A History Of Mediation In Italy: Both Ancient (Including Bankruptcy) And Recent

By: Donald L Swanson

Mediation has a long and fascinating history in Italy.

What follows is an attempt at a summary of that history (both ancient and recent), taken from a recent report by Giovanni Matteucci titled, “Mandatory mediation, The Italian Experience.”

Mediation in Italian Legal Tradition and Culture

Mediation is part of the Italian legal tradition and culture.

The Italian State was founded in 1861, and, for example:

• Its first Civil Procedure Code (1865) focused on “Conciliation”;
• Another 1865 law directed police officers to reconcile conflicts among private citizens; and
• An 1880 law directed the justices (who issued 70% of all sentences) to take action toward reaching “a conciliation.”

But the totalitarian regime during the Fascist period (1922 – 1943) disliked conflict resolutions reached by private citizens and wanted settlements by judges, through sentences.

Mediation in Ancient Bankruptcy Rules

Italian bankruptcy rules have their roots in the “jus mercatorum,” developed in Central and Northern Italy around the thirteenth century. 

Such laws include the “affida”: i.e. the trust given to an insolvent debtor and fugitive, allowing him to return to his city in order to negotiate with his creditors.  This practice became very popular in the business-oriented Republic of Venice from the fifteenth century onwards.

However, the acceptance and use of this debtor-creditor negotiation process vacillates between in-and-out of favor as time moves along:

• It finds opposition from the Napoleonic Code;
• It resumes under the Italian legislation of the late nineteenth century;
• It is supported in the early twentieth century; and
• It is then rejected by the bankruptcy law passed under fascism in 1942.

Mediation Under Fascism

Beginning in the 1930s, mediation in Italy gradually loses its importance and is no longer taught in universities, and that lasts for over seventy years. 

Mediation has been (and still is) part of the Italian legal tradition, but it was forgotten for a while.

A Comeback

Then, mediation and other alternative dispute resolution (“ADR) processes begin a comeback—but at a slow pace.  For example:

• A 1993 law provides that each Italian Chamber of Commerce must set up a conciliation (and arbitration) chamber; and
• A 2005 law authorizes voluntary mediation in corporate, financial and banking controversies—but lawyers do not utilize mediation because it is not compulsory.

Compulsory Mediation

Compulsory mediation in Italy begins in 2010.  But it is revoked in October 2012, then reintroduced in September 2013.  This law requires that mediation occur before a lawsuit can be filed—and it applies to 8% of the 5,826,440 cases that were pending in Italy’s overall judicial system at that time. 

This law faced furious opposition from lawyers (a matter of culture and revenues) and a benign neglect by judges (a matter of culture).

Here are statistics showing the law’s effectiveness:

• upon revocation of the compulsory mediation law, lawsuit filings increased by 9%; and
• when mandatory mediation is reintroduced, lawsuit filings decrease by 15%.

A Comparison to Other European Countries

When compared to other European countries, Italy has:

• a lower than average proportion of total public spending allocated to the entire justice system;
• a high number of litigation cases;
• longer-lasting litigation cases and increasing court fees;
• a huge and increasing number of lawyers (per 100,000 inhabitants); and
• a “shrinking” litigation market—i.e., the number of new civil case filings is decreasing, as are lawyer revenues (most Italian lawyers read the acronym ADR not as Alternative Dispute Resolution but as “Alarming Drop in Revenues”).

Changes Driven by Heavy Caseloads

Mediation in Italy began in 2003 for corporate, financial and banking conflicts. It was voluntary mediation, though—and was totally ignored.

To cope with heavy case loads, however, compulsory mediation became law in 2010: mediation is the procedure, conciliation (the agreement) is the intended result.

The compulsory mediation rules provide that a mediation:

• can only be used for disputes over alienable rights (“diritti disponibili”);
• must be concluded within four months time; and
• provides tax relief to the parties—which relief is doubled when agreement is reached.

Under such rules, mediator training is required, and mediators operate within organizations (“Organismi di mediazione,” mediation bodies) under the control of the Ministry of Justice.  In a mediation session, the mediator manages the process. 

Under such rules, a mediator can make a written proposal, which the parties are free to accept or decline.  But if the mediator’s proposal is refused, and the refusing party gets the same or worse outcome at a subsequent trial, that party must pay all judicial costs. 

A judge can require mediation of certain disputes, where the law does not compel mediation.  But the judiciary has shown a “benign neglect” for doing so.

Disappointing Developments

A “mediation explosion” was expected when an economic crisis arose in 2008.  So, many professionals, mainly lawyers, rushed to attend courses on mediation.

As a consequence, in 2011 there were about 1,000 “Organismi di mediazione” (mediation bodies) and – while no one knows the exact number – approximately 40,000 mediators (mainly lawyers). There were more mediators than mediations.

On March 21, 2011, mandatory mediation began. The initial results included;

• only 26% – 30% of proceedings saw all parties present (that’s understandable, because of the lawyers’ hostility and novelty of the procedure); but
• when all parties were present, the success rate was 51% – 59%; and
• overall, three to four months were required to reach a deal.

Over time, the number of mediation proceedings increased, as did the percentage where all parties were present. But the success rates started to decline, continuously, constantly, and stubbornly, until the end of 2012. Here’s why:

• The mediator’s fee doubles when an agreement is reached—so, in some (if not many) cases, the parties left the mediation just before the deal was to be signed; and
• At the beginning of 2011, mediators were professionals with expertise and training—but later on, many people jumped on the bandwagon without adequate training or experience, and a consequent deterioration in mediation quality resulted.

Lawyers’ Strike, Unconstitutionality, Etc.

In 2010 mandatory mediation became a pre-condition to accessing courts.  As noted above, this faced a furious opposition by most lawyers.

Even though most mediators were lawyers, Italy’s national lawyers union (Organismo Unitario dell’Avvocatura Italiana) called for a national strike in opposition to the mandatory mediation law.

On December 12th , 2012, the Constitutional Court declared the compulsory mediation law unconstitutional—i.e., the Government went beyond its powers in creating the law.

As a result, the number of mediation proceedings dropped, even as there were almost 1,000 mediation bodies, almost 40,000 mediators, and still an enormous number of legal disputes.

All this is puzzling.  But here’s an explanation.  In Italy:

• there has never been a liberal or an industrial revolution, but only a bourgeois revolution managed by Benito Mussolini;
• almost everything is expected to come from the public sector—from the State (Italian public debt is one of the highest in Europe);
• So, there can be no mandatory mediation; and
• Nevertheless, voluntary mediation survives, with a much higher success rate than that of compulsory mediation.

Mandatory Mediation Reloaded

In 2013, under pressure from the European Union, Italy reintroduces mediation as a mandatory first step before going to court.

But opposition continues:

• “Even though there is a significant backlog of cases in Italy, lawyers are obviously not taking this new law lying down”; and
• “the Government passed the law notwithstanding such strong opposition from the Bar.”

The behavior of most lawyers has been (and still is) almost a form of boycott:

• when invited to take part in a mediation, they refuse to do so;
• oftentimes, lawyers attend the first informative meeting (without the party they represent), only to declare, “We are not interested in proceeding”; and
• the same behavior is adopted by many banks and insurance companies.

By the end of 2015, however, mediation proceedings are on the rise.

Additionally, a new law has conferred upon all lawyers the qualification of a mediator and entrusted their representative bodies with decisions about training. The result is a 15 hour training course (5 hours on Italian legislation, and 10 hours on conflict management techniques and mediation skills).

The Judiciary

When compulsory mediation came into force in 2011, judges did not take a stand against it, but in practice most did not use the opportunities provided by the law.

Some years ago, however, a small portion of the Italian judiciary began to look carefully at mediation and its possible use. One judge began using mediation and achieved a reduction of at least 10% of the disputes entrusted to him.  He did this by analyzing all incoming cases and (when he believed the parties could reach a settlement) inviting the parties to undergo a mediation proceeding. Such moral suasion was effective.

Additionally, many judges are now condemning the practice of failing to attend the first informative meeting, or attend it (without the party) and declaring they are not interested in proceeding with the mediation.

Summing Up

The Italian experience shows that mediation works but is underutilized.

Conclusion

Wow!  That’s amazing!  There are many things we can all learn from such history.

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