Finland: Consensus Approach

Article by Petri Taivalkoskiand and Helle Lindegaard

This article first appeared in Legal Week Global October 2002

Pragmatism and a lack of formality are typical features of how dispute resolution is generally conducted in the Nordic Countries. In countries such as Finland, the homogeneity of society and the small size of the business community has meant that relationships between companies are straightforward and the need for formal communications and procedures are fewer than in many other countries.

Confidential, expedient and informal arbitration as a dispute resolution method is particularly well suited to such a business climate, as opposed to often lengthy and more formal proceedings in state courts. Accordingly, it is hardly surprising that the traditional method of resolving business disputes in Finland has been arbitration.

A relevant question today is whether arbitration still meets the legitimate expectations of expediency and informality. It would seem that Finland has escaped the tendencies of ‘jurisdiction’ or ‘proceduralisation’ of arbitration more than many other countries. However, although arbitration in Finland is functioning well, there remains a clear demand for even more expedient and less adversarial methods — most commonly referred to as alternative dispute resolution (ADR).

The topic of ADR has been well covered by legal periodicals and, from time to time, in the national media in the Nordic Countries. A general concern has been the scope of the application of ADR (business versus consumer disputes and/or disputes related to family law) and the possible interaction between court proceedings/arbitration and ADR (the right to access to justice and conciliation already being provided by judges etc).

Many of the controversies surrounding the subject seem to stem from a fundamental, yet mistaken, perception that ADR is a competitor to court or arbitral proceedings.

It is important to underline that ADR is intended to serve as a complement to judicial procedures and not — in spite of what the terminology might indicate — a substitute for proceedings before a court of law or an arbitral tribunal. ADR can never be a substitute for a thorough, comprehensive, juridical review of a dispute, which takes place in a court of law and should never pretend to do so. But where ADR is an improvement on court proceedings is in its spirit. ADR is a voluntary, party driven process and the focus is not on the legal rights of the disputing parties (i.e. the past), but on their mutual interests (i.e. the future).

Finland has one arbitral institution, the Central Chamber of Commerce. The Chamber of Commerce has not, so far, considered it necessary to offer services relating to ADR, as opposed to its Swedish counterpart, the Stockholm Chamber of Commerce, which introduced its Mediation Rules in 1999.

However, in June 1998, the Finnish Bar Association launched a set of mediation rules, making it the first and only Finnish organisation to offer generally applicable mediation techniques, adopted by the parties, to a dispute as a part of their agreement to mediate, the mediation rules provide a framework for submission of any civil or commercial dispute to meditation.

The parties themselves appoint the mediator, or may ask the mediation board — a separate body operating under the aegis of the Finnish Bar Association responsible for managing the administration work relating to the mediation — to propose a mediator. In any event, the mediator must be a member of the Finnish Bar Association, have been trained in the art of mediation and be on the register of trained members kept by the mediation board. Currently 438 members (out of 1,587 members of the Finnish Bar Association) have received basic education in mediation and 210 members have received more advanced education.

The mediation rules require that the mediator be independent and impartial and that each appointed mediator, before accepting to act as a mediator, notifies the parties of any factors that may give rise to justifiable doubts as to his impartiality or independence.

The mediation rules contain no detailed procedural provisions. The procedure is informal and would normally be tailored by the parties and the mediator to meet the specific requirements of the dispute.

The mediation procedure is not binding. Although the parties have agreed to submit their dispute to mediation, they are consequently under no obligation to participate or continue with the mediation process if they do not want to.

Neither does the mediator have any power to impose solutions on the parties. If the parties so wish, the mediator may give a non-binding evaluation of the dispute. The mediator’s main task is, however, to facilitate communication between the parties to enable them to reach a settlement.

The mediator is bound by a lawyer’s obligation to maintain secrecy and undertake to keep confidential everything about the parties and their circumstances to which he has become privy. Should the mediation result in consultation with outside persons, they too shall be made subject to due confidentiality.

The parties have to undertake to keep the mediation confidential, meaning that they will not refer to any proposal or concession made by the other party or mediator outside the mediation. The parties also have to undertake that they will not appoint the mediator as a witness in any matter relating to the dispute.

The first experiences in Finland have been very positive and mediation has created great enthusiasm among legal practitioners — demonstrated by the considerable number of members of the Finnish Bar who have participated in mediation training organised by the Bar.

However, at the regulatory level in Finland, ADR has been looked at with a considerable amount of scepticism. This may be changing. At the beginning of June, the Finnish Ministry of Justice established a working party with the task of looking into the possibility of creating a conflict solving mechanism to run parallel to traditional court proceedings. The working group is expected to present possible proposals by end of February 2003.

Presumably this will lead to a diversification of dispute resolution methods in Finland and that ADR/mediation in the years to come will establish its place alongside the traditional methods.

But changes to ADR in Scandinavia are not confined to Finland. In Denmark a recent turning point for ADR came this summer when the Danish Ministry of Justice, together with the administrative body responsible for Danish Courts and the Danish Bar Association, organised a conference called Civil Litigation in the 21st Century. Mediation development was one of the main themes of the conference, which marked a Danish aim to put civil justice high on the agenda of European Union.

In relation to the latter, it should finally be noticed that the European Commission sent out a Green Paper in April on ADR in Civil and Commercial Law, inviting all interested parties, including Member States, to comment by 15 October. The Green Paper can be found at: http://europa.eu.int/eurlex/en/com/gpr/en_gpr_number_2002_04.html.