« Les preuves fatiguent la vérité »
« Evidence tires the Truth » (Georges Braque)

Question: “How can you benefit from a conflict?”

Pipedreams ?… Or alternatively just by succeeding at trial?

Answer: Neither. By achieving a win/win outcome and particularly with an “opponent” who may well be an existing or future customer.

This was the message delivered by France’s Finance Minister, Thierry Breton, at the signing of the Commercial Mediation Charter on 22 November 2005 at the Paris Chamber of Commerce and he was suggesting that the way to do this was through ADR (Alternative Dispute Resolution) and mediation in particular.

The charter was signed by such prestigious companies as Alcatel, Auchan, Club Med, Saint-Gobain, Dassault Systems, Carrefour, Publicis, Renault, Thomson, Thalès and Total…

First class names, and this is probably just the beginning.

One year later, on 16 October 2006, more than 100 law firms (large, small, regional, Parisian, niche, etc.) also signed a mediation charter.

Both charters were prepared under the aegis of the Academie de Médiation, which informally brings together mediators, legal directors, judges and lawyers to deal with the development of ADR in the business world.
Commercial Mediation Charter

The companies that signed the “Inter-company charter for the resolution of commercial disputes”, aware of the benefits of amicably solving commercial disputes made their intentions clear:

– to examine whether recourse to a resolution procedure is possible and advisable when they are in a situation which may lead to a dispute;

– in the event of a positive response, to propose an amicable solution to the other parties, whilst providing, where needed, all necessary information;

– for contractual matters, whenever possible and desirable, to introduce mediation

– clauses into agreements;

– to provide for internal training; and

– more generally, to communicate the charter’s objective.

Law firms’ mediation charter

The charter, signed by lawyers, is the counterpart of the business charter. It states:

“Law firms subscribing to this charter are aware that:

– it is in their clients’ interests to prevent disputes and to resolve their disputes amicably rather than through litigation; and

– there are techniques and procedures that allow for amicable solutions, even where negotiations have failed and court proceedings have been initiated.

That is why, they have announced that they intend:

1. to inform their clients that these methods exist and that they have signed up to this charter;

2. to examine whether recourse to an amicable dispute resolution procedure is possible and expedient, when their clients find themselves in a pre-litigation situation or are lured into judicial or arbitration proceedings;

3. in the affirmative, to propose an amicable procedure to the other parties whilst providing them, where necessary, with all relevant useful information on the subject;

4. to renew this examination where needed during the litigation procedure, where it has not been possible to warn parties at the outset;

5. to insert an adapted clause for amicable resolution into the contracts that they draft, wherever possible and expedient;

6. to provide for internal training such that methods for settling disputes amicably are well known by lawyers that may encounter litigious situations and such that the lawyers responsible for managing disputes are aware of these methods, in the best interests of their clients; and

7. to meet with other firms that have signed this charter and the companies that have signed up to the inter-company charter for the resolution of commercial disputes to compare their experiences in relation to the amicable resolution of disputes.”

Hammonds Hausmann is proud to have promoted and signed the charter.

An obvious pragmatic and satisfactory solution

The advantages of ADR are now well known:

Compared to conventional dispute resolution methods (litigation or arbitration) mediation provides cost and time benefits, predictability, re-appropriation of the conflict by the parties and, last but not least, the preservation of the parties’ commercial relationship.

A strong or obvious case often means that one forgets and neglects this alternative form of justice. In a conflict it is often time to call upon an independent third party to bring the parties back to negotiating table. Neither a Judge, nor an arbitrator, nor even King Salomon, the mediator has no authority, he is a facilitator, a technician of both dialogue and non-confrontational negotiation. The process is confidential. Furthermore, global figures show that mediation works in three quarters of all cases – a figure that speaks volumes.

Without launching into comparative anthropology (we know for example that in Asia open conflicts are not warmly welcomed and that many social regulators contribute to such situations being kept to a minimum, in the West in certain social circles there was an old and vivid tradition of mediation. For example, the Gratien Decree (12th century canon law) sets out at Distinction 90: “Bishops must not approve of protests and must look to settle those of parties who are in disagreement”.

We are somewhat rediscovering the obvious!

Mediation in France

France is behind the UK and the US in terms of commercial mediation for a number of reasons: it does not come naturally to the French, whose mentality is to rely on the State, pitting conceptual or even idealistic notions of “régle de droit”, Truth and Justice against the pragmatic problem-solving Anglo-American approach. Mediation is considered as private and therefore as potentially hazardous justice. Finally, litigating in France is considerably cheaper and involves little or no cost sanctions for the ultimate loser, even where his good faith is not entirely beyond doubt.

However, demand is on the increase. The French business world along with numerous French lawyers and judges are becoming more and more aware of the potential advantages of mediation. The time is approaching when the lawyer may be held responsible if he has not taken care to inform and to advise his client about the existence and the advantages of Mediation.

Mediation services and training are now available at appealing prices. The “Paris Centre for Mediation and Arbitration” (CMAP), which has been working hard for over 10 years, deserves a mention as a model.

In February 2003, the Cour de cassation (France’s Supreme Court) ruled that where a pre-litigation mediation clause has been included in a contract, compliance with it is mandatory and cannot be bypassed by the parties or their lawyers (Cour de cassation, Chambre mixte, 14 February 2003).

In an age where the cost of business disputes is subject to thorough scrutiny at both a micro and macroeconomic level; where the sheer volume of legislation creates uncertainty and is growing steadily and where the Jupiterian model (legal, rational, pyramidal, Kelsenian) which dominates in France, seems to be set to fail, mediation looks like a triple “win win” solution – for the people, for the business world and for the State budget.

At Hammonds Hausmann we are keen defenders and promoters of mediation. We have recourse to it within the Commercial Dispute Resolution department and our non-contentious colleagues are ardent advocates of contractual mediation or conciliation clauses.

As pragmatic and client focused practitioners, we know that a trial is not necessarily the right answer. Ambrose Bierce once said that litigation is a machine which you go into as a pig and come out of as a sausage ! The statement is slightly unfair and sometimes one has no choice but to litigate; however the message remains: over-indulgence on this type of charcuterie can seriously damage your business’ financial health.