Main out-of-court dispute resolution mechanisms
The claims of the parties to a legal relationship, whether or not there is a contract signed between them, are often contrary or at least different, in some or all points of the contract or business.
The normal thing is to think that in these cases we have to go to court.
But there are other options: out-of-court dispute resolution mechanisms.
As a requirement to adopt any of them, both parties must have the will to submit to these procedures and they must deal with rights or assets over which the parties have availability: mainly civil, labor and commercial matters.
In the first place we can always resort to negotiation, a procedure by virtue of which the parties, without the mediation of any third party, can reach an agreement on a dispute.
The advantages are cost and time savings. However, the parties are required to make an effort to waive some of their claims.
Another alternative to judicial dispute resolution is mediation.
Article 1 of Law 5/2012 of July 6, 2012 on mediation in civil and commercial matters, defines mediation as a dispute resolution procedure in which two or more parties attempt to reach an agreement on their own with the intervention of a mediator.
This flexible, inexpensive and quick procedure is regulated in this regulation, as an alternative to judicial and arbitration proceedings. The mediator’s decision may be made public and become enforceable.
Recently, the Ministry of Justice has designed a draft bill to determine the obligatory nature of mediation before going to court in cases such as separations and divorces, inheritances, non-payment of rents or mortgages or claims for amounts of less than 2,000 euros.
In the event that mediation does not resolve the conflict, it is possible to go to court.
As a third option, the parties may submit to an arbitration procedure regulated by the current Arbitration Law 60/2003 of December 23rd.
By means of an arbitration agreement, the parties may voluntarily choose this means of dispute resolution, which usually lasts about 10 months, by virtue of which arbitrators, instead of judges, settle a case. It is usually used in the commercial and corporate fields.
The arbitration procedure is more rigid than the mediation procedure, and the parties must comply with certain formal and procedural guidelines. The intervention of the courts will be only in support and control functions.
Arbitration may be based on equity (for example, in consumer matters) or on law, in which the arbitrators apply the law applicable to the matter to be settled, the latter being the default arbitrator.
Arbitrators may be individuals or arbitral institutions. The performance shall be exercised by an odd number of arbitrators, and there may be one or more. In the latter case, it shall be called an arbitration panel.
The arbitrators’ decision, the award, is binding and enforceable.
Finally, another of the main extrajudicial procedures is thetransaction. It can be used only in the event that a judicial proceeding has been filed, reaching, where appropriate, a settlement agreement with respect to the subject matter of the litigation, and putting an end to the lawsuit.
However, such an agreement may be reached in the first instance, in the appeals or in the execution of the judgment.
Do you need legal advice? .
If you have a problem but prefer not to go to trial, the best thing to do is to contact a specialized lawyer. In this way, you will ensure that your matter will be resolved well, with full knowledge of the law in force and the most beneficial options for your case.
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