UIA World Forum of Mediation C entres Prague, June 2013 MEDIATING WITH BANKS AND FINAN C IAL INSTITUTIONS Stefano Pavletič 1
Mediating with banks and financial institutions ( Stefano Pavletič ) §. MAIN FEATURES – the disputes • Wide range of possible claims (derivatives and structured products, mis- selling claims and contractual disputes, debt recovery and insolvency-related disputes, ecc … ) • Large companies involved • Legislation and regulation in the banking and finance industry is exceptionally complex. Technical matters facing privates and/or consumers • Uneven balance of power • Widespread interests and mass-products and services at stake 2
Mediating with banks and financial institutions ( Stefano Pavletič ) • High value of the disputes • Reputation-threatening matters • Disputes which may require a decision on technical ground • The banking and finance sector has come under the spotlight of consumers and regulators in recent years and has attracted a great deal of negative publicity that has led to an increase in disputes • Multi-jurisdictional 3
Mediating with banks and financial institutions ( Stefano Pavletič ) §. MAIN FEATURES – the parties • B anks and financial institutions may have internal ADR staff and functions with organisational capability and capacity for resolving conflicts • Privates and consumers may be represented by associations or gathered in class actions • Technical issues may require an active role played by lawyers and experts. Stronger importance of the consultants’ role in mediation, not always in line with the parties’ interests • Usually sensitive nature of financial transactions favours the undisclosed confidentiality of mediation 4
Mediating with banks and financial institutions ( Stefano Pavletič ) • C orporate subjects may be focused on keeping alive the relationship while privates/consumers may have other valid alternatives to take • The parties may rely on an authority figure • It could be more difficult for the parties to trust the mediator while being forced to negotiate (in case of compulsory mediation) 5
Mediating with banks and financial institutions ( Stefano Pavletič ) §. HINTS FOR MEDIATORS • Mediators are necessarily required to target their activity at the peculiar aspects of such disputes - as compared to “ordinary disputes” - and to adjust their own mediation style • A new set of skills and competences has become essential for acting in the industry. Mediators could be required to be flexible to tackle both emotional issues and corporate positions based on company procedures • Problem-solving attitude is due to become more important than facilitating role • A more leading and evaluative approach by the mediator will arguably prove effective 6
Mediating with banks and financial institutions ( Stefano Pavletič ) • Mediators’ strategy has to manage the possible uneven power. Mediation creates an even platform for agreed resolution • Might be more difficult for the mediator “to earn the trust” of all the subjects involved, in case of mandatory access 7
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