FINLAND Law and Practice Contributed by: Tuuli Timonen, Annika Lampela and Tony Chokairy, Dottir Attorneys
4.6 Costs The allocation of ADR costs depends largely on the type of ADR mechanism. In private mediation the allo- cation depends on what the parties have agreed on. Typically, the parties share the mediator’s fees and administrative costs equally. In institution-based mediation, the allocation of costs depends similarly on the parties’ agreement and the applicable rules. For example, the FAI Mediation Rules provide that, unless otherwise agreed, the parties share the costs equally. In court-annexed mediation, the parties cover the fees incurred from using attorneys, whereas the cost of the mediation process itself is minimal and typically covered by the initiating party (EUR310 at the time of this article). 4.7 Courts and ADR Finnish courts generally have a supportive attitude towards ADR. In cases where settlement is permitted, the courts have a statutory obligation to encourage the parties to reach an amicable resolution. Where the court considers it appropriate for the purpose of promoting settlement, it may also propose a settle- ment to the parties, taking into account the wishes of the parties, the nature of the matter, and other relevant circumstances. This typically takes place during the preparatory phase of litigation, where the court may actively explore the possibility of settlement with the parties. The availability of court-annexed mediation also reflects a broader policy objective of promoting effi- cient and consensual dispute resolution.
Fees are commonly calculated on an hourly basis, although alternative fee arrangements may also be agreed. The overall level of fees typically depends on factors such as the complexity of the matter, the value of the dispute and the experience of the lawyer involved. 5.2 Third-Party Funding Third-party funding is permitted in Finland and is not subject to statutory regulation. Although third-party funding is legally allowed, it remains relatively uncommon in the Finnish market. Commercial disputes are typically funded directly by the parties themselves or through legal expenses insurance. However, interest in third-party funding in Finland has followed the international market and gradually increased, particularly in large internation- al disputes or cases involving significant damages claims. Where third-party funding is used, the arrangement is generally governed by contract between the funder and the funded party. Finnish procedural law does not specifically regulate disclosure of funding arrange- ments. 5.3 Contingency Fee Arrangement Contingency fee arrangements are permitted in Fin- land but are subject to professional regulation. Law- yers and clients may agree on success-based fee structures, provided that the arrangement complies with ethical requirements and is not considered unrea- sonable. Finnish practice distinguishes between different types of success-based arrangements. A pactum de quota litis allows the lawyer’s fee to be agreed in advance as a proportion of the value obtained for the client, whereas a pactum de palmario involves a specific amount of compensation payable to the lawyer if a specified outcome is achieved. Such agreements must be made in writing. Pure contingency fees, where the lawyer’s remunera- tion depends entirely on the outcome of the case, remain uncommon in practice.
5. Costs, Fees and Funding 5.1 Legal Fees
Legal fees in Finland are generally based on an agree- ment between the lawyer and the client. Members of the Finnish Bar Association must comply with profes- sional rules governing fees, which require that fees be reasonable and proportionate to the nature of the assignment and the amount of work involved.
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