexual harassment policies. Policies like these discourage the type of behavior that can subject a company to liability. But in many jurisdictions, they may also provide a defense to a company in the event an employee sues the company for allowing the harassment to take place.
Third, employers should seriously examine disparities in pay and job roles. If the highest paid employees at a company are largely male and the lowest paid employees are largely female, then an employee may claim that the employer engages in sex discrimination. Similarly, if the executives of a company are largely white but its blue-collar workers are largely people of color, an employee may allege that the company engages in racial discrimination. Rather than litigate these issues, a company should investigate whether those disparities exist in its own workplace and address them if they do.
Fourth, employers should consider whether they want employment disputes to go to arbitration instead of to court. Employers can largely determine this by including an arbitration clause in the offer letters they send to employees upon hiring them. Arbitration has some advantages: it tends to move quicker, it is private, it has the reputation for being a friendly forum for employers, and it tends to cost less. But it also has some downsides: it does not permit appeals on the merits of the dispute and it can cost more than litigation depending on the kind of case.
Fifth, any time an employee discloses that he or she has a health issue, the company should immediately consider how to accommodate that issue. Many employers may disregard the disclosure of a health issue if it does not seem important to the employee’s job. But if the employee later believes that the employer penalized him or her because of the health issue, the employee may claim discrimination. Before that happens, an employer should work with an employee to make sure the health issue does not impede job performance.
Sixth, employers should ensure they make consistent decisions. If an employer allows one employee to work from home, other employees may want the same treatment. And if an employer lays one employee off, she may wonder why another employee did not meet the same fate. Employers may reduce the risk of a lawsuit by setting firm policies and abiding by them.
Seventh, employers should frequently consult a lawyer they trust when employment issues arise. Spending a few hundred dollars to speaking to a lawyer for an hour before firing an employee or before responding to an employee complaint can help an employer avoid a lawsuit that may cost tens or even hundreds of thousands of dollars.
And finally, employers should consider settling disputes with employees, even if they are meritless. No company wants an employee to take advantage of them. But lawsuits are often more expensive and a hassle than the cost of a settlement. Spending a lot of money on defense, even if successful, may be more expensive than just compromising and paying the employee a fraction of what they demand.
越南 
巴西 
意大利 
沙特阿拉伯 
Finland 
埃及 
写信给 Alexandre
Mediation as an instrument to solve conflicts in compliance related issues and international contracts
2025年4月9日
- 非诉讼解决机制
- 仲裁
- 诉讼
Introduction: A Paradigm Shift in Conflict Resolution
The approval of Organic Law 1/2025, of January 2, on measures for the efficiency of the Public Justice Service, marks a turning point in the Spanish judicial system. This legislation is not limited to introducing procedural changes, but reflects a profound transformation in the very concept of justice. The legislator has made a firm commitment to promoting alternatives to the judicial resolution of disputes, making prior negotiation a central element of the system.
The saturation of the courts, the costs associated with judicial proceedings, and the search for more satisfactory solutions for the parties have prompted this reform, which places the so-called “appropriate means of non-jurisdictional dispute resolution” as the cornerstone of a new justice model oriented towards dialogue and agreement.
The philosophy behind alternative means of dispute resolution
Beyond the decongestion of the courts, this reform responds to a philosophy that understands that not all conflicts necessarily require a judicial response. Alternative means of dispute resolution are based on the premise that many conflicts can find more satisfactory and lasting solutions, adapted to the needs and interests of the parties, when they actively participate in their construction.
Organic Law 1/2025 defines these means as “any type of negotiating activity, recognized in this or other laws, state or autonomous, to which the parties to a conflict resort in good faith with the aim of finding an extrajudicial solution to it, either by themselves or with the intervention of a neutral third party”. This broad and flexible definition is intended to cover various forms of negotiation whose common denominator is the protagonism of the parties in the resolution of their own disputes.
A range of possibilities: Diversity of mechanisms for diversity of conflicts
One of the most noteworthy aspects of the new regulation is that it does not rely on a single model of alternative dispute resolution but recognizes the diversity of situations and the need to offer different tools adapted to each particular case.
Mediation, already consolidated in our legal system through Law 5/2012, maintains its relevance as the preferred method, but other modalities such as conciliation in its various variants (notarial, registry, before a lawyer of the Administration of Justice or judicial), the opinion of independent experts, confidential binding offers, or the novel process of collaborative law are added to it.
This plurality of mechanisms reflects the complexity of contemporary legal relationships and the need to provide tailored responses to each type of conflict. Resolving a neighborhood dispute is not the same as resolving a complex business dispute, and the legislator has been aware that “one size fits all” would not be effective for the diversity of situations that may arise.
The controversial commitment to enforceability: The requirement of procedural validity
Undoubtedly, the most innovative -and probably the most controversial- aspect of the new regulation is the configuration of these means as a mandatory prerequisite for resorting to judicial proceedings in certain areas. This decision represents a qualitative leap with respect to the previous regulation, which mainly favored the voluntary nature of these mechanisms.
From the entry into force of Organic Law 1/2025, April 3, 2025, the claim in the civil jurisdictional order will not be admitted if it is not justified that the resolution of the conflict has been previously attempted by any of the recognized alternative ways. Not only that, but also the identity between the object of the previous negotiation and the object of the litigation to be initiated must be established.
This mandatory nature has been the subject of intense debate. Its advocates argue that it is necessary to promote cultural change in a traditionally litigious society, while its detractors warn of the risk of turning these mechanisms into mere formalities that distort their true purpose.
The truth is that the legislator has tried to find a balance, excluding from this obligation certain particularly sensitive matters or those which, by their nature, require an immediate judicial response. Thus, issues such as the judicial protection of fundamental rights, measures for the protection of minors, or the request for precautionary measures, among others, are exempted from the requirement of prior negotiation.
The guiding principles: Autonomy and confidentiality as pillars of the system
The effectiveness of alternative dispute resolution rests mainly on two fundamental principles: the autonomy of the parties and the confidentiality of the process.
The principle of private autonomy recognizes that the parties themselves best know their interests and needs and are, therefore, in the best position to find solutions adapted to their situation. The law establishes that the parties are free to settle, if they respect the law, good faith, and public policy. This freedom is essential for the solutions reached to be truly satisfactory and lasting.
The principle of confidentiality is crucial to creating a climate of trust that allows the parties to express themselves freely during the negotiation process. The law establishes that the information and documentation disclosed during the negotiation must be kept confidential, with very specific exceptions, such as express waivers by the parties, court orders in criminal matters, or reasons of public order.
This duty of confidentiality extends to all participants in the process: the parties, their lawyers, and, where appropriate, the neutral third party involved. The aim is to ensure that what is said or proposed during the negotiation cannot be used later in a possible judicial process, thus promoting a sincere and constructive dialogue.
The Negotiation Process: Relevant Procedural Aspects
The regulation of the procedural aspects of the different means of dispute resolution also reflects the legislator’s desire to combine the necessary flexibility with the minimum guarantees required.
As regards standing, the initiative to resort to these mechanisms may come from either party, from both by mutual agreement, or even from a judicial referral. This recognizes both the parties’ autonomy and the possibility that the judicial system itself may encourage the use of these alternative channels.
Regarding the involvement of professionals, the law generally prefers a non-mandatory approach to legal assistance, except in specific situations like the preparation of binding offers (with exceptions for smaller amounts). This flexibility aims to enhance access to these mechanisms; however, the complexity of many legal disputes often makes it wise to seek professional guidance.
A particularly relevant aspect is the effect that the request for these mechanisms has on the statute of limitations and expiration periods. The law establishes that such a request interrupts the statute of limitations or suspends the expiration of actions from the date of communication to the other party, thus avoiding the attempt of an amicable solution that may prejudice the rights of the party that promotes it.
In terms of form, the preferred method is face-to-face, although the use of telematic means is permitted by agreement of the parties or in the case of claims for amounts of less than 600 euros. This flexibility is particularly appropriate in a context of increasing digitalization of legal relations.
Specific Modalities: Diversity of mechanisms for diversity of conflicts
Among the different modalities recognized by the law, it is worthwhile to focus on some that present particularly novel or relevant characteristics.
Private conciliation involves the intervention of a person with technical or legal expertise related to the dispute’s subject matter. The law requires this person to be registered in a recognized professional association or in a register of mediators and to act impartially and confidentially. This mechanism takes advantage of the specialized knowledge of certain professionals to facilitate agreement in technically complex matters.
The confidential binding offer is a particularly interesting mechanism for certain types of disputes. One of the parties makes an offer that is binding on it in the event of acceptance by the other party. The law requires that the identity of the offeror, the actual receipt by the other party, and the detailed content of the offer be recorded. This instrument can be particularly useful in financial claims, where the main obstacle to settlement is often the amount.
The independent expert opinion consists of commissioning an opinion from an expert in the subject matter of the dispute. Unlike other mechanisms, this opinion is not binding, but may serve as a basis for agreement if the parties accept it, or at least to clarify the technical aspects of the dispute. Following the issuance of the opinion, the parties may accept it as an agreement, propose improvements or reject it, in which case the procedural requirement is deemed to be fulfilled.
Finally, the collaborative law process represents perhaps the most innovative aspect of the new regulation. It is a structured negotiation in which the parties, assisted by their respective lawyers, work together to reach a satisfactory solution, being able to integrate other professionals (psychologists, economists, etc.) when the complexity of the case requires it. At the end, minutes are drawn up with the participants, the sessions held and the agreements reached.
The challenge of implementation: From theory to practice
The real effectiveness of this new system will depend largely on how it is implemented in practice. It is not enough to make it compulsory to attempt out-of-court settlement; this attempt must be genuine and not become a mere formality.
In this regard, the law requires that the negotiation attempt be “real and credible; it cannot be fictitious.” To this end, it establishes documentation requirements that vary depending on whether or not a neutral third party is involved but always include a responsible statement that the parties have intervened in good faith in the process.
Likewise, the law regulates in detail when the negotiation process is understood to be concluded, whether it concludes with or without an agreement. In the event of an agreement, it must be formalized by identifying the parties and, if applicable, their lawyers and the neutral third party, indicating the place and date, as well as the obligations assumed by each party.
The possibility of converting the agreement into a public deed to convert it into an enforceable title reinforces its value and facilitates its compliance, avoiding the possibility of non-compliance with the agreement, forcing the initiation of a declaratory judicial proceeding.
A horizon to be explored: Perspectives and challenges
Organic Law 1/2025 represents a turning point in the conception of justice in Spain, bringing us closer to models already consolidated in other countries with a long tradition in alternative means of conflict resolution. The United States, Canada and the Nordic countries have been using these mechanisms for decades, with generally positive results in terms of user satisfaction and decongestion of the courts.
However, each legal system has its particularities, and the success of these mechanisms depends not only on their legal regulation but also on cultural, sociological, and organizational factors. Spanish society’s traditional litigiousness, the poor negotiating culture in certain areas, and the lack of specific training of many professionals are challenges that must be faced.
The commitment to obligatory nature as an initial impulse may be understandable in a context of paradigm change, but the real success of these mechanisms will come from their capacity to generate satisfactory solutions that will progressively make them the preferred option on their own merits, beyond their obligatory nature.
Conclusion: Between Hope and Caution
The new regulation of the appropriate means of non-jurisdictional dispute resolution is in line with a clear international trend towards the promotion of alternatives to judicial dispute resolution. This trend responds both to practical needs – decongesting the courts, reducing costs – and to a philosophy that values the protagonism of the parties in the management of their own conflicts.
In this sense, Spanish legislation joins a global movement that has shown positive results in many jurisdictions. However, only time will tell whether the legislative technique used, especially the commitment to mandatory nature as a procedural requirement, is the most appropriate to achieve the true purpose of encouraging agreement in order to avoid litigation.
The success of this reform will depend not only on its regulatory design, but also on factors such as adequate training of the professionals involved, public awareness of the advantages of these alternative routes, and the system’s capacity to evaluate and adapt according to the results obtained.
In short, we are facing an ambitious and necessary reform, which opens up a hopeful horizon but which will have to overcome important challenges in order to consolidate itself as a true paradigm shift in the administration of justice in Spain. The true criterion of success will not be the number of negotiation attempts made, but the quality of the agreements reached and the satisfaction of citizens with a more participatory, efficient justice system adapted to their real needs.
On April 8, 2025, during the Paris Arbitration Week, France’s Ministers of Justice Gérard Darmanin, announced a significant reform of French arbitration law. The aim of this reform is to clarify, modernise and consolidate the regulatory framework, the last substantial revision of which dates back to 2011.
It is set to culminate in the adoption of an Arbitration code by autumn 2026. This code is envisioned as a unifying legal instrument that will enhance the clarity, autonomy and international appeal of French arbitration law.
Structural proposals: building an autonomous and coherent legal framework
The creation of a standalone Arbitration Code
The proposal n°1 calls for the unification of all legislative and regulatory text governing arbitration within a dedicated code, structured into several parts and decoupled from the approximately 20 existing codes currently housing arbitration provisions.
This codification process is not purely technical, it serves pedagogical, symbolic and strategic purposes namely, enhancing the clarity, accessibility and international attractiveness of French arbitration law.
Common provisions for domestic and international arbitration
Proposal n°3 and 4 suggest reorganising French arbitration law around a set of common rules applicable to both domestic and international arbitration with limited derogation for the former. This represents a shift from the current dualistic system to a more unified and clearer and framework without eliminating the particularities of either.
As an instance, a preliminary article would define the international nature of arbitration, abandoning outdated reference to “commercial” character in favour of a more inclusive in realistic standard.
However, it does not mean a division summa divisio of those two types of arbitration because of the stable wish to preserve the dissociation between ordre public interne and ordre public international.
Codification of guiding principles
Proposal n°5 aims to enshrine as guiding principles (“principes directeurs”) those considered to embody the core values of French arbitration law such as the autonomy of the arbitration agreement, the competence-competence principle, the independence and impartiality of the arbitral tribunal, and the respect for the adversarial principle and party equality.
Others, though not considered fundamental, nonetheless shape the legal framework, such as good faith, loyalty, the principle of effectiveness (“effet utile”), confidentiality, proportionality, procedural loyalty and celerity, parties’ autonomy in choosing applicable law and procedure rules, amiable composition and access to justice (prevention of denial of justice), which form the broader ethical and procedural framework of arbitration in France.
Over the 19 principles elected to be enshrined, the report highlights and develop only few:
- Regarding the principle of independence and impartiality of the arbitral tribunal, it is given a particular prominence in the reform, both through its inclusion in the preliminary article of the Code and its designation as a guiding principle. However, the reform does not aim to consolidate the jurisprudence that has recognised exceptions such as the notoriety or the parties’ duty of curiosity (which exempt the arbitrator from disclosing allegedly well-known facts). Instead, it adopts a strict approach according to which, arbitrators must disclose any circumstances that, in the eyes of the parties, could affect their independence or impartiality, and cannot rely on the fact that such information might be publicly known. Parties are not expected to be in a state of constant investigation.
- Regarding the equality of the parties, this principle is reaffirmed at the stage of the constitution of the arbitral tribunal and throughout the arbitral proceedings. It ensures that the parties are treated equally and fairly.
- Regarding the confidentiality of proceedings, the reform extends this principle (already established in domestic arbitration) to international arbitration, while allowing for necessary exceptions, particularly in the context of investment arbitration. However, its application ultimately remains subject to party autonomy.
- Regarding the proportionality, article 14 serves both as an encouragement and support for the arbitral tribunal. It urges the tribunal to “adopt a procedure adapted to the complexity and stakes of the dispute”. In response to certain issues and recurring criticisms regarding the cost and duration of arbitration, this is a call for moderation on all fronts (time, volume of submissions, document production requests, length of hearings, number of witnesses to be heard, and the cost for the parties).
- Regarding the prohibition of denial of justice, this principle introduces a new role for the supporting judge (“juge d’appui”), who becomes the judge overseeing the prevention of denial of justice in a broader sense. His role extends both materially, in cases where it is impossible to appoint an arbitrator, and substantively, when the timely delivery of an award is at risk.
These principles are presented not merely as procedural standards but as fundamental values that shape and distinguish the French approach to arbitration.
Unification of judicial control and support
Proposals N°6 to 9 aim to unify and rationalise the judicial handling of arbitration disputes by several objectives such as exclusive jurisdiction of the judicial courts (“tribunal judiciaire”) over all challenges and enforcement of international arbitral awards, including those involving public entities, thereby ending the long-standing jurisdictional duality exposed in the Inserm case (2010), where the recognition and enforcement of international awards involving French public entities was scattered between judicial and administrative Courts.
Exclusive jurisdiction is awarded to the Paris Judicial Court to decide on all international arbitration matters. Another purpose is the specialisation of domestic courts in handling arbitration matters, and the elimination of residual competence formerly existing in favour of commercial courts presidents as supporting judges (“juges d’appui”).
This restructuring is intended to foster efficiency, consistency, and international credibility.
Substantive changes: a more flexible, protective and efficient arbitration framework
Promotion of flexibility
Several proposals aim to liberalize and modernize arbitration procedures like the elimination of the references to “commercial” matters in determining the international character of arbitration and the tribunal’s ability to apply to trade usages.
It will also serve this purpose by simplifying the formal requirements for arbitration agreements, removing the requirement that the clause be in writing and aligning domestic arbitration on international standards.
In this regard, the reform aims to abolish the written form requirement for arbitration agreements to align domestic and international arbitration rules. As arbitration agreements are typically written in practice, this formal requirement is now seen as outdated and inconsistent with general contract law.
However, the requirement of written form will remain solely a matter of evidence. At the stage of enforcement or annulment proceedings, the arbitration agreement (or a copy thereof) will need to be produced. In practice, this means that the arbitration agreement will still have to be recorded in a document, even if it does not meet the strict definition of a written instrument.
Party protection and procedural safeguards
The reform also seeks to bolster procedural guarantees such as the necessity for tribunal’s seated in France to be composed of an odd number of arbitrators.
According to the proposition of code, arbitrators should be natural persons, through these does not hinder recognition of awards rendered abroad by legal entities and the contractual nature of relationships between parties, arbitrators and arbitral institution will be formally recognised.
A mechanism for financial hardship (“impécuniosité”) is introduced to prevent abuses and ensure access to justice. Jurisprudence has confirmed that impecuniosity does not render the arbitration agreement manifestly void or inapplicable. While ensuring access to arbitration lies with the “arbitration actors” (i.e arbitrators, institutions, parties) the authority of the supporting judge (“juge d’appui”) to intervene in support of an impecunious party remains unsettled.
The reform proposal aims to expressly empower the juge d’appui to facilitate arbitral proceedings in such circumstances by ordering “any appropriate measures” (art. 33): this would serve to prevent a genuine denial of justice. Measures may include procedural actions (e.g., convening a case management conference) or substantive adaptations (e.g., amending the arbitration agreement to reduce costs, appointing a sole arbitrator, selecting a less expensive arbitral institution, or streamlining proceedings by limiting document production, written submissions, or hearings).
It also proposes a clarification of arbitration rules applicable in labour, family, and consumer fields:
- Regarding Family Law, the working group clarified that arbitration is allowed for patrimonial issues in family law but excluded for matters related to personal status. Divorce remains under state Courts’ jurisdiction. For patrimonial matters, additional safeguards are proposed, such as a written agreement, lawyers counter-signature, appeal options. Family judges will also have exclusive jurisdiction on recognition and enforcement of the awards.
- Regarding Labour Law and Consumer Law, the proposed measures aim to emphasize that while an arbitration agreement is permissible in these areas, it cannot be imposed by the “strong” party on the “weak” party. The latter will always have the option to exclude its application and revert to State Courts. Furthermore, in these areas, the principle of competence-competence is excluded, meaning that the consumer or the employee will not be obliged to establish an arbitral tribunal in order to invoke the jurisdiction of the State Court.
A protection of third-party rights is also specified through accessory intervention before the Court of Appeal and rule for third party opposition (tierce opposition), prohibited against arbitral awards but allowed against the Court decision related to them, such as decisions related to annulment proceedings or requests for exequatur.
Procedural efficiency
To promote procedural efficiency, the reform proposes the codification of the negative effect of the competence-competence principle, the authorization of consolidation of arbitral proceedings.
It entails the following modification and few others:
- Rewriting of the article 1448 of the Code of civil procedure and elimination of its last paragraph. This article currently states that “where a dispute falling within the scope of an arbitration agreement is brought before a State court, the court shall decline jurisdiction unless the arbitral tribunal has not yet been seized and the arbitration agreement is manifestly null and void or manifestly inapplicable”. Its second and third paragraph state that “the state court may not raise its lack of jurisdiction ex officio” and that “any provision to the contrary shall be deemed unwritten”.
Contrary stipulations would therefore be permitted, and parties could expressly provide in their arbitration agreement that the court is authorized to conduct a full review of the arbitration clause, or that the parties waive the principle of the arbitrator’s priority. However, such a deviation to be valid, it must be explicit and unequivocal.
- In order to consolidate procedures, unless the parties agree otherwise, in cases involving claims based on multiple contracts or related to multiple contracts, these claims should be made in a single arbitration proceeding under one or more arbitration agreements. However, two conditions are required: the compatibility of the arbitration agreements and the existence of a connection between the claims such that it is in the interest of efficiency and justice to have them heard and decided together by the arbitral tribunal.
- Under the current law, the arbitral tribunal can impose a penalty (“astreinte”), but there is not provision regarding its authority to liquidate it. The future code would allow the tribunal to do so “as long as it remains seized of the case”. However, it does not mean that the tribunal to retain jurisdiction for the purpose of liquidating the penalty after it has rendered its final award.
In addition to this, the project lays the groundwork for class arbitration, poses principles of procedural loyalty and concentration of arguments and expanding the powers of the supporting judge to address denial of justice, financial hardship, evidence production, enforcement and interim measures, and constitution of tribunals.
The efficiency objective also extends to recognition and enforcement of arbitral awards in clarifying recognition procedures and deadlines, removing the suspensive effect of appeals in domestic arbitration, allowing incidental annulment or refusing of enforcement to apply to related awards, and revisiting annulment grounds and enabling award correction or classification to avoid annulment or enforcement refusal.
Regulatory adjustments and technical reforms and promoting transparency
This reform includes adjustment proposals to ensure consistency across existing legislation and regulation.
Lastly, this reform addresses the promotion and dissemination of French arbitration law by increasing transparency in the appointment of arbitrators by supporting judges, including publication of the names and an annual public list. It is planned to reinforce judicial training in arbitration through enhanced ENM (“Ecole Nationale de la Magistrature”, which is the national school of judges) programs, internships with the ICC, and digital tools.
Promoting French arbitration law domestically and internationally through multilingual commentaries, outreach events, and strategic communication will be a way to extend the project.
In conclusion, the 2025 reform constitutes a major step toward modern, readable, and globally competitive French arbitration law. By consolidating legislation, strengthening procedural safeguards, and fostering accessibility and transparency, the proposed arbitration code is poised to elevate France as a leading venue for arbitration.
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.
PFAS are chemicals that have been used in industry for over 50 years. Between 4,000 and 5,000 varieties are used for various everyday consumer applications, and they are renowned for their non-stick, waterproofing, and heat-resistant properties. They have come under scrutiny in recent years, and are covered by European regulations, as they are in the USA, where the public authorities have imposed maximum use values, as well as reporting obligations. EU Regulation 2019/1021 (POP) restricts the production and use of certain categories of PFAS in specific industries or above certain values and their use with food products. France has gone further, regulating the levels of discharges into watercourses.
Scientific research suspects that PFAS cause illnesses such as cancer and reproductive disorders. Given the extent of contamination not only in everyday products but also in the environment, particularly waterways, the issue is likely to pose major public health problems in the years to come. This concern is more pressing given that PFASs are considered ‘eternal pollutants’, as there is currently no way of eliminating them from the environment.
The impact on companies’ and insurers’ liability is already significant. In the USA, more than 6,000 lawsuits have been filed since 2005. Three groups have already paid more than USD 1.2 billion in settlements due to contamination, and another group has paid more than USD 10 billion to end a class action.
In France, the Metropole of Lyon has brought a summary expert appraisal action against two chemical companies before considering bringing a liability action. In addition, several criminal complaints have been lodged for endangering the lives of others and damaging the environment.
Under French law, companies and their insurers could be liable on various legal grounds. In addition to ordinary civil liability law – based on article 1240 of the Civil Code – the special system of liability for defective products could also serve as a basis for a liability action (articles 1245 et seq. of the Civil Code), with French law defining a defect as any product that does not offer the safety that can legitimately be expected.
Although it is currently difficult to identify a causal link with an identified disease, asbestos-related case law has shown in the past that victims can take action if they can demonstrate that they suffered anxiety-related harm as a result of their exposure to the product, even if they are not positively suffering from a disease at the time of their claim.
In addition, the reporting obligations imposed by the public authorities will undoubtedly facilitate the filing of liability actions by facilitating the identification of the emitters and users of these pollutants.
Insurers are directly affected by this phenomenon, which for them constitutes an “emerging” risk (“silent cover”) because, for the most part, this risk was not identified when the policy was taken out, which exposes them directly and is all the more problematic because insurance premiums have not been able to take such a risk into account.
Civil liability or professional indemnity insurance policies, especially if they are drafted with “all risks except” clauses (“tous risques sauf” in French legal vocabulary, i.e. covering all liability risks vis-à-vis third parties except those strictly listed), as well as those including clauses relating to environmental risks, are particularly targeted.
Lloyd’s has already published model exclusion clauses for the attention of insurers, although such clauses can obviously only cover future insurance contracts or endorsements:
https://www.lmalloyds.com/LMA_Bulletins/LMA23-039-SD.aspx
The clauses contained in insurance policies must be drafted with particular care, considering each country’s specific features. In France, for example, to be enforceable against the insured, clauses must be “formal and limited”, which means that the exclusion must be both clearly expressed and that it must be possible to determine its content perfectly.
For example, the Court of Cassation recently ruled that the use of the terms “such as” or “in particular” (“tells que” “en particulier”) in an exclusion clause led to confusion in the interpretation of the exclusion clause, rendering it invalid (Civ. 2e, 26 Nov. 2020, no. 19-16.435). There was also a debate on the validity of an exclusion clause relating to bodily injury caused by asbestos, a risk which at the time had not been identified by insurers, who subsequently excluded it from most policies (Cass. 2e civ., 21 Sept. 2023, nos. 21-19801 and 21-19776). Similarly, policies should clearly indicate whether cover is provided based on a harmful event or based on a claim (i.e “base dommage” or “base reclamation”, which indicates if the risk is covered, depending on if the damage happened during the policy was valid, or if it depends on the moment when the risk was notified by the insured during such period).
One thing is sure: the risks associated with PFAS and claims are only just beginning to emerge in Europe, where the conditions for group actions have recently been extended with EU Directive 2020/1828, which came into force on 25 June 2023 and is currently the subject of a draft law under discussion in the French Parliament with a view to its transposition.
Dealing with unpaid invoices can be challenging for any business. In Belgium, where judicial processes can seem daunting, understanding how to manage debt collection effectively is crucial. This article offers practical guidance derived from a comprehensive legal guide to help your company navigate Belgium’s judicial debt recovery landscape.
Understanding Your Options
Assess the Situation: Before taking legal action, evaluating the amount owed and the debtor’s financial status is essential. This assessment will guide you in choosing the appropriate legal avenue, as Belgium offers different courts and procedures based on the dispute’s value. For instance, for claims up to € 5,000, the local court or ‘justice de paix’, which is a court of first instance for minor civil cases, is typically used due to its cost-effectiveness and efficiency.
Send a Notice of Default: Under Belgian law, a notice of default is mandatory before initiating legal proceedings. This step adheres to legal requirements and gives the debtor one last chance to settle their dues without further legal complications.
Efficient Legal Procedures
Use Simplified Procedures for Small Amounts: A simplified legal procedure can be utilized for undisputed money debts up to €1,860, which expedites the payment request process significantly. This approach can be particularly advantageous for recovering smaller debts quickly.
Consider Direct Bailiff Intervention: For undisputed amounts, irrespective of their size, between companies, creditors can authorize a bailiff to recover the debt directly without a court judgment. This procedure reduces legal fees and speeds up the debt collection process.
Leveraging Legal and Financial Advice
Consult with a Belgian Attorney: Navigating the Belgian legal system can be complex. Consulting with a local attorney can provide insights into the most effective procedures tailored to your case. This is especially true for international debt collection, where regulations and guidelines vary significantly.
Prepare Necessary Documentation: Ensure you have all necessary documents, such as contracts, invoices, and payment records, organized. These documents are essential to support your claim, whether you are dealing with local or international debt recovery.
After Initiating Debt Recovery
Use Interim Measures: If immediate action is needed, interim measures like seizing bank accounts or assets may be applicable. These measures, which are temporary and can be requested even before legal proceedings, can ensure that the debtor’s assets are secured while the legal process unfolds.
Conclusion
Recovering debts through judicial means in Belgium requires understanding the legal landscape and an appropriate strategy based on the debt’s nature and amount. While this article provides practical guidance, it is important to note that each case is unique, and professional legal advice is recommended for complex debt recovery cases. Businesses can enhance their chances of successful debt recovery while maintaining financial stability by utilizing simplified procedures for smaller or undisputed debts and consulting with legal experts. This proactive approach ensures that your business can continue to thrive even in the face of financial adversity.
What do the mythical Vega Sicilia wines, El Cid Campeador and the abuse of rights have in common? If you read on, you will find out.
The Vega Sicilia Único was for many years considered the best, the most prestigious and the most expensive Spanish wine.
The abuse of rights is a legal institute that allows the defense of situations in which the opponent acts with (apparent and formal) subjection to the law, but making a spurious use of the law with the intention of harming the injured party.
Last October, the Supreme Court handed down a judgment declaring certain agreements adopted by Bodegas Vega Sicilia S.A., producer of Vega Sicilia Único wine, to be null and void based on the principle of abuse of rights.
The judgment in question is doubly interesting.
Firstly, because it highlights the endemic evil of Spanish justice: it declares the nullity of resolutions adopted at a meeting held in March 2013, which were the subject of a lawsuit in February 2014, with a first instance ruling that same year, appealed to the Provincial Court of Valladolid who issued its judgement on 2019 and four years later the Supreme Court has put an end to the lawsuit: nine years after the shareholders meeting whose resolutions were the subject of the challenge.
As the Constitutional Court very recently reiterated in its ruling dated last October, “judicial slowness has no place in the Magna Carta”. But, although it has no place, or should not have a place, our courts continue to insist that it does and, as an example, this case that we are commenting on is, unfortunately, no exception.
Beyond the barbarity of a litigant having to wait for nine years to find a final solution to his claim, the judgment we are commenting on is of interest for other reasons.
The plaintiffs sought the nullity of certain resolutions adopted at a shareholders’ meeting, basing their claim on the fact that these resolutions constituted an abuse of rights since, through them, the shareholders of Bodegas Vega Sicilia S.A. sought to take control of Bodegas Vega Sicilia away from the company of which the plaintiffs were in turn shareholders.
The legislation in force at the time the meeting was held (prior to the 2014 reform) established that “resolutions that are contrary to the law, oppose the articles of association or harm the corporate interest to the benefit of one or more shareholders or third parties” could be challenged, adding that those contrary to the law would be null and void and the remaining resolutions could be annulled.
Following the 2014 reform, article 204 considers that “corporate resolutions that are contrary to the law, are contrary to the articles of association or the regulations of the company meeting or harm the corporate interest to the benefit of one or more shareholders or third parties” can be challenged and no longer distinguishes between null and voidable resolutions; although it partially recovers the concept of radical nullity in the case of resolutions contrary to public order by establishing that in such cases the action does not have a statute of limitations or lapse.
But both with the regulations prior to the reform and with those currently in force, the controversy resolved by the ruling we are commenting on is the same: when the legislator requires the agreement to be contrary to “law” in order to be able to challenge it, does he mean that it contravenes a precept of the Capital Companies Act (LSC), or can it be considered a requirement for challengeability if it contravenes any other positive precept of any other legal text? And finally, if the resolution in question is classified as constituting an “abuse of rights”, can such a situation be considered as “contrary to law” for the purposes of the application of article 204 LSC?
The Chamber reminds us of the requirements for the concurrence of abuse of rights in corporate matters:
- formal or outwardly correct use of a right
- causing damage to an interest not protected by a specific legal prerogative, and
- the immorality or antisociality (sic) of that conduct manifested subjectively (intention to damage or absence of legitimate interest) or objectively (abnormal exercise of the right contrary to the economic and social purposes of the same).
And it then refers to the numerous occasions on which its case law has reiterated that, although the regulation on challenging corporate resolutions does not expressly mention abuse of rights, this is no obstacle to annulling resolutions in such cases, since according to article 7 of the Civil Code (which prohibits abuse of rights), they must be deemed as contrary to the law.
The interest and peculiarity of this case lies in the fact that the contested resolutions were neither adopted in the interests of the company nor did they cause any harm to it, since the alleged harm was caused to a third party formally outside the company.
And on these premises, the Supreme Court reiterates and insists that the expression “contrary to the law” in article 204 LSC must be understood as “contrary to the legal system”, which includes those agreements adopted in fraud of the law, in bad faith or with abuse of rights, all of which are included and regulated in the Preliminary Title of the Civil Code. For these reasons, the judgment of the Provincial Court upholds the claim and declares the nullity of the contested agreements.
And what has El Cid got to do with all this? Is it a typo? No, not at all. Legend has it (invented, it seems, by a monk of the monastery of San Pedro de Cardeña to attract visitors) that Rodrigo Diaz de Vivar won a battle on the walls of Valencia against the Almoravids, after his death, saddling his corpse on his legendary horse Babieca.
It turns out that his almost fellow countryman, David Alvarez, buyer of the winery in the 1980s, the latter from León, the former from Burgos, but both old Castilians, also won his last battle after his death; David Alvarez was, together with one of his daughters, a plaintiff against the agreements of Bodegas Vega Sicilia and died in 2015; seven years later the Supreme Court has given him the right against the Almogavars, in this case, his own children.
And two lessons: first, justice is not justice if it is slow, a phrase apocryphally attributed to Seneca; it was not in this case for David Alvarez. Secondly, the abuse of rights is not only an “in extremis” recourse when one does not find frank legal support for one’s claims; on the contrary, it is, on many occasions, the solution.
Every employer should manage the risk of employee lawsuits. Many companies believe that they treat their workers well and that their employees are happy. As a result, they believe that they are not at risk of a lawsuit. But in my work, I frequently see employment relationships sour and employees surprise management by retaining a lawyer.
Employers should proactively manage this risk instead of hoping lawsuits never come. Defending a business against litigation by a current or former employee takes a lot of time and can be very expensive. It can also be incredibly frustrating to see an employee the company once trusted making false and damaging allegations. But employers can take steps before a dispute arises to reduce the impact of a lawsuit. I discuss eight such steps below.
First, employers should consider purchasing insurance that may cover employee claims. In the United States, this insurance is called Employment Practices Liability (“EPLI”) Insurance. These kinds of insurance policies may pay for a lawyer to defend the company in the event of a lawsuit. They may also pay the employee the amount he or she demands or that a court awards. Although insurance costs money, many companies prefer to pay regular and foreseeable premiums than sudden, steep, and unpredictable legal fees and employee payouts.
Second, employers should implement and enforce sexual harassment policies. Policies like these discourage the type of behavior that can subject a company to liability. But in many jurisdictions, they may also provide a defense to a company in the event an employee sues the company for allowing the harassment to take place.
Third, employers should seriously examine disparities in pay and job roles. If the highest paid employees at a company are largely male and the lowest paid employees are largely female, then an employee may claim that the employer engages in sex discrimination. Similarly, if the executives of a company are largely white but its blue-collar workers are largely people of color, an employee may allege that the company engages in racial discrimination. Rather than litigate these issues, a company should investigate whether those disparities exist in its own workplace and address them if they do.
Fourth, employers should consider whether they want employment disputes to go to arbitration instead of to court. Employers can largely determine this by including an arbitration clause in the offer letters they send to employees upon hiring them. Arbitration has some advantages: it tends to move quicker, it is private, it has the reputation for being a friendly forum for employers, and it tends to cost less. But it also has some downsides: it does not permit appeals on the merits of the dispute and it can cost more than litigation depending on the kind of case.
Fifth, any time an employee discloses that he or she has a health issue, the company should immediately consider how to accommodate that issue. Many employers may disregard the disclosure of a health issue if it does not seem important to the employee’s job. But if the employee later believes that the employer penalized him or her because of the health issue, the employee may claim discrimination. Before that happens, an employer should work with an employee to make sure the health issue does not impede job performance.
Sixth, employers should ensure they make consistent decisions. If an employer allows one employee to work from home, other employees may want the same treatment. And if an employer lays one employee off, she may wonder why another employee did not meet the same fate. Employers may reduce the risk of a lawsuit by setting firm policies and abiding by them.
Seventh, employers should frequently consult a lawyer they trust when employment issues arise. Spending a few hundred dollars to speaking to a lawyer for an hour before firing an employee or before responding to an employee complaint can help an employer avoid a lawsuit that may cost tens or even hundreds of thousands of dollars.
And finally, employers should consider settling disputes with employees, even if they are meritless. No company wants an employee to take advantage of them. But lawsuits are often more expensive and a hassle than the cost of a settlement. Spending a lot of money on defense, even if successful, may be more expensive than just compromising and paying the employee a fraction of what they demand.
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Spain | Appropriate Means of Dispute Resolution (ADR) as a prerequisite for litigation
2025年1月6日
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西班牙
- 非诉讼解决机制
- 诉讼
Introduction: A Paradigm Shift in Conflict Resolution
The approval of Organic Law 1/2025, of January 2, on measures for the efficiency of the Public Justice Service, marks a turning point in the Spanish judicial system. This legislation is not limited to introducing procedural changes, but reflects a profound transformation in the very concept of justice. The legislator has made a firm commitment to promoting alternatives to the judicial resolution of disputes, making prior negotiation a central element of the system.
The saturation of the courts, the costs associated with judicial proceedings, and the search for more satisfactory solutions for the parties have prompted this reform, which places the so-called “appropriate means of non-jurisdictional dispute resolution” as the cornerstone of a new justice model oriented towards dialogue and agreement.
The philosophy behind alternative means of dispute resolution
Beyond the decongestion of the courts, this reform responds to a philosophy that understands that not all conflicts necessarily require a judicial response. Alternative means of dispute resolution are based on the premise that many conflicts can find more satisfactory and lasting solutions, adapted to the needs and interests of the parties, when they actively participate in their construction.
Organic Law 1/2025 defines these means as “any type of negotiating activity, recognized in this or other laws, state or autonomous, to which the parties to a conflict resort in good faith with the aim of finding an extrajudicial solution to it, either by themselves or with the intervention of a neutral third party”. This broad and flexible definition is intended to cover various forms of negotiation whose common denominator is the protagonism of the parties in the resolution of their own disputes.
A range of possibilities: Diversity of mechanisms for diversity of conflicts
One of the most noteworthy aspects of the new regulation is that it does not rely on a single model of alternative dispute resolution but recognizes the diversity of situations and the need to offer different tools adapted to each particular case.
Mediation, already consolidated in our legal system through Law 5/2012, maintains its relevance as the preferred method, but other modalities such as conciliation in its various variants (notarial, registry, before a lawyer of the Administration of Justice or judicial), the opinion of independent experts, confidential binding offers, or the novel process of collaborative law are added to it.
This plurality of mechanisms reflects the complexity of contemporary legal relationships and the need to provide tailored responses to each type of conflict. Resolving a neighborhood dispute is not the same as resolving a complex business dispute, and the legislator has been aware that “one size fits all” would not be effective for the diversity of situations that may arise.
The controversial commitment to enforceability: The requirement of procedural validity
Undoubtedly, the most innovative -and probably the most controversial- aspect of the new regulation is the configuration of these means as a mandatory prerequisite for resorting to judicial proceedings in certain areas. This decision represents a qualitative leap with respect to the previous regulation, which mainly favored the voluntary nature of these mechanisms.
From the entry into force of Organic Law 1/2025, April 3, 2025, the claim in the civil jurisdictional order will not be admitted if it is not justified that the resolution of the conflict has been previously attempted by any of the recognized alternative ways. Not only that, but also the identity between the object of the previous negotiation and the object of the litigation to be initiated must be established.
This mandatory nature has been the subject of intense debate. Its advocates argue that it is necessary to promote cultural change in a traditionally litigious society, while its detractors warn of the risk of turning these mechanisms into mere formalities that distort their true purpose.
The truth is that the legislator has tried to find a balance, excluding from this obligation certain particularly sensitive matters or those which, by their nature, require an immediate judicial response. Thus, issues such as the judicial protection of fundamental rights, measures for the protection of minors, or the request for precautionary measures, among others, are exempted from the requirement of prior negotiation.
The guiding principles: Autonomy and confidentiality as pillars of the system
The effectiveness of alternative dispute resolution rests mainly on two fundamental principles: the autonomy of the parties and the confidentiality of the process.
The principle of private autonomy recognizes that the parties themselves best know their interests and needs and are, therefore, in the best position to find solutions adapted to their situation. The law establishes that the parties are free to settle, if they respect the law, good faith, and public policy. This freedom is essential for the solutions reached to be truly satisfactory and lasting.
The principle of confidentiality is crucial to creating a climate of trust that allows the parties to express themselves freely during the negotiation process. The law establishes that the information and documentation disclosed during the negotiation must be kept confidential, with very specific exceptions, such as express waivers by the parties, court orders in criminal matters, or reasons of public order.
This duty of confidentiality extends to all participants in the process: the parties, their lawyers, and, where appropriate, the neutral third party involved. The aim is to ensure that what is said or proposed during the negotiation cannot be used later in a possible judicial process, thus promoting a sincere and constructive dialogue.
The Negotiation Process: Relevant Procedural Aspects
The regulation of the procedural aspects of the different means of dispute resolution also reflects the legislator’s desire to combine the necessary flexibility with the minimum guarantees required.
As regards standing, the initiative to resort to these mechanisms may come from either party, from both by mutual agreement, or even from a judicial referral. This recognizes both the parties’ autonomy and the possibility that the judicial system itself may encourage the use of these alternative channels.
Regarding the involvement of professionals, the law generally prefers a non-mandatory approach to legal assistance, except in specific situations like the preparation of binding offers (with exceptions for smaller amounts). This flexibility aims to enhance access to these mechanisms; however, the complexity of many legal disputes often makes it wise to seek professional guidance.
A particularly relevant aspect is the effect that the request for these mechanisms has on the statute of limitations and expiration periods. The law establishes that such a request interrupts the statute of limitations or suspends the expiration of actions from the date of communication to the other party, thus avoiding the attempt of an amicable solution that may prejudice the rights of the party that promotes it.
In terms of form, the preferred method is face-to-face, although the use of telematic means is permitted by agreement of the parties or in the case of claims for amounts of less than 600 euros. This flexibility is particularly appropriate in a context of increasing digitalization of legal relations.
Specific Modalities: Diversity of mechanisms for diversity of conflicts
Among the different modalities recognized by the law, it is worthwhile to focus on some that present particularly novel or relevant characteristics.
Private conciliation involves the intervention of a person with technical or legal expertise related to the dispute’s subject matter. The law requires this person to be registered in a recognized professional association or in a register of mediators and to act impartially and confidentially. This mechanism takes advantage of the specialized knowledge of certain professionals to facilitate agreement in technically complex matters.
The confidential binding offer is a particularly interesting mechanism for certain types of disputes. One of the parties makes an offer that is binding on it in the event of acceptance by the other party. The law requires that the identity of the offeror, the actual receipt by the other party, and the detailed content of the offer be recorded. This instrument can be particularly useful in financial claims, where the main obstacle to settlement is often the amount.
The independent expert opinion consists of commissioning an opinion from an expert in the subject matter of the dispute. Unlike other mechanisms, this opinion is not binding, but may serve as a basis for agreement if the parties accept it, or at least to clarify the technical aspects of the dispute. Following the issuance of the opinion, the parties may accept it as an agreement, propose improvements or reject it, in which case the procedural requirement is deemed to be fulfilled.
Finally, the collaborative law process represents perhaps the most innovative aspect of the new regulation. It is a structured negotiation in which the parties, assisted by their respective lawyers, work together to reach a satisfactory solution, being able to integrate other professionals (psychologists, economists, etc.) when the complexity of the case requires it. At the end, minutes are drawn up with the participants, the sessions held and the agreements reached.
The challenge of implementation: From theory to practice
The real effectiveness of this new system will depend largely on how it is implemented in practice. It is not enough to make it compulsory to attempt out-of-court settlement; this attempt must be genuine and not become a mere formality.
In this regard, the law requires that the negotiation attempt be “real and credible; it cannot be fictitious.” To this end, it establishes documentation requirements that vary depending on whether or not a neutral third party is involved but always include a responsible statement that the parties have intervened in good faith in the process.
Likewise, the law regulates in detail when the negotiation process is understood to be concluded, whether it concludes with or without an agreement. In the event of an agreement, it must be formalized by identifying the parties and, if applicable, their lawyers and the neutral third party, indicating the place and date, as well as the obligations assumed by each party.
The possibility of converting the agreement into a public deed to convert it into an enforceable title reinforces its value and facilitates its compliance, avoiding the possibility of non-compliance with the agreement, forcing the initiation of a declaratory judicial proceeding.
A horizon to be explored: Perspectives and challenges
Organic Law 1/2025 represents a turning point in the conception of justice in Spain, bringing us closer to models already consolidated in other countries with a long tradition in alternative means of conflict resolution. The United States, Canada and the Nordic countries have been using these mechanisms for decades, with generally positive results in terms of user satisfaction and decongestion of the courts.
However, each legal system has its particularities, and the success of these mechanisms depends not only on their legal regulation but also on cultural, sociological, and organizational factors. Spanish society’s traditional litigiousness, the poor negotiating culture in certain areas, and the lack of specific training of many professionals are challenges that must be faced.
The commitment to obligatory nature as an initial impulse may be understandable in a context of paradigm change, but the real success of these mechanisms will come from their capacity to generate satisfactory solutions that will progressively make them the preferred option on their own merits, beyond their obligatory nature.
Conclusion: Between Hope and Caution
The new regulation of the appropriate means of non-jurisdictional dispute resolution is in line with a clear international trend towards the promotion of alternatives to judicial dispute resolution. This trend responds both to practical needs – decongesting the courts, reducing costs – and to a philosophy that values the protagonism of the parties in the management of their own conflicts.
In this sense, Spanish legislation joins a global movement that has shown positive results in many jurisdictions. However, only time will tell whether the legislative technique used, especially the commitment to mandatory nature as a procedural requirement, is the most appropriate to achieve the true purpose of encouraging agreement in order to avoid litigation.
The success of this reform will depend not only on its regulatory design, but also on factors such as adequate training of the professionals involved, public awareness of the advantages of these alternative routes, and the system’s capacity to evaluate and adapt according to the results obtained.
In short, we are facing an ambitious and necessary reform, which opens up a hopeful horizon but which will have to overcome important challenges in order to consolidate itself as a true paradigm shift in the administration of justice in Spain. The true criterion of success will not be the number of negotiation attempts made, but the quality of the agreements reached and the satisfaction of citizens with a more participatory, efficient justice system adapted to their real needs.
On April 8, 2025, during the Paris Arbitration Week, France’s Ministers of Justice Gérard Darmanin, announced a significant reform of French arbitration law. The aim of this reform is to clarify, modernise and consolidate the regulatory framework, the last substantial revision of which dates back to 2011.
It is set to culminate in the adoption of an Arbitration code by autumn 2026. This code is envisioned as a unifying legal instrument that will enhance the clarity, autonomy and international appeal of French arbitration law.
Structural proposals: building an autonomous and coherent legal framework
The creation of a standalone Arbitration Code
The proposal n°1 calls for the unification of all legislative and regulatory text governing arbitration within a dedicated code, structured into several parts and decoupled from the approximately 20 existing codes currently housing arbitration provisions.
This codification process is not purely technical, it serves pedagogical, symbolic and strategic purposes namely, enhancing the clarity, accessibility and international attractiveness of French arbitration law.
Common provisions for domestic and international arbitration
Proposal n°3 and 4 suggest reorganising French arbitration law around a set of common rules applicable to both domestic and international arbitration with limited derogation for the former. This represents a shift from the current dualistic system to a more unified and clearer and framework without eliminating the particularities of either.
As an instance, a preliminary article would define the international nature of arbitration, abandoning outdated reference to “commercial” character in favour of a more inclusive in realistic standard.
However, it does not mean a division summa divisio of those two types of arbitration because of the stable wish to preserve the dissociation between ordre public interne and ordre public international.
Codification of guiding principles
Proposal n°5 aims to enshrine as guiding principles (“principes directeurs”) those considered to embody the core values of French arbitration law such as the autonomy of the arbitration agreement, the competence-competence principle, the independence and impartiality of the arbitral tribunal, and the respect for the adversarial principle and party equality.
Others, though not considered fundamental, nonetheless shape the legal framework, such as good faith, loyalty, the principle of effectiveness (“effet utile”), confidentiality, proportionality, procedural loyalty and celerity, parties’ autonomy in choosing applicable law and procedure rules, amiable composition and access to justice (prevention of denial of justice), which form the broader ethical and procedural framework of arbitration in France.
Over the 19 principles elected to be enshrined, the report highlights and develop only few:
- Regarding the principle of independence and impartiality of the arbitral tribunal, it is given a particular prominence in the reform, both through its inclusion in the preliminary article of the Code and its designation as a guiding principle. However, the reform does not aim to consolidate the jurisprudence that has recognised exceptions such as the notoriety or the parties’ duty of curiosity (which exempt the arbitrator from disclosing allegedly well-known facts). Instead, it adopts a strict approach according to which, arbitrators must disclose any circumstances that, in the eyes of the parties, could affect their independence or impartiality, and cannot rely on the fact that such information might be publicly known. Parties are not expected to be in a state of constant investigation.
- Regarding the equality of the parties, this principle is reaffirmed at the stage of the constitution of the arbitral tribunal and throughout the arbitral proceedings. It ensures that the parties are treated equally and fairly.
- Regarding the confidentiality of proceedings, the reform extends this principle (already established in domestic arbitration) to international arbitration, while allowing for necessary exceptions, particularly in the context of investment arbitration. However, its application ultimately remains subject to party autonomy.
- Regarding the proportionality, article 14 serves both as an encouragement and support for the arbitral tribunal. It urges the tribunal to “adopt a procedure adapted to the complexity and stakes of the dispute”. In response to certain issues and recurring criticisms regarding the cost and duration of arbitration, this is a call for moderation on all fronts (time, volume of submissions, document production requests, length of hearings, number of witnesses to be heard, and the cost for the parties).
- Regarding the prohibition of denial of justice, this principle introduces a new role for the supporting judge (“juge d’appui”), who becomes the judge overseeing the prevention of denial of justice in a broader sense. His role extends both materially, in cases where it is impossible to appoint an arbitrator, and substantively, when the timely delivery of an award is at risk.
These principles are presented not merely as procedural standards but as fundamental values that shape and distinguish the French approach to arbitration.
Unification of judicial control and support
Proposals N°6 to 9 aim to unify and rationalise the judicial handling of arbitration disputes by several objectives such as exclusive jurisdiction of the judicial courts (“tribunal judiciaire”) over all challenges and enforcement of international arbitral awards, including those involving public entities, thereby ending the long-standing jurisdictional duality exposed in the Inserm case (2010), where the recognition and enforcement of international awards involving French public entities was scattered between judicial and administrative Courts.
Exclusive jurisdiction is awarded to the Paris Judicial Court to decide on all international arbitration matters. Another purpose is the specialisation of domestic courts in handling arbitration matters, and the elimination of residual competence formerly existing in favour of commercial courts presidents as supporting judges (“juges d’appui”).
This restructuring is intended to foster efficiency, consistency, and international credibility.
Substantive changes: a more flexible, protective and efficient arbitration framework
Promotion of flexibility
Several proposals aim to liberalize and modernize arbitration procedures like the elimination of the references to “commercial” matters in determining the international character of arbitration and the tribunal’s ability to apply to trade usages.
It will also serve this purpose by simplifying the formal requirements for arbitration agreements, removing the requirement that the clause be in writing and aligning domestic arbitration on international standards.
In this regard, the reform aims to abolish the written form requirement for arbitration agreements to align domestic and international arbitration rules. As arbitration agreements are typically written in practice, this formal requirement is now seen as outdated and inconsistent with general contract law.
However, the requirement of written form will remain solely a matter of evidence. At the stage of enforcement or annulment proceedings, the arbitration agreement (or a copy thereof) will need to be produced. In practice, this means that the arbitration agreement will still have to be recorded in a document, even if it does not meet the strict definition of a written instrument.
Party protection and procedural safeguards
The reform also seeks to bolster procedural guarantees such as the necessity for tribunal’s seated in France to be composed of an odd number of arbitrators.
According to the proposition of code, arbitrators should be natural persons, through these does not hinder recognition of awards rendered abroad by legal entities and the contractual nature of relationships between parties, arbitrators and arbitral institution will be formally recognised.
A mechanism for financial hardship (“impécuniosité”) is introduced to prevent abuses and ensure access to justice. Jurisprudence has confirmed that impecuniosity does not render the arbitration agreement manifestly void or inapplicable. While ensuring access to arbitration lies with the “arbitration actors” (i.e arbitrators, institutions, parties) the authority of the supporting judge (“juge d’appui”) to intervene in support of an impecunious party remains unsettled.
The reform proposal aims to expressly empower the juge d’appui to facilitate arbitral proceedings in such circumstances by ordering “any appropriate measures” (art. 33): this would serve to prevent a genuine denial of justice. Measures may include procedural actions (e.g., convening a case management conference) or substantive adaptations (e.g., amending the arbitration agreement to reduce costs, appointing a sole arbitrator, selecting a less expensive arbitral institution, or streamlining proceedings by limiting document production, written submissions, or hearings).
It also proposes a clarification of arbitration rules applicable in labour, family, and consumer fields:
- Regarding Family Law, the working group clarified that arbitration is allowed for patrimonial issues in family law but excluded for matters related to personal status. Divorce remains under state Courts’ jurisdiction. For patrimonial matters, additional safeguards are proposed, such as a written agreement, lawyers counter-signature, appeal options. Family judges will also have exclusive jurisdiction on recognition and enforcement of the awards.
- Regarding Labour Law and Consumer Law, the proposed measures aim to emphasize that while an arbitration agreement is permissible in these areas, it cannot be imposed by the “strong” party on the “weak” party. The latter will always have the option to exclude its application and revert to State Courts. Furthermore, in these areas, the principle of competence-competence is excluded, meaning that the consumer or the employee will not be obliged to establish an arbitral tribunal in order to invoke the jurisdiction of the State Court.
A protection of third-party rights is also specified through accessory intervention before the Court of Appeal and rule for third party opposition (tierce opposition), prohibited against arbitral awards but allowed against the Court decision related to them, such as decisions related to annulment proceedings or requests for exequatur.
Procedural efficiency
To promote procedural efficiency, the reform proposes the codification of the negative effect of the competence-competence principle, the authorization of consolidation of arbitral proceedings.
It entails the following modification and few others:
- Rewriting of the article 1448 of the Code of civil procedure and elimination of its last paragraph. This article currently states that “where a dispute falling within the scope of an arbitration agreement is brought before a State court, the court shall decline jurisdiction unless the arbitral tribunal has not yet been seized and the arbitration agreement is manifestly null and void or manifestly inapplicable”. Its second and third paragraph state that “the state court may not raise its lack of jurisdiction ex officio” and that “any provision to the contrary shall be deemed unwritten”.
Contrary stipulations would therefore be permitted, and parties could expressly provide in their arbitration agreement that the court is authorized to conduct a full review of the arbitration clause, or that the parties waive the principle of the arbitrator’s priority. However, such a deviation to be valid, it must be explicit and unequivocal.
- In order to consolidate procedures, unless the parties agree otherwise, in cases involving claims based on multiple contracts or related to multiple contracts, these claims should be made in a single arbitration proceeding under one or more arbitration agreements. However, two conditions are required: the compatibility of the arbitration agreements and the existence of a connection between the claims such that it is in the interest of efficiency and justice to have them heard and decided together by the arbitral tribunal.
- Under the current law, the arbitral tribunal can impose a penalty (“astreinte”), but there is not provision regarding its authority to liquidate it. The future code would allow the tribunal to do so “as long as it remains seized of the case”. However, it does not mean that the tribunal to retain jurisdiction for the purpose of liquidating the penalty after it has rendered its final award.
In addition to this, the project lays the groundwork for class arbitration, poses principles of procedural loyalty and concentration of arguments and expanding the powers of the supporting judge to address denial of justice, financial hardship, evidence production, enforcement and interim measures, and constitution of tribunals.
The efficiency objective also extends to recognition and enforcement of arbitral awards in clarifying recognition procedures and deadlines, removing the suspensive effect of appeals in domestic arbitration, allowing incidental annulment or refusing of enforcement to apply to related awards, and revisiting annulment grounds and enabling award correction or classification to avoid annulment or enforcement refusal.
Regulatory adjustments and technical reforms and promoting transparency
This reform includes adjustment proposals to ensure consistency across existing legislation and regulation.
Lastly, this reform addresses the promotion and dissemination of French arbitration law by increasing transparency in the appointment of arbitrators by supporting judges, including publication of the names and an annual public list. It is planned to reinforce judicial training in arbitration through enhanced ENM (“Ecole Nationale de la Magistrature”, which is the national school of judges) programs, internships with the ICC, and digital tools.
Promoting French arbitration law domestically and internationally through multilingual commentaries, outreach events, and strategic communication will be a way to extend the project.
In conclusion, the 2025 reform constitutes a major step toward modern, readable, and globally competitive French arbitration law. By consolidating legislation, strengthening procedural safeguards, and fostering accessibility and transparency, the proposed arbitration code is poised to elevate France as a leading venue for arbitration.
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.
PFAS are chemicals that have been used in industry for over 50 years. Between 4,000 and 5,000 varieties are used for various everyday consumer applications, and they are renowned for their non-stick, waterproofing, and heat-resistant properties. They have come under scrutiny in recent years, and are covered by European regulations, as they are in the USA, where the public authorities have imposed maximum use values, as well as reporting obligations. EU Regulation 2019/1021 (POP) restricts the production and use of certain categories of PFAS in specific industries or above certain values and their use with food products. France has gone further, regulating the levels of discharges into watercourses.
Scientific research suspects that PFAS cause illnesses such as cancer and reproductive disorders. Given the extent of contamination not only in everyday products but also in the environment, particularly waterways, the issue is likely to pose major public health problems in the years to come. This concern is more pressing given that PFASs are considered ‘eternal pollutants’, as there is currently no way of eliminating them from the environment.
The impact on companies’ and insurers’ liability is already significant. In the USA, more than 6,000 lawsuits have been filed since 2005. Three groups have already paid more than USD 1.2 billion in settlements due to contamination, and another group has paid more than USD 10 billion to end a class action.
In France, the Metropole of Lyon has brought a summary expert appraisal action against two chemical companies before considering bringing a liability action. In addition, several criminal complaints have been lodged for endangering the lives of others and damaging the environment.
Under French law, companies and their insurers could be liable on various legal grounds. In addition to ordinary civil liability law – based on article 1240 of the Civil Code – the special system of liability for defective products could also serve as a basis for a liability action (articles 1245 et seq. of the Civil Code), with French law defining a defect as any product that does not offer the safety that can legitimately be expected.
Although it is currently difficult to identify a causal link with an identified disease, asbestos-related case law has shown in the past that victims can take action if they can demonstrate that they suffered anxiety-related harm as a result of their exposure to the product, even if they are not positively suffering from a disease at the time of their claim.
In addition, the reporting obligations imposed by the public authorities will undoubtedly facilitate the filing of liability actions by facilitating the identification of the emitters and users of these pollutants.
Insurers are directly affected by this phenomenon, which for them constitutes an “emerging” risk (“silent cover”) because, for the most part, this risk was not identified when the policy was taken out, which exposes them directly and is all the more problematic because insurance premiums have not been able to take such a risk into account.
Civil liability or professional indemnity insurance policies, especially if they are drafted with “all risks except” clauses (“tous risques sauf” in French legal vocabulary, i.e. covering all liability risks vis-à-vis third parties except those strictly listed), as well as those including clauses relating to environmental risks, are particularly targeted.
Lloyd’s has already published model exclusion clauses for the attention of insurers, although such clauses can obviously only cover future insurance contracts or endorsements:
https://www.lmalloyds.com/LMA_Bulletins/LMA23-039-SD.aspx
The clauses contained in insurance policies must be drafted with particular care, considering each country’s specific features. In France, for example, to be enforceable against the insured, clauses must be “formal and limited”, which means that the exclusion must be both clearly expressed and that it must be possible to determine its content perfectly.
For example, the Court of Cassation recently ruled that the use of the terms “such as” or “in particular” (“tells que” “en particulier”) in an exclusion clause led to confusion in the interpretation of the exclusion clause, rendering it invalid (Civ. 2e, 26 Nov. 2020, no. 19-16.435). There was also a debate on the validity of an exclusion clause relating to bodily injury caused by asbestos, a risk which at the time had not been identified by insurers, who subsequently excluded it from most policies (Cass. 2e civ., 21 Sept. 2023, nos. 21-19801 and 21-19776). Similarly, policies should clearly indicate whether cover is provided based on a harmful event or based on a claim (i.e “base dommage” or “base reclamation”, which indicates if the risk is covered, depending on if the damage happened during the policy was valid, or if it depends on the moment when the risk was notified by the insured during such period).
One thing is sure: the risks associated with PFAS and claims are only just beginning to emerge in Europe, where the conditions for group actions have recently been extended with EU Directive 2020/1828, which came into force on 25 June 2023 and is currently the subject of a draft law under discussion in the French Parliament with a view to its transposition.
Dealing with unpaid invoices can be challenging for any business. In Belgium, where judicial processes can seem daunting, understanding how to manage debt collection effectively is crucial. This article offers practical guidance derived from a comprehensive legal guide to help your company navigate Belgium’s judicial debt recovery landscape.
Understanding Your Options
Assess the Situation: Before taking legal action, evaluating the amount owed and the debtor’s financial status is essential. This assessment will guide you in choosing the appropriate legal avenue, as Belgium offers different courts and procedures based on the dispute’s value. For instance, for claims up to € 5,000, the local court or ‘justice de paix’, which is a court of first instance for minor civil cases, is typically used due to its cost-effectiveness and efficiency.
Send a Notice of Default: Under Belgian law, a notice of default is mandatory before initiating legal proceedings. This step adheres to legal requirements and gives the debtor one last chance to settle their dues without further legal complications.
Efficient Legal Procedures
Use Simplified Procedures for Small Amounts: A simplified legal procedure can be utilized for undisputed money debts up to €1,860, which expedites the payment request process significantly. This approach can be particularly advantageous for recovering smaller debts quickly.
Consider Direct Bailiff Intervention: For undisputed amounts, irrespective of their size, between companies, creditors can authorize a bailiff to recover the debt directly without a court judgment. This procedure reduces legal fees and speeds up the debt collection process.
Leveraging Legal and Financial Advice
Consult with a Belgian Attorney: Navigating the Belgian legal system can be complex. Consulting with a local attorney can provide insights into the most effective procedures tailored to your case. This is especially true for international debt collection, where regulations and guidelines vary significantly.
Prepare Necessary Documentation: Ensure you have all necessary documents, such as contracts, invoices, and payment records, organized. These documents are essential to support your claim, whether you are dealing with local or international debt recovery.
After Initiating Debt Recovery
Use Interim Measures: If immediate action is needed, interim measures like seizing bank accounts or assets may be applicable. These measures, which are temporary and can be requested even before legal proceedings, can ensure that the debtor’s assets are secured while the legal process unfolds.
Conclusion
Recovering debts through judicial means in Belgium requires understanding the legal landscape and an appropriate strategy based on the debt’s nature and amount. While this article provides practical guidance, it is important to note that each case is unique, and professional legal advice is recommended for complex debt recovery cases. Businesses can enhance their chances of successful debt recovery while maintaining financial stability by utilizing simplified procedures for smaller or undisputed debts and consulting with legal experts. This proactive approach ensures that your business can continue to thrive even in the face of financial adversity.
What do the mythical Vega Sicilia wines, El Cid Campeador and the abuse of rights have in common? If you read on, you will find out.
The Vega Sicilia Único was for many years considered the best, the most prestigious and the most expensive Spanish wine.
The abuse of rights is a legal institute that allows the defense of situations in which the opponent acts with (apparent and formal) subjection to the law, but making a spurious use of the law with the intention of harming the injured party.
Last October, the Supreme Court handed down a judgment declaring certain agreements adopted by Bodegas Vega Sicilia S.A., producer of Vega Sicilia Único wine, to be null and void based on the principle of abuse of rights.
The judgment in question is doubly interesting.
Firstly, because it highlights the endemic evil of Spanish justice: it declares the nullity of resolutions adopted at a meeting held in March 2013, which were the subject of a lawsuit in February 2014, with a first instance ruling that same year, appealed to the Provincial Court of Valladolid who issued its judgement on 2019 and four years later the Supreme Court has put an end to the lawsuit: nine years after the shareholders meeting whose resolutions were the subject of the challenge.
As the Constitutional Court very recently reiterated in its ruling dated last October, “judicial slowness has no place in the Magna Carta”. But, although it has no place, or should not have a place, our courts continue to insist that it does and, as an example, this case that we are commenting on is, unfortunately, no exception.
Beyond the barbarity of a litigant having to wait for nine years to find a final solution to his claim, the judgment we are commenting on is of interest for other reasons.
The plaintiffs sought the nullity of certain resolutions adopted at a shareholders’ meeting, basing their claim on the fact that these resolutions constituted an abuse of rights since, through them, the shareholders of Bodegas Vega Sicilia S.A. sought to take control of Bodegas Vega Sicilia away from the company of which the plaintiffs were in turn shareholders.
The legislation in force at the time the meeting was held (prior to the 2014 reform) established that “resolutions that are contrary to the law, oppose the articles of association or harm the corporate interest to the benefit of one or more shareholders or third parties” could be challenged, adding that those contrary to the law would be null and void and the remaining resolutions could be annulled.
Following the 2014 reform, article 204 considers that “corporate resolutions that are contrary to the law, are contrary to the articles of association or the regulations of the company meeting or harm the corporate interest to the benefit of one or more shareholders or third parties” can be challenged and no longer distinguishes between null and voidable resolutions; although it partially recovers the concept of radical nullity in the case of resolutions contrary to public order by establishing that in such cases the action does not have a statute of limitations or lapse.
But both with the regulations prior to the reform and with those currently in force, the controversy resolved by the ruling we are commenting on is the same: when the legislator requires the agreement to be contrary to “law” in order to be able to challenge it, does he mean that it contravenes a precept of the Capital Companies Act (LSC), or can it be considered a requirement for challengeability if it contravenes any other positive precept of any other legal text? And finally, if the resolution in question is classified as constituting an “abuse of rights”, can such a situation be considered as “contrary to law” for the purposes of the application of article 204 LSC?
The Chamber reminds us of the requirements for the concurrence of abuse of rights in corporate matters:
- formal or outwardly correct use of a right
- causing damage to an interest not protected by a specific legal prerogative, and
- the immorality or antisociality (sic) of that conduct manifested subjectively (intention to damage or absence of legitimate interest) or objectively (abnormal exercise of the right contrary to the economic and social purposes of the same).
And it then refers to the numerous occasions on which its case law has reiterated that, although the regulation on challenging corporate resolutions does not expressly mention abuse of rights, this is no obstacle to annulling resolutions in such cases, since according to article 7 of the Civil Code (which prohibits abuse of rights), they must be deemed as contrary to the law.
The interest and peculiarity of this case lies in the fact that the contested resolutions were neither adopted in the interests of the company nor did they cause any harm to it, since the alleged harm was caused to a third party formally outside the company.
And on these premises, the Supreme Court reiterates and insists that the expression “contrary to the law” in article 204 LSC must be understood as “contrary to the legal system”, which includes those agreements adopted in fraud of the law, in bad faith or with abuse of rights, all of which are included and regulated in the Preliminary Title of the Civil Code. For these reasons, the judgment of the Provincial Court upholds the claim and declares the nullity of the contested agreements.
And what has El Cid got to do with all this? Is it a typo? No, not at all. Legend has it (invented, it seems, by a monk of the monastery of San Pedro de Cardeña to attract visitors) that Rodrigo Diaz de Vivar won a battle on the walls of Valencia against the Almoravids, after his death, saddling his corpse on his legendary horse Babieca.
It turns out that his almost fellow countryman, David Alvarez, buyer of the winery in the 1980s, the latter from León, the former from Burgos, but both old Castilians, also won his last battle after his death; David Alvarez was, together with one of his daughters, a plaintiff against the agreements of Bodegas Vega Sicilia and died in 2015; seven years later the Supreme Court has given him the right against the Almogavars, in this case, his own children.
And two lessons: first, justice is not justice if it is slow, a phrase apocryphally attributed to Seneca; it was not in this case for David Alvarez. Secondly, the abuse of rights is not only an “in extremis” recourse when one does not find frank legal support for one’s claims; on the contrary, it is, on many occasions, the solution.
Every employer should manage the risk of employee lawsuits. Many companies believe that they treat their workers well and that their employees are happy. As a result, they believe that they are not at risk of a lawsuit. But in my work, I frequently see employment relationships sour and employees surprise management by retaining a lawyer.
Employers should proactively manage this risk instead of hoping lawsuits never come. Defending a business against litigation by a current or former employee takes a lot of time and can be very expensive. It can also be incredibly frustrating to see an employee the company once trusted making false and damaging allegations. But employers can take steps before a dispute arises to reduce the impact of a lawsuit. I discuss eight such steps below.
First, employers should consider purchasing insurance that may cover employee claims. In the United States, this insurance is called Employment Practices Liability (“EPLI”) Insurance. These kinds of insurance policies may pay for a lawyer to defend the company in the event of a lawsuit. They may also pay the employee the amount he or she demands or that a court awards. Although insurance costs money, many companies prefer to pay regular and foreseeable premiums than sudden, steep, and unpredictable legal fees and employee payouts.
Second, employers should implement and enforce sexual harassment policies. Policies like these discourage the type of behavior that can subject a company to liability. But in many jurisdictions, they may also provide a defense to a company in the event an employee sues the company for allowing the harassment to take place.
Third, employers should seriously examine disparities in pay and job roles. If the highest paid employees at a company are largely male and the lowest paid employees are largely female, then an employee may claim that the employer engages in sex discrimination. Similarly, if the executives of a company are largely white but its blue-collar workers are largely people of color, an employee may allege that the company engages in racial discrimination. Rather than litigate these issues, a company should investigate whether those disparities exist in its own workplace and address them if they do.
Fourth, employers should consider whether they want employment disputes to go to arbitration instead of to court. Employers can largely determine this by including an arbitration clause in the offer letters they send to employees upon hiring them. Arbitration has some advantages: it tends to move quicker, it is private, it has the reputation for being a friendly forum for employers, and it tends to cost less. But it also has some downsides: it does not permit appeals on the merits of the dispute and it can cost more than litigation depending on the kind of case.
Fifth, any time an employee discloses that he or she has a health issue, the company should immediately consider how to accommodate that issue. Many employers may disregard the disclosure of a health issue if it does not seem important to the employee’s job. But if the employee later believes that the employer penalized him or her because of the health issue, the employee may claim discrimination. Before that happens, an employer should work with an employee to make sure the health issue does not impede job performance.
Sixth, employers should ensure they make consistent decisions. If an employer allows one employee to work from home, other employees may want the same treatment. And if an employer lays one employee off, she may wonder why another employee did not meet the same fate. Employers may reduce the risk of a lawsuit by setting firm policies and abiding by them.
Seventh, employers should frequently consult a lawyer they trust when employment issues arise. Spending a few hundred dollars to speaking to a lawyer for an hour before firing an employee or before responding to an employee complaint can help an employer avoid a lawsuit that may cost tens or even hundreds of thousands of dollars.
And finally, employers should consider settling disputes with employees, even if they are meritless. No company wants an employee to take advantage of them. But lawsuits are often more expensive and a hassle than the cost of a settlement. Spending a lot of money on defense, even if successful, may be more expensive than just compromising and paying the employee a fraction of what they demand.
写信给 Ignacio
France – PFAS risks: impacts on professional liability for insurance sectors in France and Europe
2024年6月6日
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法国
- 诉讼
Introduction: A Paradigm Shift in Conflict Resolution
The approval of Organic Law 1/2025, of January 2, on measures for the efficiency of the Public Justice Service, marks a turning point in the Spanish judicial system. This legislation is not limited to introducing procedural changes, but reflects a profound transformation in the very concept of justice. The legislator has made a firm commitment to promoting alternatives to the judicial resolution of disputes, making prior negotiation a central element of the system.
The saturation of the courts, the costs associated with judicial proceedings, and the search for more satisfactory solutions for the parties have prompted this reform, which places the so-called “appropriate means of non-jurisdictional dispute resolution” as the cornerstone of a new justice model oriented towards dialogue and agreement.
The philosophy behind alternative means of dispute resolution
Beyond the decongestion of the courts, this reform responds to a philosophy that understands that not all conflicts necessarily require a judicial response. Alternative means of dispute resolution are based on the premise that many conflicts can find more satisfactory and lasting solutions, adapted to the needs and interests of the parties, when they actively participate in their construction.
Organic Law 1/2025 defines these means as “any type of negotiating activity, recognized in this or other laws, state or autonomous, to which the parties to a conflict resort in good faith with the aim of finding an extrajudicial solution to it, either by themselves or with the intervention of a neutral third party”. This broad and flexible definition is intended to cover various forms of negotiation whose common denominator is the protagonism of the parties in the resolution of their own disputes.
A range of possibilities: Diversity of mechanisms for diversity of conflicts
One of the most noteworthy aspects of the new regulation is that it does not rely on a single model of alternative dispute resolution but recognizes the diversity of situations and the need to offer different tools adapted to each particular case.
Mediation, already consolidated in our legal system through Law 5/2012, maintains its relevance as the preferred method, but other modalities such as conciliation in its various variants (notarial, registry, before a lawyer of the Administration of Justice or judicial), the opinion of independent experts, confidential binding offers, or the novel process of collaborative law are added to it.
This plurality of mechanisms reflects the complexity of contemporary legal relationships and the need to provide tailored responses to each type of conflict. Resolving a neighborhood dispute is not the same as resolving a complex business dispute, and the legislator has been aware that “one size fits all” would not be effective for the diversity of situations that may arise.
The controversial commitment to enforceability: The requirement of procedural validity
Undoubtedly, the most innovative -and probably the most controversial- aspect of the new regulation is the configuration of these means as a mandatory prerequisite for resorting to judicial proceedings in certain areas. This decision represents a qualitative leap with respect to the previous regulation, which mainly favored the voluntary nature of these mechanisms.
From the entry into force of Organic Law 1/2025, April 3, 2025, the claim in the civil jurisdictional order will not be admitted if it is not justified that the resolution of the conflict has been previously attempted by any of the recognized alternative ways. Not only that, but also the identity between the object of the previous negotiation and the object of the litigation to be initiated must be established.
This mandatory nature has been the subject of intense debate. Its advocates argue that it is necessary to promote cultural change in a traditionally litigious society, while its detractors warn of the risk of turning these mechanisms into mere formalities that distort their true purpose.
The truth is that the legislator has tried to find a balance, excluding from this obligation certain particularly sensitive matters or those which, by their nature, require an immediate judicial response. Thus, issues such as the judicial protection of fundamental rights, measures for the protection of minors, or the request for precautionary measures, among others, are exempted from the requirement of prior negotiation.
The guiding principles: Autonomy and confidentiality as pillars of the system
The effectiveness of alternative dispute resolution rests mainly on two fundamental principles: the autonomy of the parties and the confidentiality of the process.
The principle of private autonomy recognizes that the parties themselves best know their interests and needs and are, therefore, in the best position to find solutions adapted to their situation. The law establishes that the parties are free to settle, if they respect the law, good faith, and public policy. This freedom is essential for the solutions reached to be truly satisfactory and lasting.
The principle of confidentiality is crucial to creating a climate of trust that allows the parties to express themselves freely during the negotiation process. The law establishes that the information and documentation disclosed during the negotiation must be kept confidential, with very specific exceptions, such as express waivers by the parties, court orders in criminal matters, or reasons of public order.
This duty of confidentiality extends to all participants in the process: the parties, their lawyers, and, where appropriate, the neutral third party involved. The aim is to ensure that what is said or proposed during the negotiation cannot be used later in a possible judicial process, thus promoting a sincere and constructive dialogue.
The Negotiation Process: Relevant Procedural Aspects
The regulation of the procedural aspects of the different means of dispute resolution also reflects the legislator’s desire to combine the necessary flexibility with the minimum guarantees required.
As regards standing, the initiative to resort to these mechanisms may come from either party, from both by mutual agreement, or even from a judicial referral. This recognizes both the parties’ autonomy and the possibility that the judicial system itself may encourage the use of these alternative channels.
Regarding the involvement of professionals, the law generally prefers a non-mandatory approach to legal assistance, except in specific situations like the preparation of binding offers (with exceptions for smaller amounts). This flexibility aims to enhance access to these mechanisms; however, the complexity of many legal disputes often makes it wise to seek professional guidance.
A particularly relevant aspect is the effect that the request for these mechanisms has on the statute of limitations and expiration periods. The law establishes that such a request interrupts the statute of limitations or suspends the expiration of actions from the date of communication to the other party, thus avoiding the attempt of an amicable solution that may prejudice the rights of the party that promotes it.
In terms of form, the preferred method is face-to-face, although the use of telematic means is permitted by agreement of the parties or in the case of claims for amounts of less than 600 euros. This flexibility is particularly appropriate in a context of increasing digitalization of legal relations.
Specific Modalities: Diversity of mechanisms for diversity of conflicts
Among the different modalities recognized by the law, it is worthwhile to focus on some that present particularly novel or relevant characteristics.
Private conciliation involves the intervention of a person with technical or legal expertise related to the dispute’s subject matter. The law requires this person to be registered in a recognized professional association or in a register of mediators and to act impartially and confidentially. This mechanism takes advantage of the specialized knowledge of certain professionals to facilitate agreement in technically complex matters.
The confidential binding offer is a particularly interesting mechanism for certain types of disputes. One of the parties makes an offer that is binding on it in the event of acceptance by the other party. The law requires that the identity of the offeror, the actual receipt by the other party, and the detailed content of the offer be recorded. This instrument can be particularly useful in financial claims, where the main obstacle to settlement is often the amount.
The independent expert opinion consists of commissioning an opinion from an expert in the subject matter of the dispute. Unlike other mechanisms, this opinion is not binding, but may serve as a basis for agreement if the parties accept it, or at least to clarify the technical aspects of the dispute. Following the issuance of the opinion, the parties may accept it as an agreement, propose improvements or reject it, in which case the procedural requirement is deemed to be fulfilled.
Finally, the collaborative law process represents perhaps the most innovative aspect of the new regulation. It is a structured negotiation in which the parties, assisted by their respective lawyers, work together to reach a satisfactory solution, being able to integrate other professionals (psychologists, economists, etc.) when the complexity of the case requires it. At the end, minutes are drawn up with the participants, the sessions held and the agreements reached.
The challenge of implementation: From theory to practice
The real effectiveness of this new system will depend largely on how it is implemented in practice. It is not enough to make it compulsory to attempt out-of-court settlement; this attempt must be genuine and not become a mere formality.
In this regard, the law requires that the negotiation attempt be “real and credible; it cannot be fictitious.” To this end, it establishes documentation requirements that vary depending on whether or not a neutral third party is involved but always include a responsible statement that the parties have intervened in good faith in the process.
Likewise, the law regulates in detail when the negotiation process is understood to be concluded, whether it concludes with or without an agreement. In the event of an agreement, it must be formalized by identifying the parties and, if applicable, their lawyers and the neutral third party, indicating the place and date, as well as the obligations assumed by each party.
The possibility of converting the agreement into a public deed to convert it into an enforceable title reinforces its value and facilitates its compliance, avoiding the possibility of non-compliance with the agreement, forcing the initiation of a declaratory judicial proceeding.
A horizon to be explored: Perspectives and challenges
Organic Law 1/2025 represents a turning point in the conception of justice in Spain, bringing us closer to models already consolidated in other countries with a long tradition in alternative means of conflict resolution. The United States, Canada and the Nordic countries have been using these mechanisms for decades, with generally positive results in terms of user satisfaction and decongestion of the courts.
However, each legal system has its particularities, and the success of these mechanisms depends not only on their legal regulation but also on cultural, sociological, and organizational factors. Spanish society’s traditional litigiousness, the poor negotiating culture in certain areas, and the lack of specific training of many professionals are challenges that must be faced.
The commitment to obligatory nature as an initial impulse may be understandable in a context of paradigm change, but the real success of these mechanisms will come from their capacity to generate satisfactory solutions that will progressively make them the preferred option on their own merits, beyond their obligatory nature.
Conclusion: Between Hope and Caution
The new regulation of the appropriate means of non-jurisdictional dispute resolution is in line with a clear international trend towards the promotion of alternatives to judicial dispute resolution. This trend responds both to practical needs – decongesting the courts, reducing costs – and to a philosophy that values the protagonism of the parties in the management of their own conflicts.
In this sense, Spanish legislation joins a global movement that has shown positive results in many jurisdictions. However, only time will tell whether the legislative technique used, especially the commitment to mandatory nature as a procedural requirement, is the most appropriate to achieve the true purpose of encouraging agreement in order to avoid litigation.
The success of this reform will depend not only on its regulatory design, but also on factors such as adequate training of the professionals involved, public awareness of the advantages of these alternative routes, and the system’s capacity to evaluate and adapt according to the results obtained.
In short, we are facing an ambitious and necessary reform, which opens up a hopeful horizon but which will have to overcome important challenges in order to consolidate itself as a true paradigm shift in the administration of justice in Spain. The true criterion of success will not be the number of negotiation attempts made, but the quality of the agreements reached and the satisfaction of citizens with a more participatory, efficient justice system adapted to their real needs.
On April 8, 2025, during the Paris Arbitration Week, France’s Ministers of Justice Gérard Darmanin, announced a significant reform of French arbitration law. The aim of this reform is to clarify, modernise and consolidate the regulatory framework, the last substantial revision of which dates back to 2011.
It is set to culminate in the adoption of an Arbitration code by autumn 2026. This code is envisioned as a unifying legal instrument that will enhance the clarity, autonomy and international appeal of French arbitration law.
Structural proposals: building an autonomous and coherent legal framework
The creation of a standalone Arbitration Code
The proposal n°1 calls for the unification of all legislative and regulatory text governing arbitration within a dedicated code, structured into several parts and decoupled from the approximately 20 existing codes currently housing arbitration provisions.
This codification process is not purely technical, it serves pedagogical, symbolic and strategic purposes namely, enhancing the clarity, accessibility and international attractiveness of French arbitration law.
Common provisions for domestic and international arbitration
Proposal n°3 and 4 suggest reorganising French arbitration law around a set of common rules applicable to both domestic and international arbitration with limited derogation for the former. This represents a shift from the current dualistic system to a more unified and clearer and framework without eliminating the particularities of either.
As an instance, a preliminary article would define the international nature of arbitration, abandoning outdated reference to “commercial” character in favour of a more inclusive in realistic standard.
However, it does not mean a division summa divisio of those two types of arbitration because of the stable wish to preserve the dissociation between ordre public interne and ordre public international.
Codification of guiding principles
Proposal n°5 aims to enshrine as guiding principles (“principes directeurs”) those considered to embody the core values of French arbitration law such as the autonomy of the arbitration agreement, the competence-competence principle, the independence and impartiality of the arbitral tribunal, and the respect for the adversarial principle and party equality.
Others, though not considered fundamental, nonetheless shape the legal framework, such as good faith, loyalty, the principle of effectiveness (“effet utile”), confidentiality, proportionality, procedural loyalty and celerity, parties’ autonomy in choosing applicable law and procedure rules, amiable composition and access to justice (prevention of denial of justice), which form the broader ethical and procedural framework of arbitration in France.
Over the 19 principles elected to be enshrined, the report highlights and develop only few:
- Regarding the principle of independence and impartiality of the arbitral tribunal, it is given a particular prominence in the reform, both through its inclusion in the preliminary article of the Code and its designation as a guiding principle. However, the reform does not aim to consolidate the jurisprudence that has recognised exceptions such as the notoriety or the parties’ duty of curiosity (which exempt the arbitrator from disclosing allegedly well-known facts). Instead, it adopts a strict approach according to which, arbitrators must disclose any circumstances that, in the eyes of the parties, could affect their independence or impartiality, and cannot rely on the fact that such information might be publicly known. Parties are not expected to be in a state of constant investigation.
- Regarding the equality of the parties, this principle is reaffirmed at the stage of the constitution of the arbitral tribunal and throughout the arbitral proceedings. It ensures that the parties are treated equally and fairly.
- Regarding the confidentiality of proceedings, the reform extends this principle (already established in domestic arbitration) to international arbitration, while allowing for necessary exceptions, particularly in the context of investment arbitration. However, its application ultimately remains subject to party autonomy.
- Regarding the proportionality, article 14 serves both as an encouragement and support for the arbitral tribunal. It urges the tribunal to “adopt a procedure adapted to the complexity and stakes of the dispute”. In response to certain issues and recurring criticisms regarding the cost and duration of arbitration, this is a call for moderation on all fronts (time, volume of submissions, document production requests, length of hearings, number of witnesses to be heard, and the cost for the parties).
- Regarding the prohibition of denial of justice, this principle introduces a new role for the supporting judge (“juge d’appui”), who becomes the judge overseeing the prevention of denial of justice in a broader sense. His role extends both materially, in cases where it is impossible to appoint an arbitrator, and substantively, when the timely delivery of an award is at risk.
These principles are presented not merely as procedural standards but as fundamental values that shape and distinguish the French approach to arbitration.
Unification of judicial control and support
Proposals N°6 to 9 aim to unify and rationalise the judicial handling of arbitration disputes by several objectives such as exclusive jurisdiction of the judicial courts (“tribunal judiciaire”) over all challenges and enforcement of international arbitral awards, including those involving public entities, thereby ending the long-standing jurisdictional duality exposed in the Inserm case (2010), where the recognition and enforcement of international awards involving French public entities was scattered between judicial and administrative Courts.
Exclusive jurisdiction is awarded to the Paris Judicial Court to decide on all international arbitration matters. Another purpose is the specialisation of domestic courts in handling arbitration matters, and the elimination of residual competence formerly existing in favour of commercial courts presidents as supporting judges (“juges d’appui”).
This restructuring is intended to foster efficiency, consistency, and international credibility.
Substantive changes: a more flexible, protective and efficient arbitration framework
Promotion of flexibility
Several proposals aim to liberalize and modernize arbitration procedures like the elimination of the references to “commercial” matters in determining the international character of arbitration and the tribunal’s ability to apply to trade usages.
It will also serve this purpose by simplifying the formal requirements for arbitration agreements, removing the requirement that the clause be in writing and aligning domestic arbitration on international standards.
In this regard, the reform aims to abolish the written form requirement for arbitration agreements to align domestic and international arbitration rules. As arbitration agreements are typically written in practice, this formal requirement is now seen as outdated and inconsistent with general contract law.
However, the requirement of written form will remain solely a matter of evidence. At the stage of enforcement or annulment proceedings, the arbitration agreement (or a copy thereof) will need to be produced. In practice, this means that the arbitration agreement will still have to be recorded in a document, even if it does not meet the strict definition of a written instrument.
Party protection and procedural safeguards
The reform also seeks to bolster procedural guarantees such as the necessity for tribunal’s seated in France to be composed of an odd number of arbitrators.
According to the proposition of code, arbitrators should be natural persons, through these does not hinder recognition of awards rendered abroad by legal entities and the contractual nature of relationships between parties, arbitrators and arbitral institution will be formally recognised.
A mechanism for financial hardship (“impécuniosité”) is introduced to prevent abuses and ensure access to justice. Jurisprudence has confirmed that impecuniosity does not render the arbitration agreement manifestly void or inapplicable. While ensuring access to arbitration lies with the “arbitration actors” (i.e arbitrators, institutions, parties) the authority of the supporting judge (“juge d’appui”) to intervene in support of an impecunious party remains unsettled.
The reform proposal aims to expressly empower the juge d’appui to facilitate arbitral proceedings in such circumstances by ordering “any appropriate measures” (art. 33): this would serve to prevent a genuine denial of justice. Measures may include procedural actions (e.g., convening a case management conference) or substantive adaptations (e.g., amending the arbitration agreement to reduce costs, appointing a sole arbitrator, selecting a less expensive arbitral institution, or streamlining proceedings by limiting document production, written submissions, or hearings).
It also proposes a clarification of arbitration rules applicable in labour, family, and consumer fields:
- Regarding Family Law, the working group clarified that arbitration is allowed for patrimonial issues in family law but excluded for matters related to personal status. Divorce remains under state Courts’ jurisdiction. For patrimonial matters, additional safeguards are proposed, such as a written agreement, lawyers counter-signature, appeal options. Family judges will also have exclusive jurisdiction on recognition and enforcement of the awards.
- Regarding Labour Law and Consumer Law, the proposed measures aim to emphasize that while an arbitration agreement is permissible in these areas, it cannot be imposed by the “strong” party on the “weak” party. The latter will always have the option to exclude its application and revert to State Courts. Furthermore, in these areas, the principle of competence-competence is excluded, meaning that the consumer or the employee will not be obliged to establish an arbitral tribunal in order to invoke the jurisdiction of the State Court.
A protection of third-party rights is also specified through accessory intervention before the Court of Appeal and rule for third party opposition (tierce opposition), prohibited against arbitral awards but allowed against the Court decision related to them, such as decisions related to annulment proceedings or requests for exequatur.
Procedural efficiency
To promote procedural efficiency, the reform proposes the codification of the negative effect of the competence-competence principle, the authorization of consolidation of arbitral proceedings.
It entails the following modification and few others:
- Rewriting of the article 1448 of the Code of civil procedure and elimination of its last paragraph. This article currently states that “where a dispute falling within the scope of an arbitration agreement is brought before a State court, the court shall decline jurisdiction unless the arbitral tribunal has not yet been seized and the arbitration agreement is manifestly null and void or manifestly inapplicable”. Its second and third paragraph state that “the state court may not raise its lack of jurisdiction ex officio” and that “any provision to the contrary shall be deemed unwritten”.
Contrary stipulations would therefore be permitted, and parties could expressly provide in their arbitration agreement that the court is authorized to conduct a full review of the arbitration clause, or that the parties waive the principle of the arbitrator’s priority. However, such a deviation to be valid, it must be explicit and unequivocal.
- In order to consolidate procedures, unless the parties agree otherwise, in cases involving claims based on multiple contracts or related to multiple contracts, these claims should be made in a single arbitration proceeding under one or more arbitration agreements. However, two conditions are required: the compatibility of the arbitration agreements and the existence of a connection between the claims such that it is in the interest of efficiency and justice to have them heard and decided together by the arbitral tribunal.
- Under the current law, the arbitral tribunal can impose a penalty (“astreinte”), but there is not provision regarding its authority to liquidate it. The future code would allow the tribunal to do so “as long as it remains seized of the case”. However, it does not mean that the tribunal to retain jurisdiction for the purpose of liquidating the penalty after it has rendered its final award.
In addition to this, the project lays the groundwork for class arbitration, poses principles of procedural loyalty and concentration of arguments and expanding the powers of the supporting judge to address denial of justice, financial hardship, evidence production, enforcement and interim measures, and constitution of tribunals.
The efficiency objective also extends to recognition and enforcement of arbitral awards in clarifying recognition procedures and deadlines, removing the suspensive effect of appeals in domestic arbitration, allowing incidental annulment or refusing of enforcement to apply to related awards, and revisiting annulment grounds and enabling award correction or classification to avoid annulment or enforcement refusal.
Regulatory adjustments and technical reforms and promoting transparency
This reform includes adjustment proposals to ensure consistency across existing legislation and regulation.
Lastly, this reform addresses the promotion and dissemination of French arbitration law by increasing transparency in the appointment of arbitrators by supporting judges, including publication of the names and an annual public list. It is planned to reinforce judicial training in arbitration through enhanced ENM (“Ecole Nationale de la Magistrature”, which is the national school of judges) programs, internships with the ICC, and digital tools.
Promoting French arbitration law domestically and internationally through multilingual commentaries, outreach events, and strategic communication will be a way to extend the project.
In conclusion, the 2025 reform constitutes a major step toward modern, readable, and globally competitive French arbitration law. By consolidating legislation, strengthening procedural safeguards, and fostering accessibility and transparency, the proposed arbitration code is poised to elevate France as a leading venue for arbitration.
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.
PFAS are chemicals that have been used in industry for over 50 years. Between 4,000 and 5,000 varieties are used for various everyday consumer applications, and they are renowned for their non-stick, waterproofing, and heat-resistant properties. They have come under scrutiny in recent years, and are covered by European regulations, as they are in the USA, where the public authorities have imposed maximum use values, as well as reporting obligations. EU Regulation 2019/1021 (POP) restricts the production and use of certain categories of PFAS in specific industries or above certain values and their use with food products. France has gone further, regulating the levels of discharges into watercourses.
Scientific research suspects that PFAS cause illnesses such as cancer and reproductive disorders. Given the extent of contamination not only in everyday products but also in the environment, particularly waterways, the issue is likely to pose major public health problems in the years to come. This concern is more pressing given that PFASs are considered ‘eternal pollutants’, as there is currently no way of eliminating them from the environment.
The impact on companies’ and insurers’ liability is already significant. In the USA, more than 6,000 lawsuits have been filed since 2005. Three groups have already paid more than USD 1.2 billion in settlements due to contamination, and another group has paid more than USD 10 billion to end a class action.
In France, the Metropole of Lyon has brought a summary expert appraisal action against two chemical companies before considering bringing a liability action. In addition, several criminal complaints have been lodged for endangering the lives of others and damaging the environment.
Under French law, companies and their insurers could be liable on various legal grounds. In addition to ordinary civil liability law – based on article 1240 of the Civil Code – the special system of liability for defective products could also serve as a basis for a liability action (articles 1245 et seq. of the Civil Code), with French law defining a defect as any product that does not offer the safety that can legitimately be expected.
Although it is currently difficult to identify a causal link with an identified disease, asbestos-related case law has shown in the past that victims can take action if they can demonstrate that they suffered anxiety-related harm as a result of their exposure to the product, even if they are not positively suffering from a disease at the time of their claim.
In addition, the reporting obligations imposed by the public authorities will undoubtedly facilitate the filing of liability actions by facilitating the identification of the emitters and users of these pollutants.
Insurers are directly affected by this phenomenon, which for them constitutes an “emerging” risk (“silent cover”) because, for the most part, this risk was not identified when the policy was taken out, which exposes them directly and is all the more problematic because insurance premiums have not been able to take such a risk into account.
Civil liability or professional indemnity insurance policies, especially if they are drafted with “all risks except” clauses (“tous risques sauf” in French legal vocabulary, i.e. covering all liability risks vis-à-vis third parties except those strictly listed), as well as those including clauses relating to environmental risks, are particularly targeted.
Lloyd’s has already published model exclusion clauses for the attention of insurers, although such clauses can obviously only cover future insurance contracts or endorsements:
https://www.lmalloyds.com/LMA_Bulletins/LMA23-039-SD.aspx
The clauses contained in insurance policies must be drafted with particular care, considering each country’s specific features. In France, for example, to be enforceable against the insured, clauses must be “formal and limited”, which means that the exclusion must be both clearly expressed and that it must be possible to determine its content perfectly.
For example, the Court of Cassation recently ruled that the use of the terms “such as” or “in particular” (“tells que” “en particulier”) in an exclusion clause led to confusion in the interpretation of the exclusion clause, rendering it invalid (Civ. 2e, 26 Nov. 2020, no. 19-16.435). There was also a debate on the validity of an exclusion clause relating to bodily injury caused by asbestos, a risk which at the time had not been identified by insurers, who subsequently excluded it from most policies (Cass. 2e civ., 21 Sept. 2023, nos. 21-19801 and 21-19776). Similarly, policies should clearly indicate whether cover is provided based on a harmful event or based on a claim (i.e “base dommage” or “base reclamation”, which indicates if the risk is covered, depending on if the damage happened during the policy was valid, or if it depends on the moment when the risk was notified by the insured during such period).
One thing is sure: the risks associated with PFAS and claims are only just beginning to emerge in Europe, where the conditions for group actions have recently been extended with EU Directive 2020/1828, which came into force on 25 June 2023 and is currently the subject of a draft law under discussion in the French Parliament with a view to its transposition.
Dealing with unpaid invoices can be challenging for any business. In Belgium, where judicial processes can seem daunting, understanding how to manage debt collection effectively is crucial. This article offers practical guidance derived from a comprehensive legal guide to help your company navigate Belgium’s judicial debt recovery landscape.
Understanding Your Options
Assess the Situation: Before taking legal action, evaluating the amount owed and the debtor’s financial status is essential. This assessment will guide you in choosing the appropriate legal avenue, as Belgium offers different courts and procedures based on the dispute’s value. For instance, for claims up to € 5,000, the local court or ‘justice de paix’, which is a court of first instance for minor civil cases, is typically used due to its cost-effectiveness and efficiency.
Send a Notice of Default: Under Belgian law, a notice of default is mandatory before initiating legal proceedings. This step adheres to legal requirements and gives the debtor one last chance to settle their dues without further legal complications.
Efficient Legal Procedures
Use Simplified Procedures for Small Amounts: A simplified legal procedure can be utilized for undisputed money debts up to €1,860, which expedites the payment request process significantly. This approach can be particularly advantageous for recovering smaller debts quickly.
Consider Direct Bailiff Intervention: For undisputed amounts, irrespective of their size, between companies, creditors can authorize a bailiff to recover the debt directly without a court judgment. This procedure reduces legal fees and speeds up the debt collection process.
Leveraging Legal and Financial Advice
Consult with a Belgian Attorney: Navigating the Belgian legal system can be complex. Consulting with a local attorney can provide insights into the most effective procedures tailored to your case. This is especially true for international debt collection, where regulations and guidelines vary significantly.
Prepare Necessary Documentation: Ensure you have all necessary documents, such as contracts, invoices, and payment records, organized. These documents are essential to support your claim, whether you are dealing with local or international debt recovery.
After Initiating Debt Recovery
Use Interim Measures: If immediate action is needed, interim measures like seizing bank accounts or assets may be applicable. These measures, which are temporary and can be requested even before legal proceedings, can ensure that the debtor’s assets are secured while the legal process unfolds.
Conclusion
Recovering debts through judicial means in Belgium requires understanding the legal landscape and an appropriate strategy based on the debt’s nature and amount. While this article provides practical guidance, it is important to note that each case is unique, and professional legal advice is recommended for complex debt recovery cases. Businesses can enhance their chances of successful debt recovery while maintaining financial stability by utilizing simplified procedures for smaller or undisputed debts and consulting with legal experts. This proactive approach ensures that your business can continue to thrive even in the face of financial adversity.
What do the mythical Vega Sicilia wines, El Cid Campeador and the abuse of rights have in common? If you read on, you will find out.
The Vega Sicilia Único was for many years considered the best, the most prestigious and the most expensive Spanish wine.
The abuse of rights is a legal institute that allows the defense of situations in which the opponent acts with (apparent and formal) subjection to the law, but making a spurious use of the law with the intention of harming the injured party.
Last October, the Supreme Court handed down a judgment declaring certain agreements adopted by Bodegas Vega Sicilia S.A., producer of Vega Sicilia Único wine, to be null and void based on the principle of abuse of rights.
The judgment in question is doubly interesting.
Firstly, because it highlights the endemic evil of Spanish justice: it declares the nullity of resolutions adopted at a meeting held in March 2013, which were the subject of a lawsuit in February 2014, with a first instance ruling that same year, appealed to the Provincial Court of Valladolid who issued its judgement on 2019 and four years later the Supreme Court has put an end to the lawsuit: nine years after the shareholders meeting whose resolutions were the subject of the challenge.
As the Constitutional Court very recently reiterated in its ruling dated last October, “judicial slowness has no place in the Magna Carta”. But, although it has no place, or should not have a place, our courts continue to insist that it does and, as an example, this case that we are commenting on is, unfortunately, no exception.
Beyond the barbarity of a litigant having to wait for nine years to find a final solution to his claim, the judgment we are commenting on is of interest for other reasons.
The plaintiffs sought the nullity of certain resolutions adopted at a shareholders’ meeting, basing their claim on the fact that these resolutions constituted an abuse of rights since, through them, the shareholders of Bodegas Vega Sicilia S.A. sought to take control of Bodegas Vega Sicilia away from the company of which the plaintiffs were in turn shareholders.
The legislation in force at the time the meeting was held (prior to the 2014 reform) established that “resolutions that are contrary to the law, oppose the articles of association or harm the corporate interest to the benefit of one or more shareholders or third parties” could be challenged, adding that those contrary to the law would be null and void and the remaining resolutions could be annulled.
Following the 2014 reform, article 204 considers that “corporate resolutions that are contrary to the law, are contrary to the articles of association or the regulations of the company meeting or harm the corporate interest to the benefit of one or more shareholders or third parties” can be challenged and no longer distinguishes between null and voidable resolutions; although it partially recovers the concept of radical nullity in the case of resolutions contrary to public order by establishing that in such cases the action does not have a statute of limitations or lapse.
But both with the regulations prior to the reform and with those currently in force, the controversy resolved by the ruling we are commenting on is the same: when the legislator requires the agreement to be contrary to “law” in order to be able to challenge it, does he mean that it contravenes a precept of the Capital Companies Act (LSC), or can it be considered a requirement for challengeability if it contravenes any other positive precept of any other legal text? And finally, if the resolution in question is classified as constituting an “abuse of rights”, can such a situation be considered as “contrary to law” for the purposes of the application of article 204 LSC?
The Chamber reminds us of the requirements for the concurrence of abuse of rights in corporate matters:
- formal or outwardly correct use of a right
- causing damage to an interest not protected by a specific legal prerogative, and
- the immorality or antisociality (sic) of that conduct manifested subjectively (intention to damage or absence of legitimate interest) or objectively (abnormal exercise of the right contrary to the economic and social purposes of the same).
And it then refers to the numerous occasions on which its case law has reiterated that, although the regulation on challenging corporate resolutions does not expressly mention abuse of rights, this is no obstacle to annulling resolutions in such cases, since according to article 7 of the Civil Code (which prohibits abuse of rights), they must be deemed as contrary to the law.
The interest and peculiarity of this case lies in the fact that the contested resolutions were neither adopted in the interests of the company nor did they cause any harm to it, since the alleged harm was caused to a third party formally outside the company.
And on these premises, the Supreme Court reiterates and insists that the expression “contrary to the law” in article 204 LSC must be understood as “contrary to the legal system”, which includes those agreements adopted in fraud of the law, in bad faith or with abuse of rights, all of which are included and regulated in the Preliminary Title of the Civil Code. For these reasons, the judgment of the Provincial Court upholds the claim and declares the nullity of the contested agreements.
And what has El Cid got to do with all this? Is it a typo? No, not at all. Legend has it (invented, it seems, by a monk of the monastery of San Pedro de Cardeña to attract visitors) that Rodrigo Diaz de Vivar won a battle on the walls of Valencia against the Almoravids, after his death, saddling his corpse on his legendary horse Babieca.
It turns out that his almost fellow countryman, David Alvarez, buyer of the winery in the 1980s, the latter from León, the former from Burgos, but both old Castilians, also won his last battle after his death; David Alvarez was, together with one of his daughters, a plaintiff against the agreements of Bodegas Vega Sicilia and died in 2015; seven years later the Supreme Court has given him the right against the Almogavars, in this case, his own children.
And two lessons: first, justice is not justice if it is slow, a phrase apocryphally attributed to Seneca; it was not in this case for David Alvarez. Secondly, the abuse of rights is not only an “in extremis” recourse when one does not find frank legal support for one’s claims; on the contrary, it is, on many occasions, the solution.
Every employer should manage the risk of employee lawsuits. Many companies believe that they treat their workers well and that their employees are happy. As a result, they believe that they are not at risk of a lawsuit. But in my work, I frequently see employment relationships sour and employees surprise management by retaining a lawyer.
Employers should proactively manage this risk instead of hoping lawsuits never come. Defending a business against litigation by a current or former employee takes a lot of time and can be very expensive. It can also be incredibly frustrating to see an employee the company once trusted making false and damaging allegations. But employers can take steps before a dispute arises to reduce the impact of a lawsuit. I discuss eight such steps below.
First, employers should consider purchasing insurance that may cover employee claims. In the United States, this insurance is called Employment Practices Liability (“EPLI”) Insurance. These kinds of insurance policies may pay for a lawyer to defend the company in the event of a lawsuit. They may also pay the employee the amount he or she demands or that a court awards. Although insurance costs money, many companies prefer to pay regular and foreseeable premiums than sudden, steep, and unpredictable legal fees and employee payouts.
Second, employers should implement and enforce sexual harassment policies. Policies like these discourage the type of behavior that can subject a company to liability. But in many jurisdictions, they may also provide a defense to a company in the event an employee sues the company for allowing the harassment to take place.
Third, employers should seriously examine disparities in pay and job roles. If the highest paid employees at a company are largely male and the lowest paid employees are largely female, then an employee may claim that the employer engages in sex discrimination. Similarly, if the executives of a company are largely white but its blue-collar workers are largely people of color, an employee may allege that the company engages in racial discrimination. Rather than litigate these issues, a company should investigate whether those disparities exist in its own workplace and address them if they do.
Fourth, employers should consider whether they want employment disputes to go to arbitration instead of to court. Employers can largely determine this by including an arbitration clause in the offer letters they send to employees upon hiring them. Arbitration has some advantages: it tends to move quicker, it is private, it has the reputation for being a friendly forum for employers, and it tends to cost less. But it also has some downsides: it does not permit appeals on the merits of the dispute and it can cost more than litigation depending on the kind of case.
Fifth, any time an employee discloses that he or she has a health issue, the company should immediately consider how to accommodate that issue. Many employers may disregard the disclosure of a health issue if it does not seem important to the employee’s job. But if the employee later believes that the employer penalized him or her because of the health issue, the employee may claim discrimination. Before that happens, an employer should work with an employee to make sure the health issue does not impede job performance.
Sixth, employers should ensure they make consistent decisions. If an employer allows one employee to work from home, other employees may want the same treatment. And if an employer lays one employee off, she may wonder why another employee did not meet the same fate. Employers may reduce the risk of a lawsuit by setting firm policies and abiding by them.
Seventh, employers should frequently consult a lawyer they trust when employment issues arise. Spending a few hundred dollars to speaking to a lawyer for an hour before firing an employee or before responding to an employee complaint can help an employer avoid a lawsuit that may cost tens or even hundreds of thousands of dollars.
And finally, employers should consider settling disputes with employees, even if they are meritless. No company wants an employee to take advantage of them. But lawsuits are often more expensive and a hassle than the cost of a settlement. Spending a lot of money on defense, even if successful, may be more expensive than just compromising and paying the employee a fraction of what they demand.
写信给 Alexandre
Belgium – How to recover unpaid receivables
2024年5月8日
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比利时
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Introduction: A Paradigm Shift in Conflict Resolution
The approval of Organic Law 1/2025, of January 2, on measures for the efficiency of the Public Justice Service, marks a turning point in the Spanish judicial system. This legislation is not limited to introducing procedural changes, but reflects a profound transformation in the very concept of justice. The legislator has made a firm commitment to promoting alternatives to the judicial resolution of disputes, making prior negotiation a central element of the system.
The saturation of the courts, the costs associated with judicial proceedings, and the search for more satisfactory solutions for the parties have prompted this reform, which places the so-called “appropriate means of non-jurisdictional dispute resolution” as the cornerstone of a new justice model oriented towards dialogue and agreement.
The philosophy behind alternative means of dispute resolution
Beyond the decongestion of the courts, this reform responds to a philosophy that understands that not all conflicts necessarily require a judicial response. Alternative means of dispute resolution are based on the premise that many conflicts can find more satisfactory and lasting solutions, adapted to the needs and interests of the parties, when they actively participate in their construction.
Organic Law 1/2025 defines these means as “any type of negotiating activity, recognized in this or other laws, state or autonomous, to which the parties to a conflict resort in good faith with the aim of finding an extrajudicial solution to it, either by themselves or with the intervention of a neutral third party”. This broad and flexible definition is intended to cover various forms of negotiation whose common denominator is the protagonism of the parties in the resolution of their own disputes.
A range of possibilities: Diversity of mechanisms for diversity of conflicts
One of the most noteworthy aspects of the new regulation is that it does not rely on a single model of alternative dispute resolution but recognizes the diversity of situations and the need to offer different tools adapted to each particular case.
Mediation, already consolidated in our legal system through Law 5/2012, maintains its relevance as the preferred method, but other modalities such as conciliation in its various variants (notarial, registry, before a lawyer of the Administration of Justice or judicial), the opinion of independent experts, confidential binding offers, or the novel process of collaborative law are added to it.
This plurality of mechanisms reflects the complexity of contemporary legal relationships and the need to provide tailored responses to each type of conflict. Resolving a neighborhood dispute is not the same as resolving a complex business dispute, and the legislator has been aware that “one size fits all” would not be effective for the diversity of situations that may arise.
The controversial commitment to enforceability: The requirement of procedural validity
Undoubtedly, the most innovative -and probably the most controversial- aspect of the new regulation is the configuration of these means as a mandatory prerequisite for resorting to judicial proceedings in certain areas. This decision represents a qualitative leap with respect to the previous regulation, which mainly favored the voluntary nature of these mechanisms.
From the entry into force of Organic Law 1/2025, April 3, 2025, the claim in the civil jurisdictional order will not be admitted if it is not justified that the resolution of the conflict has been previously attempted by any of the recognized alternative ways. Not only that, but also the identity between the object of the previous negotiation and the object of the litigation to be initiated must be established.
This mandatory nature has been the subject of intense debate. Its advocates argue that it is necessary to promote cultural change in a traditionally litigious society, while its detractors warn of the risk of turning these mechanisms into mere formalities that distort their true purpose.
The truth is that the legislator has tried to find a balance, excluding from this obligation certain particularly sensitive matters or those which, by their nature, require an immediate judicial response. Thus, issues such as the judicial protection of fundamental rights, measures for the protection of minors, or the request for precautionary measures, among others, are exempted from the requirement of prior negotiation.
The guiding principles: Autonomy and confidentiality as pillars of the system
The effectiveness of alternative dispute resolution rests mainly on two fundamental principles: the autonomy of the parties and the confidentiality of the process.
The principle of private autonomy recognizes that the parties themselves best know their interests and needs and are, therefore, in the best position to find solutions adapted to their situation. The law establishes that the parties are free to settle, if they respect the law, good faith, and public policy. This freedom is essential for the solutions reached to be truly satisfactory and lasting.
The principle of confidentiality is crucial to creating a climate of trust that allows the parties to express themselves freely during the negotiation process. The law establishes that the information and documentation disclosed during the negotiation must be kept confidential, with very specific exceptions, such as express waivers by the parties, court orders in criminal matters, or reasons of public order.
This duty of confidentiality extends to all participants in the process: the parties, their lawyers, and, where appropriate, the neutral third party involved. The aim is to ensure that what is said or proposed during the negotiation cannot be used later in a possible judicial process, thus promoting a sincere and constructive dialogue.
The Negotiation Process: Relevant Procedural Aspects
The regulation of the procedural aspects of the different means of dispute resolution also reflects the legislator’s desire to combine the necessary flexibility with the minimum guarantees required.
As regards standing, the initiative to resort to these mechanisms may come from either party, from both by mutual agreement, or even from a judicial referral. This recognizes both the parties’ autonomy and the possibility that the judicial system itself may encourage the use of these alternative channels.
Regarding the involvement of professionals, the law generally prefers a non-mandatory approach to legal assistance, except in specific situations like the preparation of binding offers (with exceptions for smaller amounts). This flexibility aims to enhance access to these mechanisms; however, the complexity of many legal disputes often makes it wise to seek professional guidance.
A particularly relevant aspect is the effect that the request for these mechanisms has on the statute of limitations and expiration periods. The law establishes that such a request interrupts the statute of limitations or suspends the expiration of actions from the date of communication to the other party, thus avoiding the attempt of an amicable solution that may prejudice the rights of the party that promotes it.
In terms of form, the preferred method is face-to-face, although the use of telematic means is permitted by agreement of the parties or in the case of claims for amounts of less than 600 euros. This flexibility is particularly appropriate in a context of increasing digitalization of legal relations.
Specific Modalities: Diversity of mechanisms for diversity of conflicts
Among the different modalities recognized by the law, it is worthwhile to focus on some that present particularly novel or relevant characteristics.
Private conciliation involves the intervention of a person with technical or legal expertise related to the dispute’s subject matter. The law requires this person to be registered in a recognized professional association or in a register of mediators and to act impartially and confidentially. This mechanism takes advantage of the specialized knowledge of certain professionals to facilitate agreement in technically complex matters.
The confidential binding offer is a particularly interesting mechanism for certain types of disputes. One of the parties makes an offer that is binding on it in the event of acceptance by the other party. The law requires that the identity of the offeror, the actual receipt by the other party, and the detailed content of the offer be recorded. This instrument can be particularly useful in financial claims, where the main obstacle to settlement is often the amount.
The independent expert opinion consists of commissioning an opinion from an expert in the subject matter of the dispute. Unlike other mechanisms, this opinion is not binding, but may serve as a basis for agreement if the parties accept it, or at least to clarify the technical aspects of the dispute. Following the issuance of the opinion, the parties may accept it as an agreement, propose improvements or reject it, in which case the procedural requirement is deemed to be fulfilled.
Finally, the collaborative law process represents perhaps the most innovative aspect of the new regulation. It is a structured negotiation in which the parties, assisted by their respective lawyers, work together to reach a satisfactory solution, being able to integrate other professionals (psychologists, economists, etc.) when the complexity of the case requires it. At the end, minutes are drawn up with the participants, the sessions held and the agreements reached.
The challenge of implementation: From theory to practice
The real effectiveness of this new system will depend largely on how it is implemented in practice. It is not enough to make it compulsory to attempt out-of-court settlement; this attempt must be genuine and not become a mere formality.
In this regard, the law requires that the negotiation attempt be “real and credible; it cannot be fictitious.” To this end, it establishes documentation requirements that vary depending on whether or not a neutral third party is involved but always include a responsible statement that the parties have intervened in good faith in the process.
Likewise, the law regulates in detail when the negotiation process is understood to be concluded, whether it concludes with or without an agreement. In the event of an agreement, it must be formalized by identifying the parties and, if applicable, their lawyers and the neutral third party, indicating the place and date, as well as the obligations assumed by each party.
The possibility of converting the agreement into a public deed to convert it into an enforceable title reinforces its value and facilitates its compliance, avoiding the possibility of non-compliance with the agreement, forcing the initiation of a declaratory judicial proceeding.
A horizon to be explored: Perspectives and challenges
Organic Law 1/2025 represents a turning point in the conception of justice in Spain, bringing us closer to models already consolidated in other countries with a long tradition in alternative means of conflict resolution. The United States, Canada and the Nordic countries have been using these mechanisms for decades, with generally positive results in terms of user satisfaction and decongestion of the courts.
However, each legal system has its particularities, and the success of these mechanisms depends not only on their legal regulation but also on cultural, sociological, and organizational factors. Spanish society’s traditional litigiousness, the poor negotiating culture in certain areas, and the lack of specific training of many professionals are challenges that must be faced.
The commitment to obligatory nature as an initial impulse may be understandable in a context of paradigm change, but the real success of these mechanisms will come from their capacity to generate satisfactory solutions that will progressively make them the preferred option on their own merits, beyond their obligatory nature.
Conclusion: Between Hope and Caution
The new regulation of the appropriate means of non-jurisdictional dispute resolution is in line with a clear international trend towards the promotion of alternatives to judicial dispute resolution. This trend responds both to practical needs – decongesting the courts, reducing costs – and to a philosophy that values the protagonism of the parties in the management of their own conflicts.
In this sense, Spanish legislation joins a global movement that has shown positive results in many jurisdictions. However, only time will tell whether the legislative technique used, especially the commitment to mandatory nature as a procedural requirement, is the most appropriate to achieve the true purpose of encouraging agreement in order to avoid litigation.
The success of this reform will depend not only on its regulatory design, but also on factors such as adequate training of the professionals involved, public awareness of the advantages of these alternative routes, and the system’s capacity to evaluate and adapt according to the results obtained.
In short, we are facing an ambitious and necessary reform, which opens up a hopeful horizon but which will have to overcome important challenges in order to consolidate itself as a true paradigm shift in the administration of justice in Spain. The true criterion of success will not be the number of negotiation attempts made, but the quality of the agreements reached and the satisfaction of citizens with a more participatory, efficient justice system adapted to their real needs.
On April 8, 2025, during the Paris Arbitration Week, France’s Ministers of Justice Gérard Darmanin, announced a significant reform of French arbitration law. The aim of this reform is to clarify, modernise and consolidate the regulatory framework, the last substantial revision of which dates back to 2011.
It is set to culminate in the adoption of an Arbitration code by autumn 2026. This code is envisioned as a unifying legal instrument that will enhance the clarity, autonomy and international appeal of French arbitration law.
Structural proposals: building an autonomous and coherent legal framework
The creation of a standalone Arbitration Code
The proposal n°1 calls for the unification of all legislative and regulatory text governing arbitration within a dedicated code, structured into several parts and decoupled from the approximately 20 existing codes currently housing arbitration provisions.
This codification process is not purely technical, it serves pedagogical, symbolic and strategic purposes namely, enhancing the clarity, accessibility and international attractiveness of French arbitration law.
Common provisions for domestic and international arbitration
Proposal n°3 and 4 suggest reorganising French arbitration law around a set of common rules applicable to both domestic and international arbitration with limited derogation for the former. This represents a shift from the current dualistic system to a more unified and clearer and framework without eliminating the particularities of either.
As an instance, a preliminary article would define the international nature of arbitration, abandoning outdated reference to “commercial” character in favour of a more inclusive in realistic standard.
However, it does not mean a division summa divisio of those two types of arbitration because of the stable wish to preserve the dissociation between ordre public interne and ordre public international.
Codification of guiding principles
Proposal n°5 aims to enshrine as guiding principles (“principes directeurs”) those considered to embody the core values of French arbitration law such as the autonomy of the arbitration agreement, the competence-competence principle, the independence and impartiality of the arbitral tribunal, and the respect for the adversarial principle and party equality.
Others, though not considered fundamental, nonetheless shape the legal framework, such as good faith, loyalty, the principle of effectiveness (“effet utile”), confidentiality, proportionality, procedural loyalty and celerity, parties’ autonomy in choosing applicable law and procedure rules, amiable composition and access to justice (prevention of denial of justice), which form the broader ethical and procedural framework of arbitration in France.
Over the 19 principles elected to be enshrined, the report highlights and develop only few:
- Regarding the principle of independence and impartiality of the arbitral tribunal, it is given a particular prominence in the reform, both through its inclusion in the preliminary article of the Code and its designation as a guiding principle. However, the reform does not aim to consolidate the jurisprudence that has recognised exceptions such as the notoriety or the parties’ duty of curiosity (which exempt the arbitrator from disclosing allegedly well-known facts). Instead, it adopts a strict approach according to which, arbitrators must disclose any circumstances that, in the eyes of the parties, could affect their independence or impartiality, and cannot rely on the fact that such information might be publicly known. Parties are not expected to be in a state of constant investigation.
- Regarding the equality of the parties, this principle is reaffirmed at the stage of the constitution of the arbitral tribunal and throughout the arbitral proceedings. It ensures that the parties are treated equally and fairly.
- Regarding the confidentiality of proceedings, the reform extends this principle (already established in domestic arbitration) to international arbitration, while allowing for necessary exceptions, particularly in the context of investment arbitration. However, its application ultimately remains subject to party autonomy.
- Regarding the proportionality, article 14 serves both as an encouragement and support for the arbitral tribunal. It urges the tribunal to “adopt a procedure adapted to the complexity and stakes of the dispute”. In response to certain issues and recurring criticisms regarding the cost and duration of arbitration, this is a call for moderation on all fronts (time, volume of submissions, document production requests, length of hearings, number of witnesses to be heard, and the cost for the parties).
- Regarding the prohibition of denial of justice, this principle introduces a new role for the supporting judge (“juge d’appui”), who becomes the judge overseeing the prevention of denial of justice in a broader sense. His role extends both materially, in cases where it is impossible to appoint an arbitrator, and substantively, when the timely delivery of an award is at risk.
These principles are presented not merely as procedural standards but as fundamental values that shape and distinguish the French approach to arbitration.
Unification of judicial control and support
Proposals N°6 to 9 aim to unify and rationalise the judicial handling of arbitration disputes by several objectives such as exclusive jurisdiction of the judicial courts (“tribunal judiciaire”) over all challenges and enforcement of international arbitral awards, including those involving public entities, thereby ending the long-standing jurisdictional duality exposed in the Inserm case (2010), where the recognition and enforcement of international awards involving French public entities was scattered between judicial and administrative Courts.
Exclusive jurisdiction is awarded to the Paris Judicial Court to decide on all international arbitration matters. Another purpose is the specialisation of domestic courts in handling arbitration matters, and the elimination of residual competence formerly existing in favour of commercial courts presidents as supporting judges (“juges d’appui”).
This restructuring is intended to foster efficiency, consistency, and international credibility.
Substantive changes: a more flexible, protective and efficient arbitration framework
Promotion of flexibility
Several proposals aim to liberalize and modernize arbitration procedures like the elimination of the references to “commercial” matters in determining the international character of arbitration and the tribunal’s ability to apply to trade usages.
It will also serve this purpose by simplifying the formal requirements for arbitration agreements, removing the requirement that the clause be in writing and aligning domestic arbitration on international standards.
In this regard, the reform aims to abolish the written form requirement for arbitration agreements to align domestic and international arbitration rules. As arbitration agreements are typically written in practice, this formal requirement is now seen as outdated and inconsistent with general contract law.
However, the requirement of written form will remain solely a matter of evidence. At the stage of enforcement or annulment proceedings, the arbitration agreement (or a copy thereof) will need to be produced. In practice, this means that the arbitration agreement will still have to be recorded in a document, even if it does not meet the strict definition of a written instrument.
Party protection and procedural safeguards
The reform also seeks to bolster procedural guarantees such as the necessity for tribunal’s seated in France to be composed of an odd number of arbitrators.
According to the proposition of code, arbitrators should be natural persons, through these does not hinder recognition of awards rendered abroad by legal entities and the contractual nature of relationships between parties, arbitrators and arbitral institution will be formally recognised.
A mechanism for financial hardship (“impécuniosité”) is introduced to prevent abuses and ensure access to justice. Jurisprudence has confirmed that impecuniosity does not render the arbitration agreement manifestly void or inapplicable. While ensuring access to arbitration lies with the “arbitration actors” (i.e arbitrators, institutions, parties) the authority of the supporting judge (“juge d’appui”) to intervene in support of an impecunious party remains unsettled.
The reform proposal aims to expressly empower the juge d’appui to facilitate arbitral proceedings in such circumstances by ordering “any appropriate measures” (art. 33): this would serve to prevent a genuine denial of justice. Measures may include procedural actions (e.g., convening a case management conference) or substantive adaptations (e.g., amending the arbitration agreement to reduce costs, appointing a sole arbitrator, selecting a less expensive arbitral institution, or streamlining proceedings by limiting document production, written submissions, or hearings).
It also proposes a clarification of arbitration rules applicable in labour, family, and consumer fields:
- Regarding Family Law, the working group clarified that arbitration is allowed for patrimonial issues in family law but excluded for matters related to personal status. Divorce remains under state Courts’ jurisdiction. For patrimonial matters, additional safeguards are proposed, such as a written agreement, lawyers counter-signature, appeal options. Family judges will also have exclusive jurisdiction on recognition and enforcement of the awards.
- Regarding Labour Law and Consumer Law, the proposed measures aim to emphasize that while an arbitration agreement is permissible in these areas, it cannot be imposed by the “strong” party on the “weak” party. The latter will always have the option to exclude its application and revert to State Courts. Furthermore, in these areas, the principle of competence-competence is excluded, meaning that the consumer or the employee will not be obliged to establish an arbitral tribunal in order to invoke the jurisdiction of the State Court.
A protection of third-party rights is also specified through accessory intervention before the Court of Appeal and rule for third party opposition (tierce opposition), prohibited against arbitral awards but allowed against the Court decision related to them, such as decisions related to annulment proceedings or requests for exequatur.
Procedural efficiency
To promote procedural efficiency, the reform proposes the codification of the negative effect of the competence-competence principle, the authorization of consolidation of arbitral proceedings.
It entails the following modification and few others:
- Rewriting of the article 1448 of the Code of civil procedure and elimination of its last paragraph. This article currently states that “where a dispute falling within the scope of an arbitration agreement is brought before a State court, the court shall decline jurisdiction unless the arbitral tribunal has not yet been seized and the arbitration agreement is manifestly null and void or manifestly inapplicable”. Its second and third paragraph state that “the state court may not raise its lack of jurisdiction ex officio” and that “any provision to the contrary shall be deemed unwritten”.
Contrary stipulations would therefore be permitted, and parties could expressly provide in their arbitration agreement that the court is authorized to conduct a full review of the arbitration clause, or that the parties waive the principle of the arbitrator’s priority. However, such a deviation to be valid, it must be explicit and unequivocal.
- In order to consolidate procedures, unless the parties agree otherwise, in cases involving claims based on multiple contracts or related to multiple contracts, these claims should be made in a single arbitration proceeding under one or more arbitration agreements. However, two conditions are required: the compatibility of the arbitration agreements and the existence of a connection between the claims such that it is in the interest of efficiency and justice to have them heard and decided together by the arbitral tribunal.
- Under the current law, the arbitral tribunal can impose a penalty (“astreinte”), but there is not provision regarding its authority to liquidate it. The future code would allow the tribunal to do so “as long as it remains seized of the case”. However, it does not mean that the tribunal to retain jurisdiction for the purpose of liquidating the penalty after it has rendered its final award.
In addition to this, the project lays the groundwork for class arbitration, poses principles of procedural loyalty and concentration of arguments and expanding the powers of the supporting judge to address denial of justice, financial hardship, evidence production, enforcement and interim measures, and constitution of tribunals.
The efficiency objective also extends to recognition and enforcement of arbitral awards in clarifying recognition procedures and deadlines, removing the suspensive effect of appeals in domestic arbitration, allowing incidental annulment or refusing of enforcement to apply to related awards, and revisiting annulment grounds and enabling award correction or classification to avoid annulment or enforcement refusal.
Regulatory adjustments and technical reforms and promoting transparency
This reform includes adjustment proposals to ensure consistency across existing legislation and regulation.
Lastly, this reform addresses the promotion and dissemination of French arbitration law by increasing transparency in the appointment of arbitrators by supporting judges, including publication of the names and an annual public list. It is planned to reinforce judicial training in arbitration through enhanced ENM (“Ecole Nationale de la Magistrature”, which is the national school of judges) programs, internships with the ICC, and digital tools.
Promoting French arbitration law domestically and internationally through multilingual commentaries, outreach events, and strategic communication will be a way to extend the project.
In conclusion, the 2025 reform constitutes a major step toward modern, readable, and globally competitive French arbitration law. By consolidating legislation, strengthening procedural safeguards, and fostering accessibility and transparency, the proposed arbitration code is poised to elevate France as a leading venue for arbitration.
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.
PFAS are chemicals that have been used in industry for over 50 years. Between 4,000 and 5,000 varieties are used for various everyday consumer applications, and they are renowned for their non-stick, waterproofing, and heat-resistant properties. They have come under scrutiny in recent years, and are covered by European regulations, as they are in the USA, where the public authorities have imposed maximum use values, as well as reporting obligations. EU Regulation 2019/1021 (POP) restricts the production and use of certain categories of PFAS in specific industries or above certain values and their use with food products. France has gone further, regulating the levels of discharges into watercourses.
Scientific research suspects that PFAS cause illnesses such as cancer and reproductive disorders. Given the extent of contamination not only in everyday products but also in the environment, particularly waterways, the issue is likely to pose major public health problems in the years to come. This concern is more pressing given that PFASs are considered ‘eternal pollutants’, as there is currently no way of eliminating them from the environment.
The impact on companies’ and insurers’ liability is already significant. In the USA, more than 6,000 lawsuits have been filed since 2005. Three groups have already paid more than USD 1.2 billion in settlements due to contamination, and another group has paid more than USD 10 billion to end a class action.
In France, the Metropole of Lyon has brought a summary expert appraisal action against two chemical companies before considering bringing a liability action. In addition, several criminal complaints have been lodged for endangering the lives of others and damaging the environment.
Under French law, companies and their insurers could be liable on various legal grounds. In addition to ordinary civil liability law – based on article 1240 of the Civil Code – the special system of liability for defective products could also serve as a basis for a liability action (articles 1245 et seq. of the Civil Code), with French law defining a defect as any product that does not offer the safety that can legitimately be expected.
Although it is currently difficult to identify a causal link with an identified disease, asbestos-related case law has shown in the past that victims can take action if they can demonstrate that they suffered anxiety-related harm as a result of their exposure to the product, even if they are not positively suffering from a disease at the time of their claim.
In addition, the reporting obligations imposed by the public authorities will undoubtedly facilitate the filing of liability actions by facilitating the identification of the emitters and users of these pollutants.
Insurers are directly affected by this phenomenon, which for them constitutes an “emerging” risk (“silent cover”) because, for the most part, this risk was not identified when the policy was taken out, which exposes them directly and is all the more problematic because insurance premiums have not been able to take such a risk into account.
Civil liability or professional indemnity insurance policies, especially if they are drafted with “all risks except” clauses (“tous risques sauf” in French legal vocabulary, i.e. covering all liability risks vis-à-vis third parties except those strictly listed), as well as those including clauses relating to environmental risks, are particularly targeted.
Lloyd’s has already published model exclusion clauses for the attention of insurers, although such clauses can obviously only cover future insurance contracts or endorsements:
https://www.lmalloyds.com/LMA_Bulletins/LMA23-039-SD.aspx
The clauses contained in insurance policies must be drafted with particular care, considering each country’s specific features. In France, for example, to be enforceable against the insured, clauses must be “formal and limited”, which means that the exclusion must be both clearly expressed and that it must be possible to determine its content perfectly.
For example, the Court of Cassation recently ruled that the use of the terms “such as” or “in particular” (“tells que” “en particulier”) in an exclusion clause led to confusion in the interpretation of the exclusion clause, rendering it invalid (Civ. 2e, 26 Nov. 2020, no. 19-16.435). There was also a debate on the validity of an exclusion clause relating to bodily injury caused by asbestos, a risk which at the time had not been identified by insurers, who subsequently excluded it from most policies (Cass. 2e civ., 21 Sept. 2023, nos. 21-19801 and 21-19776). Similarly, policies should clearly indicate whether cover is provided based on a harmful event or based on a claim (i.e “base dommage” or “base reclamation”, which indicates if the risk is covered, depending on if the damage happened during the policy was valid, or if it depends on the moment when the risk was notified by the insured during such period).
One thing is sure: the risks associated with PFAS and claims are only just beginning to emerge in Europe, where the conditions for group actions have recently been extended with EU Directive 2020/1828, which came into force on 25 June 2023 and is currently the subject of a draft law under discussion in the French Parliament with a view to its transposition.
Dealing with unpaid invoices can be challenging for any business. In Belgium, where judicial processes can seem daunting, understanding how to manage debt collection effectively is crucial. This article offers practical guidance derived from a comprehensive legal guide to help your company navigate Belgium’s judicial debt recovery landscape.
Understanding Your Options
Assess the Situation: Before taking legal action, evaluating the amount owed and the debtor’s financial status is essential. This assessment will guide you in choosing the appropriate legal avenue, as Belgium offers different courts and procedures based on the dispute’s value. For instance, for claims up to € 5,000, the local court or ‘justice de paix’, which is a court of first instance for minor civil cases, is typically used due to its cost-effectiveness and efficiency.
Send a Notice of Default: Under Belgian law, a notice of default is mandatory before initiating legal proceedings. This step adheres to legal requirements and gives the debtor one last chance to settle their dues without further legal complications.
Efficient Legal Procedures
Use Simplified Procedures for Small Amounts: A simplified legal procedure can be utilized for undisputed money debts up to €1,860, which expedites the payment request process significantly. This approach can be particularly advantageous for recovering smaller debts quickly.
Consider Direct Bailiff Intervention: For undisputed amounts, irrespective of their size, between companies, creditors can authorize a bailiff to recover the debt directly without a court judgment. This procedure reduces legal fees and speeds up the debt collection process.
Leveraging Legal and Financial Advice
Consult with a Belgian Attorney: Navigating the Belgian legal system can be complex. Consulting with a local attorney can provide insights into the most effective procedures tailored to your case. This is especially true for international debt collection, where regulations and guidelines vary significantly.
Prepare Necessary Documentation: Ensure you have all necessary documents, such as contracts, invoices, and payment records, organized. These documents are essential to support your claim, whether you are dealing with local or international debt recovery.
After Initiating Debt Recovery
Use Interim Measures: If immediate action is needed, interim measures like seizing bank accounts or assets may be applicable. These measures, which are temporary and can be requested even before legal proceedings, can ensure that the debtor’s assets are secured while the legal process unfolds.
Conclusion
Recovering debts through judicial means in Belgium requires understanding the legal landscape and an appropriate strategy based on the debt’s nature and amount. While this article provides practical guidance, it is important to note that each case is unique, and professional legal advice is recommended for complex debt recovery cases. Businesses can enhance their chances of successful debt recovery while maintaining financial stability by utilizing simplified procedures for smaller or undisputed debts and consulting with legal experts. This proactive approach ensures that your business can continue to thrive even in the face of financial adversity.
What do the mythical Vega Sicilia wines, El Cid Campeador and the abuse of rights have in common? If you read on, you will find out.
The Vega Sicilia Único was for many years considered the best, the most prestigious and the most expensive Spanish wine.
The abuse of rights is a legal institute that allows the defense of situations in which the opponent acts with (apparent and formal) subjection to the law, but making a spurious use of the law with the intention of harming the injured party.
Last October, the Supreme Court handed down a judgment declaring certain agreements adopted by Bodegas Vega Sicilia S.A., producer of Vega Sicilia Único wine, to be null and void based on the principle of abuse of rights.
The judgment in question is doubly interesting.
Firstly, because it highlights the endemic evil of Spanish justice: it declares the nullity of resolutions adopted at a meeting held in March 2013, which were the subject of a lawsuit in February 2014, with a first instance ruling that same year, appealed to the Provincial Court of Valladolid who issued its judgement on 2019 and four years later the Supreme Court has put an end to the lawsuit: nine years after the shareholders meeting whose resolutions were the subject of the challenge.
As the Constitutional Court very recently reiterated in its ruling dated last October, “judicial slowness has no place in the Magna Carta”. But, although it has no place, or should not have a place, our courts continue to insist that it does and, as an example, this case that we are commenting on is, unfortunately, no exception.
Beyond the barbarity of a litigant having to wait for nine years to find a final solution to his claim, the judgment we are commenting on is of interest for other reasons.
The plaintiffs sought the nullity of certain resolutions adopted at a shareholders’ meeting, basing their claim on the fact that these resolutions constituted an abuse of rights since, through them, the shareholders of Bodegas Vega Sicilia S.A. sought to take control of Bodegas Vega Sicilia away from the company of which the plaintiffs were in turn shareholders.
The legislation in force at the time the meeting was held (prior to the 2014 reform) established that “resolutions that are contrary to the law, oppose the articles of association or harm the corporate interest to the benefit of one or more shareholders or third parties” could be challenged, adding that those contrary to the law would be null and void and the remaining resolutions could be annulled.
Following the 2014 reform, article 204 considers that “corporate resolutions that are contrary to the law, are contrary to the articles of association or the regulations of the company meeting or harm the corporate interest to the benefit of one or more shareholders or third parties” can be challenged and no longer distinguishes between null and voidable resolutions; although it partially recovers the concept of radical nullity in the case of resolutions contrary to public order by establishing that in such cases the action does not have a statute of limitations or lapse.
But both with the regulations prior to the reform and with those currently in force, the controversy resolved by the ruling we are commenting on is the same: when the legislator requires the agreement to be contrary to “law” in order to be able to challenge it, does he mean that it contravenes a precept of the Capital Companies Act (LSC), or can it be considered a requirement for challengeability if it contravenes any other positive precept of any other legal text? And finally, if the resolution in question is classified as constituting an “abuse of rights”, can such a situation be considered as “contrary to law” for the purposes of the application of article 204 LSC?
The Chamber reminds us of the requirements for the concurrence of abuse of rights in corporate matters:
- formal or outwardly correct use of a right
- causing damage to an interest not protected by a specific legal prerogative, and
- the immorality or antisociality (sic) of that conduct manifested subjectively (intention to damage or absence of legitimate interest) or objectively (abnormal exercise of the right contrary to the economic and social purposes of the same).
And it then refers to the numerous occasions on which its case law has reiterated that, although the regulation on challenging corporate resolutions does not expressly mention abuse of rights, this is no obstacle to annulling resolutions in such cases, since according to article 7 of the Civil Code (which prohibits abuse of rights), they must be deemed as contrary to the law.
The interest and peculiarity of this case lies in the fact that the contested resolutions were neither adopted in the interests of the company nor did they cause any harm to it, since the alleged harm was caused to a third party formally outside the company.
And on these premises, the Supreme Court reiterates and insists that the expression “contrary to the law” in article 204 LSC must be understood as “contrary to the legal system”, which includes those agreements adopted in fraud of the law, in bad faith or with abuse of rights, all of which are included and regulated in the Preliminary Title of the Civil Code. For these reasons, the judgment of the Provincial Court upholds the claim and declares the nullity of the contested agreements.
And what has El Cid got to do with all this? Is it a typo? No, not at all. Legend has it (invented, it seems, by a monk of the monastery of San Pedro de Cardeña to attract visitors) that Rodrigo Diaz de Vivar won a battle on the walls of Valencia against the Almoravids, after his death, saddling his corpse on his legendary horse Babieca.
It turns out that his almost fellow countryman, David Alvarez, buyer of the winery in the 1980s, the latter from León, the former from Burgos, but both old Castilians, also won his last battle after his death; David Alvarez was, together with one of his daughters, a plaintiff against the agreements of Bodegas Vega Sicilia and died in 2015; seven years later the Supreme Court has given him the right against the Almogavars, in this case, his own children.
And two lessons: first, justice is not justice if it is slow, a phrase apocryphally attributed to Seneca; it was not in this case for David Alvarez. Secondly, the abuse of rights is not only an “in extremis” recourse when one does not find frank legal support for one’s claims; on the contrary, it is, on many occasions, the solution.
Every employer should manage the risk of employee lawsuits. Many companies believe that they treat their workers well and that their employees are happy. As a result, they believe that they are not at risk of a lawsuit. But in my work, I frequently see employment relationships sour and employees surprise management by retaining a lawyer.
Employers should proactively manage this risk instead of hoping lawsuits never come. Defending a business against litigation by a current or former employee takes a lot of time and can be very expensive. It can also be incredibly frustrating to see an employee the company once trusted making false and damaging allegations. But employers can take steps before a dispute arises to reduce the impact of a lawsuit. I discuss eight such steps below.
First, employers should consider purchasing insurance that may cover employee claims. In the United States, this insurance is called Employment Practices Liability (“EPLI”) Insurance. These kinds of insurance policies may pay for a lawyer to defend the company in the event of a lawsuit. They may also pay the employee the amount he or she demands or that a court awards. Although insurance costs money, many companies prefer to pay regular and foreseeable premiums than sudden, steep, and unpredictable legal fees and employee payouts.
Second, employers should implement and enforce sexual harassment policies. Policies like these discourage the type of behavior that can subject a company to liability. But in many jurisdictions, they may also provide a defense to a company in the event an employee sues the company for allowing the harassment to take place.
Third, employers should seriously examine disparities in pay and job roles. If the highest paid employees at a company are largely male and the lowest paid employees are largely female, then an employee may claim that the employer engages in sex discrimination. Similarly, if the executives of a company are largely white but its blue-collar workers are largely people of color, an employee may allege that the company engages in racial discrimination. Rather than litigate these issues, a company should investigate whether those disparities exist in its own workplace and address them if they do.
Fourth, employers should consider whether they want employment disputes to go to arbitration instead of to court. Employers can largely determine this by including an arbitration clause in the offer letters they send to employees upon hiring them. Arbitration has some advantages: it tends to move quicker, it is private, it has the reputation for being a friendly forum for employers, and it tends to cost less. But it also has some downsides: it does not permit appeals on the merits of the dispute and it can cost more than litigation depending on the kind of case.
Fifth, any time an employee discloses that he or she has a health issue, the company should immediately consider how to accommodate that issue. Many employers may disregard the disclosure of a health issue if it does not seem important to the employee’s job. But if the employee later believes that the employer penalized him or her because of the health issue, the employee may claim discrimination. Before that happens, an employer should work with an employee to make sure the health issue does not impede job performance.
Sixth, employers should ensure they make consistent decisions. If an employer allows one employee to work from home, other employees may want the same treatment. And if an employer lays one employee off, she may wonder why another employee did not meet the same fate. Employers may reduce the risk of a lawsuit by setting firm policies and abiding by them.
Seventh, employers should frequently consult a lawyer they trust when employment issues arise. Spending a few hundred dollars to speaking to a lawyer for an hour before firing an employee or before responding to an employee complaint can help an employer avoid a lawsuit that may cost tens or even hundreds of thousands of dollars.
And finally, employers should consider settling disputes with employees, even if they are meritless. No company wants an employee to take advantage of them. But lawsuits are often more expensive and a hassle than the cost of a settlement. Spending a lot of money on defense, even if successful, may be more expensive than just compromising and paying the employee a fraction of what they demand.
Spain – Abuse of rights in corporate resolutions
2022年12月15日
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西班牙
- 公司法
- 诉讼
Introduction: A Paradigm Shift in Conflict Resolution
The approval of Organic Law 1/2025, of January 2, on measures for the efficiency of the Public Justice Service, marks a turning point in the Spanish judicial system. This legislation is not limited to introducing procedural changes, but reflects a profound transformation in the very concept of justice. The legislator has made a firm commitment to promoting alternatives to the judicial resolution of disputes, making prior negotiation a central element of the system.
The saturation of the courts, the costs associated with judicial proceedings, and the search for more satisfactory solutions for the parties have prompted this reform, which places the so-called “appropriate means of non-jurisdictional dispute resolution” as the cornerstone of a new justice model oriented towards dialogue and agreement.
The philosophy behind alternative means of dispute resolution
Beyond the decongestion of the courts, this reform responds to a philosophy that understands that not all conflicts necessarily require a judicial response. Alternative means of dispute resolution are based on the premise that many conflicts can find more satisfactory and lasting solutions, adapted to the needs and interests of the parties, when they actively participate in their construction.
Organic Law 1/2025 defines these means as “any type of negotiating activity, recognized in this or other laws, state or autonomous, to which the parties to a conflict resort in good faith with the aim of finding an extrajudicial solution to it, either by themselves or with the intervention of a neutral third party”. This broad and flexible definition is intended to cover various forms of negotiation whose common denominator is the protagonism of the parties in the resolution of their own disputes.
A range of possibilities: Diversity of mechanisms for diversity of conflicts
One of the most noteworthy aspects of the new regulation is that it does not rely on a single model of alternative dispute resolution but recognizes the diversity of situations and the need to offer different tools adapted to each particular case.
Mediation, already consolidated in our legal system through Law 5/2012, maintains its relevance as the preferred method, but other modalities such as conciliation in its various variants (notarial, registry, before a lawyer of the Administration of Justice or judicial), the opinion of independent experts, confidential binding offers, or the novel process of collaborative law are added to it.
This plurality of mechanisms reflects the complexity of contemporary legal relationships and the need to provide tailored responses to each type of conflict. Resolving a neighborhood dispute is not the same as resolving a complex business dispute, and the legislator has been aware that “one size fits all” would not be effective for the diversity of situations that may arise.
The controversial commitment to enforceability: The requirement of procedural validity
Undoubtedly, the most innovative -and probably the most controversial- aspect of the new regulation is the configuration of these means as a mandatory prerequisite for resorting to judicial proceedings in certain areas. This decision represents a qualitative leap with respect to the previous regulation, which mainly favored the voluntary nature of these mechanisms.
From the entry into force of Organic Law 1/2025, April 3, 2025, the claim in the civil jurisdictional order will not be admitted if it is not justified that the resolution of the conflict has been previously attempted by any of the recognized alternative ways. Not only that, but also the identity between the object of the previous negotiation and the object of the litigation to be initiated must be established.
This mandatory nature has been the subject of intense debate. Its advocates argue that it is necessary to promote cultural change in a traditionally litigious society, while its detractors warn of the risk of turning these mechanisms into mere formalities that distort their true purpose.
The truth is that the legislator has tried to find a balance, excluding from this obligation certain particularly sensitive matters or those which, by their nature, require an immediate judicial response. Thus, issues such as the judicial protection of fundamental rights, measures for the protection of minors, or the request for precautionary measures, among others, are exempted from the requirement of prior negotiation.
The guiding principles: Autonomy and confidentiality as pillars of the system
The effectiveness of alternative dispute resolution rests mainly on two fundamental principles: the autonomy of the parties and the confidentiality of the process.
The principle of private autonomy recognizes that the parties themselves best know their interests and needs and are, therefore, in the best position to find solutions adapted to their situation. The law establishes that the parties are free to settle, if they respect the law, good faith, and public policy. This freedom is essential for the solutions reached to be truly satisfactory and lasting.
The principle of confidentiality is crucial to creating a climate of trust that allows the parties to express themselves freely during the negotiation process. The law establishes that the information and documentation disclosed during the negotiation must be kept confidential, with very specific exceptions, such as express waivers by the parties, court orders in criminal matters, or reasons of public order.
This duty of confidentiality extends to all participants in the process: the parties, their lawyers, and, where appropriate, the neutral third party involved. The aim is to ensure that what is said or proposed during the negotiation cannot be used later in a possible judicial process, thus promoting a sincere and constructive dialogue.
The Negotiation Process: Relevant Procedural Aspects
The regulation of the procedural aspects of the different means of dispute resolution also reflects the legislator’s desire to combine the necessary flexibility with the minimum guarantees required.
As regards standing, the initiative to resort to these mechanisms may come from either party, from both by mutual agreement, or even from a judicial referral. This recognizes both the parties’ autonomy and the possibility that the judicial system itself may encourage the use of these alternative channels.
Regarding the involvement of professionals, the law generally prefers a non-mandatory approach to legal assistance, except in specific situations like the preparation of binding offers (with exceptions for smaller amounts). This flexibility aims to enhance access to these mechanisms; however, the complexity of many legal disputes often makes it wise to seek professional guidance.
A particularly relevant aspect is the effect that the request for these mechanisms has on the statute of limitations and expiration periods. The law establishes that such a request interrupts the statute of limitations or suspends the expiration of actions from the date of communication to the other party, thus avoiding the attempt of an amicable solution that may prejudice the rights of the party that promotes it.
In terms of form, the preferred method is face-to-face, although the use of telematic means is permitted by agreement of the parties or in the case of claims for amounts of less than 600 euros. This flexibility is particularly appropriate in a context of increasing digitalization of legal relations.
Specific Modalities: Diversity of mechanisms for diversity of conflicts
Among the different modalities recognized by the law, it is worthwhile to focus on some that present particularly novel or relevant characteristics.
Private conciliation involves the intervention of a person with technical or legal expertise related to the dispute’s subject matter. The law requires this person to be registered in a recognized professional association or in a register of mediators and to act impartially and confidentially. This mechanism takes advantage of the specialized knowledge of certain professionals to facilitate agreement in technically complex matters.
The confidential binding offer is a particularly interesting mechanism for certain types of disputes. One of the parties makes an offer that is binding on it in the event of acceptance by the other party. The law requires that the identity of the offeror, the actual receipt by the other party, and the detailed content of the offer be recorded. This instrument can be particularly useful in financial claims, where the main obstacle to settlement is often the amount.
The independent expert opinion consists of commissioning an opinion from an expert in the subject matter of the dispute. Unlike other mechanisms, this opinion is not binding, but may serve as a basis for agreement if the parties accept it, or at least to clarify the technical aspects of the dispute. Following the issuance of the opinion, the parties may accept it as an agreement, propose improvements or reject it, in which case the procedural requirement is deemed to be fulfilled.
Finally, the collaborative law process represents perhaps the most innovative aspect of the new regulation. It is a structured negotiation in which the parties, assisted by their respective lawyers, work together to reach a satisfactory solution, being able to integrate other professionals (psychologists, economists, etc.) when the complexity of the case requires it. At the end, minutes are drawn up with the participants, the sessions held and the agreements reached.
The challenge of implementation: From theory to practice
The real effectiveness of this new system will depend largely on how it is implemented in practice. It is not enough to make it compulsory to attempt out-of-court settlement; this attempt must be genuine and not become a mere formality.
In this regard, the law requires that the negotiation attempt be “real and credible; it cannot be fictitious.” To this end, it establishes documentation requirements that vary depending on whether or not a neutral third party is involved but always include a responsible statement that the parties have intervened in good faith in the process.
Likewise, the law regulates in detail when the negotiation process is understood to be concluded, whether it concludes with or without an agreement. In the event of an agreement, it must be formalized by identifying the parties and, if applicable, their lawyers and the neutral third party, indicating the place and date, as well as the obligations assumed by each party.
The possibility of converting the agreement into a public deed to convert it into an enforceable title reinforces its value and facilitates its compliance, avoiding the possibility of non-compliance with the agreement, forcing the initiation of a declaratory judicial proceeding.
A horizon to be explored: Perspectives and challenges
Organic Law 1/2025 represents a turning point in the conception of justice in Spain, bringing us closer to models already consolidated in other countries with a long tradition in alternative means of conflict resolution. The United States, Canada and the Nordic countries have been using these mechanisms for decades, with generally positive results in terms of user satisfaction and decongestion of the courts.
However, each legal system has its particularities, and the success of these mechanisms depends not only on their legal regulation but also on cultural, sociological, and organizational factors. Spanish society’s traditional litigiousness, the poor negotiating culture in certain areas, and the lack of specific training of many professionals are challenges that must be faced.
The commitment to obligatory nature as an initial impulse may be understandable in a context of paradigm change, but the real success of these mechanisms will come from their capacity to generate satisfactory solutions that will progressively make them the preferred option on their own merits, beyond their obligatory nature.
Conclusion: Between Hope and Caution
The new regulation of the appropriate means of non-jurisdictional dispute resolution is in line with a clear international trend towards the promotion of alternatives to judicial dispute resolution. This trend responds both to practical needs – decongesting the courts, reducing costs – and to a philosophy that values the protagonism of the parties in the management of their own conflicts.
In this sense, Spanish legislation joins a global movement that has shown positive results in many jurisdictions. However, only time will tell whether the legislative technique used, especially the commitment to mandatory nature as a procedural requirement, is the most appropriate to achieve the true purpose of encouraging agreement in order to avoid litigation.
The success of this reform will depend not only on its regulatory design, but also on factors such as adequate training of the professionals involved, public awareness of the advantages of these alternative routes, and the system’s capacity to evaluate and adapt according to the results obtained.
In short, we are facing an ambitious and necessary reform, which opens up a hopeful horizon but which will have to overcome important challenges in order to consolidate itself as a true paradigm shift in the administration of justice in Spain. The true criterion of success will not be the number of negotiation attempts made, but the quality of the agreements reached and the satisfaction of citizens with a more participatory, efficient justice system adapted to their real needs.
On April 8, 2025, during the Paris Arbitration Week, France’s Ministers of Justice Gérard Darmanin, announced a significant reform of French arbitration law. The aim of this reform is to clarify, modernise and consolidate the regulatory framework, the last substantial revision of which dates back to 2011.
It is set to culminate in the adoption of an Arbitration code by autumn 2026. This code is envisioned as a unifying legal instrument that will enhance the clarity, autonomy and international appeal of French arbitration law.
Structural proposals: building an autonomous and coherent legal framework
The creation of a standalone Arbitration Code
The proposal n°1 calls for the unification of all legislative and regulatory text governing arbitration within a dedicated code, structured into several parts and decoupled from the approximately 20 existing codes currently housing arbitration provisions.
This codification process is not purely technical, it serves pedagogical, symbolic and strategic purposes namely, enhancing the clarity, accessibility and international attractiveness of French arbitration law.
Common provisions for domestic and international arbitration
Proposal n°3 and 4 suggest reorganising French arbitration law around a set of common rules applicable to both domestic and international arbitration with limited derogation for the former. This represents a shift from the current dualistic system to a more unified and clearer and framework without eliminating the particularities of either.
As an instance, a preliminary article would define the international nature of arbitration, abandoning outdated reference to “commercial” character in favour of a more inclusive in realistic standard.
However, it does not mean a division summa divisio of those two types of arbitration because of the stable wish to preserve the dissociation between ordre public interne and ordre public international.
Codification of guiding principles
Proposal n°5 aims to enshrine as guiding principles (“principes directeurs”) those considered to embody the core values of French arbitration law such as the autonomy of the arbitration agreement, the competence-competence principle, the independence and impartiality of the arbitral tribunal, and the respect for the adversarial principle and party equality.
Others, though not considered fundamental, nonetheless shape the legal framework, such as good faith, loyalty, the principle of effectiveness (“effet utile”), confidentiality, proportionality, procedural loyalty and celerity, parties’ autonomy in choosing applicable law and procedure rules, amiable composition and access to justice (prevention of denial of justice), which form the broader ethical and procedural framework of arbitration in France.
Over the 19 principles elected to be enshrined, the report highlights and develop only few:
- Regarding the principle of independence and impartiality of the arbitral tribunal, it is given a particular prominence in the reform, both through its inclusion in the preliminary article of the Code and its designation as a guiding principle. However, the reform does not aim to consolidate the jurisprudence that has recognised exceptions such as the notoriety or the parties’ duty of curiosity (which exempt the arbitrator from disclosing allegedly well-known facts). Instead, it adopts a strict approach according to which, arbitrators must disclose any circumstances that, in the eyes of the parties, could affect their independence or impartiality, and cannot rely on the fact that such information might be publicly known. Parties are not expected to be in a state of constant investigation.
- Regarding the equality of the parties, this principle is reaffirmed at the stage of the constitution of the arbitral tribunal and throughout the arbitral proceedings. It ensures that the parties are treated equally and fairly.
- Regarding the confidentiality of proceedings, the reform extends this principle (already established in domestic arbitration) to international arbitration, while allowing for necessary exceptions, particularly in the context of investment arbitration. However, its application ultimately remains subject to party autonomy.
- Regarding the proportionality, article 14 serves both as an encouragement and support for the arbitral tribunal. It urges the tribunal to “adopt a procedure adapted to the complexity and stakes of the dispute”. In response to certain issues and recurring criticisms regarding the cost and duration of arbitration, this is a call for moderation on all fronts (time, volume of submissions, document production requests, length of hearings, number of witnesses to be heard, and the cost for the parties).
- Regarding the prohibition of denial of justice, this principle introduces a new role for the supporting judge (“juge d’appui”), who becomes the judge overseeing the prevention of denial of justice in a broader sense. His role extends both materially, in cases where it is impossible to appoint an arbitrator, and substantively, when the timely delivery of an award is at risk.
These principles are presented not merely as procedural standards but as fundamental values that shape and distinguish the French approach to arbitration.
Unification of judicial control and support
Proposals N°6 to 9 aim to unify and rationalise the judicial handling of arbitration disputes by several objectives such as exclusive jurisdiction of the judicial courts (“tribunal judiciaire”) over all challenges and enforcement of international arbitral awards, including those involving public entities, thereby ending the long-standing jurisdictional duality exposed in the Inserm case (2010), where the recognition and enforcement of international awards involving French public entities was scattered between judicial and administrative Courts.
Exclusive jurisdiction is awarded to the Paris Judicial Court to decide on all international arbitration matters. Another purpose is the specialisation of domestic courts in handling arbitration matters, and the elimination of residual competence formerly existing in favour of commercial courts presidents as supporting judges (“juges d’appui”).
This restructuring is intended to foster efficiency, consistency, and international credibility.
Substantive changes: a more flexible, protective and efficient arbitration framework
Promotion of flexibility
Several proposals aim to liberalize and modernize arbitration procedures like the elimination of the references to “commercial” matters in determining the international character of arbitration and the tribunal’s ability to apply to trade usages.
It will also serve this purpose by simplifying the formal requirements for arbitration agreements, removing the requirement that the clause be in writing and aligning domestic arbitration on international standards.
In this regard, the reform aims to abolish the written form requirement for arbitration agreements to align domestic and international arbitration rules. As arbitration agreements are typically written in practice, this formal requirement is now seen as outdated and inconsistent with general contract law.
However, the requirement of written form will remain solely a matter of evidence. At the stage of enforcement or annulment proceedings, the arbitration agreement (or a copy thereof) will need to be produced. In practice, this means that the arbitration agreement will still have to be recorded in a document, even if it does not meet the strict definition of a written instrument.
Party protection and procedural safeguards
The reform also seeks to bolster procedural guarantees such as the necessity for tribunal’s seated in France to be composed of an odd number of arbitrators.
According to the proposition of code, arbitrators should be natural persons, through these does not hinder recognition of awards rendered abroad by legal entities and the contractual nature of relationships between parties, arbitrators and arbitral institution will be formally recognised.
A mechanism for financial hardship (“impécuniosité”) is introduced to prevent abuses and ensure access to justice. Jurisprudence has confirmed that impecuniosity does not render the arbitration agreement manifestly void or inapplicable. While ensuring access to arbitration lies with the “arbitration actors” (i.e arbitrators, institutions, parties) the authority of the supporting judge (“juge d’appui”) to intervene in support of an impecunious party remains unsettled.
The reform proposal aims to expressly empower the juge d’appui to facilitate arbitral proceedings in such circumstances by ordering “any appropriate measures” (art. 33): this would serve to prevent a genuine denial of justice. Measures may include procedural actions (e.g., convening a case management conference) or substantive adaptations (e.g., amending the arbitration agreement to reduce costs, appointing a sole arbitrator, selecting a less expensive arbitral institution, or streamlining proceedings by limiting document production, written submissions, or hearings).
It also proposes a clarification of arbitration rules applicable in labour, family, and consumer fields:
- Regarding Family Law, the working group clarified that arbitration is allowed for patrimonial issues in family law but excluded for matters related to personal status. Divorce remains under state Courts’ jurisdiction. For patrimonial matters, additional safeguards are proposed, such as a written agreement, lawyers counter-signature, appeal options. Family judges will also have exclusive jurisdiction on recognition and enforcement of the awards.
- Regarding Labour Law and Consumer Law, the proposed measures aim to emphasize that while an arbitration agreement is permissible in these areas, it cannot be imposed by the “strong” party on the “weak” party. The latter will always have the option to exclude its application and revert to State Courts. Furthermore, in these areas, the principle of competence-competence is excluded, meaning that the consumer or the employee will not be obliged to establish an arbitral tribunal in order to invoke the jurisdiction of the State Court.
A protection of third-party rights is also specified through accessory intervention before the Court of Appeal and rule for third party opposition (tierce opposition), prohibited against arbitral awards but allowed against the Court decision related to them, such as decisions related to annulment proceedings or requests for exequatur.
Procedural efficiency
To promote procedural efficiency, the reform proposes the codification of the negative effect of the competence-competence principle, the authorization of consolidation of arbitral proceedings.
It entails the following modification and few others:
- Rewriting of the article 1448 of the Code of civil procedure and elimination of its last paragraph. This article currently states that “where a dispute falling within the scope of an arbitration agreement is brought before a State court, the court shall decline jurisdiction unless the arbitral tribunal has not yet been seized and the arbitration agreement is manifestly null and void or manifestly inapplicable”. Its second and third paragraph state that “the state court may not raise its lack of jurisdiction ex officio” and that “any provision to the contrary shall be deemed unwritten”.
Contrary stipulations would therefore be permitted, and parties could expressly provide in their arbitration agreement that the court is authorized to conduct a full review of the arbitration clause, or that the parties waive the principle of the arbitrator’s priority. However, such a deviation to be valid, it must be explicit and unequivocal.
- In order to consolidate procedures, unless the parties agree otherwise, in cases involving claims based on multiple contracts or related to multiple contracts, these claims should be made in a single arbitration proceeding under one or more arbitration agreements. However, two conditions are required: the compatibility of the arbitration agreements and the existence of a connection between the claims such that it is in the interest of efficiency and justice to have them heard and decided together by the arbitral tribunal.
- Under the current law, the arbitral tribunal can impose a penalty (“astreinte”), but there is not provision regarding its authority to liquidate it. The future code would allow the tribunal to do so “as long as it remains seized of the case”. However, it does not mean that the tribunal to retain jurisdiction for the purpose of liquidating the penalty after it has rendered its final award.
In addition to this, the project lays the groundwork for class arbitration, poses principles of procedural loyalty and concentration of arguments and expanding the powers of the supporting judge to address denial of justice, financial hardship, evidence production, enforcement and interim measures, and constitution of tribunals.
The efficiency objective also extends to recognition and enforcement of arbitral awards in clarifying recognition procedures and deadlines, removing the suspensive effect of appeals in domestic arbitration, allowing incidental annulment or refusing of enforcement to apply to related awards, and revisiting annulment grounds and enabling award correction or classification to avoid annulment or enforcement refusal.
Regulatory adjustments and technical reforms and promoting transparency
This reform includes adjustment proposals to ensure consistency across existing legislation and regulation.
Lastly, this reform addresses the promotion and dissemination of French arbitration law by increasing transparency in the appointment of arbitrators by supporting judges, including publication of the names and an annual public list. It is planned to reinforce judicial training in arbitration through enhanced ENM (“Ecole Nationale de la Magistrature”, which is the national school of judges) programs, internships with the ICC, and digital tools.
Promoting French arbitration law domestically and internationally through multilingual commentaries, outreach events, and strategic communication will be a way to extend the project.
In conclusion, the 2025 reform constitutes a major step toward modern, readable, and globally competitive French arbitration law. By consolidating legislation, strengthening procedural safeguards, and fostering accessibility and transparency, the proposed arbitration code is poised to elevate France as a leading venue for arbitration.
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.
PFAS are chemicals that have been used in industry for over 50 years. Between 4,000 and 5,000 varieties are used for various everyday consumer applications, and they are renowned for their non-stick, waterproofing, and heat-resistant properties. They have come under scrutiny in recent years, and are covered by European regulations, as they are in the USA, where the public authorities have imposed maximum use values, as well as reporting obligations. EU Regulation 2019/1021 (POP) restricts the production and use of certain categories of PFAS in specific industries or above certain values and their use with food products. France has gone further, regulating the levels of discharges into watercourses.
Scientific research suspects that PFAS cause illnesses such as cancer and reproductive disorders. Given the extent of contamination not only in everyday products but also in the environment, particularly waterways, the issue is likely to pose major public health problems in the years to come. This concern is more pressing given that PFASs are considered ‘eternal pollutants’, as there is currently no way of eliminating them from the environment.
The impact on companies’ and insurers’ liability is already significant. In the USA, more than 6,000 lawsuits have been filed since 2005. Three groups have already paid more than USD 1.2 billion in settlements due to contamination, and another group has paid more than USD 10 billion to end a class action.
In France, the Metropole of Lyon has brought a summary expert appraisal action against two chemical companies before considering bringing a liability action. In addition, several criminal complaints have been lodged for endangering the lives of others and damaging the environment.
Under French law, companies and their insurers could be liable on various legal grounds. In addition to ordinary civil liability law – based on article 1240 of the Civil Code – the special system of liability for defective products could also serve as a basis for a liability action (articles 1245 et seq. of the Civil Code), with French law defining a defect as any product that does not offer the safety that can legitimately be expected.
Although it is currently difficult to identify a causal link with an identified disease, asbestos-related case law has shown in the past that victims can take action if they can demonstrate that they suffered anxiety-related harm as a result of their exposure to the product, even if they are not positively suffering from a disease at the time of their claim.
In addition, the reporting obligations imposed by the public authorities will undoubtedly facilitate the filing of liability actions by facilitating the identification of the emitters and users of these pollutants.
Insurers are directly affected by this phenomenon, which for them constitutes an “emerging” risk (“silent cover”) because, for the most part, this risk was not identified when the policy was taken out, which exposes them directly and is all the more problematic because insurance premiums have not been able to take such a risk into account.
Civil liability or professional indemnity insurance policies, especially if they are drafted with “all risks except” clauses (“tous risques sauf” in French legal vocabulary, i.e. covering all liability risks vis-à-vis third parties except those strictly listed), as well as those including clauses relating to environmental risks, are particularly targeted.
Lloyd’s has already published model exclusion clauses for the attention of insurers, although such clauses can obviously only cover future insurance contracts or endorsements:
https://www.lmalloyds.com/LMA_Bulletins/LMA23-039-SD.aspx
The clauses contained in insurance policies must be drafted with particular care, considering each country’s specific features. In France, for example, to be enforceable against the insured, clauses must be “formal and limited”, which means that the exclusion must be both clearly expressed and that it must be possible to determine its content perfectly.
For example, the Court of Cassation recently ruled that the use of the terms “such as” or “in particular” (“tells que” “en particulier”) in an exclusion clause led to confusion in the interpretation of the exclusion clause, rendering it invalid (Civ. 2e, 26 Nov. 2020, no. 19-16.435). There was also a debate on the validity of an exclusion clause relating to bodily injury caused by asbestos, a risk which at the time had not been identified by insurers, who subsequently excluded it from most policies (Cass. 2e civ., 21 Sept. 2023, nos. 21-19801 and 21-19776). Similarly, policies should clearly indicate whether cover is provided based on a harmful event or based on a claim (i.e “base dommage” or “base reclamation”, which indicates if the risk is covered, depending on if the damage happened during the policy was valid, or if it depends on the moment when the risk was notified by the insured during such period).
One thing is sure: the risks associated with PFAS and claims are only just beginning to emerge in Europe, where the conditions for group actions have recently been extended with EU Directive 2020/1828, which came into force on 25 June 2023 and is currently the subject of a draft law under discussion in the French Parliament with a view to its transposition.
Dealing with unpaid invoices can be challenging for any business. In Belgium, where judicial processes can seem daunting, understanding how to manage debt collection effectively is crucial. This article offers practical guidance derived from a comprehensive legal guide to help your company navigate Belgium’s judicial debt recovery landscape.
Understanding Your Options
Assess the Situation: Before taking legal action, evaluating the amount owed and the debtor’s financial status is essential. This assessment will guide you in choosing the appropriate legal avenue, as Belgium offers different courts and procedures based on the dispute’s value. For instance, for claims up to € 5,000, the local court or ‘justice de paix’, which is a court of first instance for minor civil cases, is typically used due to its cost-effectiveness and efficiency.
Send a Notice of Default: Under Belgian law, a notice of default is mandatory before initiating legal proceedings. This step adheres to legal requirements and gives the debtor one last chance to settle their dues without further legal complications.
Efficient Legal Procedures
Use Simplified Procedures for Small Amounts: A simplified legal procedure can be utilized for undisputed money debts up to €1,860, which expedites the payment request process significantly. This approach can be particularly advantageous for recovering smaller debts quickly.
Consider Direct Bailiff Intervention: For undisputed amounts, irrespective of their size, between companies, creditors can authorize a bailiff to recover the debt directly without a court judgment. This procedure reduces legal fees and speeds up the debt collection process.
Leveraging Legal and Financial Advice
Consult with a Belgian Attorney: Navigating the Belgian legal system can be complex. Consulting with a local attorney can provide insights into the most effective procedures tailored to your case. This is especially true for international debt collection, where regulations and guidelines vary significantly.
Prepare Necessary Documentation: Ensure you have all necessary documents, such as contracts, invoices, and payment records, organized. These documents are essential to support your claim, whether you are dealing with local or international debt recovery.
After Initiating Debt Recovery
Use Interim Measures: If immediate action is needed, interim measures like seizing bank accounts or assets may be applicable. These measures, which are temporary and can be requested even before legal proceedings, can ensure that the debtor’s assets are secured while the legal process unfolds.
Conclusion
Recovering debts through judicial means in Belgium requires understanding the legal landscape and an appropriate strategy based on the debt’s nature and amount. While this article provides practical guidance, it is important to note that each case is unique, and professional legal advice is recommended for complex debt recovery cases. Businesses can enhance their chances of successful debt recovery while maintaining financial stability by utilizing simplified procedures for smaller or undisputed debts and consulting with legal experts. This proactive approach ensures that your business can continue to thrive even in the face of financial adversity.
What do the mythical Vega Sicilia wines, El Cid Campeador and the abuse of rights have in common? If you read on, you will find out.
The Vega Sicilia Único was for many years considered the best, the most prestigious and the most expensive Spanish wine.
The abuse of rights is a legal institute that allows the defense of situations in which the opponent acts with (apparent and formal) subjection to the law, but making a spurious use of the law with the intention of harming the injured party.
Last October, the Supreme Court handed down a judgment declaring certain agreements adopted by Bodegas Vega Sicilia S.A., producer of Vega Sicilia Único wine, to be null and void based on the principle of abuse of rights.
The judgment in question is doubly interesting.
Firstly, because it highlights the endemic evil of Spanish justice: it declares the nullity of resolutions adopted at a meeting held in March 2013, which were the subject of a lawsuit in February 2014, with a first instance ruling that same year, appealed to the Provincial Court of Valladolid who issued its judgement on 2019 and four years later the Supreme Court has put an end to the lawsuit: nine years after the shareholders meeting whose resolutions were the subject of the challenge.
As the Constitutional Court very recently reiterated in its ruling dated last October, “judicial slowness has no place in the Magna Carta”. But, although it has no place, or should not have a place, our courts continue to insist that it does and, as an example, this case that we are commenting on is, unfortunately, no exception.
Beyond the barbarity of a litigant having to wait for nine years to find a final solution to his claim, the judgment we are commenting on is of interest for other reasons.
The plaintiffs sought the nullity of certain resolutions adopted at a shareholders’ meeting, basing their claim on the fact that these resolutions constituted an abuse of rights since, through them, the shareholders of Bodegas Vega Sicilia S.A. sought to take control of Bodegas Vega Sicilia away from the company of which the plaintiffs were in turn shareholders.
The legislation in force at the time the meeting was held (prior to the 2014 reform) established that “resolutions that are contrary to the law, oppose the articles of association or harm the corporate interest to the benefit of one or more shareholders or third parties” could be challenged, adding that those contrary to the law would be null and void and the remaining resolutions could be annulled.
Following the 2014 reform, article 204 considers that “corporate resolutions that are contrary to the law, are contrary to the articles of association or the regulations of the company meeting or harm the corporate interest to the benefit of one or more shareholders or third parties” can be challenged and no longer distinguishes between null and voidable resolutions; although it partially recovers the concept of radical nullity in the case of resolutions contrary to public order by establishing that in such cases the action does not have a statute of limitations or lapse.
But both with the regulations prior to the reform and with those currently in force, the controversy resolved by the ruling we are commenting on is the same: when the legislator requires the agreement to be contrary to “law” in order to be able to challenge it, does he mean that it contravenes a precept of the Capital Companies Act (LSC), or can it be considered a requirement for challengeability if it contravenes any other positive precept of any other legal text? And finally, if the resolution in question is classified as constituting an “abuse of rights”, can such a situation be considered as “contrary to law” for the purposes of the application of article 204 LSC?
The Chamber reminds us of the requirements for the concurrence of abuse of rights in corporate matters:
- formal or outwardly correct use of a right
- causing damage to an interest not protected by a specific legal prerogative, and
- the immorality or antisociality (sic) of that conduct manifested subjectively (intention to damage or absence of legitimate interest) or objectively (abnormal exercise of the right contrary to the economic and social purposes of the same).
And it then refers to the numerous occasions on which its case law has reiterated that, although the regulation on challenging corporate resolutions does not expressly mention abuse of rights, this is no obstacle to annulling resolutions in such cases, since according to article 7 of the Civil Code (which prohibits abuse of rights), they must be deemed as contrary to the law.
The interest and peculiarity of this case lies in the fact that the contested resolutions were neither adopted in the interests of the company nor did they cause any harm to it, since the alleged harm was caused to a third party formally outside the company.
And on these premises, the Supreme Court reiterates and insists that the expression “contrary to the law” in article 204 LSC must be understood as “contrary to the legal system”, which includes those agreements adopted in fraud of the law, in bad faith or with abuse of rights, all of which are included and regulated in the Preliminary Title of the Civil Code. For these reasons, the judgment of the Provincial Court upholds the claim and declares the nullity of the contested agreements.
And what has El Cid got to do with all this? Is it a typo? No, not at all. Legend has it (invented, it seems, by a monk of the monastery of San Pedro de Cardeña to attract visitors) that Rodrigo Diaz de Vivar won a battle on the walls of Valencia against the Almoravids, after his death, saddling his corpse on his legendary horse Babieca.
It turns out that his almost fellow countryman, David Alvarez, buyer of the winery in the 1980s, the latter from León, the former from Burgos, but both old Castilians, also won his last battle after his death; David Alvarez was, together with one of his daughters, a plaintiff against the agreements of Bodegas Vega Sicilia and died in 2015; seven years later the Supreme Court has given him the right against the Almogavars, in this case, his own children.
And two lessons: first, justice is not justice if it is slow, a phrase apocryphally attributed to Seneca; it was not in this case for David Alvarez. Secondly, the abuse of rights is not only an “in extremis” recourse when one does not find frank legal support for one’s claims; on the contrary, it is, on many occasions, the solution.
Every employer should manage the risk of employee lawsuits. Many companies believe that they treat their workers well and that their employees are happy. As a result, they believe that they are not at risk of a lawsuit. But in my work, I frequently see employment relationships sour and employees surprise management by retaining a lawyer.
Employers should proactively manage this risk instead of hoping lawsuits never come. Defending a business against litigation by a current or former employee takes a lot of time and can be very expensive. It can also be incredibly frustrating to see an employee the company once trusted making false and damaging allegations. But employers can take steps before a dispute arises to reduce the impact of a lawsuit. I discuss eight such steps below.
First, employers should consider purchasing insurance that may cover employee claims. In the United States, this insurance is called Employment Practices Liability (“EPLI”) Insurance. These kinds of insurance policies may pay for a lawyer to defend the company in the event of a lawsuit. They may also pay the employee the amount he or she demands or that a court awards. Although insurance costs money, many companies prefer to pay regular and foreseeable premiums than sudden, steep, and unpredictable legal fees and employee payouts.
Second, employers should implement and enforce sexual harassment policies. Policies like these discourage the type of behavior that can subject a company to liability. But in many jurisdictions, they may also provide a defense to a company in the event an employee sues the company for allowing the harassment to take place.
Third, employers should seriously examine disparities in pay and job roles. If the highest paid employees at a company are largely male and the lowest paid employees are largely female, then an employee may claim that the employer engages in sex discrimination. Similarly, if the executives of a company are largely white but its blue-collar workers are largely people of color, an employee may allege that the company engages in racial discrimination. Rather than litigate these issues, a company should investigate whether those disparities exist in its own workplace and address them if they do.
Fourth, employers should consider whether they want employment disputes to go to arbitration instead of to court. Employers can largely determine this by including an arbitration clause in the offer letters they send to employees upon hiring them. Arbitration has some advantages: it tends to move quicker, it is private, it has the reputation for being a friendly forum for employers, and it tends to cost less. But it also has some downsides: it does not permit appeals on the merits of the dispute and it can cost more than litigation depending on the kind of case.
Fifth, any time an employee discloses that he or she has a health issue, the company should immediately consider how to accommodate that issue. Many employers may disregard the disclosure of a health issue if it does not seem important to the employee’s job. But if the employee later believes that the employer penalized him or her because of the health issue, the employee may claim discrimination. Before that happens, an employer should work with an employee to make sure the health issue does not impede job performance.
Sixth, employers should ensure they make consistent decisions. If an employer allows one employee to work from home, other employees may want the same treatment. And if an employer lays one employee off, she may wonder why another employee did not meet the same fate. Employers may reduce the risk of a lawsuit by setting firm policies and abiding by them.
Seventh, employers should frequently consult a lawyer they trust when employment issues arise. Spending a few hundred dollars to speaking to a lawyer for an hour before firing an employee or before responding to an employee complaint can help an employer avoid a lawsuit that may cost tens or even hundreds of thousands of dollars.
And finally, employers should consider settling disputes with employees, even if they are meritless. No company wants an employee to take advantage of them. But lawsuits are often more expensive and a hassle than the cost of a settlement. Spending a lot of money on defense, even if successful, may be more expensive than just compromising and paying the employee a fraction of what they demand.
写信给 Javier
USA – How to Manage the Risk of Employee Lawsuits
2022年9月26日
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美国
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Introduction: A Paradigm Shift in Conflict Resolution
The approval of Organic Law 1/2025, of January 2, on measures for the efficiency of the Public Justice Service, marks a turning point in the Spanish judicial system. This legislation is not limited to introducing procedural changes, but reflects a profound transformation in the very concept of justice. The legislator has made a firm commitment to promoting alternatives to the judicial resolution of disputes, making prior negotiation a central element of the system.
The saturation of the courts, the costs associated with judicial proceedings, and the search for more satisfactory solutions for the parties have prompted this reform, which places the so-called “appropriate means of non-jurisdictional dispute resolution” as the cornerstone of a new justice model oriented towards dialogue and agreement.
The philosophy behind alternative means of dispute resolution
Beyond the decongestion of the courts, this reform responds to a philosophy that understands that not all conflicts necessarily require a judicial response. Alternative means of dispute resolution are based on the premise that many conflicts can find more satisfactory and lasting solutions, adapted to the needs and interests of the parties, when they actively participate in their construction.
Organic Law 1/2025 defines these means as “any type of negotiating activity, recognized in this or other laws, state or autonomous, to which the parties to a conflict resort in good faith with the aim of finding an extrajudicial solution to it, either by themselves or with the intervention of a neutral third party”. This broad and flexible definition is intended to cover various forms of negotiation whose common denominator is the protagonism of the parties in the resolution of their own disputes.
A range of possibilities: Diversity of mechanisms for diversity of conflicts
One of the most noteworthy aspects of the new regulation is that it does not rely on a single model of alternative dispute resolution but recognizes the diversity of situations and the need to offer different tools adapted to each particular case.
Mediation, already consolidated in our legal system through Law 5/2012, maintains its relevance as the preferred method, but other modalities such as conciliation in its various variants (notarial, registry, before a lawyer of the Administration of Justice or judicial), the opinion of independent experts, confidential binding offers, or the novel process of collaborative law are added to it.
This plurality of mechanisms reflects the complexity of contemporary legal relationships and the need to provide tailored responses to each type of conflict. Resolving a neighborhood dispute is not the same as resolving a complex business dispute, and the legislator has been aware that “one size fits all” would not be effective for the diversity of situations that may arise.
The controversial commitment to enforceability: The requirement of procedural validity
Undoubtedly, the most innovative -and probably the most controversial- aspect of the new regulation is the configuration of these means as a mandatory prerequisite for resorting to judicial proceedings in certain areas. This decision represents a qualitative leap with respect to the previous regulation, which mainly favored the voluntary nature of these mechanisms.
From the entry into force of Organic Law 1/2025, April 3, 2025, the claim in the civil jurisdictional order will not be admitted if it is not justified that the resolution of the conflict has been previously attempted by any of the recognized alternative ways. Not only that, but also the identity between the object of the previous negotiation and the object of the litigation to be initiated must be established.
This mandatory nature has been the subject of intense debate. Its advocates argue that it is necessary to promote cultural change in a traditionally litigious society, while its detractors warn of the risk of turning these mechanisms into mere formalities that distort their true purpose.
The truth is that the legislator has tried to find a balance, excluding from this obligation certain particularly sensitive matters or those which, by their nature, require an immediate judicial response. Thus, issues such as the judicial protection of fundamental rights, measures for the protection of minors, or the request for precautionary measures, among others, are exempted from the requirement of prior negotiation.
The guiding principles: Autonomy and confidentiality as pillars of the system
The effectiveness of alternative dispute resolution rests mainly on two fundamental principles: the autonomy of the parties and the confidentiality of the process.
The principle of private autonomy recognizes that the parties themselves best know their interests and needs and are, therefore, in the best position to find solutions adapted to their situation. The law establishes that the parties are free to settle, if they respect the law, good faith, and public policy. This freedom is essential for the solutions reached to be truly satisfactory and lasting.
The principle of confidentiality is crucial to creating a climate of trust that allows the parties to express themselves freely during the negotiation process. The law establishes that the information and documentation disclosed during the negotiation must be kept confidential, with very specific exceptions, such as express waivers by the parties, court orders in criminal matters, or reasons of public order.
This duty of confidentiality extends to all participants in the process: the parties, their lawyers, and, where appropriate, the neutral third party involved. The aim is to ensure that what is said or proposed during the negotiation cannot be used later in a possible judicial process, thus promoting a sincere and constructive dialogue.
The Negotiation Process: Relevant Procedural Aspects
The regulation of the procedural aspects of the different means of dispute resolution also reflects the legislator’s desire to combine the necessary flexibility with the minimum guarantees required.
As regards standing, the initiative to resort to these mechanisms may come from either party, from both by mutual agreement, or even from a judicial referral. This recognizes both the parties’ autonomy and the possibility that the judicial system itself may encourage the use of these alternative channels.
Regarding the involvement of professionals, the law generally prefers a non-mandatory approach to legal assistance, except in specific situations like the preparation of binding offers (with exceptions for smaller amounts). This flexibility aims to enhance access to these mechanisms; however, the complexity of many legal disputes often makes it wise to seek professional guidance.
A particularly relevant aspect is the effect that the request for these mechanisms has on the statute of limitations and expiration periods. The law establishes that such a request interrupts the statute of limitations or suspends the expiration of actions from the date of communication to the other party, thus avoiding the attempt of an amicable solution that may prejudice the rights of the party that promotes it.
In terms of form, the preferred method is face-to-face, although the use of telematic means is permitted by agreement of the parties or in the case of claims for amounts of less than 600 euros. This flexibility is particularly appropriate in a context of increasing digitalization of legal relations.
Specific Modalities: Diversity of mechanisms for diversity of conflicts
Among the different modalities recognized by the law, it is worthwhile to focus on some that present particularly novel or relevant characteristics.
Private conciliation involves the intervention of a person with technical or legal expertise related to the dispute’s subject matter. The law requires this person to be registered in a recognized professional association or in a register of mediators and to act impartially and confidentially. This mechanism takes advantage of the specialized knowledge of certain professionals to facilitate agreement in technically complex matters.
The confidential binding offer is a particularly interesting mechanism for certain types of disputes. One of the parties makes an offer that is binding on it in the event of acceptance by the other party. The law requires that the identity of the offeror, the actual receipt by the other party, and the detailed content of the offer be recorded. This instrument can be particularly useful in financial claims, where the main obstacle to settlement is often the amount.
The independent expert opinion consists of commissioning an opinion from an expert in the subject matter of the dispute. Unlike other mechanisms, this opinion is not binding, but may serve as a basis for agreement if the parties accept it, or at least to clarify the technical aspects of the dispute. Following the issuance of the opinion, the parties may accept it as an agreement, propose improvements or reject it, in which case the procedural requirement is deemed to be fulfilled.
Finally, the collaborative law process represents perhaps the most innovative aspect of the new regulation. It is a structured negotiation in which the parties, assisted by their respective lawyers, work together to reach a satisfactory solution, being able to integrate other professionals (psychologists, economists, etc.) when the complexity of the case requires it. At the end, minutes are drawn up with the participants, the sessions held and the agreements reached.
The challenge of implementation: From theory to practice
The real effectiveness of this new system will depend largely on how it is implemented in practice. It is not enough to make it compulsory to attempt out-of-court settlement; this attempt must be genuine and not become a mere formality.
In this regard, the law requires that the negotiation attempt be “real and credible; it cannot be fictitious.” To this end, it establishes documentation requirements that vary depending on whether or not a neutral third party is involved but always include a responsible statement that the parties have intervened in good faith in the process.
Likewise, the law regulates in detail when the negotiation process is understood to be concluded, whether it concludes with or without an agreement. In the event of an agreement, it must be formalized by identifying the parties and, if applicable, their lawyers and the neutral third party, indicating the place and date, as well as the obligations assumed by each party.
The possibility of converting the agreement into a public deed to convert it into an enforceable title reinforces its value and facilitates its compliance, avoiding the possibility of non-compliance with the agreement, forcing the initiation of a declaratory judicial proceeding.
A horizon to be explored: Perspectives and challenges
Organic Law 1/2025 represents a turning point in the conception of justice in Spain, bringing us closer to models already consolidated in other countries with a long tradition in alternative means of conflict resolution. The United States, Canada and the Nordic countries have been using these mechanisms for decades, with generally positive results in terms of user satisfaction and decongestion of the courts.
However, each legal system has its particularities, and the success of these mechanisms depends not only on their legal regulation but also on cultural, sociological, and organizational factors. Spanish society’s traditional litigiousness, the poor negotiating culture in certain areas, and the lack of specific training of many professionals are challenges that must be faced.
The commitment to obligatory nature as an initial impulse may be understandable in a context of paradigm change, but the real success of these mechanisms will come from their capacity to generate satisfactory solutions that will progressively make them the preferred option on their own merits, beyond their obligatory nature.
Conclusion: Between Hope and Caution
The new regulation of the appropriate means of non-jurisdictional dispute resolution is in line with a clear international trend towards the promotion of alternatives to judicial dispute resolution. This trend responds both to practical needs – decongesting the courts, reducing costs – and to a philosophy that values the protagonism of the parties in the management of their own conflicts.
In this sense, Spanish legislation joins a global movement that has shown positive results in many jurisdictions. However, only time will tell whether the legislative technique used, especially the commitment to mandatory nature as a procedural requirement, is the most appropriate to achieve the true purpose of encouraging agreement in order to avoid litigation.
The success of this reform will depend not only on its regulatory design, but also on factors such as adequate training of the professionals involved, public awareness of the advantages of these alternative routes, and the system’s capacity to evaluate and adapt according to the results obtained.
In short, we are facing an ambitious and necessary reform, which opens up a hopeful horizon but which will have to overcome important challenges in order to consolidate itself as a true paradigm shift in the administration of justice in Spain. The true criterion of success will not be the number of negotiation attempts made, but the quality of the agreements reached and the satisfaction of citizens with a more participatory, efficient justice system adapted to their real needs.
On April 8, 2025, during the Paris Arbitration Week, France’s Ministers of Justice Gérard Darmanin, announced a significant reform of French arbitration law. The aim of this reform is to clarify, modernise and consolidate the regulatory framework, the last substantial revision of which dates back to 2011.
It is set to culminate in the adoption of an Arbitration code by autumn 2026. This code is envisioned as a unifying legal instrument that will enhance the clarity, autonomy and international appeal of French arbitration law.
Structural proposals: building an autonomous and coherent legal framework
The creation of a standalone Arbitration Code
The proposal n°1 calls for the unification of all legislative and regulatory text governing arbitration within a dedicated code, structured into several parts and decoupled from the approximately 20 existing codes currently housing arbitration provisions.
This codification process is not purely technical, it serves pedagogical, symbolic and strategic purposes namely, enhancing the clarity, accessibility and international attractiveness of French arbitration law.
Common provisions for domestic and international arbitration
Proposal n°3 and 4 suggest reorganising French arbitration law around a set of common rules applicable to both domestic and international arbitration with limited derogation for the former. This represents a shift from the current dualistic system to a more unified and clearer and framework without eliminating the particularities of either.
As an instance, a preliminary article would define the international nature of arbitration, abandoning outdated reference to “commercial” character in favour of a more inclusive in realistic standard.
However, it does not mean a division summa divisio of those two types of arbitration because of the stable wish to preserve the dissociation between ordre public interne and ordre public international.
Codification of guiding principles
Proposal n°5 aims to enshrine as guiding principles (“principes directeurs”) those considered to embody the core values of French arbitration law such as the autonomy of the arbitration agreement, the competence-competence principle, the independence and impartiality of the arbitral tribunal, and the respect for the adversarial principle and party equality.
Others, though not considered fundamental, nonetheless shape the legal framework, such as good faith, loyalty, the principle of effectiveness (“effet utile”), confidentiality, proportionality, procedural loyalty and celerity, parties’ autonomy in choosing applicable law and procedure rules, amiable composition and access to justice (prevention of denial of justice), which form the broader ethical and procedural framework of arbitration in France.
Over the 19 principles elected to be enshrined, the report highlights and develop only few:
- Regarding the principle of independence and impartiality of the arbitral tribunal, it is given a particular prominence in the reform, both through its inclusion in the preliminary article of the Code and its designation as a guiding principle. However, the reform does not aim to consolidate the jurisprudence that has recognised exceptions such as the notoriety or the parties’ duty of curiosity (which exempt the arbitrator from disclosing allegedly well-known facts). Instead, it adopts a strict approach according to which, arbitrators must disclose any circumstances that, in the eyes of the parties, could affect their independence or impartiality, and cannot rely on the fact that such information might be publicly known. Parties are not expected to be in a state of constant investigation.
- Regarding the equality of the parties, this principle is reaffirmed at the stage of the constitution of the arbitral tribunal and throughout the arbitral proceedings. It ensures that the parties are treated equally and fairly.
- Regarding the confidentiality of proceedings, the reform extends this principle (already established in domestic arbitration) to international arbitration, while allowing for necessary exceptions, particularly in the context of investment arbitration. However, its application ultimately remains subject to party autonomy.
- Regarding the proportionality, article 14 serves both as an encouragement and support for the arbitral tribunal. It urges the tribunal to “adopt a procedure adapted to the complexity and stakes of the dispute”. In response to certain issues and recurring criticisms regarding the cost and duration of arbitration, this is a call for moderation on all fronts (time, volume of submissions, document production requests, length of hearings, number of witnesses to be heard, and the cost for the parties).
- Regarding the prohibition of denial of justice, this principle introduces a new role for the supporting judge (“juge d’appui”), who becomes the judge overseeing the prevention of denial of justice in a broader sense. His role extends both materially, in cases where it is impossible to appoint an arbitrator, and substantively, when the timely delivery of an award is at risk.
These principles are presented not merely as procedural standards but as fundamental values that shape and distinguish the French approach to arbitration.
Unification of judicial control and support
Proposals N°6 to 9 aim to unify and rationalise the judicial handling of arbitration disputes by several objectives such as exclusive jurisdiction of the judicial courts (“tribunal judiciaire”) over all challenges and enforcement of international arbitral awards, including those involving public entities, thereby ending the long-standing jurisdictional duality exposed in the Inserm case (2010), where the recognition and enforcement of international awards involving French public entities was scattered between judicial and administrative Courts.
Exclusive jurisdiction is awarded to the Paris Judicial Court to decide on all international arbitration matters. Another purpose is the specialisation of domestic courts in handling arbitration matters, and the elimination of residual competence formerly existing in favour of commercial courts presidents as supporting judges (“juges d’appui”).
This restructuring is intended to foster efficiency, consistency, and international credibility.
Substantive changes: a more flexible, protective and efficient arbitration framework
Promotion of flexibility
Several proposals aim to liberalize and modernize arbitration procedures like the elimination of the references to “commercial” matters in determining the international character of arbitration and the tribunal’s ability to apply to trade usages.
It will also serve this purpose by simplifying the formal requirements for arbitration agreements, removing the requirement that the clause be in writing and aligning domestic arbitration on international standards.
In this regard, the reform aims to abolish the written form requirement for arbitration agreements to align domestic and international arbitration rules. As arbitration agreements are typically written in practice, this formal requirement is now seen as outdated and inconsistent with general contract law.
However, the requirement of written form will remain solely a matter of evidence. At the stage of enforcement or annulment proceedings, the arbitration agreement (or a copy thereof) will need to be produced. In practice, this means that the arbitration agreement will still have to be recorded in a document, even if it does not meet the strict definition of a written instrument.
Party protection and procedural safeguards
The reform also seeks to bolster procedural guarantees such as the necessity for tribunal’s seated in France to be composed of an odd number of arbitrators.
According to the proposition of code, arbitrators should be natural persons, through these does not hinder recognition of awards rendered abroad by legal entities and the contractual nature of relationships between parties, arbitrators and arbitral institution will be formally recognised.
A mechanism for financial hardship (“impécuniosité”) is introduced to prevent abuses and ensure access to justice. Jurisprudence has confirmed that impecuniosity does not render the arbitration agreement manifestly void or inapplicable. While ensuring access to arbitration lies with the “arbitration actors” (i.e arbitrators, institutions, parties) the authority of the supporting judge (“juge d’appui”) to intervene in support of an impecunious party remains unsettled.
The reform proposal aims to expressly empower the juge d’appui to facilitate arbitral proceedings in such circumstances by ordering “any appropriate measures” (art. 33): this would serve to prevent a genuine denial of justice. Measures may include procedural actions (e.g., convening a case management conference) or substantive adaptations (e.g., amending the arbitration agreement to reduce costs, appointing a sole arbitrator, selecting a less expensive arbitral institution, or streamlining proceedings by limiting document production, written submissions, or hearings).
It also proposes a clarification of arbitration rules applicable in labour, family, and consumer fields:
- Regarding Family Law, the working group clarified that arbitration is allowed for patrimonial issues in family law but excluded for matters related to personal status. Divorce remains under state Courts’ jurisdiction. For patrimonial matters, additional safeguards are proposed, such as a written agreement, lawyers counter-signature, appeal options. Family judges will also have exclusive jurisdiction on recognition and enforcement of the awards.
- Regarding Labour Law and Consumer Law, the proposed measures aim to emphasize that while an arbitration agreement is permissible in these areas, it cannot be imposed by the “strong” party on the “weak” party. The latter will always have the option to exclude its application and revert to State Courts. Furthermore, in these areas, the principle of competence-competence is excluded, meaning that the consumer or the employee will not be obliged to establish an arbitral tribunal in order to invoke the jurisdiction of the State Court.
A protection of third-party rights is also specified through accessory intervention before the Court of Appeal and rule for third party opposition (tierce opposition), prohibited against arbitral awards but allowed against the Court decision related to them, such as decisions related to annulment proceedings or requests for exequatur.
Procedural efficiency
To promote procedural efficiency, the reform proposes the codification of the negative effect of the competence-competence principle, the authorization of consolidation of arbitral proceedings.
It entails the following modification and few others:
- Rewriting of the article 1448 of the Code of civil procedure and elimination of its last paragraph. This article currently states that “where a dispute falling within the scope of an arbitration agreement is brought before a State court, the court shall decline jurisdiction unless the arbitral tribunal has not yet been seized and the arbitration agreement is manifestly null and void or manifestly inapplicable”. Its second and third paragraph state that “the state court may not raise its lack of jurisdiction ex officio” and that “any provision to the contrary shall be deemed unwritten”.
Contrary stipulations would therefore be permitted, and parties could expressly provide in their arbitration agreement that the court is authorized to conduct a full review of the arbitration clause, or that the parties waive the principle of the arbitrator’s priority. However, such a deviation to be valid, it must be explicit and unequivocal.
- In order to consolidate procedures, unless the parties agree otherwise, in cases involving claims based on multiple contracts or related to multiple contracts, these claims should be made in a single arbitration proceeding under one or more arbitration agreements. However, two conditions are required: the compatibility of the arbitration agreements and the existence of a connection between the claims such that it is in the interest of efficiency and justice to have them heard and decided together by the arbitral tribunal.
- Under the current law, the arbitral tribunal can impose a penalty (“astreinte”), but there is not provision regarding its authority to liquidate it. The future code would allow the tribunal to do so “as long as it remains seized of the case”. However, it does not mean that the tribunal to retain jurisdiction for the purpose of liquidating the penalty after it has rendered its final award.
In addition to this, the project lays the groundwork for class arbitration, poses principles of procedural loyalty and concentration of arguments and expanding the powers of the supporting judge to address denial of justice, financial hardship, evidence production, enforcement and interim measures, and constitution of tribunals.
The efficiency objective also extends to recognition and enforcement of arbitral awards in clarifying recognition procedures and deadlines, removing the suspensive effect of appeals in domestic arbitration, allowing incidental annulment or refusing of enforcement to apply to related awards, and revisiting annulment grounds and enabling award correction or classification to avoid annulment or enforcement refusal.
Regulatory adjustments and technical reforms and promoting transparency
This reform includes adjustment proposals to ensure consistency across existing legislation and regulation.
Lastly, this reform addresses the promotion and dissemination of French arbitration law by increasing transparency in the appointment of arbitrators by supporting judges, including publication of the names and an annual public list. It is planned to reinforce judicial training in arbitration through enhanced ENM (“Ecole Nationale de la Magistrature”, which is the national school of judges) programs, internships with the ICC, and digital tools.
Promoting French arbitration law domestically and internationally through multilingual commentaries, outreach events, and strategic communication will be a way to extend the project.
In conclusion, the 2025 reform constitutes a major step toward modern, readable, and globally competitive French arbitration law. By consolidating legislation, strengthening procedural safeguards, and fostering accessibility and transparency, the proposed arbitration code is poised to elevate France as a leading venue for arbitration.
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.
PFAS are chemicals that have been used in industry for over 50 years. Between 4,000 and 5,000 varieties are used for various everyday consumer applications, and they are renowned for their non-stick, waterproofing, and heat-resistant properties. They have come under scrutiny in recent years, and are covered by European regulations, as they are in the USA, where the public authorities have imposed maximum use values, as well as reporting obligations. EU Regulation 2019/1021 (POP) restricts the production and use of certain categories of PFAS in specific industries or above certain values and their use with food products. France has gone further, regulating the levels of discharges into watercourses.
Scientific research suspects that PFAS cause illnesses such as cancer and reproductive disorders. Given the extent of contamination not only in everyday products but also in the environment, particularly waterways, the issue is likely to pose major public health problems in the years to come. This concern is more pressing given that PFASs are considered ‘eternal pollutants’, as there is currently no way of eliminating them from the environment.
The impact on companies’ and insurers’ liability is already significant. In the USA, more than 6,000 lawsuits have been filed since 2005. Three groups have already paid more than USD 1.2 billion in settlements due to contamination, and another group has paid more than USD 10 billion to end a class action.
In France, the Metropole of Lyon has brought a summary expert appraisal action against two chemical companies before considering bringing a liability action. In addition, several criminal complaints have been lodged for endangering the lives of others and damaging the environment.
Under French law, companies and their insurers could be liable on various legal grounds. In addition to ordinary civil liability law – based on article 1240 of the Civil Code – the special system of liability for defective products could also serve as a basis for a liability action (articles 1245 et seq. of the Civil Code), with French law defining a defect as any product that does not offer the safety that can legitimately be expected.
Although it is currently difficult to identify a causal link with an identified disease, asbestos-related case law has shown in the past that victims can take action if they can demonstrate that they suffered anxiety-related harm as a result of their exposure to the product, even if they are not positively suffering from a disease at the time of their claim.
In addition, the reporting obligations imposed by the public authorities will undoubtedly facilitate the filing of liability actions by facilitating the identification of the emitters and users of these pollutants.
Insurers are directly affected by this phenomenon, which for them constitutes an “emerging” risk (“silent cover”) because, for the most part, this risk was not identified when the policy was taken out, which exposes them directly and is all the more problematic because insurance premiums have not been able to take such a risk into account.
Civil liability or professional indemnity insurance policies, especially if they are drafted with “all risks except” clauses (“tous risques sauf” in French legal vocabulary, i.e. covering all liability risks vis-à-vis third parties except those strictly listed), as well as those including clauses relating to environmental risks, are particularly targeted.
Lloyd’s has already published model exclusion clauses for the attention of insurers, although such clauses can obviously only cover future insurance contracts or endorsements:
https://www.lmalloyds.com/LMA_Bulletins/LMA23-039-SD.aspx
The clauses contained in insurance policies must be drafted with particular care, considering each country’s specific features. In France, for example, to be enforceable against the insured, clauses must be “formal and limited”, which means that the exclusion must be both clearly expressed and that it must be possible to determine its content perfectly.
For example, the Court of Cassation recently ruled that the use of the terms “such as” or “in particular” (“tells que” “en particulier”) in an exclusion clause led to confusion in the interpretation of the exclusion clause, rendering it invalid (Civ. 2e, 26 Nov. 2020, no. 19-16.435). There was also a debate on the validity of an exclusion clause relating to bodily injury caused by asbestos, a risk which at the time had not been identified by insurers, who subsequently excluded it from most policies (Cass. 2e civ., 21 Sept. 2023, nos. 21-19801 and 21-19776). Similarly, policies should clearly indicate whether cover is provided based on a harmful event or based on a claim (i.e “base dommage” or “base reclamation”, which indicates if the risk is covered, depending on if the damage happened during the policy was valid, or if it depends on the moment when the risk was notified by the insured during such period).
One thing is sure: the risks associated with PFAS and claims are only just beginning to emerge in Europe, where the conditions for group actions have recently been extended with EU Directive 2020/1828, which came into force on 25 June 2023 and is currently the subject of a draft law under discussion in the French Parliament with a view to its transposition.
Dealing with unpaid invoices can be challenging for any business. In Belgium, where judicial processes can seem daunting, understanding how to manage debt collection effectively is crucial. This article offers practical guidance derived from a comprehensive legal guide to help your company navigate Belgium’s judicial debt recovery landscape.
Understanding Your Options
Assess the Situation: Before taking legal action, evaluating the amount owed and the debtor’s financial status is essential. This assessment will guide you in choosing the appropriate legal avenue, as Belgium offers different courts and procedures based on the dispute’s value. For instance, for claims up to € 5,000, the local court or ‘justice de paix’, which is a court of first instance for minor civil cases, is typically used due to its cost-effectiveness and efficiency.
Send a Notice of Default: Under Belgian law, a notice of default is mandatory before initiating legal proceedings. This step adheres to legal requirements and gives the debtor one last chance to settle their dues without further legal complications.
Efficient Legal Procedures
Use Simplified Procedures for Small Amounts: A simplified legal procedure can be utilized for undisputed money debts up to €1,860, which expedites the payment request process significantly. This approach can be particularly advantageous for recovering smaller debts quickly.
Consider Direct Bailiff Intervention: For undisputed amounts, irrespective of their size, between companies, creditors can authorize a bailiff to recover the debt directly without a court judgment. This procedure reduces legal fees and speeds up the debt collection process.
Leveraging Legal and Financial Advice
Consult with a Belgian Attorney: Navigating the Belgian legal system can be complex. Consulting with a local attorney can provide insights into the most effective procedures tailored to your case. This is especially true for international debt collection, where regulations and guidelines vary significantly.
Prepare Necessary Documentation: Ensure you have all necessary documents, such as contracts, invoices, and payment records, organized. These documents are essential to support your claim, whether you are dealing with local or international debt recovery.
After Initiating Debt Recovery
Use Interim Measures: If immediate action is needed, interim measures like seizing bank accounts or assets may be applicable. These measures, which are temporary and can be requested even before legal proceedings, can ensure that the debtor’s assets are secured while the legal process unfolds.
Conclusion
Recovering debts through judicial means in Belgium requires understanding the legal landscape and an appropriate strategy based on the debt’s nature and amount. While this article provides practical guidance, it is important to note that each case is unique, and professional legal advice is recommended for complex debt recovery cases. Businesses can enhance their chances of successful debt recovery while maintaining financial stability by utilizing simplified procedures for smaller or undisputed debts and consulting with legal experts. This proactive approach ensures that your business can continue to thrive even in the face of financial adversity.
What do the mythical Vega Sicilia wines, El Cid Campeador and the abuse of rights have in common? If you read on, you will find out.
The Vega Sicilia Único was for many years considered the best, the most prestigious and the most expensive Spanish wine.
The abuse of rights is a legal institute that allows the defense of situations in which the opponent acts with (apparent and formal) subjection to the law, but making a spurious use of the law with the intention of harming the injured party.
Last October, the Supreme Court handed down a judgment declaring certain agreements adopted by Bodegas Vega Sicilia S.A., producer of Vega Sicilia Único wine, to be null and void based on the principle of abuse of rights.
The judgment in question is doubly interesting.
Firstly, because it highlights the endemic evil of Spanish justice: it declares the nullity of resolutions adopted at a meeting held in March 2013, which were the subject of a lawsuit in February 2014, with a first instance ruling that same year, appealed to the Provincial Court of Valladolid who issued its judgement on 2019 and four years later the Supreme Court has put an end to the lawsuit: nine years after the shareholders meeting whose resolutions were the subject of the challenge.
As the Constitutional Court very recently reiterated in its ruling dated last October, “judicial slowness has no place in the Magna Carta”. But, although it has no place, or should not have a place, our courts continue to insist that it does and, as an example, this case that we are commenting on is, unfortunately, no exception.
Beyond the barbarity of a litigant having to wait for nine years to find a final solution to his claim, the judgment we are commenting on is of interest for other reasons.
The plaintiffs sought the nullity of certain resolutions adopted at a shareholders’ meeting, basing their claim on the fact that these resolutions constituted an abuse of rights since, through them, the shareholders of Bodegas Vega Sicilia S.A. sought to take control of Bodegas Vega Sicilia away from the company of which the plaintiffs were in turn shareholders.
The legislation in force at the time the meeting was held (prior to the 2014 reform) established that “resolutions that are contrary to the law, oppose the articles of association or harm the corporate interest to the benefit of one or more shareholders or third parties” could be challenged, adding that those contrary to the law would be null and void and the remaining resolutions could be annulled.
Following the 2014 reform, article 204 considers that “corporate resolutions that are contrary to the law, are contrary to the articles of association or the regulations of the company meeting or harm the corporate interest to the benefit of one or more shareholders or third parties” can be challenged and no longer distinguishes between null and voidable resolutions; although it partially recovers the concept of radical nullity in the case of resolutions contrary to public order by establishing that in such cases the action does not have a statute of limitations or lapse.
But both with the regulations prior to the reform and with those currently in force, the controversy resolved by the ruling we are commenting on is the same: when the legislator requires the agreement to be contrary to “law” in order to be able to challenge it, does he mean that it contravenes a precept of the Capital Companies Act (LSC), or can it be considered a requirement for challengeability if it contravenes any other positive precept of any other legal text? And finally, if the resolution in question is classified as constituting an “abuse of rights”, can such a situation be considered as “contrary to law” for the purposes of the application of article 204 LSC?
The Chamber reminds us of the requirements for the concurrence of abuse of rights in corporate matters:
- formal or outwardly correct use of a right
- causing damage to an interest not protected by a specific legal prerogative, and
- the immorality or antisociality (sic) of that conduct manifested subjectively (intention to damage or absence of legitimate interest) or objectively (abnormal exercise of the right contrary to the economic and social purposes of the same).
And it then refers to the numerous occasions on which its case law has reiterated that, although the regulation on challenging corporate resolutions does not expressly mention abuse of rights, this is no obstacle to annulling resolutions in such cases, since according to article 7 of the Civil Code (which prohibits abuse of rights), they must be deemed as contrary to the law.
The interest and peculiarity of this case lies in the fact that the contested resolutions were neither adopted in the interests of the company nor did they cause any harm to it, since the alleged harm was caused to a third party formally outside the company.
And on these premises, the Supreme Court reiterates and insists that the expression “contrary to the law” in article 204 LSC must be understood as “contrary to the legal system”, which includes those agreements adopted in fraud of the law, in bad faith or with abuse of rights, all of which are included and regulated in the Preliminary Title of the Civil Code. For these reasons, the judgment of the Provincial Court upholds the claim and declares the nullity of the contested agreements.
And what has El Cid got to do with all this? Is it a typo? No, not at all. Legend has it (invented, it seems, by a monk of the monastery of San Pedro de Cardeña to attract visitors) that Rodrigo Diaz de Vivar won a battle on the walls of Valencia against the Almoravids, after his death, saddling his corpse on his legendary horse Babieca.
It turns out that his almost fellow countryman, David Alvarez, buyer of the winery in the 1980s, the latter from León, the former from Burgos, but both old Castilians, also won his last battle after his death; David Alvarez was, together with one of his daughters, a plaintiff against the agreements of Bodegas Vega Sicilia and died in 2015; seven years later the Supreme Court has given him the right against the Almogavars, in this case, his own children.
And two lessons: first, justice is not justice if it is slow, a phrase apocryphally attributed to Seneca; it was not in this case for David Alvarez. Secondly, the abuse of rights is not only an “in extremis” recourse when one does not find frank legal support for one’s claims; on the contrary, it is, on many occasions, the solution.
Every employer should manage the risk of employee lawsuits. Many companies believe that they treat their workers well and that their employees are happy. As a result, they believe that they are not at risk of a lawsuit. But in my work, I frequently see employment relationships sour and employees surprise management by retaining a lawyer.
Employers should proactively manage this risk instead of hoping lawsuits never come. Defending a business against litigation by a current or former employee takes a lot of time and can be very expensive. It can also be incredibly frustrating to see an employee the company once trusted making false and damaging allegations. But employers can take steps before a dispute arises to reduce the impact of a lawsuit. I discuss eight such steps below.
First, employers should consider purchasing insurance that may cover employee claims. In the United States, this insurance is called Employment Practices Liability (“EPLI”) Insurance. These kinds of insurance policies may pay for a lawyer to defend the company in the event of a lawsuit. They may also pay the employee the amount he or she demands or that a court awards. Although insurance costs money, many companies prefer to pay regular and foreseeable premiums than sudden, steep, and unpredictable legal fees and employee payouts.
Second, employers should implement and enforce sexual harassment policies. Policies like these discourage the type of behavior that can subject a company to liability. But in many jurisdictions, they may also provide a defense to a company in the event an employee sues the company for allowing the harassment to take place.
Third, employers should seriously examine disparities in pay and job roles. If the highest paid employees at a company are largely male and the lowest paid employees are largely female, then an employee may claim that the employer engages in sex discrimination. Similarly, if the executives of a company are largely white but its blue-collar workers are largely people of color, an employee may allege that the company engages in racial discrimination. Rather than litigate these issues, a company should investigate whether those disparities exist in its own workplace and address them if they do.
Fourth, employers should consider whether they want employment disputes to go to arbitration instead of to court. Employers can largely determine this by including an arbitration clause in the offer letters they send to employees upon hiring them. Arbitration has some advantages: it tends to move quicker, it is private, it has the reputation for being a friendly forum for employers, and it tends to cost less. But it also has some downsides: it does not permit appeals on the merits of the dispute and it can cost more than litigation depending on the kind of case.
Fifth, any time an employee discloses that he or she has a health issue, the company should immediately consider how to accommodate that issue. Many employers may disregard the disclosure of a health issue if it does not seem important to the employee’s job. But if the employee later believes that the employer penalized him or her because of the health issue, the employee may claim discrimination. Before that happens, an employer should work with an employee to make sure the health issue does not impede job performance.
Sixth, employers should ensure they make consistent decisions. If an employer allows one employee to work from home, other employees may want the same treatment. And if an employer lays one employee off, she may wonder why another employee did not meet the same fate. Employers may reduce the risk of a lawsuit by setting firm policies and abiding by them.
Seventh, employers should frequently consult a lawyer they trust when employment issues arise. Spending a few hundred dollars to speaking to a lawyer for an hour before firing an employee or before responding to an employee complaint can help an employer avoid a lawsuit that may cost tens or even hundreds of thousands of dollars.
And finally, employers should consider settling disputes with employees, even if they are meritless. No company wants an employee to take advantage of them. But lawsuits are often more expensive and a hassle than the cost of a settlement. Spending a lot of money on defense, even if successful, may be more expensive than just compromising and paying the employee a fraction of what they demand.
写信给 William
Recognition and Enforcement of Foreign Judgments in the USA
2022年8月28日
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美国
- 诉讼
Introduction: A Paradigm Shift in Conflict Resolution
The approval of Organic Law 1/2025, of January 2, on measures for the efficiency of the Public Justice Service, marks a turning point in the Spanish judicial system. This legislation is not limited to introducing procedural changes, but reflects a profound transformation in the very concept of justice. The legislator has made a firm commitment to promoting alternatives to the judicial resolution of disputes, making prior negotiation a central element of the system.
The saturation of the courts, the costs associated with judicial proceedings, and the search for more satisfactory solutions for the parties have prompted this reform, which places the so-called “appropriate means of non-jurisdictional dispute resolution” as the cornerstone of a new justice model oriented towards dialogue and agreement.
The philosophy behind alternative means of dispute resolution
Beyond the decongestion of the courts, this reform responds to a philosophy that understands that not all conflicts necessarily require a judicial response. Alternative means of dispute resolution are based on the premise that many conflicts can find more satisfactory and lasting solutions, adapted to the needs and interests of the parties, when they actively participate in their construction.
Organic Law 1/2025 defines these means as “any type of negotiating activity, recognized in this or other laws, state or autonomous, to which the parties to a conflict resort in good faith with the aim of finding an extrajudicial solution to it, either by themselves or with the intervention of a neutral third party”. This broad and flexible definition is intended to cover various forms of negotiation whose common denominator is the protagonism of the parties in the resolution of their own disputes.
A range of possibilities: Diversity of mechanisms for diversity of conflicts
One of the most noteworthy aspects of the new regulation is that it does not rely on a single model of alternative dispute resolution but recognizes the diversity of situations and the need to offer different tools adapted to each particular case.
Mediation, already consolidated in our legal system through Law 5/2012, maintains its relevance as the preferred method, but other modalities such as conciliation in its various variants (notarial, registry, before a lawyer of the Administration of Justice or judicial), the opinion of independent experts, confidential binding offers, or the novel process of collaborative law are added to it.
This plurality of mechanisms reflects the complexity of contemporary legal relationships and the need to provide tailored responses to each type of conflict. Resolving a neighborhood dispute is not the same as resolving a complex business dispute, and the legislator has been aware that “one size fits all” would not be effective for the diversity of situations that may arise.
The controversial commitment to enforceability: The requirement of procedural validity
Undoubtedly, the most innovative -and probably the most controversial- aspect of the new regulation is the configuration of these means as a mandatory prerequisite for resorting to judicial proceedings in certain areas. This decision represents a qualitative leap with respect to the previous regulation, which mainly favored the voluntary nature of these mechanisms.
From the entry into force of Organic Law 1/2025, April 3, 2025, the claim in the civil jurisdictional order will not be admitted if it is not justified that the resolution of the conflict has been previously attempted by any of the recognized alternative ways. Not only that, but also the identity between the object of the previous negotiation and the object of the litigation to be initiated must be established.
This mandatory nature has been the subject of intense debate. Its advocates argue that it is necessary to promote cultural change in a traditionally litigious society, while its detractors warn of the risk of turning these mechanisms into mere formalities that distort their true purpose.
The truth is that the legislator has tried to find a balance, excluding from this obligation certain particularly sensitive matters or those which, by their nature, require an immediate judicial response. Thus, issues such as the judicial protection of fundamental rights, measures for the protection of minors, or the request for precautionary measures, among others, are exempted from the requirement of prior negotiation.
The guiding principles: Autonomy and confidentiality as pillars of the system
The effectiveness of alternative dispute resolution rests mainly on two fundamental principles: the autonomy of the parties and the confidentiality of the process.
The principle of private autonomy recognizes that the parties themselves best know their interests and needs and are, therefore, in the best position to find solutions adapted to their situation. The law establishes that the parties are free to settle, if they respect the law, good faith, and public policy. This freedom is essential for the solutions reached to be truly satisfactory and lasting.
The principle of confidentiality is crucial to creating a climate of trust that allows the parties to express themselves freely during the negotiation process. The law establishes that the information and documentation disclosed during the negotiation must be kept confidential, with very specific exceptions, such as express waivers by the parties, court orders in criminal matters, or reasons of public order.
This duty of confidentiality extends to all participants in the process: the parties, their lawyers, and, where appropriate, the neutral third party involved. The aim is to ensure that what is said or proposed during the negotiation cannot be used later in a possible judicial process, thus promoting a sincere and constructive dialogue.
The Negotiation Process: Relevant Procedural Aspects
The regulation of the procedural aspects of the different means of dispute resolution also reflects the legislator’s desire to combine the necessary flexibility with the minimum guarantees required.
As regards standing, the initiative to resort to these mechanisms may come from either party, from both by mutual agreement, or even from a judicial referral. This recognizes both the parties’ autonomy and the possibility that the judicial system itself may encourage the use of these alternative channels.
Regarding the involvement of professionals, the law generally prefers a non-mandatory approach to legal assistance, except in specific situations like the preparation of binding offers (with exceptions for smaller amounts). This flexibility aims to enhance access to these mechanisms; however, the complexity of many legal disputes often makes it wise to seek professional guidance.
A particularly relevant aspect is the effect that the request for these mechanisms has on the statute of limitations and expiration periods. The law establishes that such a request interrupts the statute of limitations or suspends the expiration of actions from the date of communication to the other party, thus avoiding the attempt of an amicable solution that may prejudice the rights of the party that promotes it.
In terms of form, the preferred method is face-to-face, although the use of telematic means is permitted by agreement of the parties or in the case of claims for amounts of less than 600 euros. This flexibility is particularly appropriate in a context of increasing digitalization of legal relations.
Specific Modalities: Diversity of mechanisms for diversity of conflicts
Among the different modalities recognized by the law, it is worthwhile to focus on some that present particularly novel or relevant characteristics.
Private conciliation involves the intervention of a person with technical or legal expertise related to the dispute’s subject matter. The law requires this person to be registered in a recognized professional association or in a register of mediators and to act impartially and confidentially. This mechanism takes advantage of the specialized knowledge of certain professionals to facilitate agreement in technically complex matters.
The confidential binding offer is a particularly interesting mechanism for certain types of disputes. One of the parties makes an offer that is binding on it in the event of acceptance by the other party. The law requires that the identity of the offeror, the actual receipt by the other party, and the detailed content of the offer be recorded. This instrument can be particularly useful in financial claims, where the main obstacle to settlement is often the amount.
The independent expert opinion consists of commissioning an opinion from an expert in the subject matter of the dispute. Unlike other mechanisms, this opinion is not binding, but may serve as a basis for agreement if the parties accept it, or at least to clarify the technical aspects of the dispute. Following the issuance of the opinion, the parties may accept it as an agreement, propose improvements or reject it, in which case the procedural requirement is deemed to be fulfilled.
Finally, the collaborative law process represents perhaps the most innovative aspect of the new regulation. It is a structured negotiation in which the parties, assisted by their respective lawyers, work together to reach a satisfactory solution, being able to integrate other professionals (psychologists, economists, etc.) when the complexity of the case requires it. At the end, minutes are drawn up with the participants, the sessions held and the agreements reached.
The challenge of implementation: From theory to practice
The real effectiveness of this new system will depend largely on how it is implemented in practice. It is not enough to make it compulsory to attempt out-of-court settlement; this attempt must be genuine and not become a mere formality.
In this regard, the law requires that the negotiation attempt be “real and credible; it cannot be fictitious.” To this end, it establishes documentation requirements that vary depending on whether or not a neutral third party is involved but always include a responsible statement that the parties have intervened in good faith in the process.
Likewise, the law regulates in detail when the negotiation process is understood to be concluded, whether it concludes with or without an agreement. In the event of an agreement, it must be formalized by identifying the parties and, if applicable, their lawyers and the neutral third party, indicating the place and date, as well as the obligations assumed by each party.
The possibility of converting the agreement into a public deed to convert it into an enforceable title reinforces its value and facilitates its compliance, avoiding the possibility of non-compliance with the agreement, forcing the initiation of a declaratory judicial proceeding.
A horizon to be explored: Perspectives and challenges
Organic Law 1/2025 represents a turning point in the conception of justice in Spain, bringing us closer to models already consolidated in other countries with a long tradition in alternative means of conflict resolution. The United States, Canada and the Nordic countries have been using these mechanisms for decades, with generally positive results in terms of user satisfaction and decongestion of the courts.
However, each legal system has its particularities, and the success of these mechanisms depends not only on their legal regulation but also on cultural, sociological, and organizational factors. Spanish society’s traditional litigiousness, the poor negotiating culture in certain areas, and the lack of specific training of many professionals are challenges that must be faced.
The commitment to obligatory nature as an initial impulse may be understandable in a context of paradigm change, but the real success of these mechanisms will come from their capacity to generate satisfactory solutions that will progressively make them the preferred option on their own merits, beyond their obligatory nature.
Conclusion: Between Hope and Caution
The new regulation of the appropriate means of non-jurisdictional dispute resolution is in line with a clear international trend towards the promotion of alternatives to judicial dispute resolution. This trend responds both to practical needs – decongesting the courts, reducing costs – and to a philosophy that values the protagonism of the parties in the management of their own conflicts.
In this sense, Spanish legislation joins a global movement that has shown positive results in many jurisdictions. However, only time will tell whether the legislative technique used, especially the commitment to mandatory nature as a procedural requirement, is the most appropriate to achieve the true purpose of encouraging agreement in order to avoid litigation.
The success of this reform will depend not only on its regulatory design, but also on factors such as adequate training of the professionals involved, public awareness of the advantages of these alternative routes, and the system’s capacity to evaluate and adapt according to the results obtained.
In short, we are facing an ambitious and necessary reform, which opens up a hopeful horizon but which will have to overcome important challenges in order to consolidate itself as a true paradigm shift in the administration of justice in Spain. The true criterion of success will not be the number of negotiation attempts made, but the quality of the agreements reached and the satisfaction of citizens with a more participatory, efficient justice system adapted to their real needs.
On April 8, 2025, during the Paris Arbitration Week, France’s Ministers of Justice Gérard Darmanin, announced a significant reform of French arbitration law. The aim of this reform is to clarify, modernise and consolidate the regulatory framework, the last substantial revision of which dates back to 2011.
It is set to culminate in the adoption of an Arbitration code by autumn 2026. This code is envisioned as a unifying legal instrument that will enhance the clarity, autonomy and international appeal of French arbitration law.
Structural proposals: building an autonomous and coherent legal framework
The creation of a standalone Arbitration Code
The proposal n°1 calls for the unification of all legislative and regulatory text governing arbitration within a dedicated code, structured into several parts and decoupled from the approximately 20 existing codes currently housing arbitration provisions.
This codification process is not purely technical, it serves pedagogical, symbolic and strategic purposes namely, enhancing the clarity, accessibility and international attractiveness of French arbitration law.
Common provisions for domestic and international arbitration
Proposal n°3 and 4 suggest reorganising French arbitration law around a set of common rules applicable to both domestic and international arbitration with limited derogation for the former. This represents a shift from the current dualistic system to a more unified and clearer and framework without eliminating the particularities of either.
As an instance, a preliminary article would define the international nature of arbitration, abandoning outdated reference to “commercial” character in favour of a more inclusive in realistic standard.
However, it does not mean a division summa divisio of those two types of arbitration because of the stable wish to preserve the dissociation between ordre public interne and ordre public international.
Codification of guiding principles
Proposal n°5 aims to enshrine as guiding principles (“principes directeurs”) those considered to embody the core values of French arbitration law such as the autonomy of the arbitration agreement, the competence-competence principle, the independence and impartiality of the arbitral tribunal, and the respect for the adversarial principle and party equality.
Others, though not considered fundamental, nonetheless shape the legal framework, such as good faith, loyalty, the principle of effectiveness (“effet utile”), confidentiality, proportionality, procedural loyalty and celerity, parties’ autonomy in choosing applicable law and procedure rules, amiable composition and access to justice (prevention of denial of justice), which form the broader ethical and procedural framework of arbitration in France.
Over the 19 principles elected to be enshrined, the report highlights and develop only few:
- Regarding the principle of independence and impartiality of the arbitral tribunal, it is given a particular prominence in the reform, both through its inclusion in the preliminary article of the Code and its designation as a guiding principle. However, the reform does not aim to consolidate the jurisprudence that has recognised exceptions such as the notoriety or the parties’ duty of curiosity (which exempt the arbitrator from disclosing allegedly well-known facts). Instead, it adopts a strict approach according to which, arbitrators must disclose any circumstances that, in the eyes of the parties, could affect their independence or impartiality, and cannot rely on the fact that such information might be publicly known. Parties are not expected to be in a state of constant investigation.
- Regarding the equality of the parties, this principle is reaffirmed at the stage of the constitution of the arbitral tribunal and throughout the arbitral proceedings. It ensures that the parties are treated equally and fairly.
- Regarding the confidentiality of proceedings, the reform extends this principle (already established in domestic arbitration) to international arbitration, while allowing for necessary exceptions, particularly in the context of investment arbitration. However, its application ultimately remains subject to party autonomy.
- Regarding the proportionality, article 14 serves both as an encouragement and support for the arbitral tribunal. It urges the tribunal to “adopt a procedure adapted to the complexity and stakes of the dispute”. In response to certain issues and recurring criticisms regarding the cost and duration of arbitration, this is a call for moderation on all fronts (time, volume of submissions, document production requests, length of hearings, number of witnesses to be heard, and the cost for the parties).
- Regarding the prohibition of denial of justice, this principle introduces a new role for the supporting judge (“juge d’appui”), who becomes the judge overseeing the prevention of denial of justice in a broader sense. His role extends both materially, in cases where it is impossible to appoint an arbitrator, and substantively, when the timely delivery of an award is at risk.
These principles are presented not merely as procedural standards but as fundamental values that shape and distinguish the French approach to arbitration.
Unification of judicial control and support
Proposals N°6 to 9 aim to unify and rationalise the judicial handling of arbitration disputes by several objectives such as exclusive jurisdiction of the judicial courts (“tribunal judiciaire”) over all challenges and enforcement of international arbitral awards, including those involving public entities, thereby ending the long-standing jurisdictional duality exposed in the Inserm case (2010), where the recognition and enforcement of international awards involving French public entities was scattered between judicial and administrative Courts.
Exclusive jurisdiction is awarded to the Paris Judicial Court to decide on all international arbitration matters. Another purpose is the specialisation of domestic courts in handling arbitration matters, and the elimination of residual competence formerly existing in favour of commercial courts presidents as supporting judges (“juges d’appui”).
This restructuring is intended to foster efficiency, consistency, and international credibility.
Substantive changes: a more flexible, protective and efficient arbitration framework
Promotion of flexibility
Several proposals aim to liberalize and modernize arbitration procedures like the elimination of the references to “commercial” matters in determining the international character of arbitration and the tribunal’s ability to apply to trade usages.
It will also serve this purpose by simplifying the formal requirements for arbitration agreements, removing the requirement that the clause be in writing and aligning domestic arbitration on international standards.
In this regard, the reform aims to abolish the written form requirement for arbitration agreements to align domestic and international arbitration rules. As arbitration agreements are typically written in practice, this formal requirement is now seen as outdated and inconsistent with general contract law.
However, the requirement of written form will remain solely a matter of evidence. At the stage of enforcement or annulment proceedings, the arbitration agreement (or a copy thereof) will need to be produced. In practice, this means that the arbitration agreement will still have to be recorded in a document, even if it does not meet the strict definition of a written instrument.
Party protection and procedural safeguards
The reform also seeks to bolster procedural guarantees such as the necessity for tribunal’s seated in France to be composed of an odd number of arbitrators.
According to the proposition of code, arbitrators should be natural persons, through these does not hinder recognition of awards rendered abroad by legal entities and the contractual nature of relationships between parties, arbitrators and arbitral institution will be formally recognised.
A mechanism for financial hardship (“impécuniosité”) is introduced to prevent abuses and ensure access to justice. Jurisprudence has confirmed that impecuniosity does not render the arbitration agreement manifestly void or inapplicable. While ensuring access to arbitration lies with the “arbitration actors” (i.e arbitrators, institutions, parties) the authority of the supporting judge (“juge d’appui”) to intervene in support of an impecunious party remains unsettled.
The reform proposal aims to expressly empower the juge d’appui to facilitate arbitral proceedings in such circumstances by ordering “any appropriate measures” (art. 33): this would serve to prevent a genuine denial of justice. Measures may include procedural actions (e.g., convening a case management conference) or substantive adaptations (e.g., amending the arbitration agreement to reduce costs, appointing a sole arbitrator, selecting a less expensive arbitral institution, or streamlining proceedings by limiting document production, written submissions, or hearings).
It also proposes a clarification of arbitration rules applicable in labour, family, and consumer fields:
- Regarding Family Law, the working group clarified that arbitration is allowed for patrimonial issues in family law but excluded for matters related to personal status. Divorce remains under state Courts’ jurisdiction. For patrimonial matters, additional safeguards are proposed, such as a written agreement, lawyers counter-signature, appeal options. Family judges will also have exclusive jurisdiction on recognition and enforcement of the awards.
- Regarding Labour Law and Consumer Law, the proposed measures aim to emphasize that while an arbitration agreement is permissible in these areas, it cannot be imposed by the “strong” party on the “weak” party. The latter will always have the option to exclude its application and revert to State Courts. Furthermore, in these areas, the principle of competence-competence is excluded, meaning that the consumer or the employee will not be obliged to establish an arbitral tribunal in order to invoke the jurisdiction of the State Court.
A protection of third-party rights is also specified through accessory intervention before the Court of Appeal and rule for third party opposition (tierce opposition), prohibited against arbitral awards but allowed against the Court decision related to them, such as decisions related to annulment proceedings or requests for exequatur.
Procedural efficiency
To promote procedural efficiency, the reform proposes the codification of the negative effect of the competence-competence principle, the authorization of consolidation of arbitral proceedings.
It entails the following modification and few others:
- Rewriting of the article 1448 of the Code of civil procedure and elimination of its last paragraph. This article currently states that “where a dispute falling within the scope of an arbitration agreement is brought before a State court, the court shall decline jurisdiction unless the arbitral tribunal has not yet been seized and the arbitration agreement is manifestly null and void or manifestly inapplicable”. Its second and third paragraph state that “the state court may not raise its lack of jurisdiction ex officio” and that “any provision to the contrary shall be deemed unwritten”.
Contrary stipulations would therefore be permitted, and parties could expressly provide in their arbitration agreement that the court is authorized to conduct a full review of the arbitration clause, or that the parties waive the principle of the arbitrator’s priority. However, such a deviation to be valid, it must be explicit and unequivocal.
- In order to consolidate procedures, unless the parties agree otherwise, in cases involving claims based on multiple contracts or related to multiple contracts, these claims should be made in a single arbitration proceeding under one or more arbitration agreements. However, two conditions are required: the compatibility of the arbitration agreements and the existence of a connection between the claims such that it is in the interest of efficiency and justice to have them heard and decided together by the arbitral tribunal.
- Under the current law, the arbitral tribunal can impose a penalty (“astreinte”), but there is not provision regarding its authority to liquidate it. The future code would allow the tribunal to do so “as long as it remains seized of the case”. However, it does not mean that the tribunal to retain jurisdiction for the purpose of liquidating the penalty after it has rendered its final award.
In addition to this, the project lays the groundwork for class arbitration, poses principles of procedural loyalty and concentration of arguments and expanding the powers of the supporting judge to address denial of justice, financial hardship, evidence production, enforcement and interim measures, and constitution of tribunals.
The efficiency objective also extends to recognition and enforcement of arbitral awards in clarifying recognition procedures and deadlines, removing the suspensive effect of appeals in domestic arbitration, allowing incidental annulment or refusing of enforcement to apply to related awards, and revisiting annulment grounds and enabling award correction or classification to avoid annulment or enforcement refusal.
Regulatory adjustments and technical reforms and promoting transparency
This reform includes adjustment proposals to ensure consistency across existing legislation and regulation.
Lastly, this reform addresses the promotion and dissemination of French arbitration law by increasing transparency in the appointment of arbitrators by supporting judges, including publication of the names and an annual public list. It is planned to reinforce judicial training in arbitration through enhanced ENM (“Ecole Nationale de la Magistrature”, which is the national school of judges) programs, internships with the ICC, and digital tools.
Promoting French arbitration law domestically and internationally through multilingual commentaries, outreach events, and strategic communication will be a way to extend the project.
In conclusion, the 2025 reform constitutes a major step toward modern, readable, and globally competitive French arbitration law. By consolidating legislation, strengthening procedural safeguards, and fostering accessibility and transparency, the proposed arbitration code is poised to elevate France as a leading venue for arbitration.
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.
PFAS are chemicals that have been used in industry for over 50 years. Between 4,000 and 5,000 varieties are used for various everyday consumer applications, and they are renowned for their non-stick, waterproofing, and heat-resistant properties. They have come under scrutiny in recent years, and are covered by European regulations, as they are in the USA, where the public authorities have imposed maximum use values, as well as reporting obligations. EU Regulation 2019/1021 (POP) restricts the production and use of certain categories of PFAS in specific industries or above certain values and their use with food products. France has gone further, regulating the levels of discharges into watercourses.
Scientific research suspects that PFAS cause illnesses such as cancer and reproductive disorders. Given the extent of contamination not only in everyday products but also in the environment, particularly waterways, the issue is likely to pose major public health problems in the years to come. This concern is more pressing given that PFASs are considered ‘eternal pollutants’, as there is currently no way of eliminating them from the environment.
The impact on companies’ and insurers’ liability is already significant. In the USA, more than 6,000 lawsuits have been filed since 2005. Three groups have already paid more than USD 1.2 billion in settlements due to contamination, and another group has paid more than USD 10 billion to end a class action.
In France, the Metropole of Lyon has brought a summary expert appraisal action against two chemical companies before considering bringing a liability action. In addition, several criminal complaints have been lodged for endangering the lives of others and damaging the environment.
Under French law, companies and their insurers could be liable on various legal grounds. In addition to ordinary civil liability law – based on article 1240 of the Civil Code – the special system of liability for defective products could also serve as a basis for a liability action (articles 1245 et seq. of the Civil Code), with French law defining a defect as any product that does not offer the safety that can legitimately be expected.
Although it is currently difficult to identify a causal link with an identified disease, asbestos-related case law has shown in the past that victims can take action if they can demonstrate that they suffered anxiety-related harm as a result of their exposure to the product, even if they are not positively suffering from a disease at the time of their claim.
In addition, the reporting obligations imposed by the public authorities will undoubtedly facilitate the filing of liability actions by facilitating the identification of the emitters and users of these pollutants.
Insurers are directly affected by this phenomenon, which for them constitutes an “emerging” risk (“silent cover”) because, for the most part, this risk was not identified when the policy was taken out, which exposes them directly and is all the more problematic because insurance premiums have not been able to take such a risk into account.
Civil liability or professional indemnity insurance policies, especially if they are drafted with “all risks except” clauses (“tous risques sauf” in French legal vocabulary, i.e. covering all liability risks vis-à-vis third parties except those strictly listed), as well as those including clauses relating to environmental risks, are particularly targeted.
Lloyd’s has already published model exclusion clauses for the attention of insurers, although such clauses can obviously only cover future insurance contracts or endorsements:
https://www.lmalloyds.com/LMA_Bulletins/LMA23-039-SD.aspx
The clauses contained in insurance policies must be drafted with particular care, considering each country’s specific features. In France, for example, to be enforceable against the insured, clauses must be “formal and limited”, which means that the exclusion must be both clearly expressed and that it must be possible to determine its content perfectly.
For example, the Court of Cassation recently ruled that the use of the terms “such as” or “in particular” (“tells que” “en particulier”) in an exclusion clause led to confusion in the interpretation of the exclusion clause, rendering it invalid (Civ. 2e, 26 Nov. 2020, no. 19-16.435). There was also a debate on the validity of an exclusion clause relating to bodily injury caused by asbestos, a risk which at the time had not been identified by insurers, who subsequently excluded it from most policies (Cass. 2e civ., 21 Sept. 2023, nos. 21-19801 and 21-19776). Similarly, policies should clearly indicate whether cover is provided based on a harmful event or based on a claim (i.e “base dommage” or “base reclamation”, which indicates if the risk is covered, depending on if the damage happened during the policy was valid, or if it depends on the moment when the risk was notified by the insured during such period).
One thing is sure: the risks associated with PFAS and claims are only just beginning to emerge in Europe, where the conditions for group actions have recently been extended with EU Directive 2020/1828, which came into force on 25 June 2023 and is currently the subject of a draft law under discussion in the French Parliament with a view to its transposition.
Dealing with unpaid invoices can be challenging for any business. In Belgium, where judicial processes can seem daunting, understanding how to manage debt collection effectively is crucial. This article offers practical guidance derived from a comprehensive legal guide to help your company navigate Belgium’s judicial debt recovery landscape.
Understanding Your Options
Assess the Situation: Before taking legal action, evaluating the amount owed and the debtor’s financial status is essential. This assessment will guide you in choosing the appropriate legal avenue, as Belgium offers different courts and procedures based on the dispute’s value. For instance, for claims up to € 5,000, the local court or ‘justice de paix’, which is a court of first instance for minor civil cases, is typically used due to its cost-effectiveness and efficiency.
Send a Notice of Default: Under Belgian law, a notice of default is mandatory before initiating legal proceedings. This step adheres to legal requirements and gives the debtor one last chance to settle their dues without further legal complications.
Efficient Legal Procedures
Use Simplified Procedures for Small Amounts: A simplified legal procedure can be utilized for undisputed money debts up to €1,860, which expedites the payment request process significantly. This approach can be particularly advantageous for recovering smaller debts quickly.
Consider Direct Bailiff Intervention: For undisputed amounts, irrespective of their size, between companies, creditors can authorize a bailiff to recover the debt directly without a court judgment. This procedure reduces legal fees and speeds up the debt collection process.
Leveraging Legal and Financial Advice
Consult with a Belgian Attorney: Navigating the Belgian legal system can be complex. Consulting with a local attorney can provide insights into the most effective procedures tailored to your case. This is especially true for international debt collection, where regulations and guidelines vary significantly.
Prepare Necessary Documentation: Ensure you have all necessary documents, such as contracts, invoices, and payment records, organized. These documents are essential to support your claim, whether you are dealing with local or international debt recovery.
After Initiating Debt Recovery
Use Interim Measures: If immediate action is needed, interim measures like seizing bank accounts or assets may be applicable. These measures, which are temporary and can be requested even before legal proceedings, can ensure that the debtor’s assets are secured while the legal process unfolds.
Conclusion
Recovering debts through judicial means in Belgium requires understanding the legal landscape and an appropriate strategy based on the debt’s nature and amount. While this article provides practical guidance, it is important to note that each case is unique, and professional legal advice is recommended for complex debt recovery cases. Businesses can enhance their chances of successful debt recovery while maintaining financial stability by utilizing simplified procedures for smaller or undisputed debts and consulting with legal experts. This proactive approach ensures that your business can continue to thrive even in the face of financial adversity.
What do the mythical Vega Sicilia wines, El Cid Campeador and the abuse of rights have in common? If you read on, you will find out.
The Vega Sicilia Único was for many years considered the best, the most prestigious and the most expensive Spanish wine.
The abuse of rights is a legal institute that allows the defense of situations in which the opponent acts with (apparent and formal) subjection to the law, but making a spurious use of the law with the intention of harming the injured party.
Last October, the Supreme Court handed down a judgment declaring certain agreements adopted by Bodegas Vega Sicilia S.A., producer of Vega Sicilia Único wine, to be null and void based on the principle of abuse of rights.
The judgment in question is doubly interesting.
Firstly, because it highlights the endemic evil of Spanish justice: it declares the nullity of resolutions adopted at a meeting held in March 2013, which were the subject of a lawsuit in February 2014, with a first instance ruling that same year, appealed to the Provincial Court of Valladolid who issued its judgement on 2019 and four years later the Supreme Court has put an end to the lawsuit: nine years after the shareholders meeting whose resolutions were the subject of the challenge.
As the Constitutional Court very recently reiterated in its ruling dated last October, “judicial slowness has no place in the Magna Carta”. But, although it has no place, or should not have a place, our courts continue to insist that it does and, as an example, this case that we are commenting on is, unfortunately, no exception.
Beyond the barbarity of a litigant having to wait for nine years to find a final solution to his claim, the judgment we are commenting on is of interest for other reasons.
The plaintiffs sought the nullity of certain resolutions adopted at a shareholders’ meeting, basing their claim on the fact that these resolutions constituted an abuse of rights since, through them, the shareholders of Bodegas Vega Sicilia S.A. sought to take control of Bodegas Vega Sicilia away from the company of which the plaintiffs were in turn shareholders.
The legislation in force at the time the meeting was held (prior to the 2014 reform) established that “resolutions that are contrary to the law, oppose the articles of association or harm the corporate interest to the benefit of one or more shareholders or third parties” could be challenged, adding that those contrary to the law would be null and void and the remaining resolutions could be annulled.
Following the 2014 reform, article 204 considers that “corporate resolutions that are contrary to the law, are contrary to the articles of association or the regulations of the company meeting or harm the corporate interest to the benefit of one or more shareholders or third parties” can be challenged and no longer distinguishes between null and voidable resolutions; although it partially recovers the concept of radical nullity in the case of resolutions contrary to public order by establishing that in such cases the action does not have a statute of limitations or lapse.
But both with the regulations prior to the reform and with those currently in force, the controversy resolved by the ruling we are commenting on is the same: when the legislator requires the agreement to be contrary to “law” in order to be able to challenge it, does he mean that it contravenes a precept of the Capital Companies Act (LSC), or can it be considered a requirement for challengeability if it contravenes any other positive precept of any other legal text? And finally, if the resolution in question is classified as constituting an “abuse of rights”, can such a situation be considered as “contrary to law” for the purposes of the application of article 204 LSC?
The Chamber reminds us of the requirements for the concurrence of abuse of rights in corporate matters:
- formal or outwardly correct use of a right
- causing damage to an interest not protected by a specific legal prerogative, and
- the immorality or antisociality (sic) of that conduct manifested subjectively (intention to damage or absence of legitimate interest) or objectively (abnormal exercise of the right contrary to the economic and social purposes of the same).
And it then refers to the numerous occasions on which its case law has reiterated that, although the regulation on challenging corporate resolutions does not expressly mention abuse of rights, this is no obstacle to annulling resolutions in such cases, since according to article 7 of the Civil Code (which prohibits abuse of rights), they must be deemed as contrary to the law.
The interest and peculiarity of this case lies in the fact that the contested resolutions were neither adopted in the interests of the company nor did they cause any harm to it, since the alleged harm was caused to a third party formally outside the company.
And on these premises, the Supreme Court reiterates and insists that the expression “contrary to the law” in article 204 LSC must be understood as “contrary to the legal system”, which includes those agreements adopted in fraud of the law, in bad faith or with abuse of rights, all of which are included and regulated in the Preliminary Title of the Civil Code. For these reasons, the judgment of the Provincial Court upholds the claim and declares the nullity of the contested agreements.
And what has El Cid got to do with all this? Is it a typo? No, not at all. Legend has it (invented, it seems, by a monk of the monastery of San Pedro de Cardeña to attract visitors) that Rodrigo Diaz de Vivar won a battle on the walls of Valencia against the Almoravids, after his death, saddling his corpse on his legendary horse Babieca.
It turns out that his almost fellow countryman, David Alvarez, buyer of the winery in the 1980s, the latter from León, the former from Burgos, but both old Castilians, also won his last battle after his death; David Alvarez was, together with one of his daughters, a plaintiff against the agreements of Bodegas Vega Sicilia and died in 2015; seven years later the Supreme Court has given him the right against the Almogavars, in this case, his own children.
And two lessons: first, justice is not justice if it is slow, a phrase apocryphally attributed to Seneca; it was not in this case for David Alvarez. Secondly, the abuse of rights is not only an “in extremis” recourse when one does not find frank legal support for one’s claims; on the contrary, it is, on many occasions, the solution.
Every employer should manage the risk of employee lawsuits. Many companies believe that they treat their workers well and that their employees are happy. As a result, they believe that they are not at risk of a lawsuit. But in my work, I frequently see employment relationships sour and employees surprise management by retaining a lawyer.
Employers should proactively manage this risk instead of hoping lawsuits never come. Defending a business against litigation by a current or former employee takes a lot of time and can be very expensive. It can also be incredibly frustrating to see an employee the company once trusted making false and damaging allegations. But employers can take steps before a dispute arises to reduce the impact of a lawsuit. I discuss eight such steps below.
First, employers should consider purchasing insurance that may cover employee claims. In the United States, this insurance is called Employment Practices Liability (“EPLI”) Insurance. These kinds of insurance policies may pay for a lawyer to defend the company in the event of a lawsuit. They may also pay the employee the amount he or she demands or that a court awards. Although insurance costs money, many companies prefer to pay regular and foreseeable premiums than sudden, steep, and unpredictable legal fees and employee payouts.
Second, employers should implement and enforce sexual harassment policies. Policies like these discourage the type of behavior that can subject a company to liability. But in many jurisdictions, they may also provide a defense to a company in the event an employee sues the company for allowing the harassment to take place.
Third, employers should seriously examine disparities in pay and job roles. If the highest paid employees at a company are largely male and the lowest paid employees are largely female, then an employee may claim that the employer engages in sex discrimination. Similarly, if the executives of a company are largely white but its blue-collar workers are largely people of color, an employee may allege that the company engages in racial discrimination. Rather than litigate these issues, a company should investigate whether those disparities exist in its own workplace and address them if they do.
Fourth, employers should consider whether they want employment disputes to go to arbitration instead of to court. Employers can largely determine this by including an arbitration clause in the offer letters they send to employees upon hiring them. Arbitration has some advantages: it tends to move quicker, it is private, it has the reputation for being a friendly forum for employers, and it tends to cost less. But it also has some downsides: it does not permit appeals on the merits of the dispute and it can cost more than litigation depending on the kind of case.
Fifth, any time an employee discloses that he or she has a health issue, the company should immediately consider how to accommodate that issue. Many employers may disregard the disclosure of a health issue if it does not seem important to the employee’s job. But if the employee later believes that the employer penalized him or her because of the health issue, the employee may claim discrimination. Before that happens, an employer should work with an employee to make sure the health issue does not impede job performance.
Sixth, employers should ensure they make consistent decisions. If an employer allows one employee to work from home, other employees may want the same treatment. And if an employer lays one employee off, she may wonder why another employee did not meet the same fate. Employers may reduce the risk of a lawsuit by setting firm policies and abiding by them.
Seventh, employers should frequently consult a lawyer they trust when employment issues arise. Spending a few hundred dollars to speaking to a lawyer for an hour before firing an employee or before responding to an employee complaint can help an employer avoid a lawsuit that may cost tens or even hundreds of thousands of dollars.
And finally, employers should consider settling disputes with employees, even if they are meritless. No company wants an employee to take advantage of them. But lawsuits are often more expensive and a hassle than the cost of a settlement. Spending a lot of money on defense, even if successful, may be more expensive than just compromising and paying the employee a fraction of what they demand.
写信给 William
Ukraine: new hope for the creditors as the debtors’ concern grows
2022年1月17日
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乌克兰
- 银行业
- 破产
- 诉讼
Introduction: A Paradigm Shift in Conflict Resolution
The approval of Organic Law 1/2025, of January 2, on measures for the efficiency of the Public Justice Service, marks a turning point in the Spanish judicial system. This legislation is not limited to introducing procedural changes, but reflects a profound transformation in the very concept of justice. The legislator has made a firm commitment to promoting alternatives to the judicial resolution of disputes, making prior negotiation a central element of the system.
The saturation of the courts, the costs associated with judicial proceedings, and the search for more satisfactory solutions for the parties have prompted this reform, which places the so-called “appropriate means of non-jurisdictional dispute resolution” as the cornerstone of a new justice model oriented towards dialogue and agreement.
The philosophy behind alternative means of dispute resolution
Beyond the decongestion of the courts, this reform responds to a philosophy that understands that not all conflicts necessarily require a judicial response. Alternative means of dispute resolution are based on the premise that many conflicts can find more satisfactory and lasting solutions, adapted to the needs and interests of the parties, when they actively participate in their construction.
Organic Law 1/2025 defines these means as “any type of negotiating activity, recognized in this or other laws, state or autonomous, to which the parties to a conflict resort in good faith with the aim of finding an extrajudicial solution to it, either by themselves or with the intervention of a neutral third party”. This broad and flexible definition is intended to cover various forms of negotiation whose common denominator is the protagonism of the parties in the resolution of their own disputes.
A range of possibilities: Diversity of mechanisms for diversity of conflicts
One of the most noteworthy aspects of the new regulation is that it does not rely on a single model of alternative dispute resolution but recognizes the diversity of situations and the need to offer different tools adapted to each particular case.
Mediation, already consolidated in our legal system through Law 5/2012, maintains its relevance as the preferred method, but other modalities such as conciliation in its various variants (notarial, registry, before a lawyer of the Administration of Justice or judicial), the opinion of independent experts, confidential binding offers, or the novel process of collaborative law are added to it.
This plurality of mechanisms reflects the complexity of contemporary legal relationships and the need to provide tailored responses to each type of conflict. Resolving a neighborhood dispute is not the same as resolving a complex business dispute, and the legislator has been aware that “one size fits all” would not be effective for the diversity of situations that may arise.
The controversial commitment to enforceability: The requirement of procedural validity
Undoubtedly, the most innovative -and probably the most controversial- aspect of the new regulation is the configuration of these means as a mandatory prerequisite for resorting to judicial proceedings in certain areas. This decision represents a qualitative leap with respect to the previous regulation, which mainly favored the voluntary nature of these mechanisms.
From the entry into force of Organic Law 1/2025, April 3, 2025, the claim in the civil jurisdictional order will not be admitted if it is not justified that the resolution of the conflict has been previously attempted by any of the recognized alternative ways. Not only that, but also the identity between the object of the previous negotiation and the object of the litigation to be initiated must be established.
This mandatory nature has been the subject of intense debate. Its advocates argue that it is necessary to promote cultural change in a traditionally litigious society, while its detractors warn of the risk of turning these mechanisms into mere formalities that distort their true purpose.
The truth is that the legislator has tried to find a balance, excluding from this obligation certain particularly sensitive matters or those which, by their nature, require an immediate judicial response. Thus, issues such as the judicial protection of fundamental rights, measures for the protection of minors, or the request for precautionary measures, among others, are exempted from the requirement of prior negotiation.
The guiding principles: Autonomy and confidentiality as pillars of the system
The effectiveness of alternative dispute resolution rests mainly on two fundamental principles: the autonomy of the parties and the confidentiality of the process.
The principle of private autonomy recognizes that the parties themselves best know their interests and needs and are, therefore, in the best position to find solutions adapted to their situation. The law establishes that the parties are free to settle, if they respect the law, good faith, and public policy. This freedom is essential for the solutions reached to be truly satisfactory and lasting.
The principle of confidentiality is crucial to creating a climate of trust that allows the parties to express themselves freely during the negotiation process. The law establishes that the information and documentation disclosed during the negotiation must be kept confidential, with very specific exceptions, such as express waivers by the parties, court orders in criminal matters, or reasons of public order.
This duty of confidentiality extends to all participants in the process: the parties, their lawyers, and, where appropriate, the neutral third party involved. The aim is to ensure that what is said or proposed during the negotiation cannot be used later in a possible judicial process, thus promoting a sincere and constructive dialogue.
The Negotiation Process: Relevant Procedural Aspects
The regulation of the procedural aspects of the different means of dispute resolution also reflects the legislator’s desire to combine the necessary flexibility with the minimum guarantees required.
As regards standing, the initiative to resort to these mechanisms may come from either party, from both by mutual agreement, or even from a judicial referral. This recognizes both the parties’ autonomy and the possibility that the judicial system itself may encourage the use of these alternative channels.
Regarding the involvement of professionals, the law generally prefers a non-mandatory approach to legal assistance, except in specific situations like the preparation of binding offers (with exceptions for smaller amounts). This flexibility aims to enhance access to these mechanisms; however, the complexity of many legal disputes often makes it wise to seek professional guidance.
A particularly relevant aspect is the effect that the request for these mechanisms has on the statute of limitations and expiration periods. The law establishes that such a request interrupts the statute of limitations or suspends the expiration of actions from the date of communication to the other party, thus avoiding the attempt of an amicable solution that may prejudice the rights of the party that promotes it.
In terms of form, the preferred method is face-to-face, although the use of telematic means is permitted by agreement of the parties or in the case of claims for amounts of less than 600 euros. This flexibility is particularly appropriate in a context of increasing digitalization of legal relations.
Specific Modalities: Diversity of mechanisms for diversity of conflicts
Among the different modalities recognized by the law, it is worthwhile to focus on some that present particularly novel or relevant characteristics.
Private conciliation involves the intervention of a person with technical or legal expertise related to the dispute’s subject matter. The law requires this person to be registered in a recognized professional association or in a register of mediators and to act impartially and confidentially. This mechanism takes advantage of the specialized knowledge of certain professionals to facilitate agreement in technically complex matters.
The confidential binding offer is a particularly interesting mechanism for certain types of disputes. One of the parties makes an offer that is binding on it in the event of acceptance by the other party. The law requires that the identity of the offeror, the actual receipt by the other party, and the detailed content of the offer be recorded. This instrument can be particularly useful in financial claims, where the main obstacle to settlement is often the amount.
The independent expert opinion consists of commissioning an opinion from an expert in the subject matter of the dispute. Unlike other mechanisms, this opinion is not binding, but may serve as a basis for agreement if the parties accept it, or at least to clarify the technical aspects of the dispute. Following the issuance of the opinion, the parties may accept it as an agreement, propose improvements or reject it, in which case the procedural requirement is deemed to be fulfilled.
Finally, the collaborative law process represents perhaps the most innovative aspect of the new regulation. It is a structured negotiation in which the parties, assisted by their respective lawyers, work together to reach a satisfactory solution, being able to integrate other professionals (psychologists, economists, etc.) when the complexity of the case requires it. At the end, minutes are drawn up with the participants, the sessions held and the agreements reached.
The challenge of implementation: From theory to practice
The real effectiveness of this new system will depend largely on how it is implemented in practice. It is not enough to make it compulsory to attempt out-of-court settlement; this attempt must be genuine and not become a mere formality.
In this regard, the law requires that the negotiation attempt be “real and credible; it cannot be fictitious.” To this end, it establishes documentation requirements that vary depending on whether or not a neutral third party is involved but always include a responsible statement that the parties have intervened in good faith in the process.
Likewise, the law regulates in detail when the negotiation process is understood to be concluded, whether it concludes with or without an agreement. In the event of an agreement, it must be formalized by identifying the parties and, if applicable, their lawyers and the neutral third party, indicating the place and date, as well as the obligations assumed by each party.
The possibility of converting the agreement into a public deed to convert it into an enforceable title reinforces its value and facilitates its compliance, avoiding the possibility of non-compliance with the agreement, forcing the initiation of a declaratory judicial proceeding.
A horizon to be explored: Perspectives and challenges
Organic Law 1/2025 represents a turning point in the conception of justice in Spain, bringing us closer to models already consolidated in other countries with a long tradition in alternative means of conflict resolution. The United States, Canada and the Nordic countries have been using these mechanisms for decades, with generally positive results in terms of user satisfaction and decongestion of the courts.
However, each legal system has its particularities, and the success of these mechanisms depends not only on their legal regulation but also on cultural, sociological, and organizational factors. Spanish society’s traditional litigiousness, the poor negotiating culture in certain areas, and the lack of specific training of many professionals are challenges that must be faced.
The commitment to obligatory nature as an initial impulse may be understandable in a context of paradigm change, but the real success of these mechanisms will come from their capacity to generate satisfactory solutions that will progressively make them the preferred option on their own merits, beyond their obligatory nature.
Conclusion: Between Hope and Caution
The new regulation of the appropriate means of non-jurisdictional dispute resolution is in line with a clear international trend towards the promotion of alternatives to judicial dispute resolution. This trend responds both to practical needs – decongesting the courts, reducing costs – and to a philosophy that values the protagonism of the parties in the management of their own conflicts.
In this sense, Spanish legislation joins a global movement that has shown positive results in many jurisdictions. However, only time will tell whether the legislative technique used, especially the commitment to mandatory nature as a procedural requirement, is the most appropriate to achieve the true purpose of encouraging agreement in order to avoid litigation.
The success of this reform will depend not only on its regulatory design, but also on factors such as adequate training of the professionals involved, public awareness of the advantages of these alternative routes, and the system’s capacity to evaluate and adapt according to the results obtained.
In short, we are facing an ambitious and necessary reform, which opens up a hopeful horizon but which will have to overcome important challenges in order to consolidate itself as a true paradigm shift in the administration of justice in Spain. The true criterion of success will not be the number of negotiation attempts made, but the quality of the agreements reached and the satisfaction of citizens with a more participatory, efficient justice system adapted to their real needs.
On April 8, 2025, during the Paris Arbitration Week, France’s Ministers of Justice Gérard Darmanin, announced a significant reform of French arbitration law. The aim of this reform is to clarify, modernise and consolidate the regulatory framework, the last substantial revision of which dates back to 2011.
It is set to culminate in the adoption of an Arbitration code by autumn 2026. This code is envisioned as a unifying legal instrument that will enhance the clarity, autonomy and international appeal of French arbitration law.
Structural proposals: building an autonomous and coherent legal framework
The creation of a standalone Arbitration Code
The proposal n°1 calls for the unification of all legislative and regulatory text governing arbitration within a dedicated code, structured into several parts and decoupled from the approximately 20 existing codes currently housing arbitration provisions.
This codification process is not purely technical, it serves pedagogical, symbolic and strategic purposes namely, enhancing the clarity, accessibility and international attractiveness of French arbitration law.
Common provisions for domestic and international arbitration
Proposal n°3 and 4 suggest reorganising French arbitration law around a set of common rules applicable to both domestic and international arbitration with limited derogation for the former. This represents a shift from the current dualistic system to a more unified and clearer and framework without eliminating the particularities of either.
As an instance, a preliminary article would define the international nature of arbitration, abandoning outdated reference to “commercial” character in favour of a more inclusive in realistic standard.
However, it does not mean a division summa divisio of those two types of arbitration because of the stable wish to preserve the dissociation between ordre public interne and ordre public international.
Codification of guiding principles
Proposal n°5 aims to enshrine as guiding principles (“principes directeurs”) those considered to embody the core values of French arbitration law such as the autonomy of the arbitration agreement, the competence-competence principle, the independence and impartiality of the arbitral tribunal, and the respect for the adversarial principle and party equality.
Others, though not considered fundamental, nonetheless shape the legal framework, such as good faith, loyalty, the principle of effectiveness (“effet utile”), confidentiality, proportionality, procedural loyalty and celerity, parties’ autonomy in choosing applicable law and procedure rules, amiable composition and access to justice (prevention of denial of justice), which form the broader ethical and procedural framework of arbitration in France.
Over the 19 principles elected to be enshrined, the report highlights and develop only few:
- Regarding the principle of independence and impartiality of the arbitral tribunal, it is given a particular prominence in the reform, both through its inclusion in the preliminary article of the Code and its designation as a guiding principle. However, the reform does not aim to consolidate the jurisprudence that has recognised exceptions such as the notoriety or the parties’ duty of curiosity (which exempt the arbitrator from disclosing allegedly well-known facts). Instead, it adopts a strict approach according to which, arbitrators must disclose any circumstances that, in the eyes of the parties, could affect their independence or impartiality, and cannot rely on the fact that such information might be publicly known. Parties are not expected to be in a state of constant investigation.
- Regarding the equality of the parties, this principle is reaffirmed at the stage of the constitution of the arbitral tribunal and throughout the arbitral proceedings. It ensures that the parties are treated equally and fairly.
- Regarding the confidentiality of proceedings, the reform extends this principle (already established in domestic arbitration) to international arbitration, while allowing for necessary exceptions, particularly in the context of investment arbitration. However, its application ultimately remains subject to party autonomy.
- Regarding the proportionality, article 14 serves both as an encouragement and support for the arbitral tribunal. It urges the tribunal to “adopt a procedure adapted to the complexity and stakes of the dispute”. In response to certain issues and recurring criticisms regarding the cost and duration of arbitration, this is a call for moderation on all fronts (time, volume of submissions, document production requests, length of hearings, number of witnesses to be heard, and the cost for the parties).
- Regarding the prohibition of denial of justice, this principle introduces a new role for the supporting judge (“juge d’appui”), who becomes the judge overseeing the prevention of denial of justice in a broader sense. His role extends both materially, in cases where it is impossible to appoint an arbitrator, and substantively, when the timely delivery of an award is at risk.
These principles are presented not merely as procedural standards but as fundamental values that shape and distinguish the French approach to arbitration.
Unification of judicial control and support
Proposals N°6 to 9 aim to unify and rationalise the judicial handling of arbitration disputes by several objectives such as exclusive jurisdiction of the judicial courts (“tribunal judiciaire”) over all challenges and enforcement of international arbitral awards, including those involving public entities, thereby ending the long-standing jurisdictional duality exposed in the Inserm case (2010), where the recognition and enforcement of international awards involving French public entities was scattered between judicial and administrative Courts.
Exclusive jurisdiction is awarded to the Paris Judicial Court to decide on all international arbitration matters. Another purpose is the specialisation of domestic courts in handling arbitration matters, and the elimination of residual competence formerly existing in favour of commercial courts presidents as supporting judges (“juges d’appui”).
This restructuring is intended to foster efficiency, consistency, and international credibility.
Substantive changes: a more flexible, protective and efficient arbitration framework
Promotion of flexibility
Several proposals aim to liberalize and modernize arbitration procedures like the elimination of the references to “commercial” matters in determining the international character of arbitration and the tribunal’s ability to apply to trade usages.
It will also serve this purpose by simplifying the formal requirements for arbitration agreements, removing the requirement that the clause be in writing and aligning domestic arbitration on international standards.
In this regard, the reform aims to abolish the written form requirement for arbitration agreements to align domestic and international arbitration rules. As arbitration agreements are typically written in practice, this formal requirement is now seen as outdated and inconsistent with general contract law.
However, the requirement of written form will remain solely a matter of evidence. At the stage of enforcement or annulment proceedings, the arbitration agreement (or a copy thereof) will need to be produced. In practice, this means that the arbitration agreement will still have to be recorded in a document, even if it does not meet the strict definition of a written instrument.
Party protection and procedural safeguards
The reform also seeks to bolster procedural guarantees such as the necessity for tribunal’s seated in France to be composed of an odd number of arbitrators.
According to the proposition of code, arbitrators should be natural persons, through these does not hinder recognition of awards rendered abroad by legal entities and the contractual nature of relationships between parties, arbitrators and arbitral institution will be formally recognised.
A mechanism for financial hardship (“impécuniosité”) is introduced to prevent abuses and ensure access to justice. Jurisprudence has confirmed that impecuniosity does not render the arbitration agreement manifestly void or inapplicable. While ensuring access to arbitration lies with the “arbitration actors” (i.e arbitrators, institutions, parties) the authority of the supporting judge (“juge d’appui”) to intervene in support of an impecunious party remains unsettled.
The reform proposal aims to expressly empower the juge d’appui to facilitate arbitral proceedings in such circumstances by ordering “any appropriate measures” (art. 33): this would serve to prevent a genuine denial of justice. Measures may include procedural actions (e.g., convening a case management conference) or substantive adaptations (e.g., amending the arbitration agreement to reduce costs, appointing a sole arbitrator, selecting a less expensive arbitral institution, or streamlining proceedings by limiting document production, written submissions, or hearings).
It also proposes a clarification of arbitration rules applicable in labour, family, and consumer fields:
- Regarding Family Law, the working group clarified that arbitration is allowed for patrimonial issues in family law but excluded for matters related to personal status. Divorce remains under state Courts’ jurisdiction. For patrimonial matters, additional safeguards are proposed, such as a written agreement, lawyers counter-signature, appeal options. Family judges will also have exclusive jurisdiction on recognition and enforcement of the awards.
- Regarding Labour Law and Consumer Law, the proposed measures aim to emphasize that while an arbitration agreement is permissible in these areas, it cannot be imposed by the “strong” party on the “weak” party. The latter will always have the option to exclude its application and revert to State Courts. Furthermore, in these areas, the principle of competence-competence is excluded, meaning that the consumer or the employee will not be obliged to establish an arbitral tribunal in order to invoke the jurisdiction of the State Court.
A protection of third-party rights is also specified through accessory intervention before the Court of Appeal and rule for third party opposition (tierce opposition), prohibited against arbitral awards but allowed against the Court decision related to them, such as decisions related to annulment proceedings or requests for exequatur.
Procedural efficiency
To promote procedural efficiency, the reform proposes the codification of the negative effect of the competence-competence principle, the authorization of consolidation of arbitral proceedings.
It entails the following modification and few others:
- Rewriting of the article 1448 of the Code of civil procedure and elimination of its last paragraph. This article currently states that “where a dispute falling within the scope of an arbitration agreement is brought before a State court, the court shall decline jurisdiction unless the arbitral tribunal has not yet been seized and the arbitration agreement is manifestly null and void or manifestly inapplicable”. Its second and third paragraph state that “the state court may not raise its lack of jurisdiction ex officio” and that “any provision to the contrary shall be deemed unwritten”.
Contrary stipulations would therefore be permitted, and parties could expressly provide in their arbitration agreement that the court is authorized to conduct a full review of the arbitration clause, or that the parties waive the principle of the arbitrator’s priority. However, such a deviation to be valid, it must be explicit and unequivocal.
- In order to consolidate procedures, unless the parties agree otherwise, in cases involving claims based on multiple contracts or related to multiple contracts, these claims should be made in a single arbitration proceeding under one or more arbitration agreements. However, two conditions are required: the compatibility of the arbitration agreements and the existence of a connection between the claims such that it is in the interest of efficiency and justice to have them heard and decided together by the arbitral tribunal.
- Under the current law, the arbitral tribunal can impose a penalty (“astreinte”), but there is not provision regarding its authority to liquidate it. The future code would allow the tribunal to do so “as long as it remains seized of the case”. However, it does not mean that the tribunal to retain jurisdiction for the purpose of liquidating the penalty after it has rendered its final award.
In addition to this, the project lays the groundwork for class arbitration, poses principles of procedural loyalty and concentration of arguments and expanding the powers of the supporting judge to address denial of justice, financial hardship, evidence production, enforcement and interim measures, and constitution of tribunals.
The efficiency objective also extends to recognition and enforcement of arbitral awards in clarifying recognition procedures and deadlines, removing the suspensive effect of appeals in domestic arbitration, allowing incidental annulment or refusing of enforcement to apply to related awards, and revisiting annulment grounds and enabling award correction or classification to avoid annulment or enforcement refusal.
Regulatory adjustments and technical reforms and promoting transparency
This reform includes adjustment proposals to ensure consistency across existing legislation and regulation.
Lastly, this reform addresses the promotion and dissemination of French arbitration law by increasing transparency in the appointment of arbitrators by supporting judges, including publication of the names and an annual public list. It is planned to reinforce judicial training in arbitration through enhanced ENM (“Ecole Nationale de la Magistrature”, which is the national school of judges) programs, internships with the ICC, and digital tools.
Promoting French arbitration law domestically and internationally through multilingual commentaries, outreach events, and strategic communication will be a way to extend the project.
In conclusion, the 2025 reform constitutes a major step toward modern, readable, and globally competitive French arbitration law. By consolidating legislation, strengthening procedural safeguards, and fostering accessibility and transparency, the proposed arbitration code is poised to elevate France as a leading venue for arbitration.
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.
PFAS are chemicals that have been used in industry for over 50 years. Between 4,000 and 5,000 varieties are used for various everyday consumer applications, and they are renowned for their non-stick, waterproofing, and heat-resistant properties. They have come under scrutiny in recent years, and are covered by European regulations, as they are in the USA, where the public authorities have imposed maximum use values, as well as reporting obligations. EU Regulation 2019/1021 (POP) restricts the production and use of certain categories of PFAS in specific industries or above certain values and their use with food products. France has gone further, regulating the levels of discharges into watercourses.
Scientific research suspects that PFAS cause illnesses such as cancer and reproductive disorders. Given the extent of contamination not only in everyday products but also in the environment, particularly waterways, the issue is likely to pose major public health problems in the years to come. This concern is more pressing given that PFASs are considered ‘eternal pollutants’, as there is currently no way of eliminating them from the environment.
The impact on companies’ and insurers’ liability is already significant. In the USA, more than 6,000 lawsuits have been filed since 2005. Three groups have already paid more than USD 1.2 billion in settlements due to contamination, and another group has paid more than USD 10 billion to end a class action.
In France, the Metropole of Lyon has brought a summary expert appraisal action against two chemical companies before considering bringing a liability action. In addition, several criminal complaints have been lodged for endangering the lives of others and damaging the environment.
Under French law, companies and their insurers could be liable on various legal grounds. In addition to ordinary civil liability law – based on article 1240 of the Civil Code – the special system of liability for defective products could also serve as a basis for a liability action (articles 1245 et seq. of the Civil Code), with French law defining a defect as any product that does not offer the safety that can legitimately be expected.
Although it is currently difficult to identify a causal link with an identified disease, asbestos-related case law has shown in the past that victims can take action if they can demonstrate that they suffered anxiety-related harm as a result of their exposure to the product, even if they are not positively suffering from a disease at the time of their claim.
In addition, the reporting obligations imposed by the public authorities will undoubtedly facilitate the filing of liability actions by facilitating the identification of the emitters and users of these pollutants.
Insurers are directly affected by this phenomenon, which for them constitutes an “emerging” risk (“silent cover”) because, for the most part, this risk was not identified when the policy was taken out, which exposes them directly and is all the more problematic because insurance premiums have not been able to take such a risk into account.
Civil liability or professional indemnity insurance policies, especially if they are drafted with “all risks except” clauses (“tous risques sauf” in French legal vocabulary, i.e. covering all liability risks vis-à-vis third parties except those strictly listed), as well as those including clauses relating to environmental risks, are particularly targeted.
Lloyd’s has already published model exclusion clauses for the attention of insurers, although such clauses can obviously only cover future insurance contracts or endorsements:
https://www.lmalloyds.com/LMA_Bulletins/LMA23-039-SD.aspx
The clauses contained in insurance policies must be drafted with particular care, considering each country’s specific features. In France, for example, to be enforceable against the insured, clauses must be “formal and limited”, which means that the exclusion must be both clearly expressed and that it must be possible to determine its content perfectly.
For example, the Court of Cassation recently ruled that the use of the terms “such as” or “in particular” (“tells que” “en particulier”) in an exclusion clause led to confusion in the interpretation of the exclusion clause, rendering it invalid (Civ. 2e, 26 Nov. 2020, no. 19-16.435). There was also a debate on the validity of an exclusion clause relating to bodily injury caused by asbestos, a risk which at the time had not been identified by insurers, who subsequently excluded it from most policies (Cass. 2e civ., 21 Sept. 2023, nos. 21-19801 and 21-19776). Similarly, policies should clearly indicate whether cover is provided based on a harmful event or based on a claim (i.e “base dommage” or “base reclamation”, which indicates if the risk is covered, depending on if the damage happened during the policy was valid, or if it depends on the moment when the risk was notified by the insured during such period).
One thing is sure: the risks associated with PFAS and claims are only just beginning to emerge in Europe, where the conditions for group actions have recently been extended with EU Directive 2020/1828, which came into force on 25 June 2023 and is currently the subject of a draft law under discussion in the French Parliament with a view to its transposition.
Dealing with unpaid invoices can be challenging for any business. In Belgium, where judicial processes can seem daunting, understanding how to manage debt collection effectively is crucial. This article offers practical guidance derived from a comprehensive legal guide to help your company navigate Belgium’s judicial debt recovery landscape.
Understanding Your Options
Assess the Situation: Before taking legal action, evaluating the amount owed and the debtor’s financial status is essential. This assessment will guide you in choosing the appropriate legal avenue, as Belgium offers different courts and procedures based on the dispute’s value. For instance, for claims up to € 5,000, the local court or ‘justice de paix’, which is a court of first instance for minor civil cases, is typically used due to its cost-effectiveness and efficiency.
Send a Notice of Default: Under Belgian law, a notice of default is mandatory before initiating legal proceedings. This step adheres to legal requirements and gives the debtor one last chance to settle their dues without further legal complications.
Efficient Legal Procedures
Use Simplified Procedures for Small Amounts: A simplified legal procedure can be utilized for undisputed money debts up to €1,860, which expedites the payment request process significantly. This approach can be particularly advantageous for recovering smaller debts quickly.
Consider Direct Bailiff Intervention: For undisputed amounts, irrespective of their size, between companies, creditors can authorize a bailiff to recover the debt directly without a court judgment. This procedure reduces legal fees and speeds up the debt collection process.
Leveraging Legal and Financial Advice
Consult with a Belgian Attorney: Navigating the Belgian legal system can be complex. Consulting with a local attorney can provide insights into the most effective procedures tailored to your case. This is especially true for international debt collection, where regulations and guidelines vary significantly.
Prepare Necessary Documentation: Ensure you have all necessary documents, such as contracts, invoices, and payment records, organized. These documents are essential to support your claim, whether you are dealing with local or international debt recovery.
After Initiating Debt Recovery
Use Interim Measures: If immediate action is needed, interim measures like seizing bank accounts or assets may be applicable. These measures, which are temporary and can be requested even before legal proceedings, can ensure that the debtor’s assets are secured while the legal process unfolds.
Conclusion
Recovering debts through judicial means in Belgium requires understanding the legal landscape and an appropriate strategy based on the debt’s nature and amount. While this article provides practical guidance, it is important to note that each case is unique, and professional legal advice is recommended for complex debt recovery cases. Businesses can enhance their chances of successful debt recovery while maintaining financial stability by utilizing simplified procedures for smaller or undisputed debts and consulting with legal experts. This proactive approach ensures that your business can continue to thrive even in the face of financial adversity.
What do the mythical Vega Sicilia wines, El Cid Campeador and the abuse of rights have in common? If you read on, you will find out.
The Vega Sicilia Único was for many years considered the best, the most prestigious and the most expensive Spanish wine.
The abuse of rights is a legal institute that allows the defense of situations in which the opponent acts with (apparent and formal) subjection to the law, but making a spurious use of the law with the intention of harming the injured party.
Last October, the Supreme Court handed down a judgment declaring certain agreements adopted by Bodegas Vega Sicilia S.A., producer of Vega Sicilia Único wine, to be null and void based on the principle of abuse of rights.
The judgment in question is doubly interesting.
Firstly, because it highlights the endemic evil of Spanish justice: it declares the nullity of resolutions adopted at a meeting held in March 2013, which were the subject of a lawsuit in February 2014, with a first instance ruling that same year, appealed to the Provincial Court of Valladolid who issued its judgement on 2019 and four years later the Supreme Court has put an end to the lawsuit: nine years after the shareholders meeting whose resolutions were the subject of the challenge.
As the Constitutional Court very recently reiterated in its ruling dated last October, “judicial slowness has no place in the Magna Carta”. But, although it has no place, or should not have a place, our courts continue to insist that it does and, as an example, this case that we are commenting on is, unfortunately, no exception.
Beyond the barbarity of a litigant having to wait for nine years to find a final solution to his claim, the judgment we are commenting on is of interest for other reasons.
The plaintiffs sought the nullity of certain resolutions adopted at a shareholders’ meeting, basing their claim on the fact that these resolutions constituted an abuse of rights since, through them, the shareholders of Bodegas Vega Sicilia S.A. sought to take control of Bodegas Vega Sicilia away from the company of which the plaintiffs were in turn shareholders.
The legislation in force at the time the meeting was held (prior to the 2014 reform) established that “resolutions that are contrary to the law, oppose the articles of association or harm the corporate interest to the benefit of one or more shareholders or third parties” could be challenged, adding that those contrary to the law would be null and void and the remaining resolutions could be annulled.
Following the 2014 reform, article 204 considers that “corporate resolutions that are contrary to the law, are contrary to the articles of association or the regulations of the company meeting or harm the corporate interest to the benefit of one or more shareholders or third parties” can be challenged and no longer distinguishes between null and voidable resolutions; although it partially recovers the concept of radical nullity in the case of resolutions contrary to public order by establishing that in such cases the action does not have a statute of limitations or lapse.
But both with the regulations prior to the reform and with those currently in force, the controversy resolved by the ruling we are commenting on is the same: when the legislator requires the agreement to be contrary to “law” in order to be able to challenge it, does he mean that it contravenes a precept of the Capital Companies Act (LSC), or can it be considered a requirement for challengeability if it contravenes any other positive precept of any other legal text? And finally, if the resolution in question is classified as constituting an “abuse of rights”, can such a situation be considered as “contrary to law” for the purposes of the application of article 204 LSC?
The Chamber reminds us of the requirements for the concurrence of abuse of rights in corporate matters:
- formal or outwardly correct use of a right
- causing damage to an interest not protected by a specific legal prerogative, and
- the immorality or antisociality (sic) of that conduct manifested subjectively (intention to damage or absence of legitimate interest) or objectively (abnormal exercise of the right contrary to the economic and social purposes of the same).
And it then refers to the numerous occasions on which its case law has reiterated that, although the regulation on challenging corporate resolutions does not expressly mention abuse of rights, this is no obstacle to annulling resolutions in such cases, since according to article 7 of the Civil Code (which prohibits abuse of rights), they must be deemed as contrary to the law.
The interest and peculiarity of this case lies in the fact that the contested resolutions were neither adopted in the interests of the company nor did they cause any harm to it, since the alleged harm was caused to a third party formally outside the company.
And on these premises, the Supreme Court reiterates and insists that the expression “contrary to the law” in article 204 LSC must be understood as “contrary to the legal system”, which includes those agreements adopted in fraud of the law, in bad faith or with abuse of rights, all of which are included and regulated in the Preliminary Title of the Civil Code. For these reasons, the judgment of the Provincial Court upholds the claim and declares the nullity of the contested agreements.
And what has El Cid got to do with all this? Is it a typo? No, not at all. Legend has it (invented, it seems, by a monk of the monastery of San Pedro de Cardeña to attract visitors) that Rodrigo Diaz de Vivar won a battle on the walls of Valencia against the Almoravids, after his death, saddling his corpse on his legendary horse Babieca.
It turns out that his almost fellow countryman, David Alvarez, buyer of the winery in the 1980s, the latter from León, the former from Burgos, but both old Castilians, also won his last battle after his death; David Alvarez was, together with one of his daughters, a plaintiff against the agreements of Bodegas Vega Sicilia and died in 2015; seven years later the Supreme Court has given him the right against the Almogavars, in this case, his own children.
And two lessons: first, justice is not justice if it is slow, a phrase apocryphally attributed to Seneca; it was not in this case for David Alvarez. Secondly, the abuse of rights is not only an “in extremis” recourse when one does not find frank legal support for one’s claims; on the contrary, it is, on many occasions, the solution.
Every employer should manage the risk of employee lawsuits. Many companies believe that they treat their workers well and that their employees are happy. As a result, they believe that they are not at risk of a lawsuit. But in my work, I frequently see employment relationships sour and employees surprise management by retaining a lawyer.
Employers should proactively manage this risk instead of hoping lawsuits never come. Defending a business against litigation by a current or former employee takes a lot of time and can be very expensive. It can also be incredibly frustrating to see an employee the company once trusted making false and damaging allegations. But employers can take steps before a dispute arises to reduce the impact of a lawsuit. I discuss eight such steps below.
First, employers should consider purchasing insurance that may cover employee claims. In the United States, this insurance is called Employment Practices Liability (“EPLI”) Insurance. These kinds of insurance policies may pay for a lawyer to defend the company in the event of a lawsuit. They may also pay the employee the amount he or she demands or that a court awards. Although insurance costs money, many companies prefer to pay regular and foreseeable premiums than sudden, steep, and unpredictable legal fees and employee payouts.
Second, employers should implement and enforce sexual harassment policies. Policies like these discourage the type of behavior that can subject a company to liability. But in many jurisdictions, they may also provide a defense to a company in the event an employee sues the company for allowing the harassment to take place.
Third, employers should seriously examine disparities in pay and job roles. If the highest paid employees at a company are largely male and the lowest paid employees are largely female, then an employee may claim that the employer engages in sex discrimination. Similarly, if the executives of a company are largely white but its blue-collar workers are largely people of color, an employee may allege that the company engages in racial discrimination. Rather than litigate these issues, a company should investigate whether those disparities exist in its own workplace and address them if they do.
Fourth, employers should consider whether they want employment disputes to go to arbitration instead of to court. Employers can largely determine this by including an arbitration clause in the offer letters they send to employees upon hiring them. Arbitration has some advantages: it tends to move quicker, it is private, it has the reputation for being a friendly forum for employers, and it tends to cost less. But it also has some downsides: it does not permit appeals on the merits of the dispute and it can cost more than litigation depending on the kind of case.
Fifth, any time an employee discloses that he or she has a health issue, the company should immediately consider how to accommodate that issue. Many employers may disregard the disclosure of a health issue if it does not seem important to the employee’s job. But if the employee later believes that the employer penalized him or her because of the health issue, the employee may claim discrimination. Before that happens, an employer should work with an employee to make sure the health issue does not impede job performance.
Sixth, employers should ensure they make consistent decisions. If an employer allows one employee to work from home, other employees may want the same treatment. And if an employer lays one employee off, she may wonder why another employee did not meet the same fate. Employers may reduce the risk of a lawsuit by setting firm policies and abiding by them.
Seventh, employers should frequently consult a lawyer they trust when employment issues arise. Spending a few hundred dollars to speaking to a lawyer for an hour before firing an employee or before responding to an employee complaint can help an employer avoid a lawsuit that may cost tens or even hundreds of thousands of dollars.
And finally, employers should consider settling disputes with employees, even if they are meritless. No company wants an employee to take advantage of them. But lawsuits are often more expensive and a hassle than the cost of a settlement. Spending a lot of money on defense, even if successful, may be more expensive than just compromising and paying the employee a fraction of what they demand.
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