Alternative Dispute Resolution Methods in Panama

In daily life, we face situations that can lead to conflicts, from business deals to personal or family disputes. It’s crucial to know how to resolve these promptly and effectively. In this article, get to know four alternative methods of conflict resolution used in Panama and their advantages.

By: Albany Broce – Associate

It’s common to encounter situations in our daily lives that involve exchanges of opinions potentially leading to conflicts. These conflicts can arise from simple situations such as commercial, personal, or family transactions. Differences of opinion can also spark conflicts.

In the face of any conflict, it is essential to know the mechanisms available for timely resolution, whether directly between the parties involved or with the help of a neutral third party, without resorting to traditional justice systems that make it difficult to achieve a prompt and effective solution.

If the parties are willing, these conflict resolution mechanisms can be utilized at any time, even if a judicial process has already begun.

What are the alternative methods of conflict resolution?

Here are some of these methods:

I) Negotiation: This first alternative dispute resolution mechanism is preventive. By reaching a beneficial outcome, it helps restore the relationship between the parties and minimizes the likelihood of resorting to the other procedures described later. It is recommended that any negotiation agreement be documented in writing, identifying the obligations, rights, and duties of each party. Key factors for a successful negotiation process include the willingness of the involved parties, a cooperative spirit, good communication between the negotiator and the negotiating party, devising a good strategy, and identifying the interests of the parties.

II) Mediation: This method requires the appointment of a third party unrelated to any of the involved parties, making them neutral. This third party, called the “mediator,” uses their training and experience to help the parties find a harmonious solution through joint sessions. When an agreement is reached, a mediation agreement is signed, detailing each party’s obligations and the legal implications in case of non-compliance.

III) Conciliation: Similar to mediation, this process involves a neutral and trained third party, the “conciliator,” who listens to both parties equally, facilitates communication, and encourages them to propose their own settlement solutions. If an agreement is reached, a conciliation agreement is signed, clearly outlining each party’s obligations, the conditions for compliance, and the legal implications in case of non-compliance.

IV) Arbitration: In this process, the parties agree, through an arbitration agreement, to resolve their dispute by a decision made by a neutral third party, called the “arbitrator.” This arbitration agreement is usually included in the initial contract between the parties and should be reviewed by a specialist. If not initially included, the parties can sign an additional document to agree on arbitration. Unlike other methods, arbitration involves established stages based on the type of arbitration. The arbitration process concludes with a binding decision known as the “arbitral award,” which is final and has the effect of res judicata, preventing the winning party from initiating another arbitration on the same issues resolved previously.

Advantages of alternative dispute resolution methods:

• Confidentiality;
• Immediate procedure;
• Greater flexibility in resolving the conflict;
• Access to effective and private justice;
• Process managed by an impartial expert;
• Avoiding overburdened judicial courts.

Current Situation and Challenges:

Today, the benefits of these alternative mechanisms have led to a positive impact and growing adoption among users, increasing confidence in their use. Panama has several qualified Arbitration Centers that manage the process and have mediation, conciliation, and arbitration regulations to guide these procedures. Despite the positive impact of these methods on conflict resolution, their success requires effort from those involved to examine the mutual and reciprocal benefits they offer, which involves respect, empathy, and collaboration. This should be done with the guidance of experts.

It is evident that there are various effective tools for parties in a conflict to resolve it and even rebuild professional relationships. It is crucial to understand, through experts, which of these methods is most suitable for different scenarios to achieve positive outcomes.