Sweden
In your jurisdiction, are there any formal ADR procedures available for resolving commercial disputes other than litigating (or arbitrating) to a final hearing?
A type of formal ADR-procedure, regulated by The Swedish Code of Judicial Procedure (sw. Rättegångsbalk), is generally carried out during the preparatory proceedings of the litigation process. As such, during the preparatory proceedings, the judge appointed to the case has a duty, to the extent appropriate, considering the nature of the case, to work for the parties to reach a settlement.
If it is considered more appropriate, the court may, with the parties’ consent, direct the parties to appear at a mediation session before an independent mediator appointed by the court (special mediation). The cost for a special mediator is normally shared between the parties.
The parties may avoid initiating a court (or arbitration) proceeding entirely, by opting to resolve their dispute via private mediation. Private mediation is largely unregulated under Swedish law, though certain aspects are regulated in the Swedish Mediation Act (sw. Lag om medling i vissa privaträttsliga tvister). The Swedish Mediation Act, which implements the European Mediation Directive 2008/52/EC, contains provisions on the duty of confidentiality of the mediator, staying of limitation periods during ongoing mediation, and the possibility for the parties, if they so wish, to apply for a mediation agreement to be enforceable. The parties may also choose to conduct private mediation in accordance with the rules set forth by a mediation institute, such as the Mediation Rules of the Stockholm Chamber of Commerce Arbitration Institute.
As of 2021, the Stockholm Chamber of Commerce provides an express dispute resolution tool, SCC Express Dispute Assessment (SCC Express), designed to help resolve disagreements between business partners quickly and at a fixed price, as an alternative to a full-length arbitration or court proceeding. It is a consent-based and confidential process through which parties to a dispute receive a legal assessment of the dispute from a neutral legal expert in three weeks for a fixed fee. The assessment of the neutral legal expert is non-binding upon the parties – unless they specifically agree otherwise – and can be used to guide settlement discussions or otherwise help the parties move forward.
Does engaging in ADR have any effect on potential or existing litigation or arbitration?
As mentioned above, mediation proceedings in accordance with the Swedish Mediation Act would stay such limitation periods that were running at the time of commencement of mediation up until one month after the mediation is ended.
Engaging in ADR does not, in general, affect the right to initiate litigation or arbitration proceedings. However, the parties may have agreed to engage in ADR prior to litigation or arbitration. If so, the parties are contractually obliged to engage in the chosen form of ADR before initiating litigation or arbitration proceedings. Such an agreement to engage in ADR prior to initiating formal proceedings would not, however, constitute a procedural hindrance. Failure to settle through ADR, either regarding the dispute as a whole or in respect of certain issues, does not affect the right to litigation or arbitration.
If litigation or arbitration is commenced after an attempted ADR, the conducted ADR process may be of benefit for the preparation for the court hearing. A mediation carried out at a mediation institute may, similarly, proceed to arbitration if the parties are unable to reach an agreement.
Is ADR compulsory and if so are there any consequences if a party fails to engage in ADR? If it is not compulsory are there any plans for this to change?
ADR is not compulsory, though, as mentioned above, Swedish general courts will in almost all cases work for the parties to reach a settlement during the initial stages of litigation. To our knowledge, there are no plans to make participating in ADR compulsory.
Can the parties agree, in advance of any potential dispute, to engage in ADR?
Yes, the parties can agree in advance that they will attempt to resolve any disputes that arise by using one or more forms of ADR. This is often specified in contract which is the subject-matter of the dispute.
When does ADR generally take place?
There are no limitations as to when ADR may take place. Private mediation can be initiated whenever a dispute has arisen. Settlement discussions regularly take place at different times during court proceedings, even at such a late stage as the main hearing. Special mediation may likewise be instigated at any time during the preparatory proceedings.
Is ADR subject to without prejudice privilege and/or confidential? If not, is there any other means to protect confidential information?
There are no provisions under Swedish law concerning without prejudice privilege in respect of ADR. Swedish advocates (sw. advokater) are however, under the Code of Professional Conduct for Members of the Swedish Bar Association, prevented from disclosing offers of settlement made by the opposing party in legal proceedings.
In respect of private mediators, confidentiality is generally considered to follow from the assignment itself. Confidentiality is also expressly stated in the Swedish Mediation Act. In respect of special mediators, confidentiality applies provided it is requested by one of the parties. If special mediation has taken place, the special mediator is normally exempt from testifying during court proceedings.
The duty of confidentiality does not automatically extend to the parties. They must therefore enter into confidentiality agreements or agree to use mediation rules containing confidentiality clauses. Parties who choose to conduct private mediation under the Mediation Rules of the SCC Arbitration Institute, agree not to use any information learned in the context of the mediation, whether in a subsequent arbitration or otherwise.
Under the Swedish Code of Judicial Procedure, admissions made by a party would constitute full proof against them in respect of the circumstances thus admitted. This would only apply, however, to admissions made within the court proceedings. The court would not be bound by, for example admissions made during ADR. Settlement offers etc made during ADR would generally have very limited value as evidence in a court proceeding.
Does the output from ADR create precedents?
A settlement reached through ADR does not create a precedent.
Who bears the costs of ADR?
The cost of ADR is typically shared between the parties, though the parties are free to agree otherwise as part of a settlement.
Is your jurisdiction subject to any specific rules for cross border ADR?
As mentioned above, EU directive 2008/52/EC on certain aspects of mediation in civil and commercial matters, has been implemented through the Swedish Mediation Act. The rules are applicable in respect of cross-border mediation.
Apart from this, Sweden is not part of any international agreements regarding cross-border ADR. For example, Sweden is not a party to The United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention).
Are there any particularly unusual features of ADR in your jurisdiction that you are aware are different to other jurisdictions?
There are certain types of disputes for which mediation is specially regulated. This is the case for disputes concerning labor market, copyright, and lease and rent of property issues. Mediation in respect of such disputes will be carried out in special tribunals. There are no specific qualifications required for a mediator/third party managing the ADR process.
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