A look into Portuguese Alternative Dispute Resolution Mechanisms (ADR’s)

published on July 6, 2018

It is known and recognised that the consumer society has caused a significant increase of the legal acts and, therefore, of the level of dispute. It is also known and recognised that this framework has gradually conducted to the strangling and erosion of the capacity of response from legal courts, to the increase of the outstanding legal proceedings and even in certain circumstances to the denial of the right to justice.
 


As far as dispute resolution is concerned, it is also known and recognised that this framework has rendered favourably that many states (mainly in Europe and America) would promote and develop innovating experiences through the recourse to alternative means, which gradually are commencing to generate good results.
 
This Alternative Dispute Resolution movement, which arose among the society, has grown due to the valuation of self-settlement of disputes, which would have been directly related to an increase of the specialization of disputes. The new disputes of the second half of the XX century required a technical decision issued by a reliable and specialized entity.
 
In the same way, the society has acknowledged that the traditional system (the legal courts) was not able to give a response to the new type of disputes which have arisen. Such disputes, although for small amounts, but if presented as a whole, represent considerable sums to the supplier, require a quick decision and at a low cost, which court procedures are not adjusted to.
 
As far as this matter is concerned, the Portuguese case is a good example considering that, between 1992 and 2003, the outstanding legal proceedings in the scope of civil jurisdiction increased from 250,000 to more than a million and that the average term for resolution was of 24 months.
 

A true un-judicial policy

The Ministry of Justice, on the basis of the statistical figures, has disclosed in 2001 a document named “For a New Allotment of Attributions” (“Para uma Nova Repartição de Competências”) where, fairly recognising some of the obstacles of the system of justice, tried to strengthen a true un-judicial policy.
 
It was necessary to act, on one hand, on the prevention of disputes and on the other hand, on the diversification of answers from the System of Justice.
 

Courts of Peace

One of the main items of this programmatic guideline was the approval, by unanimity, of Law n.º 78/2001, of 13 July (Courts of Peace Law (Lei dos Julgados de Paz)) and, consequently, the launch of the experimental project of the Courts of Peace (Julgados de Paz), initially established in Lisbon, Oliveira de Bairro, Seixal and Vila Nova de Gaia. This new type of courts with powers to resolve disputes in amounts not exceeding the jurisdiction of the court of first resort has been used, namely, for the resolution of matters related to property disputes, condominium, compliance of obligations, urban rental, possession lawsuits, civil responsibility, breach of contracts, lawsuits related to the general guarantee of the obligations and civil statements of claim in certain types of crimes.
 
Courts of Peace were incorporated on the basis of an extremely simplified procedure. Accordingly, the claim form and the defence may be submitted personally or by an attorney, being also possible to present them orally to the services of the Courts of Peace. The Courts of Peace are based on principles, such as informality, orality, absolute economy of procedures and celerity and have confirmedly constituted an alternative to citizens and simultaneously a new complement to the traditional system of Justice. 
 
They make available to citizens a more expedite response for their disputes (taking into consideration that the average term to resolve a dispute does not exceed two months) and are less expensive but also more consensual and participative given the possibility granted to the parties to terminate the dispute by reaching an agreement with the adequate help from a neutral and impartial third party (mediator).
 
On the other hand, from the 18,000 proceedings initially submitted, around 30 % ended by an agreement reached through mediation.
 

Arbitration Centres of institutional character

Another type of mechanism of alternative dispute resolution and probably the most known and recognised one in Portugal is the arbitration, which, without prejudice of being a model which involves a third party – through the role performed by the arbitrator – lays on the will of the parties in what concerns the origin and functioning of the arbitral court, given that it is up to the parties to choose the rules of the proceeding and the law to be applicable by the respective arbitrator(s).
 

Among the undeniable advantages usually pointed out to arbitration, the following are highlighted:
  • Voluntary nature (which implies the voluntary acceptance of the parties expressed in the arbitral convention of the dispute resolution by the arbitrator);
  • Confidentiality, flexibility of the proceeding and the specialised character of the decision;
  • Celerity (the simplicity of the procedure allows the resolution of the dispute in useful timing for the resolution of the interests of the parties);
  • Effectiveness of the arbitral decision (the decisions issued by the arbitral judge have the same status and force of the Judicial Court of First Resort).

  
The most important reasons for seeking an alternative to the courthouse in the transnational context include the hope for simplified commencement of proceedings and service of process, neutrality and facilitated taking of evidence. They also include the hope for expeditious issuance of an award, confidentiality and simplified enforcement.
 
Given the above and having in view the dynamism and growth of the arbitration in Portugal, the Ministry of Justice has been financially supporting several arbitration centres with jurisdiction in the area of consumer disputes resolution, motor vehicles sector, motor vehicles insurance sector, IP Sector or tax and public sectors.
 
These arbitration centres are included in a wider range network of arbitration centres of institutional character. Presently there are more than 30 entities in Portugal authorised by the Minister of Justice to carry out voluntary arbitrations of institutional character, covering different areas such as commercial and industrial sectors, private and public work sectors, tax matters, intellectual property, property and urban rental, motor vehicle accidents, consumer and even sports.
 
The arbitration, by allowing the shortening of the terms of decisions, the specialization of the final decision and its confidentiality, works as a competitive aspect of the economy. The interconnection between these two plans is in fact confirmed by the significant adherence to the arbitration centres through the “on the spot firm” programme (empresa na hora) and the “on-line firm” programme (empresa on line).  
 
In Portugal it is possible to incorporate and register a single-member or limited liability company in one visit to a single office, irrespective of a new company’s location. The articles of association are registered and published immediately on the ministry web site, with free public access, and the company is automatically allocated a registered web domain “.pt” with the company’s name on the internet (“on the spot firm” programme and the “on-line firm” programme). Around 55 % of the “firms incorporated on the spot” have automatically adhered to an arbitration centre. More than 3,000 companies have adhered through this way.
 
The evidence of the role of the arbitral courts in the scope of the policy of the Portuguese administration of justice, the recognition of its advantages in view of the traditional means, the surplus of some opinions reluctant to the growth of the arbitration beyond traditional limits and the ranging with modern European and international tendencies were circumstances that influenced the challenges of the Portuguese Ministry of Justice in the arbitration area, mainly in the institutional arbitration.
 
Therefore, new and innovative projects were included in the agenda of the Portuguese Ministry of Justice:

  1. The incorporation of the Information, Mediation and Arbitration Centre for Hospital Debts (CIMADH), which was justified given that 2.4 % of the lawsuits that ended in the small civil courts related to the collection of hospital debts.
  2. The incorporation of the Arbitration Centre for Administrative Matters (CAAD) was also intended for disputes resolution arising from public officers and public procurement. The incorporation of this arbitration centre by the Ministry of Justice has constituted another important step for the development of the alternative dispute resolution means in Portugal, in particular of the arbitration, since it was the Portuguese state itself, through the Ministry of Justice, to give the example by being bound by an order to the jurisdiction of an arbitral court with a permanent and pre-existent character to the dispute in question.
  3. The incorporation of the arbitration centre to resolve disputes of commercial and industrial property nature (Arbitrare) were other projects also included in that demanding agenda.
     
Arbitrare is an institutionalized arbitration centre with national scope, created in 2009 and competent to resolve:
  • Disputes arising out of industrial property rights, .PT domain names, trade names and corporate names, subject to voluntary arbitration; and
  • Disputes arising from industrial property rights, when reference medicines and generic medicines are at stake, subject to compulsory arbitration under Law no. 62/2011, 12 December.
     

Public Systems of Mediation – In particular, Family Mediation, Labour Mediation and Criminal Mediation

Concerning the development of the alternative dispute resolution means in Portugal, reference must be made to the important work performed by the Family Mediation Office (Gabinete de Mediação Familiar) incorporated in 1997 with authority to mediate disputes related to the regulation, alteration and breach of the paternal power, divorce and legal separation, reconciliation of separate spouses, attribution or alteration of alimony, loss of the use of the surnames of the other spouse or even for the division of the assets of the couple, among others.
 
Another example of dynamism and enthusiasm regarding the promotion of the alternative means was the Labour Mediation System (SML), to which entities representing employees and employers became associated and executed, on 5 May 2006, a protocol granting powers to the SML to resolve through mediation all labour disputes with the exception of those related to labour accidents or unavailable rights.
 
SML entered into activity on an experimental basis and for a period of one year on 19 December 2006, at the metropolitan areas of Lisbon and Oporto.
 
Besides the social partners that have executed the protocol, more than 70 trade union entities and companies have executed protocols of adherence to the SML, expressing their intention to consider the use of labour mediation and to disclose SML among their associates and employees.
 
Regarding restorative justice and not less important to the desirable social harmony was the Criminal Mediation System (SMP). The SMP entered into activity, also on an experimental basis and for a period of two years, on 23 January 2008, in three districts of Portugal and included, pursuant to the politic and parliament agreement executed between the Socialist Party and the Social-Democratic Party, at the mediation services of the Courts of Peace.
 
This project was focused on private or semi-public crimes against individuals or assets (with the exception of crimes punished for imprisonment greater than five years, crimes against liberty or sexual self-determination, embezzlement by a public officer crime, corruption or influence trafficking, whenever the offender has less than 16 years, the accused is a corporate person or the summary procedure (processo sumário) or simplest procedure (processo sumaríssimo) are applicable).
 

The general principles of mediation were expressly provided for in Law 29/2013 of 19 April (known as Portuguese mediation law).
 

In conclusion, we consider that Portugal is an excellent example of a country that has adopted an un-judicial policy and that has promoted many alternative dispute resolution mechanisms.

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Filipe Lobo d’Avila

+351 213 8684 995 00

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