CPR European Minitrial Procedure (rev. 1996)
July 8, 2010
The minitrial is a structured settlement process. In a short hearing, lawyers present their best case to senior executives from each side. Negotiations between the executives follow. At the parties' option, a neutral adviser may preside over the hearing and facilitate the settlement.
Le "Minitrial" est une procédure organisée, dont l'objectif est d'aboutir à une transaction. Après une brève audience, pendant laquelle les avocats exposent leurs principaux arguments à des dirigeants de chaque partie, ces dirigeants entament une négociation. Si les parties le désirent, un consultant neutre peut être désigné pour présider l'audience et faciliter la transaction.
Der "Minitrial" ist ein strukturiertes Vergleichsverfahren. in einer kurzen Anhörung legen die Anwälte den Verntwortlichen jeder Partei die Sach- und Rechstslage aus ihrer jeweiligen Sicht dar. Verhandlungen zwischen den Verant-wortlichen der Parteien schließen sich an. Auf Wunsch der Parteien übernimmt ein unparteiischer Berater den Vorsitz über die Anhörung und fördert die Einigung.
Il Minitrial è un procedimento per la composizione della vertenza. In una breve udienza i respettivi legali presentano ciascuna la loro difesa ai dirigenti di ognuna delle parti. Seguono le trattative tra i dirigenti. A riohiesta delle l'udienza può essere presieduta da un consulente neutrale, al fine facilitare la composizione della vertenza.
El "minitrial" es un procedimiento estructurado de solución de conflictos. En una audiencia breve, los abogados presentan sus mejores argumentos juridicos ante los altos cargos de cada parte. Las negoiaciones se producen a contuación entre los propios ejecutivos. A discreción de las partes, un asesor neutral puede presidir la audiencia y facilitar la solución del conflicto.
The CPR European Minitrial Procedure is private and confidential, informal, expeditious, and far less expensive or disruptive of business relationships than litigation or arbitration, whether institutional or ad hoc. The CPR Minitrial Procedure does not result in an adjudication, i.e., in a binding decision. The parties fashion their own solution.
Experience shows that the chances of arriving at a solution are high. Administrative involvement of an institution, e.g., that of an arbitral authority or Chamber of Commerce, is not required or necessary for its success.
The CPR Minitrial Procedure consists essentially of:
- An "initiating agreement";
- A "formal meeting" at which lawyers or other representatives of both parties present their case to a senior executive of each party, usually in the presence of a Neutral Third Party selected by the parties;
- Settlement negotiations between the senior executives.
1. INSTITUTION OF PROCEEDING
2. NEUTRAL THIRD PARTY
3. EXCHANGE OF INFORMATION
4. FORMAL MEETING
5. NEGOTIATIONS BETWEEN SENIOR EXECUTIVES
7. LEGAL PROCEEDINGS
9. TERMINATION OF PROCEDURE
1. INSTITUTION OF PROCEEDING
1.1 The parties will commence the CPR Minitrial Procedure by signing a written agreement (the "Initiating Agreement"), the recommended form for which is attached. The party proposing the CPR Minitrial Procedure shall submit to the other(s) a draft of the Initiating Agreement.
2. NEUTRAL THIRD PARTY
2.1 The parties shall agree upon a single, mutually acceptable neutral third party ("the Neutral Third Party"), who shall have the functions stated in this CPR Minitrial Procedure or in the Initiating Agreement.
2.2 If the parties have not agreed upon a Neutral Third Party within fifteen (15) business days from signature of the Initiating Agreement by all of the parties involved, any party may request CPR or a similar body involved with alternative dispute resolution in writing, with a copy to all other parties, to assist in the selection of a Neutral Third Party. A copy of the Initiating Agreement shall be attached to such request. Any such assistance, or recommendation, by that body shall not be binding on the parties.
2.3 Unless the parties agree otherwise, an individual shall not serve as Neutral Third Party if circumstances exist which would cause reasonable doubt regarding his impartiality and independence vis-à-vis the parties involved. Any such circumstances shall be promptly disclosed.
2.4 Prior to the Formal Meeting pursuant to Section 4 below, no party, nor anyone acting on its behalf, may unilaterally communicate with the Neutral Third Party, except as specifically provided for herein or otherwise agreed.
2.5 The Neutral Third Party's fee (fixed or time-based) will be established at the time of his appointment.
2.6 The Neutral Third Party shall not assume the powers of an amiable compositeur unless the parties have expressly agreed, in the Initiating Agreement or otherwise, to give him or her such powers.
3. EXCHANGE OF INFORMATION
3.1 Before the Formal Meeting pursuant to Section 4 below, and by the date specified in the Initiating Agreement, the parties shall exchange, and submit to the Neutral Third Party, concise memoranda of no more than 25 pages double-spaced A4-size paper, unless the parties have agreed otherwise as to the length, stating the legal and factual issues in the dispute and their position.
3.2 Each party will at the same time submit all documents and other exhibits on which that party intends to rely during the Formal Meeting, or which are helpful in understanding its respective position, but not to exceed 25 separate documents or exhibits in the case of any single party unless the parties have agreed otherwise.
3.3 Documents and exhibits presented, if not in the language(s) of the CPR Minitrial Procedure pursuant to the Initiating Agreement, will be accompanied by a translation into the language(s) of the CPR Minitrial Procedure, unless the parties have agreed otherwise.
4. FORMAL MEETING
4.1 A formal meeting (the "Formal Meeting") will be held, which shall be attended by the Neutral Third Party pursuant to Section 2 above and one Senior Executive of each party who shall have authority to negotiate a settlement on behalf of the party which he represents. The Neutral Third Party will moderate the Formal Meeting.
4.2 The Formal Meeting shall be held at the place and time, and in the manner designated, in the Initiating Agreement.
4.3 During the Formal Meeting, each party will make an oral presentation of its case, and each party shall be entitled to a reply. The presentations and replies may be made in any form, and by any individuals, other than the Senior Executives, as desired by each party, and may be supported solely by the memoranda, documents and other exhibits submitted pursuant to Section 3 above. The presentations shall not exceed the time specified for them in the Initiating Agreement (Section 6 below).
4.4 The use of witnesses and experts shall be permitted in the presentations. Presentations may not be interrupted, except that the Neutral Third Party and the Senior Executives may ask clarifying questions.
4.5 The Formal Meeting shall not be recorded. However, persons attending may take notes. Each Senior Executive may have not more than two advisers in attendance.
5. NEGOTIATIONS BETWEEN SENIOR EXECUTIVES
5.1 At the conclusion of the Formal Meeting, the Senior Executives shall make all reasonable efforts to agree on a resolution of the dispute. They shall meet one or more times, as necessary. By agreement, other members of their teams including advisers pursuant to Section 4.5 above, and an interpreter if necessary, may be invited to attend the negotiations.
5.2 The Neutral Third Party will mediate or moderate the negotiations. At the request of any Senior Executive, the Neutral Third Party will make a settlement proposal and/or give an oral or written opinion, including a prediction as to the likely outcome should the dispute be submitted to litigation or arbitration.
5.3 No settlement agreement will be binding until the terms of the settlement are set out in a written agreement signed by the Senior Executives. This should be done as soon as possible after the conclusion of the negotiations. Such agreement, once signed, shall be legally binding on the parties, subject to any limitations of the substantive or procedural law which the parties have agreed is applicable to such settlement, or which is otherwise applicable.
6.1 By entering into the CPR Minitrial Procedure, the parties shall be deemed to have agreed that the entire proceeding is confidential and without prejudice, and that the parties, the Senior Executives and any other representatives, and the Neutral Third Party must keep confidential all statements, whether oral or written, made or submitted in the course of the procedure, and all other matters relating to the procedure, including the settlement agreement, except when and insofar as its disclosure is necessary to implement, recognize or enforce such settlement agreement. All such matters will, subject to Section 6.3 below, be inadmissible and not subject to submission into evidence in any litigation, arbitration or other proceeding.
6.2 The Neutral Third Party will be disqualified as a witness, consultant or expert for any party to the CPR Minitrial Procedure, and his opinions in the procedure will, absent a valid and enforceable court order to the contrary, be inadmissible in any litigation, arbitration or other proceeding.
6.3 Section 6 herein is subject to any provisions of the substantive or procedural law which the parties have agreed is applicable to such settlement, or which is otherwise mandatory.
7. LEGAL PROCEEDINGS
7.1 Subject to any provisions of the substantive or procedural law which the parties have agreed is applicable to such settlement pursuant to Section 5.3 above, or which is otherwise mandatory, execution of the Initiating Agreement shall be deemed to constitute an agreement suspending the application of all applicable statutes of limitation and contractual prescription periods until the procedure has terminated. The parties shall take such other action, if any, required, to effectuate such suspension, likewise subject to any provisions of the substantive or procedural law which the parties have agreed is applicable to such settlement, or which is otherwise mandatory.
7.2 If this procedure should not result in a settlement, the parties may pursue legal remedies following termination of this procedure pursuant to Section 9 below.
7.3 The foregoing shall be without prejudice to the parties' right and ability to seek interim or conservatory relief in a court of appropriate jurisdiction.
8.1 Unless the parties agree otherwise, the fees and expenses of the Neutral Third Party, as well as any other expenses of the procedure, will be borne equally by the parties; and each party shall bear its own costs of the procedure.
9. TERMINATION OF PROCEDURE
9.1 The procedure shall be deemed terminated if and when (a) the parties have not executed a written settlement agreement within thirty (30) business days following conclusion of the Formal Meeting (which deadline may be extended by agreement of the parties), or (b) either party serves on the other party and on the Neutral Third Party a written notice of withdrawal from the procedure.
The CPR European Minitrial Procedure is particularly suitable when difficulties arise out of complex, long-term international/transnational undertakings, such as take-or-pay contracts, joint ventures, participation agreements, major construction projects, or technology arrangements. It is also suitable, increasingly, to intellectual property disputes, which are especially wanting of swift resolution. Such difficulties are best resolved amicably and rapidly, with the least damage to the business relationship.
The parties are free to modify the CPR Minitrial Procedure. Indeed flexibility and adaptability are essential features of this procedure.
Parties can use the CPR Minitrial Procedure whether or not their dispute has already been submitted to litigation or arbitration. The CPR Minitrial Procedure also can be used when more than two parties are involved in a dispute; in view of the uncertainty surrounding multiparty arbitration in certain jurisdictions (notably in France, in the wake of the 1992 DUTCO decision by the Cour de Cassation), this advantage is particularly noteworthy.
A party may withdraw from the CPR Minitrial Procedure at any time. The CPR Minitrial Procedure is without prejudice to the rights and remedies of the parties, e.g., to commence or continue litigation or arbitration, should the settlement efforts culminating the procedure not succeed. Obviously, such action may dilute the cost-saving aspect of the CPR Minitrial Procedure.
The CPR European Minitrial Procedure is an adaptation of CPR's earlier domestic Minitrial model. The process has been used with great success in the United States to settle business disputes.
While seeking to benefit from the successful experiences of the minitrial as practiced in the U.S., the European version of the CPR Minitrial Procedure has been carefully adapted to take into account differences in the legal and business landscape in Europe. It is not a simple transplant of the U.S. framework. Its primary advantages include those of cost, efficiency and providing a non-adversarial and confidential framework and the assistance of an independent and neutral third party who, if desired, may provide a dispassionate prediction of the likely outcome should the dispute be submitted to litigation or arbitration.
LENGTH OF PROCEEDING
The simplicity of the CPR Minitrial Procedure permits rapid completion. The period from signing the Initiating Agreement to settlement might be about 60 days. The formal meeting usually would be completed in one day.
THE FORMAL MEETING
A key feature of the CPR Minitrial Procedure (the "Procedure") is the Formal Meeting. Why hold such a meeting? Executives often lack a thorough understanding of the adversary's side of a dispute, and each party is best able to present its own position in a persuasive manner. The formal meeting enables each party to present the essentials of its case to the Senior Executive of the other party. Such a presentation usually gives each executive a much better understanding of the dispute and leads to his taking a more realistic position in the settlement negotiations which follow. Participation in the process also tends to defuse hostility and to strengthen the resolve of both Senior Executives to find a solution and to avoid litigation or arbitration.
THE SENIOR EXECUTIVES
The negotiations are more likely to succeed if the negotiators do not feel a need to defend past actions. The settlement may well entail a new business deal in which neither party loses. The more senior the Senior Executives and the less prior involvement in the dispute before the procedure, the greater the range of options for a constructive solution they are likely to perceive.
Business executives, who have the best understanding of their underlying interests and have settlement options not available to a conventional judge or arbitrator, play a central role in the process. The solution which they develop may well be more constructive than either the "win-lose" decision of a court or tribunal or the "cut-the-baby-in-half" approach which businessmen perceive, rightly or wrongly, to be the result of many arbitration awards.
THE NEUTRAL THIRD PARTY
A highly qualified Neutral Third Party, in whose impartiality and judgment the parties have confidence, can significantly enhance the prospects for success. It might be desirable to select as the Neutral Third Party a respected jurist with a thorough knowledge of the applicable law(s), experience in the relevant business and/or technical field, and the ability to facilitate the conduct of the process. Such a jurist can give the Senior Executives educated, objective views on the issues and on the likely outcome of a lawsuit or arbitration.
With the concurrence of the Senior Executives, the Neutral Third Party also can play a mediating role in their negotiations and make a settlement proposal. If need be, an appointing organisation, such as CPR, can assist in the selection of a Neutral Third Party. Suitable candidates for this role are to be found in the roster of CPR's International Panel of Distinguished Neutrals, as well as CPR's U.S. Panels of Distinguished Neutrals.
Assuming parties decide to proceed with a neutral, they should enter into an agreement with the Neutral Third Party by which the latter agrees to be bound by the provisions of Section 6 (Confidentiality) of the CPR Minitrial Procedure, and covering the Neutral Third Party's fee or time charges and such other matters as the parties and the Neutral Third Party see fit (see Model Agreements for form of such an agreement with the Neutral Third Party).
If the parties need independent expert advice on critical technical or legal issues, and the Neutral Third Party does not possess the required expertise, they may agree on the selection of a neutral expert or empower the Neutral Third Party to select one.
Parties of different nationalities often are reluctant to litigate or arbitrate in each other's country. They should be less reluctant to hold this Procedure in each other's country, since the objective is a settlement negotiated by the parties, not adjudication. In any event, the parties may meet in a third country of their choice, e.g., that of the Neutral Third Party.
At all times, the parties and the Neutral Third Party should take all appropriate measures to verify whether the particular provisions of their Initiating Agreement are permissible and enforceable under the substantive or procedural law which they have agreed is applicable to the proceedings and to any settlement agreement, or the substantive or procedural law which is otherwise applicable by virtue of, e.g., the "situs" of the proceedings and the place of entry into the Initiating Agreement or the settlement agreement.
If no litigation is pending between the parties with respect to the subject matter of the dispute, and if a statute of limitations would expire while the Procedure is being conducted, the parties should consider the feasibility of suspending such statute of limitations by agreement for the duration of the CPR Minitrial Procedure, subject to any provisions of the substantive or procedural law which the parties have agreed is applicable to such settlement, or which is otherwise mandatory.