It is a well-known fact that lawyers traditionally lead the mediation resistance movement and Ukraine is no exception. Moreover, many Ukrainian lawyers lack general knowledge about the alternative means of dispute settlement, adhering to traditional litigation without any hint of hesitation. This can be explained by the fact that Ukrainian law schools only recently started to offer comprehensive courses on arbitration and other alternatives to litigation. Those recent law school graduates who have some theoretical knowledge of mediation and other ADR methods are often reluctant to share it with their supervisors, mistakenly thinking that these supervisors already possess deep knowledge of various dispute settlement methods.
As a result, the only alternative to litigation that the majority of experienced Ukrainian lawyers may consider offering their clients is international arbitration. Local arbitration, mediation, etc., are treated as a taboo topic when discussing dispute settlement options with a client.
The other factor which does not help to combat the general hostility towards mediation is that law firms, in general, do not wish to invest in mediation training for their lawyers. The main argument is that there is insufficient demand from clients for this service and, therefore, it is hard to foresee a return on such investment in the near future. For some reason, management teams at law firms do not realise that even if having their own lawyers certified as mediators may not bring any direct material gains, these lawyers can effectively represent clients at all stages of the mediation process as they would know the specifics of the mediation method.
Those rare Ukrainian lawyers who understand the mediation method and know what it entails do not always appreciate that the sphere of its use is rather broad and is not limited by family and employment matters. For instance, mediation can be widely used as part of the multi-staged dispute settlement clauses in infrastructure development contracts. Ukraine has only recently learned about the public-private partnership model for developing infrastructure and it may well be that launching a few public-private partnership projects will make lawyers recognise that mediation is not only a new fancy word, but also an effective dispute settlement mechanism which is vital for certain categories of projects, such as large construction and other infrastructure development projects.
Even those lawyers who do their homework and try to assess all the options available to best serve their client's interests in a given project are often hesitant to suggest mediation, fearing that a mediation decision will not be voluntarily performed and that there are no proven means available under Ukrainian law to ensure enforcement of a mediation decision. Their scepticism is supported by the fact that mediation has not yet been formally introduced into the Ukrainian legal system by either passing a special law on mediation or amending the existing legislation.
The other obstacle for spreading mediation is a lack of awareness among in-house legal counsel of mediation as an effective tool in settling, in particular, corporate and employment disputes. Only a few companies operating in Ukraine approve the use of mediation at the initial stage of resolving a dispute as a matter of corporate policy. As a result, local in-house counsel simply do not need to learn about this method of settling disputes. Thus, they do not approach law firms with this issue. On the other hand, those in-house lawyers who know of mediation and its potential benefits for their company are reluctant to suggest this mechanism to their management as they are not sure if there are any outside counsel in Ukraine qualified to represent their company while it resolves a dispute through mediation.
Mediation centres functioning in Ukraine, international organisations that provide technical assistance in the area of access to justice, and other promoters of mediation, persistently make the same mistake by continually offering mediation training and organising mediation seminars and roundtables for lawyers and judges. It is true that over 10 years or so this approach may bring positive results. However, promoting mediation by 'selling' information to business owners and managers, which are direct consumers of mediation services, could trigger the development of mediation in Ukraine much quicker.
The other problem, which is not unique to Ukraine but common to all jurisdictions, is that at the stage of structuring a transaction, lawyers do not bother to ask their colleagues from the dispute resolution team to advise on the best options available for the client in the particular project. In other words, actual substantial negotiation of the dispute resolution strategy at the outset of contractual relations is an exception rather than the rule. For transactional lawyers, including dispute settlement provisions in a contract is at the bottom of the list of priorities, somewhere next to force majeure and other important, but underestimated contract clauses. This may not serve the client well. For instance, those companies subject to regulation under the FCPA and the UK Bribery Act 2010 could use mediation as a safe harbour for resolving many disputes in Ukraine without the risk of being accused of supporting foreign corrupt practices or bribery.
Notwithstanding the above obstacles for the widespread use of mediation in Ukraine, the good news is that at least mediation is developing in this country. Fifteen years ago no one could even dream of making a mistake or having the wrong mediation development strategy. Back then, the word 'mediation' did not exist in the Ukrainian language and Ukrainian law did not recognise this dispute settlement alternative. Sooner or later, Ukrainian lawyers will understand that mediators are not their rivals and that it is more productive and beneficial to become a part of the mediation movement than to fight it and inevitably lose the battle.
Previously published in Corporate Disputes
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.