Counsel and witnesses

Are the parties typically represented by lawyers in commercial mediation? Are fact- and expert witnesses commonly used?

Yes, lawyers are very common in commercial mediations. Either both parties shall have lawyers or neither of them. If one party attends with a lawyer, the mediator should cease the procedure until both parties have lawyers (article 10, Law 13105/2015). Fact and expert witnesses are quite rare.

Procedural rules

Are there rules governing the mediation procedure? If not, what is the typical procedure before and during the hearing?

Yes. The Law of Mediation provides ground rules in articles 14 to 29. Common rules for both judicial and private mediation are that mediators shall explain to the parties the confidentiality of the procedure at the very beginning. It is possible to have co-mediation. Both plenary and caucus sessions are possible. Judicial deadlines are suspended. The mediation procedure ends with the final agreement or a term that states there is no possible agreement. For extrajudicial mediation, the law states that the invitation for the first meeting should have a clear date and place, there should be a clear minimum deadline for the conclusion of the procedure and the criteria for the choice of the mediator. Parties can always contractually decide differently. In the absence of contractual provisions, article 22 of the Law establishes some rules, such as a minimum of 10 days and maximum of three months for the mediation to be concluded. For judicial mediation, the main differences are that parties cannot freely appoint their mediator (article 25), public defence is granted for those in need and, if the case is resolved by the mediation procedure before hearing the defendant’s case, there are no legal fees for either party.

Tolling effect on limitation periods

Does commencement of mediation interrupt the limitation period for a court or arbitration claim?

Yes. The Mediation Law provides for this in article 16. This article states: ‘Judicial or arbitral proceedings may be suspended at the request of the parties in a mediation procedure.’ This was one of the advantages that the new law brought and that helped boost the use of commercial mediation.

Enforceability of mediation clauses

Is a dispute resolution clause providing for mediation enforceable? What is the legal basis for enforceability?

According to the Mediation Law (article 22, IV), mediation clauses imply the obligation to attend the first mediation session. There can be penalties for non-attendance at the first session. As the mediators clarify the principles and the operation at the first session, it is clear that a mediation clause only establishes the duty for parties to attend and to get to know what mediation is. After the first session parties are completely free to leave, since mediation is a voluntary process.

In addition, according to §2 of the same article, in the absence of express contractual provision, some legal criteria must be observed for the first mediation meeting and establishes a fine of 50 per cent of the costs of the suit for the party who does not attend the first meeting.

Confidentiality of proceedings

Are mediation proceedings strictly private and confidential?

Mediation proceedings are private and confidential. Mediators are not allowed to share information discussed during sessions. For instance, they cannot be enrolled as witnesses. There is one exception: the mediator should inform the authorities of any crime.

Article 30 of the Mediation Law states that any information shared during the mediation session is confidential unless the parties decide otherwise. Confidentiality applies to the mediators, parties, lawyers and any other person who took part in the proceedings. Information shared during caucuses cannot be disclosed publicly. Chambers and courts have codes of ethics that deal with confidentiality. Article 173 of the Civil Procedure Code establishes that mediators who breach confidentiality will be excluded from the list of mediators.

Success rate

What is the likelihood of a commercial mediation being successful?

There is little data on commercial mediation in Brazil. FGV professor and ADR lawyer, Cristiane Carneiro, is completing research on the economic benefits of business mediation here in Brazil and shows as preliminary results that less than 20 per cent of commercial cases in judicial mediation are settled. For extrajudicial mediation, the research was not able to gather much data, since not all chambers responded or have this information owing to confidentiality. The only private chamber that answered had three commercial cases resulting in one agreement; therefore, a 33 per cent rate of success.