Spanish association calls for the development of insurance mediation

The Spanish government implemented a law on legal mediation – the practice whereby parties try to resolve conflicts via discussions out of court – in March 2012, although some autonomous regions previously had legislation in place. Insurance is one of the sectors that experts believe could benefit most from the spread of mediation. They say it would help buyers and underwriters alike to reduce costs and the time spent involved in protracted court cases. Civil liability would likely be one area to benefit the most, they said. Miguel Angel Zarandona, Vice-President at Agers and risk manager at retailers El Corte Ingles, noted that the practice remains underdeveloped in Spain, despite the advantages it offers such as reducing conflict and guaranteeing certain corporate details remain confidential.hideThe advantages can reach further than the mere solution of trade and civil disputes said Fernando Rodriguez Prieto, a leading notary in Madrid. But in Spain, where courts are swamped with cases, there remains a lot of scepticism about its use. "Spain is the only country in the world with more mediators than mediations," Mr Rodriguez joked. A lack of knowledge about the mechanism has prevented its development, he said, but noted that mediation met resistance in other countries before gaining broad acceptance. That was the case even in the US, the country in which the practice is most widely used. Thelma Butts, an international mediator, said the US experience taught the market that although mediation is no panacea it certainly helps to reduce costs for those involved. She said key to its development in the US, the UK and other countries such as Singapore and Canada, is the fact that mediation was made mandatory for certain kinds of conflicts, meaning that it has to be considered by parties before a case reaches court. This is not the situation in Spain, where mediation is offered only as a voluntary option for those involved in a legal conflict. Once people start to realise its benefits the practice takes off, Ms Butts noted. In Canada the number of petitions of mediation doubled to 28,000 between 2007 and 2012. In Germany a law on mediation was introduced as recently as in 2009 and the number of annual petitions has already breached the 7,000 mark. One consideration is whether insurance policies that provide coverage against legal procedures should include the option of mediation too. This would encourage its use. Jordi Rivera, the CEO of DAS International Spain, said that legal protection policies issued by his firm already cover the cost of mediation. He noted that it makes economic sense to try and drive more companies to look for solutions to their legal squabbles out of court. A mediation sentence costs about €910, he said, while the European average cost for litigation costs reaches €2400 (the fees of lawyers and other such expenses not included). More importantly, perhaps, companies can save much time and effort by avoiding legal wrangling. Mr Rivera said that in Belgium litigation takes on average about 505 days to conclude. Mediation, however, takes a mere 45 days. In Italy, where courts are famously slow, the difference is even greater. While litigations run for more than three years on average, the implementation of mediation in the country allows the length of conflicts to fall to 42 days.

Spanish association calls for the development of insurance mediation

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