Jean-Louis Marsaud gives the CEA's view on the European Commission's proposal for a directive on mediation
On 19 April 2002, the European Commission (DG Justice and Home Affairs) launched a debate on the development of 'alternative dispute resolution' procedures (ADR) through the medium of a green paper. On the basis of more than 150 replies, the Commission presented, in spring 2004, a preliminary proposal for a directive on mediation with the aim of finalising a draft text by the end of 2004.
The Comite Europeen des Assurances (CEA) was involved in this issue from the outset and submitted comments on it via two official position papers(1)
- one in relation to the principles and the other in relation to the experience and contribution provided by legal expenses insurance in this field.
Is community action necessary?
The great majority of EU insurance markets noted in the first place the low percentage of cross-border disputes and noted also that with the EEJ-NET and the FIN-NET, the Commission had already created effective mechanisms which have the advantage of taking into account the functioning of existing national ADR systems. In addition, in most member states insurers have already set up mediation systems or specific ombudsmen.
The CEA does not therefore consider it to be absolutely essential to take community action in the field of ADR. However, recognising that legal proceedings may prove to be very costly and time consuming, CEA favours more intensive promotion of the advantages of ADR within a community framework.
A framework that meets precise conditions
CEA considers it is essential that the community framework to promote ADR and mediation systems:
- clearly distinguishes between the different methods of ADR (mediation, arbitration, conciliation);
- avoids establishing too rigid and precise procedures which might be hard to adapt to the specific economic aspects of each sector and might call into question existing mediation systems in the field of insurance; and
- is not based on a compulsory system.
Any new European system must be set up on a voluntary basis, especially since the procedures for its application such as the supervision of the quality and training of mediators falls within the competence of each member state.
The new community framework should be a tool for promoting, encouraging and inviting parties to use ADR and more specifically mediation within the proposal for a directive of April 2004. We believe that this should be 'suggested' to the parties and the court should be able to 'invite' parties to use mediation, but not order them to do so. The parties must be free to accept or refuse this invitation.
On the other hand, it is necessary for the community framework to include certain minimum principles to guarantee a high quality of mediation and put in place effective mechanisms for supervising the quality of mediation services. It is in this respect that legal expenses insurance is an existing tool which is well placed to meet the principle of voluntary participation, quality and supervision.
Legal expenses - an essential means of facilitation
Legal expenses (LE) insurance has been in existence for a long time and has proved its worth (more than 80% of cases subject to LE insurance are resolved on an out-of court basis). It benefits from a network of specialists trained in mediation and fully meets the required ethical criteria within a framework regulated at European level.
LE insurance should be clearly positioned as one of the means of promoting ADR.
- It embraces the main areas covered in the green paper: consumer law, neighbourhood and co-proprietarial law and, increasingly, family law.
- It is based on voluntary contractual membership.
- It meets the main principles established in the Commission's two recommendations of 1998 and 2001 on out-of-court procedures, and the main constraints of an ADR system, which emerged from the conclusions of the consultation on the green paper and which were adopted in the proposal for a directive on mediation:
- validity of consent;
- effectiveness of agreements;
- training, accreditation and responsibility of those involved; and
- transparency, contradiction, equity.
For these reasons, the CEA hopes that the proposal for a directive will clarify that LE insurance comes within the framework of the two definitions of Article 2, and that it is clearly considered as an option in accordance with Article 3.1. This would be in accordance with the spirit of Article 1 which, laying down the aims of the text, mentions a necessary link with the existing situation in the field of mediation.
In addition, the promotion and establishment of non-exclusive mediation models, of which LE insurance is one element, would widen the scope of services available to European citizens for the out-of-court resolution of conflicts. And in such a social role, LE insurance can make a substantial contribution in terms of the costs of recourse to ADR and to mediation.
In fact, neither the green paper nor the proposal for a directive addresses this issue of costs. However, any mediation system will have a cost. And the solutions appear very limited. Either the citizen who uses ADR is totally or partially covered by legal aid mechanisms, if they exist, or costs are borne by the parties to the dispute.
LE insurance offers a third solution. It enables insureds using ADR to have their costs covered by means of an annual payment. The advantage is to provide a solution for those whose income is too high to benefit from legal aid and for those who, despite that, do not have the means to pay all the costs.
CEA and European insurers are very interested in these issues and are prepared to make every contribution to the development of ADR and in particular mediation, which they have long used in disputes with their insureds but also within the framework of their LE cover.
However, a European system should remain very open with regard to the different ADR systems to be promoted, be based on flexibility, voluntary participation and the inclusion of existing structures, and finally should comply with the main legal principles of confidentiality, the binding nature of decisions (which should apply in the case of mediation), and rules on limitation periods or withdrawal.
(1) Documents PJ 3001/MU 3008 (01/03) of 13/01/03 and MU 4151 (04/04) of 26/04/04 - CEA website: www.cea.ssur.org - Position paper - search by subject.
Background to the green paper
Following on from the Vienna action plan and the conclusions of the Tampere European Council, the Council of Justice and Home Affairs Ministers called on the European Commission to present a green paper on ADR in civil and commercial law other than arbitration, taking stock of the current situation and launching broad consultations on the measures to be taken. Priority was to be given to the possibility of laying down basic principles, either in general or in specific fields, which would offer the requisite guarantees that out-of-court dispute resolution will ensure the proper degree of security in the administration of justice.
In April 2002, the European Commission published this discussion paper, entitled Green Paper on alternative dispute resolution in civil and commercial law. The main purpose of the green paper was to come up with answers to the delicate question of the balance to be achieved between the need for flexibility and the need to guarantee quality of results, and the harmonious relationship with court procedures. The paper also highlighted the existing achievements and initiatives in this area both in the member states and in the Community.
The 21 questions put in the green paper concerned the decisive elements of the different forms of alternative dispute resolution, such as clauses providing for them, the problem of limitation periods, the need for confidentiality, the validity of consent, the effect of resulting agreements, training for third parties, their accreditation and the rules governing their liability.
In its green paper the Commission stated that the development of these forms of dispute settlement are not to be regarded as a means of remedying deficiencies in the operation of the courts but as an alternative, more consensus-based form of social peace-keeping which in many cases will be more appropriate than the courts or arbitration. "Alternative dispute resolution techniques such as mediation allow the parties to resume dialogue and come to a real solution to their dispute instead of getting locked into a logic of confrontation with a winner and a loser at the end," said the Commission.
The paper provides a significant amount of information and considers a wide range of questions, with the aim of familiarising the largest possible number of people with these new forms of dispute settlement (litigants, the judiciary and the legal professions). And, as part of the follow-up to the green paper on ADR, a European code of conduct on mediation has been developed.