Belgium
In your jurisdiction, are there any formal ADR procedures available for resolving commercial disputes other than litigating (or arbitrating) to a final hearing?
Parties are always, even during litigation, able to informally negotiate to try to reach a settlement agreement. The main types of formal ADR in commercial matters in Belgium are meditation, “Collaborative” negotiations, conciliation, binding third party decisions, ombudsman decisions and the European Online Dispute Resolution (ODR) Platform.
The mediation procedure is described in articles 1723/1 to 1737 of the Belgian Judicial Code. A neutral third party (such as the mediator), tries to help the parties to find a suitable solution to a dispute. The mediator ensures that the parties can improve or resume communication with each other in order to find the best solution. The mediator does not settle the dispute as a judge would. The mediator suggests options, but the parties work out their own solutions. There are two types of mediation and in both cases, participation is entirely voluntary, and any party can end the mediation process at any time. Firstly there is extrajudicial mediation, initiated by one or more parties involved in a dispute (article 1730 to 1733 of the Belgian Judicial Code). Alternatively there is judicial mediation which is ordered by a judge upon request of the parties or with the agreement of the parties (article 1734 to 1737 of the Belgian Judicial Code).
“Collaborative” negotiations is a voluntary and confidential negotiation process, which uses effective negotiation and communication techniques to help the parties reach a mutually acceptable and sustainable agreement, in compliance with the law (article 1738 Belgian Judicial Code). Collaborative negotiations are carried out by the lawyers of each party involved with the parties they represent. These lawyers have a specific certification to conduct collaborative negotiations and commit themselves to withdraw if the negotiation fails. This means that other lawyers will have to take charge of the litigation/arbitration after unsuccessful collaborative negotiations.
Conciliation (described in articles 731 to 734 of the Belgian Judicial Code) is where a neutral third party (such as the conciliator), hears the parties before offering them a solution which they are not obliged to accept/apply. Conciliation is always a voluntary procedure. The conciliator organizes freely the conciliation attempt and is guided by the principles of fairness, impartiality and justice. There are two types of conciliation. Firstly, conventional conciliation, initiated by the parties, where the conciliator may be any third party requested by the parties and recognized as such by them. Some organizations may propose a legal conciliator or a technical conciliator (for example CEPANI). Alternatively, judicial conciliation, where the judge may act as conciliator when a petition of conciliation is submitted. The judge must act within the limits of the competence of their court, for example the judge of the justice of peace is competent for conciliation relating to housing leases disputes, etc In some cases, conciliation is required by law: for example the appointment of a social conciliator by the labor court in the context of a collective dispute (article 734 of the Belgian Judicial Code), regarding housing leases (article 1344 of the Belgian Judicial Code). When an expert is appointed by a court, they try to conciliate the parties during the judicial expertise (article 977 of the Belgian Judicial Code).
Binding third party decision is a consensual process by which the parties mandate a third party, who is neither an arbitrator nor a judge, to rule on one or more disputed points by means of a decision that will be binding (article 5.69 of the Belgian Civil Code; article 1134 of the “old” Belgian Civil Code). Parties wishing to make use of a binding third party decision draw up and sign an agreement providing for its implementation. This agreement contains a description of the specific issue(s) they wish to resolve through this procedure, and for which they undertake to treat the binding third party decision as a contractual obligation (binding them).
An Ombudsmen’s task is to analyze complaints of individuals concerning the functioning of public institutions (federal public services, pensions, Belgian Railways, Communities, Regions, Municipalities...) or specific sectors (post office, insurance companies, banks, telecommunications...) and to issue an opinion. If a company or public institution does not wish to comply with the Ombudsman’s opinion, it must motivate its decision (meaning that they have to elaborate as to why they choose not to comply). The Ombudsmen also plays a preventive role by making suggestions and recommendations in order to provide long-term solutions. All Ombudsmen possess a special status under Belgian law and are usually free of charge for the consumer.
European Online Dispute Resolution (ODR) Platform: in Belgium, the EU ADR Directive has been implemented in Book XVI – “Out-of-court resolution of consumer disputes” of the Economic Law Code. The ODR platform provides a single access point for disputes arising from online transactions, where consumers can submit their complaints in all official languages of the Union. The complaint can then be forwarded to a national ADR body which will deal with the case. The platform will also provide general information on ADR.
Does engaging in ADR have any effect on potential or existing litigation or arbitration?
Expiry of the limitation period (time-barred period) whilst engaging in ADR, does not apply when it occurs during judicial proceedings, such as judicial mediation or judicial conciliation, as the case has already been brought before a judge.
In other situations, engaging in ADR can have an effect on the limitation period. For example in the case of extrajudicial mediation, the limitation period is suspended for one month, from the date the proposal to resort to mediation is sent by registered letter. Once the mediation protocol has been signed, the limitation period is suspended for the duration of the mediation and the case cannot become time-barred before the end of the mediation (Article 1731 of the Belgian Judicial Code). However, the suspensive effect of the limitation period does not apply to the so-called “prefixed” periods, which by their very nature cannot be extended either by a cause of suspension or by an interruptive act (for example the ten-year period within which the contractor and the architect are liable for the total or partial destruction of structures due to defects in construction or the unsuitability of the ground is an expiry period that cannot be suspended or interrupted). Should the mediation fail (and unless otherwise agreed), the suspension shall not expire until one month after one of the parties or the mediator notifies (by registered letter) the other party(s) of its wish to end the mediation. Should the mediation succeed, the parties can either decide to have their agreement homologated by court (it will then have the same legal value as a court decision and is binding), in which case the decision would be time-barred by ten years (cfr. 1043 of the Belgian Judicial Code); or not to have their agreement homologated and therefore the ongoing limitation period is interrupted and article 2248 of the “old” Belgian Civil Code applies. In this case, a limitation period of the same nature and duration as the interrupted time-barred period will start over.
In relation to collaborative negotiations, the limitation period is suspended for the duration of the collaborative negotiations (article 1741§2 of the Belgian Judicial Code). This suspension will end upon notification by registered mail, one month after the date of sending (article 1741, §3 of the Belgian Judicial Code).
Engaging in an ADR process may be imposed by law or agreed by the parties, therefore, a judge could decide to suspend proceedings until it is demonstrated that the specified ADR has been initiated and has failed (for example Article 1725, §2 of the Belgian Judicial Code). However, if there are serious indications that violence, threats or any other form of pressure is being or has been exercised by one party against the other, the judge may not order mediation/conciliation without ensuring that the other party freely consents. To this end, the judge shall obtain the oral consent of the latter in the absence of the other party (Articles 1734, §1, alinea 3 and 731, §2 of the Belgian Judicial Code).
Following mediation, it is not mandatory that parties have their agreement homologated by the court. However, if parties request the court to do so, the court’s decision cannot be appealed (Articles 1043, 1733 and 1736 of the Belgian Judicial Code). If they do not homologate the agreement, the agreement will be binding between the parties but parties will be subjected to confidentiality.
The fact that a mediation/conciliation has failed does not affect the merits of the arbitration/litigation proceedings themselves.
In the context of a binding third party decision, the decision is binding not only on the parties but also on the judge, who must comply with it if a dispute is subsequently brought. The judge retains only marginal discretionary powers, for example, to set aside the third party decision if it is contrary to public policy, tainted by fraud, if the third party decision-maker has exceeded the powers granted by the parties or has failed to comply with the stipulated procedure.
Is ADR compulsory and if so are there any consequences if a party fails to engage in ADR? If it is not compulsory are there any plans for this to change?
No. Lawyers and bailiffs have an ethical and legal obligation to inform their clients of the various ADR options applicable to their case to try to reach an amicable settlement (article 444 and 519 of the Belgian Judicial Code). Compliance with this obligation is subject to a verification by the judge who may question the parties on the manner in which they have tried to resolve the dispute amicably, and inform them of such possibilities, possibly by ordering their personal appearance (article 730/1 of the Belgian Judicial Code).
In practice, the claimant (plaintiff) will often mention in the writ of summons that an attempt to settle the dispute was made but failed. There are no legal sanctions as such for failing to settle a dispute. Nevertheless, such an attempt, even if unsuccessful, may be a ground to avoid a successful counterclaim for damages for bringing frivolous and vexatious proceedings, or a penalty for abuse of judicial proceedings. However, ADR can be imposed, but participating and reaching a settlement agreement is always done on a voluntary basis and so parties are not (directly) sanctioned if they fail to resolve their dispute with an ADR process. There are no plans in the pipeline to change this.
Can the parties agree, in advance of any potential dispute, to engage in ADR?
Yes. Parties can contractually agree to try to settle disputes through negotiation, conciliation, mediation, or other ADR before initiating court litigation/arbitration. These agreements are enforceable, which means that a court can stay proceedings until the negotiations/conciliation/mediation or other ADR have proven to be unsuccessful.
When does ADR generally take place?
It can take place at any time so before, during or even after litigation.
Is ADR subject to without prejudice privilege and/or confidential? If not, is there any other means to protect confidential information?
Mediation is confidential (Articles 1728 and 1729 of the Belgian Judicial Code) but confidentiality may be extended, restricted, or waived by agreement between the parties. The mediator and experts appointed in mediation proceedings are bound by professional secrecy, as are all lawyers. Disclosure of confidential information exchanged during mediation may give rise to claims for damages. There is therefore a risk when an ill-intentioned party communicates information or a document with the aim of making it confidential, and thus ensuring that this cannot be produced afterwards in judicial proceedings.
Collaborative negotiations are confidential (Article 1738 of the Belgian Judicial Code) but confidentiality of a document may be waived in writing by the parties.
The conciliation process is confidential, and is binding not only on the conciliator himself, but also on the parties. However, the confidentiality of the conciliation is not stipulated in Belgian law, but the principle is accepted by the majority of the jurisprudence.
Other forms of ADR are confidential only if the parties agree.
Does the output from ADR create precedents?
No, as ADR is almost always confidential. However, some institutions/organizations (in particular with regard to mediation) issue annual reports where they summarize the main cases in an anonymized manner.
Who bears the costs of ADR?
ADR is always a voluntary process. Parties can agree on mediator, conciliator, expert fees and allocation of costs. In practice, costs are often split equally. Such choice can be freely and expressly agreed or made by reference to institutional rules (Cepani, Mediation chamber, etc).
Is your jurisdiction subject to any specific rules for cross border ADR?
No.
Are there any particularly unusual features of ADR in your jurisdiction that you are aware are different to other jurisdictions?
As referenced previously, lawyers conducting collaborative negotiations must be certified. Mediators may also be certified. Certification is granted by the FPS Justice when the mediator fulfils certain training conditions. The FPS Justice keeps a list of certified mediators (available in Dutch or French), sorted according to their specialization and place of residence. Mediation made by a certified mediator has two advantages. Firstly, if the parties request it, and provided that the mediator is certified, the agreement can be homologated by a court. Secondly, the limitation period is suspended as soon as a mediation protocol is signed, provided that the mediator is certified.
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