Mediation Manager Laura-Pauline Adcock-Jones presents “Mediation Monthly” in which articles of interest concerning mediation are presented by LPC Law’s mediators. This month, given that Europe continues to be greatly discussed, Laura discusses the European influence on ADR and ODR.

 

In his 1995 Access to Justice Report, Lord Woolf commented “Where there exists an appropriate ADR mechanism which is capable of resolving a dispute more economically and efficiently than court proceedings, then the parties should be encouraged not to commence proceedings in court until after they have made use of that mechanism”. Fast-forward to 2008, when Sir Anthony Clarke noted[1] the numerous references to the use of ADR within the CPR and, particularly, under the Court’s duty to case manage, the need to encourage and facilitate the use of ADR pursuant to CPR 1.4(e), commenting that directing parties to engage in a mediation process was “a direction that I would like to see as routine.”[2]

 

These comments were set against the backdrop of the 2008 Directive[3] which detailed that “Mediation can provide a cost-effective and quick extra-judicial resolution of disputes” and that “agreements…are more likely to be complied with voluntarily”.[4] As detailed in Articles 1 and 2 of the 2008 Directive, the purpose was to “facilitate access to ADR and promote the amicable settlement of disputes” and applied to both cross-border disputes and civil and commercial matters.

 

The impact of the 2008 Directive was to give opted-in Member States the right of recourse to mediation as an effective tool to resolve cross-border disputes and, more importantly, to enforce any agreements which resulted from mediation with the explicit consent of the parties.  Notwithstanding that the conduct of mediation was already established in 2004 by the Code of Conduct for Mediators, in the commercial and civil environment of the EU and the Single Market, such a cost-effective way to deal with disputes between parties in different Member States was well-received.

 

The 2008 Directive confirmed that such recourse was voluntary, although it was “without prejudice to national legislation making the use of mediation compulsory or subject to incentives or sanctions”. Some Member States, namely Italy and Romania, implemented mandatory mediation for civil and commercial matters which was met, particularly by the former, with considerable backlash from its legal profession resulting in the question of a potential breach of Article 6 being considered and rejected by the ECJ.[5]  Contrastingly, the approach adopted by the Court in the United Kingdom in the case of Halsey[6] was that no party could be forced to mediate although costs sanctions could arise for a failure to engage in ADR.

 

Subsequently, Member States had to facilitate the training of mediators, judges can invite parties to engage in mediation, mediation agreements could be enforceable at both parties’ request, confidentiality was preserved and time limits for bringing an action were suspended during the period of mediation (as explained on the Europa website).[7] Each Member State has a designated page on the website detailing the “legislative or procedural rules” that apply in that country.

 

Within the consumer-trader context, the impact of the EU upon consumer rights law has been gargantuan; however, with the introduction of the Directive and Regulations of 21 May 2013[8] (“the 2013 Directive and Regulations”), the necessity of ADR was elevated to the consumer level. As the 2013 Directive noted “ADR is not yet sufficiently and consistently developed across the Union[9]...[and] the uneven availability, quality and awareness of simple, efficient, fast and low-cost means of resolving disputes...constitutes a barrier within the internal market[10]”.

 

Consumers now have access to ADR when disputes arise with traders. The 2013 Directive enables consumers to submit complaints to ADR entities against traders who commit or are obliged to engage in ADR and prescribes that Member States are to ensure that ADR entity details are accurate and effective.

 

The Regulations established the “ODR Platform” which enables parties involved in an online transaction to be signposted to a national ADR provider via the Europa portal. Case management services are also provided once an online complaint has been filed by a consumer and the trader has ten days to respond.

 

The 2013 Directive and Regulations were implemented in the UK by the ADR for Consumer Disputes (Amendment) Regulations 2015 and Consumer Rights Act 2015 on 1 October 2015. Traders are now required to inform consumers of ADR entities and whether they intend to use ADR.  Websites and email contents had to be amended to take the requirements into account and any fees due to the ADR entity have to be borne by the trader.  They set timescales for effective resolution insofar as, once information about the dispute is received, the ADR entity has 90 days to communicate the outcome of the process to the parties. Clearly, this will result in a transition from an adversarial approach to consumer disputes to a facilitative approach with the aim of reducing the need for litigation.

 

Arguably, the impact of the EC directives has already filtered to costs within civil litigation.  Following the Jackson Reforms, the focus has been on conducting cases at a proportionate cost. A way to reduce costs is for parties to engage in ADR and this is noted in the Precedent H form which includes provision for ADR as a contingency to litigation. This inclusion is testament to the weight to be attached to exploring ADR as a viable resolution.

 

The Court of Appeal and the Small Claims Mediation Service were introduced to assist parties to avoid further litigation in a cost-effective and proportionate manner. Consequently, many litigators and advocacy service providers have made a conscious shift towards participating in the ADR and ODR market, either through the training of advocates or provision of facilities for such processes.

 

Accordingly, the Directives have affected the domestic conduct of litigation but also created a wider acceptance of ADR as a valued tool on the European scale.  The Directives have enabled a transition from conflict, leading inevitably to judicial intervention, towards compromise which is satisfactory to all involved and cost-effective. Evidently, the intention of the EU for the continued use of ADR and ODR is now embedded within the domestic legislative framework, notwithstanding the effect of Brexit and, whilst ADR and civil litigation may have grown symbiotically, it is envisaged that we will see a predominance of ADR to civil and commercial conflict as a whole.

 

If you are interested in LPC Law’s mediation services, please visit our web page or contact Laura via her email lpaj@lpc-law.co.uk.