When we imagine a contractual or commercial dispute, it is quite natural to think about a lawsuit before the judicial authorities: the great Italian legal culture, together with the journalistic narration of the cases, creates an almost automatic association between litigation and the judge.
However, fortunately, this does not always happen: the parties involved in a dispute often prefer to settle it out of court, without facing the expenses and the strict rules of the proceedings. Even the legislator, given the enormous judicial burden, has developed more and more instruments aimed at resolving legal issues between the parties, in certain cases utilizing such instruments as a first attempt in resolving the legal issues is obligatory.
Among these instruments there are: mediation, arbitration, assisted negotiation.
The main institute, especially with regard to commercial disputes, is without doubt, mediation, introduced by Legislative Decree no. 28 of March 4th 2020, which defines it as the professional activity carried out by an impartial third party and aimed at assisting two or more parties both in finding an amicable agreement for the solution of a dispute and in formulating a proposal that brings the parties together. This activity is carried out by an impartial and independent third person, known as a mediator, who does not have the power to issue a judgment or a decision, but who can formulate a conciliation proposal following the request of one or both parties.
Mediation proceedings may have many different origins and is therefore distinguished according to the function it assumes from time to time. Mandatory mediation, for example, occurs when the law provides that without an attempt at conciliation, the parties will not be able to claim their rights in court. It is important to point out that such an attempt is obligatory, the failure of the friendly resolution of the dispute (the list of matters in which the law provides for the attempt at conciliation as mandatory is contained in Article 5 of the Legislative Decree number 28/2010, for example, cases involving condominiums, insurance contracts and the rental of companies). In cases in which the law does not provide for it as compulsory it shall be therefore voluntary, and the procedure in this case is identical to that provided for mandatory mediation, but which is undertaken by the voluntary decision of the parties. Another type of mediation occurs when the judge, in the course of the trial, invites the parties to attempt conciliation (delegated mediation), and this invitation has the same preclusive effects of the mandatory mediation.
A final mediation scenario also exists where parties to a contract upon signing the agreement agree to resolve the disputes that arise from the agreement by finding a shared solution (consensual mediation).
Mediation is a widely used institute in the commercial field, mainly because of its speed and low costs. Immediately after its introduction, it rapidly spread within this field, as well as in banking and corporate. Unlike the other methods mentioned above, in mediation the third party cannot decide but can only help the parties to find a shared solution. On the contrary, in the case of arbitration the parties entrust the decision to a third party (different from the judge).
Another difference is that in mediation the parties can participate without a lawyer. This element also distinguishes mediation from assisted negotiation (introduced by Article 5 of Legislative Decree No. 28/2010), which is the procedure in which the parties, through their lawyers, resolve a dispute by negotiating a conciliation agreement, which has contractual value and in which no third party is involved.
Mediation is concluded with or without the agreement of the parties. In any case, in the final stage, the mediator must draw up a report on the conclusion of the procedure.
The above steps represent only a small amount of the information necessary to proceed with mediation. At D’Andrea & Partners Legal Counsel we have a team of experts who can help you with alternative dispute resolution. Please feel free to contact us by e-mail at info@dandreapartners.com to find out more about our services.
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