Author Archives: Matthew Rushton

Mandatory Mediation under Threat in Italy

Posted on by Matthew Rushton

Matthew Rushton is the deputy managing director of JAMS International. He can be reached at mrushton@jamsinternational.com.

On October 24, 2012, Italy’s Constitutional Court ruled that the Italian government had exceeded its legislative authority in making mediation a mandatory precursor to trial.The Court’s ruling on Legislative Decree no. 28 (2010) is limited to provisions concerning mandatory mediation. The news broke on October 26, when the court issued a two-line interim press release; judgment is expected to follow shortly.

Parallel with Italy’s supreme court (the Court of Cassation), the Constitutional Court is the highest court and there is no avenue of appeal. While some have interpreted the ruling as the end of mandatory mediation in Italy, others believe that it is too soon to judge.

Giuseppe de Palo, founder of ADR Center, a member of JAMS International and Italy’s largest ADR provider, indicated that the press release was silent on the court’s view of mediation, and was simply a narrow ruling on the lawfulness of the Decree.  “This doesn’t mean that the court doesn’t believe that mediation isn’t a beautiful thing,” de Palo said. “We will know more when judgment is handed down. The press release merely states that an Act of Parliament, rather than an Act of Government, is required to lawfully implement mandatory mediation.”

The Government issued Legislative Decree no. 28 of 2010 based on delegated legislative powers flowing from Act 69 (2009) of the Italian Parliament. Act 69 implemented the 2008 EU Directive on certain aspects of cross-border mediation, but granted no specific authority for the Government to introduce mandatory mediation. The Act did however give the Government the power to issue a mediation regulation provided that it did not harm access to justice.

The question as to whether or not mandatory mediation can be introduced into the Italian legal system was not addressed in the Court’s press release, and might not feature in the judgment. According to de Palo, the Court may rule that the specific language used in the 2009 Act did not encompass mandatory mediation, but that a narrow ruling on the constitutionality of mandatory mediation would be tantamount to an invitation to re-submit the same legislative text, but in the form of an Act, not a Legislative Decree.

Italian commentators therefore expect that the Court will address, in an obiter dictum, whether mandatory mediation violates access to justice. These dicta could then be used to guide Parliament in drafting the new Statute, and proposals to this effect are being written.

The Italian government seized the opportunity offered by the EU Directive to tackle a 5.4 million backlog of cases in the Italian civil courts. To date, more than 130,000 cases have been mediated, achieving settlement in around 50 percent of cases.

The Decree was controversial, and triggered strikes by Italian lawyers to protest what they saw as a potential threat to their livelihood. At the same time, there has been widespread interest in Italy’s approach to mediation among other EU countries. It remains to be seen what sort of effect Friday’s ruling will have on those countries’ interest to proceed.

The International Challenge

Posted on by Matthew Rushton

Matthew Rushton is the deputy managing director of JAMS International. He can be reached at mrushton@jamsinternational.com.

As ADR providers have begun expanding worldwide, a global shift towards ADR has gained momentum. Change at this pace generates interesting challenges and worthwhile debate as new entrants bring fresh ideas and new methodologies to the market.

Most of the 27 EU Member States implemented the European Union Directive legislation in 2011, which provided a consistent approach to confidentiality and the recognition and enforcement of mediation agreements. States, for various reasons, adopted the Directive differently. Italy took the most radical approach, with the result that mediation is now a mandatory precursor to the use of the courts for a wide range of civil disputes.

The Italian model raises taxing questions for mediation globally, being born of a broken civil justice system rather than the more familiar need to save time and legal costs. By 2011, the civil courts in Italy had a backlog of 5.4 million cases and an average processing time of eight years. Mediation was touted as the best available solution to these problems. By contrast, ADR in the United States has risen in prominence precisely because it is complimentary to the courts: a credible threat of judicial determination is the elephant in many of mediation rooms.

Given such different starting points, different mediation styles inevitably follow, which raises some practical challenges in managing cross-border and cross-continental disputes.

Fortunately mediation can respond and including a mediation clause in business contracts is becoming a more attractive and popular option. Among mediation’s advantages are total procedural flexibility and the ability to evolve as the market requires. At a practical level therefore, in cross-continental matters mediators are encouraged to develop a “mid-Atlantic” style. At its most basic, this involves throwing away the rule book, and adapting an approach to suit either side. It means being tough enough on the legal merits to engage U.S. clients, but leaving scope for parties to determine the outcome themselves.

As business becomes more “glocal” and jurisdictions become blurred, charting out ahead of time what is important to you or client can prevent a lot of wasted time and money. Additionally, mediation has proven effective at not only resolving all types of conflicts, but more importantly, leaving the business relationship intact so future business can still occur. Therefore, inserting a mediation clause, indicating both the name of the mediation service provider and the city where the procedure will take place, can aid in the process of an effective and efficient resolution.

With more than 20 languages and various legal traditions, the EU can still look like a daunting place to resolve business disputes efficiently and cost-effectively. With some creative thinking and appropriate infrastructure, most challenges can be overcome. Traditional barriers of language and culture have been successfully managed using co-mediation; process and style are on-going and fascinating challenges, but mediation can change to meet market demands.

Cross-border and cross-continental mediation is still new and evolving. How experiments like those in Italy impact the theory and practice of mediation over the next decade make these exciting times for global ADR.

Long Awaited German Mediation Law Enacted

Posted on by Matthew Rushton

As we last reported, the German Mediation Code, after going back and forth between the Bunderstag’s two chambers for the last 18 months, was sent to mediation itself. But finally, the code was signed into law by the President of the Federal Republic on July 21 and four days later, it was published in the Federal Gazette and came into law on July 26.

According to JAMS International panelist Judge Sabine Konig, in an interview with CDR News, “The German constitution includes a mechanism to resolve disputes between the two parliamentary chambers, the Vermittlungsausschuss, translated as the Mediation Committee. So our new mediation law is itself the result of a successful mediation; what a great start!”

The Mediation Act required the Mediation Committee of the upper and the lower chambers (Bundesrat and Bundestag) to find an amicable solution within the German parliament.

Considered the two biggest hurdles between the sides was the use of court-integrated mediation with judges acting as mediators and the concept of a conciliation judge, which were approved and integrated into the Act.

Other regulations in the Mediation Act include:

  • Financial incentives to encourage mediation, which is a first in German law. Such incentives may be created by individual states and will likely differ from state to state. The states can reduce or even waive court fees, if matters are settled through mediation or other means of ADR;
  • Introduction of the title of a “certified mediator,” who has to complete at least 120 hours of intensive training. Prior to the Mediation Act, German mediators did not have to meet any specific educational standards required by law;
  • Suspension of the statutes of limitation during mediation proceedings;
  • Enforceability of settlement agreements reached through mediation.

It’s a big day for the German mediation community and we look forward to see how the act is utilized.

International Mediation – The New Libel Tourism?

Posted on by Matthew Rushton

Paul Tweed

Paul Tweed is a mediator and arbitrator with JAMS International who focuses on media law in England and Ireland.

For decades, U.S. nationals have taken advantage of the UK’s more favorable libel laws, dating back to Liberace’s famous case against the Daily Mirror on the basis of an article implying that he was a homosexual at a time when homosexuality was illegal.  However, in recent times, there has been a marked increase in the number of these claims for several reasons:

  • The rapid expansion of the Internet has resulted in the extended publication internationally of established U.S. newspapers and periodicals, many of which can and are readily downloaded from within the UK and other European jurisdictions.
  • There is an increasing importance of brand protection, with the credibility of the names of international personalities – their brands – being just as important to their commercial interests as to their professional achievements and personal reputation.
  • There is the prohibitive nature of the challenging hurdles facing an individual wishing to bring an action in the United States.  Not only do the First Amendment and other protections leave an individual with the difficult burden of having to prove actual and specific malice on the part of the publisher, but the introduction by states such as California of SLAPP Motions, with the various costs and risks involved, is discouraging.

However, over the past year, there have been a number of positive indications from the UK and Irish governments that mediation should be encouraged as an alternative to expensive litigation in these types of matters. A number of high-profile cases have made the views of the judiciary crystal clear, along with the draft Irish Mediation Bill, and with an indication given that lawyers owe a duty of care to their clients to advise them of the option of mediation and to caution them on the likely consequences if they refuse.

With increasing pressure from the British Government and Judiciary for a reduction in escalating legal costs, it will be interesting to see whether these increasing calls for mediation as an alternative to litigation will be adhered to, particularly following from the recent European Directive, which is intended to encourage ADR across the board in all European states.

Perhaps surprisingly, it has until recently been the defendant publishers who have shown the most reluctance to engage in what is still regarded as very much a new and untested option of ADR.  The landscape is changing rapidly, primarily due to the dramatic revelations coming out of the Leveson Inquiry on a daily basis and the introduction of an experienced mediator to determine the level of damages in the less controversial of the phone hacking cases.  Perhaps this new direction in strategy on the part of News Corporation will encourage others to follow suit with regard to other forms of media litigation.

Accordingly, we may yet see London, Dublin and Belfast becoming the go-to places for their mediation facilities for Americans seeking justice on European shores.