Compulsory Civil Mediation in Italy 2011/ 2021

Past, Present and (likely) Future

Mandatory civil and commercial mediation came in force in Italy in 2011. This article looks at the update ten years later, based on official statistical data on year 2021 just published by the Italian Ministry of Justice.

Among contemporary Western countries, Italy was, most likely, the first to introduce civil compulsory mediation, in 2010. In the beginning, furious opposition from lawyers and benign neglect from the judiciary.

The main criticism was: mediation does not belong to the Italian legal tradition. History teaches the opposite.

Italy has an estimated population of 60 million people. There are 9,401 judges and 231,295 lawyers.

At the beginning of the century, the backlog in civil justice was growing. The Legislative Decree no. 5/2003 was issued, which ruled voluntary mediation in corporate, financial and banking controversies. Nobody (rectius, no lawyer) used it, and when I asked why, lawyers replied: “Because it was not compulsory”.

In 2009, there were 5,922,673 pending civil litigation cases, the highest number ever reached.

The Legislative Decree no. 28/2010 and Ministerial Decree no.180/2010 ruled the compulsory civil and commercial mediation (starting on March 2011) in many civil matters. The conflicts subjected to mandatory mediation account for about the 9% of all the conflicts filed in Italian civil courts. The accreditation mechanism of mediators, mediation bodies and mediation training providers is under the control of the Ministry of Justice. Mediation providers can be public or private.

On March 21, 2011 the Italian civil and commercial mediation took-off. Untill December 31, 2011: registered proceedings 60.810, all parties present in 31% of proceedings, agreements 9.912, two to three months required to reach the deal. An encouraging start.

On December 12th, 2012, the Constitutional Court declared the unconstitutionality of compulsory mediation, due to over-delegation (the Government went beyond its powers in creating the delegated legislation) and not because of the breach of a citizen’s right to defense.

Under the pressure from the European Union, the so-called “To Do” Law, Legislative Decree no. 69/2013, reintroduced mediation as a mandatory first step before going to court, starting on September 20, 2013, with some innovations. Among others, compulsory lawyers’ assistance to the parties, the first “information” meeting free of charge and the possibility, for the parties, to “OPT-OUT” of the proceeding.  

In the first information meeting the neutral explains the main features of the proceeding and asks the parties if they want to start the mediation. Parties can “opt-out” for justified reason. If they “opt-in”, the mediation starts. No longer compulsory, but voluntary.

The mediation agreement is an automatically enforceable title if undersigned by the parties, the lawyers and the mediator. 

Judges can order litigants to undergo mediation in  ALL  subjects related to alienable civil rights (delegated mediation), or issue a solution proposal based on equity in  ALL  subjects related to alienable civil rights. Proposal, which the parties are free to accept or refuse (not binding arbitration). In many cases the judges blend these two options: a solution proposal and, if rejected, an order to mandatory mediation (arb-then-med).

Regretfully, the invited party waives to start the proceeding without a significant reason too many times. In addition, too often the parties are not present themselves, but are represented by a lawyer, thus deeply undermining the effectiveness of mediation. 

In March 2022 the Italian Ministry of Justice issued the figures on year 2021

– 2,731,349 new proceedings filed in civil courts; 

–     166,511 civil mediation proceedings; 

–       22,812 mediated settlement agreements.

In the 2011 / 2021 period there has been 

– a decrease in civil court litigation (- 4% per year), because of the economic crisis; 

– a strong increase in mediation proceedings (+17% per year) and 

– a strong increase in mediated settlement agreements (+13% per year).

And according to the European Parliament, “Italy … uses mediation at a rate six times higher than the rest of Europe”.   

But in 2021, the ratio of settlement agreements to new proceedings filed in civil courts was 0.9%. Still too little.

During the Covid-19 pandemia, the Italian government was granted of funds by the European Union, in order to restart the country and its economy. Among others, there was the commitment to reduce the length of civil trials by 40%. On March 2021 the Minister of Justice appointed the Commissione Luiso, whose proposals were released at the end of April, then submitted to Parliament.           

On November the Law 206/2021 was issued: delegation to the Government to reform the civil proceeding and innovate the legislation on ADRs: mediation, assisted negotiation and arbitration. The implementing decrees will be issued in 2022 / 2023.

As far as mediation is concerned, the main changes will be focused on:

– more effectiveness of the mediation proceeding;

– increase of the topics covered by mandatory mediation;

– more effectiveness of mediation ordered by the judge;

– involvement of the Public Administration;

– tax incentives;

– quality of training.

Last, but not least, increase in available funds. An expenditure of 4.4 million euro in 2022 and 60.6 million euros per year from 2023 is allowed.

More effectiveness of the mediation proceeding

to encourage the personal participation of the parties, as well as effective discussion on the issues in dispute, by regulating the consequences of non-participation;

Increase of the subjects covered by mandatory mediation: 

to date, according to D.Lgs. 28/2010, the topics covered by mandatory mediation are: condominium (condominio), property (diritti reali), partition (divisione), wills and inheritance (successioni ereditarie), family convenants and agreements (patti di famiglia), lease (locazione), loans (comodato), business rents (affitto di azienda), medical malpractice damages (risarcimento del danno da responsabilità medica e sanitaria), libel (risarcimento danni da diffamazione a mezzo della stampa o altro mezzo di pubblicità), insurance, banking and financial contracts (contratti assicurativi, bancari e finanziari). 

According to Law 206/2021 mandatory mediation will be applied also to: joint ventures (contratti di associazione in partecipazione), consortium (consorzio), franchising, service agreements (contratto di opera), network agreements (contratto di rete), supply agreements (di somministrazione), personal partnerships (società di persone), subcontracting (subfornitura).

Enhancement of court-appointed mediation

When mandatory mediation was introduced, the vast majority of judges considered it to be a “Child of a lesser God”. However the judiciary at a very slow pace began to realize the usefulness of the institute. And it is likely that mediation in Italy strengthened, thanks to the judges. But there is plenty of room to grow.

According to the current law, the magistrate, who settles a lawsuit in his role through a non-judicial solution, it is as if he/she did not work. The assessment of his/her productivity is based on the number of issued judgments; if he/she spends time to analyze the mediability of a dispute, than makes a proposal for a solution, the parties reach an agreement and do not revert to court, the time he/she devoted to that case does not count for assessing his/her professionality.  According to the new law, the expertise of judges will be evaluated also on the basis of disputes settled by mediation.

Involvement of the Public Administration

Officials, representing the public administration, generally do not attend mediation proceedings for fear of accounting liability; the new regulations will limit this liability to case of fraudulent intent; this will be a huge change in mindset and it is very likely that it will take time for the future new rules to become effective.

Tax incentives

The Legislative Decree 28/2010 already provides: “All acts and documents relating to the mediation procedure are exempt from the registration tax (imposta di registro) and from all expenses, taxes or fees of any kind and nature” / c.3 “The record of the agreement is exempt from the registration tax up to the value of euros 50,000.00, otherwise the tax is due for the exceeding value”. 

The new rules should provide for the increase of the exemption from registration tax; the recognition of a tax credit proportional to the lawyer’s fee for assisting the party in the mediation proceeding; the further recognition of a tax credit related to the court fees paid at the beginning of the judicial proceedings, following an agreement in mediation related to that dispute (implicit aid to the mediation requested by the judge).

Quality of training

According to my opinion, this should be the most important prerequisite for a real development of mediation in Italy (and elsewhere). 

In Italy, certified mediators are required to hold a BA degree in any subject, or membership in a professional association (in this second case, mediators are only allowed to manage proceedings related to their professional competences) and complete a 50 hour training course on theory and practice. But, mediation is a multidisciplinary science; a 50 hour course is enough to inform, but not to form professionals. Moreover, most trainers and trainees are lawyers; therefore, lectures mainly focuse on civil procedure laws as applied to mediation. Will future legislation deal with these issues?

The focus on ODR is not relevant: “provide that mediation and assisted negotiation procedures may be conducted, upon agreement of the parties, by telematic means and that meetings may take place with remote connections”. Legislation enacted in 2010, and also rules approved during the pandemic, pay little attention to ODR. However, during the pandemic itself, the use of online proceedings grew enormously and is now an enduring trend.

Another relevant innovation. Law Decree 118, converted into Law 147, enacted in 2021, introduced a new institute, the Negotiated settlement for the solution of business crisis. Mediation, therefore, entered into the rules of business crisis management in Italy. More precisely, in contemporary Italy, because it was already part of the jus mercatorum (middleages) and, above all, of the legislation of the Serenissima Republic of Venice. Problem: the vast majority of professionals, who managed insolvency proceedings in Italy to date, are generally familiar with adversarial techniques, which are underlying the legislation in force. It is likely that it will take time the innovation to be properly perceived.  

The PREDICTABILITY of the judicial mediation is also being studied in Italy.

As mentioned above, two main mediation tools are available to Italian judges: an order to the litigants to undergo a mediation (court-ordered mediation) (art. 5, c.2, D.Lgs. 28/2010) or / and a solution proposal based on equity (art. 185-bis civil procedure code), which the parties are free to accept or refuse (not binding arbitration), in all subjects related to alienable civil rights. The two options can also be used together (arb-med). 

In two different Italian courts, methods are being developed to predict the outcome of mediation, in order to forecast which lawsuit, already started, can be resolved by means of an invitation / order from the judge to the parties to revert to the mediator (and then apply these techniques also to disputes outside the courts). 

In 2011, the Court of Bari conceived the “Integrated conciliation”.

In 2017 the University (Dpt. of Law and Dpt. of Engineering) and the Court of Florence, commercial section, started the “Simple Justice Project”, focused on court-ordered mediation and the implementation of a predictive algorithm on the “mediability” of the judicial proceeding and the probability of the outcome. 

The project is based on the collaboration among young researchers, judges and mediation providers; and it is divided in four phases:

1 – analysis of the trial files by the researcher, who

. selects the files;

. draws up the report for each file, with the information needed to asses the mediability of the judicial proceeding;

. collaborates in the filing of data on each case in the computer system;

. delivers the file and the report to the judge;

2 – referral to mediation – the judge assesses whether or not to agree with the researcher’s proposal; with the latter’s assistance, he draws up the order to refer the case to mediation, forwards it to the disputing parties and sets the return hearing (at the end of the mediation) within a maximum of six months; 

3 – mediation provider – the provider undertakes the proceeding within the time limit set by the judge, to enable the parties to return to court with a result (successful or negative) already achieved; every month the provider sends the judge data on the mediations carried out;

4 – back to court – the judge reviews the results of the return hearing and assesses the effectiveness of his previous decision; if mediation has not taken place, he may also order to revert again to it.

In 2018 researchers analyzed 9,491 trial files; after selection on the basis of strict discard rules, files reduced to 4,373; then evaluation of mediability (according to the subject matter and the stage of the proceeding) reduced them to 3,720, which were submitted to the judges.

The judges noted legal reasons not to refer 1,679 cases to mediation and for another 745 cases they did not agree with the assessment of mediation. 

1,296 cases were submitted for mediation.

In 2018, filed mediation proceedings were 1,092; performed 756; not performed 271; not ended 65. 

Out of the 756 performed mediations, 341 agreements were reached (45%).

The Dpt of Engineering – DISITLab, – University of Florence is studying all the documents to realize the predictive algorithm.

Challenges are ahead of us. Will we be able to cope with them?

Websites accessed on 22.03.2022  

Article completed writing on 22.03.2022

author

Giovanni Matteucci

Giovanni Matteucci is a commercial mediator and trainer. Giovanni Matteucci was born in Rome, Italy, in 1949. He graduated in Law and Economics & Commerce at "La Sapienza" University of Rome (Italy) and earned a "Diploma in Economics" from the University of York (UK). He attended the postgraduate specialization courses in "Alternative Dispute Resolution… MORE

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