Finishing Before You Start: International Mediation

• Author: Michael McIlwrath and Elpidio Villarreal
• Pages: 53-60

53

The best solution, from the client’s perspective, to al most any significant cross-

border litigat ion is usually for there to be no liti gation at all. Finish ing before you

start—resolving the dispute before the lawyers become entrenched in their

positions—is the result that a llows business people to do what they do best: con-

duct business. No book on international litigation would be complete, in our

view, without a discussion of resolv ing the case early.

This was true when we wrote this chapter for the first edition of this book

several years ago, and it is even truer today as the costs to businesses of cross-

border disputes have increased1 at the same time that internat ional business con-

tinues its expa nsion. What is markedly dif ferent today since the f irst edition of

1. It is now genera lly accepted that intern ational arbitration i s almost always expen sive,

while the cost of l itigation in domestic cou rts can range f rom being relatively modes t in

many civi l-law countries like Fr ance and Germany to bein g very expensive in com mon

law locations li ke New York, London, and Hong Kong. Expense s are incurred not only i n

the sense of the fee s of outside counsel and arbit rators—which ca n be substantial— but

also in the h arder-to-quanti fy but often more impor tant cost of management and

employee time. Becaus e of the signif icant time drai n of disputes, manage rs and employ-

ees who would otherw ise focus on generati ng new revenue for the company must

instead concent rate on recovery of revenue generated or capita l invested in the past

(when the company is a pla intiff ) or minimiz ing losses for past activ ities (when the com-

pany is a defenda nt). Neither of these uses of business p ersons’ time holds the potent ial,

in most cases, to g row the company’s business as the u sual use of their ti me. And the

uncertai nty of signif icant litigation c an adversely affect employee mor ale and market

perceptions of the va lue and creditwort hiness of a company.

CHAPTER 6

Finishing Before You Start:

In t e rn at i o nal M e d i atio n

Michael McIlwrath and Elpidio Villarreal

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