Jayme Petra de Mello Neto
Legal Coordinator at Marcos Martins Advogados
The year 2016 promises to be very intense and mark a new period in the history of conflict resolution in Brazil. At the center of the spotlight is the New Code of Civil Procedure, Law No. 13.105/2015, which comes under the inspiration of celerity and procedural economy, seeking the effectiveness of judicial protection in an increasingly complex world, with a high degree of socio-economic litigation, which is reflected in the increase in inter-party litigation, overloading the Judiciary.
Alongside the protagonist, the Brazilian system of conflict resolution now has Mediation as a legally defined instrument. Having completed its vaccatio legis at the beginning of 2016, Law No. 13.140/2015, entitled the Mediation Law, delimited the contours of the instrument, creating its own system alongside the current and future judicial system.
Those who hold on to the idea that Mediation is umbilically linked to traditional Civil Procedure, applied to resolving disputes submitted to the Judiciary, are mistaken. The law even provides for Mediation to take place in the course of the judicial process. But, regardless of this provision, intra-procedural Mediation is, in fact, a cause for suspending the process in order to refer the parties to another system for resolving disputes, where the sanctity of procedural rules can be softened to the benefit of consensual pacification. This is not Conciliation, an instrument of pacification through which the judge tries to re-establish dialogue and agreement between the parties while the lawsuit is in progress. Mediation is an autonomous system and must be understood as such in order to fulfill its functions. Throughout this text it will be more clearly demonstrated how Mediation differs from Conciliation.
We need to understand what Mediation is. According to the Law itself: Mediation is considered to be the technical activity carried out by an impartial third party without decision-making powers, who, chosen or accepted by the parties, assists and encourages them to identify or develop consensual solutions to the dispute[1]. Mediation is much more than a simple, informal attempt at conciliation between the parties. It is an activity: a set of coordinated acts which, in themselves, imply a procedure.
While Conciliation is the completion of an isolated act, Mediation requires a chain of acts. Mediation and Conciliation do not have a genus and species relationship. Within a Mediation procedure, there can be as many conciliation attempts as there are opportunities.
Another point that helps differentiate Mediation from Conciliation is that Mediation is a technical activity. Although the law does not define what a technical activity is, at one point it states that the mediator must be trained. However, the notion of training is vicarious in the Law. This is because, when dealing with the judicial mediator, the Law establishes quite clear criteria: a) higher education for more than 2 years; b) training at a school recognized by the National School for the Training and Improvement of Magistrates; c) possible complementation of requirements to be established by the National Council of Justice in conjunction with the Ministry of Justice.
However, when the law mentions the training of out-of-court mediators, it fails. This is because it states that any able-bodied person who enjoys the trust of the parties and is qualified to mediate may act as an extrajudicial mediator[2]. Now, if in defining Mediation the Law requires it to be an activity qualified by technique, when dealing with out-of-court mediators the Law failed to emphasize this qualification.
It didn’t even define what it meant by the capacity to carry out mediation in the case of out-of-court mediators. Which line to follow? Should out-of-court mediators be trained along the same lines as court mediators, borrowing from the law’s own regulations? Should the interpreter consider that the law, by dealing with the training of the Judicial Mediator and that of the Extrajudicial Mediator in different articles, failed to require the latter to have the seal of approval of the National School for the Training and Improvement of Magistrates – ENFAM?
These points have certainly not been resolved. To date, there is no known case that has been brought before the Judiciary to assess the issue of training for out-of-court mediators. At the risk of later censure, we believe that it is unreasonable to require Extrajudicial Mediators to be trained at a school accredited by ENFAM. On the one hand, the law does not expressly require this. On the other hand, despite the novelty of the Law in the Brazilian legal system, Mediation has been taking place for a long time, outside of state regulation, especially in the large associations of economic categories. Such Mediations have taken place with a reasonable degree of success, despite the training certified by ENFAM. In fact, efficiency has been achieved through the use of mediators trained by the economic sector itself. In this respect, look at the experiences of the clearing houses, especially that of IATA (International Air Transport Association), which mediates disputes between airlines. Mediators at the clearing house are not trained by ENFAM, but the results are very satisfactory, and the existence of judicialized conflicts between airlines adhering to the clearing house is rarely reported.
In addition, Mediation was already practiced in the main Arbitration Chambers in Brazil. Under the Arbitration Law, the Mediation procedure had already been effectively adopted at least since 1979, with the inauguration of the Mediation and Arbitration Center of the Brazil Canada Chamber of Commerce, historically the oldest Arbitration Chamber in operation in the country. So much so that the Chamber’s regulations have always provided for incidental or preparatory Mediation. If the Extrajudicial Mediator were forced to adopt an accredited qualification, there would be a logical contradiction between them, who have no decision-making power, and the arbitrators, who are de facto judges. Not to mention, for example, what happens with International Mediation, which, being fully recognized, deals with major disputes without the mediators having been accredited.
Because of these factors, it is possible to venture the interpretation that, when the law talks about the training of out-of-court mediators, it is referring to a generic and factual conciliatory capacity, not necessarily linked to the ENFAM seal. However, although omitted in the wording of Article 9 of the Mediation Law, the Extrajudicial Mediator must have technical capacity, bringing the Law into line with the concept it itself sets out.
The Mediation Law poses another major challenge: its acceptance by the general public. The Law establishes an initial procedure for Mediation that is very similar to the procedure for setting up an Arbitration Court. Thus, the preparation of Mediation involves costly and relatively technical work, which is not common in commercial relations. As is the case with Arbitration, Extrajudicial Mediations can only be carried out when the commercial contract between the parties, from which the dispute arises, contains a well-written Mediation clause. Considering that national practice is more informal, even in supply relationships between companies, the occurrence of a mediation clause tends to become rare.
The law did not favor out-of-court mediation per se. On the contrary, although the practice of contractual informality is the rule in the country, the Law emphasized this point by stating that, in contracts without a Mediation clause, the Mediator can only charge costs when Mediation is set up: in other words, when both parties to the conflict adhere to Mediation. This discourages out-of-court Mediation, considering the very peculiar reality of Brazilian legal practice.
Another indication that non-clausulated Mediation is discredited in the Law lies in the requirements of the invitation to start Mediation applicable to this type. Specifically, the requirement to indicate possible Mediators[3]. The inviting party must appoint 5 qualified and suitable people with technical knowledge to act as mediators, otherwise the invitation will not be considered valid. Now, the number of people is quite high and it would certainly involve a very costly activity to survey them. Furthermore, considering the degree of impartiality that must exist between the mediator and the parties, it is very difficult to achieve this number without a minimum of disclosure of the dispute to the candidate mediators, which would tend to compromise their confidentiality and impartiality.
Furthermore, it must be considered that the Law also discredits Mediation for cases in which there is no express clause in the contract, by establishing that the sanction for the party that refuses will be 50% (fifty percent) of the succumbent funds, including attorney’s fees, if it wins the lawsuit or arbitration procedure, if the invited party does not attend the first meeting. Even considering that this amount can be raised for cases with a higher mediate object, it is still not a strong sanction, considering the economic impact and the opportunity cost, especially the impact of inflation and financial interest. In a common situation, in which the approximate amount of court fees is 1% (one percent) of the value of the case and the attorney’s fees are set at 10%, the amount of the penalty for the party will be approximately 5.5%, bearing in mind that the more expensive the mediate object, the lower the percentage that court fees represent, due to the tax criteria for capping this tax.
There is a key fact in favor of out-of-court mediation: since, at the end of the procedure, a legal deal is brokered between the parties, mediation allows the parties to depart from the solutions preconceived by the substantive law, and may even innovate the de facto state of the deal originally entered into. The Law usually contains average provisions and solutions, generally applicable to any and all contracts, regardless of the economic asset that is the object of the relationship of obligation. Ever since the law of obligations was brought together, to the detriment of the dichotomy that previously existed between civil and commercial law, the practice has lacked a rule that gives prestige to the role of custom and commercial usage, especially those linked to the negotiation of a particular good of life. It so happens that the practice in some markets is so deep-rooted that in some cases there are even model laws (soft laws), which give the segment a sense of obligation, even though the solution is different under positive law. Out-of-court mediation makes it possible to bring out these traits that are so characteristic of economic sectors, which emerged in the mold of Lex Mercatorio, buried by the uniqueness of the system of obligations, after the Civil Code of 2002.
Overall, out-of-court mediation is an expedient of the utmost economic justice and, if properly applied, a much more efficient way of settling disputes than traditional means, in which judges are given the power to replace the will of the parties.
[1] This is the literal content of the sole paragraph of Article 1 of Law 13.140/2015.
[Art. 9: Any capable person who has the trust of the parties and is qualified to mediate may act as an extrajudicial mediator, regardless of whether they belong to or are registered with any type of council, class entity or association.
[3] Art. 22. § Paragraph 2 – In the absence of a complete contractual provision, the following criteria must be observed for holding the first mediation meeting: (…)
III – a list of five names, contact details and professional references of qualified mediators; the invited party may expressly choose any one of the five mediators and, if the invited party does not manifest itself, the first name on the list will be considered accepted;
