Italy: compulsory mediation procedure – Italian Constitutional Court rules invalid

On 24 October 2012, the Italian Constitutional Court declared invalid the provision of Legislative Decree n. 28 dated 4 March 2010 which had implemented the “Compulsory Mediation” procedure for the resolution of certain disputes (article 5.1 of the “Decree”).

Background

The Decree - which implemented in Italy the European Mediation Directive (2008/52/EC) published on 21 May 2008 as part of the European initiative to promote and regulate the development of mediation throughout the EU (“the establishment of basic principles in this area is an essential step towards enabling the appropriate development and operation of extrajudicial procedures for the settlement of disputes in civil and commercial matters so as to simplify and improve access to justice”) – was aimed at reducing the overload on the Italian legal system (which, according to a recent World Bank Report, ranks 157th for enforcing contracts) by the introduction of a two-fold Mediation procedure:

• a Non-Compulsory procedure which applies to any civil and commercial litigation (article 2.1, introduced on 20 March 2010);
• a Compulsory procedure which applies to any possible litigation in relation to insurance, banking and financial agreements, joint ownership, property rights, division of assets, hereditary and family law, leases in general, gratuitous loans, leases of going concerns, medical liability or defamation/libel (article 5.1, effective since 20 March 2011 and, only for motor/vehicles insurances and property disputes, since March 2012). More precisely:

(i) disputes subject to the Compulsory Mediation procedure can have access to judicial Courts only if the Mediation has failed;

(ii) should a party not attend the Compulsory Mediation hearing, it can be sanctioned by the Court (administrative sanction).

Also, in respect of both the Non-Compulsory and Compulsory Mediation procedures:

(i) the Court can take into account a party's unjustified absence from the mediation hearing;

(ii) should the Court’s judicial decision correspond to the Mediator’s proposal, the party who refused that proposal, although successful in the judicial claim, shall be ordered to pay the counterparties’ legal costs.

The Constitutional Court’s decision

The Constitutional Court’s reasoned judgment is awaiting publication, but it is nevertheless clear that the Court’s ruling that the Compulsory Mediation procedure is invalid is based on its finding that the Italian Government lacked the legislative power to introduce article 5.1 of the Decree, i.e. that it was going beyond the relevant provisions of the Delegation Law n. 69/2009 - which did not explicitly refer to the Compulsory Mediation procedure.

According to some of the entities that have challenged the Compulsory Mediation provision and procedure, the compulsory nature of the mediation would have resulted in an invalid and unjust limitation to the parties’ rights and freedom to access the courts for the resolution of any kind of litigation (including those covered by the Compulsory Mediation procedure).
A clear and more accurate analysis of the Constitutional Court’s decision (which has not yet been published), and its effects, will only be possible once the full judgment becomes available.

Comment – focus on insurance litigation

The Compulsory Mediation provision and procedure, notwithstanding that it has been ruled invalid, will formally remain applicable until the Constitutional Court’s decision is published in the Official Gazette.

Once the decision has been published, parties to a dispute of any kind, including insurance disputes, will no longer be subject to the preliminary mediation procedure and will be able to issue proceedings before the Courts without first participating in a mediation process, regardless of the nature of their dispute.

Although the decision has removed the Compulsory Mediation procedure, parties to a dispute of any nature who want to avoid overloading the legal system are still entitled (voluntarily) to apply for a mediation procedure to apply. An unjustified failure to attend a mediation can be taken into account by the Court in any proceedings that follow to infer the non-attending party’s fault (although no administrative sanctions can be applied against the party).

Insurance litigation triggered after the publication in the Official Gazette of the Constitutional Court’s decision will not, therefore, be completely free from the burdens imposed by the Non-Compulsory Mediation rules, should the insured call for an attempt at mediation to be made.

In that case, the Insurer should evaluate the insured’s claim and requests before the mediation hearing, in order to decide whether to attend it or not (and, if not, also to provide the competent mediation body with a justified reason for the refusal to attend).

Conclusions

Some believe that as a result of this decision an important chance has been lost for the Italian legal system to be improved. Others argue that, thanks to the decision, unfettered access to the Courts has been guaranteed.

Following the announcement of the Constitutional Court’s decision, the Italian Ministry of Justice confirmed that, for the Government, mediation will continue to be part of the Italian legal system and therefore that discussions on possible incentives to be introduced will be ongoing.

Laura Opilio and Paola Ghezzi are partners and Valerio Biondi is an associate with CMS Adonnino Ascoli & Cavasola Scamoni. CMS Cameron McKenna and CMS Adonnino Ascoli & Cavasola Scamoni are members of CMS, the organisation of European law firms. Further information can be found at www.cmslegal.com.

The information in this publication is for general purposes and guidance only and does not purport to constitute legal or professional advice. Specific advice must always be sought in relation to any particular circumstances.