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Alternative samba: Why the struggle to build ADR in Brazil matters

Any time a country can avoid the “American Disease” of hyper-litigation is a cause for celebration

Recently, I found myself in Brazil delivering a talk to a group of Brazilian executives on the virtues of alternative dispute resolution (ADR). Later that night, I spoke to a small group of law students at the University of São Paolo, also on the subject of ADR. My hosts were some of the leaders of the nascent ADR movement in Brazil, and they taught me a great deal.

As someone who has been deeply immersed in the growth and development of ADR in the U.S. and, to a lesser extent, in the rest of the world, it was fascinating for me to see a society and a legal system at an earlier stage of its response to the need for alternative and better means of resolving disputes.

One important difference between the Brazilian and American litigation systems is that, in Brazil, it doesn't cost very much to litigate. I was told of one case involving a dispute worth eight dollars that lasted 10 years. This has probably served as a disincentive to the more rapid development of ADR in that country.

But there are far more similarities than differences between the legal systems of Brazil and the United States. Litigation is a big problem in both nations. Brazil is not only one of the world's most important emerging markets, it is also one of the world's emerging litigation hotspots. As in the U.S., litigation in Brazil is incredibly destructive to business relationships and corrosive to the justice system as a whole. The Brazilian courts are being overwhelmed with millions of new cases a year, and the backlog of unresolved cases grows with each passing year.

On the bright side, there is a growing awareness on the part of the Brazilian legal profession that the country has a problem, and there are various initiatives in the works to help address the problem, not the least of which is an emphasis on mediation as a more efficient and less destructive way of managing conflict.

From what I saw, there is reason to be optimistic about those efforts. For the moment, consider me one of the cheerleaders for those working so hard to change the litigation culture in Brazil.

The story of ADR in Brazil is, of course, unique to that country, but from my perspective, I see a growing acceptance of ADR, especially mediation, in many parts of the world. In my view, this is unalloyed good news. Any time a country can avoid the “American Disease” of hyper-litigation is a cause for celebration.

The not-so-good news is twofold. There are some countries that seem determined to contract the American Disease and many countries where little to no progress has been made on the ADR front.

Once again, I think as litigators we have an important and positive role to play. American litigators—particularly those who work for multinationals—simply must start caring more about the state of dispute resolution in other parts of the world. Some of us have already learned that as global economic power shifts, so too does the focus of a company's litigation needs. Those who haven't learned that lesson yet are just waiting their turn in line.

As in so many things, the earlier we start to try to change things the better the ultimate results will be. I urge my peers to consider whether they can begin to play a positive role in encouraging the growth of ADR in markets outside the U.S. Our clients will thank us. Some day.

PD Villarreal

PD Villarreal is senior vice preisdent of global litigation at GlaxoSmithKline.

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