Civil mediation, how to kick-start it; the Italian experience

Training, compulsory, tax relieves, control

Categories: Business Law
Typology: Articles
Tags: Italy - Mediation

Civil and commercial mediation has been compulsory in Italy since 2011. More precisely:

complusory since

March 21, 2011

untill December 12, 2012

voluntary since

December 13, 2012

untill September 19, 2013

compulsory since

September 20, 2013

   
 

                          M e d i a t i o n

                 Civil

proceedings

 

Proceedings

Agreements

Agreements

Registered

   Pending

 

     

success rate                                                             

   

 

2011 °

  60,810

  9,912

16%

4,409,000

      5,566,000

 

2012

154,879

16,727

11%

4,267,000

      5,081,000

 

2013

 41,604

  5,408

13%

4,389,000

      5,155,000

 

2014

179,587

16,162

  9%

4,009,000

      4,359,000

 

2015

196,247

19,625

10%

3,334,000

      3,945,000

 

2016

     183,977

20,237

11%

3,472,000

      3,803,000

 

           

 

   

          Cases discussed in Tribunals

 

 

From 2013 to 2015

All civil proceedings

     Proceedings related

 

       

       to civil mediation

 

           

 

 

 

      -8%

 

   -16%

 

 

           

 

   

        Length    of     proceedings     (days)

 

 

           

 

     

Civil Cases

in

Courts

Mediations with

agreement

 

 

 

2012

 

n.a.

65

 

 

 

2013

 

844

82

 

 

 

2014

 

984

83

 

 

 

2015

 

902

103

 

 

 

2016

 

882

115

 

 

                 

Mediation (and ADR) are not extensively used in many Countries. If you want to kick-start them, it is necessary to have clear goals to be reached, a very good training, a strong attention to the “stakeholders” (people, lawyers, judges), their attitudes and interests, and to control what is going on. Starting with the knowledge of the historical framework.

Mediation belongs to the Italian cultural and juridical tradition. The Italian State was founded in 1861. In the first Civil Procedure Code (1865) the heading of the introductory seven articles was “Conciliation”. According to a law issued in the same year, police officers must first of all reconcile conflicts among private citizens. In 1880 Justices of Peace issued the 70% of all sentences delivered in Italy. According to Law 261/1892 the judge “in order to reach a conciliation, could call for the single party in a private hearing” (an ante litteram caucus). But the totalitarian regime carried out during the Fascist period (1922 – 1943) disliked conflict resolutions reached by private citizens; they must be settled by judges, through sentences. 1941 Civil Procedure Code, art. 183, provided the possibility of conciliation managed by the judge in the pre-trial hearings; nevertheless it is always been a pure formality.

Since the 30’s of the twentieth century, in Italy, mediation gradually lost its importance and it was no longer taught in universities for over seventy years; it was (and still is) part of the Italian legal tradition, but it was forgotten, by the potential users (people) and by the professionals (lawyers and judges).

In 1993 the Law 580 ruled : each Italian Chamber of Commerce had to set up a conciliation (and arbitration) chamber. At a very slow pace ADRs started their way in contemporary Italy. The Legislative Decree no. 5/2003 (in force since 2005) ruled voluntary mediation in corporate, financial and banking controversies. Mediation bodies were ruled; lawyers and no lawyers could be mediators. Specific training requirements, especially on communication, were very modest. Nobody (rectius, no lawyer) used it, and when I asked why, lawyers replied: “Because it was not compulsory”.

There were a high number of litigation cases, long lasting litigation cases, a huge numbers of lawyers (with decreasing revenues), a “shrinking” in the litigation market, a tremendous number of pending civil litigation cases in the overall judicial system (5,700,000 in 2009).

In 2010 the compulsory civil and commercial mediation was ruled (starting on March 2011) in many civil matters [1] , revoked in October 2012 and reintroduced in September 2013. It had to face a furious opposition by lawyers (a matter of culture and revenues – ADR,  here, doesn’t mean Alternative Dispute Resolutions, rather Alarming Drops in Revenues) and -until 2013- a benign neglect by judges (a matter of culture). Mediation bodies were regulated in detail; 50 hours training (too few) were established, with specific attention to communication; graduates in any subject could become mediators (non-graduates only on matters related to their activities). In Italy civil and commercial mediation took-off : from March 21 to December 31, 2011 : registered proceedings 60.810, all parties present in 31% of proceedings,  agreements 9.912 (with a success rate of 16%), two to three months required to reach the deal.

Over time, the number of proceedings increased as well as the percentage of proceedings where all parties were present. But the success rate of the latter started to decline, continuously, constantly, and stubbornly, until the end of 2012. Why ?

The mediator’s fee doubles when an agreement is reached. This acts as an incentive to the professional, who will try to ensure that the proceeding results in a positive solution; however, in some (if not many) cases, the parties left the mediation just before its final session, where the deal was to be signed. Moreover, it is my opinion that, at the beginning of 2011, mediators were professionals with expertise in the subject, with many years of training behind them, and able to understand the causes of conflict and how to manage them. Later on (also because of the economic crisis) many of those, who jumped on the bandwagon had a pour (50 hours) training; the consequences were deterioration in the quality of the mediation process management and worse results.

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. The number of mediation proceedings dropped, voluntary mediation survived, with a much higher success rate than that of compulsory one.

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 20th, 2013.

But the heavy pressure exerted by lawyers on the members of Parliament led to significant changes from the previous law. Among others :

- lawyers mediators “ope legis

- compulsory lawyers’ assistance (presence) for the parties;

- the first “informative” meeting free of charge (except for a 48,80 euro fee, 97,60 if mediation value is higher than 250,000 euro – the mediator works for free, the lawyer hired by the party is paid); the invited party, according to lawyers’ misinterpretation, can abstain from the proceeding by not attending the mediation meeting (with the plaintiff and the mediator) or, attend the first informative meeting, can “ OPT-OUT ” from the process .

Legislative Decree no. 69/2013, also, established the possibility for judges 

- to issue a solution proposal based on equity (ex art. 185-bis civil procedure code) in all  subjects related to alienable civil rights, which the parties were free to accept or refuse (not binding arbitration);

- to order litigants to undergo mediation in all subjects related to alienable civil rights (delegated mediation). In many cases the judges blended these two options: they made a solution proposal and, if the proposal was rejected, they ordered mandatory mediation (arbitration – then – mediation).

An increasing number of judges started using these opportunities, and with very interesting results: in most cases lawyers, though reluctant to do so, joined the mediation procedure and litigants reached an agreement. Last but not least, judges have opposed the practice of those lawyers who attended the first informative meeting, without the party, only to declare that they were not interested in proceeding with the mediation. Judges are condemning this behavior, remarking that: “lawyers are mediators ‘ope legis’, therefore ‘ope legis’ they know mediation, the necessity of the parties’ presence and of a real interaction among them”.

Judge Massimo Moriconi, Civil Court of Rome, acted as a pioneer. Thanks to an extensive use of invitation to mediation in the 2012 – 2013 period, he achieved a reduction of at least 10% of the disputes entrusted to him. From September 23rd, 2013 to October 10th, 2014 he presided over about 700 cases; according to him, ADR methods could be used in almost 200 cases of those cases; in 121 cases he turned to 40 non-binding arbitrations, 35 delegated mediations and 46 non-binding arbitrations and delegated mediations (arb-then-med); in 58% of the cases the parties reached an agreement. 8% reduction of the diputes entrusted to him [2] .

New rules in 2014 / 15 :

- cases pending before the court, upon the parties’ agreement, can be transferred in arbitration;

- assisted negotiation by lawyers : for disputes relating to compensation for damages caused by cars and boats and for all claims for payments up to 50,000.00 euro  (in matters not subject to mandatory mediation); for the separation between husband and wife (provided there are no underage children, or anyway dependent from their parents), the litigants, assisted by their lawyers, will be able to reach an agreement, that is enforceable; as mediation, this procedure will be a pre-condition to assessment in court  [3]  ;

- who loses in court will refund the expenses of the process;

- a high statutory rate of interest for late payment will be provided, to an extent at least equal to the market price; therefore the debtor, who forces the creditor by applying to the court to get the amount back, will not make money out of the lengthy procedures.

50 hours training have proved insufficient, at least 200 hours would have been necessary, and not only law experts but also communication experts, psychologists, bankers, etc. should have been involved; ADRs are a mixture of very different skills.  

It is also necessary that lawyers understand that they can make a profit out of mediation, especially in times of economic downturn, when companies need to solve their problems in order to get money. And it is also necessary for the evaluation of judges, for their career advancement, to be based not only on the number of orders issued, but also on the total number of disputes resolved. Tax benefits have been formally introduced but are not operational. National statistics and inspections carried out by the Ministry of Justice allow a check on the regularity of procedures.

When all parties meet with a mediator and decide to go further than the first infomation meeting, the overall rate of success has been 11% in 2016; too low, even if a bit higher than in  previous years. Moreover in Italy the conflicts subjected to mandatory mediation are only the 8% of all the conflicts filed in the Italian Courts; the filing of all civil cases increased by 10% between October 2012 and September 2013 (when mandatory mediation was revoked) and decreased by 15% later on (when mandatory mediation was reintroduced).

And the results are coming:

- 2016 scored the highest number of mediation agreements ever reached;

- the results achieved by mediation (in 2016, 183,977 proceedings, 20,237 agreements) are far superior to those obtained with the assisted negotiation (43,000, 4,132);

- the Italian competition on mediation (Milan, Chamber of Commerce) in 2012 was attended by 4 universities; in February 2017, there were 24 universities, 120 students all highly trained.

Knowledge is the basis for any serious activity.

(Altalex, 23 October July 2017. Article by Giovanni Matteucci)

 


 

Table 1     CIVIL  AND  COMMERCIAL  MEDIATION  IN  ITALY 

                   

 

 

Incoming mediations proceedings

The invited party

 present

Agreement

Agreement

Agreement

Agreement

 

     

success rate when parties go further              [1]

success rate when parties do NOT go further         [2]

overall

success rate                                                                [3]

absolute

values                                          [4]

 

 

A

B

C

D

B x C = E

A x E = F

 

         

B x D = E

 

 

2011 °

60,810

31%

53%

[1]

16%

  9,730

 

2012

154,879

27%

41%

[1]

11%

17,037

 

2013

41,604

32%

49%

[1]

16%

  6,657

 

2014

179,587

40%

47%

23%

9%

16,162

 

2015

196,247

45%

43%

22%

10%

19,625

 

2016

183,977

47%

43%

24%

11%

20,237

 

             

 

°  21.3 / 31.12.2011

         

 

[1] In 2011, 2012 and untill September 19, 2013 the first infomation meeting was not required

 

[2] Success rate when parties go further than the first information meeting

 

 

[3] Success rate when parties do NOT go further the first infomation meeting

 

 

[4] Overall success rata, including mediations in which invited party is not present and those

 

in which parties do NOT go further the first information meeting.

 

 

             
                             
             
 

Initial 

pending

proceedings

Incoming

proceedings

Resolved

proceedings

 

Final pending

proceedings

Agreements

overall

success rate

Agreements 

absolute

values

 

G

H

I

L

E

I x E = M

             

 2011 °

     742

60.810

40.162

21.390

16%

  6.425

2012

21.390

154.879

152.631

23.638

11%

16.789

2013

23.638

  41.604

24.019

41.222

16%

  3.843

2014

41.223

179.587

156.317

64.493

 9%

14.068

2015

64.493

196.247

185.745

74.995

10%

18.574

2016

74.995

183.977

173.474

85.499

11%

19.082

 

°  21.3 / 31.12.2011

         

 

                           

 

 

 

 

 

Table 2                 Comparison between cases discussed in the Tribunals

                                           and those discussed in mediation  

 From 2013 to 2015      All civil proceedings            Proceeding relating

                                                   to civil mediation

                                                    -  8 %                              -  16 %

Matters relating to civil mediation

Civil mediation has been

- compulsory since   March 21, 2011       untill December 12, 2012

- voluntary since       December 13, 2012 untill September 19, 2013

- compulsory since    September 20,2013

                Proceedings                              Incoming

            filed in the courts                        mediations

2011                                       209,572                                    60,810

2012                                       209,024     -  0,2%                 154,879     + 155 %    

2013                                       228,870     +10  %                   41,604     -    73 %

2014                                       195,273     - 15  %                 179,587     + 332 %

2015                                       191,587     -   2  %                 196,247     +     9 %

 

 

 

 

 

              

Table 3                   Lawyer’s assistance in voluntary mediation

                                              Inviting party to mediation                    Present invited party

                                                legally        NOT legally                          legally      NOT legally

                                                          assisted                                                  assisted

                                                   A                    B                                C                      D

21.3.2011 / 31.12.2012           81%                19%                            81%                19%

1.1 / 30.9.2013                          72%                28%                           65%                 34%

2014  Year                               63%                37%                           73%                 27%

2015  Year                               52%                48%                          83%                 17%

2016  Year                                n.a.                 n.a.                             84%                 16%

Untill September 19th, 2013 lawyer’s assistance in mediation was not compulsory.

 

 

 

 

Table 4                                       Categories of mediation

                                                            (resolved cases)

                                        Mandatory         Voluntary            Delegated         Compulsory 

                                           by law                                             by judge           by contract

                                               A                        B                           C                         D

21.3 / 31.12.2011                 78%                     20%                        2%                     0.5%

2012                                     85%                     12%                       3%                      0.3%

2013                                     56%                     42%                       2%                     1.5%   

2014                                     80%                     12%                        8%                    0.6%

2015                                     82%                       8%                       10%                    0.4%

2016                                     80%                       9%                       11%                    0.5%

Table 5                                    Outcome by type of referral / proceeding

                                                   Settled proceedings         Success rate          Success rate

                                                      according to type               when parties          when parties

                                                         of mediation                    go further        do NOT go further

                                                   (resolved cases)                    [2]                        [3]

                                                              A                                B                          C

21.03.2011 / 31.12.2012

Mandatory by law                81%                            43%                     [1]

Voluntary                              16%                            62%                     [1]

Ordered by judge                   3%                            29%                     [1] 

2013

            Mandatory by law                56%                            30%                     [1]

            Voluntary                              42%                            64%                     [1]

            Ordered by judge                   2%                            22%                      [1]    

2014                        

Mandatory by law                80%                            45%                     n.a.

Voluntary                              12%                             67%                     n.a.

Ordered by judge                   8%                            33%                     n.a. 

2015

Mandatory by law                82%                            43%                     21%

Voluntary                                8%                            62%                      41%

Ordered by judge                 10%                            31%                     14%

2016

Mandatory by law                80%                            44%                     23%

Voluntary                                9%                            61%                      39%

Ordered by judge                 11%                            32%                      15%

[1] In 2011, 2012 and untill September 19, 2013, the first information meeting was not requested.

[2] Success rate when parties go further than the information meeting.

[3] Success rate when parties do NOT go further the first information meeting.

Table 6

                          Mediation proceedings according to the type of mediation bodies

   

Mediation bodies

Settled proceedings

Success rate when parties go further           [2]

Success rate when parties do NOT go further  [3]

   

A

B

C

D

           

21.3.2011 / 31.12.2012

         

Chambers of Commerce

87

16%

49%  °

[1]

Private organizations

 

686

56%

46%  °

[1]

Professional not lawyers

80

0.6%

36%  °

[1]

Bar associations

 

115

27%

34%  °

[1]

   

968

100%

44%  °

[1]

2013

         

Chambers of Commerce

87

16%

40%  °

[1]

Private organizations

 

699

54%

49%  °

[1]

Professional not lawyers

85

1%

47%  °

[1]

Bar associations

 

115

29%

30%  °

[1]

   

986

100%

42%  °

[1]

2014

         

Chambers of Commerce

87

12%

54%

23%

Private organizations

 

644

54%

51%

27%

Professional not lawyers

92

1%

62%

38%

Bar associations

 

115

33

38%

21%

   

938

100%

47%

24%

2015

         

Chambers of Commerce

88

11%

48%

22%

Private organizations

 

611

53%

47%

26%

Professional not lawyers

88

1%

47%

33%

Bar associations

 

107

33%

37%

19%

   

894

100%

43%

23%

2016

         

Chambers of Commerce

87

11%

47%

23%

Private organizations

 

516

52%

48%

27%

Professional not lawyers

70

1%

51%

35%

Bar associations

 

105

36%

37%

21%

   

778

100%

44%

24%

           

 ° Success rate (number of agreements / total defined proceedings) when the invited party is  

Present

         

[1] In 2011, 2012 and untill September 19, 2013 the first information meeting was not requested.

[2] Success rates when parties go further the first information meeting.

 

[3] Success rate when parties do NOT go further the first information meeting.

 

 

 

 

 

Table 7                            Value of mediation disputes (euros)   

 Average  [4]                               Median  [5]

2012                                n.a.                                            n.a.

2013                            156.464                                      10.412

2014                            110.556                                      20.000

2015                            137.862                                      19.929        

2016                            139.544                                      17.000

Table 8                                      Length of proceedings  (days)

                                   Civil cases                                   Mediation proceedings  

                                    in Courts                         cases when agreement is reached                                     

2012                               n.a.                                                    65

2013                               844                                                    82

2014                               984                                                    83

2015                               921                                                  103

2016                               882                                                  115

Tabella 9

                     Incoming mediation proceedings by subject - 2016

   
           

 

 

Incoming

proceedings

The invited party

present

Agreement success rate when parties go further

Agreement overall

success rate

Value

median

 

 

%

%

%

%

euro

 

 

A

B

C

B x C = D

E

 

           

 

Bank contracts

20

46

7

3

40.000

 

Property

14

55

36

20

10.000

 

Other proceedings

(non mandatory mediat.)

12

43

36

16

11.640

 

Condominium

12

53

26

14

5.000

 

Lease

12

52

29

15

7.549

 

Medical malpractice

7

38

10

4

37.500

 

Insurance contracts

6

15

15

2

9.380

 

Partition

5

59

29

17

70.000

 

Will and inheritance

4

62

27

17

50.000

 

Financial contracts

3

40

 8

3

19.684

 

Gratuitous loans

1

46

32

15

7.500

 

Business rents

1

53

32

17

25.954

 

Libel

1

38

16

6

37.500

 

Family agreements

0,2

54

21

11

24.000

 

                 

Statistics based on data by Italian Ministry of Justice

Giovanni Matteucci  was born in Rome, Italy, in 1949. He graduated in Law and Economics & Commerce at "La Sapienza" University of Rome and earned a "Diploma in Economics" from the University of York (UK). He attended the postgraduate specialization courses in "Alternative Dispute Resolution techniques" and “Bankruptcy law” at the University of Siena.

He worked as a bank officer, specialized in assessing and managing risk, especially the uncertainly realized. He has been a civil mediator certified by the Ministry of Justice since 2006 and a trainer since 2011; he operates as a mediator at the Chamber of Commerce of Grosseto,  Conciliatore BancarioFinanziario and ADRCenter, and as a trainer at Risorsa cittadino s.c.s e Arbimedia s.r.l. . He specializes in the use of mediation to prevent conflict in the event of corporate financial crisis. He trained in Online Dispute Resolution with Virtualmediationlab-Hawaii.    

Since 2014, he is a European funding consultant.                                 

He has published, in English

papers

www.altalex.eu  

Mediation and over-indebtdeness in Italy”  30.8.2012

Early disclosure of business crisis in Italy; the early warning indicator does exists, it does work, it is not used” 13.2.2017

http://e-archivo.uc3m.es/handle/10016/20429

“Italy Is Doing It – Should We Be? - Civil and Commercial Mediation in Italy

in “Contemporary tendencies in mediation”, pag. 205, Dykinson 2015, Universidad Carlos III de Madrid

www.redp.com.br

Mandatory mediation, the Italian experience” (Vol. XVI 2015, pag. 189)

in Revista Eletronica de Direito Processual REDP; Periodico da Pòs-Graduacao Stricto Sensu em Direito Processual da UERJ Universidade do Estato do Rio de Janeiro

www.academia.edu

Mediation in Italy, July 2014; new rules being approved” 7.7.2014

ADR and the judiciary in Italy” 18.10.2014

The civil mediator in Italy : an auxiliary of the judge ?!?!” 3.7.2015

video

Mandatory mediation, the Italian experience”  23.6.2015

Contacts                         giovannimatteucci@alice.it   and   info@adrmaremma.it .

Skype ID                      adrmaremma

Linkedin profile             http://www.linkedin.com/pub/giovanni-matteucci/26/522/583      

_______________

[1]  Rights in rem, property; division of assets, partition; wills and inheritance; family covenants and agreements; lease; gratuitous loans; business rents; civil liability for medical malpractice; civil liability for defamation in teh press or other media; insurance, banking and financial contracts; condominium.  Interim and preventive procedures (injunction proceedings, notice to quit, possessory proceedings, civil action inside the criminal proceedings, etc.) were exempted from the mandatory attempt at mediation. The conflicts subjected to mandatory mediation are the 8% of all the conflicts filed in Italian courts.

[3]   Legislative Decree 132, September 12, 2014 art. 1 and art. 2, converted with amendments by Law 162/ 2014, ruled the transfer in arbitration and the assisted negotiation, both institute strongly supported by lawyers. Results in 2016: proceedings 43.000; agreements 4.132 (separations and divorces 3.197). With respect to the mediation a much wider field of application, but inferior results. No news about transfer in arbitration.

http://www.consiglionazionaleforense.it/documents/20182/321984/Monitoraggio+negoziazione+assistita+2016+-+Dati.pdf/8adb4fb2-45ec-4a8c-943a-55918435eb81?version=1.0  .

[4]  If n numbers are given, the average is the sum of the numbers divided by n .

[5]  The median is the middle number of the group when they are ranked in order.

 

 
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