Commercial mediation in The Netherlands

Although not traditionally used, commercial mediation is now becoming more popular. There is no obligation on the parties to mediate and, even though mediation clauses are binding, they are not easily enforced. The courts can propose a “mediation alongside litigation” approach, although the process remains voluntary. There are no adverse costs consequences for failing to mediate. Confidentiality is not guaranteed, and the court may, in some instances, summon a mediator as a witness in litigation. Settlement agreements are legally binding although not directly enforceable until established as such by the courts. The Dutch Ministry of Justice intends to propose legislation to strengthen the role of mediation.

What is the status of mediation in this jurisdiction?

Mediation is used with increased frequency in the Netherlands. According to statistics provided by the Mediators Federation Netherlands (“MfN”) in 2011, the MfN, which has been an advocate of mediation in the Netherlands since 1993, conducts over 50,000 mediations per year. According to the MfN, mediation has grown over the years to be a popular instrument to resolve civil and employment disputes. The MfN is currently conducting research regards the status and future of mediation, the findings of which will be published in early 2020.

On 21 November 2012, the Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain aspects of mediation in civil and commercial matters (the “Directive”) was implemented into the Dutch Code of Civil Procedure (Wetboek van Burgerlijke Rechtsvordering) and the Dutch Civil Code (Burgerlijk Wetboek). The implementation of the Directive introduced several new provisions advocating the use of mediation; for instance, a limitation period of a claim can now be interrupted by means of starting a mediation procedure.

After conducting a consultation, the Dutch Ministry of Justice is expected to submit a legislative proposal in respect of mediation to the Dutch Parliament. The Ministry plans to stimulate mediation during and outside of legal proceedings by legalising a set of disciplinary rules for mediators. The disciplinary rules are expected to increase the powers of mediators, clarify the scope and strengthen the implications of confidentiality, facilitate the direct enforceability of mediation settlement agreements and incorporate the mediation procedure into the Dutch Code of Civil Procedure and the Dutch Civil Code.

Traditionally, mediation has been reserved for disputes relating to employment and family law. Commercial mediation is slowly becoming more popular, but is currently not (yet) a widespread method to resolve commercial disputes. Occasionally, the Enterprise Chamber (Ondernemingskamer) has suggested to parties that they consider mediation, although it has not issued an obligation to refer disputes to mediation so far. Where parties do agree to enter into mediation, the Enterprise Chamber will stay the proceedings and appoint a mediator.

The District Court of Amsterdam provides for an alternative method of dispute resolution called “Proceedings Aiming Towards a Solution” (“Procedure Gericht op Oplossing”). These proceedings do not qualify as mediation as such, but are designed to be less time consuming than regular court proceedings. The judge will take an active role in finding an agreement among parties but if the parties are not able to reach an agreement, they can request the acting judge to render a verdict. In addition, sometimes Dutch parties decide to settle a dispute by means of another non-traditional form of mediation called “ex parte mediation”, in which parties do not negotiate with each other directly but only with the appointed mediator; recent examples of ex parte mediation include settlements of Ahold and Ageas, with expected mult-billion of euro settlement amounts.

How is a mediation conducted?

A mediator may be appointed by the parties or by an institution which facilitates mediation proceedings (such as the MfN or the Netherlands Arbitration Institute (“NAI”)) prior to or pending legal proceedings before an arbitral tribunal or court. When court proceedings are pending, a Dutch court can refer the dispute to mediation in accordance with the “mediation alongside litigation” procedure (see below).

In general, the mediation process can be divided in four phases:

(i) the preparation phase, during which the parties will agree on the allocation of the costs of the mediation process and determine the conduct of the mediation process;

(ii) the plenary phase, during which parties will have the opportunity to share their views and opinions on the matter and the mediator can determine the wishes and interests of the parties;

(iii) the negotiation phase, when possible solutions can be discussed and the actual negotiations take place; and

(iv) the settlement phase, when the results are set out in the settlement agreement.

Is there any obligation on litigants to mediate?

In general, there is no obligation on parties to a dispute to mediate in the Netherlands. The mediation is therefore considered voluntary. In this regard, “voluntary” means that the parties can agree that a mediator will guide them in the mediation process but they may, in principle, end the mediation at any time if either of them considers that the mediation will not contribute to resolving the dispute.

Mediation clauses entered into by the parties constitute legally binding contracts. However, they are not easily enforced before a Dutch court. In fact, the legal implications of a mediation clause are very limited. It has been established by decisions of the Dutch Supreme Court that parties who have agreed to resolve a dispute by way of mediation will always be free subsequently to decline to mediate. Consequently, a mediation clause does not impact on the competence of the courts to hear the dispute.

Does the court have powers to support a mediation?

If a Dutch court finds that “mediation alongside litigation” (“mediation naast rechtspraak”) has the potential to resolve the dispute, this option will be mentioned during court proceedings. Before taking the decision to refer the case to mediation, the judge will thoroughly examine the file and weigh up the arguments for and against mediation. If the judge decides to refer, he will adjourn the court proceedings for a certain period to facilitate the mediation process. However, even in the context of “mediation alongside litigation”, the mediation process remains voluntary.

Are mediations confidential?

Confidentiality of mediation is not guaranteed as a matter of law. The mediation rules of the NAI and the model mediation agreement of the MfN both contain confidentiality clauses. In addition, the MfN provides for a separate model agreement regarding the confidentiality of the mediation process, which will be sent to the parties by the mediator and should be signed by both parties.

It should be noted, however, that the Dutch Supreme Court has ruled that the court may, in general, summon a mediator as a witness in the context of litigation. In principle, the mediator does not have a right of privilege in witness hearings. However, in the event that the parties explicitly agreed that the mediator cannot act as a witness in litigation, a court will, in principle, not summon the mediator as a witness.

Does failure to mediate attract adverse cost consequences?

A failure to mediate will, in principle, not attract adverse cost consequences. In the Netherlands, the costs of litigation are allocated in accordance with a fixed tariff system (liquidatie-tarief). According to the fixed tariff system, points are awarded for every procedural action the successful party had to take (e.g. issuing writ of summons, filing of written statements, oral hearings, etc.). These points are accumulated and multiplied by a fixed fee, the amount of which depends on the sum at stake in the proceedings. It should be noted that the procedural costs awarded will usually not cover the actual procedural costs of a party. Mediation is not incorporated in the fixed tariff system, meaning parties usually bear their own costs. It is possible to make other arrangements regarding these costs during the preparation phase.

How are settlement agreements enforced?

Any settlement agreement resulting from a mediation process is considered to be a legally binding agreement. However, the settlement agreement is not (directly) enforceable until established as such in court.

It is currently uncertain whether the Netherlands will become a signatory to the Singapore Mediation Convention, which facilitates the direct enforceability of (cross-border) settlement agreements that have been established through mediation.

Is there a system of accreditation and/or regulatory body for mediators?

Currently, there are two well-known and continuously updated lists of certified mediators, the ADR register and the MfN register. Both lists are maintained by independent organisations and require applicants to take assessments and pass certain criteria. Whilst the MfN register is recognised by the Dutch Legal Aid Board (Raad voor Rechtsbijstand), the ADR register is accredited as a Qualifying Assessment Program for the International Mediation Institute. Every mediator who is a registered MfN or ADR mediator is bound by the code of conduct laid down by the respective organisation.