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Developing Mediation Culture in Civil Law Systems: A tale of two countries – Italy & Georgia (Part 1)

Although modern mediation and other out-of-court settlement practices have emerged mainly from common law legal cultures, many civil law countries have been attempting to make them a permanent feature of their legal systems for at least the past two decades. As a result, much of the civil law world now provides a regulatory framework for mediation and other non-adversarial procedures, such as negotiation and conciliation. How these legal systems have attempted to integrate these mechanisms within their cultures has likely contributed to the varying degrees of success that mediation has met. Despite the deep and different heritages underlying both cultures, the reasons for legislative investments in mediation are strongly pragmatic both in common and civil law systems.

While in the common law world ADR has been lauded as a necessary alternative to the high costs of litigation that render it inaccessible to many parties, in civil law countries they have usually been introduced to overcome courts overwhelmed by case backlogs. The many and rigid rules of codes of civil procedure can often lead to endless proceedings and – consequently – useless outcomes for the parties.

Even though in both cases the ultimate beneficiaries of the introduction of mediation are the parties, who can take advantage of better access to justice, the differences in the rationale for introducing mediation have a notable impact on its adoption. In common law systems, parties can be motivated by the attraction of saving significant costs to achieve an outcome, avoiding common law features such as evidence disclosure (discovery) and long evidentiary hearings (trials) that are absent in civil law systems.  These costs can facilitate the decision of parties to resort to mediation. And it can promote the perception that mediation is an instrument of equal dignity to court litigation that merits the development of its own specialized expertise among lawyers and mediators.

But this is not the story of civil law systems. Introducing a new form of resolving conflicts in a litigation-oriented culture can lead to a high degree of resistance by lawyers, as well as a certain unease and frustration. Exhausted by years of litigation, lawyers and parties may not see mediation as a means of shortening proceedings, but as an additional cost and potentially futile step.

For these reasons, creating a pro-mediation environment in civil law countries requires sensitivity towards legal and cultural/social attitudes towards conflict that has developed in the shadow of those legal systems.  [Italy and Georgia, two civil-law countries that have taken similar but different approaches to introduce mediation in recent years, offer helpful lessons. 

This article is composed of 2 parts: Part 1 describes the introduction of mediation into the Italian legal framework, the challenges faced, and the strategies applied; Part II analyses the Georgian pathway, covers how Italy has capitalized on the results and draws the conclusions.

Italy

Italy’s first attempts to introduce and regulate a modern form of mediation, at that time known as “conciliazione,” (i.e., conciliation), involved only commercial relationships. Between the late Nineties and the early 2000’s, Italy introduced reforms providing for mediation of disputes involving consumers, subcontracting (which introduced mandatory commercial mediation for the first time), and company disputes . Why start with commercial matters? Because this is where the benefits of settling can be most easily perceived and, ideally, appreciated, since for business “time is money”.

Despite these efforts, mediation floundered.  A common refrain of counsel and parties was, “not for this case.”

So, how did Italy trigger a change in the adoption of mediation? By not giving parties a choice. In 2010, Italy introduced its first Act on civil and commercial mediation. This included a mandatory mediation scheme for a broad range of matters.

The change was abrupt, and it met ferocious resistance from a significant part of the Italian legal community. The mediation statute was brought before the Constitutional Court, on the – inter alia – ground that, mediation, being both mandatory and subject to payment, violated the rights of equal treatment and access to justice.  The Court in 2012 issued a decision abolishing mandatory mediation. 

The Italian legislature then reintroduced its mandatory mediation scheme in 2014, with amendments that took into account the social and cultural aspects underlying the objections of those involved in the process; this marked the beginning of a progressive adoption of mediation by the different stakeholders.

How was the transition driven?

  1. Valuing the roles

First, the amendments to the 2014 mediation Act gave an express role to counsel. They i) provided for mandatory legal assistance in compulsory mediation, and ii) empowered parties’ counsel to sign the settlement agreement, certifying its compliance with the applicable public policy and mandatory rules. This certification makes the settlement agreement immediately enforceable, as set forth by the Mediation Act.

The codification of the role of lawyers, initially perceived as a do ut des in the battle waged by the Italian legal community against mediation, legitimated their presence in the process and led to two important results: it invested lawyers with the responsibility to provide high level service, and it provided them the opportunity to develop new areas of expertise and business development.  

Second, Italy introduced a scheme for compensating lawyers to address an unspoken concern that litigating is more remunerative than mediating. The legal fees of Italian lawyers are set by the National Bar Association, which are then incorporated into a decree issued by the Ministry of Justice.  These fees apply in cases where the lawyer and client do not agree otherwise on the lawyer’s fee for a matter.  In 2018, the Ministry issued new tariffs applicable to legal assistance in mediation and negotiation and in 2022  also included incentives for lawyers in case of settlement.

The chart below sets out how these tariffs would apply if the same case resolved in court or in mediation.

Amount in dispute: from 260,000 to 520,000 Euros
Court proceeding (first instance)Mediation
Study of the caseMediation request
Claim filingParticipation in mediation meeting and negotiation
Evidentiary phase – meritsConclusion of the proceeding (including drafting of the agreement, if successful)
Judgement 
Average duration: 514 days[1]Average duration: 134 days
Fee collection: 2 years (best case)Fee collection: 3-6 months (average)
Fee: 22,457 Euros (average)Fee 9,454 Euros (average)

While the total legal fees earned by the lawyer remains lower than if the case were pursued to the end through litigation, the lawyer stands to be paid in less than a quarter of the time in the event of settlement. Being paid in three to six months will be far more attractive than a minimum of two years for  litigation, with two years being optimistic in a country where first instance judgments in some courts can be longer than four or five years from the initial filing.

  • Building synergies

The original version of the Italian Mediation Act regulated the judges’ power to “invite” the parties to attempt mediation. While some parties or their counsel may have feared the consequences of disregarding a judge’s suggestion, the invitation was not binding and did little to trigger greater use of mediation.  For this reason, the 2014 amendment introduced mandatory mediation, transforming the judge’s suggestion into an order with the penalty of a case being dismissed for non-compliance.

But for the order to be effective and reliable, the evaluation of which cases to refer to mediation must be accurate. This can be a challenge for judges already burdened with a heavy backlog. Paradoxically, the problem itself may preclude the remedy in some cases.

With this in mind, the  University of Florence, School of Law[2] piloted a project called ‘Giustizia semplice’ (Straightforward Justice) with the Florence Courts, and which has been subsequently replicated in other Italian Court districts. Launched in 2018, the project provides interns or young scholars to assist judges in studying the court files and assessing which cases are suitable to be settled in mediation. When a case is considered suitable, the judge orders mediation.  Mediation providers share anonymized data of the cases sent to mediation and – for some of them – applying dedicated discounted fees and/or financing the project. In its inaugural year of 2018 in Florence, 47,9% of the cases sent to mediation resulted in a settlement.

This figure is even more significant considering not only the compulsory nature of the mediations, but that the level of litigiousness was especially high with the initial cases having already been in the courts for years before the Court of first instance or the Court of Appeal.

How Italy has incorporated these lessons into its more recent legislation as well as Georgia’s example will be addressed in the second part of this article.


[1] https://www.businessonline.it/articoli/tempi-medi-causa-civile-quanto-dura-un-processo-dalla-denuncia-alla-sentenza-primo-grado-.html

 


author

Chiara Tondini

CHIARA TONDINI works as International Disputes Counsel at MDisputes, a company devoted to providing in-house litigation support to private and public organizations facing international disputes. Before that, she worked as international arbitration and mediation Counsel for SLCG, an international law firm in Italy, and previously she was the founder and manager of… MORE

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