Commercial mediation in Italy
Mediation is obligatory before filing a claim in relation to certain disputes, including insurance and financial agreements. The mediator has a best efforts obligation to assist parties to reach an agreement and, if an agreement is not reached, the mediator can draw up a settlement proposal. If the parties fail to reach a settlement, this may result in adverse costs consequences in proceedings. The general rule is that the losing party pays the winning party’s costs but if the judge’s decision is effectively the same as the mediator’s proposal, which the winning party rejected, that party may not recover its costs.
What is the status of mediation in this jurisdiction?
How is a mediation conducted?
A mediation established under the Decree may be brought before any of the mediation organisations listed in Article 16 of the Decree and the procedure will follow the rules applied by the organisation chosen by the parties.
The mediator(s) shall be appointed by the organisation chosen by the parties.
Save for the cases of mandatory mediation procedures, parties do not need to be legally represented, although the participation of their legal representatives is strongly recommended by the Italian Bar Association.
Once a request for mediation has been filed, the mediation proceedings must be completed within a three-month period.
The appointed mediator has to use his best efforts to assist the parties to reach an agreement. If an agreement is not reached or should the parties request the mediator to do so, the mediator himself can draw up a settlement proposal. The parties then have seven days to decide whether or not to accept the mediator’s proposal.
There are costs consequences in the event that this proposal is rejected and the case goes to trial (please see below). The costs of mediation will vary depending on the amount in dispute and on whether the parties have chosen a private or a public mediation body. Mediation is free of charge for any party who is exempt from court fees under Italian law.
Is there any obligation on litigants to mediate?
The Decree provides for a statutory obligation to mediate for any disputes in relation to insurance, banking and financial agreements as well as other matters such as rights in rem (“diritti reali”), division of assets, inheritance, family arrangements (“patti di famiglia”), leases in general, gratuitous loans, leases of going concerns, medical liability or certain kinds of defamation/libel. In such cases, mediation has to be attempted before court proceedings are commenced. Should the claimant fail to pursue mediation proceedings, the claim is barred from continuing further and the failure may be raised by the defendant, or by the judge himself at the first hearing. However, should mediation fail, the claim may proceed to court litigation.
Furthermore, Italian law provides for alternative mediation procedures (which pre-date the Decree ) in relation to some of the abovementioned matters. In these cases, the claimants will have the option of using either the procedure as set out in the Decree or the alternatives.
Rules and regulations contained in the Decree may also apply to any civil and commercial litigation regarding matters other than those listed above, which the parties choose to delegate to a mediator.
Does the court have powers to support a mediation?
Are mediations confidential?
Does failure to mediate attract cost consequences?
At the time of their appointment, lawyers must inform their clients about: (i) the possibility of using mediation as an alternative form of dispute resolution; (ii) the potential cost advantages of proposing mediation; and (iii) the circumstances in which it is necessary to undertake mediation before claims may be commenced at court (“condizione di procedibilità”).
If the parties fail to reach a settlement, then this may (subject to certain conditions) result in adverse costs consequences in any subsequent proceedings before the court.
The general rule in Italian court proceedings is that the losing party pays the winner’s costs. However, if the judge’s decision is effectively the same as the mediator’s proposal and the winning party had failed to accept that proposal, that party may not recover its costs and may have to pay the losing party’s costs and also pay other fees equal to the “contributo unificato”. Even if the judge’s decision does not match the mediator’s proposal exactly, the judge still has the discretion to take this approach.
How are settlement agreements enforced?
Is there a system of accreditation and/or regulatory body for mediators?
Yes. The Decree allows public and/ or private bodies to establish mediation organisations, which must be registered with the Italian Ministry of Justice.
In addition, Italian bar associations can set up mediation organisations in each court of justice, and chambers of commerce and professional councils can establish mediation organisations under the provisions of the Decree for certain specific matters. These mediation organisations also need to be registered with the Italian Ministry of Justice before commencing operation.