United States: Mexico Publishes Long-Awaited ADR Law

New General Law on Alternative Dispute Resolution Mechanisms

On January 26, 2024^th, the new General Law on Alternative Dispute Resolution Mechanisms ("GLADRM") was published in the Official Journal of the Federation, in compliance with the 2017 constitutional amendment that made Alternative Dispute Resolution Mechanisms a constitutionally protected practice in Mexico.

The GLADRM seeks to regulate and harmonize the practice of parties using alternative dispute resolution mechanisms, including mediation and conciliation at a national level, taking into account the various state laws applicable to dispute resolution.

Therefore, the GLADRM is projected to be a useful tool to standardize mediation and conciliation throughout the country, as well as to update numerous procedural issues such as the use of electronic media and general principles governing mediation and conciliation. Such updates were necessary given previous differences in certain definitions and requirements found in state laws.

Despite the significant achievement the GLADRM represents for issues of access to justice, the freedom of parties to resolve disputes, and a potential solution of the immense judicial burden that exists in the country, it contains certain aspects that may potentially hinder its application since the GLADRM appears to overregulate the activity of mediators, especially private mediators. This occurs through the addition of a series of requirements that must be met to be certified as a mediator, as well as to carry out mediation agreements, and also to execute such agreements.

Another adverse aspect of the law is its article 35, which provides that mediators incur civil liability for the deficient or negligent preparation, execution or registration of mediation agreements, without prejudice to any corresponding administrative or criminal liability. This type of provision transfers to the mediators an excessive risk burden beyond their control in a wide range of possible situations, which will possibly discourage the practice of mediators and with it reduce the availability of alternative dispute resolution mechanisms. As Winston Churchill said, "if you have ten thousand regulations, you destroy all respect for the law".

Regardless of any shortcomings, the GLADRM confirms the constitutional right in Mexico of parties to opt for alternative dispute resolution mechanisms, with a series of novel mechanisms and provisions that regulate their use throughout the country in an attempt to avoid parties having to resolve their disputes through lengthy and costly judicial trials.

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