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The U.K.’s Office of Fair Trading (OFT) has criticized the European Commission’s proposal for online dispute resolution of consumer disputes and proposed Directive on alternative dispute resolution (ADR) for consumer disputes. The OFT supports the goal of increasing ADR for consumers, but urges mandatory use of ADR in many consumer cases, so that companies don’t simply refuse to participate.
Shoo Smiths.co.uk (April 2, 2012)
The European Commission has set forth a detailed proposal for online dispute resolution (ODR) of consumer disputes to provide better remedies in support of cross-border e-commerce. The ODR proposal is paired with a proposed Directive on alternative dispute resolution (ADR) for consumer disputes. Many ADR entities permit consumers to submit complaints online, but very few currently allow the entire resolution process to be handled online. Establishing ODR systems will encourage consumers to shop online across borders and permit sellers to reach broader markets. The proposal is to establish an EU-wide ODR platform accessible in all EU official languages that provides a single website for those seeking to resolve cross-border e-commerce disputes. A network of ODR facilitators will be established to provide support for the ODR platform. When a complaint is submitted, the consent of the other party will be sought and the dispute transmitted to an existing national ADR entity that will attempt to resolve the dispute within 30 days, possibly using ODR. The ADR entities will apply their own procedures and rules on cost. Confidentiality applies to the ODR process, and the ODR procedures will not deprive either consumers or sellers of their right to pursue matters in court. The timeline proposed shows adoption of the ODR Regulation and ADR Directive late in 2012, with development of the ODR platform to be completed by 2015.
Mediation World (February 11, 2012)
The U.K. Government announced that it is establishing two regional mediation networks for small and medium size enterprises (SMEs) in a pilot program to reduce workplace disputes and the number of employment tribunal cases. The mediation networks will be in Cambridge and Manchester, with mediation training of employees at 24 SMEs, as smaller companies are often not aware of the benefits of mediation and rarely use it. Trained mediators will then be able to assist other organizations in their regional network. The government is seeking a provider for the first round of mediation training. The pilot program is part of the government’s reform of the employment tribunal system; in the last two years tribunal claims have risen to 218,000, an increase of 44 percent. The program will run 12 months and expand to other areas if successful.
People Management Magazine Online (January 23, 2012); eGov Monitor (January 24, 2012)
In response to the 2008 EU Directive requiring mediation of EU cross-border disputes beginning in 2011, Ireland’s Law Reform Commission issued a 230-page report in November on new procedures for mediation in a broad range of areas, along with proposed legislation to carry out its recommendations. While instigated by the EU Directive, the report also thoroughly addressed alternative dispute resolution within Ireland, focusing on both mediation and conciliation and establishing new court rules which took effect in November. Noting that the terms mediation and conciliation have often been used interchangeably, the five-member Commission urges differentiation so that mediation is always a facilitative process, while conciliation is advisory (e.g., evaluative). The report also gives close attention to confidentiality, among many other issues, and proposes a privilege to exempt communications from disclosure, while setting out numerous exceptions.
International Law Office (December 16, 2010); CPR (December 3, 2010); The MII.ie (November 16, 2010); Report; 2008 EU Directive
Legislation in Italy requiring mediation prior to litigation of a broad range of civil and commercial disputes was enacted on March 20, but does not take effect until March 2011 so that mediators can prepare for the increased caseload. The procedures in the legislation meet the requirements of the European Directive on Mediation. If mediation is not successful, either party may file suit, but litigation costs may be withheld depending on whether the outcome of litigation differs from the terms of a mediator’s proposal. The legislation is intended to reduce the backlog of 5.4 million civil cases in Italy and resolve at least a million disputes a year.
Lexology.com (June 21, 2010) (Registration Required); Alternatives (April 2010)
Legislation introduced in Italy requires mediation prior to litigation in civil and commercial disputes, including insurance and medical malpractice. Compulsory mediation is limited to four months and must be conducted by independent professional groups registered with the Italian Ministry of Justice. If mediation is not successful, either party may then file suit, but litigation costs may be awarded or withheld depending on whether the outcome of litigation differs from proposed settlement terms. The legislation, which would take effect in March 2011, is intended to provide cost savings and help streamline Italy’s overburdened judicial system.
Mondaq.com (March 22, 2010) (Registration Required)
The Federation of European Bars (FBE), made up of the bar associations of 21 European countries, issued a Resolution on Mediation on October 3, 2009, recognizing the importance of mediation and its trend towards greater prominence. Accordingly, the FBE resolution urges that the participation of lawyers should be required in mediations in areas which may have legal consequences, that effective mediation training for lawyers should be a priority, and that necessary government funding should be provided to promote mediation and the involvement of lawyers.
The Organisation for Economic Co-operation and Development has contacted both Shell and the north Mayo community in Ireland to offer mediation after a community group filed an admissible complaint with the OECD. The complaint claims that the Corrib gas project developers violated non-binding OECD guidelines for multinational companies by, among other things, failing to provide adequate information to the public about the potential impacts of the gas refinery and pipelines.
Irish Times (March 7, 2009)
After many years of effort, a Mediation Directive for cross-border civil and commercial disputes was approved by the European Parliament on April 23, 2008. The new Directive (i) requires member states to encourage training of mediators and development of codes of conduct and other quality control measures for mediation services, (ii) gives all judges the right to invite parties to mediate, (iii) requires member states to provide judgment-like status for mediated agreements, (iv) requires mediation confidentiality and protects mediators from compulsion to give evidence, and (v) ensures that statutes of limitations and prescription periods will be suspended during mediation. Member states have three years to implement the Directive for most issues, and may chose to apply the Directive to internal as well as cross-border disputes.
European Parliament (Brussels) (April 23, 2008)
In order to provide better resolution of member disputes and improve the business environment through the use of mediation, the Macedonian Chamber of Commerce signed a memorandum of cooperation with the Alternative Dispute Resolution Program of the World Bank’s International Finance Corporation. The agreement is part of an effort by Macedonia and neighboring countries to use mediation in the business sphere, with the greatest success thus far in Serbia, Bosnia and Herzegovina, where about 2,200 disputes involving 45 million euros have been resolved.
World News Connection (September 21, 2007) (Subscription Required); IFC’s ADR Program
In its efforts to reduce gang violence and murders, the police force in Manchester, England is looking to Northern Ireland’s use of mediation in the late 1980s which helped Catholics and Protestants break the cycle of retaliatory violence and ultimately settle their issues. The process under consideration involves using community members as mediators between rival gangs in a police-sponsored program, which is already under way in Birmingham.
Manchester Evening News (August 7, 2007)
Mediation is crucial for those unable to afford the risks and costs of litigation, according to a strongly worded editorial by British High Court Justice Gavin Lightman. However, mediation was set back by the appellate decision in Halsey v. Milton Keynes General NHS Trust, EWCA (Civ) 576 (2004), which refused to order parties to mediate over their objections and required a litigant seeking costs for an opponent’s refusal to mediate to carry the burden of proving the refusal was unreasonable. The importance of these issues is heightened by the government’s limitation on civil legal aid.
TimesOnline (July 31, 2007)
Interim results from an ongoing survey of U.K. construction litigation conducted by the Technology and Construction Court (TCC) and King’s College, London, reveal that much mediation of construction disputes is occurring, but litigants are not interested in the TCC’s pilot project to provide judges as mediators. Of the many cases settled, about one-third were resolved through mediation, with most of the rest settling by direct negotiations. Of the mediations conducted, four-fifths occurred at the parties’ own initiative, generally with use of a limited number of well-regarded barristers and construction professionals as mediators. During the first year of the TCC pilot program, litigants have been willing to use judges as mediators only twice.
Mondaq (June 26, 2007) (Subscription Required or Direct with Registration); The Lawyer.com (July 4, 2007)
Mediation has proven effective in Poland since being introduced only eighteen months ago, with more than 200 cases a month now being referred to mediation by civil courts. Looking to the experiences of other European countries and the United States, a recent legal conference in Warsaw focused on the continuing need for education on the benefits of mediation, and noted that the fees paid to professional mediators often fall short of the effort spent resolving the dispute.
Polish News Bulletin (June 6, 2007) (Subscription Required)
While many sets of chambers in England now have dedicated arbitration practices, Exchange Chambers, a top thirty set in London, is the first to develop a dedicated mediation group, with a third of its barristers becoming accredited mediators. The head of chambers stated the move is based on the dramatic increase in the number of cases being resolved in mediation.
The Lawyer (March 29, 2007)
Romania’s first Mediation Congress is taking place March 16-17 in Craiova to enhance practical mediation skills and further the Union of Mediation Centers in Romania in order to continue the growth of mediation. Mediation centers are now established throughout the country, having begun in 2005 with assistance from the U.S. Embassy, the Ministry of Justice and bar associations in Romania; training was provided by experienced U.S. mediators. Expected participants at the Mediation Congress include mediators, attorneys, judges, and guests from around Romania and abroad.
Press Release (March 8, 2007)
A joint statement used in mediation by the parties’ experts in a construction dispute was held not to be privileged by the UK’s Court of Appeal, reversing the Technology and Construction Court (TCC) in Aird v. Prime Meridian Ltd. Rather than considering the intent of the trial court, the appellate court focused on the fact that the court mandated the joint expert statement using a litigation form and that the experts had agreed to remove the “without prejudice” designation. The Court of Appeal explained that a joint expert statement could only be ordered for litigation under the court’s rules and so would not be privileged even though it was used in mediation.
Aird v. Prime Meridian Ltd., [2006] EWCA Civ 1866 (Court of Appeal) (December 21, 2006)
The European Commission recently committed to use mediation and other forms of alternative dispute resolution in disputes with contractors, many of whom have complained to the Commission Ombudsman. The Commission previously endorsed mediation as a better way to resolve disputes, and proposes to include an optional mediation clause in its standard procurement contracts. While the Commission states it cannot require contractors to mediate disputes with their subcontractors, the Ombudsman is encouraging the Commission to recommend mediation in such situations, as well as using mediation in disputes over grants made by the Commission.
US Federal News (December 18, 2006) (Subscription Required)
The U.K. Department for Constitutional Affairs (DCA) and Her Majesty's Courts Service are sponsoring Mediation Week from October 9-13, with presentations, seminars and mediation demonstrations taking place in participating courts across England and Wales. The week is part of DCA’s Proportionate Dispute Resolution strategy to ensure justice by increasing awareness of rights, responsibilities and resolution alternatives.
The World Bank’s International Finance Corporation organized a mediation skills training program in Karachi in June. The training is part of the its ongoing efforts to establish a pilot mediation program in Pakistan in cooperation with the Federal Ministry of Law, Justice and Human Rights and the High Court of Sindh. Thirty-six professionals from various backgrounds were trained by UK mediators. The Chief Justice of the High Court of Sindh praised the efforts, strongly encouraging the use of mediation in Pakistan to ease the burdens on its courts, free tied-up assets, and minimize business-stifling litigation.
Business Recorder (June 17, 2006) (Subscription Required)
Draft executive regulations from the Polish Minister of Justice would provide state reimbursement for lawyers taking part in mediations that may be up to 150% of what is paid in ordinary court cases. Generous fees would encourage mediation, which only began in civil cases in Poland in December 2005, but ultimately will be set by the court.
Polish News Bulletin (July 4, 2006)
A pilot program in which judges will mediate construction disputes has begun in the UK’s Technology and Construction Court (TCC), despite lack of support from solicitors or the alternative dispute resolution community. Mediations may be handled either by the judge in charge of a case or another judge, with all mediating judges receiving special dispute resolution training. While critics raise concerns about the role of judges as mediators and potential damage to the court’s reputation, the TCC Bar Association supports the mediation program because participation is voluntary. The pilot program began June 1 and will continue until July 2007.
Lawyer (June 5, 2006) (Subscription Required)
While UK courts strongly encourage mediation, they have been reluctant to simply order parties to mediate, and have instead imposed sanctions on litigants who unreasonably refuse to mediate, even if the party is ultimately successful in litigation. In a significant line of cases, UK courts are making increasingly nuanced decisions about whether the refusal to mediate was unreasonable, looking at factors such as the nature of the dispute, the merits of the case, whether delay for mediation would cause harm, whether mediation had a reasonable chance of success and the extent to which mediation was encouraged by the court. Some decisions have recognized that looking into whether a refusal to mediate was unreasonable may involve sensitive issues of mediation confidentiality and privilege, and note the need to avoid questions of why mediation may not have resulted in settlement.
The Journal (Newcastle England) (May 2, 2006) (Subscription Required); Detailed Article
Updated Civil Procedure Rules encouraging mediation and other alternatives to litigation went into effect on April 6 in England and Wales. Notably, “pre-action protocols” were amended for personal injury (PI) claims to encourage negotiation and mediation, which are common for other types of claims. While there has been resistance to mediating PI cases in the UK, use of mediation is increasing and the success rate in PI cases is said to exceed 90%.
Civil Procedure Rules
PI Pre-Action Protocol
Post Magazine (March 9, 2006) (Subscription Required)
Estates Gazette (March 11, 2006) (Subscription Required)
The UK Patent Office began a new mediation service in April for resolving intellectual property (IP) disputes. The Patent Office provides accredited mediators for IP disputes at a set rate of 1,000 pounds/day (in London), as well as a lengthy list of independent mediators that parties can choose to hire directly. Detailed information about the new service and various aspects of mediation is available on the Patent Office’s website. The Patent Office also provides useful model mediation procedures and an agreement to mediate.
UK Patent Office Mediation Service; Model Procedures and Agreement
A new international alliance launched the UK-China Mediation Centre in April, with locations in Beijing and London. The alliance is between the Centre for Effective Dispute Resolution (CEDR) and the China Council for the Promotion of International Trade. The focus is on mediating disputes between Chinese and European businesses to avoid the need for arbitration or litigation.
Lloyd’s List International (4/12/06) (Subscription Required)
5/14: German solar subsidies bill to go before mediation committee read 4/30: Breaking Down the Romanian Mediation Law read 4/13: Judicial mediation in Belarus reaches high level read 4/12: Coming soon: a global ODR system read 3/19: Italy: Taxes - tax agency mediation for minor disputes from 1 April read 3/01: After UK complaints, Argentina suggests EU to mediate Malvinas conflict read 2/23: Microsoft seeks EU mediation in patent row read 2/15: Canada - Bearing the Costs of B2C Online Dispute Resolution read 1/11: European Commission plans threaten Britain's leading mediation sector read 12/15: Berlin looks to mediation to keep civil suits out of court read read all |
