Compulsory Mediation – the European perspective :

 A recent ruling in the European Court of Justice has stated that an Italian court’s imposition of compulsory mediation on parties to litigation did not amount to a breach of Article 6(1) of the Convention of Human Rights.

 In the case of Rosalba Alassini Italian consumers brought proceedings for breach of contract against their telecoms suppliers. The telecoms companies claimed that the action was inadmissible because the applicants had not first attempted an out-of-court settlement in accordance with Article 3 of Decision No 173/07/CONS.  The claimants complained that the courts’ refusal to hear their cases, because they had not gone through the out-of-court disputes process, amounted to a breach of Article 6(1) of the European Convention of Human Rights (the Convention) which provides for the right to a fair trial.  The court referred a question to the ECJ, asking whether the provision that required end-users to seek an out-of-court settlement before taking out court proceedings was precluded by Community law. 

 Advocate General Kokott concluded that it is not an infringement of the right to effective judicial protection, for an Italian law to require customer complaints against telecoms suppliers to be dealt with in an out-of-court dispute resolution procedure, before judicial proceedings can be brought. The provisions constitute a minor infringement on the right to enforcement by the courts, which is outweighed by the opportunity to end the dispute quickly and inexpensively.

 Background to the Legislation

EC Legislation

Article 1(2) of the Universal Service Directive (2002/22/EC) lays down the rights of end-users, and corresponding obligations on undertakings providing electronic communications networks and services.

 Article 34 of the Directive requires member states to make available out-of-court procedures for dealing with unresolved disputes. These are without prejudice to national court procedures.

Italian Leglislation

Article 3 of  Decision No 173/07/CONS states that no court proceedings may be brought until a mandatory attempt to settle the dispute has been undertaken. The time limit for completion of the settlement procedure is 30 days, after which the parties may bring court proceedings even if the procedure is incomplete.

The disputes procedure in Italy

Italian national law provides that the authority is responsible for setting up procedures to deal with disputes between service providers and end-users.  Under the authority’s procedures there is a time limit of 30 days for the out-of-court settlement procedure to be gone through once it has been started.  Once that period has passed the parties may bring court proceedings even if the settlement procedure has not been finished. 

The Italian government argued that the aim of mandatory procedure was to force would-be litigants to attempt to settle the dispute in a way which was quicker and less expensive before turning to the court system.  It said that a quicker and less expensive method of settlement was in the interests of all parties and also lightened the burden on the court system.  The Italian government said that “an agreement which the parties have reached out-of-court is frequently more likely to bring about the long-term resolution of the dispute that a judicial decision with which the parties are dissatisfied”.

 Advocate General Kokott concluded that the Italian compulsory out-of-court dispute resolution provisions were pursuing “legitimate objectives in the general interest (ie. a quicker, less expensive method of dispute settlement which also lightened the burden on the court system and was likely to produce a more satisfactory long term solution to the dispute”.  The Italian government’s argument was accepted that “an out-of-court dispute resolution procedure that is merely optional is not as efficient as a mandatory one that must be conducted before any legal action can be brought”.

 Under the Italian provisions, there is a delay for 30 days, at the end of which 30 day period the claimant can bring a claim before the courts regardless of whether or not the out-of-court settlement stage has been finished.  In the circumstances, Advocate General Kokott concluded that the “mandatory dispute resolution procedure without which judicial proceedings may not be brought does not constitute a disproportionate infringement upon the right to effective judicial protection…Provisions such as these constitute a minor infringement upon the right to enforcement by the courts that is outweighed by the opportunity to end the dispute quickly and inexpensively”. 

 The UK Approach

 The original Court of Appeal decision in Halsey came out against compulsory  mediation. However the decision has since been subject to some debate.

 For example Lightman J – ”The Court in Halsey appears to have been unfamiliar with the mediation process and to have confused an order for mediation with an order for arbitration or some other order which places a permanent stay on proceedings…An order for mediation does not interfere with the right to a trial; at most it merely imposes a short delay to afford an opportunity for settlement…and indeed the order for mediation may not even do that, for the order for mediation may require or allow the parties to proceed with preparation for trial.” And Sir Anthony Clarke MR:  “mediation….does not interfere with the right to fair trial but simply imposes a short delay on the trial process”. 

 However, the Jackson Report on costs has decided that mediation should not be made compulsory. The Jackson Report states: “in spite of the considerable benefits which mediation brings in appropriate cases, I do not believe that parties should ever be compelled to mediate”.  However, where appropriate, the UK courts should  encourage mediation, point out its considerable benefits, direct the parties to meet and/or discuss mediation and penalise in costs parties which have unreasonably refused to mediate. See also the blog entitled Mediation – The Lord Justice Jackson Review by Tim Constable dated 14 January 2010.

Summary

Although the debate continues in England, across the Channel it seems that opinion is turning in favour of compulsory mediation. Although some believe it is wrong to compel unwilling parties to mediate, believing that such compulsion would be a breach of the right of access to the courts required by the European Convention on Human Rights (ECHR), others see that compulsory mediation is not depriving parties of their rights of access to the court.  Rather it is saying you can have access to the court, but while that procedure is running, you must also attempt mediation.