MEXICO Law and Practice Contributed by: Fernando del Castillo Elorza, Sajid Arroyo, Andrea Hernández and Alexis Romero, Del Castillo & Castro Abogados
4.3 Impact of ADR Reaching a settlement through formal mediation cre- ates a binding agreement that has the same legal force as a final court judgment. If talks fail, the parties keep their full right to take the matter to court. 4.4 Timing of ADR Disputants may engage in these methods at any junc- ture before a final judgment is issued. Formal par- ticipation in alternative dispute resolution suspends procedural deadlines and statutory limitation periods while the process remains active. 4.5 Confidentiality By law, all formal mediation processes are strictly pri- vate. Both the mediators and the parties must keep all shared information secret, and this information cannot be used as evidence in later court cases. 4.6 Costs Public alternative justice centres attached to the courts offer conciliation and mediation services entirely free of charge. Conversely, when utilising private certified facilitators, parties typically agree to share the profes- sional fees equally. 4.7 Courts and ADR The Mexican judiciary maintains a highly proactive approach towards alternative dispute resolution, establishing collaboration as a core procedural prin- ciple. Judges are statutorily required to propose prac- tical solutions and actively encourage out-of-court settlement agreements. 5. Costs, Fees and Funding 5.1 Legal Fees The provision of legal services is based on the parties’ freedom of contract. 5.2 Third-Party Funding Mexico has no specific regulations governing third- party litigation funding agreements. While such agree- ments may be entered into pursuant to the principle of freedom of contract, they remain uncommon in practice. This is largely due to the unpredictability of
Mexican court rulings, which presents a heightened risk for third-party funders. 5.3 Contingency Fee Arrangement Whilst contingency arrangements are typically required by banking and credit institutions when engaging law firms to provide legal services, particularly in litigation, the principle of freedom of contract permits law firms to negotiate their fees and assume risk by entering into success fee arrangements. 5.4 Insurance In Mexico, insurance companies offer general liability and professional liability policies, which typically cover the cost of legal defence in the event of a claim, as well as compensation for damages. 5.5 Costs In litigation, the recovery of legal costs is governed by the “costs follow the event” principle, whereby the unsuccessful party is liable to reimburse the suc- cessful party for costs reasonably incurred during the proceedings. 5.6 Assessment of Costs Judges in Mexico generally determine costs by refer- ence to the fee schedule prescribed by each state. In the absence of such a schedule, they rely on expert evidence. Under Mexican law, the distinction between interim relief and interim injunctions is doctrinal rather than statutory. The prevailing view is that interim relief is the wider genus, referring to judicial measures granted on application to preserve the subject matter of the dispute and prevent serious and irreparable harm to the respondent pending final determination, whereas interim injunctions are a species of such relief, direct- ed specifically at preserving the subject matter and securing the effective enforcement of any eventual judgment. Under Mexican law, interim injunctions fall into two principal categories: (i) preservation meas- ures, intended to maintain the status quo and ensure that any eventual judgment remains enforceable; and 6. Interim Remedies 6.1 Availability of Interim Relief
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