Wednesday, August 5, 2009

Mediation Rapidly Developing in Italy as a Form of Dispute Resolution

As in the U.S., mediation as a form of dispute resolution is rapidly developing in Italy.

Its development has been aided not only by legislation on corporate disputes, which gave official status to mediation institutions, but also by a greater awareness of mediation among Italian judges that has sparked various initiatives in court-referred mediation.

A new law, Law 69/2009, which became effective on July 4, 2009, amends the Italian Code of Civil Procedure Law regarding the mediation process.

The new law provides that the mediation of disputes must be carried out by professional and independent instituations that are dedicated to the performance of mediation services. These institutions will be listed in a registry maintained by the Ministry of Justice. The registry currently lists over 40 institutions that may conduct the special corporate mediation process. The law provides that these institutions shall include, as of right, mediation agencies set up by Italian Chambers of Commerce. It also confirms the existing right of Bar Councils (the equivalent of our Bar Associations) and other professional bodies to set up their own mediation institutions, which shall also be entitled to be listed in the registry.

Mediators may have recourse to expert witnesses in special matters and mediation institutions may conduct mediation online. In fact, the mediation service of the Milan Chamber of Arbitration has already established an online mediation service.

Interestingly, under the new law, a mediator is empowered to issue a recommended solution to a dispute if no agreement can be reached and if all parties so request. The parties must state whether they are prepared to accept the recommendation; if not, they must state their reasons. If the judgment issued in a subsequent court proceeding is the same as the mediator's recommendation, the allocation of costs may be affected. The court can refuse to award costs if the winning party previously rejected the mediator's recommendation, and it may even order the winning party to pay the losing party's costs and court fees. Remember that in the U.S., generally, unless there is a contract that stipulates to the contrary, each party pays its own legal fees and costs regardless of whether the party ultimately wins the lawsuit.

An agreement reached by parties in mediation will be binding on them. And, when certified by a court, it will also be enforceable.

The new law establishes a mediation process and procedure that is somewhat different than the manner in which mediation is conducted in the U.S. It will be interesting to see if the U.S. follows suit and begins to enact similar mediation rules for a process that is, so far, not uniformly regulated.