Achieving a Balanced Relationship between Mediation and Judicial Proceedings in the European Union

On November 29, 2016, Giuseppe De Palo presented, before the European Union Parliament’s JURI Committee, the paper that we wrote together “Achieving a Balanced Relationship between Mediation and Judicial Proceedings” (available here). This important paper, (available  here) commissioned by the European Parliament’s Policy Department for Citizens’ Rights and Constitutional Affairs upon request by the JURI Committee, examines the lack of a balanced relationship between mediation and judicial proceedings as required by Article 1 of the 2008 EU Mediation Directive and the necessity of any amendments to the EU Mediation Directive. 

The 2008 EU Directive on Mediation has been a key milestone for all EU Member States in introducing various national legislation on mediation in civil and commercial matters. However, the goals stated in Article 1 of the Directive, towards encouraging the use of mediation and especially achieving a “balanced relationship between

mediation and judicial proceedings” have clearly not been realized. Despite the lack of homogeneous statistics, in almost all of the Member States mediation is used in less than 1% of the cases in court: for 1 mediation, 100 cases go to court. The only exception is the result of the model currently used in Italy in a small portion of civil cases which is emerging as a best practice.

In our paper we identified four distinct mediation models that Member States have used in implementing the Directive: Full Voluntary Mediation; Voluntary Mediation with Incentives and Sanctions; Required Initial Mediation Session; and Full Mandatory Mediation. These four models have been applied differently throughout the EU, in different types of disputes. An analysis of the four models described above, based on their actual effects in reaching the Mediation Directive’s main goals, shows that the Required Initial Mediation Session, the model used in Italy, combines the most effective elements of both the voluntary and the mandatory models.

The Voluntary Mediation Model is typically a bottom-up approach, based essentially on litigants spontaneously agreeing to mediate disputes. In this model, parties agree, on their own, when a dispute has arisen, to resort to mediation as a method of resolving their dispute. Voluntary mediation is used in the majority of the Member States. A large number of Member States have adopted a variation of this model, the Voluntary Mediation Model with the addition of various benefits and sanctions in order to incentivize parties to resort to mediation. Incentives typically come in the form of financial incentives or other fiscal advantages; sanctions have been applied by some Member States in a variety of different forms but include inadmissibility of the case in court or limitation of future judicial awards. The main aspect of the Mandatory Mediation model, imposed either by law or by court order, is that parties are required to attend and participate in a complete mediation process. Self- determination is one of the cornerstones of mediation and many critics of mandatory mediation argue that this model violates that very principle. Very few Member States have adopted the full mandatory model and those that have limit it to certain types of cases.

The Required Initial Mediation Session model, adopted by Italy, stands somewhere between voluntary mediation and full mandatory mediation: it combines the advantages of both the mandatory and voluntary models while minimizing the burdens. Moreover, going through a complete mediation procedure is neither required nor compulsory. Italy adopted this model on 20 September 2013 as a “pilot law project” (the law will sunset on 21 September 2017 if not renewed before then). In close to 200,000 cases, about 8% of all civil and commercial cases, litigants will not have direct access to the Italian courts if they cannot prove that they have attended an initial mediation meeting.[1] While there may be many variations, a system requiring such a mediation session includes ensuring the following three key elements:

1. The effective beginning of a mediation procedure by requiring an initial mediation

session with a mediator, at a very low cost, with possible sanctions in the

subsequent court proceedings if a party does not attend this initial session in good

faith;

2. The quality of the procedure by having the initial mediation session administered

by a professional mediator and/or a dedicated mediation service provider; and

3. The possibility of easily declining to proceed with the mediation process at the

end of the initial session without any subsequent sanctions or other negative

consequences at trial.

Member States have all transposed the EU Directive in different ways, however, no country has managed to achieve a balanced relationship between mediation and judicial proceedings as required by the Mediation Directive. There is no doubt that the Mediation Directive has brought about significant changes in the European Union and has encouraged the debate on alternative dispute resolution. Indeed, the intention behind the Directive was to encourage more people and businesses to use mediation and to establish a balanced relationship between mediation and judicial proceedings. However, there is also no doubt that the fundamental goals of the Directive are far from being achieved; eight and a half years after the passage of the Directive mediation is still used in less than 1% of cases in the EU.

We proposed that the Mediation Directive needs to be changed, not because it is flawed in any way, but because it has exhausted its ability to bring about any more legislative change. The Directive, while promoting significant progress in creating a functional environment for mediation, has not enabled Member States to achieve a balanced relationship as required by Article 1.

There appear to be two main options to reach a balanced relationship between mediation and judicial proceedings.

• The first and most effective of these options would be to strengthen Article 5(2) of the Directive by requiring, not just allowing to require, the parties to go through an initial mediation session with a mediator before a dispute can be filed with the courts in all new civil and commercial cases, including certain family and labor disputes where the parties’ rights are fully disposable. This has been shown to have a significant impact in achieving a balanced relationship between mediation and judicial proceedings. The CJEU’s Alassini[2] case establishes clear guidelines for required elements in ADR at the EU level.

A proposed rewrite of article 5(2) could read as follows: “Member States shall ensure that a mediation session is integrated into the judicial process for civil and commercial cases, except for such cases as Member States shall determine are not suitable for mediation. The minimum requirements for such a mediation session are that the parties must meet together with a mediator, subject to the condition that the procedure shall be non-binding and swift, suspend the period for time-barring of claims, and be free of charge or of limited cost if any party decides to opt out at the initial session.”

• As an alternative, the EU should press all Member States to use the current version of Article 5(2) to a greater extent. In particular, in its implementation resolution, the Parliament should consider asking that the Commission send a letter to each EU Government asking them (a) to measure the balanced relationship, with the aim being more than one mediation for every two cases in court and (b) to explore the reasons for the failure to achieve the balanced relationship, which is the objective of the Mediation Directive. Failure to respond and to achieve the balanced relationship could lead to the evaluation of an infraction procedure for failing to comply with the Directive.

The time and cost savings of mediation have been shown time and again in numerous studies and reports and have been acknowledged and recognized by the European Parliament itself.[3] It is obvious that further study will show that achieving a balanced relationship between mediation and court proceedings could save billions of euros and millions of days from unnecessary litigation every year. The extraordinary potential of requiring an initial mediation meeting point to the need for the EU institutions to act on these recommendations and make the Member States act. If they do so, the EU will quickly start to see the social and financial benefits of mediation.

ENDNOTES 

[1] Under Italian law, the requirement to have at least one initial mediation session before litigants can access the court systems applies in selected kind of disputes, such as banking and insurance contracts, real estate and other types of disputes specified in the law. Over the last few years, the total amount of these disputes is around 8% of all civil and commercial cases started each year.

[2] On 18 March 2010, in the joined cases of Rosalba Alassini and Others (C-317/08 and C-320/08) the ECJ found that the Italian requirement to undertake ADR before court proceedings was a legitimate objective of Italian law, and that it was in the general interest, for parties to pursue less expensive methods of dispute resolution and to reduce the burden on the court system.

[3] In a December 2014 speec, Commissioner Jourová focused on the difference between the average time and cost of mediation when compared to litigation. The speech is available at https://www.youtube.com/watch?v=bmNgdFT0lsI.

                       

Leonardo d'Urso

Leonardo D’Urso is a full-time mediator, co-founder and CEO of ADR Center, Adjunct Professor at Straus Institute for Dispute Resolution at Pepperdine University (Malibu-CA, USA), Scientific Expert of the Working Group on Mediation of CEPEJ at the Council of Europe and member of the Board of Directors of the Weinstein… MORE >