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EuropeWhy do legal professionals in Europe still avoid out-of-court procedures?

Why do legal professionals in Europe still avoid out-of-court procedures?

Veneta Manolova-Draganova
Veneta Manolova-Draganovahttps://venetamanolova.com/
Veneta Manolova–Draganova is practising as a Lawyer (Sliven Bar Association, Bulgaria) and registered Mediator (registered in The Ministry of Justice of the Republic of Bulgaria) in the field of commercial law and business mediation, with expertise in the agricultural business sector and AML Policies of the European Union. Contacts: v.manolova@venetamanolova.com

Over the last years, we have witnessed events that we only know from history books. Our European culture has been confronted with what is happening. The ugly truth is that primary reactions are not alien to us. We are born with them; just over the years, we have learned to suppress primitive emotions and behave properly because we live in society. We’ve learned to use common sense focused on negotiation, compromise and agreements. In political language – this is diplomacy. In legal language – these are out-of-court procedures or mediation.

As we all know: “Even the worst agreement is better than the best court decision.” – a well-known statement among lawyers. Then why do legal professionals still avoid mediation? Is the problem in legislation, or is it in our agreement culture?

According to Article 1 of Directive 2008/52 of the European Parliament and of the Council of 21 May 2008 on Certain Aspects of Mediation in Civil and Commercial Matters, 2008 OJ (L 136), its main objective is “to facilitate access to alternative dispute resolution and to promote the amicable settlement of disputes by encouraging the use of mediation and ensuring a balanced relationship between mediation and judicial proceedings.”

Since 2008, many studies and analyses have been carried out, and all of them show that the practical application of the Directive is far from the objectives set. Some of the studies that should be noted are:

Quantifying the Cost of Not Using Mediation – a Data Analysis” (The 2011 Study and “The 2014 Rebooting Study”, both commissioned by the European Parliament. These studies estimated that if all cases in the EU went to mediation first, and the procedure succeeded in 50% of cases, the average number of days saved would be 240 days; if mediation succeeded in 70% of the cases, time savings would increase up to 354 days. As to cost savings: money savings per single dispute were multiplied by the number of disputes in the EU annually, resulting in savings of around thirty to forty billion Euros at a 50% success rate. Despite these impressive data, the European Parliament passed its Resolution of 12 September 2017 on the implementation of the EU Mediation Directive, saying that the objectives stated in Article 1 have not been achieved, as mediation is used in less than 1 % of the cases in court on average in the majority of Member States. Later in 2018, a Briefing requested by the JURI committee of the European Parliament was published, according to which we are witnessing the “EU Mediation Paradox”: “If increasing the use of mediation brings significant time and cost savings to the parties (as well as the judiciary and taxpayers), why were the Member States experiencing such low rates of mediation?”

The answer to this question is quite complex. The reasons for this paradox are not so much legal but psychological and cultural. My observations, from my experience so far, overlap with some of the conclusions of the cited studies and we can summarize them as follows:

1- Introduction of mandatory mediation is crucial for the successful implementation of mediation

It turns out that when Member states have the freedom to choose whether to apply mediation, they simply do not. And I believe it is an understandable psychological reaction. Italy is an example of the fact that after the introduction of mandatory mediation for a certain range of cases, the demand for voluntary mediation has sharply increased (150.000 – 200.000 mediation cases per year). In Bulgaria, we have had The Mediation Act since 2004, long before the adoption of the EU Mediation Directive. Since then, a small group of experienced mediators have been trying to break stereotypes and implement mediation at the national level. In 2018, there was a breakthrough with the Round table on Mandatory Mediation, organized by the Supreme Bar Council and the Center for Agreements and Mediation at the Sofia District and Sofia City Courts, which had a serious public response. But only in 2021, The Panel of Judges of the Supreme Judicial Council adopted a Concept for the Introduction of Mandatory Judicial Mediation in civil and commercial cases in Bulgaria.

2- Financial incentives for participation in the procedure / Relative sanctions:

Introduction of anything new is much easier to be accepted if tied to financial incentives or related sanctions. For example, in Bulgaria, the parties receive a refund of 50% of the state fee paid to the court if they successfully resolve the dispute through mediation. Romanian law provides a full refund of the court fee if the parties resolve a pending dispute through mediation. Similar provisions can be found in Hungarian law and also in Italy, where all acts and agreements resulting from mediation are exempt from state fees. As for sanctions, they seem to be the most sensitive topic at this stage because we risk affecting human rights and access to justice.

3- Increasing the criteria for licensing mediators

At the moment, I consider this a deficiency, as the criteria are too general, and this is why many judges in countries where mediation is not mandatory avoid the procedure because they doubt the effectiveness of the procedure and/or the qualifications of the mediators. Therefore, I believe that regulations regarding the requirements for mediators should be specified, and access to this profession should be tightened. Here we should mention the good example of Romania and their Mediation Council – a national body fully dedicated to promoting mediation, developing training standards, training of teachers who provide training, issuing documents proving professional qualifications of mediators, adoption of a code of ethics, as well as formulation of proposals for legislative acts.

4- Cooperation with Lawyers

Unfortunately, in many European countries, lawyers still avoid mediation, as they believe that out-of-court dispute resolution will deprive their income from litigation. In order to overcome this problem, it is extremely important that National Bar Associations work towards increasing the competence of lawyers. Lawyers need to be reassured that mediation will not throw them out of the market but will give them new opportunities as the participation of lawyers in the mediation procedure is crucial. Recall that even in Italy, legal practitioners opposed the changes, appealed legislation in court and even went on strikes.

5- Clarification of the obligations of Enforcement Agents

In 2021, The CEPEJ (European Commission for the Efficiency of Justice), at its 36th plenary meeting, adopted a Mediation Awareness and Training Programme for Enforcement Agents, which aims to ensure the efficiency of the Judicial Referral to mediation. I fully share the opinion stated in the Guidelines of the Council of Europe’s recommendation on enforcement, according to which the enforcement agent’s role should be clearly defined, by national law, in order to avoid confusion in competencies and procedures. Enforcement agents are expected to take on the role of “post judicial mediator” during the enforcement stage. But the imposition of this role must be communicated in detail and in advance. Otherwise, we risk the opposite effect of which enforcement agents might withdraw from mediation, just like other legal professionals mentioned above.

6- Improving the legal culture of society

The introduction of European regulations and legislation, in general, is moving from top to bottom, which is normal. But this often leads to a problem with their implementation in practice. In my experience, I always take the opposite approach – individualize the problem in its infancy and formulate a solution. For example, I think we cannot talk about mandatory family mediation if we have not made progress in solving the problem of domestic violence. Issues need to be prioritized, especially in countries with a lower standard of living, as well as in societies whose culture is initially more militant.

In conclusion, it turns out that, even if we have a great regulatory framework that aims to make our lives easier, regulations will be inapplicable in practice until we apply an individual bottom-up approach – starting with individuals, through legal professionals up to national and European institutions.

So, do we fear mediation? Not anymore.
But do we have an agreement culture? Not yet.

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