Cross-Border Mediation and Small and Medium Enterprises

Abstract

The European Union created a common market with free movement of persons, goods, services and capital, which has resulted in the “Europeanisation” of many civil relations, including trade, contracts and family issues. In recent years, at least 30% of companies within the European Union were involved in cross-border civil and commercial activities. Such commerce is not limited to big multinational companies but also engages small and medium size enterprises, which form the core of the economy. Nevertheless, a lot of companies still refrain from cross-border relations because each commercial activity inevitably carries at least a minimum risk of legal conflict and, consequently, involvement in a cross-border judicial process. Cross-border judicial processes can bring inconveniences, beginning from the language of the process and finalizing with the foreign regulation of civil procedure and possible application of foreign substantial law. For some small and medium size enterprises this can mean a significant loss and in some instances it can ruin the business. This article presents mediation as an alternative to the judicial process and considers the advantages and deficiencies that still prevent it from becoming a totally effective tool.