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Mediate.com

Italy Update

by F. Peter Phillips
December 2013

Business Conflict Blog by Peter Phillips

F. Peter  Phillips

The new law on mandatory attempt of mediation in Italy
BY Alessandro Bruni, IMI certified mediator

PREMISES

The Italian Law (Legislative decree no. 28/2010) defined mediation as an activity carried out by a neutral and impartial

third party – the professional mediator – with the aim to assist two or more parties in reaching a possible and amicable agreement and a resolution to a dispute.

In order to reach an agreement between the parties, the mediation must be carried out by professional and independent

(public or private) mediation providers that are accredited in a registry maintained and controlled by the Italian Ministry of Justice.

In October 2012 the Italian Constitutional Court quashed compulsory attempt of mediation inserted in Legislative Decree no. 28/2010, finding that by enacting the law, the Government had exceeded the scope of both the Mediation Directive and Law 69/2009, which empowered the Italian government to adopt a legislative decree introducing civil and commercial mediation procedures.

On 20 September 2013, the so-called “mandatory mediation” (re)entered into force into the Italian legal system.

In fact, the Italian Government, following the above-mentioned declared unconstitutionality of Legislative Decree no. 28/2010 in the section which introduced the mandatory attempt of mediation (Constitutional Court decision no. 272/2012), reintroduced such procedure, even though partially amended, by mean of Law Decree no. 69/2013 (“Decree 69/13”) on “Urgent dispositions to relaunch the economy”.

Such amended and reintroduced attempt of mediation in civil and commercial cases is considered by law as “mandatory” for some matters and for an experimental period of four years, during which the Ministry of Justice will have to carry out a follow up on the results concretely detected in the praxis.

The Law of 9 August 2013 n. 98, converting the Law Decree no. 69/2013, contains the new framework of rules regulating and promoting the use of mediation in civil and commercial disputes in Italy.

The law was enacted with the goal to ease the overwhelming caseload in the Italian courts and also to prevent additional delays in Italian judicial proceedings, no longer tolerable.

TYPES OF MEDIATION

As already provided for in the Italian legal system, three different types of mediation are established:

1. voluntary mediation, when mediation is freely chosen by the parties. It is possible in every civil and commercial matter, upon rights that are considered available;

2. judicial mediation, when the judge may order the parties of a judicial proceeding (even for cases of non-mandatory attempt of mediation), at any stage of the proceeding, but before the last hearing, to first try mediation, giving them 15 days to choose the mediation provider.

3. mandatory mediation, when a preliminary and mandatory attempt of mediation is imposed by law and becomes a condition precedent to bringing a suit in court. The subject matters are:

neighbour-disputes (condominium); property rights; division of goods; trusts and real estates; family-owned business;

landlord/tenant disputes; loans; leasing of companies; medical, paramedical and clinical malpractice; libel; insurance, banking and financial contracts.

Compared to the previous legislation, declared – as said before – unconstitutional, the cases related to the compensation for damage caused by the traffic of vehicles and boats, as well as the procedures of prior technical advice for the settlement of the dispute provided by Article 696-bis of the Italian Code of Civil Procedure are excluded.

In the case one party bring, before a judicial court, a dispute for which is required a preliminary attempt of mediation, a judge in such court proceeding would suspend the case and would invite the claimant to start an out-of-court mediation proceedings.

THE PROCEDURE

The new law provides for the obligation of assistance of lawyers for all the parties involved in a mediation attempt, especially for the cases in which a preliminary mediation attempt is considered mandatory.

The presence of parties’ lawyers is mandatory for all the phases of the mediation procedure, till the end.

In fact, parties’ lawyers must sign the mediation minutes and the agreement (if it has been positively produced), in order to give to them value of enforceability (the so called “titolo esecutivo”). But, before the signing, all the lawyers must control that the reached written agreement is not contrary to mandatory rules and public order.

The new law introduced a novelty: the so called “preliminary meeting” which is not a mediation meeting yet, and has to be held not later than 30 days from the filing of the mediation request.

In this phase, the mediator, the parties and their lawyers must decide together and indicate if a mediation procedure may start and may be feasible for that particular dispute.

If the parties decide not to start a mediation (negative outcome of the preliminary meeting), they will be free to go before a tribunal. In this case, the condition of admissibility is to be considered as satisfied, and they will not pay anything to the mediation provider, except the initial fees (fixed by law in € 40 plus VAT).

From the absence of a party to the mediation on unjustified grounds, the Judge may gather evidence as provided for by Article 116, Italian Code of Civil Procedure. Moreover, in the case of mandatory attempt of mediation, the Judge condemn such absent party to the payment of a sum equal to the contribution due for the filing of a petition (the so called “unified contribution”).

No compensation is due, in any case, by any party who is eligible for the free legal aid, in accordance with Article 76, paragraph. 1, of the Presidential Decree dated May 30, 2002 no. 115.

The proceeding for a mandatory attempt of mediation can lasts for a maximum of 3 months.

Any mediation is composed by some peculiar phases, described as follows:

- After a written mediating request has been submitted to an accredited mediation body (public or private), a qualified professional and independent mediator is designated; together with the date, the hour and the place in which there will be organized the preliminary meeting between the parties, the nominated mediator and the parties’ lawyers, in order to evaluate the possibility to start an attempt of mediation;

- If the first meeting (the preliminary one) finishes with the accord of the parties to commence an attempt of mediation, the mediator will start the (real) first mediation meeting (in the same day too, or in a different moment decided together with the parties).

Thereafter, two possible scenarios follow:

a) If the parties are able to reach an agreement, the mediator drafts the minutes of the meeting which must be signed by the mediator, the parties and their lawyers. In the case of the signing of the minutes and the agreement by the lawyers too, those documents will immediately be enforceable. In the case the parties are not assisted by lawyers, the minutes must be homologated by the President of the tribunal established in the district of the headquarter of the mediation provider in order to have the power of enforceability.

In any case, a party may request enforceability of the mediation agreement before the president of the tribunal of the place in which the mediation provider has its headquarters. The request must be made by depositing the mediation minutes and the attached mediation agreement. Before granting enforceability, the judge will verify that the content is not contrary to public policy or mandatory rules, and checks for compliance with formalities. Following a grant of enforceability, the mediation minutes will be enforceable for (i) compulsory expropriation; (ii) performance for delivery and release; (iii) fulfillment of the obligations to do and not to do and (iv) recognition of judicial mortgage.

In cross-border disputes, the mediation minutes are approved by the chief-judge of the district in which they are to be performed.

b) if no agreement is reached at the parties’ request the mediator can issue a non-binding proposal (he is obliged to issue a non-binding proposal if the parties, mutually, request it to him) about resolution of the dispute, which the parties may choose to accept or refuse. If either party refuses the proposal, the mediation is considered to have failed and any party may commence a lawsuit. But if the judicial decision is identical to the previous mediator’s proposal, such decision may affect the allocation of judicial expenses because the court will refuse to award all the costs and the expenses to the winning party if that party has previously rejected the mediator’s proposal. In such circumstances, the court will order the winning party to pay the losing party.

CONFIDENTIALITY

All mediators shall keep confidential any information arising out of (or in connection with) the mediation, including the fact that the mediation exists and has been conducted between the parties. In addition, Legislative Decree No. 28 of 2010 provides that mediators may not be called as witnesses and the parties may not rely on any communications made or any information collected during mediation in the subsequent judicial proceedings.

In particular, article 9, entitled ‘Duty of confidentiality’, states that anyone who works in a mediation provider accredited by the Ministry of Justice is bound by an obligation of confidentiality with respect to statements made and the information acquired during the mediation process. In addition, the same article states that the mediator shall be held to confidentiality in relation to all other parties, with regard to the statements made and to the information acquired during the caucuses (separate sessions), except with the consent of the registrant, or the consent of the party from whom the information originated.

Article 10, entitled ‘Usability and professional-secrecy’, sets forth that the statements made or the information acquired in the course of a mediation process cannot be used in a trial having the same object, even in part, that has begun, been summarized, or continued after the failure of mediation, except with the consent of the registrant or the party from whom the information originated. Furthermore, the evidence of witnesses is not allowed on the content of those statements and information.

The article further states that the mediator may not be required to testify about the content of the statements made and the information gathered during the mediation process before the court or other authorities.

In addition, in accordance with article 22 of Legislative Decree No. 28 of 2010, the mediator must report suspected money laundering or terrorist financing to the competent authority. The disclosure of confidential information by the mediator or the parties is permitted or compelled in the cases provided by article 7 of EU Directive No. 2008/52/EC.

DUTY TO INFORM

When powers of attorney are signed, the parties’ lawyers are required to inform their clients, in writing, about the mediation option and the financial incentives. Should the lawyer fail to do so, the power of attorney may be voided.

COSTS OF MEDIATION

For mediation mandated by law, there is an identical tariff for both public or private providers.

With regard to voluntary mediations, each provider may set its own rates, which must be approved by the Ministry of Justice.

Parties are jointly and severally obliged to pay the fees and the fees-increase in proportion to the value of the dispute.

The mediator is paid by the provider, with a percentage of the fee that the parties pay to the same provider.

Public rates range from a minimum of € 65 to a maximum of € 9,200.

EXEMPTIONS AND BENEFITS

The minutes of mediations with a value under € 50,000 shall be exempt from payment of registration fees.

All records and documents relating to the mediation process shall be exempt from stamp duty, and any expenses and taxes.

The poor can benefit from legal aid, and can freely participate in mediation.

The parties to mediation can benefit from a tax credit up to a maximum of € 500.

MEDIATION INSTITUTIONS

In Italy public and private mediation providers are accredited by the Ministry of Justice for conducting civil and commercial mediation upon the provisions of Legislative Decree No. 28 of 2010 (there are more than 1.000 mediation providers at the time of this writing, and the number increases every month).

Biography


F. Peter Phillips is a commercial arbitrator and mediator with substantial experience providing consultation on the management of business disputes to companies around the globe.

A cum laude graduate of Dartmouth College and a magna cum laude graduate of New York Law School, Mr. Phillips served for nearly ten years as Senior Vice President of the International Institute for Conflict Prevention and Resolution (CPR Institute). During that time, he earned a reputation as an author, teacher, industry liaison, and systems designer for the avoidance, management and resolution of complex and sophisticated business conflicts.

In 2008, Mr. Phillips formed Business Conflict Management LLC (BCM) in order to offer his direct services as a neutral and a consultant. Through BCM, Mr. Phillips also continues his career as a highly sought-after public speaker, facilitator and instructor.



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Website: www.BusinessConflictManagement.com

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