Settembre 11, 2013

RELEVANT ASPECTS ON ARBITRATION

On the 10th of July in Milan at the GI Group’s auditorium it was held the conference on the positive outlook of arbitration relating to employment.The speakers that took part at the conference were Avv. Mauro Rubino Sammartano, President of the European Court of Arbitration Strasbourg, Avv. Mario Fusani, a labour law expert with many years of experience, Dr. Fabio Begini, National Secretary at UIL-UILCOM and Dr. Davide Patruno, Human resources manager at the Maxi Zoo Italia S.p.a – Fresssnapf Group.

Firstly during the conference emerged the opportunity to insert/include into our legal system some sort of a remedy to try and prevent that a good number of disputes end up clogging or occupying our courts. As a matter of fact, in a country such as ours, with a very high rate of litigation, arbitration plays a very significant and important role in comparison to elsewhere. In fact in Italy, as confirmed by the recent OECD data, a civil case can take up to 8 years to complete the three stages of the legal system, 788 days, almost four times the number of days that are required on an average compared to other OECD countries. On the contrary, the minimum time required of 368 days, or one year, is in Switzerland and is the country with the shortest time. And if you consider only the first instance of judgment in comparison to the OECD’s average of 240 days, in Italy it takes up to 564 days. The challenge is based upon both cultural and on a legal standpoint. Firstly, the ambition is to encourage a better legal culture that does not always exaggerate conflict and to not always see the arbitrator as a figure that is capable of solving the matter. And also from a legal point of view, still based on the OECD report on civil justice, raises concerns and imposes reflection and most importantly how the length increment by 10% will impact the economic productivity of the world. This is associated to a reduction of about 2% in probability that a person declares to having faith in the justice system. This may also have a direct effect on the availability and the credit costs, which in Italy’s maybe of 70 base points higher compared to the countries with more efficient systems.The conference reveled that, the development of this remedy proves to be convenient even during the application of employment law under various points of view including:

1)The time factor:

All those that work within the corporate world are well aware of the many delays and lengthy waiting periods during an ongoing legal dispute. This is due to the lengthy pending cases and for the fact that
majority of the courts lack enough magistrates and are under staffed. The situation is not made easier by the higher rates of litigation that exists within the country, thus making Italy have twice the number of litigations compared to France within the recent years. The Pinto Act, developed in order to obtain the appropriate compensation for the damages suffered, as a result of the excessive length of the proceeding, has in fact created an unbelievable paradox of delay even for those procedures that should sanction the unreasonable duration. In light of the given framework, for a company it might prove to be very beneficial to rely upon a method such as arbitration, which is bound to be completed within a given time span of several months and almost never exceeding one year.
It is necessary to highlight this aspect, because figure in the economic system, the length of trials is most certainly one many reasons that discourage foreign investments in Italy. For this reason, an increased use of arbitration could generate a notable inversion and thus be one of the means for boosting the economic development.
 
2) Confidentiality:
 
The arbitration is useful even under another point of view, in terms of confidentiality. The procedure is in fact, know to be a public process in its entirety. Vice versa, arbitration, may be handled with strict confidence. The decision may also never be made ​​public. Just this element, is a valuable asset to both ascertain relations and for business terms given the fact that often it’s very detrimental for a company when their right to privacy is infringed.
 
3)Trust:
 
Another positive point of the arbitration is directly associated with its competency and trust. The parties involved, have the ability to choose. Another positive element of the arbitration is directly associated with its competency and trust. The parties involved have the choice to choose an arbitrator of their choice depending on the nature of the case. Which means that the parties will respect any
decision made by the arbitrator as it was they themselves that decided on before whom they wanted the case be heard of and by doing so, they place their trust in the arbitrators ability to a fair trial.
This leads to a situation where, obviously the arbitrators are obligated to justify their actions and decisions in the event of misjudgment or wrongful verdict. Having examined the decided cases, it was evident that appeals over decisions made were very rare.
 
4)The jurisdiction:
 
Today the arbitration, has developed in many areas. Often characterized by a notable level in its technique. For individuals such as us, that play a role in the economic realm and are in contact with the rules that govern employment law, relying upon arbitration represents a choice made simply for the competencies that the arbitrators posses.
 
5)The location and the language:
 
It’s hard to forget the other two major positive elements of the arbitration. The first of the two elements is that the companies have the freedom to choose the location of the arbitration. The second point being that, during a the course of a procedure the standard language used is Italian. However, the arbitration maybe conducted in a different language of choice as per the request of the parties involved. The facility to conduct the procedure in a language other than Italian is a great advantage as this opens new opportunity to international business.
 
6)The business climate:
 
Last but not least, the improvements within the business culture. A very interesting scientific article addresses the above given question. The article studies the effect of introducing the subject of arbitration within a large American company. The company in question (with more than 100 thousand employees spread over thousand working locations) introduced the system of appeals at various
stages in the year 2004. When an employee has a complaint, they must, firstly report it to their superior.
If the outcome is not satisfactory or is not resolved appropriately, then the person may refer to the Human Resources department. If this step too does not resolve the problem, then the employee may proceed with referring the case to an arbitrator (and never to a
judge). The company collected information (using questionnaires) which gave them a way of measuring the effects of introducing arbitration within the working environment: each year a set of employees are asked to take the survey and by answering a set of given question that may determine the efficiency and impact. For example: “My manager treats all employees equally regardless of the race, gender or age”. Questions such as the given above, reflects the perception of compliance
(in this case anti-discrimination rules) at work place. Or “If I have a problem, I feel free to refer to my manager for advice”. Questions as such gives us a perception of interactive justice or informal methods within the working environment. Or even “I believe that this company is dedicated to resolving employee problems quickly and efficiently without being biased”.
Questions as such, reflect the perception of formal justice procedure within the work place. The study analyzed how the answers to these questions changed after the introduction of arbitration. It is estimated that formal justice procedure may decrease greatly. This suggests that the employees percept a minor dedication from the company, recognized as the main point of reference, to resolving the disputes with satisfactory results. At the same time though, there’s an increased perception towards the interactive/informal justice.
This also suggests that the employees percept a positive change within the working environment, with respect to each place of employment and a trust towards the superiors after the introduction of the
arbitration system. In conclusion, it is proven the necessity of the use of arbitration clause in a contract. Sometimes this is mistaken to be a (midnight clause), it’s a criticalstep in establishing a negotiation relationship and obviously a prerequisites for the use of arbitration that today may represent a great contribution of the legal world for the growth and development of the economy.
 
7)The Rules:
 
The primary importance falls on the issue of the applicable procedural rules and the law. With reference to the first point , it must be taken into consideration to analyze and discuss the possibility of conceiving the use of procedural regulations better adapted to the subject of arbitration
for the specific purpose of increasing the use of these solutions, including all the logics and positive repercussions that may impact upon the length of judgments. On the second point, it’s about the evaluation and the understanding of the possibility of using the law and its jurisprudence contents better cut on the basis of who’s involved which is referred to the arbitration. Undoubtedly, the new methods, experimented in within the employment law sector, but also may improve the effectiveness of arbitration.
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