21st March, 2011 - The Introduction of the Mandatory Pre-trial Mediation in Italy
Starting today, March 21st, a new law comes into force providing for mandatory pre-trial mediation in Italy in a number of civil and commercial disputes. The law is D.Lgs. no.28 of 4.03.2010, as further implemented by D.M. no.180 of 18.10.2010.
Not all areas of law will be affected, but only the following: banking, insurance and finance contracts, real rights and division of co-ownership, leases (residential/commercial/going concern), family agreements, medical malpractice and libel. In a year from now, also condo disputes and road traffic accidents (personal injuries and other damages) will be included.
A party which intends to bring a legal action in the above areas will therefore now first need to select, with the assistance of a legal counsel if desired, the appropriate registered mediation body. An application will have to be filed and the body will inform the adverse party and appoint a mediator.
The mediation procedure, which may take up to 4 months to complete, will be paid by the parties and the cost will vary depending on the value of the dispute, the range being Euro 100,00 to Euro 9.000,00 for each party. In specific cases, the costs can be increased by 1/5. The parties may benefit from a tax break in the form of a tax deduction of Euro 500,00 if the mediation was successful and up to a maximum of Euro 250,00 if it was unsuccessful.
If a settlement is reached, it may be necessary to draft an agreement between the parties. In the event of complex disputes, an agreement will be reached on the main terms and negotiations on the details will continue at the parties’ law firms. If the agreement involves the transfer of real property, it may be necessary to stipulate the agreement before a notary in the form of a public deed.
If the mediation procedure does not lead to settlement, the plaintiff will be allowed to start legal proceedings. At that point the court one-off fee will have to be paid and ordinary proceedings will commence.
It is important to note that the mediation procedure does not affect a party’s right to request and obtain urgent measures, an injunction to pay or an eviction order if the relevant requirements are met.
Lawyers have in the last months asked that the law be amended and that its coming into force be deferred in order to allow the said amendments. The main objections to the law are: that it was designed to ease courts’ backed-up caseloads to the benefit of privately-owned mediation bodies and at the parties’ sole cost, that mediators do not possess the required legal preparation since it is sufficient that they either hold any 3-year college degree or that they are members of any professional association (including accountants and land surveyors), that mediation can be started anywhere in Italy regardless of the territorial competence rules, that parties are allowed to go into mediation without the assistance of a legal counsel.
Furthermore, a lawyer will be able to assess what information should be disclosed and which claims should be raised in the application to the mediation body and will be able to take into account the statute of limitations concerning time bars and forfeiture of rights. Finally, a lawyer will be called to enforce the minutes signed before the mediator if the other party does not comply. For the above reasons, Italian lawyers went on strike, vowing not to attend hearings (which will be postponed) for a week to protest against this controversial law.
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