The most varied and possible crisis scenarios are always cause for concern and planning. Companies focus on numbers, goals, contracts, reputation, inventory, sales, tangible and intangible risks, natural and technological accidents, criminal actions, and data protection. Individuals impacted by economic instability, to a lesser or greater degree, worry about jobs, investments, debts, and so many other commitments. Public authorities demand an immediate response from individuals and companies to minimize (and sometimes resolve) disputes and ensure social welfare. That is what we have seen since the beginning of the year 2020. The effects of the poignant world crisis unleashed by the covid-19 pandemic are immeasurable and have affected all sectors of society.
In this context of so many uncertainties, it is important to reflect on the movement of the already troubled Judiciary for resolution of disputes resulting from the crisis we are experiencing. The economic recession faced by companies and the citizens’ loss of income are directly proportional to the increase in the number of new disputes of all kinds: family, consumer, labor, contractual, corporate, bankruptcy, judicial reorganization, etc.
In addition to the losses resulting from the stoppage or reduction in operating activities with the unpredictable quarantine period, companies’ problems can be greatly aggravated by cases that last for years on end. Disputes demand a rapid response from institutions in order to allow resources to circulate and, with this, for companies to resume the course of business and for citizens to honor their commitments. At stake are not only the allocation of endless resources (of the parties and the Judiciary) to litigation over the years, but also the wear and tear of those involved, the credibility of the company, the viability of the business, and, ultimately, the generation of jobs.
The traditional method of resolving disputes with the filing of claims, an adversarial process, production of evidence, judgment, and appeals should be the last way to resolve disputes related to the present moment in which we live.
Without the purpose of pointing out alternative methods of dispute resolution as a remedy for the pathologies of the Judiciary, the objective of this article is to demonstrate the importance and advantages of reaching good solutions via mediation, especially in times of crisis. In the absence of precedents that apply to the situation we live in (nothing is found in the courts that serves as a guide for resolution of judicial disputes related to the pandemic), it is not possible to predict the probability of success of this or that judicial measure. The unpredictability of the outcome of judicial measures, combined with the need for rapid circulation of resources, considerably increases the advantages of using mediation as a means of dispute resolution.
One of the most relevant factors associated with the effectiveness of mediation is the voluntary settlement by the parties without direct and partial interference by the mediator. They can engage a professional specialized[1] in the dispute, raising the level of discussions and contributing to the dialogue. Reaching a settlement is the common goal of the parties, which contributes to mutual satisfaction and provides greater chances for fulfillment of the agreement. There is no need to point to who was right or wrong, who lost or who won, the important thing is to reconcile interests and allow both parties to continue their activities.
Surveys confirm that mediations in countries with broad adherence to this private method have very high rates of success, around 89% in the United Kingdom and 75% in the United States in 2017.[2] The same studies estimate that roughly 70% to 90% of the cases litigated in the United States end in settlement. Also, in terms of satisfaction, a study conducted with 368 companies in the "Fortune 1000" ranking in 2011[3] indicates that 98% would used mediation in the prior three years and 89% indicate likely use of mediation in the future.
Unlike mediation, traditionally litigious dispute resolution, through a judge in the Judiciary and arbitrator or arbitral tribunal in arbitration, rarely resolves the real dispute and adapts to the interests of the parties. Dissatisfaction and reluctance with respect to the judicial relief results in the lodging of appeals and the use of other manoeuvres which may delay the outcome of the dispute for years, causing immense wear and tear for the parties.
Time is another extremely relevant factor to consider in the use of mediation in an attempt to resolve a dispute. According to data published in the "Justice in Numbers" report in 2019,[4] the average duration of a private mediation proceedings is up to four and a half months, while arbitration, in turn, may take up to two and a half years to result in an arbitral judgment. Judicial proceedings, the longest, take on average four years and ten months until a trial judgment is issued. When the nature of the cause is bankruptcy or judicial reorganization, the time for an outcome is doubled or tripled.
The consequences of the exacerbated volume of claims and structural deficiencies in the Judiciary are disastrous when considering the time factor for dispute resolution. Often, judicial relief may no longer suit the interests and factual reality of companies when it is pronounced, resulting in inestimable practical consequences. In this crisis scenario, it is not out of line to say that many companies may not survive the time of waiting on these claims.
The speed of the mediation process naturally means a reduction in the costs incurred by the parties. It is worth mentioning that the sums involved in mediation proceedings, both in private chambers and in the Judiciary, are remarkably low compared to the costs of a lawsuit or arbitration proceedings. Many private chambers also have special conditions with the possibility of reducing costs if the mediation fails or if the proceeding is conducted during the course of an arbitration.
In addition, the rationalization of costs is considerable when considering, globally, the impacts of a successful mediation, such as the prevention of repetitive claims in court, which, in addition to overloading the Judiciary, requires funding expenses, costs, payment of judgments, fees for loss in suit, etc. In this regard, it is relevant to mention that there are emblematic and complex cases that have been resolved by means of chambers for compensation involving mediation. This experience has already been seen in air accidents (Chamber of Compensation 3054, related to the compensation of the relatives of the victims of flight JJ3054, and Compensation Program 447, related to the compensation of the relatives of the victims of flight AF 447); environmental accidents (PIM - Mediated Compensation Program, related to the compensation of those affected by the breach of the Fundão Dam, and CIB - Dam Compensation Center, related to the compensation of those affected by the breach of the Brumadinho Dam); mass consumer issues involving telecommunications services; and even issues involving the negotiation of telephone company claims under judicial reorganization, as determined by the 7th Business Court of the Rio de Janeiro State Court of Appeals in 2017.
In the midst of the crisis caused by the covid-19 pandemic, the São Paulo State Court of Appeals' Internal Review Board, per Provision No. 11/2020, instituted a pilot project for conciliation and pre-trial mediation for business disputes resulting from the pandemic. Innovative, the resolution includes judges in the pre-trial phase to hold a conciliation session with the parties, who must be referred to mediation if the attempt is unsuccessful. The mediator shall be chosen by common agreement of the parties and, in the event of disagreement, appointed by the judge. The parties only have to prepare an application to initiate the procedure, via e-mail, with the appropriate party information/identification, claim, and cause of action. The sessions must be conducted in electronic format, through Microsoft Teams. The provision does not, however, provide for the use of the method in matters involving applications for judicial reorganization and bankruptcy, which has already been applied by the Rio de Janeiro State Court of Appeals.[5]
In the same vein, the National Council of Justice (CNJ) announced in May of this year the launching of an online platform for mediation, precisely to avoid a build-up of post-pandemic lawsuits.
Although there may be cultural resistance, it is necessary to carefully analyze all the advantages that the mediation procedure offers and may come to offer to companies and businesses, including structural aspects that do not seem to make up the conflict in question, but which constitute a broader and more contemporary view of access to justice.
The current crisis scenario requires the Judiciary, more than ever, to focus on the adoption of preventive measures to avoid the filing of many cases to litigate contracts and claims for the application of disclaimers of liability due to force majeure or unforeseeable circumstances, for example. In essence, the effective economic recovery of companies and businesses is a condition for Brazil’s economic recovery and social peace. In this scenario, mediation constitutes an essential and undeniably practical tool for achieving these objectives, contributing to the management of crises such as the current one and others of so diverse a nature. In the end, every crisis brings to light forced structural changes which, despite the difficulties, certainly contribute to the cultural evolution of society and institutions.
[1] In addition to the various national and international private institutions focused on the expertise of professionals to act as mediators in business disputes, the courts maintain agreements with training courses so that professionals can act in Cejuscs.
[2] https://www.german-resolver.de/resources/The_Eighth_Mediation_Audit_2018-2.pdf
[3] Cornell’s Survey Research Institute, 2011.
[4] CNJ, Justice in Numbers 2019, https://www.cnj.jus.br/wp-content/uploads/conteudo/arquivo/2019/08/justica_em_numeros20190919.pdf
[5] All the information regarding the procedure is available at Provision No. 11/2020 of the TJSP's Internal Review Board https://www.tjsp.jus.br/Download/Portal/Coronavirus/Comunicados/Provimento_CG_N11-2020.pdf.
