The European Mediation Directive
The objectives and applicability of the Directive
The European institutions regard the promotion of mediation within the EU as highly desirable. However, without formal legislation, it has proved difficult to establish predictable practices and equal opportunities for mediation across member states.
The EU therefore adopted the European Mediation Directive 2008/52/EC (the “Directive”) in May 2008 to govern various mediation issues within Member States. All Member States (apart from Denmark, which has opted out of the Directive) were obliged to bring the provisions of the Directive into force by 21 May 2011.
The objective of the Directive is “to facilitate access to dispute resolution and to promote the amicable settlement of disputes by encouraging the use of mediation and by ensuring a balanced relationship between mediation and judicial proceedings” (Article 1). It applies where two or more parties to a cross-border dispute of a civil or commercial nature voluntarily attempt to reach an amicable settlement with the assistance of a mediator. It does not extend to revenue, customs or administrative matters, nor to disputes involving the liability of the state, nor to those areas of family law where the parties do not have a choice of applicable law. However, given the broad definition of “cross-border disputes”, the Directive’s provisions on confidentiality, limitation and prescription periods also apply in situations which are purely internal at the time of mediation but become international at the judicial proceedings stage, e.g. if one party moves abroad after mediation fails.
The Directive does not impose an obligation on parties to mediate, although it does identify a number of potential advantages of mediation. Neither does the Directive contain detailed guidelines for the conduct of a mediation; rather it provides high level principles. It envisages that Member States will create their own mediation guidelines in accordance with their own procedures.
What is a “cross-border” dispute?
Under the Directive, a dispute is “cross-border” when at least one of the parties is domiciled or habitually resident in a Member State different to the other party on one of the following dates:
- when the parties agree to use mediation once a dispute has arisen;
- when a court invites or orders the parties to attempt mediation; or
- when the parties are obliged to use mediation under national law (Article 2.1).
The key provisions of the Directive include:
- providing that agreements reached through mediation may be made enforceable.
The enforcement of agreements reached by way of mediation is perhaps the most important and novel aspect of the Directive. Under Article 6, Member States have a duty to “ensure that it is possible for the parties, or for one of them with the explicit consent of the others, to request that the content of a written agreement resulting from mediation be enforceable”. Compliance with agreements resulting from mediation should not “depend on the good will of the parties”.
As can be seen from the individual jurisdiction sections in this Review, settlement agreements, however reached, are usually considered to be contracts and enforceable under usual contract principles. Failure to comply with the agreed terms will be a breach of contract upon which the injured party may bring legal proceedings in accordance with local law. The Directive obliges Member States to set up a mechanism by which agreements resulting from mediation can be rendered enforceable if both parties so request. The choice of mechanism is left to the Member States. The Directive bolsters the status of a settlement agreement from cross-border mediation by providing that such agreements should be made enforceable unless either:
- the content of the agreement is contrary to the law of the Member State in which enforceability of the settlement agreement is requested; or
- the law of that Member State does not provide for the enforcement of agreements with that specific content.
Any agreement which has been made enforceable in one member state should be recognised and declared enforceable in other Member States in accordance with Community or national law, for example, by way of recognition under Council Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
- acknowledging that judges have the right to invite parties to attempt mediation.
Article 5 of the Directive gives a judge the right to invite the parties to have recourse to mediation if, at any stage of the procedure, the judge considers it appropriate. A judge can also suggest that the parties attend an information meeting on mediation. The intention is to encourage parties to consider using mediation, without making it compulsory. However, individual Member States are not prevented from introducing legislation to make mediation compulsory or subject to incentives or sanctions, provided that such legislation does not prevent access to the judicial system.
The Directive does not specify sanctions for failure to mediate, but neither does it preclude individual Member States from introducing legislation for this purpose or prevent courts from imposing such sanctions.
- providing that, to preserve confidentiality, submissions and disclosure in mediation may not be used in any subsequent legal proceedings and mediators may not be compelled to give evidence in any subsequent legal proceedings.
Under Article 7 of the Directive, the general position is that, unless the parties agree otherwise, neither mediators nor those administering the process can be obliged to give evidence in relation to matters or information arising from, or connected with, the mediation. There are two exceptions to this:
- where overriding public policy considerations make it necessary; in particular, when it is necessary to ensure the protection of children or to prevent physical or psychological harm;
- where disclosure of the content of an agreement resulting from mediation is necessary to implement or enforce that agreement.
Article 7.2 expressly provides that nothing in the Directive prevents Member States from enacting stricter confidentiality measures to govern mediations.
- ensuring that parties’ claims will not be statute-barred as a result of time spent on mediation.
The Directive proposes that any limitation period should be suspended while the parties are engaging in mediation, in order to guarantee that parties will not be prevented from going to court should the limitation expire while the, ultimately unsuccessful, mediation is taking place. This was, unsurprisingly, one of the most controversial Articles of the Directive.
- advocating the development and use of voluntary codes of conduct and quality control mechanisms.
The Directive obliges Member States to encourage the training of mediators and the development of, and adherence to, voluntary codes of conduct and other effective quality control mechanisms concerning the provision of mediation services. The voluntary nature of Article 4, however, means that there is no process for monitoring or enforcing the recommendation and the emphasis is on self-regulation.
Rebooting the Directive
A study published in January 2014 in response to a request by the European Parliament (“Rebooting the Mediation Directive”) found, disappointingly, that mediation was being used in fewer than 1% of cases in the EU. In 46% of EU Member States, fewer than 500 mediations took place every year. The study put this down to the retention of a voluntary approach to mediation in almost all of the 28 Member States. In fact, the study found that 10,000 mediations took place annually in only four countries. Italy was the main exception, where mediation is compulsory before proceedings can be brought in certain categories of cases – there over 200,000 mediations were recorded in Italy.
The study experts strongly supported a number of proposed non-legislative measures to promote mediation development, failing which the experts suggested the introduction of a ‘mitigated’ form of mandatory mediation might be the only way to make mediation actually happen in the EU. They proposed two ways to “reboot” the Directive: either to amend it or request that each Member State commit to, and reach, a simple “balanced relationship target number” between civil litigation and mediation.
Following a consultation in 2015, a ‘reboot’ for the Directive was proposed by the Commission in its report of August 2016. While finding that the Directive had raised awareness of the advantages of mediation amongst national legislators, the Commission also identified areas for improvement, including how the use of mediation could best be promoted and encouraged across the EU. The Commission recommended that Member States should be encouraged to increase their efforts to promote the use of mediation, in particular by increasing the number of cases in which courts invite parties to consider its use and by promoting financial incentives which make it economically more attractive for parties to use mediation instead of judicial proceedings.
A Resolution was subsequently adopted by the European Parliament in September 2017. Although mandatory mediation was not mentioned, the Resolution proposed, among other things, that:
- EU member states should step up their efforts to encourage the use of mediation in civil and commercial disputes, for example, through information campaigns about the procedure and its advantages, and to improved cooperation between legal professionals and an exchange of best practices.
- The Commission should assess the need to develop EU-wide quality standards and consistency in the provision of mediation services, while taking into account the fundamental right of access to justice and differences in mediation cultures.
- The Commission should assess the need for member states to create and maintain national registers of mediated proceedings, which could provide information to the Commission and enable national mediators to benefit from best practices. Any such register must comply with the General Data Protection Regulation (Regulation (EU) 2016/679).
- The European Parliament requests that the Commission undertake a detailed study on the obstacles to the free circulation of foreign mediation agreements across the EU, and on various options to promote the use of mediation as a sound, affordable and effective way to solve domestic and international conflicts.
- The Commission should find solutions to extend the scope of mediation to other civil or administrative matters. However, special attention must be paid to the implications that mediation could have on certain social issues, such as family law, which may require the implementation of appropriate safeguards to protect weaker parties and prevent any possible abuse of process.
Despite this, a briefing published in 2018 at the request of JURI, the Legal Affairs Committee of the European Parliament, found that the Directive “remains very far from reaching its stated goals of encouraging the use of mediation”.
The Consumer ADR Directive and Online Disputes Resolution Regulation
While mediation is perhaps the best established and most formalised method of ADR, the European Commission has been keen to strengthen other methods of out-of-court settlement. In its view, well-functioning ADR mechanisms are necessary to strengthen consumer confidence in the internal European market and as such Member States should ensure consumers are aware of the ADR opportunities available to them. Therefore, in April 2013 the European Council adopted proposals for a consumer ADR directive (“ADR Directive”) and a regulation for the online resolution of consumer disputes (“ODR Regulation”). The ODR Regulation came into force without the need for further implementation. Member States were obliged to enact measures to bring the ADR Directive into force by 9 July 2015.
The Commission introduced the ADR Directive in an effort to address the concern that ADR was not sufficiently developed across the EU to provide consumers with the low-cost, fast and simple out-of-court dispute resolution. The ADR Directive therefore aims to bolster the out-of-court resolution of contractual disputes arising from the sale of goods or supply of services by a trader to a consumer within the EU. The Directive obliges Member States to ensure that there is appropriate access to good quality ADR facilities, which includes designating appropriate ADR bodies and monitoring their performance and by imposing requirements on traders to ensure their customers are aware of these facilities.
To facilitate the use of consumer ADR, the ODR Regulation establishes an online dispute resolution platform (“Platform”) which provides a single point of entry for consumers and traders who are looking to resolve a dispute arising out of a cross-border e-commerce transaction. The Platform became operational in January 2016 and is an interactive website accessible by all consumers and traders operating in the EU. EU businesses that sell goods or services online to consumers, as well as online marketplaces, are required to provide an “easily accessible” link to the Platform on their websites. The Platform gives access to an electronic complaint form which can be completed online in any one of the 23 official languages of the EU. The Platform will then transmit the dispute to an appropriate local ADR body included in the national lists provided by Member States. The whole procedure may be conducted online, including correspondence between the parties and the ADR body.
The application of the ADR Directive and the ODR regulation and their impact were reviewed by the Commission in a report submitted to the European Parliament in September 2019. The report found that the ADR Directive has led to increased and improved ADR procedures amongst consumer dispute resolution bodies, including increased transparency of their operations. However, overall, updates for the new ADR procedures has been patchy and the framework is still underused. Even now, only one in three retailers is willing to use ADR.
Conversely, the high number of visitors and complaints submitted to the ODR platform and high number of direct settlements suggest that the online solution has proved popular. However, there remains a low number of disputes that can be transmitted to an ADR entity in this way.
The Commission is committed to developing ADR across the EU and has pledged to further promote ADR and ODR in its campaigns on consumer law and improve the ODR platform, by providing targeted information on consumer rights and redress, better directing users to the most appropriate redress tools and better facilitating direct settlements.