Alternative dispute resolution - Community law

The European Union is very interested in alternative dispute resolution.

In April 2002 the European Commission published a discussion paper on alternative dispute resolution. In July 2004 the Commission organised the launch of a Code of Conduct for Mediators which was approved and adopted by a large number of Mediation experts and in October 2004 the Commission adopted and submitted to the European Parliament and the Council a draft Directive on Mediation.

The Green Paper, the Code of Conduct and the draft Directive all form part of the European Community's current work on establishing an area of freedom, security and justice, and particularly on improving access to justice. It is the Commission's view that encouraging the use of Mediation and other forms of ADR assists in the resolution of disputes and helps to avoid the worry, time and cost associated with court-based litigation and so assists citizens in a real way to secure their legal rights.

Following on from the Vienna Action Plan in 1998 and the Conclusions of the Tampere European Council in 1999, the Council of Justice and Home Affairs Ministers called on the Commission to present a Green Paper on alternative dispute resolution 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 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 its Green Paper the Commission recalled that the development of these forms of dispute settlement was 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 and conflict and dispute resolution which in many cases would be more appropriate than the resolution of disputes by a third party as through the courts or by arbitration.

Alternative dispute resolution techniques such as mediation allow the parties to resume dialogue and come to a real solution to their dispute through negotiation instead of getting locked into a logic of conflict and confrontation with a winner and a loser at the end. The importance of this is highly obvious, for instance, in family disputes, but it is potentially very valuable in many other types of dispute.

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It is used increasingly in complex commercial disputes where the parties, whilst wishing to resolve a conflict, also wish to retain as far as possible a continuing commercial relationship. It is becoming increasingly common in disputes arising out of medical accidents where Mediation can lead to the adoption of an innovative resolution of what are often very sensitive conflicts and provide creative remedies which may be beyond the powers of the courts.

The Green Paper also provided a host of information and considered a wide range of questions, thereby setting out to familiarise the largest possible number of people with these alternative, often new, forms of dispute settlement. It was directed in particular towards litigants, the judiciary and the legal profession.

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. It also highlighted the existing achievements and initiatives in this area both in the Member States and in the Community.

Lastly, by publishing this Green Paper, the Commission contributed to the continuing debates in the Member States and internationally on the best way of ensuring that the best possible environment was available for the development of alternative dispute resolution.

The 21 questions put in the Green Paper concerned the decisive elements of the different forms of alternative dispute resolution, such as clauses providing agreements to go to ADR , the problem of periods of prescription and limitation, the need for confidentiality, the validity of consent, the effect of resulting agreements particularly for enforcement, training for mediators and other third parties, their accreditation and the rules governing their liability.

The Code of Conduct

The Code of Conduct sets out a series of norms which can be applied to the practice of Mediation and which can be adhered to by Mediation organisations. It was elaborated in co-operation with a large number of organisations and individuals among whom are skilled practitioners of Mediation and others who are interested in seeing Mediation develop in the European Union. The Code was adopted by a meeting involving these experts in July 2004 and the Commission was very pleased to be involved in and to have the opportunity to assist this process.

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The proposal for a directive on Mediation

The Commission's proposal was adopted by the College of Commissioners in October 2004 and sent immediately to the European Parliament and the Council. The proposal was prepared following the Green Paper and involved extensive consultation with those involved in Mediation. The preparation process worked in parallel with that for the Code of Conduct and involved many of the same people.

The proposal for a Directive seeks to further the use of Mediation by making certain legal rules available within the legal systems of the Member States. These rules cover the areas of confidentiality of the mediation process and of mediators as witnesses, enforcement of agreements for settling disputes as a result of mediation, the suspension of the running of periods of prescription and limitation of actions while mediation is in progress thus removing one potential disincentive to the use of mediation. As these rules do not attempt to regulate or harmonise the laws of the Member States they encourage the training of mediators and the adoption of norms of conduct to secure the quality of mediation on a consistent basis throughout the Union.

The Green Paper also made reference to a number of existing achievements

Alternative dispute resolution has already been recommended, directly or indirectly, in a number of Community instruments and proposals. Many of these encourage the Member States are recommended to introduce, or at least to promote the introduction and operation of ADR.

A few examples are shown here:

• The Commission is interested in the financial aspects of ADR in general. Following a Commission proposal, on 27 January 2003 the Council adopted a Directive on legal aid, which provides for legal aid to be available for extra-judicial proceedings in certain circumstances, to help less well-off people enjoy access to alternative dispute resolution.
• As regards family relationships, the Commission has endeavoured to promote alternative dispute resolution in the Regulation (EC) 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and in matters of parental responsibility.
• Regarding consumer disputes in e-commerce, the role of alternative dispute resolution is stressed both in Directive 2000/31/EC on electronic commerce and in a Joint Declaration by the Council and the Commission made when the "Brussels I" Regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters was adopted.
• Directive 98/10/EC on the application of open network provision (ONP) to voice telephony and on universal service for telecommunications in a competitive environment provides that "easily accessible and in principle inexpensive procedures shall be available at a national level to resolve such disputes in a fair, transparent and timely manner" in the Member States.
• Directive 2002/21/EC (Framework Directive) on a common regulatory framework for electronic communications networks and services provides for non-judicial structures to settle disputes between professionals.

In some areas the Commission has gone further than simply encouraging the establishment of alternative dispute resolution. It has sought to promote the quality and effectiveness of alternative dispute resolution in consumer disputes.

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The quality of alternative dispute resolution

Care is taken in the C ommunity to distinguish two major categories of alternative dispute resolution available to help consumers settle their disputes with tradespeople:

• Processes in which third parties help the parties come to an agreement without actually formally expressing an opinion on the different possible solutions to the dispute.

The Commission has taken an initiative to ensure that non-judicial consumer dispute settlement procedures respect a certain number of principles. On 4 April 2001 it published a Recommendation concerning procedures in which the third party does not express an opinion on the solution but simply helps the parties find the solution that suits them best. The Recommendation sets out four principles: impartiality, transparency, effectiveness and fairness.

• Procedures in which the third party finds the solution and puts it to the parties:

The Commission has taken an initiative to ensure that these procedures respect a certain number of principles.

On 30 March 1998 it published a Recommendation concerning procedures in which the third party actually settles the dispute between the parties in a manner which may or may not be binding on them. This Recommendation also covers arbitration in consumer disputes. It contains seven basic principles: independence, transparency, the adversarial principle, effectiveness, legality, liberty and representation. Member States are asked to produce an inventory of bodies responsible for the out-of-court resolution of consumer disputes that they regard as compliant with the Commission Recommendation. The Commission has been notified of the national lists, which can be consulted on the website of the Directorate-General for Health and Consumer Protection (DG SANCO).

The effectiveness of alternative dispute resolution

The Commission is behind the establishment of two European networks of judicial bodies sharing the objective of facilitating consumer access to non-judicial procedures for the settlement of cross-border disputes in cases where the tradesperson is established in a Member State other than the one where the consumer resides. They pursue the same objective but work in different ways:

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• The European extra-judicial network "ECC- Net" is a structure to provide assistance and information for consumers, consisting of national contact points in each Member State and in Norway and Iceland. Each of the contact points acts as an information relay for the 400 bodies regarded by the Member States as meeting the demands of the two Commission Recommendations concerning the principles applicable to bodies responsible for the out-of-court settlement of consumer disputes.
• The out-of-court complaints network for financial services "FIN-NET" links thirty or so national bodies responsible for the out-of-court resolution of disputes falling under the first Commission Recommendation. FIN-NET offers consumers facing a problem relating to financial services (banking, insurance, investments) direct access to an out-of-court dispute resolution facility.
• SOLVIT is an on-line problem solving network in which EU Member States work together to solve without legal proceedings cross-border problems caused by the misapplication of Internal Market law by public authorities. Using SOLVIT is free of charge.

Encouragement for practical initiatives

In parallel with all this quasi-legislative activity, the European Union provides financial support for certain initiatives, in particular in the on-line settlement of consumer disputes. The Commission was financially involved in the launching of ECODIR (Electronic COnsumer DIspute Resolution Platform), an electronic dispute resolution platform.

Reference documents

• Summary (PDF file 124 KB) of responses to the Green Paper on alternative dispute resolution
• Green Paper on alternative dispute resolution in civil and commercial law
• Council Directive 2002/8/EC of 27 January 2003 to improve access to justice in cross-border disputes by establishing minimum common rules relating to legal aid and other financial aspects of civil proceedings
• Council Regulation (EC) 2201/203 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and in matters of parental responsibility repealing Regulation (EC) No 1347/2000
• Joint Declaration by the Council and the Commission on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters
• Commission Recommendation of 4 April 2001 on the principles for out-of-court bodies involved in the consensual resolution of consumer disputes
• Commission Recommendation of 30 March 1998 on the principles applicable to the bodies responsible for out-of-court settlement of consumer disputes
• European Code of Conduct for Mediators (PDF file 118 KB)
• Proposal for a Directive of the European Parliament and of the Council on certain aspects of mediation in civil and commercial matters (COM/2004/718 final)

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Last update: 04-11-2009