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21 May 2014
Law 24.573, issued on October 4 1995, establishes a mandatory mediation procedure under a certified mediator as a condition precedent for bringing a complaint in court where a claimant alleges damages under – or non-compliance with – the terms and conditions of the Aeronautical Code, as well as cases triggered by the Warsaw Convention.
On April 5 2010 Law 26.589 was passed, providing an updated version of the mandatory mediation hearing process. Law 26.589 builds on the positive developments implemented by Law 24.573 and has proved to be an improved version thereof.
A passenger that alleges a claim against an airline for death, injury or delay – or for delay or loss of baggage – during air transportation must request a mediation hearing with the defendant airline. At such hearing the parties must sign an agreement under strict confidentiality that they will try to settle the case. Both parties must be assisted by an attorney, and the mediator must be an attorney certified by the Ministry of Justice.
Both parties may agree subsequent hearings with the mediator until a settlement is reached.
In general, in the first hearing, the claimant will explain the facts on which the claim is based and the defendant will request evidence of such facts, particularly documentary evidence (eg, tickets, invoices for alleged expenses incurred by claimant and any other evidence held by the claimant).
At the second hearing, after investigating the case, the defendant will be in a position to either reject the claim or make an offer of settlement. Sometimes this procedure is developed over more than one hearing.
If the parties reach an agreement during the mediation process, a document must be signed to this effect. The mediator's fee is normally paid by the defendant airline. Such fee will vary depending on the amount of the agreement reached, ranging from Ps300 (around $37.50) to Ps12,000 (around $1,500).
If the parties fail to reach a settlement, the claimant is free to bring a complaint before the federal civil and commercial courts. Further, under the new mediation hearing law, during the mediation process all legal terms are suspended. However, 20 days after such closure, the term to file the complaint will reopen.
The procedure allows parties to save on legal expenses in long court cases where the attorneys' legal fees must be paid, as well as a court tax of 3% of the amount claimed and interest rates from the time of the event (or from the first notification of the event by the claimant to the airline). Furthermore, the defendant need not pay for expert witnesses, letter rogatories or any other kind of evidence.
Court cases generally last at least three to four years, taking into account the fact that the decision of the first-instance judge can be subject to appeal before the Federal Civil and Commercial Court of Appeals. If the case is a federal matter, the losing party may also file recourse to the Supreme Court. Further, under the Civil and Commercial Procedures Code, only cases above Ps20,000 ($2,500) may be appealed to the Federal Civil and Commercial Court of Appeals. Therefore, in many cases, the defendant is left with an unfavourable decision that cannot be appealed.
When the Aeronautical Code or the Warsaw Convention applies to a certain petition, Article 18(c) of Law 26.589 states that while the mediation process is underway, if the statute of limitation is considered either a prescription or caducity, the two-year term under the convention (or one-year term under the code) will be suspended indefinitely until the mediation process has been closed.
After nearly 20 years of implementation, the system has proved to be effective in reducing legal fees for airlines, providing new opportunities for negotiation with claimants and giving both parties new ways to avoid going to the courts to settle a dispute.
For further information on this topic please contact Elizabeth Mireya Freidenberg at Freidenberg Freidenberg & Lifsic by telephone (+54 11 4311 4991), fax (+54 11 4311 0852) or email (firstname.lastname@example.org).
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