Law N. 13,140 (known as the Brazilian Mediation Law) was enacted on June 29, 2015. It provides for mediation involving individuals and private entities, as well as the settlement of disputes involving public entities.
The new law, which comes into effect in 180 days, regulates extrajudicial and judicial mediation.
The provisions on judicial mediation must be interpreted together with the new Brazilian Civil Procedure Code. The Code will come into effect in March 2016 and provides for a mediation or a conciliation hearing in the early stages of most lawsuits. The Code also regulates the activities of mediators in judicial proceedings.
Extrajudicial mediation involving individuals and private entities has been already used in some cases, since it does not require a specific law regulating the matter. But it is expected that the new legal framework will boost the adoption of mediation and provide comfort to parties that are not familiar with this method of conflict resolution.
The new law establishes that parties to an agreement may provide for a mandatory mediation meeting if a dispute arises. Like an arbitration clause, this mediation clause will have a binding effect. According to certain studies, the binding effect of the mediation clause contributes significantly to the development of the mediation proceeding and to the resolution of conflicts without arbitration or judicial proceedings.
With respect to disputes involving public entities, the new law provides for the future creation of administrative resolution and conflict chambers. It allows, however, the immediate adoption of ad hoc proceedings while these chambers are not constituted.
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